AMD 2004 Annual Report Download - page 114

Table of Contents
may not 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
2004 2003 2002 2004 2003 2002
Expected life (years) 3.68 3.27 3.17 0.25 0.25 0.25
Expected stock price volatility 78.33% 82.91% 84.68% 45.21% 63.66% 99.00%
Risk-free interest rate 2.74% 1.99% 2.93% 1.69% 1.49% 1.87%
The Company granted a total of 25,999,480 stock-based awards during 2004 with exercise prices equal to the closing price of its common stock on the
grant date. The weighted-average exercise price and weighted-average fair value of these awards were $14.56 and $8.20. The Company granted a total of 80,265
stock-based awards during 2004 with exercise prices greater than the closing price of its common stock on the grant date. The weighted-average exercise price
and weighted-average fair value of these awards were $14.54 and $6.34. The Company granted 41,000 stock-based awards in 2004 at less than the closing price
of its common stock on the grant date, excluding 43,000 shares of restricted stock granted in 2004 at less than closing price of its common stock on the grant
date. The weighted-average exercise price and weighted-average fair value of these awards were $1.39 and $13.61.
The Company granted a total of 5,566,484 stock-based awards during 2003 with exercise prices equal to the closing price of its common stock on the grant
date. The weighted-average exercise price and weighted-average fair value of these awards were $9.46 and $5.67. The Company granted a total of 8,745
stock-based awards during 2003 with exercise prices greater than the closing price of its common stock on the grant date. The weighted-average exercise price
and weighted-average fair value of these awards were $9.54 and $4.05. The Company did not grant stock-based awards during 2003 with exercise prices less
than the closing price of its common 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 closing price of its common stock on the
grant date. The weighted-average exercise price and weighted-average fair value of these awards were $9.86 and $5.48. The Company granted a total of 114,980
stock-based awards during 2002 with exercise prices greater than the closing price of its common stock on the grant date. The weighted-average exercise price
and weighted-average fair value of these awards were $12.73 and $5.89. The Company granted a total of 186,157 stock-based awards during 2002 with exercise
prices less than the closing price of its common stock on the grant date. The weighted-average exercise price and weighted-average fair value of these awards
were $0.08 and $13.70.
NOTE 11: Other Employee Benefit Plans
Profit Sharing Program. The Company has a profit sharing program to which the Board of Directors may authorize quarterly contributions. All
employees who have worked with the Company for three months or more are eligible to participate in this program. Profit sharing expense was approximately
$14 million in 2004 and $4 million in 2003. There was no profit sharing expense in 2002.
Retirement Savings Plan. The Company has a retirement savings plan, commonly known as a 401(k) plan, that allows participating employees in the
United States to contribute up to 100 percent of their pre-tax salary subject to Internal Revenue Service limits. The Company matches employee contributions at
a rate of 50 cents on each dollar of the first six percent of participants’ contributions, to a maximum of three percent of eligible compensation. The Company’s
contributions to the 401(k) plan were approximately $12 million in 2004, $10 million in 2003 and $14 million in 2002.
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Source: ADVANCED MICRO DEVIC, 10-K, March 01, 2005