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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No.     )

Dell Computer Corporation

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

      Payment of Filing Fee (Check the appropriate box):

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NOTICE OF ANNUAL MEETING

AND

PROXY STATEMENT

2003

May      , 2003

Dear Fellow Stockholders:

On behalf of the Board of Directors, it is my pleasure to invite you to Dell’s 2003 Annual Meeting of Stockholders. The meeting will be held on Friday, July 18, 2003, at 8:00 a.m. Central Time, in Exhibit Halls 1, 2 and 3 of the Austin Convention Center, 500 E. Cesar Chavez, Austin, Texas 78701. For your convenience, we are also offering a Webcast of the meeting. If you choose to view the Webcast, go to www.dell.com/investor shortly before the meeting time and follow the instructions provided. If you miss the meeting, you can view a replay of the Webcast on that site until August 15, 2003.

You will find information regarding the matters to be voted on in the attached Notice of Annual Meeting and Proxy Statement. A copy of our Annual Report on Form 10-K and a copy of the brochure entitled “Dell Fiscal 2003 in Review” are enclosed with these materials. We are also pleased to offer you the opportunity to receive future stockholder communications electronically. By signing up for electronic delivery, you can receive stockholder communications faster and can help us reduce our printing and mailing costs. For more information, see “Electronic Delivery of Stockholder Communications” on page ii inside.

This meeting is for Dell stockholders. If you attend the meeting in person, you will need to present the enclosed admission ticket, a recent account statement or other proof that you own Dell stock and proper photo identification. If you have received your materials electronically, you may request a ticket from www.proxyvote.com, or you may receive a ticket at the door by presenting identification and an account statement showing your ownership of Dell stock.

Whether or not you plan to attend the meeting in person, please submit your vote using one of the voting methods described in the attached materials. Submitting your voting instructions by any of these methods will not affect your right to attend the meeting and vote in person should you so choose.

If you have any questions concerning the meeting, please contact Dell’s Investor Relations Department at (512) 728-7800 or www.dell.com/investor. For questions regarding your stock ownership, you may contact our transfer agent, American Stock Transfer & Trust Company, at (800) 937-5449 or www.amstock.com.

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DELL COMPUTER CORPORATION

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

Stockholders will also transact any other business properly brought before the meeting. At this time, the Board of Directors knows of no other proposals or matters to be presented.

This Proxy Statement is accompanied by a copy of the Annual Report on Form 10-K and a copy of the brochure entitled “Dell Fiscal 2003 in Review.”

	On behalf of the Board of Directors:
	Thomas B. Green, Secretary
	May       , 2003

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Our Proxy Statement, Annual Report on Form 10-K and “Dell Fiscal 2003 in Review” brochure are available electronically. As an alternative to receiving printed copies of these materials in future years, you may elect to receive and access them electronically. By signing up for electronic delivery, you can receive stockholder communications as soon as they are available without waiting for them to arrive in the mail. You can also reduce the number of bulky documents in your personal files, eliminate duplicate mailings, conserve natural resources and help us reduce our printing and mailing costs.

To sign up for electronic delivery, please vote via the Internet at www.proxyvote.com and, when prompted, indicate that you agree to receive or access stockholder communications electronically in future years. If you have any questions about electronic delivery, please contact Dell’s Investor Relations Department at (512) 728-7800 or www.dell.com/investor.

We are pleased to offer a Webcast of our 2003 annual meeting. If you choose to view the Webcast, go to www.dell.com/investor shortly before the meeting time and follow the instructions provided. If you miss the meeting, you can view a replay of the Webcast on that site until August 15, 2003.

Please note that you will not be able to vote your shares via the Webcast. So if you plan to view the Webcast, please submit your vote using one of the methods described in the accompanying materials prior to the meeting.

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PROXY STATEMENT

This Proxy Statement is furnished in connection with the solicitation of proxies by Dell Computer Corporation, on behalf of the Board of Directors, for the 2003 Annual Meeting of Stockholders. This Proxy Statement and the related proxy form are being distributed on or about June       , 2003.

You can vote your shares using one of the following methods:

Internet and telephone voting are available 24 hours a day, and if you use one of those methods, you do not need to return a proxy card. The deadline for voting through the Internet or by telephone is 11:59 p.m., Eastern Time, on July 17, 2003.

You can also vote in person at the meeting, and submitting your voting instructions by any of the methods mentioned above will not affect your right to attend the meeting and vote.

Stockholders are being asked to consider four proposals at the meeting. The following is a summary of the proposals and the voting recommendations of the Board of Directors:

SUMMARY OF PROPOSALS

The details of each proposal are set forth below.

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The first proposal to be voted on at the meeting is the election of three directors, and the Board’s nominees are Michael A. Miles, Alex J. Mandl and Morton L. Topfer, each of whom is currently serving as a Dell director. Biographical information about each of these nominees is included in “Director Information” below.

