2016 Nvidia Corporation Annual Review

Transcription

2016NVIDIA CORPORATIONANNUAL REVIEWNOTICE OF ANNUAL MEETINGPROXY STATEMENTFORM 10-K

A ONE-OF-A-KIND COMPANYNVIDIA is dedicated to creating products that areloved by the most demanding computer users inthe world—gamers, designers, and scientists.We are the pioneers of GPU-accelerated computing.Our company is united by a core belief that excellenceand mastery of our craft are the source of power thatlets us tackle challenges that matter to the world.We aspire to build one of the world’s great companies,respected and admired for the amazing work we doand the impact we make.—Jen-Hsun Huang

BARRON’SPC gaming is expanding. Thereare multiple drivers. The explodingpopularity of eSports, a steadystream of blockbuster titles, andthe transformation of gaming into asocial, creative medium are bringingnew energy and enthusiasm toan already massive market. VR iscoming next.Our GeForce GTX platform is the heartNVIDIA: GAMINGEXPLOSIONTRANSFORMINGTHEM, VR IS NEXTand soul of PC gaming. More than 100million gamers around the world playon GeForce. NVIDIA GameWorkstechnologies were integrated in 12blockbuster titles in 2015. Our discreteGPU market share approached 80percent, with the GeForce GTX 970 themost popular graphics card on Steam,the online gaming platform.IEM ESL Katowice eSports Tournament, 2016

SF CHRONICLETHE FUTUREOF HOMEENTERTAINMENTThe future of TV will be apps and thefuture of gaming will be streaming.NVIDIA SHIELD is our foothold in thisfuture. With 4K streaming and advancedgaming, it’s the best Android TV box onthe market. And it will only get betterwith our regular software updatesand a growing app catalog.GeForce NOW is our “Netflix for games.”The game-streaming service deliversan incredible GeForce GTX experienceto SHIELD devices.With SHIELD, we’ve created an amazingplatform that integrates everythingfrom the processor architecture to theindustrial design to the user interface.And we’re just getting started.SHIELD campaign skydiving stunt.

Dissection in virtual reality.DNANVIDIA PAVES THEWAY FOR VR.Virtual reality is sparking a revolution in thecomputing experience. It will transform gamingand ripple through product design, retail, sports,medicine, and many other industries. VR requires“If we had unlimited GPU horsepower ineverybody’s computers that would makeour lives much easier.”— Palmer Luckey, Founder, Oculuspowerful GPUs, and our NVIDIA VRWorkssoftware helps headset makers and gamedevelopers create amazing VR experiences.

COMPUTER GRAPHICS WORLDNVIDIAILLUSTRATESTHE POWER OFPHYSICALLYBASEDRENDERING.For designers who build the products people useevery day—from cars to skyscrapers—it’s criticalthat what they see digitally mirrors reality. NVIDIAIray—technologies for physically based renderingof lighting and materials—is integrated into leadingdesign applications, including Dassault SystèmesCatia, SOLIDWORKS Visualize, Autodesk 3DS Max andMaya, as well as McNeel Rhino and Maxon Cinema 4D.As we advance the state of the art of design, we’realso extending it to more people. With NVIDIA GRID,enterprise workers can access any app on any deviceanywhere. More than 500 companies, including 11 ofthe Fortune 100, have deployed it. At VMworld 2015,we demonstrated GRID’s capabilities—7.4 billionpixels worth of virtualized desktops filled our“Tower of Power” demo.Gensler, one of the world’s leadingarchitecture firms, is using Iraytechnologies in the design of our newheadquarters.

