AMD 2012 Annual Report Download - page 112

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Restricted Stock. Restricted stock awards can be granted to any employee, director or consultant. The
purchase price for an award of restricted stock is $0.00 per share. Restricted stock based on continued service
may fully vest with no minimum time requirements. Restricted stock that is performance based generally may
not fully vest for at least one year from the date of grant.
Restricted Stock Units. Restricted stock units are awards that can be granted to any employee, director or
consultant and that obligate the Company to issue a specific number of shares of the Company’s common stock
in the future if the vesting terms and conditions are satisfied. The purchase price for the shares is $0.00 per share.
Restricted stock units based on continued service may fully vest with no minimum time requirements. Restricted
stock units that are performance based generally do not vest for at least one year from the date of grant.
Market-based Restricted Stock Units and Stock Options. During 2012, the Company granted restricted
stock units with both a market condition and a service condition (market-based restricted stock units) to the
Company’s executive officers. The market-based condition for these awards requires that AMD common stock
maintains a weighted-average closing price during the three-year vesting period of equal to or greater than
$10.00 per share over any 30-day period. Provided the market-based condition is satisfied and the respective
executive officer remains an employee of the Company, the grants will vest in three equal annual installments on
the applicable vesting date.
During 2011, the Company granted market-based restricted stock units and stock options to the Company’s
President and Chief Executive Officer, whom the Company hired in August 2011. The market-based condition
for these awards requires that AMD common stock maintains a weighted-average closing price during the
three-year vesting period of equal to or greater than $11.00 per share over any 30-day period. Provided the
market-based condition is satisfied and the Company’s President and CEO remains an employee of the
Company, the grants will vest in three equal annual installments on the applicable vesting date.
The Company estimated the fair value of market-based restricted stock units and stock options using a
Monte Carlo simulation model on the date of grant. As of December 29, 2012, there were 1,756,000 market-
based restricted stock units and 739,000 market-based stock options outstanding with a grant date fair value of
$7.1 million and $2.0 million, respectively.
Valuation and Expense Information
Stock-based compensation expense related to employee stock options, restricted stock and restricted stock
units was allocated in the consolidated statements of operations as follows:
2012 2011 2010
(In millions)
Cost of sales ...................................................... $ 8 $ 6 $ 4
Research and development ........................................... 52 46 46
Marketing, general, and administrative ................................. 37 38 37
Total stock-based compensation expense, net of tax of $0 .................. $97 $90 $87
During 2012, 2011 and 2010, the Company did not realize any excess tax benefits related to stock-based
compensation and therefore the Company did not record any related financing cash flows. The Company did not
capitalize stock-based compensation cost as part of the cost of an asset because the cost was immaterial.
The Company uses the lattice-binomial model in determining the fair value of the employee stock options.
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