If Proposal 2 (Elimination of Classified Board) is approved by the stockholders at the meeting, each of these nominees will be elected to serve a one-year term and will be subject to reelection next year along with all the other directors. See “Proposal 2 — Elimination of Classified Board” below. If Proposal 2 is not approved, each of these nominees will be elected to serve a three-year term.

The Board of Directors recommends a vote “FOR” all nominees.

The Board has no reason to believe that any nominee would be unable or unwilling to serve if elected. If a nominee becomes unable or unwilling to accept nomination or election, the Board will either select a substitute nominee or will reduce the size of the Board. If you have submitted a proxy and a substitute nominee is selected, your shares will be voted for the election of the substitute nominee.

In accordance with Dell’s Bylaws, directors are elected by a plurality of the votes of shares represented and entitled to be voted at the meeting. That means the three nominees will be elected if they receive more affirmative votes than any other nominees.

Set forth below is biographical and other information, as of May 1, 2003, about the persons who will make up the Board following the meeting, assuming election of the nominees named above.

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Michael H. Jordan, who became Chairman and Chief Executive Officer of Electronic Data Systems Corporation in March 2003, resigned from the Board in April 2003 citing the demands of his new position. Mr. Jordan had been a Dell director for eleven years. Following Mr. Jordan’s resignation, the Board has passed a resolution reducing the size of the Board of Directors from eleven to ten.

Corporate Governance Principles. The Board of Directors believes that adherence to sound corporate governance policies and practices is important in ensuring that Dell is governed and managed with the highest standards of responsibility, ethics and integrity and in the best interests of its stockholders. The Board has adopted Principles of Corporate Governance, which provide an effective corporate governance framework for Dell, intending to reflect a set of core values that provide the foundation for Dell’s governance and management systems and its interactions with others. A copy of those principles can be found on Dell’s website at www.dell.com/commitment.

Director Independence. As stated in the corporate governance principles, the Board believes that the interests of the stockholders are best served by having a substantial number of objective, independent representatives on the Board. For this purpose, a director will be considered to be “independent” only if the Board affirmatively determines that the director does not have any direct or indirect material relationship with Dell that may impair, or appear to impair, the director’s ability to make independent judgments.

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The Board has recently evaluated all relationships between each director and Dell and has made the following determinations with respect to each director’s “independence”:

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The Board will continue to monitor the standards for director independence established under applicable law or Nasdaq listing requirements and will ensure that Dell’s Principles of Corporate Governance continue to be consistent with those standards.

Dell purchases services, supplies and equipment in the normal course of business from many suppliers and sells or leases products and services to many customers. In some instances, these transactions occur with companies with which members of the Board of Directors have relationships as directors or executive officers. For fiscal 2003, none of these transactions was significant or reportable, either individually or collectively.

Committees. The Board maintains the following committees to assist it in discharging its oversight responsibilities:

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Each committee is governed by a written charter approved by the full Board. These charters form an integral part of the Principles of Corporate Governance, and a copy of each charter and can be found with those principles on Dell’s website at www.dell.com/ commitment.

Meetings and Attendance. During fiscal 2003, the full Board held six meetings, the Audit Committee met nine times, the Compensation Committee met six times, the Governance and Nominating Committee met twice and the Finance Committee met four times. All directors attended at least 75% of the meetings of the full Board and the meetings of the committees on which they served.

Mr. Dell is the only director who is also a Dell employee, and he does not receive any additional compensation for serving on the Board of Directors.

Annual Retainer Fee. Each non-employee director receives an annual retainer fee, which was $40,000 during fiscal 2003. The director can receive that amount in cash, can defer all or a portion of it into a deferred compensation plan or, at the discretion of the Compensation Committee, can receive fair market value stock options or restricted stock in lieu of cash. Amounts deferred into the deferred compensation plan are payable in a lump sum or in installments beginning upon termination of service as a director. The number of options or shares of restricted stock received in lieu of the annual retainer fee (or the method of computing the number) and the terms and conditions of those awards are determined from time to time by the Compensation Committee.

Option or Stock Awards. The non-employee directors are also eligible for stock option and restricted stock awards. The number of options or shares awarded, as well as the other terms and conditions of the awards (such as vesting and exercisability schedules and termination provisions) are generally within the discretion of the Compensation Committee, except that (1) no non-employee director may receive awards (not including awards in lieu of annual cash retainer) covering more than 50,000 shares of stock in any year (other than the year the

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Other Benefits. Dell reimburses directors for the reasonable expenses associated with attending Board meetings and provides them with liability insurance coverage for their activities as directors of Dell.

Under Dell’s Certificate of Incorporation and Bylaws, the directors are entitled to indemnification from Dell to the fullest extent permitted by Delaware corporate law. Dell recently entered into indemnification agreements with each of the non-employee directors. Those agreements do not increase the extent or scope of the indemnification provided, but were entered into to establish processes and procedures for indemnification claims. A copy of the form of indemnification agreement is contained as an exhibit to Dell’s Annual Report on Form 10-K for fiscal 2003, as filed with the Securities and Exchange Commission.

