Exhibit 10.1
 

NVIDIA CORPORATION
FISCAL YEAR 2011 VARIABLE COMPENSATION PLAN
Overview

    The compensation philosophy of NVIDIA Corporation (the “Company”) is to
attract, motivate, retain and reward its management through a combination of
base salary and performance based compensation. Certain Senior Officers,
Directors and Managers (collectively, the “Participants”), each as defined
below, who are employed at the Company during fiscal year 2011 and, unless
otherwise determined by the Compensation Committee (the “Committee”), are
employees of the Company on and as of the date the cash payments are awarded
(each, a “Variable Cash Payment”), shall be eligible to participate in the
Fiscal Year 2011 Variable Compensation Plan (the “Plan”). The Plan is designed
to award a Variable Cash Payment for performance in fiscal year 2011 to a
Participant if the Company achieves certain corporate performance targets (the
“Corporate Targets”) and/or if the Participant achieves certain Individual
Targets (as defined below) and/or certain Individual Rankings (as defined
below).

    For purposes of the Plan, only the Company’s chief executive officer, chief
financial officer, other executive officers and certain other senior officers
shall be considered “Senior Officers,” other employees at the level of vice
president or director shall be considered “Directors” and managers or qualifying
senior contributors shall be considered “Managers.” The Committee shall
determine (i) the persons to be specified as Senior Officers for purposes of
this Plan and the Senior Officers who may be Participants hereunder, (ii) the
class of employees who may be designated by Senior Officers as Directors for
purposes of this Plan and (iii) the class of employees who many be designated by
Senior Officers or Directors as Managers for purposes of this Plan.

    For fiscal year 2011, for purposes of the Plan, “Individual Targets” shall
be set for certain Senior Officers and Directors as follows:

·
For the chief executive officer, certain key performance objectives set by the
Committee;
 
·
For certain Senior Officers, certain key performance objectives set by the chief
executive officer; and

·
For the Directors, certain key performance objectives set by the respective
Senior Officer to whom the applicable Director reports.

    For fiscal year 2011, for purposes of the Plan, “Individual Rankings” for
Managers shall be the ranking of such Manager in January or February 2011 by the
Senior Officer or Director to whom the Manager reports.

Determination of Fiscal Year 2011 Variable Cash Payments

    Certain Senior Officers and Directors are eligible to receive a Variable
Cash Payment if the Company achieves its Corporate Targets and/or the Senior
Officer or Director achieves his or her Individual Targets at specified levels.
Managers are eligible to receive a Variable Cash Payment if the Company achieves
its Corporate Targets and/or based on the level of his or her Individual
Ranking. The aggregate potential amount of the Variable Cash Payment a
Participant may receive upon achievement of the Corporate Targets and/or his or
her Individual Targets and/or Individual Ranking, as applicable, and the pool
available to all Participants under the Plan will be set by the Committee for
all Participants based on a recommendation made by the chief executive officer
(the “Variable Cash Payment Target Amount”). A Participant’s Variable Cash
Payment Target Amount is based on the difficulty and responsibility of each
position. For fiscal year 2011, each Participant’s Variable Cash Payment Target
Amount will be split such that fifty percent (50%) is allocated to the
achievement of the Corporate Targets (the “Corporate Variable Cash Payment”) and
fifty percent (50%) is allocated to the achievement of his or her Individual
Targets or Individual Ranking, as applicable (the “Individual Variable Cash
Payment”). A Participant may be eligible to receive more or less than his or her
Variable Cash Payment Target Amount as described more fully below.

 
 

--------------------------------------------------------------------------------

 
 
Individual Variable Cash Payment

    An Individual Variable Cash Payment may be awarded to a Participant based on
the achievement of his or her Individual Targets or Individual Ranking, as
applicable, or other criteria determined by the Committee.

    The actual Individual Variable Cash Payments to be made for fiscal 2011 (the
“Actual Individual Variable Cash Payments”) shall be made pursuant to the
following guidelines and taking into account whether Individual Targets have
been achieved or the level of the Individual Ranking, as applicable, and the
amount of the Actual Individual Variable Cash Payment shall be determined as
follows:

 ·
For the chief executive officer, the Committee shall determine if the Individual
Targets have been achieved and shall determine the amount of the Actual
Individual Variable Cash Payment;
 
·
For all other Senior Officers, the Committee, based on input from the chief
executive officer, shall determine if the Individual Targets have been achieved
by such Senior Officer and shall determine the amount of the Actual Individual
Variable Cash Payment for each other Senior Officer;
 
·
For Directors, the Senior Officer to whom a Director directly reports shall
determine if the Individual Targets have been achieved by such Director and
shall determine the amount of the Actual Individual Variable Cash Payment for
such Director; and
 
·
For Managers, the Senior Officer or Director to whom a Manager directly reports
shall determine the amount of the Actual Individual Variable Cash Payment for
such Manager, based on the Individual Ranking achieved by such Manager.

