Dell 2009 Annual Report Download - page 97

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The weighted-average fair value of stock options was determined based on the Black-Scholes option pricing model weighted for all
grants utilizing the assumptions in the following table:
Fiscal Year Ended
January 29, January 30, February 1,
2010 2009 2008
Expected term 4.5 years 3.6 years 3.5 years
Risk-free interest rate (U.S. Government Treasury Note) 1.8% 2.3% 4.4%
Volatility 44% 37% 27%
Dividends 0% 0% 0%
Employee Benefits
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 2010, 2009, and 2008
were $91 million, $93 million, and $76 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 $4.2 million to Perot Systems'
401(k) Plan after the acquisition of the company on November 3, 2009.
Deferred Compensation Plan — Dell has a nonqualified 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 in the Consolidated Statements of Financial Position,
respectively. The assets held by the trust are classified as trading securities with changes recorded to interest and other, net. These assets
are valued at $90 million and are disclosed in Note 3 of Notes to Consolidated Financial Statements. Changes in the deferred
compensation liability are recorded to compensation expense.
NOTE 14 — SEGMENT INFORMATION
Dell's four global business segments are Large Enterprise, Public, Small and Medium Business ("SMB"), and Consumer. Large
Enterprise includes sales of IT infrastructure and service solutions to large global and national corporate customers. Public includes sales
to educational institutions, governments, health care organizations, and law enforcement agencies, among others. SMB includes sales of
complete IT solutions to small and medium-sized businesses. Consumer includes sales to individual consumers and retailers around the
world. Reference to Commercial business refers to Large Enterprise, Public, and Small and Medium Business.
The business segments disclosed in the accompanying Consolidated Financial Statements are based on this organizational structure and
information reviewed by Dell's management to evaluate the business segment results. Dell's measure of segment operating income for
management reporting purposes excludes severance and facility closure expenses, broad based long-term incentives, acquisition-related
charges, and amortization of intangibles.
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