NVIDIA 2016 Annual Report Download - page 132

A-22
(kk) “Participant” means a person to whom an Award is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Stock Award.
(ll) “Performance Cash Award” means an award of cash granted pursuant to the terms and conditions of Section 6(c)
(ii).
(mm) “Performance Criteria” means the one or more criteria that the Committee (or, to the extent that an Award is
not intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Board) will select for
purposes of establishing the Performance Goals for a Performance Period. The Performance Criteria that will be used to
establish such Performance Goals may be based on any one of, or combination of, the following: (1) earnings, including
any of the following: gross profit, operating income, income before income tax, net income, and earnings per share, in each
case with any one of or combination of the following exclusions or inclusions: (a) interest income, (b) interest expense, (c)
other income that is categorized as non-operating income, (d) other expense that is categorized as non-operating expense,
(e) income tax, (f) depreciation, and (g) amortization; (2) total stockholder return; (3) return on equity or average stockholder’s
equity; (4) return on assets, investment, or capital employed; (5) stock price; (6) gross profit margin; (7) operating income
margin; (8) cash flow from operating activities (including cash flow from operating activities per share); (9) free cash flow
(including free cash flow per share); (10) change in cash and cash equivalents (or cash flow) (including change in cash and
cash equivalents per share (or cash flow per share)); (11) sales or revenue targets; (12) increases in revenue or product
revenue; (13) expenses and cost reduction goals; (14) improvement in or attainment of expense levels; (15) improvement
in or attainment of working capital levels; (16) economic value added (or an equivalent metric); (17) market share; (18)
share price performance; (19) debt reduction; (20) implementation or completion of projects or processes; (21) customer
satisfaction; (22) stockholders’ equity; (23) capital expenditures; (24) debt levels; (25) workforce diversity; (26) growth of
net income or operating income; (27) employee retention; (28) quality measures; and (29) to the extent that an Award is not
intended to qualify as “performance-based compensation” under Section 162(m) of the Code, other measures of performance
selected by the Board. Partial achievement of the specified criteria may result in the payment or vesting corresponding to
the degree of achievement as specified in the Stock Award Agreement or the written terms of a Performance Cash Award.
The Committee (or, to the extent that an Award is not intended to qualify as “performance-based compensation” under
Section 162(m) of the Code, the Board) will, in its sole discretion, define the manner of calculating the Performance Criteria
it selects to use for such Performance Period.
(nn) “Performance Goals” means, for a Performance Period, the one or more goals established by the Committee (or,
to the extent that an Award is not intended to qualify as “performance-based compensation” under Section 162(m) of the
Code, the Board) for the Performance Period based upon the Performance Criteria. Performance Goals may be based on a
Company-wide basis, with respect to one or more business units, divisions, Affiliates, or business segments, and in either
absolute terms or relative to the performance of one or more comparable companies or the performance of one or more
relevant indices. The Committee (or, to the extent that an Award is not intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Board) will be authorized to appropriately make adjustments in the
method of calculating the attainment of Performance Goals for a Performance Period as follows, provided that any such
adjustments must be objectively determinable to the extent that the Award is intended to qualify as “performance-based
compensation” under Section 162(m) of the Code: (1) to exclude the effects of stock-based compensation (including any
modification charges); (2) to exclude the portion of any legal settlement assigned as past infringement (i.e. the fair value
associated with the portion of settlement that is non-recurring); (3) to exclude restructuring charges (including any costs
associated with a reduction in force and/or shutting down of business operations, such as severance compensation and
benefits and the cost to shut down operating sites/offices); (4) to exclude amortization expenses associated with intangible
assets obtained through a business combination (acquisition or asset purchase); (5) to exclude other costs incurred in
connection with acquisitions or divestitures (including potential acquisitions or divestitures) that are required to be expensed
under generally accepted accounting principles (including any direct acquisition costs that are not associated with providing
ongoing future benefit to the combined company and certain compensation costs associated with an acquisition, such as
one-time compensation charges, longer-term retention incentives, and associated payroll tax charges); (6) to exclude any
exchange rate effects; (7) to exclude the effects of changes to generally accepted accounting principles; (8) to exclude the
effects of any statutory adjustments to corporate tax rates or changes in tax legislation; (9) to exclude the portion of any tax
related settlements; (10) to exclude the effects of any items of an unusual nature or of infrequency of occurrence; (11) to