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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
(MARK ONE)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934.
FOR THE FISCAL YEAR ENDED DECEMBER 26, 1993
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM
---------------TO
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COMMISSION FILE NUMBER 1-7882
ADVANCED MICRO DEVICES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 94-1692300
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
ONE AMD PLACE
SUNNYVALE, CALIFORNIA 94088-3453
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (408) 732-2400
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Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
(NAME OF EACH EXCHANGE ON
(TITLE OF EACH CLASS) WHICH REGISTERED)
$.01 PAR VALUE COMMON STOCK NEW YORK STOCK EXCHANGE
PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE
DEPOSITARY CONVERTIBLE EXCHANGEABLE NEW YORK STOCK EXCHANGE
PREFERRED SHARES
</TABLE>
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Securities registered pursuant to Section 12(g) of the Act:
NONE
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes No
X
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. /X/
Aggregate market value of the voting stock
held by nonaffiliates as of February 28, 1994.
$1,980,075,847
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
92,627,503 SHARES AS OF FEBRUARY 28, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Shareholders for the fiscal year ended
December 26, 1993, are incorporated into Parts I, II and IV hereof.
(2) Portions of the Proxy Statement dated on or before March 27, 1994, for the
Annual Meeting of Stockholders to be held on April 27, 1994 are incorporated
into Part III hereof.
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PART I
ITEM 1. BUSINESS
GENERAL
Advanced Micro Devices, Inc. was incorporated under the laws of the state
of Delaware on May 1, 1969. The mailing address of its executive offices is One
AMD Place, P.O. Box 3453, Sunnyvale, California 94088-3453, and its telephone
number is (408) 732-2400. Unless otherwise indicated, the terms "Advanced Micro
Devices," the "Corporation" and "AMD" in this report refer to Advanced Micro
Devices, Inc. and its subsidiaries.
The Corporation designs, develops, manufactures and markets complex
monolithic integrated circuits for use by manufacturers of a broad range of
electronic equipment and systems.
PRODUCTS
The Corporation's products are primarily standard or catalog items or are
made from designs based on such items, as opposed to custom circuits designed
for a single customer. While a substantial portion of AMD's products are still
standard or catalog items, many of the recently developed devices are designed
for specific applications such as telecommunications, personal computers,
engineering workstations, optical disk memory or local area networks. As a
service to major customers, the Corporation modifies portions of these
application-specific devices to meet specific customer needs. The resulting
"semi-standard" devices are produced in significant volumes for particular
customers.
The Corporation began as an alternate-source manufacturer of integrated
circuits originally developed by other suppliers and has gradually shifted its
emphasis to proprietary products (i.e. products resulting from the
Corporation's design or technology innovations). Over the past five years, the
Corporation has made a significant research and development investment which
has contributed toward its leadership in manufacturing and process technology
within the integrated circuit industry. The Corporation has focused its future
product development activities on the three areas of its business: X86 and
other microprocessors and related peripheral chips for personal computers,
applications solutions products, and programmable logic and non-volatile memory
devices. Personal computer (PC) products include microprocessors and related
peripheral chips used in computers. Applications solutions products are
products which are either proprietary to AMD or have a limited supplier base,
are targeted at specialized markets, and typically require substantial
applications interface between AMD and its customers. AMD's applications
solutions products are focused on networks, voice/data communications (WORLD
NETWORK(Registered Trademark)), and on computer peripherals, computer
interfaces and mass storage. Those programmable logic devices (PLDs) and memory
devices that are high-volume commodity products are typically produced by more
than one manufacturer, subject to intense competition, and broadly applicable
across a wide customer base. Since a substantial portion of the Corporation's
products are utilized in personal computers and related peripherals, the
Corporation's future growth is closely tied to the performance of the PC
industry.
Integrated circuits have generally been manufactured with either bipolar or
metal-oxide semiconductor (MOS) process technologies. Historically, bipolar was
the technology of choice where the highest speed or analog precision was needed,
and MOS offered higher levels of integration and lower power consumption than
bipolar. Advances in complementary metal-oxide semiconductor (CMOS) technology
are yielding bipolar performance with the density and power advantages of MOS
technology. Consequently, the Corporation is focusing process development on
advanced CMOS technology to support its designated product areas. By the end of
1993, over two-thirds of the Corporation's total sales were derived from CMOS
products.
Microprocessors
X86 Microprocessors. A microprocessor is the central processing unit (CPU)
of a computer. A CPU microprocessor processes system data and controls
input/output, peripheral and memory devices. A CPU microprocessor may also be
used in connection with other microprocessors such as microcontrollers which are
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embedded microprocessors contained in peripherals or other coprocessors
which perform certain functions such as arithmetic calculations. The iAPX
architecture, originally developed by Intel Corporation, has been the leading
architecture for personal computer microprocessors. AMD's strategy has been to
serve as an alternative source for iAPX microprocessors, introducing products
at comparable prices to competitive products, but with additional
customer-driven features. The Corporation in 1993 entered into a license
agreement with Microsoft(Registered Trademark), the personal computer
industry's leading supplier of operation systems software, pursuant to which
the Microsoft(Registered Trademark) Windows(Trademark) compatible logo now
appears on AMD's microprocessor packaging and advertising indicating that the
Corporation's product is compatible with such software. This approach is also
representative of the computer industry's shift from an emphasis on hardware
compatibility to software compatibility.
The PC market is currently divided into laptop, personal information
devices, desktop and portable varieties, and AMD plays a significant role in
such arenas. The Corporation has developed the Am386(Registered Trademark)
microprocessor, which is designed to meet the specifications of the Intel 80386
microprocessor. The Am386 family of microprocessors accounted for approximately
seventeen percent (17%) of the Corporation's 1993 revenues. The Corporation
believes that its success with the Am386 family has been largely due to its
competitive features and pricing coupled with customers' demand for a
reasonably priced second source. As is often the case in the semiconductor
industry, the average selling price of the Am386 has experienced significant
downward pressure as it approaches the end of its product life cycle. Most
computer manufacturers have made a transition from the 386 to the 486 family of
microprocessors.
The Corporation now offers a Am486(Trademark) family of products. The
Corporation began shipping Am486DX products in the second quarter of 1993, and
began volume shipment of its Am486SX products in 1994. The Corporation's 486DX
and 486SX products are the subject of microcode litigations with Intel
Corporation. (For more information see Item 3, Legal Proceedings, Numbers 2-8).
The Corporation is currently in the process of developing additional Am486
products. It is anticipated that development of such 486 products will be
completed by the end of 1994.
The Corporation is currently developing its next generation of CPU
microprocessor products known as the K series, based on superscalar RISC type
architecture. The K series products will be compatible with software such as
Microsoft(Registered Trademark) Windows(Trademark) currently compatible with
the X86 CPU microprocessors. The Corporation anticipates that the development
of the first K series products will be completed sometime in late 1994. The
Corporation currently offers a family of RISC microprocessors for embedded
control applications discussed below.
The future outlook for the Corporation's microprocessor products is highly
dependent on the timing of new product introductions, the outcome of its various
litigation matters with Intel, and other microprocessor market conditions.
Applications Solutions Products
Computer Systems, Interfaces and Mass Storage. The Corporation offers a
range of products which are utilized in a variety of computer systems. Computer
systems include a peripheral chip which is a special-purpose component that
works with central processing units, managing selected input/output or other
system functions. Other systems components control disk drives, keyboards and
printers. Through the use of communication peripherals, computers can operate in
networks and communicate locally and over long distances.
Many of these systems require a high-performance microprocessor for
embedded control. The Corporation's proprietary Am29000(Trademark) family of
RISC microprocessors is used extensively by a wide range of customers for
embedded control applications. Examples of these applications include
high-performance laser printer controllers, high-resolution graphics
controllers, communications controllers, and accelerator cards. Many
manufacturers, such as Motorola, Intel, IDT, National Semiconductor and Texas
Instruments offer RISC-based microprocessors which compete with the Am29000
family in certain applications. The Corporation expects that the RISC
microprocessor market will continue to grow.
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The Corporation also supplies a range of products specially designed to add
additional functions, improve performance and reduce costs in computer
peripheral, interface or mass storage applications. These are generally
special-purpose products which are optimized for a specific application and are
frequently proprietary products of the Corporation or in the case of selected
large customers, products which have been tailored for that customer.
Networks and Voice/Data Communications. The Corporation provides a wide
variety of products for a broad spectrum of connectivity solutions. These
include applications in central office switches, PBX equipment, voice/data
terminals, and different performance classes of Local Area Networks (LANs) used
to connect workstations and personal computers. In addition to providing the
integrated circuits for these applications, the Corporation also provides
various forms of hardware evaluation tools, development software and interface
software. AMD continues to be a major supplier of Ethernet LAN devices for
workstation applications. During 1993, the Corporation introduced several
Ethernet products designed for use on Personal Computer motherboards and add-in
cards. AMD also is a principal supplier for chip sets to support the
100-megabit-per-second Fiber Distributed Data Interface (FDDI) local area
network standard which is primarily used to connect high performance
workstations and servers. The Corporation has also developed, in cooperation
with systems manufacturers, a family of devices for the 10Base-T standard, which
allows transmission of data using Ethernet protocols on twisted-pair wiring,
rather than on the more expensive coaxial cable.
The Subscriber Line Interface Circuit (SLIC) and the Subscriber Line
Audio-Processing Circuit (SLAC(Trademark)), co-invented and manufactured by the
Corporation, are an integral part of one of the leading designs for digital
telephone switching equipment. The SLIC connects the user's telephone wire to
the telephone company's digital switching equipment. The SLAC is a
coder/decoder which converts analog voice signals to a digital format and back.
The Corporation enjoys its continued success with these products in the
European market, and more recently has seen increased demand from nations
committed to upgrading their telecommunications infrastructure.
High-Volume Commodity Products
Programmable Logic Devices (PLDs). The Corporation is a leading
supplier of high-speed, field-programmable integrated circuits. PLDs generally
afford a user increased design flexibility relative to standard logic devices.
The initial design time and design cost in customizing a programmable device is
significantly less than designing a custom integrated circuit or customizing a
gate array logic device. The Corporation's Programmable Array Logic
(PAL(Registered Trademark)) architecture was invented by Monolithic Memories,
Inc. (MMI), which was acquired by the Corporation in 1987, and AMD's PAL
devices continue to comprise a large share of the worldwide market for
field-programmable logic devices. These devices combine off-the-shelf
availability, ease of use and the low cost of standard products with a
capability for semi-custom design, making them attractive to a broad range of
users. The Corporation's PLDs are generally manufactured with
transistor-to-transistor logic (TTL) designs in bipolar technology for
low-density, high-speed devices, and CMOS for complex architecture,
high-density and low-power devices. In the past several years, the Corporation
has utilized CMOS technology for lower power and more complex architectures.
Programmable devices have generally been manufactured using bipolar
technology to provide users with high-speed products. The Corporation offers
several products using CMOS technology and has continued to expand its product
portfolio in this area.
Non-Volatile/Volatile Memories. Memory components are used to store
computer programs and data entered during system operation. There are two types
of memory storage capability, volatile and non-volatile. Volatile memories
include Dynamic and Static Random Access Memories (DRAMs and SRAMs). Non-
volatile memories retain data when system power is shut off, while volatile
memories do not. Non-volatile memories include Erasable Programmable Read-Only
Memories (EPROMs) and the new generation Flash Memory. The Corporation's memory
products are primarily non-volatile memories used in a wide range of
applications such as PCs, workstations, peripherals, instrumentation, PBX
equipment, avionics and a variety of other equipment where programmed data
storage is needed. The Corporation now has a complete family of
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CMOS EPROM devices from 64K (64,000 bits) to 4 megabits (4,000,000 bits) in
density. AMD generally offers the highest performance at each density of any
standard EPROM supplier.
The Corporation has developed a family of Flash EPROMs to address the
emerging market for PC memory cards, solid-state disks, cellular communications
and networking applications. Flash Memory is a potential alternative to bulky
and relatively slow hard-disk drives for PCs because it is smaller, faster and
can store data almost indefinitely, yet can be erased, read and programmed
efficiently. The Corporation is developing a family of Flash EPROMs to address
the demand for PC memory cards, solid-state disks, cellular communications and
networking applications.
The Corporation's joint venture with Fujitsu Limited (Fujitsu) will allow
it to take advantage of expected growth in Flash Memory sales. Under the joint
venture, AMD and Fujitsu will jointly manufacture EPROMs and Flash Memory. (See
discussion of Joint Venture with Fujitsu Limited below).
Joint Venture with Fujitsu Limited. In 1993, AMD and Fujitsu entered into
various agreements for a comprehensive collaboration covering joint development,
manufacturing and sales of integrated circuits and formed a Joint Venture,
Fujitsu AMD Semiconductor Limited (the "Joint Venture"). Through the Joint
Venture, AMD expects to further develop its strong position in EPROMs and Flash
Memory. Under the Joint Venture, the two companies are cooperating in building
and operating an $800 million wafer fabrication facility in Aizu-Wakamatsu,
Japan to produce non-volatile memory devices such as EPROMs and Flash Memories.
The percentage of the equity of the Joint Venture owned by the Corporation and
Fujitsu are 49.95% and 50.05%, respectively (the "Ownership Percentage").
