AMD 2005 Annual Report Download - page 57

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Table of Contents
In-the-money and out-of-the-money stock option information as of December 25, 2005, was as follows:
Exercisable
Unexercisable
Total
Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price Shares
Weighted
Average
Exercise
Price
(In thousands except share price)
In-the-Money 35,470,046 $ 14.02 9,094,702 N/A(3) 44,564,748 $ 14.41
Out-of-the-Money(1) 1,361,496 $ 38.97 2,000 N/A(3) 1,363,496 $ 38.97
Total Options Outstanding 36,831,542 $ 14.94 9,096,702 N/A(3) 45,928,244(2) $ 15.14
(1) Out-of-the-money stock options have an exercise price equal to or above $30.50, the closing price of AMD’s common stock, on December 23, 2005, the
last trading day of fiscal year 2005.
(2) Includes 69,396 shares outstanding from treasury stock as non-plan grants.
(3) Weighted average exercise price information is not available.
Section III. Distribution and Dilutive Effect of Options
Options granted to employees, including officers, and non-employee directors were as follows:
Fiscal
2005
Fiscal
2004
Fiscal
2003
Net grants(1) during the period as % of outstanding shares(2) 2.11% 5.79% (4.87)%
Grants to listed officers(3) during the period as % of total awards granted 14.22% 3.59% 11.77%
Grants to listed officers during the period as % of outstanding shares 0.30% 0.24% 0.19%
Cumulative options and awards held by listed officers as % of total options
and awards outstanding 16.85% 11.94% 22.90%
(1) Grants are net of canceled awards.
(2) Outstanding shares as of December 25, 2005, December 26, 2004 and December 28, 2003.
(3) The “listed officers” are those executive officers listed in the summary compensation table in our proxy statements for our annual meeting of stockholders
held in 2005, 2004 and 2003.
Recently Issued Accounting Pronouncements
In December 2004, the Financial Accounting Standard Board (FASB) issued a revision to Statement of Financial Accounting Standard No. 123,
“Accounting for Stock-Based Compensation” (SFAS 123R). SFAS 123R eliminates our ability to use the intrinsic value method of accounting under APB
Opinion 25, “Accounting for Stock Issued to Employees,” and generally requires a public entity to reflect on its income statement, instead of pro forma
disclosures in its financial footnotes, the cost of employee services received in exchange for an award of equity based on the grant-date fair value of the award.
The grant-date fair value will be estimated using option-pricing models adjusted for the unique characteristics of those equity instruments. Among other things,
SFAS 123R also requires entities to estimate the number of instruments for which the requisite service is expected to be rendered and, if the terms or conditions
of an equity award are modified after the grant date, to recognize incremental compensation cost for such a modification by comparing the fair value of the
modified award with the fair value of the award immediately before the modification. In addition, SFAS 123R amends FASB Statement No. 95, “Statement of
Cash Flows,” to require that excess tax benefits be reported as a financing cash inflow rather than as a reduction of taxes paid. We will adopt SFAS 123R in the
first quarter of 2006. SFAS 123R applies to all awards granted after the required effective date and to awards modified, repurchased, or cancelled after that date.
52
Source: ADVANCED MICRO DEVIC, 10-K, February 27, 2006