Compensation During Fiscal 2003. The following table describes the compensation paid to the non-employee directors for the last fiscal year.

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The Board is currently separated into three classes, as follows:

Each year, the stockholders are requested to elect the directors comprising one of the classes for a three-year term. Currently, the term of the Class I directors is set to expire in 2004, the term of the Class II directors is set to expire in 2005 and the term of the Class III directors is set to expire in 2003 at this year’s annual meeting. Because of the classified board structure, stockholders have the opportunity to vote on only roughly one-third of the directors each year.

The Board of Directors is proposing an amendment to Dell’s Certificate of Incorporation to eliminate the classified board structure. If the stockholders approve this proposal, the terms of all directors will expire at the annual meeting of stockholders each year and their successors will be elected for one-year terms that will expire at the next annual meeting. The text of the actual amendment to the Certificate of Incorporation is set forth in Appendix A.

The Board of Directors recommends a vote “FOR” the elimination of the classified board.

The concept of a classified board is an anti-takeover measure that the Board of Directors feels is no longer appropriate given Dell’s size and stature. Rather, the Board believes that stockholders should have the opportunity to vote on all directors each year and believes that this will be an effective way to maintain and enhance the accountability of the Board.

As noted above, if the stockholders approve this proposal, each of the three directors who are elected this year (who would otherwise comprise Class III) will be elected for a one-year term that will expire at next year’s annual meeting. In addition, each of the four directors who would otherwise comprise Class II and whose terms would otherwise expire in 2005 has agreed to voluntarily relinquish the third year of his existing three-year term upon approval of this proposal. Consequently, if this proposal is approved by the stockholders, the entire Board of Directors will be subject to election at next year’s annual meeting of stockholders.

Approval of the amendment to the Certificate of Incorporation that is required to effect the elimination of the classified board requires the affirmative vote of at least 66 2/3% of the shares of common stock issued and outstanding as of the record date.

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Dell’s Certificate of Incorporation currently specifies the name of the company as “Dell Computer Corporation.” The Board of Directors is proposing an amendment to Dell’s Certificate of Incorporation to change the company’s name to “Dell Inc.” If the stockholders approve this proposal, Article First of Dell’s Certificate of Incorporation will be amended to read in its entirety as follows:

The Board of Directors recommends a vote “FOR” changing the company name to “Dell Inc.”

While Dell began as a supplier of personal computers, our capabilities now reach deeply into the enterprise and we are a leading seller of servers, storage systems and other technology products and services. Therefore, the Board of Directors believes that “Dell Computer Corporation” is no longer reflective of Dell’s business as it exists today. Changing the company’s name to “Dell Inc.” represents Dell’s evolution from strictly a computer hardware company to a diverse supplier of technology products and services. In addition, recognition of the “Dell” brand has grown so that the company is commonly known simply as “Dell.” The change of the name to “Dell Inc.” more closely aligns our formal corporate name with our brand.

Approval of the amendment to the Certificate of Incorporation that is required to effect the change of the company name to “Dell Inc.” requires the affirmative vote of a majority of the shares of common stock issued and outstanding as of the record date. Therefore, approval of this proposal will require the affirmative vote of                        shares.

In April 2003, the Board of Directors, upon the recommendation of the Compensation Committee, unanimously approved and adopted the Executive Annual Incentive Bonus Plan (the “Annual Bonus Plan”) to govern the award and payment of annual cash bonuses to certain of Dell’s executive officers and directed that the Annual Bonus Plan be submitted to Dell’s stockholders for approval so that payments under the Annual Bonus Plan will be deductible by Dell for federal income purposes.

The Board of Directors recommends a vote “FOR” the approval of the Annual Bonus Plan.

The purpose of the Annual Bonus Plan is to enhance Dell’s ability to attract and retain highly qualified executives and to provide additional financial incentives to those executives to promote Dell’s success. The Annual Bonus Plan is also

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The Annual Bonus Plan will replace the substantially identical Executive Incentive Bonus Plan that was approved by the stockholders at the 1998 annual meeting and is set to expire at this year’s annual meeting.

The Board believes that it is in the best interests of Dell and its stockholders to ensure that cash bonuses to be paid to its executive officers are deductible by Dell for federal income tax purposes. Accordingly, Dell has structured the Annual Bonus Plan to satisfy the requirements of Section 162(m) for “performance-based” compensation. Generally, Section 162(m) of the Internal Revenue Code prevents a company from receiving a federal income tax deduction for compensation paid to a “Named Executive Officer” (see the “Executive Compensation — Summary Compensation Table” below) in excess of $1 million for any year, unless that compensation is performance-based. One of the requirements of “performance-based” compensation for purposes of Section 162(m) is that the compensation be paid pursuant to a plan that has been approved by the company’s stockholders. The Board also believes that the Annual Bonus Plan serves Dell’s interests by focusing management’s attention on the achievement of those goals that the Board determines to be strategically and operationally important for Dell.