    An Actual Individual Variable Cash Payment that is in excess of fifty
percent (50%) of the Variable Cash Payment Target Amount may be awarded to a
Participant for extraordinary individual performance. If a Participant achieves
only a portion of his or her Individual Targets, or in the case of a Manager who
does not reach his or her Individual Ranking, the Participant may still be
eligible to receive an Actual Individual Variable Cash Payment to the extent
determined by the Committee (for the chief executive officer and other Senior
Officers), Senior Officers (for Directors) or Senior Officers or Directors (for
Managers who report to such Senior Officer or Director, as applicable), each in
their sole discretion. If a Participant does not receive an Individual Variable
Cash Payment, he or she may still be eligible to receive a Corporate Variable
Cash Payment as outlined below.

Corporate Variable Cash Payment

    The Committee has set the Corporate Targets for the Participants, based on
achievement of specified fiscal year 2011 net income. The amount of actual net
income, as set forth in the Company’s financial statements for fiscal 2011, as
determined according to United States generally accepted accounting principles,
shall be the “Actual Result.” The Committee has also set threshold and maximum
Actual Result targets for fiscal year 2011 for Participants for the award of a
portion or all of the Corporate Variable Cash Payment (the “Threshold” and
“Maximum,” respectively). The actual Corporate Variable Cash Payments to be made
for fiscal 2011 (the “Actual Corporate Variable Cash Payments”) shall be made
pursuant to the following guidelines:

         ·
If the Actual Result is less than or equal to the Threshold, a Participant will
not receive any portion of his or her Corporate Variable Cash Payment.
 
         · 
If the Actual Result falls between the Threshold and the applicable Corporate
Target, each Participant shall receive an Actual Corporate Variable Cash Payment
based on the following formula:

                Actual Corporate Variable Cash Payment  =    (Actual Result -
Threshold) / (Corporate Target - Threshold) x (50% of Variable Cash Payment
Target Amount)

         ·
If the Actual Result equals the Corporate Target, each Participant shall be
eligible to receive 50% of his or her Variable Cash Payment Target Amount.
 
         ·
If the Actual Result exceeds the Corporate Target but is less than the Maximum,
each Participant shall be eligible to receive an Actual Corporate Variable Cash
Payment pursuant to the formula set forth below:

 
                Actual Corporate Variable Cash Payment  = [1 + ((Actual Result -
Corporate Target) / (Maximum - Corporate Target))] x (50% of Variable Cash
Payment Target Amount)

         ·
If the Actual Result equals or exceeds the Maximum, each Participant shall be
eligible to receive 100% of his or her Variable Cash Payment Target Amount.
 

 
 

--------------------------------------------------------------------------------

 
    In no event shall any Participant receive an Actual Corporate Variable Cash
Payment in excess of two (2) times the amount of his or her Corporate Variable
Cash Payment.

    If a Participant does not receive a Corporate Variable Cash Payment, he or
she may still be eligible to receive all or a portion of an Individual Variable
Cash Payment as outlined above.

Miscellaneous Provisions

    Payments under this Plan shall be made following the end of the fiscal year,
on such schedule as may be approved by the Committee in its discretion.

    Participation in the Plan shall not alter in any way the at will nature of
the Company’s employment of a Participant, and such employment may be terminated
at any time for any reason, with or without cause and with or without prior
notice.

    Notwithstanding whether this Plan is referenced in another agreement,
policy, arrangement or other document, only the Board of Directors or the
Committee may amend or terminate this Plan at any time. Further, the Board of
Directors or the Committee may modify the Corporate Targets, Individual Targets
and/or Individual Ranking and/or Corporate and/or Individual Variable Cash
Payment amounts at any time.

    Any Variable Cash Payments or other benefits under this Plan shall be
subject to the Company’s Clawback Policy and shall bind all Participants subject
to the Clawback Policy who receive any amounts under this Plan.

    This Plan shall be governed by and construed in accordance with the laws of
the State of California, without regard to its principles of conflicts of laws.

 
 

--------------------------------------------------------------------------------