Dell 1997 Annual Report Download - page 39

amount paid by the Company for term life insurance coverage under health and
welfare plans available to all Company employees.
(e) In accordance with the terms of the ESOIP, Mr. Topfer, Mr. Rollins and Mr.
Meredith each elected to receive discounted stock options in lieu of 100% of
his annual bonus, and Mr. Kelly elected to receive discounted stock options
in lieu of 30% of his annual bonus. The amount shown represents the amount
of the annual bonus awarded, whether paid or foregone in lieu of discounted
options. In lieu of the foregone amounts, those persons received options
covering the following number of shares: Mr. Topfer, 157,016; Mr. Rollins,
88,396; Mr. Meredith, 80,134; and Mr. Kelly, 13,640. The options were
granted on March 20, 1998 and have an exercise price of $50.95 (which was
80% of the market value of the common stock on that date). These options are
subject to a one-year vesting period and, accordingly, do not vest and are
not exercisable until the first anniversary of the date of grant.
Incentive Plan Awards -- The Company's Incentive Plan provides for the granting
of incentive awards in the form of stock options, stock appreciation rights,
stock and cash to directors, executive officers and key employees of the Company
and its subsidiaries and certain other persons who provide consulting or
advisory services to the Company. Pursuant to an amendment to the Incentive Plan
that was approved by the stockholders at last year's annual meeting, the number
of shares of the Company's common stock that may be issued pursuant to awards
under the Incentive Plan is automatically increased at the beginning of each
fiscal year, beginning with fiscal 1999 and ending with fiscal 2003. The number
of additional shares that will be available for awards at the beginning of any
such fiscal year will be equal to 4% of the following amount: the total number
of issued and outstanding shares of common stock as of the end of the
immediately preceding fiscal year, plus the total number of shares of common
stock repurchased by the Company during the immediately preceding fiscal year
under the Company's stock repurchase program. That percentage will be increased
to 5% if the total shareholder return (consisting of increase in stock price
plus dividends paid) achieved by the Company during the immediately preceding
fiscal year exceeds the average total shareholder return achieved by the
companies included in the S&P Computer Systems Index during the immediately
preceding fiscal year. As of the beginning of fiscal 1999, an aggregate of
162,701,660 shares of common stock were authorized for issuance pursuant to
awards under the Incentive Plan (including 35,654,140 shares that were added at
the beginning of fiscal 1999 under the formula described above) and 45,728,576
shares remained available for issuance under Incentive Plan awards.
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No restricted stock was awarded to any of the Named Executive Officers during
fiscal 1998. The following table sets forth information about stock option
grants made to the Named Executive Officers during fiscal 1998. The Company has
not made any awards of stock appreciation rights to any of the Named Executive
Officers.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------------------
NUMBER PERCENTAGE OF
OF SHARES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE GRANT EXPIRATION PRESENT
NAME GRANTED(A) FISCAL YEAR PER SHARE DATE DATE VALUE(B)
---- ---------- ------------- --------- -------- ---------- -----------
Mr. Dell............. 2,000,000 9.16% $ 18.531 3-5-97 3-5-07 $31,244,700
1,200,000 5.49 37.040 7-18-97 7-18-07 35,784,810
Mr. Topfer........... 309,388(c) 1.42 13.338 3-21-97 3-21-07 6,294,746
150,000 0.69 37.040 7-18-97 7-18-07 4,473,101
Mr. Rollins.......... 100,000 0.46 37.040 7-18-97 7-18-07 2,982,068
300,000 1.37 40.625 12-22-97 12-22-07 10,020,015
Mr. Meredith......... 163,516(c) 0.75 13.338 3-21-97 3-21-07 3,326,864
80,000 0.37 37.040 7-18-97 7-18-07 2,385,654
Mr. Kelly............ 45,516(c) 0.21 13.338 3-21-97 3-21-07 926,059
60,000 0.27 37.040 7-18-97 7-18-07 1,789,241
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(a) Unless otherwise noted, these options will vest and become exercisable with
respect to one-fifth of the underlying shares on each of the first five
anniversaries of the date of grant.
(b) Calculated using the Black-Scholes model. The material assumptions and
adjustments incorporated into the Black-Scholes model in making such
calculations include the following: (1) an interest rate representing the
interest rate on U.S. Treasury securities with a maturity date
corresponding to the option term; (2) volatility determined using daily
prices for the Company's common stock during the five-year period
immediately preceding date of grant; (3) a dividend rate of $0; and (4) in
each case (other than the ESOIP options described in note (c) below), a