Currently, the primary mission of the Joint Venture is the production of Flash
Memory devices. Each company will contribute toward funding and supporting the
Joint Venture in proportion to its Ownership Percentage. In 1993, AMD
contributed approximately $2 million to the Joint Venture and it anticipates it
will make additional contributions in 1994 of approximately $135 million. AMD is
expected to contribute approximately one-half of its share of funding in cash as
equity investment, and guarantee third party loans made to the Joint Venture for
the remaining one-half. Accordingly, each company is obligated to invest up to
approximately $200 million as equity in the Joint Venture. As the forecasted
Joint Venture costs and funding commitments are denominated in Yen, the dollar
amounts involved are subject to change due to fluctuations in exchange rates.
The agreements provide that the Joint Venture will borrow funds required for
capital investment and working capital purposes which are in excess of the
participants' equity contributions. Each participant is obligated to guarantee a
portion of such borrowings proportionate to its Ownership Percentage. To the
extent that such borrowings cannot be made on the strength of a participant's
guarantee, the participant is obligated to make direct cash loans to the Joint
Venture.
The ability of the Corporation to sell products produced by the Joint
Venture into certain territories, including the United Kingdom and Japan, is
limited under the terms of the Joint Venture agreement. AMD and Fujitsu will not
independently produce EPROM and Flash Memory products with geometries of
one-half (0.5) micron and smaller outside of the Joint Venture and thus will not
compete with the Joint Venture in such products. Also under the agreement,
Fujitsu acquired a minority equity position in AMD and will continue to increase
its position over five (5) years. AMD has acquired a minority equity position in
Fujitsu. The respective equity investments will be less than five percent of the
common stock of each company.
The new facility is expected to begin volume production in 1995, and will
utilize eight-inch wafers and process technologies capable of producing products
with geometries of one-half (0.5) micron and smaller. In connection with the
Joint Venture, the Corporation and Fujitsu have entered into various joint
development, cross-license and investment arrangements. Accordingly, AMD and
Fujitsu will provide their product designs and process and manufacturing
technologies to the Joint Venture. In addition, both companies will collaborate
in developing manufacturing processes and designing integrated circuits for the
Joint Venture. The right of each company to use the licensed intellectual
property of the other with respect to certain products is limited to certain
geographic areas. Consequently, AMD's ability to sell certain products
incorporating Fujitsu intellectual property, whether or not produced by the
Joint Venture, is also limited in certain territories, including the United
Kingdom and Japan.
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MARKETING AND SALES
Advanced Micro Devices markets and sells its products primarily to
original equipment manufacturers of computation and communication equipment.
AMD's products are sold under the AMD(Registered Trademark) trademark. The
Corporation recently entered into an agreement with Compaq Computer Corporation
(Compaq) under which the Corporation will supply Compaq with microprocessor
products; however, the agreement does not require Compaq to purchase
microprocessor products from the Corporation. The Corporation sells to a broad
base of customers; no single customer accounted for more than ten percent (10%)
of sales during the fiscal year ended December 26, 1993. Through its principal
facilities in Santa Clara County, California, and field offices throughout the
United States and abroad (primarily Europe and the Asia-Pacific Basin) the
Corporation employs a direct sales force. The Corporation also sells its
products through third-party distributors and independent representatives in
both domestic and international markets pursuant to nonexclusive agreements.
The distributors also sell products manufactured by AMD's competitors,
including those products for which the Corporation is an alternate source.
Distributors typically maintain an inventory of AMD's products. The
Corporation, pursuant to its agreements with the distributors, employs
procedures which provide protection to the distributors for their inventory of
Advanced Micro Devices' products against price reductions as well as products
that are slow moving or have been discontinued by the Corporation. These
agreements, which may be cancelled by either party on a specified notice,
generally contain a provision for the return of AMD's products to the
Corporation in the event the agreement with the distributor is terminated. (See
Note 1 of Notes to Consolidated Financial Statements contained in the 1993
Annual Report to Stockholders.)
Advanced Micro Devices has established sales subsidiaries that have offices
in Belgium, Canada, China, France, Germany, Hong Kong, Italy, Japan, Korea,
Singapore, Sweden, Switzerland, Taiwan, and the United Kingdom. (See Note 9 of
Notes to Consolidated Financial Statements contained in the 1993 Annual Report
to Stockholders.) The international sales force also works with independent
sales representatives and distributors in approximately 30 countries, including,
those where Advanced Micro Devices has sales subsidiaries. The Corporation's
international sales operations entail political and economic risks including
expropriation, currency controls, exchange fluctuations, changes in freight
rates, and changes in rates and exemptions for taxes and tariffs. The
Corporation has not experienced any material adverse effects associated with
such risks.
BACKLOG
Since Advanced Micro Devices manufactures and markets a standard line of
products, a significant portion of its sales are made from inventory on a
current basis. Sales are made primarily pursuant to (1) purchase orders for
current delivery of standard items, or (2) agreements covering purchases over a
period of time, which are frequently subject to revision and cancellation.
Generally, in light of current industry practice and experience, the Corporation
does not believe that such agreements provide reliable backlog figures.
COMPETITION
Numerous firms are engaged in the manufacture and sale of integrated
circuits competitive with those of the Corporation. Some of these firms have
resources greater than those of the Corporation and do not depend upon
integrated circuits as their principal source of revenue. There is also
significant captive production by certain large users of circuits such as
manufacturers of computers, telecommunications equipment and consumer
electronics products.
The industry typically experiences rapid technological advances together
with substantial price reductions in maturing products. After a product is
introduced, prices normally decrease over time as production efficiency and
competition increase, and a successive generation of products is developed and
introduced for sale.
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According to Dataquest, an industry research firm, during 1993, the
Corporation was the fifth-largest independent U.S. manufacturer of integrated
circuits, and the thirteenth largest worldwide (excluding IBM), ranked according
to sales to unaffiliated customers. Advanced Micro Devices competes for
integrated circuit market share with Texas Instruments, Motorola, National
Semiconductor, Intel, North American Philips, and with several prominent
Japanese firms. These firms include Nippon Electric Co., Hitachi, Toshiba,
Fujitsu, Matsushita and Mitsubishi, who are making active efforts to increase
their respective and collective worldwide market shares. (For more information
concerning Fujitsu, see section Joint Venture with Fujitsu Limited above.)
All of the above-mentioned competitors are either substantially larger in
both gross sales and in total assets than Advanced Micro Devices or are part of
larger corporate enterprises to whose resources, financial and other, the
competitors have access. In addition to the above, many other companies
dedicated to only one or two process technologies and product types compete with
the Corporation in those technologies and product types.
RESEARCH AND DEVELOPMENT
In keeping with its objective of increasing emphasis on the development of
proprietary products while maintaining its role as a high-volume producer of
popular designs, Advanced Micro Devices endeavors to manufacture products
utilizing advanced technology which is consistently reproducible in an industry
where the technology is complex and subject to rapid change. The Corporation
directs its research and development efforts towards the advancement of wafer
processing technology and the design of new circuits utilizing consistently
reproducible advanced technologies. (For information concerning these advances
see section Process Technology and Manufacturing below.) The Corporation
emphasizes research and development efficiency improvements through the use of
computer-aided design workstations and complementary circuit design software.
The semiconductor industry is subject to rapid changes in technology and
requires a high level of capital spending and extensive research and development
programs to maintain the state of the art. The Corporation's expenses for
research and development in 1991, 1992 and 1993, were $213,765,000,
$227,860,000, and $262,802,000, respectively. Such expenses were 17.4%, 15.0%
and 16.0% of sales in 1991, 1992 and 1993, respectively. Advanced Micro Devices'
research and development expenses are charged to operations as incurred. Most of
the research and development personnel are integrated into the engineering
staff.
PROCESS TECHNOLOGY AND MANUFACTURING
Monolithic integrated circuits are manufactured from a circuit layout
separated into layers that are produced on photomasks (working plates). The
actual production of the integrated circuit includes wafer fabrication, wafer
sort, assembly and final test.
The semiconductor industry is increasingly process-based, meaning that the
advance of semiconductor technology requires the ability to develop new design
and manufacturing processes. The process technologies generally utilized in the
manufacture of integrated circuits are bipolar and metal-oxide semiconductor
(MOS). CMOS products require less power than circuits built with other
processes, such as bipolar or N-MOS (N-channel MOS). In addition, CMOS
technology allows for a much broader circuit design capability than NMOS or
bipolar and thus CMOS designs are displacing both NMOS and bipolar product
designs. The advances and advantages of CMOS technology have created an
increased demand for products manufactured with CMOS processes. During 1993,
over two-thirds of the Corporation's total sales were derived from CMOS
products.
With advances in CMOS processing technology and the continued erosion of
demand for products manufactured with bipolar technology, the Corporation has
significantly streamlined its wafer fabrication capacity by restructuring its
manufacturing capabilities from an emphasis on bipolar process technology to an
emphasis on CMOS process technology. The Corporation is primarily a CMOS
manufacturer and has achieved cost-effective production in its Submicron
Development Center (SDC) which was completed in 1991 and continues to be
improved to incorporate more advanced technology. Am386 microprocessors have
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been produced using 0.8-micron CMOS technology, and the vast majority of AMD's
manufacturing capacity is now sub-micron CMOS. In 1993, the Corporation began to
prepare the SDC for the anticipated demand for its Am486 microprocessor family
and its 5-volt Flash Memory through the investment of additional funds in 1993,
bringing the total investment in the SDC to more than $360 million in 1993, and
it is estimated to reach approximately $460 million in 1994.
AMD has developed different base processes that are optimized for logic,
memory and programmable logic designs. Having process expertise which is
reproducible across different product designs allows AMD to bring new and
improved designs quickly into production. The Corporation's capital commitment
to improvements in process technology has led to reductions in feature size and
defect densities, which in turn result in the higher transistor count, speed,
functionality and power efficiency of AMD's integrated circuits. In 1993, the
Corporation continued building development versions of 0.7-micron triple-layer
metal logic products and memory devices with 0.5-micron feature sizes, and
researched patterning methods that will eventually produce 0.25-micron feature
sizes. In 1993, the Corporation also began shipment of 0.7-micron triple-layer
metal logic products (Am486). In addition, 0.5 micron feature size logic and
memory devices are in the final stages of development. Research is also being
carried out on process and patterning methods to produce 0.35-micron and
0.25-micron feature size devices.
Product design and development and wafer fabrication activities are
currently conducted at Advanced Micro Devices' facilities in California and in
Texas. A subsidiary of Sony Corporation manufactures bipolar products for the
Corporation in San Antonio, Texas, using equipment owned by the Corporation.
Nearly all product assembly and final testing is performed at the Corporation's
manufacturing facilities in Penang, Malaysia; Singapore; and Bangkok, Thailand,
or by subcontractors in Asia. A limited amount of testing of products destined
for delivery in Europe and Asia is performed at the Corporation's facilities in
Basingstoke, England.
Foreign manufacture entails political and economic risks, including
political instability, expropriation, currency controls and fluctuations,
changes in freight rates and in interest rates, and exemptions for taxes and
tariffs. For example, if the Corporation were not able to assemble and test its
products abroad, or if air transportation between the United States and these
facilities were disrupted, there could be a material adverse effect on the
Corporation's operations. The Corporation has not experienced any material
adverse effects associated with such risks.
In July 1993, the Corporation commenced construction of its 700,000
square foot submicron semiconductor manufacturing facility in Austin, Texas
(FAB 25). The Corporation estimates that the cost of this facility will be
approximately $1 billion when fully equipped. The Corporation anticipates the
facility will commence volume production in 1995. The Corporation has also
recently entered in to an agreement with Digital Equipment Corporation
(DEC(Registered Trademark)) under which DEC will provide a foundry in
Queensferry, Scotland, for production of the Corporation's Am486 products;
however, under the terms of such arrangement both parties have certain rights
to terminate this relationship earlier, in the event of adverse developments in
the Corporation's litigations with Intel. DEC will produce wafers for the
Corporation in the Queensferry foundry utilizing an adaptation of DEC's
0.68-micron process technology.
A major portion of the Corporation's current effort in both process
technology and circuit design is directed toward the development of large scale
integration products for microprocessor, programmable logic and memory
applications. The Corporation has entered into a strategic alliance with
Hewlett-Packard Corporation to collaborate on the development of advanced
process technology that will enable the Corporation to produce microprocessors
and logic devices with 0.35 micron CMOS logic technology. The Corporation
anticipates the technology will be developed by the end of 1995 and that the
production of such products will commence sometime in 1996. The Corporation is
also placing emphasis on the development of CMOS non-volatile memories,
programmable logic and VLSI (Very Large Scale Integration) logic products and
specialized circuits for the telecommunications market. (For information
concerning product development refer to the section entitled Products above.)
Quality Assurance. The Corporation's long-established quality program has
allowed it to achieve one of the highest quality and reliability levels in the
industry. This program is led by top management through an
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Executive Quality Board comprised of senior executives. The Corporation's Total
Quality Management (TQM) Program is actuated by Market Driven Quality (MDQ)
principles and implemented at all levels within the Corporation. TQM and MDQ
principles are applied through team empowerment, and business process technology
and manufacturing qualification. The Corporation's proprietary product
management methodology starts with detailed analysis of the requirements of
developing and supporting a new product, as well as extensive product simulation
before production to assure that the finished product meets specifications free
of defects. The program uses statistical process control techniques and involves
all aspects of the manufacture of AMD products. The Corporation has also
implemented leading international quality system standards, has been certified
to ISO-9000 standards in its manufacturing operations in Asia, and will soon
have a wafer fabrication facility ISO certified. All of the Corporation's
facilities follow uniform quality policies set by the Corporation's corporate
quality organizations in Sunnyvale, California and in Austin, Texas.
