Fiscal Year 2008 Variable Compensation Plan, approved March 30, 2007


    EXHIBIT
      10.1

     

    NVIDIA
      CORPORATION

    FISCAL
      YEAR 2008 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. Senior Officers, Directors
      and
      Managers as defined below (collectively, the “Participants”), who are employed
      at the Company during fiscal year 2008 and are employees of the Company on
      and
      as of January 27, 2008, shall be eligible to participate in the Fiscal Year
      2008
      Variable Compensation Plan (the “Plan”).
      The
      Plan is designed to award a cash payment (each a “Variable
      Cash Payment”)
      for
      performance in fiscal year 2008 to a Participant if the Company achieves certain
      corporate performance targets (“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, the Company’s chief executive 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
      Compensation Committee (the “Committee”)
      shall
      determine (i) the persons to be specified as Senior Officers for purposes of
      this Plan, (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 2008, for purposes of the Plan, “Individual
      Targets”
shall
      be set for Senior Officers and Directors as follows:

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

            


    

    
      	·  	
              For
                the other 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 2008, for purposes of the Plan, “Individual
      Rankings”
for
      Managers shall be the ranking of such Manager in January or February 2008 by
      the
      Senior Officer or Director to whom the Manager reports.

    


    Determination
      of Fiscal Year 2008 Variable Cash Payments

    


    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 their 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 their 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 2008, 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 the 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 2008 (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
                the other Senior Officers, the Committee, based on input from the
                chief
                executive officer of the Company, shall determine if the Individual
                Targets have been achieved by each other Senior Officer and shall
                determine the amount of the Actual Individual Variable Cash Payments
                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
                Payments 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
                Payments 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 other 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 2008 net income. The amount of actual
      net
      income, as set forth in the Company’s financial statements for fiscal 2008, but
      (i) excluding the impact of stock-based compensation expense, and (ii) excluding
      or including items that the Committee in its sole discretion deems to be
      extraordinary or otherwise inappropriate to include or appropriate to include,
      shall be the “Actual
      Result.”
The
      Committee has also set threshold and maximum Actual Result targets for fiscal
      year 2008 for Participants, for the award of all of or a portion of the
      Corporate Variable Cash Payment (the “Threshold”
and
      “Maximum”).
      The
      actual Corporate Variable Cash Payments to be made for fiscal 2008 (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)  
      x
      Corporate Variable Cash Payment

    (Corporate
      Target - Threshold)

    


    
      	·  	
              If
                the Actual Result equals the Corporate Target, each Participant shall
                be
                eligible to receive the full amount of his or her Corporate Variable
                Cash
                Payment.

            


    

    
      	·  	
              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 = [(Actual
      Result - Corporate Target)
      +1] x
      Corporate Variable Cash  Payment
      

                                                                                  (Maximum
      - Corporate Target)

    


    
      	·  	
              If
                the Actual Result equals the Maximum, each Participant shall be eligible
                to receive 200% of his or her Corporate Variable Cash
                Payment.

            


    

    


    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.


    


    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.

    


    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.