Dell 2006 Annual Report Download - page 90

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Share Repurchase Program — Dell has a share repurchase program that authorizes it to purchase shares of common stock
in order to increase shareholder value and manage dilution resulting from shares issued under Dell's equity compensation
plans. However, Dell does not currently have a policy that requires the repurchase of common stock in conjunction with
stock-based payment arrangements. At February 2, 2007, Dell's share repurchase program authorized the purchase of
common stock at an aggregate cost not to exceed $30.0 billion. As of the end of Fiscal 2007, Dell had cumulatively
repurchased 1.5 billion shares for an aggregate cost of approximately $28.6 billion. During Fiscal 2007, Dell repurchased
approximately 118 million shares of common stock for an aggregate cost of $3.0 billion before temporarily suspending the
share repurchase program in September 2006. Dell expects to recommence its share repurchase program in the fourth
quarter of Fiscal 2008.
Preferred Share Purchase Rights
In December 1995, Dell distributed a dividend of one Preferred Share Repurchase Right for each outstanding share of
common stock. Dell issued shares of common stock with accompanying Preferred Share Purchase Rights until the rights
expired on November 29, 2005.
NOTE 6 — Benefit Plans
Description of the Plans
Employee Stock Purchase Plan — Dell has a shareholder approved employee stock purchase plan ("ESPP") that permits
substantially all employees to purchase shares of Dell's common stock. Prior to July 1, 2005, participating employees were
permitted to purchase common stock through payroll deductions at the end of each six-month 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. Effective July 1, 2005, the plan was amended to allow participating employees to purchase common
stock through payroll deductions at the end of each three-month participation period at a purchase price equal to 85% of the
fair market value of the common stock at the end of the participation period. Upon adoption of SFAS 123(R) in Fiscal 2007,
Dell began recognizing compensation expense for the 15% discount received by the participating employees. Common stock
reserved for future employee purchases under the plan aggregated 10 million shares at February 2, 2007, 16 million shares
at February 3, 2006, and 21 million shares at January 28, 2005. Common stock issued under this plan totaled 6 million
shares in Fiscal 2007, 5 million shares in Fiscal 2006, and 4 million shares in Fiscal 2005. The weighted-average fair value of
the purchase rights under the ESPP during Fiscal 2007, Fiscal 2006, and Fiscal 2005 was $3.89, $6.30, and $9.77 per right,
respectively.
Employee Stock Plans — Dell has the following four employee stock plans (collectively referred to as the "Stock Plans")
under which options, restricted stock, and restricted stock units were outstanding at February 2, 2007:
• The Dell Computer Corporation 1989 Stock Option Plan (the "1989 Option Plan")
• The Dell Computer Corporation Incentive Plan (the "1994 Incentive Plan")
• The Dell Computer Corporation 1998 Broad-Based Stock Option Plan (the "1998 Broad-Based Plan"),
• The Dell Computer Corporation 2002 Long-Term Incentive Plan (the "2002 Incentive Plan")
The Stock Plans are administered by the Leadership Development and Compensation Committee of Dell's Board of
Directors. The 1989 Option Plan, the 1994 Incentive Plan, and the 1998 Broad-Based Plan have been terminated (except for
options previously granted under those plans that are still outstanding). Consequently, awards are currently only being
granted under the 2002 Incentive Plan.
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