If the Annual Bonus Plan is not approved by the stockholders, it is currently contemplated that any annual bonuses for fiscal 2004 and subsequent years for executive officers would be discretionary and that such annual bonuses would not be deductible under Section 162(m) to the extent that (when combined with other non-exempt compensation) they exceed the $1 million limit.

Approval of the Annual Bonus Plan requires the affirmative vote of a majority of the shares represented at the meeting and entitled to vote.

The following is a brief summary of the material features of the Annual Bonus Plan. The full text of the plan document is attached as Appendix B.

Administration and Operation

The Annual Bonus Plan will be administered by a committee of at least two “outside” directors (within the meaning of Section 162(m)) designated from time to time by the Board. Currently, the Compensation Committee has been charged with the responsibility of administering the Annual Bonus Plan. The Compensation Committee will have complete and absolute authority to make any and all decisions regarding the administration of the Annual Bonus Plan, including interpreting the terms and provisions of the Annual Bonus Plan and establishing, adjusting, paying or declining to pay bonuses under the Annual Bonus Plan.

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Eligible Executives

Participation in the Annual Bonus Plan will be limited to “Eligible Executives,” which is defined as the Chief Executive Officer and any other executive officer of Dell designated by the Compensation Committee. No non-employee director or non-executive officer employee will be entitled to participate in, or otherwise receive benefits under, the Annual Bonus Plan. Currently, there are 11 executive officers of Dell, including the Chief Executive Officer.

Performance Goal

The Board has chosen “Consolidated Net Income” as the measure of performance necessary for the payment of bonuses under the Annual Bonus Plan. For purposes of the Annual Bonus Plan, Consolidated Net Income consists of net income before extraordinary items, as reported in Dell’s applicable quarterly or annual published financial statements.

Establishment of Target Bonuses

Within 90 days after the end of each fiscal year, the Compensation Committee will designate those Eligible Executives who are to be participants in the Annual Bonus Plan for that year and will specify the terms and conditions for the determination and payment of an “Incentive Bonus” to each of those participants. The maximum Incentive Bonus that may be payable to any Eligible Executive for any fiscal year will be 0.5% of the Consolidated Net Income for that fiscal year. The Compensation Committee may condition the payment of an Incentive Bonus upon the satisfaction of such objective or subjective standards that the Compensation Committee determines to be appropriate. The Annual Bonus Plan contains special provisions for designating additional Eligible Executives for participation in the Annual Bonus Plan after such 90-day period and determining the amount of their maximum Incentive Bonuses.

Committee Certification and Determination of Incentive Bonuses

As soon as practicable after the end of each fiscal year, the Compensation Committee will certify in writing whether the stated performance goal has been met and will determine the amount of the Incentive Bonus to be paid to each Annual Bonus Plan participant. In determining that amount, the Compensation Committee will consider the target bonuses established at the beginning of the year, the degree to which the established standards were satisfied and any other objective or subjective factors it deems appropriate and may reduce the amount of, or eliminate altogether, any Incentive Bonus that would otherwise be payable.

Payment of Incentive Bonuses

Following the Compensation Committee’s determination of the Incentive Bonuses to be paid, those Incentive Bonuses will be paid in cash (subject to any election made by an Eligible Executive with respect to the deferral of all or a portion of his or her Incentive Bonus or the payment of all or a portion of his or her Incentive Bonus in some form other than cash if such options are available).

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Duration and Amendment

If the Annual Bonus Plan is approved by the stockholders, it will be effective for fiscal 2004 (the current fiscal year of the Company, which commenced on February 1, 2003) and will continue in effect until the fifth anniversary of the date of such approval. The Board, however, may suspend or terminate the Annual Bonus Plan at any time. In addition, the Board may amend the Annual Bonus Plan from time to time as it deems advisable, except that, without the approval of the stockholders, the Board may not amend the Annual Bonus Plan to (a) increase the maximum amount of Incentive Bonus that may be paid or otherwise materially increase the benefits accruing to any Eligible Executive under the Annual Bonus Plan, (b) materially modify the eligibility requirements for participation in the Annual Bonus Plan or (c) change the material terms of the stated performance goal.

Federal Income Tax Consequences

The following is a brief description of the material U.S. federal income tax consequences associated with payments under the Annual Bonus Plan. It is based on existing U.S. laws and regulations, and there can be no assurances that those laws and regulations will not change in the future. Tax consequences in other countries vary.

Under present federal income tax law, an Annual Bonus Plan participant will be taxed at ordinary income rates on the cash portion of the bonus in the year in which such cash was received. If a participant elects to defer a portion of the bonus or to receive it in some form other than cash (if such options are available), the participant may be entitled to defer the recognition of income. Generally, and subject to the provisions of Section 162(m), Dell will receive a federal income tax deduction corresponding to the amount of income recognized by the Annual Bonus Plan participants.

