Dell 2011 Annual Report Download - page 103

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Table of Contents DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Stock-based Compensation Expense
Stock-based compensation expense was allocated as follows:
Fiscal Year Ended
February 3,
2012 January 28,
2011 January 29,
2010
(in millions)
Stock-based compensation expense:
Cost of net revenue $ 59 $ 57 $ 47
Operating expenses 303 275 265
Stock-based compensation expense before taxes 362 332 312
Income tax benefit (108) (97) (91)
Stock-based compensation expense, net of income taxes $ 254 $ 235 $ 221
Employee Benefit Plans
401(k) Plan — Dell has a defined contribution retirement plan (the “401(k) Plan”) that complies with Section 401(k) of the Internal Revenue Code.
Substantially all employees in the U.S. are eligible to participate in the 401(k) Plan. Effective January 1, 2008, Dell matches 100% of each participant's
voluntary contributions, subject to a maximum contribution of 5% of the participant's compensation, and participants vest immediately in all Dell
contributions to the 401(k) Plan. Dell's contributions during Fiscal 2012 , Fiscal 2011 , and Fiscal 2010 were $153 million , $132 million , and $91 million ,
respectively. Dell's contributions are invested according to each participant's elections in the investment options provided under the Plan. Investment options
include Dell common stock, but neither participant nor Dell contributions are required to be invested in Dell common stock. During Fiscal 2010, Dell also
contributed $4 million to Perot Systems' 401(k) Plan (the "Perot Plan") after the acquisition of the company on November 3, 2009. The Perot Plan was merged
into the 401(k) Plan during Fiscal 2011.
Deferred Compensation Plan — Dell has a non-qualified deferred compensation plan (the “Deferred Compensation Plan”) for the benefit of certain
management employees and non-employee directors. The Deferred Compensation Plan permits the deferral of base salary and annual incentive bonus. The
deferrals are held in a separate trust, which has been established by Dell to administer the Plan. The assets of the trust are subject to the claims of Dell's
creditors in the event that Dell becomes insolvent. Consequently, the trust qualifies as a grantor trust for income tax purposes (known as a “Rabbi Trust”). In
accordance with the accounting provisions for deferred compensation arrangements where amounts earned are held in a Rabbi Trust and invested, the assets
and liabilities of the Deferred Compensation Plan are presented in Long-term investments and Accrued and other liabilities, respectively, in the Consolidated
Statements of Financial Position. The assets held by the trust are classified as trading securities with changes recorded to Interest and other, net. These assets
were valued at $105 million at February 3, 2012, and are disclosed in Note 3 of the Notes to Consolidated Financial Statements. Changes in the deferred
compensation liability are recorded to compensation expense.
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