Materials and Energy. The principal raw materials used by the Corporation
in the manufacture of its products are silicon wafers, processing chemicals and
gases, ceramic and plastic packages, and some precious metals. Certain of the
raw materials used in the manufacture of circuits are available from a limited
number of suppliers in the United States and elsewhere. For example, for several
types of the integrated circuit packages that are purchased by Advanced Micro
Devices, as well as by the majority of other companies in the semiconductor
industry, the principal suppliers are Japanese companies. The Corporation does
not generally depend on long-term fixed supply contracts with its suppliers.
However, shortages could occur in various essential materials due to
interruption of supply or increased demand in the industry. If Advanced Micro
Devices were unable to procure certain of such materials from any source, it
would be required to reduce its manufacturing operations. To date, the
Corporation has experienced no significant difficulty in obtaining the necessary
raw materials. The Corporation's operations also depend upon a continuing
adequate supply of electricity, natural gas and water.
Environmental Regulations. To the Corporation's knowledge, compliance with
federal, state and local regulatory provisions enacted or adopted for protection
of the environment has had no material effect upon the capital expenditures,
earnings or competitive position of Advanced Micro Devices. (See also Item 3,
Legal Proceedings, Number 1.)
INTELLECTUAL PROPERTY AND LICENSING
The Corporation and its subsidiaries have been granted 746 United States
patents, and approximately 305 patent applications are pending in the United
States. Where appropriate, the Corporation has filed corresponding applications
in foreign jurisdictions. The Corporation expects to file future patent
applications in both the United States and abroad on significant inventions
which may be made by its employees or consultants. Advanced Micro Devices plans
to protect its innovations by various means, including litigation where
appropriate, and patents and mask work registrations, even though patent and
mask work registration protection may not be essential to maintain the
Corporation's market position. (See Microprocessors discussed above concerning
the Microsoft license.)
As is common in the semiconductor industry, from time to time Advanced
Micro Devices has been notified that it may be infringing patents issued to
others. Such claims are referred to counsel for evaluation and resolution. While
patent owners in such instances generally express a willingness to grant a
license, the Corporation cannot presently estimate the dollar amount, if any,
that might be involved in such disputes. No assurance can be given that all
necessary licenses can be obtained on satisfactory terms, nor that litigation
may always be avoided. (See also Item 3, Legal Proceedings, Numbers 2-8.)
Under a technology exchange agreement and patent cross-license agreement
with Intel Corporation, the Corporation manufactures various iAPX products,
including the 8051 single-chip microcontroller and the 8086, 8088, 80186, 80286,
80386 and 80486 microprocessors and the 80287, a math co-processor. Certain
rights and obligations under the agreements with Intel are currently the subject
of litigation between AMD and Intel. (See Item 3, Legal Proceedings, Numbers
2-8).
The Corporation has entered into numerous cross-licensing and technology
exchange agreements under which it both transfers and receives technology and
intellectual property rights. Such arrangements include
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licenses between the Corporation and Hewlett-Packard Company and Fujitsu
Limited. (See information under sections Joint Venture with Fujitsu Limited and
Process Technology and Manufacturing above.)
EMPLOYEES
Attracting and retaining competent employees and motivating them to meet
corporate objectives are essential elements of maintaining profitability in the
intensely competitive semiconductor industry where such personnel are in high
demand. Since its inception in 1969, Advanced Micro Devices has implemented
policies designed to create a favorable working environment for its employees.
For example, the Corporation makes available stock option and stock purchase
plans, pays special bonuses and maintains a profit-sharing program for some or
all employees, depending upon the plan or program. (See Note 10 of Notes to
Consolidated Financial Statements contained in the 1994 Annual Report to
Stockholders.) Like other semiconductor manufacturers, at times the Corporation
experiences difficulty in hiring and retaining experienced personnel. The
Corporation intends to utilize whatever forms of compensation, benefits and
other activities are necessary and cost effective in order to continue to
attract and retain the quality of personnel required for its business.
On December 26, 1993, Advanced Micro Devices and its subsidiaries employed
approximately 12,060 employees. Management considers its employee relations to
be very good. Direct communication among all employees and management is
encouraged. No employees of Advanced Micro Devices are represented by a
collective bargaining agent.
ITEM 2. PROPERTIES
The Corporation's principal engineering, manufacturing, warehouse and
administrative facilities comprise approximately 2 million square feet and are
located in Santa Clara County, California and in Austin, Texas. (See Item 1,
Process Technology and Manufacturing and Item 7, Management's Discussion). Over
1.2 million square feet of this space is in buildings owned by the Corporation.
Of these properties, approximately 264,300 square feet is subject to a mortgage
with a remaining term of up to fourteen years.
In 1992, the Corporation entered into certain operating leases and an
arrangement for the purchase of certain property containing a building with
approximately 318,000 square feet, located on 45.6 acres of land in Sunnyvale,
California (One AMD Place). The Corporation intends to utilize One AMD Place for
its corporate sales, marketing and administrative offices upon completion of
alterations to the building in 1994. This arrangement provides the Corporation
with the option to purchase One AMD Place during the lease term, and at the end
of the lease term the Corporation is obligated to either purchase One AMD Place
or arrange for the sale of One AMD Place to a third party with a guarantee of
residual value to the seller of One AMD Place. In 1993, the Corporation entered
into a lease agreement for approximately 175,000 square feet located adjacent to
One AMD Place to be used in connection with One AMD Place.
The Corporation also owns or leases facilities containing approximately
718,300 square feet for its operations in Malaysia, Singapore and Thailand. (See
Item 1, Process Technology and Manufacturing and Item 7, Management's
Discussion). Of the entire worldwide facilities owned or leased by the
Corporation nearly 947,300 square feet are currently vacant, of which
approximately 487,000 are currently under improvement or construction. The
Corporation holds 74 undeveloped acres of land in the Republic of Ireland,
approximately 8 acres were sold in 1993. The Corporation also has an equity
interest in 61 acres of land in Albuquerque, New Mexico.
The Corporation maintains 35 sales offices in North America and 18 sales
offices in Asia and Europe for its direct sales force. These offices are located
in cities in major electronics markets where concentrations of Advanced Micro
Devices' customers are located.
Leases covering the Corporation's facilities expire over terms of generally
1 to 20 years. The Corporation anticipates no difficulty in either retaining
occupancy of any of its facilities through lease renewals prior to expiration or
through month-to-month occupancy, or replacing them with equivalent facilities.
(See Note 12 of Notes to Consolidated Financial Statements contained in the 1993
Annual Report to Stockholders.)
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ITEM 3. LEGAL PROCEEDINGS
1. Environmental Matters. Since 1981, the Corporation has discovered,
investigated and begun remediation of three sites where releases from
underground chemical tanks at its facilities in Santa Clara County, California
adversely affected the groundwater. There is no indication, however, that any
public drinking water supplies have been affected. The chemicals released into
the groundwater were commonly in use in the semiconductor industry in the wafer
fabrication process prior to 1979. At least one of the released chemicals (which
is no longer used by the Corporation) has been identified as a probable
carcinogen.
In 1991, the Corporation received four Final Site Clean-up Requirements
Orders from the California Regional Water Quality Control Board, San Francisco
Bay Region (RWQCB) relating to the three sites. One of the sites (Final Site
Clean-up Requirements Order No. 91-102) includes clean-up of groundwater
contamination from TRW Microwave, Inc. (TRW), Philips Semiconductor (formerly
Signetics Corporation) and the Corporation which the RWQCB claims merged. The
Corporation is proceeding jointly with Philips and TRW to clean-up the merged
contamination and the parties are contributing to the clean-up equally. Another
of the sites (Final Site Clean-up Requirements Order Nos. 91-139 and 91-140)
includes clean-up of groundwater contamination from National Semiconductor
Corporation, the Corporation and others, which the RWQCB claims merged. National
Semiconductor Corporation and the Corporation have been named in the orders as
primarily responsible and have commenced clean-up efforts in accordance with
their respective orders. However, there has been no allocation of responsibility
for the groundwater contamination. The third site (Final Site Clean-up
Requirements Order No. 91-101) is primarily the responsibility of the
Corporation.
In each instance mentioned above, the Corporation conducted appropriate
programs of remedial action that involved soil removal, installation of
monitoring and extraction wells and water treatment systems, disposal of
inoperative tank systems, and repair and alterations to existing facilities. The
final clean-up plan includes continued groundwater monitoring, extraction and
treatment and, in one instance, soil vapor extraction. Federal and State
governmental agencies have approved the final clean-up plans being implemented.
The Corporation has not yet determined to what extent the costs of such remedial
actions will be covered by insurance. The three sites are on the National
Priorities List (Superfund).
If the Corporation fails to satisfy federal compliance requirements or
inadequately performs the compliance measures, the government (a) can bring an
action to enforce compliance, or (b) can undertake the desired response actions
itself and later bring an action to recover its costs and penalties, up to three
times the costs of clean-up activities, if appropriate. It is expected that
these matters will not have a material adverse effect on the financial condition
or results of operations of the Corporation.
In addition, homeowners residing in the vicinity of two of the Superfund
sites filed a class action lawsuit against the Corporation, TRW and Signetics in
the Superior Court of Santa Clara County, California (Case No. 716064). The
class action suit alleged that groundwater contamination caused by the
defendants lowered property values and that the plaintiff class suffered
emotional distress and fear. In May 1993, the action was settled and the
complaint was dismissed with prejudice in July 1993.
2. AMD/Intel Technology Agreement Arbitration. A 1982 technology exchange
agreement (the "1982 Agreement") between AMD and Intel Corporation has been the
subject of a dispute which was submitted to Arbitration through the Superior
Court of Santa Clara County, California and the matter is now at the California
Supreme Court on appeal. The dispute centers around issues relating to whether
Intel breached its agreement with AMD and whether that breach injured AMD, as
well as the remedies available for such a breach to AMD.
In February 1992, the Arbitrator awarded AMD several remedies including the
following: a permanent, royalty-free, nonexclusive, nontransferable worldwide
right to all Intel copyrights, patents, trade secrets and mask work rights, if
any, contained in the then-current version of AMD's Am80386 family of
microprocessors; and a two-year extension, until December 31, 1997, of the
copyright and patent rights granted to AMD. Intel appealed this decision as it
relates to the technology award. On May 22, 1992, the Superior Court in Santa
Clara County confirmed the Arbitrator's award and entered judgment in the
Corporation's favor on June 1, 1992. Intel appealed the decision confirming the
Arbitrator's award in state court. On June 4, 1993, the
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California Court of Appeal affirmed in all respects the Arbitrator's
determinations that Intel breached the 1982 Agreement, however, the Court of
Appeal held that the arbitrator exceeded his powers in awarding to AMD a license
to Intel intellectual property, if any, in AMD's Am386 microprocessor and in
extending the 1976 patent and copyright agreement between AMD and Intel (the
"1976 Agreement") by two years. As a result, the Court of Appeal ordered the
lower court to correct the award to remove these rights and then confirm the
award as so corrected.
On September 2, 1993, the California Supreme Court granted the
Corporation's petition for review of the California Court of Appeal decision
that the Arbitrator exceeded his authority. The Corporation has requested that
the California Supreme Court affirm the judgment confirming the Arbitrator's
award to the Corporation, which includes the right to the Intel 386 microcode.
If the California Supreme Court affirms the judgment confirming the
Arbitrator's award, the Corporation would assert an additional defense against
Intel's intellectual property claims in the 386 and 486 Microcode Litigations
(discussed below) which could preclude Intel from continuing to pursue any
damage or intellectual property claims regarding the Am386. If the Supreme Court
does not affirm the judgment it could: (i) decide to remand the matter for a new
Arbitration proceeding either on the merits or solely on the issue of relief
including the damages due to the Corporation, or (ii) order no further
proceedings which would foreclose the possibility of AMD collecting additional
monetary damages through the Arbitration and/or potentially impact AMD's ability
to use the Arbitration Award as a defense in the 386 or 486 Microcode
Litigations discussed below. The California Supreme Court is expected to decide
the case by the end of 1994.
The Corporation believes it has the right to use Intel technology to
manufacture and sell AMD's microprocessor products based on a variety of factors
including: (i) the 1982 Agreement, (ii) the Arbitrator's award in the
Arbitration which is pending review by the California Supreme Court and (iii)
the 1976 Agreement. An unfavorable decision by the California Supreme Court
could materially affect other AMD/Intel Microcode Litigations discussed herein.
The AMD/Intel Litigations involve multiple interrelated and complex issues of
fact and law. Therefore, the ultimate outcome of the AMD/Intel Litigations
cannot presently be determined. Accordingly, no provision for any liability that
may result upon the adjudication of the AMD/Intel Litigations has been made in
the Corporation's financial statements.
3. 287 Microcode Litigation. (Case No. C-90-20237, N. D. Cal.) On April
23, 1990, Intel Corporation filed an action against the Corporation in the U.S.
District Court, Northern District of California, seeking an injunction and
damages with respect to the Corporation's 80C287, a math coprocessor designed to
function with the 80286. Intel's suit alleges several causes of action,
including infringement of Intel copyright on the Intel microcode used in its 287
math coprocessor. In June 1992, a jury determined that the Corporation did not
have the right to use Intel microcode in the 80C287. On December 2, 1992, the
court denied the Corporation's request for declaratory relief to the effect it
has the right, under the 1976 Agreement with Intel to distribute products
containing Intel microcode. The Corporation filed a motion on February 1, 1993,
for a new trial based upon the discovery by AMD of evidence improperly withheld
by Intel at the time of trial.
