NVIDIA 2016 Annual Report Download - page 99

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excess, if any, of the fair market value of the stock on the date the award is granted over any amount paid by the recipient
for the stock.
The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from stock
awards will be the amount paid for such shares plus any ordinary income recognized either when the stock is received or
when the stock becomes vested.
Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Internal Revenue Code and the
satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income
realized by the recipient of the stock award.
Restricted Stock Unit Awards. Generally, the recipient of a restricted stock unit award structured to conform to the
requirements of Section 409A of the Internal Revenue Code or an exception to Section 409A of the Internal Revenue Code
will recognize ordinary income at the time the stock is delivered equal to the excess, if any, of the fair market value of the
shares of our common stock received over any amount paid by the recipient in exchange for the shares of our common
stock. To conform to the requirements of Section 409A of the Internal Revenue Code, the shares of our common stock
subject to a restricted stock unit award may generally only be delivered upon one of the following events: a fixed calendar
date (or dates), separation from service, death, disability or a change in control. If delivery occurs on another date, unless
the restricted stock unit award otherwise complies with or qualifies for an exception to the requirements of Section 409A
of the Internal Revenue Code, in addition to the tax treatment described above, the recipient will owe an additional 20%
federal tax and interest on any taxes owed.
The recipient’s basis for the determination of gain or loss upon the subsequent disposition of shares acquired from a
restricted stock unit award will be the amount paid for such shares plus any ordinary income recognized when the stock is
delivered.
Subject to the requirement of reasonableness, the provisions of Section 162(m) of the Internal Revenue Code and the
satisfaction of a tax reporting obligation, we will generally be entitled to a tax deduction equal to the taxable ordinary income
realized by the recipient of the stock award.
Stock Appreciation Rights. We may grant under the 2007 Plan stock appreciation rights separate from any other award
or in tandem with other awards under the 2007 Plan. Where the stock appreciation rights are granted with a strike price
equal to the fair market value of the underlying stock on the grant date, the recipient will recognize ordinary income equal
to the fair market value of the stock or cash received upon such exercise. Subject to the requirement of reasonableness, the
provisions of Section 162(m) of the Internal Revenue Code, and the satisfaction of a tax reporting obligation, we will
generally be entitled to a tax deduction equal to the taxable ordinary income realized by the recipient of the stock appreciation
right.
New Plan Benefits
Awards under the 2007 Plan are discretionary and are not subject to set benefits or amounts under the terms of the 2007
Plan. However, our Board’s current policy establishes the number of shares subject to initial and annual stock awards that
will be granted to our non-employee directors under the 2007 Plan. The Board’s current policy with respect to stock awards
granted to our non-employee directors is described under Director Compensation above.