Dell 1997 Annual Report Download - page 41

earnings during calendar 1997.
Deferred Compensation Plan -- The Company maintains a deferred compensation
plan, pursuant to which certain members of management (including the executive
officers) may elect to defer a portion of annual compensation. The Company
matches 100% of the employee's voluntary contributions not in excess of 3% of
annual compensation. The funds attributable to a participant (including
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voluntary contributions and matching contributions) are invested among various
funds designated by the plan administrator. Upon the death or retirement of a
participant, the funds attributable to the participant (including any earnings
on contributions) are distributed to the participant or the participant's
beneficiary in a lump sum or in annual, quarterly or monthly installments over a
period of up to ten years. A participant whose employment with the Company is
terminated prior to death or retirement is entitled to receive his or her
contributions to the plan (and any earnings thereon) but is entitled to receive
the Company's matching contributions only if he or she has completed four years
of service with the Company.
Employee Stock Purchase Plan -- The Company maintains an employee stock purchase
plan that qualifies under Section 423 of the Internal Revenue Code and permits
substantially all employees to purchase shares of the Company's common stock.
Participating employees may purchase common stock at the end of each
participation period at a purchase price equal to 85% of the lower of the fair
market value of the common stock at the beginning or the end of the
participation period. Participation periods are semi-annual and begin on January
1 and July 1 of each year. Employees may designate up to 15% of their base
compensation for the purchase of common stock under the plan.
Employment Agreements and Change-in-Control Arrangements -- Each of the Named
Executive Officers has entered into an employment agreement with the Company.
For the Named Executive Officers other than Mr. Dell, such employment agreements
do not contain any provisions regarding compensation or continued employment and
are identical in all material respects to those contained in the employment
agreement entered into by all the Company's employees upon the commencement of
their employment with the Company. Mr. Dell's employment agreement provides for
continued employment for successive one-year terms, subject to termination at
any time at the option of Mr. Dell upon 30 days' written notice.
Under the terms of the Incentive Plan and the Company's prior stock option
plans, the Compensation Committee, if it so chooses, may issue awards with
provisions that accelerate vesting and exercisability in the event of a
change-in-control of the Company and may amend existing awards to provide for
such acceleration. To date, the Compensation Committee has not elected to
include such acceleration provisions in any awards.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Miles, Mr. Hirschbiel and Mr. Jordan served as members of the Compensation
Committee of the Company's Board of Directors during all of fiscal 1998, and Mr.
Mandl has been serving as a member of the Compensation Committee since his
election to the Board of Directors in November 1997. None of such persons is an
officer or employee, or former officer or employee, of the Company or any of its
subsidiaries. No interlocking relationship exists between the members of the
Company's Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company, nor has any such
interlocking relationship existed in the past.
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ITEM 12 -- SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information about the beneficial ownership of the
Company's common stock (the only class of voting securities of the Company
outstanding) by the persons known to the Company to be the beneficial owners of
more than 5% of the outstanding common stock, by each of the Company's
directors, by each Named Executive Officer and by all of the Company's directors
and executive officers as a group. To the best of the Company's knowledge, each
such person holds sole investment and voting power over the shares shown, except
as otherwise indicated.
AMOUNT AND NATURE PERCENTAGE
OF BENEFICIAL OF
BENEFICIAL OWNER OWNERSHIP(A) CLASS (B)
---------------- ----------------- ----------
Michael S. Dell............................................. 103,047,382(c)(d) 16.1%
One Dell Way
Round Rock, Texas 78682-2244
Alliance Capital Management L.P............................. 35,925,662(e) 5.5%
787 Seventh Avenue
New York, New York 10019
Donald J. Carty............................................. 235,200(c) *