In April, 1993, the court granted AMD a new trial on the issue of whether
the 1976 Agreement with Intel Corporation granted AMD a license to use Intel
microcode in its products. The ruling vacated both an earlier jury verdict
holding that the 1976 Agreement did not cover the rights to microcode contained
in the Intel 80287 math coprocessor and the December 2, 1992 ruling (discussed
above). A new trial commenced in January, 1994 and a decision is expected in
either the first or second quarter of 1994.
The impact of the ultimate outcome of the 287 Microcode Litigation is
highly uncertain and dependent upon the scope and breadth of the final decision
in the case. A decision of broad scope could not only result in a damages award
but also impact the Corporation's ability to continue to ship and produce its
Am486DX product or other microprocessor products adjudicated to contain any
copyrighted Intel microcode. The Corporation's inability to ship product could
have a material adverse impact on the Corporation's trends in results of
operations and financial condition. The outcome of the 287 litigation could also
materially impact the outcomes in the other AMD/Intel Microcode Litigations
discussed herein. The AMD/Intel Litigations involve multiple interrelated and
complex issues of fact and law. Therefore, the ultimate outcome of the AMD/Intel
Litigations cannot presently be determined. Accordingly, no provision for any
liability that may
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result upon the adjudication of the AMD/Intel Litigations has been made in the
Corporation's financial statements.
4. 386 Microcode Litigation. (Case No. A-91-CA-800, W.D. Texas and Case
No. C-92-20039, N.D. Cal.) On October 9, 1991, Intel Corporation filed an action
against the Corporation in the U.S. District Court for the Western District of
Texas (Case No. A-91-CA-800, W.D. Texas), alleging the separate existence and
copyrightability of the logic programming in a microprocessor and characterizing
that logic as a "control program," and further alleging that the Corporation
violated copyrights on this material and on the Intel microcode contained in the
Am386 microprocessor. This action has been transferred to the U.S. District
Court, Northern District of California (Case No. C-92-20039, N.D. Cal.). The
complaint in this action asserts claims for copyright infringement of what Intel
describes as: (1) its 386 microprocessor microcode program and revised programs,
(2) its control program stored in a 386 microprocessor programmable logic array
and (3) Intel In-Circuit Emulation (ICE) microcode. The complaint seeks damages
and injunctive relief arising out of the Corporation's development, manufacture
and sale of its Am386 microprocessors and seeks a declaratory judgment as to the
Intel-AMD license agreements (1976 and 1982 Agreements). The monetary relief
sought by Intel is unspecified. The Corporation has answered and counterclaimed
seeking declaratory relief.
The Corporation believes that Intel's microcode copyright claims are
substantively the same as claims made in the 287 Microcode Litigation (Case No.
C-90-20237, N.D. Cal.) (discussed above). Intel has also asserted that federal
law prevents the Corporation from asserting as a defense the intellectual
property rights that were awarded in the Intel Arbitration (discussed above).
Intel has made this claim both in its appeal of the Arbitration decision and in
the '386 Microcode Litigation. On October 29, 1992, the court in the '386
Microcode Litigation granted the Corporation's motion to stay further
proceedings pending resolution of the state court Arbitration appeal.
On December 28, 1993, the U.S. Court of Appeals for the Ninth Circuit
reversed the stay order and the case was remanded for further proceedings. The
Corporation will file a petition for writ of certiorari in the Supreme Court of
the United States. If the Ninth Circuit decision is not reversed or modified,
this action will proceed. In any event, the Corporation expects Intel will argue
that the Arbitration is not a defense in this action.
As discussed above, in the 287 Microcode Litigation, the ultimate outcome
of the 287 Microcode Litigation could materially impact the outcome in the 386
Microcode Litigation and thus affect the Corporation's ability to produce Am386
products.
An unfavorable final decision in the 386 Microcode Litigation could result
in a material monetary damages award to Intel and/or preclude the Corporation
from continuing to produce the Am386 and any other microprocessors which are
adjudicated to contain any copyrighted Intel microcode, either or both of which
could have a material adverse impact on the Corporation's trends in results of
operations and financial condition. The AMD/Intel Litigations involve multiple
interrelated and complex issues of fact and law. Therefore, the ultimate outcome
of the AMD/Intel Litigations cannot presently be determined. Accordingly, no
provision for any liability that may result upon the adjudication of the
AMD/Intel Litigations has been made in the Corporation's financial statements.
5. 486 Microcode Litigation. (Case No. C-93-20301 PVT, N.D. Cal). On April
28, 1993 Intel Corporation filed an action against AMD in the U.S. District
Court, Northern District of California, seeking an injunction and damages with
respect to the Corporation's Am486 microprocessor. The suit alleges several
causes of action, including infringement of various Intel copyrighted computer
programs.
Intel's Fourth Amended Complaint was filed on November 2, 1993. The Fourth
Amended Complaint seeks damages and injunctive relief based on: (1) AMD's
alleged copying and distribution of 486 "Processor Microcode Programs" and
"Control Programs" and (2) AMD's alleged copying of 486 "Processor Microcode" as
an intermediate step in creating proprietary microcode for the AMD version of
the 486. The Fourth Amended Complaint also seeks a declaratory judgment that (1)
AMD has induced third party copyright infringement through encouraging third
parties to import Am486-based products ("Third Party
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Inducement Claim"); (2) AMD's license rights to Intel microcode expire as of
December 31, 1995 ("License Expiration Claim"); (3) that AMD's license rights to
Intel microcode do not extend to In-Circuit Emulation (ICE) microcode ("ICE
Claim"); and (4) that AMD is not licensed to authorize third parties to
manufacture products containing copies of Intel microcode ("Have Made Claim").
Intel's Fourth Amended Complaint further seeks damages and injunctive relief
based on AMD's alleged copying and distribution of Intel's "386 Processor
Microcode Program" in AMD's 486SX microprocessor. The Corporation answered the
complaint in January, 1994.
On December 1, 1993, Intel moved for partial summary judgment on its claim
for copyright infringement of Intel's 486 ICE microcode. This motion was heard
on March 1, 1994. The Court requested further briefing from the parties, and
indicated its intention to rule on the motion after the briefing is completed on
March 9, 1994.
By order dated December 21, 1993, the Court granted the Corporation's
motion to stay Intel's claim that AMD's 486SX infringes Intel copyrights on its
386 microcode. In light of the Ninth Circuit decision discussed above in the 386
Microcode Litigation reversing the Court's order staying the case, the stay
order in this action may be vacated and/or appealed and the litigation
concerning this claim may proceed.
AMD believes that the microcode copyright infringement claims made by Intel
in the 486 Microcode Litigation are substantively the same as claims: (i) made
in the 287 Microcode Litigation with regard to the Intel microcode, discussed
above and (ii) made in the 386 Microcode Litigation with regard to AMD's rights
to utilize the so-called Intel microcode, "control programs" and ICE microcode.
Intel has also made the following two new allegations not contained in either
the 386 or 287 Microcode Litigations: (i) despite any rights AMD may have to
copy the Intel microcode, those rights do not extend to foundry rights and thus
AMD cannot use foundries to manufacture the Am486 product with Intel microcode
and (ii) AMD's rights to Intel copyrights terminate on December 31, 1995.
As discussed above, in the 287 Microcode Litigation, the ultimate outcome
of the 287 Microcode Litigation could materially impact the outcome in the 486
Microcode Litigation. The outcomes in the 287 or the 486 Microcode Litigations
could affect the Corporation's ability to continue to ship and produce its
Am486DX products and thus have an immediate, material adverse impact on the
Corporation's trends in results of operations and financial condition. The
AMD/Intel Litigations involve multiple interrelated and complex issues of fact
and law. Therefore, the ultimate outcome of the AMD/Intel Litigations cannot
presently be determined. Accordingly, no provision for any liability that may
result upon the adjudication of the AMD/Intel Litigations has been made in the
Corporation's financial statements.
6. Intel Antitrust Case. On August 28, 1991, the Corporation filed an
antitrust complaint against Intel Corporation in the U.S. District Court for the
Northern District of California (Case No. C-91-20541-JW-EAI), alleging that
Intel engaged in a series of unlawful acts designed to secure and maintain a
monopoly in iAPX microprocessor chips. The complaint alleges that Intel
illegally coerced customers to purchase Intel chips through selective allocation
of Intel products and tying availability of the 80386 to purchases of other
products from Intel, and that Intel filed baseless lawsuits against AMD in order
to eliminate AMD as a competitor and intimidate AMD customers. The complaint
requests significant monetary damages (which may be trebled), and an injunction
requiring Intel to license the 80386 and 80486 to AMD, or other appropriate
relief. On December 17, 1991, the Court dismissed certain of AMD's claims
relating to Intel's past practices on statute of limitations grounds. Intel has
filed a motion for partial summary judgment on one of AMD's remaining claims for
relief, and the hearing on this motion is scheduled for March 4, 1994. The
current trial date is October 3,1994.
7. Intel Business Interference Case. On November 12, 1992, the Corporation
filed a proceeding against Intel Corporation in the Superior Court of Santa
Clara County, California (Case No. 726343), for tortious interference with
prospective economic advantage, violation of California's Unfair Competition
Act, breach of contract and declaratory relief arising out of Intel's efforts to
require licensees of an Intel patent to pay royalties if they purchased 386 and
486 microprocessors from suppliers of those parts other than Intel. The patent
involved, referred to as the Crawford '338 patent, covers various aspects of how
the Intel 386 microprocessor, the 486 microprocessor and future X86 processors
manage memory and how these
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microprocessors generate memory pages and page tables when combined
with external memory and multi-tasking software such as Microsoft(Registered
Trademark) Windows(Trademark), OS/2(Registered Trademark) or UNIX(Registered
Trademark). The action was subsequently removed to the Federal District Court
where AMD amended its complaint to include causes of action for violation of
the Lanham Act and a declaration of patent invalidity and unenforceability. The
complaint alleges that Intel is demanding royalties for the use of the Intel
patents from the Corporation's customers, without informing the Corporation's
customers that the Corporation's license arrangement with Intel protects the
Corporation's customers from an Intel patent infringement lawsuit. No royalties
for the license are charged to customers who purchase these microprocessors
from Intel.
8. International Trade Commission Proceeding. The United States
International Trade Commission Proceeding (the "ITC Proceeding") (Investigation
No. 337-TA-352) was filed by Intel Corporation on May 7, 1993, against two
respondents, Twinhead International and its U.S. subsidiary, Twinhead
Corporation. Twinhead is a Taiwan-based manufacturer which is a customer of both
AMD and Intel. Twinhead purchases microprocessors from AMD and Intel, and
incorporates these microprocessors into computers sold by Twinhead. Intel claims
that the respondents induce computer end-users to infringe on what is known as
the Crawford '338 patent when the computers containing AMD microprocessors are
used with multi-tasking software such as Windows, Unix or OS/2. Intel seeks a
permanent exclusion order from entry into the United States of certain Twinhead
personal computers and an order directing Twinhead to cease and desist from
demonstrating, testing or otherwise using such computers in the United States.
AMD's dispute with Intel in the Intel Business Interference Case (Case No.
C-92-20789, N.D. Cal) (discussed above) requests a declaration that the Crawford
'338 patent is invalid; accordingly, AMD intervened in the ITC Proceeding as a
real party in interest by filing a motion with the ITC to intervene on the side
of the respondents. On July 2, 1993, the ITC granted AMD's motion to intervene
in the ITC Proceeding on the side of respondents and to participate fully in all
proceedings as a party.
The Corporation has vigorously contested the relief Intel seeks. A hearing
date before an administrative law judge has been set for May 2, 1994. Any
decision by an administrative judge would then be confirmed or not be confirmed
by the International Trade Commission (ITC).
On February 4, 1994, the Corporation filed a motion to suspend immediately
and thereafter to terminate the ITC proceeding on the ground that Intel is
collaterally estopped from pursuing the relief it seeks by reason of a judgment
soon to be entered in favor of Cyrix Corporation, also an intervenor in the ITC
Proceeding, and against Intel in a lawsuit involving the Crawford 338 patent
trial in Texas federal court. Intel opposed the motion, and filed a motion of
its own requesting that the ITC proceeding be suspended, not terminated, pending
appellate review of the Cyrix Judgment. On February 22, 1994, ITC Administrative
Law Judge Sidney Harris granted AMD's motion to suspend, and indicated his
intent to terminate the ITC Proceeding upon entry of the judgment in the Texas
federal court as AMD has requested. Judge Harris denied Intel's motion to
suspend the ITC Proceeding until its appeal of the judgment in favor of Cyrix
has been resolved.
An unfavorable outcome before the ITC could have an adverse effect on the
Corporation's ability to sell microprocessors to Twinhead and other computer
manufacturers in Taiwan and potentially, other countries. An unfavorable outcome
could have a material adverse impact on the Corporation's trends in results of
operations and financial condition.
9. In Re Advanced Micro Devices Securities Litigation. Between September 8
and September 10, 1993, five class actions were filed, purportedly on behalf of
purchasers of the Corporation's stock, alleging that the Corporation and various
of its officers and directors violated Sections 10(b) and 20(a) of the
Securities and Exchange Act of 1934, 15 U.S.C. sec.sec. 78j(b) and 78t(a),
respectively, and Rule 10b-5 promulgated thereunder, 17 C.F.R. sec. 240.10b-5,
by issuing allegedly false and misleading statements about the Corporation's
development of its 486SX personal computer microprocessor products, and the
extent to which that development process included access to Intel's 386
microcode. Some or all of the complaints alleged that the Corporation's conduct
also constituted fraud, negligent misrepresentation and violations of the
California Corporations Code.
