NVIDIA 2003 Annual Report Download - page 61

NVIDIA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following table summarizes information about stock options outstanding as of January 26, 2003:
Options Outstanding Options Exercisable
Range of Exercise Prices
Number
Outstanding
Weighted
Average
Remaining
Contractual
Life
Weighted
Average
Exercise
Price
Number
Exercisable
Weighted
Average
Exercise
Price
$ 0.09 — $ 0.09 312,000 4.1 $ 0.09 312,000 $ 0.09
0.33 — 0.33 178,900 4.6 $ 0.33 178,900 $ 0.33
0.66 — 0.79 629,460 4.9 $ 0.75 629,460 $ 0.75
1.04 — 1.38 378,419 5.0 $ 1.32 378,419 $ 1.32
1.58 — 2.25 6,973,921 5.3 $ 1.79 6,684,921 $ 1.79
4.09 — 5.88 5,944,418 6.6 $ 4.82 3,802,501 $ 4.69
8.56 — 11.90 4,961,273 8.4 $ 9.94 1,220,428 $ 9.13
14.97 — 22.34 9,924,425 7.8 $16.86 4,027,208 $16.80
24.63 — 36.88 5,409,388 8.1 $30.27 2,221,609 $29.36
37.17 — 53.61 923,000 8.8 $41.51 617,125 $42.97
65.47 — 65.47 500 9.0 $65.47 125 $65.47
$ 0.09 — $65.47 35,635,704 7.1 $12.93 20,072,696 $10.03
Note 7—Retirement Plan
The Company has a 401(k) Plan (the “Plan”) covering substantially all of its United States employees.
Under the Plan, participating employees may defer up to 100 percent of their pre-tax earnings, subject to the
Internal Revenue Service annual contribution limits.
Note 8—Stock Option Exchange
On September 26, 2002, the Company commenced an offer (the “Offer”) to its employees to exchange
outstanding stock options with exercise prices equal to or greater than $27.00 per share (“Eligible Options”).
Stock options to purchase an aggregate of approximately 20,615,000 shares were eligible for tender at the
commencement of the Offer, representing approximately 39% of the Company’s outstanding stock options as of
the commencement date. Only employees of NVIDIA or one of its subsidiaries as of September 26, 2002 who
continued to be employees through the Offer termination date of October 24, 2002 were eligible to participate in
the Offer. Employees who were on medical, maternity, worker’s compensation, military or other statutorily
protected leave of absence, or a personal leave of absence, were also eligible to participate in the Offer.
Employees who were terminated on or before the Offer termination date of October 24, 2002, were not eligible to
participate in the Offer. In addition, the Company’s Chief Executive Officer and Chief Financial Officer and
members of the Company’s Board of Directors were not eligible to participate in this Offer.
Eligible employees who participated in the Offer received, in exchange for the cancellation of Eligible
Options, a fixed amount of consideration, represented by fully vested, non-forfeitable common stock and
applicable withholding taxes, equal to the number of shares underlying such Eligible Options, multiplied by
$3.20, less the amount of applicable tax withholdings, divided by $10.46, the closing price of the Company’s
common stock as reported on the Nasdaq National Market on October 24, 2002. The Company concluded that
the consideration paid for the Eligible Options represented “substantial consideration” as required by Issue 39(f)
of EITF Issue No. 00-23 “Issues Relating to Accounting for Stock Compensation Under APB Opinion No. 25
and FASB Interpretation No. 44,” as the $3.20 per Eligible Option was at least the fair value for each Eligible
59