POPULAR SCIENCETHE GPU IS THE WORKHORSEOF MODERN AISince the dawn of the computer age,college post-graduate level. Thenartificial intelligence has been the finalBaidu announced that a deep learningfrontier. Building intelligent machinessystem called Deep Speech 2 hadthat can perceive the world as we do,learned both English and Mandarinunderstand our language, and learnwith a single algorithm.from examples has been the life’swork of computer scientists forIn just two years, the number ofover five decades.companies NVIDIA collaborates withon deep learning has jumped nearlyRecently, the combination of deep35x to over 3,400. Industries such asneural networks, big data, and powerfulhealthcare, life sciences, energy,GPU platforms has dramaticallyfinancial services, automotive,accelerated the advance of AI. Inmanufacturing, and entertainment2015, GPU-accelerated deep learningwill all benefit by inferring insight fromsystems achieved superhuman levelsmountains of data. And with Facebook,of perception for the first time.Google, and Microsoft opening theirdeep-learning platforms for all to use,Using deep learning, Google andAI-powered applications will spread fast.Microsoft both beat the best humanscore in the ImageNet challenge.Deep-learning breakthroughs haveShortly thereafter, Microsoft andsparked the AI revolution. Progressthe China University of Science andis exponential. Adoption is exponential.Technology announced a networkThe impact to the tech industry andthat achieved IQ test scores at thesociety will also be exponential.EVERY INDUSTRY WANTS INTELLIGENCEOrganizations engaged with NVIDIA on deep learningHigher EducationInternetLife SciencesDevelopment ToolsFinanceMedia & AutomotiveGamingOil & GasOther1549201434092015

WALL STREET JOURNALNVIDIA STEPS ON THE GASAccelerated computing and AI will makeDRIVE PX 2 to power a fleet of 100 Volvonetworks; and DriveNet, our referencefuture cars safer and more delightful toXC90 SUVs starting next year in its Drivedeep neural network. Global automakersdrive. Driverless shuttles will changeMe autonomous-car pilot program.such as Audi, BMW, Daimler, and Ford;the horsepower of 150 MacBook Pros,The DRIVE PX platform is loaded withand Toyota-partner Preferred Networksthe lunchbox-sized NVIDIA DRIVE PX 2software, including DriveWorks, forare using NVIDIA DRIVE to developis a supercomputer for the car that willdeveloping applications across the entireautonomous cars. In all, more than 70usher in this transformation. Volvo, aself-driving pipeline; NVIDIA DIGITS,companies and institutions are workingbrand synonymous with safety, chosefor training and visualizing deep neuralwith the DRIVE PX platform.Japanese robot taxi developer ZMP;how we think about transportation. With

ENGADGETNVIDIA’S ‘MOBILESUPERCOMPUTER’CAN MAKEMACHINESSMARTER.We’re also bringing AI and deep learning to the worldof robots and drones. NVIDIA Jetson TX1, the firstembedded computer designed to process deep neuralnetworks, delivers an astounding 1 teraflops ofperformance in a credit card-sized module. Suchpower will enable autonomous machines to learnon their own.Walking, obstacle-avoiding robot developed by General Electric.

DEAR NVIDIANS AND STAKEHOLDERS,A ONE-OF-A-KIND COMPANY—AN EXTRAORDINARY YEARNVIDIA is dedicated to creating products that areloved by the most demanding computer users inthe world—gamers, designers, and scientists. Ourcompany is united by a core belief that excellenceand mastery of our craft is the source of powerthat lets us tackle challenges that matter to theworld. We aspire to build one of the world’s greatcompanies, respected and admired for the amazingwork we do and the impact we make.NVIDIA is the pioneer of GPU-accelerated computing.Our strategy is to leverage our deep expertise andsignificant scale to serve markets where our specialtyis greatly valued. The problems we tackle require atight integration of processor, software, algorithms,system architecture, and deep domain expertise.We have chosen to serve several important andsustainable markets—Gaming, ProfessionalVisualization, Data Center, and Automotive.

