Exhibit 10.1
 
NVIDIA Corporation
 
1998 Non-Employee Directors’ Stock Option Plan
 
1.    PURPOSE.
 
(a)   This Plan is an amendment and restatement of the NVIDIA Corporation (the
“Company”) 1998 Non-Employee Directors’ Stock Option Plan adopted on February
17, 1998 (the “Prior Plan”). The Prior Plan hereby is amended and restated in
its entirety as follows (the “Plan”) and shall become effective on the date of
approval of the Plan (the “Effective Date”) by the Board of Directors of the
Company (the “Board”). The terms of the Prior Plan (other than the aggregate
number of shares issuable thereunder) shall remain in effect and apply to all
options granted pursuant to the Prior Plan.

(b) The purpose of the Plan is to provide a means by which each director of
NVIDIA Corporation (the “Company”) who is not otherwise at the time of grant an
employee of or consultant to the Company or of any Affiliate of the Company
(each such person being hereafter referred to as a “Non-Employee Director”) will
be given an opportunity to purchase stock of the Company.  

(c) The word “Affiliate” as used in the Plan means any parent corporation or
subsidiary corporation of the Company as those terms are defined in Sections
424(e) and (f), respectively, of the Internal Revenue Code of 1986, as amended
from time to time (the “Code”).

(d)  The Company, by means of the Plan, seeks to retain the services of persons
now serving as Non-Employee Directors of the Company, to secure and retain the
services of persons capable of serving in such capacity, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
 
2.    ADMINISTRATION.
 
(a)  The Board shall administer the Plan unless and until the Board delegates
administration to a committee, as provided in subparagraph 2(b).
 
(b)  The Board may delegate administration of the Plan to a committee composed
of two (2) or more members of the Board (the “Committee”). If administration is
delegated to a Committee, the Committee shall have, in connection with the
administration of the Plan, the powers theretofore possessed by the Board,
subject, however, to such resolutions, not inconsistent with the provisions of
the Plan, as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the administration of
the Plan.
 
3.    SHARES SUBJECT TO THE PLAN.
 
(a)  Subject to the provisions of paragraph 10 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to options granted under
the Plan shall not exceed in the aggregate One Million Two Hundred Thousand
(1,200,000) shares of the Company’s common stock. If any option granted under
the Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the stock not purchased under such option shall again become
available for the Plan.
 
(b)  The stock subject to the Plan may be unissued shares or reacquired shares,
bought on the market or otherwise.
 
4.    ELIGIBILITY.
 
Options shall be granted only to Non-Employee Directors of the Company.
 
5.    NON-DISCRETIONARY GRANTS.
 
(a)  Each person who is elected or appointed for the first time to be a
Non-Employee Director automatically shall, upon the date of his or her initial
election or appointment to be a Non-Employee Director by the Board or
stockholders of the Company, be granted an option to purchase Ninety Thousand
(90,000) shares of common stock of the Company on the terms and conditions set
forth herein (an “Initial Grant”).
 

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(b)  On August 1st of each year, commencing with August 1st, 2006, each person
who is then a Non-Employee Director automatically shall be granted an option to
purchase Thirty Thousand (30,000) shares of common stock of the Company (an
“Annual Grant”); provided, however, that if the person has not been serving as a
Non-Employee Director for the entire period since the preceding August 1st, then
the number of shares subject to the Annual Grant shall be reduced pro rata for
each full quarter prior to the date of grant during which such person did not
serve as a Non-Employee Director.
 
(c)  On August 1st of each year, commencing with August 1st, 2006, each
Non-Employee Director who is then a member of the Audit Committee or the
Compensation Committee of the Board automatically shall be granted, for each
such committee, an option to purchase Ten Thousand (10,000) shares of common
stock of the Company (a “Committee Grant”), respectively; provided, however,
that if the person has not been serving as a member of either such committee for
the entire period since the preceding August 1st, the number of shares subject
to the Committee Grant shall be reduced pro rata for each full quarter prior to
the date of grant during which such person did not serve as a member of either
such committee.
 
