AMD 2003 Annual Report Download - page 92

Table of Contents
48,291 shares without issuance and the Company has issued 370,524 shares pursuant to prior agreements. As of December 28, 2003, agreements covering 18,425
shares were outstanding. Activity under this plan is included in the accompanying tables summarizing activity under the Company’s employee stock plans.
Shares Reserved for Issuance. The Company had a total of approximately 77,337,831 shares of common stock reserved as of December 28, 2003 for
issuance under employee stock option plans and the ESPP, including restricted stock awards.
Stock-Based Compensation—Pro Forma Disclosures. For pro forma disclosure purposes only, the Company estimates the fair value of its stock-based
awards to employees using a Black-Scholes option pricing model. The Black-Scholes model was developed for use in estimating fair value of traded options that
have no vesting restrictions and are fully transferable. In addition, the Black-Scholes model requires the input of highly subjective assumptions including
expected stock price volatility. Because our stock-based awards to employees have characteristics significantly different from those of traded options, and
because changes in the subjective input assumptions can materially affect the fair value estimate, in management’s opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of our stock-based awards to employees. The fair value of our stock-based awards to employees
was estimated assuming no expected dividends and the following weighted-average assumptions:
Options ESPP
2003 2002 2001 2003 2002 2001
Expected life (years) 3.27 3.17 3.02 0.25 0.25 0.25
Expected stock price volatility 82.91% 84.68% 83.43% 63.66% 99.00% 85.03%
Risk-free interest rate 1.99% 2.93% 3.57% 1.49% 1.87% 2.58%
The Company granted a total of 5,566,484 stock-based awards during 2003 with exercise prices equal to the market price of the stock on the grant date.
The weighted-average exercise price and weighted-average fair value of these awards were $9.46 and $5.67, respectively. The Company granted a total of 8,745
stock-based awards during 2003 with exercise prices greater than the market price of the stock on the grant date. The weighted-average exercise price and
weighted-average fair value of these awards were $9.54 and $4.05, respectively. The Company did not grant stock-based awards during 2003 with exercise prices
less than the market price of the stock on the grant date.
The Company granted a total of 11,527,551 stock-based awards during 2002 with exercise prices equal to the market price of the stock on the grant date.
The weighted-average exercise price and weighted-average fair value of these awards were $9.86 and $5.48, respectively. The Company granted a total of
114,980 stock-based awards during 2002 with exercise prices greater than the market price of the stock on the grant date. The weighted-average exercise price
and weighted-average fair value of these awards were $12.73 and $5.89, respectively. The Company granted a total of 186,157 stock-based awards during 2002
with exercise prices less than the market price of the stock on the grant date. The weighted-average exercise price and weighted-average fair value of these
awards were $0.08 and $13.70, respectively. The Company granted a total of 13,870,950 stock-based awards during 2001 with exercise prices equal to the
market price of the stock on the grant date. The weighted-average exercise price and weighted-average fair value of these awards were $16.93 and $9.27,
respectively. The Company granted a total of 157,476 stock-based awards during 2001 with exercise prices greater than the market price of the stock on the grant
date. The weighted-average exercise price and weighted-average fair value of these awards were $21.21 and $0.11, respectively. The Company granted a total of
59,115 stock-based awards during 2001 with exercise prices less than the market price of the stock on the grant date. The weighted-average exercise price and
weighted-average fair value of these awards were $1.08 and $22.54, respectively.
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004