5.01B RECORD REVENUE56.1%RECORD GROSS MARGINSCAPITAL MARKET LABORATORIESTHE CROWN JEWELOF TECHNOLOGY JUSTCRUSHED ITS EARNINGS.The success of our strategy is clear ina new computing model and our specialtyWe exited the mobile market thisour financial results. Revenue was upof GPU-accelerated computing hasyear and stopped building modems.7 percent to reach a record 5.01 billionquickly become the standard. EveryWe were one of the first entrants toand gross margins expanded by 60 basisdeep learning framework—includingmobile computing. We saw the mobilepoints to a record 56.1 percent.Facebook’s Torch, Google’s TensorFlow,device becoming our most personalIBM’s Watson, and Microsoft’s CNTK—computers—always connected, andOur strategy has propelled us to strongruns on our GPU platform. We’re workingeventually replacing music players,positions in our focused markets:with more than 3,400 companies acrossGPS devices, cameras, readers, portableindustries. And we’re engaged in deepgame consoles, and even some PCs.NVIDIA GeForce is the #1 PC gaminglearning in every function and at everyOur vision was right, but the mobileplatform: NVIDIA Maxwell, ourlevel of our company.business is not for us. NVIDIA is notbreakthrough GPU architecture, gives usin the commodity chip business thata powerful foundation on which to build.NVIDIA DRIVE PX takes the pole positionthe smartphone market has become.GeForce Experience, an application thatin the race to self-driving cars: A veryWe are in the specialized-computingoptimizes games, now boasts 77 millionpromising application of GPU-poweredbusiness, where computing challengesusers. And GeForce GTX graphics cardsdeep learning, the self-driving car isare near infinite and our deep expertisecontinued to gain share. Revenue in ourthe most important development inadvances the field.gaming market grew by a remarkabletransportation in our lifetime. More37 percent this year to hit 2.8 billion.than 70 companies are working withOur mobile experience was far fromDRIVE PX—our scalable, programmablea bust. The future of computing isplatform is off to a great start.constrained by energy. The technology,NVIDIA Quadro is the #1 designplatform: Digital artists in all fieldsmethodologies, and design culture ofprefer Quadro and our market shareThe year was not without itsenergy efficiency have allowed us toheld at 78 percent. For the eighth yeardisappointments. The ITC ruled thatbuild the world’s most efficient GPUrunning, all films nominated in theSamsung did not infringe the patentsarchitecture, which fuels every one ofAcademy Awards Best Visual Effectswe asserted. We wholeheartedlyour businesses. And the great designcategory were made with NVIDIAdisagree. Making fundamental inventionsteams we built are now focused ontechnology. Our Iray technologiesand doing pioneering work are hardinventing amazing products—the DRIVEfor physically based rendering areand costly. We believe that it’s wrongPX self-driving car computer, the Jetsonrevolutionizing the design process andfor others to use our hard-earnedAI-powered embedded computer forwill strengthen our leadership position.inventions without proper compensation.autonomous machines, and the SHIELDThis experience is a reminder that thereAndroid TV console that is creating theNVIDIA Tesla is the #1 acceleratedare many dynamics in a lawsuit thatfuture of television and gaming.computing platform: It hasare unpredictable and that being rightturbocharged the deep learningis not always enough.revolution. Deep learning requires

