Dell 2006 Annual Report Download - page 139

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Table of Contents
We did not have any special employment agreement with any of our executive officers, nor did we provide them with any
kind of contractual severance or change-in-control benefits, during Fiscal 2007. We have recently begun to implement
special employment agreements with our executive officers that contain non-solicitation and non-competition agreements
and also provide for the payment of specified severance upon termination of employment. On September 6, 2007, the
Leadership Development and Compensation Committee approved new severance arrangements for the executive officers
other than Mr. Dell. Under the new agreements, if an executive officer's employment is terminated without cause, the
executive will receive a severance payment equal to 12 months' base salary and target bonus. The agreements also obligate
each executive officer to comply with certain noncompetition and nonsolicitation obligations for a period of 12 months
following termination of employment. We previously entered into separate severance arrangements with Michael R. Cannon
and Ronald G. Garriques upon the commencement of their employment in February 2007. The new severance
arrangements will not be applicable to either Mr. Cannon or Mr. Garriques until the expiration of their current arrangements.
No executive officer severance payments would have been required as of the last business day of Fiscal 2007.
All of our equity awards contain provisions that accelerate the vesting of the awards upon the death or permanent disability
of the holder. These provisions are generally applicable to all Dell employees, including the executive officers. In addition,
the Leadership Development and Compensation Committee has authority under our stock plans to issue awards with
provisions that accelerate vesting and exercisability in the event of a change-in-control and to amend existing awards to
provide for such acceleration. To date, the committee has not elected to include change-in-control acceleration provisions in
any awards.
Other Factors Affecting Compensation
In establishing total compensation for the executive officers, the Leadership Development and Compensation Committee
considered the effect of Section 162(m) of the Internal Revenue Code, which limits the deductibility of compensation paid to
each "covered employee" (generally, the chief executive officer and the three other highest paid officers other than the chief
financial officer) to $1 million, unless it is performance based. To the extent practical, the committee intends to preserve
deductibility, but may choose to provide compensation that is not deductible if necessary to attract, retain, and reward high-
performing executives.
Compensation Committee Report
The Leadership Development and Compensation Committee has reviewed and discussed the foregoing Compensation
Discussion and Analysis with management. Based on that review and those discussions, the committee recommended to the
Board of Directors that the Compensation Discussion and Analysis be included in Dell's Annual Report on Form 10-K for the
fiscal year ended February 2, 2007, and Dell's 2007 proxy statement. This report is provided by the following independent
directors, who comprise the committee.
THE LEADERSHIP DEVELOPMENT AND
COMPENSATION COMMITTEE
MICHAEL A. MILES, Chair
ALAN (A.G.) LAFLEY
JUDY C. LEWENT
KLAUS S. LUFT
136