Dell 2006 Annual Report Download - page 128

Table of Contents
unvested options vest immediately upon death or permanent disability. The options terminate ten years from the date of grant unless terminated
earlier as follows: all options (vested and unvested) terminate immediately if the director resigns at the request or demand of the Board or is
otherwise removed from the Board; if the director ceases to be a member of the Board by reason of death, permanent disability, or retirement
after attaining the age of 72, vested options remain exercisable for one year; if the director resigns for any other reason, vested options remain
exercisable for 90 days. The options are transferable to family members under specified conditions. The exercise price of the options is the fair
market value of Dell common stock on the date of grant ($26.36 for the award to Mr. Luce on December 7, 2006, and $19.55 for the awards to
the other non-employee directors on July 21, 2006). The grant date fair value for these awards, computed in accordance with SFAS 123(R), was
$104,367 for each of the Annual Stock Option Awards; $208,735 for each of the New Director Stock Option Awards granted to Ms. Krawcheck
and Mr. Lafley; and $174,884 for the New Director Stock Option Award granted to Mr. Luce.
The restricted stock included in the Restricted Stock in Lieu of Retainer column was granted pursuant to the director's election to receive
restricted stock in lieu of some or all of the $75,000 annual cash retainer. This stock was fully vested at grant, but may not be sold or transferred
for six months following the grant. The number of shares was determined by dividing the foregone retainer amount by the fair market value of
Dell common stock on the date of grant ($19.55). The grant date fair value for these awards, computed in accordance with SFAS 123(R), was
equal to the amount of the foregone retainer ($37,500 in the case of Mr. Gray and $75,000 in the case of each other director who elected this
option).
The following table sets forth the number of shares of restricted stock and the number of shares underlying stock options held by each of the
non-employee directors as of the end of Fiscal 2007:
Name Restricted Stock Stock Options
Mr. Carty 6,576 342,376
Mr. Gray 6,576 83,375
Ms. Krawcheck 11,832 47,325
Mr. Lafley 11,832 47,325
Ms. Lewent 6,576 157,669
Mr. Luce 5,850 37,208
Mr. Luft 6,576 165,091
Mr. Mandl 6,576 167,704
Mr. Miles 6,576 361,402
Mr. Nunn 6,576 182,549
The information for Mr. Carty reflects awards he received in his capacity as a director, prior to becoming an executive officer. For information
regarding awards he received as an executive officer, see "Compensation of Executive Officers" below.
(b) These awards were made to Mr. Carty as a member of the Board prior to his becoming an executive officer. As an executive officer, he is no
longer eligible for additional compensation for service on the Board. For a description of Mr. Carty's compensation as an executive officer, see
"Compensation of Executive Officers" below.
(c) To afford Mr. Luft, a resident of Germany, a comparable compensation benefit under local law, all awards designated as restricted stock awards
were made in the form of restricted stock units with the same vesting and expiration provisions as the restricted stock.
Compensation of Executive Officers
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis is designed to provide stockholders with an understanding of our compensation
philosophy, core principles, and decision making process. It discusses the Leadership Development and Compensation
Committee's determinations of how and why, in addition to what, compensation actions were taken for the executive officers
who are identified in the Summary Compensation Table below (the "Named Executive Officers").
Specifically, the Leadership Development and Compensation Committee has the responsibilities listed below. For more
information about the committee's role, see the committee's charter, which can be found on our website at www.dell.com/
corporategovernance.
• Reviewing with management and approving the compensation philosophy and core objectives for executive officers;
• Evaluating the performance of the Chairman and Chief Executive Officer in light of the current business environment and
our strategic objectives;
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