GIVING BACK TOOUR COMMUNITIESACCELERATINGWHAT MATTERSOur people share a strong sense ofCompute the Cure includes a grantNVIDIA has built a culture that strivescorporate responsibility and a passionthis year to the University of Torontofor excellence in everything we do.for contributing to their communities.for its work applying deep learningThis attitude pervades our company.to cancer diagnostics. Other grantsExceptional mastery of our craft givesNVIDIA features prominently in liststhis year promoted patient care, fundedus the ability to do important work thatof America’s most socially responsiblea children’s oncology hospital in India,can shape the world. Our companycompanies, such as the Dow Jonesand furthered a breast-cancer preventionis agile—teams across the globeSustainability Index, the Carboneffort in Togo.collaborate without organizationalDisclosure Project, and Newsweek’sGreen Rankings.boundaries, with the singular focusAn annual tradition across our officesof doing great work.is Project Inspire, which brings togetherOur philanthropic giving this yearour people and their families to enhanceexceeded 5 million. We awardedtheir local communities, often focusingour second annual 150,000 Globalon education. In Santa Clara, 1,500 ofImpact Award, recognizing the use ofus transformed two local schools, ourGPUs to address social, humanitarian,latest effort in an underserved districtand environmental problems. Thewhere we have directly impacted nearlywinner, from among more than twoone-third of the students in recentdozen submissions, was a team fromyears. In Pune, India, several hundredDuke University for its work enablingemployees assisted a village school.eye surgeons to interact in real timeIn Munich, we refurbished an outdoorOur culture is our greatest achievement.with live volumetric visualizations ofyouth camp.It’s allowed us to stay ahead and vibranttheir operations.in one of the world’s most competitiveOver the course of the year, employeesindustries. Today, it’s put us right inOur philanthropic efforts are drivencontributed some 17,000 volunteerthe middle of the grand challengesby the NVIDIA Foundation, which hashours. Many chose to support educationof our time—virtual reality, artificialits priorities set by our employees.programs and activities that, in total,intelligence, and self-driving cars.Its flagship program, Compute thebenefited more than 64,000 children.Cure, supports innovative computingThis reflects the spirit of our employees,These problems demand our specialtechniques to fight cancer. The morebenefiting the less fortunate and bringingtalent and deep expertise in acceleratedthan 2 million we have invested inus closer together as a team.computing. Our amazing people areinspired to take them on. And when wedo, we expect VR, AI, and self-drivingcars to be the most exciting growthdrivers we’ve ever seen. Strap in foran incredible ride.Jen-Hsun HuangCEO & Co-FounderNVIDIAApril 2016

NVIDIA CORPORATIONNOTICE OF 2016 ANNUAL MEETINGPROXY STATEMENT AND FORM 10-KFORWARD-LOOKING STATEMENTSCertain statements in this document including, but not limited to, statements as to: the PC gaming industry continuing to grow and the drivers forgrowth; the benefits and impact of our products and technologies; our market share; the future of TV and gaming; the impact of VR, AI, deeplearning and self-driving cars as drivers for growth; and our strategies and position in our focused markets are forward-looking statements thatare subject to risks and uncertainties that could cause results to be materially different than expectations. Important factors that could causeactual results to differ materially include: global economic conditions; our reliance on third parties to manufacture, assemble, package and testour products; the impact of technological development and competition; development of new products and technologies or enhancements to ourexisting product and technologies; market acceptance of our products or our partners’ products; design, manufacturing or software defects;changes in consumer preferences or demands; changes in industry standards and interfaces; unexpected loss of performance of our products ortechnologies when integrated into systems; as well as other factors detailed from time to time in the reports NVIDIA files with the Securities andExchange Commission, or SEC, including its Form 10-K for the fiscal period ended January 31, 2016. Copies of reports filed with the SEC areposted on the company’s website and are available from NVIDIA without charge. These forward-looking statements are not guarantees of futureperformance and speak only as of April 7, 2016, and, except as required by law, NVIDIA disclaims any obligation to update these forward-lookingstatements to reflect future events or circumstances.

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NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERSDate and time:Wednesday, May 18, 2016 at 10:00 a.m. Pacific Daylight TimeLocation:Online at www.virtualshareholdermeeting.com/NVIDIA2016Items of business: Election of twelve directors nominated by the Board of Directors Approval of our executive compensation Ratification of the selection of PricewaterhouseCoopers LLP as our independentregistered public accounting firm for fiscal year 2017 Approval of an amendment and restatement of our Amended and Restated 2007 EquityIncentive Plan Approval of an amendment and restatement of our Amended and Restated 2012Employee Stock Purchase PlanTransaction of other business properly brought before the meetingRecord date:You can vote at the meeting if you were a stockholder of record at the close of business onMarch 21, 2016.Virtual meetingadmission:We will be holding our annual meeting online only this year. Stockholders of record as ofMarch 21, 2016 will be able to participate in the annual meeting by 16. To participate in the annual meeting, youwill need the control number included on your notice of Internet availability of the proxymaterials or your proxy card (if you received a printed copy of the proxy materials).Pre-meeting forum:The new online format for the annual meeting also allows us to communicate more effectivelywith you via a pre-meeting forum that you can enter by visiting www.theinvestornetwork.com/forum/nvda. On our pre-meeting forum, you can submit questions in advance of the annualmeeting, and also access copies of our proxy statement and annual report.Your vote is very important. Whether or not you plan to attend the virtual meeting, PLEASE VOTE YOUR SHARES.As an alternative to voting online at the meeting, you may vote via the Internet, by telephone or, if you receive a paperproxy card in the mail, by mailing the completed proxy card.Important notice regarding the availability of proxy materials for the Annual Meeting of Stockholders to be heldon May 18, 2016. This Notice, our Proxy Statement, our Annual Report on Form 10-K and our Stockholder Letter areavailable at www.nvidia.com/proxy.By Order of the Board of DirectorsDavid M. ShannonSecretarySanta Clara, CaliforniaApril 7, 2016