6.    OPTION PROVISIONS.
 
Each option shall be subject to the following terms and conditions:
 
(a)  The term of each option commences on the date it is granted and, unless
sooner terminated as set forth herein, expires on the date six (6) years from
the date of grant (“Expiration Date”). If the optionee’s service as a
Non-Employee Director of the Company or an employee, member of the Board of
Directors or consultant to the Company or any Affiliate terminates for any
reason or for no reason, the option shall terminate on the earlier of the
Expiration Date or the date twelve (12) months following the date of termination
of all such service; provided, however, that if such termination of service is
due to the optionee’s death, the option shall terminate on the earlier of the
Expiration Date or eighteen (18) months following the date of the optionee’s
death.
 
(b)  The exercise price of each option shall be equal to one hundred percent
(100%) of the Fair Market Value of the stock (as such term is defined in
subparagraph 9(d)) subject to such option on the date such option is granted.
 
(c)  The optionee may elect to make payment of the exercise price under one of
the following alternatives:
 
(i)  Payment of the exercise price per share in cash at the time of exercise;
 
(ii)  Provided that at the time of the exercise the Company’s common stock is
publicly traded and quoted regularly in the Wall Street Journal, payment by
delivery of shares of common stock of the Company already owned by the optionee,
held for the period required to avoid a charge to the Company’s reported
earnings, and owned free and clear of any liens, claims, encumbrances or
security interest, which common stock shall be valued at its Fair Market Value
on the date preceding the date of exercise; or
 
(iii)  Payment pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or check) by
the Company either prior to the issuance of shares of the Company’s common stock
or pursuant to the terms of irrevocable instructions issued by the optionee
prior to the issuance of shares of the Company’s common stock.
 
(iv)  Payment by a combination of the methods of payment specified in
subparagraph 6(c)(i) through 6(c)(iii) above.
 
(d)  An option shall be transferable only to the extent specifically provided in
the option agreement; provided, however, that if the option agreement does not
specifically provide for the transferability of an option, then the option shall
not be transferable except by will or by the laws of descent and distribution,
and shall be exercisable during the lifetime of the person to whom the option is
granted only by such person (or by his guardian or legal representative) or
transferee pursuant to such an order. Notwithstanding the foregoing, the
optionee may, by delivering written notice to the Company in a form satisfactory
to the Company, designate a third party who, in the event of the death of the
optionee, shall thereafter be entitled to exercise the option.
 

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(e)  The options granted pursuant to Section 5 shall vest and become exercisable
as follows:
 
(i)  The Initial Grant shall vest quarterly over the three (3)-year period
following the date of grant such that the entire Initial Grant shall become
exercisable on the three (3)-year anniversary of the date of grant of the
option, provided that the optionee has, during the entire period prior to each
such vesting installment date, continuously served as a director or employee of
or consultant to the Company or any Affiliate of the Company, whereupon such
option shall become fully vested and exercisable in accordance with its terms
with respect to that portion of the shares represented by that installment.
  
(ii)  With respect to an Annual Grant, if the optionee has attended at least
seventy-five percent (75%) of the meetings of the Board held between the date of
grant of the option and the two (2)-year anniversary of the date of grant of the
option, then the Annual Grant shall begin vesting quarterly in equal
installments on the two (2)-year anniversary of the date of grant such that
entire Annual Grant shall become vested and exercisable on the three (3)-year
anniversary of the date of the grant of the option. If the optionee’s service as
a Director terminates between the date of grant of the option and the two
(2)-year anniversary of the date of grant of the option due to the disability or
death of the optionee, then the Annual Grant shall immediately vest and become
exercisable on a quarterly pro rata basis. Unless the Annual Grant sooner vests
and becomes exercisable as provided in this subsection 6(e)(ii), the Annual
Grant shall vest over the four (4)-year period following the date of grant at
the rate of thirty percent (30%) on the three (3)-year anniversary of the date
of grant of the option and seventy percent (70%) on the four (4)-year
anniversary such that the entire Annual Grant shall become vested and
exercisable on the four (4)-year anniversary of the date of grant of the option,
provided that the optionee has, during the entire period prior to each such
vesting installment date, continuously served as a director or employee of or
consultant to the Company or any Affiliate of the Company, whereupon such option
shall become fully vested and exercisable in accordance with its terms with
respect to that portion of the shares represented by that installment.
 