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By order dated October 13, 1993, these five cases, as well as any
subsequently filed cases, were consolidated under the caption "In Re Advanced
Micro Devices Securities Litigation", with the lead case for the consolidated
actions being Samuel Sinay v. Advanced Micro Devices, Inc., et al., (No.
C-93-20662-JW, N.D. Cal). A consolidated amended class action complaint was
filed on December 3, 1993, containing all the claims described above and an
additional allegation that the Corporation made false and misleading statements
about its revenues and earnings during the third quarter of its 1993 fiscal
year. The amended complaint seeks damages in an unspecified amount. On January
14, 1994, the Company filed a motion to dismiss various claims in the amended
and consolidated class action complaint. The motion to dismiss is currently
scheduled for hearing on March 25, 1994. The Company has responded to initial
document requests and interrogatories, but has not yet produced documents. No
depositions have been taken. This case is in the early stage of discovery. The
Corporation believes that the ultimate outcome of this litigation will not have
a material adverse effect upon the financial condition or trends in results of
operations of the Corporation.
10. George A. Bilunka, et al. v. Sanders, et al. (93-20727JW, N.D. Cal.).
On September 30, 1993, an AMD shareholder, George A. Bilunka, purported to
commence an action derivatively on the Corporation's behalf against all of the
Corporation's directors and certain of the Corporation's officers. The
Corporation is named as a nominal defendant. This purported derivative action
essentially alleges that the individual defendants breached their fiduciary
duties to the Corporation by causing, or permitting, the Corporation to make
allegedly false and misleading statements about the Corporation's development of
its 486SX personal computer microprocessor products, and the extent to which
that development process included access to Intel's 386 microcode. The action
alleges that a pre-suit demand on the Corporation's Board of Directors would
have been futile because of alleged director involvement. Damages are sought
against the individual defendants in an unspecified amount.
On November 10, 1993, the Corporation, as nominal defendant, filed a motion
to dismiss the action for failure to make a demand upon the Corporation's Board
of Directors. The plaintiff then filed an amended derivative complaint on
December 17, 1993. The Corporation has again moved to dismiss the complaint. The
motion was heard on February 4, 1994, and on March 1, 1994 the Court denied the
motion. The Corporation believes that the ultimate outcome of this litigation
will not have a material adverse effect upon the financial condition or trends
in results of operations of the Corporation.
11. SEC Investigation. The Securities and Exchange Commission (SEC) has
notified the Corporation that it is conducting an informal investigation of the
Corporation into the Corporation's disclosures about the development of its
Am486SX products. The Corporation is cooperating fully with the SEC.
12. Other Matters. The Corporation is a defendant or plaintiff in various
other actions which arose in the normal course of business. In the opinion of
management, the ultimate disposition of these matters will not have a material
adverse effect on the financial condition or overall trends in the results of
operations of the Corporation.
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
EXECUTIVE OFFICERS OF THE REGISTRANT
<TABLE>
<CAPTION>
NAME AGE POSITION HELD SINCE
- -------------------- ---- --------------------------------------------------- ----------
<S> <C> <C> <C>
W. J. Sanders III 57 Chairman of the Board and Chief Executive Officer 1969
Anthony B. Holbrook 54 Vice Chairman of the Board and Chief Technical 1989
Officer. Mr. Holbrook was President from 1986 to
1990, Executive Vice President from 1982 to 1986,
and concurrently was Chief Operating Officer from
1982 until 1989.
Richard Previte 59 Director, President and Chief Operating Officer. 1989
Mr. Previte became Chief Operating Officer in 1989
and President in 1990. Mr. Previte was Chief
Financial Officer and Treasurer from 1969 to 1989.
Marvin D. Burkett 51 Senior Vice President, Chief Administrative Officer 1989
and Secretary; Chief Financial Officer and
Treasurer. Mr. Burkett was Controller from 1972
until 1989.
Larry R. Carter 50 Vice President and Corporate Controller. Mr. Carter 1992
was, from August 1989 until June 1992, Chief
Financial Officer of VLSI Technology, Inc. and
prior to that he was Vice President and Controller,
MOS Group, at Motorola, Inc.
Gene Conner 50 Senior Vice President, Operations. Mr. Conner 1987
joined the Corporation in 1969, and was elected an
executive officer in 1981.
Stanley Winvick 54 Senior Vice President, Human Resources. 1980
Stephen Zelencik 59 Senior Vice President and Chief Marketing 1979
Executive. Mr. Zelencik joined the Corporation in
1970.
</TABLE>
There is no family relationship between any executive officers of the
Corporation.
16
<PAGE> 18
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The information regarding market price range, dividend information and
number of holders of Common Stock of Advanced Micro Devices appearing under the
caption "Supplemental Financial Data" on pages 30 and 31 of the Corporation's
1993 Annual Report to Stockholders is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information regarding selected financial data for the fiscal years 1989
through 1993 under the caption "Financial Summary" on pages 30 and 31 of the
Corporation's 1993 Annual Report to Stockholders is incorporated herein by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The information appearing under the caption "Management's Discussion and
Analysis of Results of Operations and Financial Condition" on pages 14 through
16 of the Corporation's 1993 Annual Report to Stockholders is incorporated
herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Advanced Micro Devices' consolidated financial statements at December 29,
1991, December 27, 1992, and at December 26, 1993, and for each of the three
fiscal years in the period ended December 26, 1993, and the report of
independent auditors thereon, and the unaudited quarterly financial data of
Advanced Micro Devices for the two-year period ended December 26, 1993, on pages
17 through 29 of the Corporation's 1993 Annual Report to Stockholders are
incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
17
<PAGE> 19
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing at the end of Part I under the caption "Executive
Officers of the Registrant" and under the captions "Proposal No. 1-Election of
Directors" and "Compliance with Section 16(a) of the Securities Exchange Act of
1934" in the Corporation's Proxy Statement to be mailed to Stockholders on or
before March 27, 1994 is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the paragraphs entitled "Directors Fees and Expenses"
under the caption "Committees and Meetings of the Board of Directors", and the
information under the captions "Executive Compensation" (not including the
performance graph on page 12), "Material Compensation Agreements", "Change in
Control Arrangements" and "Compensation Committee Interlocks and Insider
Participation" in the Corporation's Proxy Statement to be mailed to Stockholders
on or before March 27, 1994, is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information appearing under the captions "Principal Stockholders" and
"Stock Ownership Table" in the Corporation's Proxy Statement to be mailed to
Stockholders on or before March 27, 1994 is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing under the caption "Transactions with Management"
in the Corporation's Proxy Statement to be mailed to Stockholders on or before
March 27, 1994 is incorporated herein by reference.
18
<PAGE> 20
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. Financial Statements
The financial statements listed in the accompanying Index to Consolidated
Financial Statements and Financial Statement Schedules Covered by Report of
Independent Auditors are filed or incorporated by reference as part of this
annual report. The following is a list of such Financial Statements:
<TABLE>
<CAPTION>
PAGE REFERENCES
-------------------
1993 ANNUAL
FORM REPORT TO
10-K STOCKHOLDERS
---- ------------
<S> <C> <C>
Report of Independent Auditors............................................. -- 29
Consolidated Statements of Operations for each of the three fiscal years in
the
period ended December 26, 1993........................................... -- 17
Consolidated Balance Sheets at December 27, 1992 and December 26, 1993..... -- 18
Consolidated Statements of Cash Flows for each of the three fiscal years in
the
period ended December 26, 1993........................................... -- 19
Notes to consolidated financial statements................................. -- 20-28
Supplementary financial data:
Fiscal years 1992 and 1993 by quarter (unaudited)........................ -- 30-31
</TABLE>
2. Financial Statement Schedules
The financial statement schedules listed in the accompanying Index to
Consolidated Financial Statements and Financial Statement Schedules Covered by
Report of Independent Auditors are filed or incorporated by reference as part of
this annual report. The following is a list of such Financial Statement
Schedules:
<TABLE>
<CAPTION>
PAGE REFERENCES
-------------------
1993 ANNUAL
FORM REPORT TO
10-K STOCKHOLDERS
---- ------------
<S> <C> <C> <C>
I Marketable Securities............................................... F-3 --
II Amounts receivable from officers and employees...................... F-4 --
V Property, plant and equipment....................................... F-5 --
Accumulated depreciation and amortization of property, plant and
VI equipment........................................................... F-6 --
VIII Valuation and qualifying accounts................................... F-7 --
X Supplementary operations statement information...................... F-8 --
</TABLE>
19
<PAGE> 21
3. EXHIBITS
The exhibits listed in the accompanying Index to Exhibits are filed or
incorporated by reference as part of this annual report. The following is a list
of such Exhibits:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ---------- ----------------------------------------------------------------------------
<S> <C>
3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to the
Corporation's Annual Report on Form 10-K for the fiscal period ended
December 27, 1987, is hereby incorporated by reference.
3.2 Certificate of Designations for Convertible Exchangeable Preferred Shares,
filed as Exhibit 3.2 to the Corporation's Annual Report on Form 10-K for the
fiscal year ended March 27, 1987, is hereby incorporated by reference.
3.3 Certificate of Designations for Series A Junior Participating Preferred
Stock, filed as Exhibit 3.3 to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 31, 1989, is hereby incorporated by
reference.
3.4 By-Laws, as amended, filed as Exhibit 3.4 to the Corporations Annual Report
on Form 10-K for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable Preferred
Shares, filed as Exhibit 4.3 to the Corporation's Annual Report on Form 10-K
for the fiscal year ended March 29, 1987, is hereby incorporated by
reference.
4.2 Indenture with respect to the 6% Convertible Subordinated Debentures due in
2012, filed as Exhibit 4.4 to the Corporation's Annual Report on Form 10-K
for the fiscal year ended March 29, 1987, is hereby incorporated by
reference.
4.3 The Corporation hereby agrees to file on request of the Commission a copy of
all instruments not otherwise filed with respect to long-term debt of the
Corporation or any of its subsidiaries for which the total amount of
securities authorized under such instruments does not exceed 10% of the
total assets of the Corporation and its subsidiaries on a consolidated
basis.
4.4 Rights Agreement between the Corporation and Bank of America N.T. & S.A.,
filed as Exhibit 4.1 to the Corporation's Current Report on Form 8-K dated
February 7, 1990, is hereby incorporated by reference.
*10.1 AMD 1982 Stock Option Plan, as amended.
*10.2 AMD 1986 Stock Option Plan, as amended.
*10.3 AMD 1992 Stock Incentive Plan, as amended.
*10.4 AMD 1980 Stock Appreciation Rights Plan, as amended.
*10.5 AMD 1986 Stock Appreciation Rights Plan, as amended.
*10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
29, 1991, is hereby incorporated by reference.
*10.7 MMI 1981 Incentive Stock Option Plan, as amended.
*10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 29, 1991, is
hereby incorporated by reference.
*10.9 Form of Limited Stock Appreciation Rights Agreement, filed as Exhibit 4.11
to the Corporation's Registration Statement on Form S-8 (No. 33-26266) is
hereby incorporated by reference.
</TABLE>
20
<PAGE> 22
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ---------- ----------------------------------------------------------------------------
<S> <C>
*10.10 AMD 1987 Restricted Stock Award Plan, as amended.
*10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
29, 1991, is hereby incorporated by reference.
*10.12 Resolution of Board of Directors on September 9, 1981, regarding
acceleration of vesting of all outstanding stock options and associated
limited stock appreciation rights held by officers under certain
circumstances, filed as Exhibit 10.10 to the Corporation's Annual Report on
Form 10-K for fiscal year ended March 31, 1985, is hereby incorporated by
reference.
*10.13(a) Employment Agreement dated July 1, 1991, between the Corporation and W. J.
Sanders III, filed as Exhibit 10.1 to the Corporation's Form 8-K dated
September 3, 1991, is hereby incorporated by reference.
*10.13(b) Amendment dated August 27, 1991, to Employment Agreement between the
Corporation and W. J. Sanders III, filed as Exhibit 10.2 to the
Corporation's Form 8-K dated September 3, 1991, is hereby incorporated by
reference.
*10.14 Management Continuity Agreement between the Corporation and W. J. Sanders
III, filed as Exhibit 10.14 to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 29, 1991, is hereby incorporated by
reference.
*10.15 Bonus Agreement between the Corporation and Richard Previte, filed as
Exhibit 10.15 to the Corporation's Annual Report on Form 10-K for the fiscal
year ended December 29, 1991, is hereby incorporated by reference.
*10.16 Executive Bonus Plan, filed as Exhibit 10.16 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 29, 1991, is hereby
incorporated by reference.
*10.17 Bonus Agreement between the Corporation and Anthony B. Holbrook, filed as
Exhibit 10.17 for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
*10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended March 30,
1986, is hereby incorporated by reference.
*10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
31, 1989, is hereby incorporated by reference.
*10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit 10.18 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
31, 1989, is hereby incorporated by reference.
10.21 License Agreement with Western Electric Company, Incorporated, filed as
Exhibit 10.5 to the Corporation's Annual Report on Form 10-K for fiscal year
ended 1979, is hereby incorporated by reference.
10.22 Intellectual Property Agreements with Intel Corporation, filed as Exhibit
10.21 to the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 29, 1991, is hereby incorporated by reference.