TABLE OF CONTENTSDEFINITIONSPROXY SUMMARYPROXY STATEMENTInformation About the MeetingProposal 1—Election of DirectorsDirector QualificationsOur Director NomineesInformation About the Board of Directors and Corporate GovernanceIndependence of the Members of the Board of DirectorsBoard Leadership StructureRole of the Board in Risk OversightCorporate Governance Policies of the Board of DirectorsStockholder Communications with the Board of DirectorsNomination of DirectorsMajority Vote StandardBoard Meeting InformationCommittees of the Board of DirectorsDirector CompensationReview of Transactions with Related PersonsSecurity Ownership of Certain Beneficial Owners and ManagementProposal 2—Approval of Executive CompensationExecutive CompensationCompensation Discussion and AnalysisRisk Analysis of Our Compensation PlansSummary Compensation Table for Fiscal Years 2016, 2015 and 2014Grants of Plan-Based Awards For Fiscal Year 2016Outstanding Equity Awards as of January 31, 2016Option Exercises and Stock Vested in Fiscal Year 2016Employment, Severance and Change-In-Control ArrangementsPotential Payments Upon Termination or Change-In-ControlCompensation Committee Interlocks and Insider ParticipationCompensation Committee ReportProposal 3—Ratification of Selection of Independent Registered Public Accounting Firm for Fiscal Year 2017Fees Billed by the Independent Registered Public Accounting FirmReport of the Audit Committee of the Board of DirectorsEquity Compensation Plan InformationProposal 4—Approval of an Amendment and Restatement of our Amended and Restated 2007 Equity IncentivePlanProposal 5—Approval of an Amendment and Restatement of our Amended and Restated 2012 Employee StockPurchase PlanAdditional InformationSection 16(a) Beneficial Ownership Reporting ComplianceOther MattersAPPENDIX A—Amended and Restated 2007 Equity Incentive PlanAPPENDIX B—Amended and Restated 2012 Employee Stock Purchase 545556586162626363646466676884919191A-1B-1

