AMD 2000 Annual Report Download - page 417

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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(Thousands except employee participants) 2000 1999 1998
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Aggregate purchase price $ 12,388 $ 13,294 $ 14,949
Shares purchased 815 861 952
Employee participants 2,490 2,273 3,037
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Stock Appreciation Rights. The Company may grant stock appreciation rights
(SARs) to key employees under the 1992 stock incentive plan. The number of SARs
exercised plus common stock issued under the stock option plans may not exceed
the number of shares authorized under the stock option plans. The Company may
grant SARs in tandem with outstanding stock options, in tandem with future stock
option grants or independently of any stock options. Generally, the terms of
SARs granted under the plan are similar to those of options granted under the
stock option plans, including exercise prices, exercise dates and expiration
dates. To date, the Company has granted only limited SARs, which become
exercisable in the event of certain changes in control of AMD.
Restricted Stock Awards. The Company established the 1987 restricted stock award
plan under which the Company was authorized to issue up to four million shares
of common stock to employees, subject to terms and conditions determined at the
discretion of the Board of Directors. The Company entered into agreements to
issue 30,000 shares in 1997. The 1987 plan expired in 1997. To date, the Company
has canceled agreements covering 384,436 shares without issuance and the Company
has issued 4,331,016 shares pursuant to prior agreements. As of December 31,
2000, agreements covering 65,120 shares were outstanding. Outstanding awards
vest under varying terms within five years.
In 1998, the Company adopted the 1998 stock incentive plan under which the
Company was authorized to issue two million shares of common stock to employees
who are not covered by Section 16 of the Securities Exchange Act of 1934, as
amended Exchange Act, subject to terms and conditions determined at the
discretion of the Board of Directors. To date, the Company has canceled
agreements covering 38,000 shares without issuance and the Company has issued
202,810 shares pursuant to prior agreements. As of December 31, 2000, agreements
covering 252,210 shares were outstanding.
Shares Reserved for Issuance. The Company had a total of approximately
86,772,032 shares of common stock reserved as of December 31, 2000 for issuance
related to our Convertible Subordinated Notes, the employee stock option plans,
the ESPP and the restricted stock awards.
Stock-Based Compensation. The Company uses the intrinsic value method to account
for stock-based awards to employees. The Company estimated 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 the fair value of traded
options which have no vesting restrictions and are fully transferable. In
addition, the Black-Scholes model requires the input of highly subjective
assumptions including the 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
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001