10.23 Award of Arbitrator in Case No. 626879 between the Corporation and Intel
Corporation, filed as Exhibit 28.2 on Form 8-K dated February 24, 1992, is
hereby incorporated by reference.
10.24 Form of Indemnification Agreements with former officers of Monolithic
Memories, Inc., filed as Exhibit 10.22 to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 27, 1987, is hereby
incorporated by reference.
</TABLE>
21
<PAGE> 23
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ---------- ----------------------------------------------------------------------------
<S> <C>
10.25 Agreement and Plan of Reorganization between Monolithic Memories Inc., the
Corporation and Advanced Micro Devices Merger Corporation, filed as Annex A
to the Corporation's Amendment No. 1 to Registration Statement on Form S-4
(No. 33-15015), dated June 25, 1987, is hereby incorporated by reference.
*10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
29, 1991, is hereby incorporated by reference.
**10.27(a) Joint Venture Agreement between the Corporation and Fujitsu Limited.
**10.27(b) Technology Cross-License Agreement between the Corporation and Fujitsu
Limited.
**10.27(c) AMD Investment Agreement between the Corporation and Fujitsu Limited.
**10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu Limited.
**10.27(e) Joint Venture License Agreement between the Corporation and Fujitsu Limited.
**10.27(f) Joint Development Agreement between the Corporation and Fujitsu Limited.
10.28 Credit Agreement dated as of January 4, 1993, among Advanced Micro Devices,
Inc., Bank of America National Trust and Savings Association as Agent, The
First National Bank of Boston as Co-Agent, filed as Exhibit 10.27 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
27, 1992, is hereby incorporated by reference.
10.29(a) Amended and Restated Guaranty dated as of January 4, 1993, by Advanced Micro
Devices, Inc. in favor of CIBC Inc., filed as Exhibit 10.28(a) to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
27, 1992, is hereby incorporated by reference.
10.29(b) Building Lease by and between CIBC Inc. and AMD International Sales &
Service, Ltd. dated as of September 22, 1992, filed as Exhibit 10.28(b) to
the Corporation's Annual Report on Form 10-K for the fiscal year ended
December 27, 1992, is hereby incorporated by reference.
10.29(c) First Amendment to Building Lease dated December 22, 1992, by and between
CIBC Inc. and AMD International Sales & Service, Ltd., filed as Exhibit
10.28(c) to the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 27, 1992, is hereby incorporated by reference.
10.29(d) Land Lease by and between CIBC Inc. and AMD International Sales & Service,
Ltd. dated as of September 22, 1992, filed as Exhibit 10.28(d) to the
Corporation's Annual Report on Form 10-K for the fiscal year ended December
27, 1992, is hereby incorporated by reference.
10.29(e) First Amendment to Land Lease dated December 22, 1992, by and between CIBC
Inc. and AMD International Sales & Service, Ltd., filed as Exhibit 10.28(e)
to the Corporation's Annual Report on Form 10-K for the fiscal year ended
December 27, 1992, is hereby incorporated by reference.
*10.30 Executive Savings Plan.
*10.31 Form of Split Dollar Agreement.
*10.32 Form of Collateral Security Assignment Agreement.
*10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, filed as
Exhibit 4.3 to the Corporation's Registration Statement on Form S-8 (No.
33-46577) is hereby incorporated by reference.
*10.34 1992 United Kingdom Share Option Scheme, Filed as Exhibit 4.2 to the
Corporation's Registration on Form S-8 (No. 33-46577) is hereby incorporated
by reference.
</TABLE>
22
<PAGE> 24
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
- ---------- ----------------------------------------------------------------------------
<S> <C>
11.1 Statement re computation of per share earnings.
13. 1993 Annual Report to Stockholders which has been incorporated by reference
into Parts I, II and IV of this annual report. To the extent filed, refer to
the front page hereinabove.
22. List of AMD subsidiaries.
24. Consent of Independent Auditors, refer to page F-2 hereinabove.
25. Power of Attorney.
</TABLE>
The Corporation will furnish a copy of any exhibit on request and payment
of the Corporation's reasonable expenses of furnishing such exhibit.
* Management contracts and compensatory plans or arrangements required to
be filed as an Exhibit to comply with Item 14(a)(3).
** Confidential treatment has been requested as to certain portions of
these Exhibits.
(b) Reports on Form 8-K.
1. A current Report on Form 8-K dated January 27, 1994, was filed
announcing an agreement with Compaq Computer Corporation.
2. A current Report on Form 8-K dated February 10, 1994, was filed
announcing an agreement with Digital Equipment Corporation.
23
<PAGE> 25
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ADVANCED MICRO DEVICES, INC.
Registrant
March 1, 1994 By: /s/ MARVIN D. BURKETT
------------------------------------
Marvin D. Burkett
Senior Vice President, Chief
Administrative Officer and
Secretary; Chief Financial
Officer and Treasurer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- ---------------
<S> <C> <C>
/s/ W. J. SANDERS III* Chairman of the Board and Chief March 1, 1994
- ---------------------------------------------
(W. J.Sanders III) Executive Officer (Principal
Executive Officer)
/s/ ANTHONY B. HOLBROOK* Vice Chairman of the Board and March 1, 1994
- ---------------------------------------------
(Anthony B. Holbrook) Chief Technical Officer
/s/ RICHARD PREVITE* Director, President and Chief March 1, 1994
- ----------------------------------------------
(Richard Previte) Operating Officer
/s/ CHARLES M. BLALACK* Director March 1, 1994
- ----------------------------------------------
(Charles M. Blalack)
/s/ R. GENE BROWN* Director March 1, 1994
- ----------------------------------------------
(R. Gene Brown)
/s/ JOE L. ROBY* Director March 1, 1994
- ----------------------------------------------
(Joe L. Roby)
/s/ MARVIN D. BURKETT Senior Vice President, Chief March 1, 1994
- ----------------------------------------------
(Marvin D. Burkett) Administrative Officer and
Secretary; Chief Financial
Officer and Treasurer
(Principal Financial Officer)
/s/ LARRY R. CARTER Vice President and Corporate March 1, 1994
- ----------------------------------------------
(Larry R. Carter) Controller (Principal
Accounting Officer)
* By: MARVIN D. BURKETT
- ---------------------------------------------
(Marvin D. Burkett, Attorney-in-Fact)
</TABLE>
<PAGE> 26
ADVANCED MICRO DEVICES, INC.
------------------------
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
ITEM 14(A)(1) AND (2)
The information under the following captions, which is included in the
Corporation's 1993 Annual Report to Stockholders, a copy of which is attached
hereto as Exhibit 13, is incorporated herein by reference:
<TABLE>
<CAPTION>
PAGE REFERENCES
--------------------------------
1993 ANNUAL REPORT
FORM 10-K TO STOCKHOLDERS
--------- ------------------
<S> <C> <C>
Report of Independent Auditors................................... -- 29
Consolidated Statements of Operations for each of the three
fiscal years in the period ended December 26, 1993............. -- 17
Consolidated Balance Sheets at December 27, 1992 and
December 26, 1993.............................................. -- 18
Consolidated Statements of Cash Flows for each of the three
fiscal years in the period ended December 26, 1993............. -- 19
Notes to consolidated financial statements....................... -- 20-28
Supplementary financial data:
Fiscal years 1992 and 1993 by quarter (unaudited).............. -- 30-31
Schedules for each of the three fiscal years in the period ended
December 26, 1993:
I Marketable Securities....................................... F-3 --
II Amounts Receivable From Officers and Employees.............. F-4 --
V Property, plant and equipment............................... F-5 --
VI Accumulated depreciation and amortization of property, plant
and equipment............................................ F-6 --
VIII Valuation and qualifying accounts........................... F-7 --
X Supplementary operations statement information.............. F-8 --
</TABLE>
All other schedules have been omitted since the required information is not
present or is not present in amounts sufficient to require submission of the
schedules, or because the information required is included in the consolidated
financial statements or notes thereto. With the exception of the information
incorporated by reference into Parts I, II and IV of this Form 10-K, the 1993,
Annual Report to Stockholders is not to be deemed filed as part of this report.
F-1
<PAGE> 27
CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form
10-K) of Advanced Micro Devices, Inc. of our report dated January 6, 1994,
included in the 1993 Annual Report to Stockholders of Advanced Micro Devices,
Inc.
Our audits also included the financial statement schedules of Advanced
Micro Devices, Inc. listed in Item 14(a). These schedules are the responsibility
of the Corporation's management. Our responsibility is to express an opinion
based on our audits. In our opinion, the financial statement schedules referred
to above, when considered in relation to the basic financial statements taken as
a whole, present fairly in all material respects the information set forth
therein.
We also consent to the incorporation by reference in the Registration
Statement on Form S-3 (No. 33-12011) pertaining to Depositary Convertible
Exchangeable Preferred Shares, in the Registration Statement on Form S-4 (No.
33-15015) pertaining to shares issued in connection with the acquisition of
Monolithic Memories, Inc. (MMI), in the Registration Statement on Form S-8 (No.
33-16060) pertaining to options granted under the MMI stock option plans, the
Registration Statement on Form S-8 (No. 33-16095) pertaining to the 1987
Restricted Stock Award Plan of Advanced Micro Devices Inc., in the Registration
Statement on Form S-8 (No. 33-39747) pertaining to the 1991 Stock Purchase Plan
of Advanced Micro Devices, Inc., in the Registration Statements on Form S-8
(Nos. 2-70376, 2-80148, 2-93392, 33-10319, 33-26266, 33-36596 and 33-46578)
pertaining to the Stock Option and Stock Appreciation Rights Plans of the
Corporation, and in the Registration Statement on Form S-8 (No. 33-46577)
pertaining to the 1992 Stock Incentive Plan of Advanced Micro Devices, Inc., and
in the related prospectuses, of our report dated January 6, 1994, with respect
to the consolidated financial statements incorporated herein by reference, and
our report included in the preceding paragraph with respect to the consolidated
financial statement schedules included in this Annual Report (Form 10-K) of
Advanced Micro Devices, Inc.
ERNST & YOUNG
March 3, 1994
San Jose, California
F-2
<PAGE> 28
SCHEDULE I
ADVANCED MICRO DEVICES, INC.
------------------------
MARKETABLE SECURITIES
YEAR ENDED DECEMBER 26, 1993
(THOUSANDS)
<TABLE>
<S> <C>
SHORT-TERM MARKETABLE SECURITIES: (A)
Certificates of Deposit...................................................... $368,016
Commercial Paper............................................................. 34,645
Treasury Notes............................................................... 25,114
--------
Total Short-Term Marketable Securities............................................ $427,775
--------
--------
</TABLE>
- ---------------
(A) Stated at cost which approximates market. No individual security or group of
securities of an issuer exceeds 2 percent of total assets.
F-3
<PAGE> 29
SCHEDULE II
ADVANCED MICRO DEVICES, INC.
------------------------
AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES
YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993
<TABLE>
<CAPTION>
BALANCE RECEIVABLE
BALANCE AT CLOSE OF PERIOD
RECEIVABLE AT ----------------------
BEGINNING CURRENT NONCURRENT
OF PERIOD ADDITIONS COLLECTIONS ASSETS ASSETS
------------- --------- ----------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 29, 1991:
Amounts Receivable from
Employees:
Robert R. Krueger............ (1) $ 310,500 $ -- $ -- $ -- $310,500
Barry Pomeroy................ (2) -- 110,000 -- -- 110,000
------------- --------- ----------- ------- ----------
Total................ $ 310,500 $ 110,000 $ -- $ -- $420,500
------------- --------- ----------- ------- ----------
------------- --------- ----------- ------- ----------
YEAR ENDED DECEMBER 27, 1992:
Amounts Receivable from
Officers:
Larry R. Carter.............. (3) $ -- $ 120,000 $ -- $40,000 $ 80,000
------------- --------- ----------- ------- ----------
Amounts Receivable from
Employees:
Robert R. Krueger............ (1) $ 310,500 $ -- $ (55,000) $ -- $255,500
Barry Pomeroy................ (2) 110,000 -- -- -- 110,000
------------- --------- ----------- ------- ----------
$ 420,500 $ -- $ (55,000) $ -- $365,500
------------- --------- ----------- ------- ----------
Total................ $ 420,500 $ 120,000 $ (55,000) $40,000 $445,500
------------- --------- ----------- ------- ----------
------------- --------- ----------- ------- ----------
YEAR ENDED DECEMBER 26, 1993:
Amounts Receivable from
Officers:
Larry R. Carter.............. (3) $ 120,000 $ -- $ (40,000) $40,000 $ 40,000
------------- --------- ----------- ------- ----------
Amounts Receivable from
Employees:
Robert R. Krueger............ (1) $ 255,500 $ -- $ (70,000) $ -- $185,500
Barry Pomeroy................ (2) 110,000 110,000 (110,000) --(4) 110,000
------------- --------- ----------- ------- ----------
$ 365,500 $ 110,000 $ (180,000) $ -- $295,500
------------- --------- ----------- ------- ----------
Total................ $ 485,500 $ 110,000 $ (220,000) $40,000 $335,500
------------- --------- ----------- ------- ----------
------------- --------- ----------- ------- ----------
</TABLE>
- ---------------
(1) Promissory note secured by real property bearing interest at the rate of
8.74 percent per year due in July/1995.
(2) Non-interest bearing promissory note secured by real property paid off in
quarter 4/1993.
(3) Non-interest bearing, non-secured loan to be paid in three equal
installments of $40,000 due in July/1993, 1994 and 1995.