(iii)  With respect to each Committee Grant, if the optionee has attended at
least seventy-five percent (75%) of the meetings of the committee held between
the date of grant of the option and the one (1)-year anniversary of the date of
grant of the option, then the Committee Grant shall vest and become exercisable
in full on the one (1)-year anniversary of the date of grant. If the optionee’s
service as a committee member terminates between the date of grant of the option
and the one (1)-year anniversary of the date of grant of the option due to the
disability or death of the optionee, then the Committee Grant shall immediately
vest and become exercisable on a monthly pro rata basis for each month served on
the respective committee. Unless the Committee Grant sooner vests and becomes
exercisable as provided in this subsection 6(e)(iii), the Committee Grant shall
vest annually over the four (4)-year period following the date of grant at the
rate of ten percent (10%) per year for the first three (3) years and seventy
percent (70%) for the fourth (4th) year such that the entire Committee Grant
shall become exercisable on the four (4)-year anniversary of the date of grant
of the option, provided that the optionee has, during the entire period prior to
each such vesting installment date, continuously served as a director or
employee of or consultant to the Company or any Affiliate of the Company,
whereupon such option shall become fully vested and exercisable in accordance
with its terms with respect to that portion of the shares represented by that
installment.
 
(f)  The Company may require any optionee, or any person to whom an option is
transferred under subparagraph 6(d), as a condition of exercising any such
option: (i) to give written assurances satisfactory to the Company as to the
optionee’s knowledge and experience in financial and business matters; and (ii)
to give written assurances satisfactory to the Company stating that such person
is acquiring the stock subject to the option for such person’s own account and
not with any present intention of selling or otherwise distributing the stock.
These requirements, and any assurances given pursuant to such requirements,
shall be inoperative if (i) the issuance of the shares upon the exercise of the
option has been registered under a then currently-effective registration
statement under the Securities Act of 1933, as amended (the “Securities Act”),
or (ii) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the
then applicable securities laws. The Company may require any optionee to provide
such other representations, written assurances or information that the Company
shall determine is necessary, desirable or appropriate to comply with applicable
securities laws as a condition of granting an option to the optionee or
permitting the optionee to exercise the option. The Company may, upon advice of
counsel to the Company, place legends on stock certificates issued under the
Plan as such counsel deems necessary or appropriate in order to comply with
applicable securities laws, including, but not limited to, legends restricting
the transfer of the stock.
 

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(g)  Notwithstanding anything to the contrary contained herein, an option may
not be exercised unless the shares issuable upon exercise of such option are
then registered under the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and issuance would be
exempt from the registration requirements of the Securities Act.
 
7.    COVENANTS OF THE COMPANY.
 
(a)  During the terms of the options granted under the Plan, the Company shall
keep available at all times the number of shares of stock required to satisfy
such options.
 
(b)  The Company shall seek to obtain from each regulatory commission or agency
having jurisdiction over the Plan such authority as may be required to issue and
sell shares of stock upon exercise of the options granted under the Plan;
provided however, that this undertaking shall not require the Company to
register under the Securities Act either the Plan, any option granted under the
Plan, or any stock issued or issuable pursuant to any such option. If, after
reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of stock under the Plan, the Company shall be
relieved from any liability for failure to issue and sell stock upon exercise of
such options.
 
8.    USE OF PROCEEDS FROM STOCK.
 
Proceeds from the sale of stock pursuant to options granted under the Plan shall
constitute general funds of the Company.
 
9.    MISCELLANEOUS.
 
(a)  Neither an optionee nor any person to whom an option is transferred under
subparagraph 6(d) shall be deemed to be the holder of, or to have any of the
rights of a holder with respect to, any shares subject to such option unless and
until such person has satisfied all requirements for exercise of the option
pursuant to its terms.
 
(b)  Nothing in the Plan or in any instrument executed pursuant thereto shall
confer upon any Non-Employee Director any right to continue in the service of
the Company or any Affiliate in any capacity or shall affect any right of the
Company, its Board or stockholders or any Affiliate, to remove any Non-Employee
Director pursuant to the Company’s Bylaws and the provisions of Delaware general
corporation law.
 