New Plan Benefits

The Incentive Bonuses, if any, that will be paid to Annual Bonus Plan participants for any fiscal year are subject to the discretion of the Compensation Committee and, therefore, are not determinable at this time.

Dell’s mission is to be the most successful technology company in the world by delivering the best customer experience in the markets we serve. To accomplish this objective, Dell has developed a comprehensive business strategy that emphasizes maximizing long-term stockholder value through superior financial performance, quality and customer and employee satisfaction.

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Compensation Philosophy

The Compensation Committee of the Board of Directors is committed to implementing a compensation program that furthers Dell’s mission. The committee therefore adheres to the following compensation policies, which are designed to support the achievement of Dell’s business strategies:

The committee compares total compensation levels for Dell’s senior executives to the compensation paid to executives of a peer group of similar high-tech companies. Each year, management develops the peer group based on similar sales volumes, market capitalization, employment levels and lines of business, and we review and approve that selection. For fiscal 2003, the peer group consisted of approximately 20 companies. This group is not the same group used for the industry comparison in the “Five-Year Performance Graph” since it includes additional companies that Dell competes with for employees in addition to industry-product competitors.

Internal Revenue Code Section 162(m) generally limits the U.S. corporate income tax deduction for compensation paid to certain executive officers to $1 million, unless the compensation is “performance based compensation” or qualifies under certain other exceptions. In designing Dell’s compensation programs, the committee carefully considers the effect of this provision together with other factors relevant to the needs of the business. We have historically taken, and intend to continue taking, such steps as we deem reasonably practicable to minimize the impact of Section 162(m).

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Components of Compensation

The key elements of Dell’s executive compensation program are base salary, short-term (annual) incentive and long-term incentive compensation. These elements are addressed separately below.

The committee does not exclusively use quantitative methods or mathematical formulas in setting any element of compensation. In determining each component of compensation, we consider all elements of a senior executive’s total compensation package, including insurance and other benefits.

Base Salaries. Base salaries are targeted at median levels for the peer group of companies and are adjusted to recognize varying levels of responsibility, individual performance, business segment performance and internal equity issues, as well as external pay practices. We review each senior executive’s base salary annually.

Short-Term Incentives. Short-term incentives for fiscal 2003 were paid pursuant to Dell’s Executive Incentive Bonus Plan. This plan was designed to comply with the performance-based compensation exemption under Internal Revenue Code Section 162(m) and was approved by stockholders at the 1998 annual meeting.

Under this plan, the committee establishes a specific annual performance target for each executive officer. The performance target is represented as a specific percentage of consolidated net income and may not exceed 0.5%. We have the discretion to reduce (but not increase) an executive’s bonus amount from the amount that would otherwise be payable under the established performance target. Although the plan does not specify factors the committee will evaluate, we evaluate, among other things, overall company and business segment financial performance, as well as non-financial company performance, in determining the appropriate final incentive bonus payout for each executive.

For fiscal 2003, the committee established a specific percentage of consolidated net income for each executive officer. At the end of the year, we certified that the performance targets had been achieved and that incentive bonus amounts could be paid. In determining the actual incentive bonus amount to be paid to each executive officer, we considered several factors, including company and business segment revenue growth, operating profit margin and non-financial performance relating to improvements in customer satisfaction, product leadership, and globalization. Based on an evaluation of these factors, we modified bonus payout amounts. The amounts paid to the Named Executive Officers are set forth in the Summary Compensation Table.

Long-Term Incentives. In keeping with Dell’s philosophy of providing a total compensation package that favors at-risk components of pay, long-term incentives comprise a significant component of a senior executive’s total compensation package. These incentives are designed to motivate and reward executives for achieving significant financial performance and maximizing stockholder value. They also serve to encourage the long-term employment of key employees.

When awarding long-term incentives, the committee considers an executive’s level of responsibility, prior experience and individual performance criteria, as well as the compensation practices of the peer group of companies used to evaluate total

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The size of stock option grants is based primarily on the dollar value of the award granted. As a result, the number of shares underlying stock option awards varies and is dependent on the price of Dell’s common stock on the date of grant. The size of the award can also be adjusted based on individual factors.

In March and September 2002, the Company granted stock options with an exercise price set at the fair market value on the date of grant as part of the semi-annual stock option grant cycle. These options generally vest ratably over five years (20% per year) beginning on the first anniversary of the date of grant. The size of each award was determined based on the criteria for awarding long-term incentives stated above.

Because the exercise price of these options is equal to the fair market value of Dell’s common stock on the date of grant, the options have value only if the stock price appreciates from the value on the date the options were granted. This design is intended to focus executives on the enhancement of stockholder value over the long-term and to encourage equity ownership in Dell.