(4) Non-secured, interest bearing loan at the rate of 4.0 percent due in
February/1996.
F-4
<PAGE> 30
SCHEDULE V
ADVANCED MICRO DEVICES, INC.
------------------------
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993
(THOUSANDS)
<TABLE>
<CAPTION>
BALANCE BALANCE
BEGINNING ADDITIONS SALES/ END OF
OF PERIOD AT COST RETIREMENTS TRANSFERS PERIOD
---------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 29, 1991:
Land.......................... $ 22,168 $ 24 $ -- $ -- $ 22,192
Buildings and leasehold
improvements............... 380,323 11,679 (388) 11,349 402,963
Equipment..................... 1,009,052 66,238 (54,594) 42,582 1,063,278
Construction in progress...... 37,783 59,261 (908) (53,931) 42,205
---------- --------- ----------- --------- ----------
$1,449,326 $ 137,202 $ (55,890) $ -- $1,530,638
---------- --------- ----------- --------- ----------
---------- --------- ----------- --------- ----------
YEAR ENDED DECEMBER 27, 1992:
Land.......................... $ 22,192 $ -- $ -- $ -- $ 22,192
Buildings and leasehold
improvements............... 402,963 19,415 (7,911) 7,622 422,089
Equipment..................... 1,063,278 134,412 (60,330) 25,198 1,162,558
Construction in progress...... 42,205 68,237 (96) (32,820) 77,526
---------- --------- ----------- --------- ----------
$1,530,638 $ 222,064 $ (68,337) $ -- $1,684,365
---------- --------- ----------- --------- ----------
---------- --------- ----------- --------- ----------
YEAR ENDED DECEMBER 26, 1993:
Land.......................... $ 22,192 $ 1,637 $ -- $ 2,443 $ 26,272
Buildings and leasehold
improvements............... 422,089 5,880 (84) 16,414 444,299
Equipment..................... 1,162,558 71,681 (74,099) 175,111 1,335,251
Construction in progress...... 77,526 308,983 -- (193,968) 192,541
---------- --------- ----------- --------- ----------
$1,684,365 $ 388,181 $ (74,183) $ -- $1,998,363
---------- --------- ----------- --------- ----------
---------- --------- ----------- --------- ----------
</TABLE>
The annual provisions for depreciation and amortization have been computed
principally in accordance with the following estimated useful lives:
<TABLE>
<S> <C> <C> <C> <C> <C>
Buildings....................... 26 years
Equipment....................... 3 to 5 years
Leasehold improvements.......... Lesser of 5 years or life of lease
</TABLE>
F-5
<PAGE> 31
SCHEDULE VI
ADVANCED MICRO DEVICES, INC.
------------------------
ACCUMULATED DEPRECIATION AND AMORTIZATION OF
PROPERTY, PLANT AND EQUIPMENT
YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993
(THOUSANDS)
<TABLE>
<CAPTION>
BALANCE ADDITIONS BALANCE
BEGINNING CHARGED TO SALES/ END OF
OF PERIOD OPERATIONS OTHER(1) RETIREMENTS PERIOD
--------- ---------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C>
YEAR ENDED DECEMBER 29, 1991:
Buildings and leasehold
improvements.................. $ 129,869 $ 43,891 $ (4) $ (384) $ 173,372
Equipment........................ 672,440 112,044 672 (54,230) 730,926
Construction in progress......... -- -- -- -- --
--------- ---------- -------- ----------- ----------
$ 802,309 $155,935 $668 $ (54,614) $ 904,298
--------- ---------- -------- ----------- ----------
--------- ---------- -------- ----------- ----------
YEAR ENDED DECEMBER 27, 1992:
Buildings and leasehold
improvements.................. $ 173,372 $ 42,498 $ -- $ (6,937) $ 208,933
Equipment........................ 730,926 109,815 222 (58,814) 782,149
Construction in progress......... -- -- -- -- --
--------- ---------- -------- ----------- ----------
$ 904,298 $152,313 $222 $ (65,751) $ 991,082
--------- ---------- -------- ----------- ----------
--------- ---------- -------- ----------- ----------
YEAR ENDED DECEMBER 26, 1993:
Buildings and leasehold
improvements.................. $ 208,933 $ 38,661 $ -- $ (18) $ 247,576
Equipment........................ 782,149 136,406 366 (72,460) 846,461
Construction in progress......... -- -- -- -- --
--------- ---------- -------- ----------- ----------
$ 991,082 $175,067 $366 $ (72,478) $1,094,037
--------- ---------- -------- ----------- ----------
--------- ---------- -------- ----------- ----------
</TABLE>
- ---------------
(1) Provision for write-down to net realizable value.
F-6
<PAGE> 32
SCHEDULE VIII
ADVANCED MICRO DEVICES, INC.
------------------------
VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993
(THOUSANDS)
<TABLE>
<CAPTION>
BALANCE ADDITIONS BALANCE
BEGINNING CHARGED END OF
OF PERIOD TO OPERATIONS DEDUCTIONS(1) PERIOD
--------- ------------- ------------- -------
<S> <C> <C> <C> <C>
Allowance for doubtful accounts:
YEARS ENDED:
December 29, 1991........................ $ 4,905 $ 1,582 $ -- $ 6,487
December 27, 1992........................ 6,487 986 (794) 6,679
December 26, 1993........................ 6,679 1,540 (727) 7,492
</TABLE>
- ---------------
(1) Accounts (written off) recovered, net.
F-7
<PAGE> 33
SCHEDULE X
ADVANCED MICRO DEVICES, INC.
------------------------
SUPPLEMENTARY OPERATIONS STATEMENT INFORMATION
YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993
(THOUSANDS)
<TABLE>
<CAPTION>
CHARGED TO COSTS AND EXPENSES
--------------------------------
1991 1992 1993
-------- -------- --------
<S> <C> <C> <C>
Maintenance and repairs....................................... $ 58,097 $ 69,004 $ 76,124
</TABLE>
All other information is either not material or included in the
consolidated financial statements, notes thereto, or other schedules.
F-8
<PAGE> 34
ADVANCED MICRO DEVICES, INC.
------------------------
INDEX TO EXHIBITS
(ITEM 14(A)(3))
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------
<C> <S> <C>
3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to
the Corporation's Annual Report on Form 10-K for the fiscal period
ended December 27, 1987, is hereby incorporated by reference.
3.2 Certificate of Designations for Convertible Exchangeable Preferred
Shares, filed as Exhibit 3.2 to the Corporation's Annual Report on
Form 10-K for the fiscal year ended March 27, 1987, is hereby
incorporated by reference.
3.3 Certificate of Designations for Series A Junior Participating
Preferred Stock, filed as Exhibit 3.3 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 31, 1989,
is hereby incorporated by reference.
3.4 By-Laws, as amended, filed as Exhibit 3.4 to the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 27,
1992, is hereby incorporated by reference.
4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable
Preferred Shares, filed as Exhibit 4.3 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended March 29, 1987, is
hereby incorporated by reference.
4.2 Indenture with respect to the 6% Convertible Subordinated
Debentures due in 2012, filed as Exhibit 4.4 to the Corporation's
Annual Report on Form 10-K for the fiscal year ended March 29,
1987, is hereby incorporated by reference.
4.3 The Corporation hereby agrees to file on request of the Commission
a copy of all instruments not otherwise filed with respect to
long-term debt of the Corporation or any of its subsidiaries for
which the total amount of securities authorized under such
instruments does not exceed 10% of the total assets of the
Corporation and its subsidiaries on a consolidated basis.
4.4 Rights Agreement between the Corporation and Bank of America N.T.
& S.A., filed as Exhibit 4.1 to the Corporation's Current Report
on Form 8-K dated February 7, 1990, is hereby incorporated by
reference.
*10.1 AMD 1982 Stock Option Plan, as amended.
*10.2 AMD 1986 Stock Option Plan, as amended.
*10.3 AMD 1992 Stock Incentive Plan, as amended.
*10.4 AMD 1980 Stock Appreciation Rights Plan, as amended.
*10.5 AMD 1986 Stock Appreciation Rights Plan.
*10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 29, 1991, is hereby incorporated by reference.
*10.7 MMI 1981 Incentive Stock Option Plan, as amended.
*10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 29, 1991, is hereby incorporated by reference.
*10.9 Form of Limited Stock Appreciation Rights Agreement, filed as
Exhibit 4.11 to the Corporation's Registration Statement on Form
S-8 (No. 33-26266) is hereby incorporated by reference.
*10.10 AMD 1987 Restricted Stock Award Plan, as amended.
*10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 29, 1991, is hereby incorporated by reference.
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------
<C> <S> <C>
*10.12 Resolution of Board of Directors on September 9, 1981, regarding
acceleration of vesting of all outstanding stock options and
associated limited stock appreciation rights held by officers
under certain circumstances, filed as Exhibit 10.10 to the
Corporation's Annual Report on Form 10-K for fiscal year ended
March 31, 1985, is hereby incorporated by reference.
*10.13(a) Employment Agreement dated July 1, 1991, between the Corporation
and W. J. Sanders III, filed as Exhibit 10.1 to the Corporation's
Form 8-K dated September 3, 1991, is hereby incorporated by
reference.
*10.13(b) Amendment dated August 27, 1991, to Employment Agreement between
the Corporation and W. J. Sanders III, filed as Exhibit 10.2 to
the Corporation's Form 8-K dated September 3, 1991, is hereby
incorporated by reference.
*10.14 Management Continuity Agreement between the Corporation and W. J.
Sanders III, filed as Exhibit 10.14 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 29, 1991,
is hereby incorporated by reference.
*10.15 Bonus Agreement between the Corporation and Richard Previte, filed
as Exhibit 10.15 to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 29, 1991, is hereby
incorporated by reference.
*10.16 Executive Bonus Plan, filed as Exhibit 10.16 to the Corporation's
Annual Report on Form 10-K for the fiscal year ended December 29,
1991, is hereby incorporated by reference.
*10.17 Bonus Agreement between the Corporation and Anthony B. Holbrook,
filed as Exhibit 10.17 for the fiscal year ended December 27,
1992, is hereby incorporated by reference.
*10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
March 30, 1986, is hereby incorporated by reference.
*10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, is hereby incorporated by reference.
*10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit
10.18 to the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, is hereby incorporated by
reference.
*10.21 License Agreement with Western Electric Company, Incorporated,
filed as Exhibit 10.5 to the Corporation's Annual Report on Form
10-K for fiscal year ended 1979, is hereby incorporated by
reference.
10.22 Intellectual Property Agreements with Intel Corporation, filed as
Exhibit 10.21 to the Corporation's Annual Report on Form 10-K for
the fiscal year ended December 29, 1991, is hereby incorporated by
reference.
10.23 Award of Arbitrator in Case No. 626879 between the Corporation and
Intel Corporation, filed as Exhibit 28.2 on Form 8-K dated
February 24, 1992, is hereby incorporated by reference.
10.24 Form of Indemnification Agreements with former officers of
Monolithic Memories, Inc., filed as Exhibit 10.22 to the
Corporation's Annual Report on Form 10-K for the fiscal year ended
December 27, 1987, is hereby incorporated by reference.
10.25 Agreement and Plan of Reorganization between Monolithic Memories
Inc., the Corporation and Advanced Micro Devices Merger
Corporation, filed as Annex A to the Corporation's Amendment No. 1
to Registration Statement on Form S-4 (No. 33-15015), dated June
25, 1987, is hereby incorporated by reference.
*10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to
the Corporation's Annual Report on Form 10-K for the fiscal year
ended December 29, 1991, is hereby incorporated by reference.
**10.27(a) Joint Venture Agreement between the Corporation and Fujitsu
Limited.
**10.27(b) Technology Cross-License Agreement between the Corporation and
Fujitsu Limited.
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ---------- ------------------------------------------------------------------
<C> <S> <C>
**10.27(c) AMD Investment Agreement between the Corporation and Fujitsu
Limited.
**10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu
Limited.
**10.27(e) Joint Venture License Agreement between the Corporation and
Fujitsu Limited.
**10.27(f) Joint Development Agreement between the Corporation and Fujitsu
Limited.
10.28 Credit Agreement dated as of January 4, 1993, among Advanced Micro
Devices, Inc., Bank of America National Trust and Savings
Association as Agent, The First National Bank of Boston as
Co-Agent, filed as Exhibit 10.27 to the Corporation's Annual
Report on Form 10-K for the fiscal year ended December 27, 1992,
is hereby incorporated by reference.
10.29(a) Amended and Restated Guaranty dated as of January 4, 1993, by
Advanced Micro Devices, Inc. in favor of CIBC Inc., filed as
Exhibit 10.28(a) to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
10.29(b) Building Lease by and between CIBC Inc. and AMD International
Sales & Service, Ltd. dated as of September 22, 1992, filed as
Exhibit 10.28(b) to the Corporation's Annual Report on Form 10-K
for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
10.29(c) First Amendment to Building Lease dated December 22, 1992, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.,
filed as Exhibit 10.28(c) to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
10.29(d) Land Lease by and between CIBC Inc. and AMD International Sales &
Service, Ltd. dated as of September 22, 1992, filed as Exhibit
10.28(d) to the Corporation's Annual Report on Form 10-K for the
fiscal year ended December 27, 1992, is hereby incorporated by
reference.
10.29(e) First Amendment to Land Lease dated December 22, 1992, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.,
filed as Exhibit 10.28(e) to the Corporation's Annual Report on
Form 10-K for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
*10.30 Executive Savings Plan.
