AMD 2008 Annual Report Download - page 151

period. Beginning with the November 2007 purchase period the Company temporary suspended its ESPP
program and indefinitely suspended the program on December 3, 2008. A summary of stock purchased under the
ESPP for the specified fiscal years is shown below:
Year Ended
December 29,
2007
Year Ended
December 31,
2006
Aggregate purchase price (in millions) ................... $ 51 $ 30
Shares purchased (in thousands) ........................ 4,385 1,550
Based on the Black-Scholes option pricing model, the weighted-average fair value of rights granted under
the Company’s ESPP during 2007 and 2006 were $3.11 and $6.14 per share. The underlying assumptions used in
the model for 2007 and 2006 ESPP purchases are outlined in the following table:
ESPP
Year Ended
December 29,
2007
Year Ended
December 31,
2006
Expected life (years) ................................. 0.25 0.25
Expected stock price volatility .......................... 37.1% 51.1%
Risk-free interest rate ................................. 4.92% 4.89%
Shares Reserved for Issuance. The Company had a total of approximately 5.7 million shares of common
stock as of December 27, 2008 that were available for future grants under the 2004 Plan and 69.5 million shares
reserved for issuance upon the exercise of outstanding stock options or the vesting of unvested restricted stock
awards (including restricted stock units and awards) under the 2004 Plan, the Company’s prior equity
compensation plans and the assumed ATI plans. In addition, the Company had approximately 4.4 million shares
reserved under the ESPP, which was suspended indefinitely in December 2008.
NOTE 12: Other Employee Benefit Plans
Profit Sharing Program. The Company has a profit sharing program to which the Company may authorize
quarterly contributions. All employees, other than officers, who have worked with the Company for three months
or more, are eligible to participate in this program. There was no profit sharing expense in 2008 and 2007. Profit
sharing expense was approximately $50 million in 2006.
Effective in 2009, the Corporate Bonus Plan will take the place of the Profit Sharing program for the
majority of employees. All full-time employees will be eligible for this program with the exception of those
participating in the sales incentive plan. As a result, there will be a substantial increase in the number of people
eligible to participate in the Corporate Bonus Plan, and will allow employees to share in the Company’s financial
success based on company and individual performance.
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 3 percent of eligible
compensation. The Company’s contributions to the 401(k) plan were approximately $15 million in 2008, $15
million in 2007 and $10 million in 2006.
In 2009, the Company decided to suspend the company match for its 401(k) plan, effective February 2, 2009
due to the global economic climate and the Company’s financial performance. The Company will continue to
monitor the macro-economic environment and its performance in determining whether to reinstate the
Company’s 401(k) matching program.
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