(c)  In connection with each option made pursuant to the Plan, it shall be a
condition precedent to the Company’s obligation to issue or transfer shares to a
Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to the
Company to insure that the amount of any federal, state or local withholding tax
required to be withheld with respect to such sale or transfer, or such removal
or lapse, is made available to the Company for timely payment of such tax.
 
(d)  As used in this Plan, “Fair Market Value” means, as of any date, the value
of the common stock of the Company determined as follows:
 
(i)  If the common stock is listed on any established stock exchange or a
national market system, including without limitation the NASDAQ National Market
(“NASDAQ”) or The NASDAQ SmallCap, the Fair Market Value of a share of common
stock shall be the closing sales price for such stock (or the closing bid, if no
sales were reported) as quoted on such system or exchange (or the exchange with
the greatest volume of trading in common stock) on the last market trading day
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable; or
 
(ii)  In the absence of an established market for the common stock, the Fair
Market Value shall be determined in good faith by the Board.
 

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10.    ADJUSTMENTS UPON CHANGES IN STOCK.
 
(a)  If any change is made in the stock subject to the Plan, or subject to any
option granted under the Plan (through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other than cash, stock
split, liquidating dividend, combination of shares, exchange of shares, change
in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan and outstanding options will be
appropriately adjusted in the class(es) and maximum number of shares subject to
the Plan and the class(es) and number of shares and price per share of stock
subject to outstanding options. Such adjustments shall be made by the Board, the
determination of which shall be final, binding and conclusive. (The conversion
of any convertible securities of the Company shall not be treated as a
“transaction not involving the receipt of consideration by the Company.”)
 
(b)  In the event of: (1) a dissolution, liquidation, or sale of all or
substantially all of the assets of the Company; (2) a merger or consolidation in
which the Company is not the surviving corporation; (3) a reverse merger in
which the Company is the surviving corporation but the shares of the Company’s
common stock outstanding immediately preceding the merger are converted by
virtue of the merger into other property, whether in the form of securities,
cash or otherwise; or (4) the acquisition by any person, entity or group within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) or any comparable successor provisions (excluding
any employee benefit plan, or related trust, sponsored or maintained by the
Company or any Affiliate of the Company) of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act, or comparable
successor rule) of securities of the Company representing at least fifty percent
(50%) of the combined voting power entitled to vote in the election of
directors, then to the extent not prohibited by applicable law, (i) any
surviving or acquiring corporation shall assume any options outstanding under
the Plan or shall substitute similar options (including an option to acquire the
same consideration paid to the shareholders in the transaction described in this
subparagraph 10(b)) for those outstanding under the Plan, or (ii) such options
shall continue in full force and effect. In the event any surviving or acquiring
corporation refuses to assume such options, or to substitute similar options for
those outstanding under the Plan, then such options shall be terminated if not
exercised prior to such event.
 
11.    AMENDMENT OF THE PLAN.
 
(a)  The Board at any time, and from time to time, may amend the Plan and/or
some or all outstanding options granted under the Plan. However, except as
provided in paragraph 10 relating to adjustments upon changes in stock, no
amendment shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary for the Plan to satisfy the
requirements of Rule 16b-3 under the Exchange Act or any NASDAQ or securities
exchange listing requirements.
 
(b)  Rights and obligations under any option granted before any amendment of the
Plan shall not be impaired by such amendment unless (i) the Company requests the
consent of the person to whom the option was granted and (ii) such person
consents in writing.
 
12.    TERMINATION OR SUSPENSION OF THE PLAN.
 
(a)  The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate ten (10) years after the date adopted by
the Board. No options may be granted under the Plan while the Plan is suspended
or after it is terminated.
 
(b)  Suspension or termination of the Plan shall not impair rights and
obligations under any option granted while the Plan is in effect, except with
the consent of the person to whom the option was granted.
 
13.    EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
 
(a)  The Plan shall become effective on the same day that the Company’s initial
public offering of shares of common stock becomes effective, subject to the
condition subsequent that the stockholders of the Company approve the Plan.
 
(b)  No option granted under the Plan shall be exercised or exercisable unless
and until the condition of subparagraph 13(a) above has been met.