DEFINITIONS1998 ESPP2007 PlanNVIDIA Corporation 1998 Employee Stock Purchase Plan2012 ESPP2015 MeetingNVIDIA Corporation Amended and Restated 2012 Employee Stock Purchase Plan2015 Annual Meeting of Stockholders2016 Meeting2016 Annual Meeting of Stockholders2017 Meeting2017 Annual Meeting of StockholdersACAudit CommitteeBoardThe Company’s Board of DirectorsCCCompensation CommitteeCD&ACompensation Discussion and AnalysisCEOChief Executive OfficerCompanyNVIDIA Corporation, a Delaware corporationControl NumberIdentification number for each stockholder included in Notice or Proxy CardDodd Frank ActDodd-Frank Wall Street Reform and Consumer Protection ActExchange ActExequitySecurities Exchange Act of 1934, as amendedExequity LLP, the CC’s independent compensation consultantFASBFinancial Accounting Standards BoardFiscal 2015Fiscal 2016The Company’s fiscal year 2015 (January 27, 2014 to January 25, 2015)Fiscal 2017Fiscal 2018The Company’s fiscal year 2017 (February 1, 2016 to January 29, 2017)Form 10-KThe Company’s Annual Report on Form 10-K for Fiscal 2016 filed with the SEC on March 16, 2016Full Value AwardAn equity award other than a stock option or stock appreciation rightGAAPGenerally accepted accounting principlesInternal Revenue CodeU.S. Internal Revenue Code of 1986, as amendedLead DirectorLead independent directorMY PSUsPSUs with a multi-year performance metricNASDAQNCGCThe NASDAQ Stock Market LLCNominating and Corporate Governance CommitteeNEOsNamed Executive OfficersNon-GAAP OperatingIncomeGAAP operating income adjusted for stock-based compensation, product warranty charge, acquisitionrelated costs, and restructuring and other charges, as the Company reports in its earnings materials. Thenet aggregate adjustment to GAAP operating income for these items for Fiscal 2016 was 378 millionNoticeNYSENotice of Internet Availability of Proxy MaterialsNew York Stock ExchangePSUsPerformance stock unitsRSUsRestricted stock unitsS&P 500Standard & Poor’s 500 Composite IndexSECU.S. Securities and Exchange CommissionStretch Operating PlanMaximum goal attainment under the Variable Cash Plan, SY PSUs and MY PSUsSY PSUsPSUs with a single-year performance metricTarget Compensation PlanTarget goal attainment under the Variable Cash Plan, SY PSUs and MY PSUsNVIDIA Corporation Amended and Restated 2007 Equity Incentive PlanThe Company’s fiscal year 2016 (January 26, 2015 to January 31, 2016)The Company’s fiscal year 2018 (January 30, 2017 to January 28, 2018)1

Threshold CompensationPlanTSRThreshold goal attainment under the Variable Cash Plan, SY PSUs and MY PSUsTotal stockholder returnPwCPricewaterhouseCoopers LLPVariable Cash PlanThe Company’s variable cash compensation plan2

PROXY SUMMARYThis summary highlights information contained elsewhere in the proxy statement. This summary does not contain allof the information that you should consider, and you should read the entire proxy statement carefully before voting.2016 Annual Meeting of StockholdersDate and time:Wednesday, May 18, 2016 at 10:00 a.m. Pacific Daylight TimeLocation:Online at www.virtualshareholdermeeting.com/NVIDIA2016Record date:Stockholders as of March 21, 2016 are entitled to voteAdmission to meeting: You will need your Control Number to attend the annual meetingVoting Matters and Board RecommendationsWhile we have summarized the 2016 Meeting proposals below, please review the proxy statement for more information.Every stockholder’s vote is important. Our Board urges you to vote your shares FOR each of the proposals below.MatterPage NumberBoard(for more detail) RecommendationVote Required forApprovalEffect ofEffect ofBrokerAbstentions Non-VotesManagement Proposals:Election of twelve directors . . . . . . . . . . . . . . . . . . .11FOR eachdirector nomineeMore FOR thanWITHHOLD votesNoneNoneAgainstNoneApproval of our executive compensation . . . . . . . . .32FORMajority of sharespresentRatification of selection ofPricewaterhouseCoopers LLP as our independentregistered public accounting firm for Fiscal 2017 . .64FORMajority of sharespresentAgainstNoneApproval of an amendment and restatement of ourAmended and Restated 2007 Equity Incentive Plan.68FORMajority of sharespresentAgainstNoneApproval of an amendment and restatement of ourAmended and Restated 2012 Employee StockPurchase Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .84FORMajority of sharespresentAgainstNone3

