NVDA » Topics » Option Grants in Fiscal 2005

This excerpt taken from the NVDA DEF 14A filed May 31, 2005.

Option Grants in Fiscal 2005

        We grant options to purchase shares of our common stock to our named executive officers under our 1998 Equity Incentive Plan, or the 1998 Plan. As of May 1, 2005, options to purchase a total of 38,744,881 shares were outstanding under the 1998 Plan and options to purchase 8,793,348 shares remained available for grant under the 1998 Plan. The following table presents each stock option grant during fiscal 2005 to each of the named executive officers. The exercise price of each option was equal to the closing price of our common stock as reported by Nasdaq for the last market-trading day prior to the date of grant. The exercise price may be paid in cash, in shares of our common stock valued at fair market value on the exercise date or through a cashless exercise procedure involving a same-day sale of the purchased shares.

        The following table also presents the potential aggregate increase in market capitalization of NVIDIA based upon the 167,089,545 outstanding shares of common stock as of January 30, 2005. The potential realizable value is calculated based on the applicable term of the option at the time of grant. Stock price appreciation of 5% and 10% is assumed pursuant to rules promulgated by the SEC and does not represent our prediction of our stock price performance. The potential realizable values at 5% and 10% appreciation are calculated by:

    multiplying the number of shares of common stock subject to a given option by the exercise price per share;

    assuming that the aggregate stock value derived from that calculation compounds at the annual 5% or 10% rate shown in the table until the expiration of the option; and

    subtracting from that result the aggregate option exercise price.

        All shares listed in the following table under the heading "Number of Securities Underlying Options Granted" are subject to vesting. The shares subject to the option granted to Mr. Huang vest 25% four years and three months after the date of grant and the remaining 75% of the shares subject to the option vest in equal quarterly installments over a nine month period. This option shall be fully vested on the fifth year anniversary of the date of grant and has a seven-year term. The shares subject to the options granted to Mr. Fisher and Dr. Ma vest 25% one year and three months after the date of grant and the remaining 75% of the shares subject to the option vest in equal quarterly installments over a two year and nine month period. These options shall be fully vested on the fourth year anniversary of the date of grant. The shares subject to the options granted to Messrs. Burkett and Shannon vest 25% two years and nine months after the date of the grant and the remaining 75% of the shares subject to the option vest in equal quarterly installments over a one year three month period. These options shall be fully vested on the fourth year anniversary of the date of grant. The options grants to Messrs. Burkett, Fisher and Shannon and Dr. Ma have six year terms. The term of each option is subject to earlier termination if the optionee's service with us ceases. Under certain circumstances following a change of control, the vesting of such option grants may accelerate and become immediately exercisable.

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        Percentages shown under "Percent of Total Options Granted to Employees in Fiscal Year" are based on an aggregate of 8,259,926 options granted to our employees under all of our equity incentive plans during the fiscal year ended January 30, 2005.

 
  Individual Grants
   
   
   
   
 
   
   
  Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
for Option Term

 
  Number of
Securities
Underlying
Options
Granted (#)

  Percent of
Total Options
Granted to
Employees in
Fiscal Year (%)

   
   
Name

  Exercise
Price Per
Share ($)

  Expiration
Date

  5% ($)
  10% ($)
Jen-Hsun Huang   200,000   2.4 % $ 26.24   04/12/11   $2,136,463   $4,978,868
Marvin D. Burkett   90,000   1.0     26.24   04/12/10   803,170   1,822,119
Jeffrey D. Fisher   80,000   1.0     26.24   04/12/10   713,929   1,619,661
Di Ma, Ph.D.   60,000   0.7     26.24   04/12/10   535,447   1,214,745
David M. Shannon   60,000   0.7     26.24   04/12/10   535,447   1,214,746

Price per share and total increase in market value of NVIDIA common stock for all stockholders at assumed annual rates of 5% and 10% stock price appreciations from $22.88 per share at January 28, 2005, the last trading day prior to our fiscal year end, over a seven year period, based on 167,089,545 shares outstanding on January 30, 2005.

 

$32.19 per share $5.4 billion

 

$44.59 per share $7.4 billion

"Option Grants in Fiscal 2005" elsewhere:

CEVA (CEVA)
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