Also, on March 23, 2002, stock options with an exercise price set at 80% of fair market value were granted to three executive officers under Dell’s Executive Stock Ownership Incentive Program. This program allows executives to elect to forego all or a portion of their pretax annual bonus payouts and receive discounted options. Because of the inherent risk in foregoing a cash payment to receive an option grant, the number of shares granted is calculated by dividing the foregone bonus amount by the amount of the discount (20% of the fair market value of the common stock on the grant date). Although the foregone cash payments would have been unrestricted, the discounted options are subject to a two-year vesting schedule.

In March 2003, we approved a new Long-Term Cash Incentive Bonus Program that is designed to demonstrate our commitment to Dell’s long-term growth and profitability goals, which we consider to be important contributors to long-term stockholder value, and to provide incentive for the attainment of those goals. We approved awards under that program to certain selected executives, including all of the executive officers other than Mr. Dell and Mr. Rollins. Awards under this program will be paid in 2007 if specified revenue growth and profitability goals are met over a four-year performance period (beginning with fiscal 2004 and continuing through fiscal 2007).

Compensation of the Chief Executive Officer

In fiscal 2003, Mr. Dell’s annualized base salary remained at $950,000. Mr. Dell’s salary remains below the median base salary earnings for chief executive officers of the peer group of companies. The committee continues to focus on the performance-based elements of Mr. Dell’s compensation package, with less emphasis on fixed base pay.

As a result of the Company’s performance in fiscal 2003, Mr. Dell received an incentive bonus equal to 174% of his target bonus.

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Mr. Dell received a stock option grant of 500,000 shares in March 2002. This grant vests ratably over five years (20% per year) beginning on the first anniversary of the date of grant. We granted the options to provide a level of competitive long-term incentive value, consistent with our philosophy vis-à-vis the market. He also received a stock option grant of 64,940 shares under the Executive Stock Ownership Incentive Program in lieu of receiving his annual bonus in cash.

Conclusion

We believe these executive compensation policies and programs serve the interests of stockholders and Dell effectively. The various pay vehicles offered are carefully designed to provide increased motivation for senior executives to contribute to Dell’s overall future success, thereby enhancing the value of Dell for the stockholders’ benefit.

Compensation Committee Interlocks and Insider Participation

Neither Mr. Jordan, Mr. Miles, nor Mr. Luft is an officer or employee, or former officer or employee, of Dell or any of its subsidiaries. No interlocking relationship exists between the members of Dell’s Board or Compensation Committee and the board of directors or compensation committee of any other company, nor has any such interlocking relationship existed in the past.

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The following table summarizes the total compensation, for each of the last three fiscal years, for Mr. Dell and the four other most highly compensated executive officers who were serving as executive officers at the end of fiscal 2003. These persons are referred to as the “Named Executive Officers.”

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The following table sets forth certain information about the stock option awards that were made to the Named Executive Officers during fiscal 2003. All of these options are transferable to family members under specified conditions.

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The following table sets forth certain information about option exercises during fiscal 2003 by the Named Executive Officers and the value of their unexercised options at the end of the year.

In March 2003, the Compensation Committee approved a Long-Term Cash Incentive Bonus Program and granted awards under that program to certain selected senior executives (not including either Mr. Dell or Mr. Rollins). The purpose of the program is to demonstrate commitment to, and provide incentive for the attainment of, Dell’s long-term growth and profitability goals, which the Compensation Committee considers to be important contributors to long-term stockholder value.

Under the program, certain revenue growth and profitability metrics are measured over the course of a four-year performance period (beginning with fiscal 2004 and continuing through fiscal 2007). If actual performance, on an annual and cumulative basis, meets specified target and threshold levels, executives who receive awards under the program will be entitled to receive cash bonuses at the end of the four-year performance period. The amount of an executive’s long-term cash incentive bonus will be equal to the sum of a base amount (equal to the amount of the executive’s annual cash bonus for fiscal 2003) plus annual amounts computed for each of the four years included in the performance period. If the annual performance targets and thresholds for a year are met, the annual amount that will be included in the long-term cash incentive bonus calculation will be a multiple of the executive’s annual cash bonus for that year (subject to specified limitations), as

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The long-term cash incentive bonuses will be paid to the participating executives only if specified cumulative performance thresholds are met. Payment of each executive’s long-term cash incentive bonus is also conditioned on continued employment and eligibility.

Because the amount of an executive’s long-term cash incentive bonus is dependent on (a) the amount of his or her annual cash bonus for each year during the four-year performance period (which cannot be determined at this time) and (b) the satisfaction of specified annual performance targets and thresholds, it is not possible to estimate the amount of the long-term cash incentive bonuses that will be paid at the end of the performance period. The following table describes, for each of the Named Executive Officers who were granted awards under this program, the maximum amount of the long-term cash incentive bonus that would be payable following fiscal 2007 assuming (1) satisfaction of all performance targets and thresholds, as well as all other vesting conditions, and (2) the annual cash bonus paid for each of the next four fiscal years is the same as that paid for fiscal 2003:

LONG-TERM CASH INCENTIVE BONUS PAYOUTS

Awards under this program were made pursuant to the 2002 Long-Term Incentive Plan, which was approved by the stockholders last year at the 2002 annual meeting. Compensation paid pursuant to this program should qualify as “performance-based compensation” for purposes of Section 162(m) of the Internal Revenue Code.