Election of Directors (Proposal 1)The following table provides summary information about each director Robert K. Burgess. . . . .582011Independent ConsultantCCTench Coxe . . . . . . . . . .581993Managing Director, Sutter Hill VenturesMemberPersis S. Drell . . . . . . . .602015Dean, School of Engineering, Stanford UniversityMemberJames C. Gaither . . . . . .781998Managing Director, Sutter Hill VenturesJen-Hsun Huang . . . . . .531993President & CEO, NVIDIA CorporationDawn Hudson . . . . . . . .582013Chief Marketing Officer, National Football LeagueHarvey C. Jones . . . . . .631993Managing Partner, Square Wave VenturesMichael G. McCaffery .622015Chairman & Managing Director, Makena Capital ManagementWilliam J. Miller**. . . .701994Independent ConsultantMark L. Perry . . . . . . . .602005Independent ConsultantA. Brooke Seawell . . . .681997Venture Partner, New Enterprise AssociatesMark A. Stevens . . . . . .562008 *** Managing Partner, S-Cubed CapitalNCGCChairMemberMemberMemberMemberMember *ChairChair *Member *MemberMember* AC Financial Expert** Lead Director*** Mr. Stevens previously served as a member of our Board from 1993 until 2006Board OverviewOur director nominees exhibit a variety of competencies, professional experience and backgrounds, and contributediverse viewpoints and perspectives to our well-rounded Board. While the Board benefits from the extensive experienceand institutional knowledge that our more veteran directors bring, the NCGC and Board have recognized the importanceof bringing in new perspectives and ideas. Therefore, the Board has appointed four highly qualified new directors in thelast five years, most recently with the additions of Dr. Drell and Mr. McCaffery in 2015. Below are the key skills andcompetencies that our NCGC and Board consider important for our directors to have in light of our current business andthe number of directors that possess these competencies:4

Corporate Governance HighlightsOur Board is committed to strong corporate governance, which is used to promote the long-term interest of NVIDIAand our stockholders. Highlights of our corporate governance practices include:Declassified BoardIndependent Lead DirectorMajority voting for directors11 out of 12 Board members independentActive Board oversight of risk and risk managementAt least annual Board and committee self-assessmentsStock ownership guidelines for our directors andexecutive officers75% or better attendance by each Board member atmeetings of the Board and applicable committeesAnnual stockholder outreach, including Lead DirectorparticipationIndependent directors frequently meet in executivesessionsRegular stockholder outreach is important to us. We seek a collaborative approach to issues of importance to ourstockholders that affect our business and also to ensure that they see our governance and executive pay practices as wellstructured. Our management contacts each stockholder holding at least 1% of our common stock (except for brokeragefirms and institutional stockholders whom we know do not engage in individual conversations with issuers) to gain valuableinsights into the corporate governance and executive compensation issues they most care about. In Fall 2015, our LeadDirector attended these meetings, and we expect representatives of the Board will continue to participate in future stockholderoutreach.Approval of Executive Compensation for Fiscal 2016 (Proposal 2)We are asking our stockholders to cast a non-binding vote, also known as “say-on-pay,” to approve our NEOcompensation. The Board believes that our compensation policies and practices are effective in achieving our goals ofattracting, motivating and retaining a high-caliber executive team, rewarding financial and operating performance andaligning our executives’ interests with those of our stockholders to create long-term value. The Board has adopted a policyof providing for annual “say-on-pay” votes.Executive Compensation HighlightsAt our 2015 Meeting, over 98% of the votes cast on our say-on-pay proposal were in support of the compensation paidto our NEOs for Fiscal 2015. Consistent with its strong commitment to engagement, communication and transparency, theCC continues to regularly review our executive compensation program to ensure alignment between the interests of ourexecutive officers and stockholders. In response to feedback received in Fiscal 2015 during our regular stockholder outreachmeetings, the CC made the following changes, each intended to further align pay with performance: MY PSUs with a relative goal: introduced PSUs with a 3-year performance measure based on our TSR relative tothe S&P 500 (prior to Fiscal 2016, all of our PSUs had an annual performance period with absolute goals) and structureda meaningful portion of our CEO’s Fiscal 2016 equity award in the form of these 3-year PSUs Separate performance metrics: assigned separate, distinct metrics for each component of our compensation wherethe amount of the award is subject to achievement of performance criteria (in Fiscal 2015, we used the same financialmetric as a goal for our Variable Cash Plan and for our PSUs)5

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Iray—technologies for physically based rendering of lighting and materials—is integrated into leading design applications, including Dassault Systèmes Catia, SOLIDWORKS Visualize, Autodesk 3DS Max and Maya, as well as McNeel Rhino and Maxon Cinema 4D. As we advance the state of the art of design, we're also extending it to more people.