Equity Compensation Plans Approved by Stockholders

Stock Option Plans. Dell stockholders have approved the 1989 Stock Option Plan, the 1993 Stock Option Plan, the 1994 Incentive Plan and the 2002 Long-Term Incentive Plan. Although options are still outstanding under the 1989, 1993 and 1994

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Employee Stock Purchase Plan. Dell maintains an employee stock purchase plan that is available to substantially all employees. Participating employees may purchase common stock at the end of each participation period at a purchase price equal to 85% of the lower of the fair market value of the stock at the beginning or the end of the period. The six-month participation periods run from January to June and from July to December each year. Employees may contribute up to 15% of their base compensation to the plan subject to certain IRS limits on stock purchases through the plan. This plan has been approved by stockholders.

Equity Compensation Plans Not Approved by Stockholders

Broad Based Stock Option Plan. In October 1998, the Board of Directors approved the Broad Based Stock Option Plan, which permitted awards of fair market value stock options to non-executive employees. This plan was terminated by the Board in November 2002, and options are no longer being awarded under this plan.

Summary Table

The following table sets forth, for each of Dell’s equity compensation plans, the number of outstanding options and the number of shares remaining available for issuance as of the end of fiscal 2003.

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401(k) Retirement Plan. Dell maintains a 401(k) retirement savings plan that is available to substantially all U.S. employees. Under the terms of the plan, Dell matches 100% of each participant’s voluntary contributions up to 3% of the participant’s compensation. A participant vests ratably in the matching contributions over the first five years of employment (20% per year). Participants may invest their contributions and the matching contributions in a variety of investment choices, including a Dell stock fund, but are not required to invest any specific portion of their contributions in Dell stock.

Deferred Compensation Plan. Dell also maintains a nonqualified deferred compensation plan that is available to executives. Under the terms of this plan, Dell matches 100% of each participant’s voluntary contributions up to 3% of the participant’s compensation. A participant vests ratably in the matching contributions over the first five years of employment (20% per year). A participant’s funds are distributed upon the participant’s death or retirement or, under certain circumstances, at the request of the participant during the participant’s employment.

Substantially all of Dell’s employees enter into a standard employment agreement upon commencement of their employment. The standard employment agreement primarily addresses intellectual property and confidential and proprietary information matters and does not contain provisions regarding compensation or continued employment.

The Compensation Committee has the authority under Dell’s stock plans to issue awards with provisions that accelerate vesting and exercisability in the event of a change-in-control and to amend existing awards to provide for such acceleration. To date, the Compensation Committee has not elected to include change-in-control acceleration provisions in any awards.

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The following graph compares the cumulative total return on Dell’s common stock during the last five fiscal years with the S&P 500 Index and the Dow Jones Computer Index during the same period. The graph shows the value, at the end of each of the last five fiscal years, of $100 invested in Dell common stock or the indices on February 1, 1998 and assumes the reinvestment of all dividends. The graph depicts the change in the value of common stock relative to the indices as of the end of each fiscal year and not for any interim period. Historical stock price performance is not necessarily indicative of future stock price performance.

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The following table sets forth certain information, as of April 30, 2003, about the ownership of Dell common stock by the directors and executive officers. Dell knows of no person, other than Mr. Dell, who owns more than 5% of the total number of shares outstanding. Unless otherwise indicated, each person named below holds sole investment and voting power over the shares shown.

The Board of Directors has established stock ownership guidelines for themselves and Dell’s executive officers to increase their equity stake in Dell and more closely link their interests with those of Dell’s stockholders. Under those guidelines, each

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Persons who assume any of these positions in the future will have three years to attain the specified minimum investment position. Unexercised stock options may not be used to satisfy these minimum ownership requirements, but unvested restricted stock can.

The Audit Committee assists the Board of Directors in its oversight of Dell’s financial reporting process. The Audit Committee’s responsibilities are more fully described in its charter, a copy of which was included as an exhibit to the 2001 proxy statement.

Management has the primary responsibility for the preparation and integrity of Dell’s financial statements, accounting and financial reporting principles and internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Dell’s independent auditors, PricewaterhouseCoopers LLP, are responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles.

In fulfilling its oversight responsibilities, the Audit Committee has reviewed and discussed the audited financial statements for fiscal 2003 with Dell’s management and has discussed with PricewaterhouseCoopers LLP the matters that are required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees. In addition, PricewaterhouseCoopers LLP has provided the Audit Committee with the written disclosures and the letter required by the Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and the Audit Committee has discussed with PricewaterhouseCoopers LLP their independence.

Based on these reviews and discussions, the Audit Committee has recommended to the Board of Directors that the audited financial statements be included in Dell’s Annual Report on Form 10-K for the year ended January 31, 2003, for filing with the Securities and Exchange Commission.

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Section 16(a) Beneficial Ownership Reporting Compliance

In November 2002, Mr. Topfer failed to timely report an acquisition of 50,000 shares of Dell common stock pursuant to a distribution from an exchange fund. This failure was inadvertent, and the transaction was reported on a Form 4 filed on November 7, 2002, four days after the prescribed filing deadline. In addition, it was recently discovered that Mr. Topfer inadvertently failed to report two charitable gifts of Dell shares — one for 36,760 shares on January 2, 2002, and the other for 53,000 shares on March 5, 2002. These gifts have been reported on an amended Form 5.

Record Date; Shares Outstanding

Stockholders of record at the close of business on May 23, 2003, are entitled to vote their shares at the annual meeting. As of that date, there were                          shares of common stock outstanding and entitled to be voted at the meeting. The holders of those shares are entitled to one vote per share.

Quorum

More than 50% of the stockholders entitled to vote must be represented at the meeting before any business may be conducted. If a quorum is not present, the stockholders who are represented may adjourn the meeting until a quorum is present. The time and place of the adjourned meeting will be announced at the time the adjournment is taken, and no other notice need be given. An adjournment will have no effect on the business that may be conducted at the meeting.

Proxies; Right to Revoke

By submitting your proxy, you will authorize Michael S. Dell and Thomas B. Green to represent you and vote your shares at the meeting in accordance with your instructions. They may also vote your shares to adjourn the meeting and will be authorized to vote your shares at any adjournments or postponements of the meeting.

If you attend the meeting, you may vote your shares in person, regardless of whether you have submitted a proxy. In addition, you may revoke your proxy by sending a written notice of revocation to Dell’s Corporate Secretary, by submitting a later-dated proxy or by voting in person at the meeting.

Default Voting

If you submit a proxy but do not indicate any voting instructions, your shares will be voted FOR Proposal 1 (Election of Directors), FOR Proposal 2 (Elimination of Classified Board), FOR Proposal 3 (Change of Company Name to “Dell Inc.”) and FOR Proposal 4 (Approval of Executive Annual Incentive Bonus Plan). If any other

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Tabulation of Votes

American Stock Transfer & Trust Company, the transfer agent, will tabulate and certify the votes.

If your shares are treated as a broker non-vote or abstention, your shares will be included in the number of shares represented for purposes of determining whether a quorum is present. Abstentions will also be counted as shares present and entitled to be voted. Broker non-votes, however, are not counted as shares present and entitled to be voted with respect to the matters which the broker has not expressly voted. Thus, broker non-votes will not affect the outcome of the voting on Proposal 1 (Election of Directors) or Proposal 4 (Approval of Executive Annual Incentive Bonus Plan) but will have the same effect as a negative vote on Proposal 2 (Elimination of Classified Board) and Proposal 3 (Change of Company Name to “Dell Inc.”). Broker non-votes are further explained below under “Voting by Street Name Holders.”

If you own shares of Dell through the Dell 401(k) Plan for employees, you can direct the trustee to vote the shares held in your account in accordance with your instructions by returning the enclosed proxy card or by registering your instructions via the telephone or Internet as directed on the proxy card. If you wish to instruct the trustee on the voting of shares held in your account, you should submit those instructions no later than July 14, 2003. The trustee will vote shares for which no voting instructions were received on or before that date in its discretion.

Voting by Street Name Holders

If your shares are held in a brokerage account or by another nominee, you are considered the “beneficial owner” of shares held in “street name,” and these proxy materials are being forwarded to you by your broker or nominee (the “record holder”) along with a voting instruction card. As the beneficial owner, you have the right to direct your record holder how to vote your shares, and the record holder is required to vote your shares in accordance with your instructions. If you do not give instructions to your record holder, the record holder will be entitled to vote the shares in its discretion on Proposal 1 (Election of Directors), Proposal 2 (Elimination of Classified Board) and Proposal 3 (Change of Company Name to “Dell Inc.”), but will not be able to vote your shares on Proposal 4 (Approval of Executive Annual Incentive Bonus Plan) and your shares will be considered a “broker non-vote” on that proposal.

As the beneficial owner of shares, you are invited to attend the annual meeting. Please note, however, that if you are a beneficial owner, you may not vote your shares in person at the meeting unless you obtain a “legal proxy” from the record holder that holds your shares.

Independent Auditors

The Audit Committee has selected PricewaterhouseCoopers LLP as independent auditors for fiscal 2004. Representatives of that firm will be at the meeting to

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In addition to retaining PricewaterhouseCoopers LLP to audit the Company’s financial statements, the Company engages the firm from time to time to perform other services. The following table sets forth the aggregate fees billed by PricewaterhouseCoopers LLP in connection with services rendered during the last two fiscal years (in millions).