*10.31 Form of Split Dollar Agreement.
*10.32 Form of Collateral Security Assignment Agreement.
*10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan,
filed as Exhibit 4.3 to the Corporation's Registration Statement
on Form S-8 (No. 33-46577) is hereby incorporated by reference.
*10.34 1992 United Kingdom Share Option Scheme, Filed as Exhibit 4.2 to
the Corporation's Registration on Form S-8 (No. 33-46577) is
hereby incorporated by reference.
11.1 Statement re computation of per share earnings.
13. 1993 Annual Report to Stockholders which have been incorporated by
reference into Parts I, II, and IV of this annual report. To the
extent filed, refer to the front page hereinabove.
22. List of AMD subsidiaries.
24. Consent of Independent Auditors, refer to page F-2 hereinabove.
25. Power of Attorney.
</TABLE>
The Corporation will furnish a copy of any exhibit on request and payment
of the Corporation's reasonable expenses of furnishing such exhibit.
* Management contracts and compensatory plans or arrangements required to be
filed as an Exhibit to comply with Item 14(a)(3).
** Confidential treatment has been requested as to certain portions of these
Exhibits.
<PAGE> 37
AMD -- 90185
<PAGE> 1
EXHIBIT 10.1
ADVANCED MICRO DEVICES, INC.
1982 STOCK OPTION PLAN
1. PURPOSE
(a) The purpose of the Plan is to provide a means whereby selected
eligible employees of Advanced Micro Devices, Inc., and its subsidiaries
(hereinafter called the "Company") may be given an opportunity to purchase the
$0.01 par value Common Stock of the Company (the "Common Stock"). The word
"subsidiary" or "parent" as used in this Plan, means a subsidiary or parent
corporation as defined in Section 425(f) of the Internal Revenue Code of 1954,
as amended. The Internal Revenue Code of 1954, as amended to date and as it
may be amended from time to time, is referred to herein as the "Code".
(b) The Company, by means of the Plan, seeks to retain the
services of its current key employees, and to secure and retain the services of
new key employees necessary for the continued improvement of operation.
2. STOCK OPTIONS
Stock options granted pursuant to the Plan may, at the discretion of
the Board, be granted either as Incentive Stock Options ("ISO") or as
Nonstatutory Stock Options ("NSO"). An ISO shall mean an option described in
section 422A(b) of the
1
<PAGE> 2
Code. A NSO shall mean an option not described in Sections 422(b), 422A(b),
423(b) or 424(b) of the Code. No option may be granted alternatively as an ISO
and as a NSO.
3. ADMINISTRATION
(a) The Board of Directors (the "Board"), whose authority shall be
plenary, shall administer the Plan and may delegate part or all of its
administrative powers with respect to part or all of the Plan pursuant to
Section 3(d); provided, however, that the Board of Directors shall delegate
administration of the Plan to the extent required by Section 3(e).
(b) The Board or its delegate shall have the power, subject to and
within the limits of the express provisions of the Plan:
(1) To grant Options and Rights pursuant to the Plan.
(2) To determine from time to time which of the eligible
persons shall be granted Options or Rights under the Plan, the number
of Shares for which each Option or Right shall be granted, the term of
each granted Option or Right and the time or times during the term of
each Option or Right within which all or portions of each Option or
Right may be exercised,
2
<PAGE> 3
(which at the discretion of the Board or its delegate may be
accelerated).
(3) To grant Options and/or Rights in exchange for
cancellation of Options and/or Rights granted earlier at different
exercise prices, provided, however, nothing contained herein shall
empower the Board or its delegate to grant an ISO under conditions or
pursuant to terms that are inconsistent with the requirements of
Section 422 of the Code.
(4) To prescribe the terms and provisions of each Option
and/or Right granted (which need not be identical) and the form of
written instrument that shall constitute the Option and/or Right
agreement.
(5) To take appropriate action to amend any Option and/or
Right hereunder, including to cause any Option granted hereunder to
cease to be an ISO, provided that no such action may be taken by the
Board or its delegate without the written consent of the affected
Participant.
(c) The Board or its delegate shall also have the power, subject
to and within the limits of the express provisions of this Plan:
3
<PAGE> 4
(1) To construe and interpret the Plan and Options and
Rights granted under the Plan, and to establish, amend and revoke
rules and regulations for administration of the Plan. The Board or
its delegate, in the exercise of this power, shall generally determine
all questions of policy and expediency that may arise and may correct
any defect, omission or inconsistency in the Plan or in any Option or
Right agreement in a manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective.
(2) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to promote the best
interests of the Company.
(d) The Board of Directors may, by resolution, delegate
administration of the Plan (including, without limitation, the Board's powers
under Sections 3(b) and (c) above), under either or both of the following:
(1) with respect to the participation of or granting of
Options or Rights to an employee who is not subject to Section 16 of
the Exchange Act, to a committee of one or more members of the Board
of Directors, whether or not such members of the Board of Directors
are Disinterested Directors;
4
<PAGE> 5
(2) with respect to matters other than the selection for
participation in the Plan, substantive decisions concerning the
timing, pricing, amount or other material term of an Option or Right,
to a committee of one or more members of the Board of Directors,
whether or not such members of the Board of Directors are
Disinterested Directors, or to one or more officers of the Company.
(e) Unless each member of the Board is a Disinterested Director,
the Board shall, by resolution, delegate administration of the Plan with
respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of an Option or Right, to a
committee of two or more Disinterested Directors. Any committee to which
administration of the Plan is so delegated pursuant to this Section 3(e) may
also administer the Plan with respect to an employee described in Section
3(d)(1) above.
(f) Except as required by Section 3(e) above, the Board shall have
complete discretion to determine the composition, structure, form, term and
operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board
5
<PAGE> 6
otherwise provides, the committee shall have, with respect to the
administration of the Plan, all of the powers and discretion theretofore
possessed by the Board and delegable to such committee, subject to any
constraints which may be adopted by the Board from time to time and which are
not inconsistent with the provisions of the Plan. The Board, at any time, may
revest in the Board any of its administrative powers under the Plan, except
under circumstances where a committee is required to administer the Plan under
Section 3(e) above.
(g) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
(h) The term "Disinterested Director" shall mean a member of the
Board of Directors of the Company who has not, during the one year prior to
service as an administrator of the Plan, or during such service, been granted
or awarded equity securities of the Company pursuant to this Plan or any other
plan of the Company or any of its Affiliates (except for automatic grants of
options to Outside Directors pursuant to Section 8 of the 1992 Stock Incentive
Plan).
4. SHARES SUBJECT TO PLAN AND TO OPTIONS
(a) Subject to the provisions of Section 10 (relating to
adjustments upon changes in stock), the stock which may be
6
<PAGE> 7
sold pursuant to options granted under the Plan shall not exceed in the
aggregate 8,500,000 shares of the Company's authorized Common Stock and may be
unissued shares or reacquired shares or shares bought on the market for the
purposes of issuance under the Plan. If any options granted under the Plan
shall for any reason terminate or expire without having been exercised in full,
the stock not purchased under such options shall be available again for the
purposes of the Plan.
(b) The aggregate fair market value of the stock (determined at
the time of the grant of the option) for which any employee may be granted
ISO's in any calendar year under all plans of the Company and its parent and
subsidiary shall not exceed $100,000 plus any unused limit carryover (as
defined in the Code) to such year or any other maximum aggregate fair market
value to be established in the future under the Code. Should it be determined
that any ISO granted under the Plan inadvertently exceeds such maximum, such
ISO grant shall be deemed to be a grant of a NSO to the extent, but only to the
extent, of such excess.
5. ELIGIBILITY
Options may be granted only to full or part time employees of the
Company and/or of any parent or subsidiary. Directors of the Company who are
not also employees of the Company shall not be eligible for the benefits of the
Plan. No ISO may be granted to a person who, at the time of grant,
7
<PAGE> 8
owns stock possessing more than 10% of the total combined voting power of the
Company or of its parent or any subsidiary unless the option price is at least
110% of the fair market value of the stock subject to the option and the term
of the option does not exceed five (5) years from the date such ISO is granted.
Any employee may hold more than one option at any time.
6. TERMS OF OPTION AGREEMENT
Each option agreement shall be in such form and shall contain such
terms and conditions as the Board or its delegate from time to time shall deem
appropriate, subject to the following limitations:
(a) The term of any ISO shall not be greater than ten (10) years
from the date it was granted.
(b) The purchase price of each option shall be no less than the
fair market value of the stock subject to the option on the date the
option is granted.
(c) An option by its terms shall not be transferable otherwise
than by will or by the laws of descent and distribution and may be
exercisable during the lifetime of the option holder only by the
option holder.
8
<PAGE> 9
(d) An option (the "New Option") which is designated by the Board
or its delegate, as the case may be, as an ISO by its terms shall not
be exercisable, notwithstanding that such may be vested in whole or in
part, with respect to all or any part of the Shares subject thereto
while there is outstanding any other ISO, granted to the optionee
prior to the grant of the New Option, to purchase Common Stock in the
Company or in a corporation that is, at the time of granting of the
New Option, to purchase Common Stock in the Company or in a
corporation that is, at the time of granting of the New Option, a
Parent or Subsidiary of the Company, or in a predecessor corporation
of any such corporations. For purposes of the preceding sentence, an
ISO shall be treated as "outstanding" until such option is exercised
in full or expires by reason of the lapse of time.
(e) Upon the termination of a Participant's employment, his rights
to exercise an option then held by him shall be only as follows:
DEATH OR DISABILITY: If a Participant's employment is
terminated by death or disability, he or his estate as the
case may be, shall have the right for a period of twelve (12)
months following the date of death or disability, or for
9
<PAGE> 10
such longer period as the Board or its delegate may fix, to exercise
the option to the extent the Participant was entitled to exercise such
option on the date of his death or disability, or to the extent
otherwise specified by the Board or its delegate, which may so
specify, at a time that is subsequent to the date of his death or
disability, provided the actual date of exercise is in no event after
the expiration date of the term of the option. A Participant's estate
shall mean his legal representative or any person who acquires the
right to exercise an option by reason of the Participant's death or
disability.
MISCONDUCT: If a Participant is determined by the Board or its
delegate (as defined in Section 3 hereinabove) to have committed an
act of theft, embezzlement, fraud, dishonesty, a breach of fiduciary
duty to the Company (or affiliate), or deliberate disregard of the
rules of the Company (or affiliate) which resulted in loss, damage or
injury to the Company (or affiliate) or if a Participant makes any
unauthorized disclosure of any of the trade secrets or confidential
information of the Company (or affiliate), engages in any conduct
which constitutes unfair competition with the Company (or affiliate),
10
<PAGE> 11
induces any customer of the Company (or affiliate) to break any
contract with the Company (or affiliate) or induces any principal for
whom the Company (or affiliate) acts as agent to terminate such agency
relationship, neither the Participant nor his estate shall be entitled
to exercise any option with respect to any shares whatsoever after
termination of employment, whether or not after termination of
employment, the Participant may receive payment from the Company (or
affiliate) for vacation pay, for services rendered prior to
termination, for services for the day on which termination occurs, for
salary in lieu of notice, or for other benefits. In making such
determination, the Board or its delegate shall give the Participant an
opportunity to present to the Board or its delegate (as defined in
Section 3 hereinabove) evidence on his behalf. For the purpose of
this paragraph, of this subsection 6(e), termination of employment
shall be deemed to occur when the Company (or affiliate) dispatches
notice or advice to Participant that his employment is terminated.
OTHER REASONS: If a Participant's employment is terminated for any
reason other than those
11
<PAGE> 12
mentioned above under "Death or Disability" or "Misconduct", he or his
estate may, within three (3) months following such termination, or
within such longer period as the Board may fix, exercise the option to
the extent such option was exercisable by the Participant on the date
of termination of his employment, or to the extent otherwise specified
by the Board, which may so specify at a time that is subsequent to the
date of the termination of his employment, provided the date of the
exercise is in no event after the expiration of the term of the
option.
DIVORCE: If an Option or any portion thereof is transferred
pursuant to a qualified domestic relations order to a former
spouse who is neither a director nor an employee of the
Company or any of its Affiliates, the former spouse shall have
the right for the period of twelve months following the date
of transfer, or such other period as the Board or its delegate
may fix, to exercise the Option to the extent the Participant
was entitled to exercise such option on the date of transfer.
Unless otherwise specified in the option agreement or by court
order, the date of transfer shall be the date the qualified
domestic relations order is executed.
12
<PAGE> 13
(f) Options may also contain such other provisions, which shall
not be inconsistent with any of the foregoing terms, as the Board or
its delegate shall deem appropriate. No option, however, nor anything
contained in the Plan, shall confer upon any employee any right to
continue in the employ of the Company (or affiliate) nor limit in any
way the right of the Company (or affiliate) to terminate his
employment at any time.
(g) If any Participant's employment is terminated by the Company
for any reason other than for Misconduct or, if applicable, by
Constructive Termination, within one year after a Change of Control
has occurred, then all Options held by such Participant shall become
fully vested for exercise upon the date of termination, irrespective
of the vesting provisions of the Participant's option agreement.
The term "Change of Control" shall mean a change of
control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
or in response to any other form or report to the Securities and
Exchange Commission or any stock
13
<PAGE> 14
exchange on which the Company's shares are listed which requires the
reporting of a change of control. In addition, a Change of Control
shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the beneficial owner, directly or indirectly, of securities of the
Company representing more than 20% of the combined voting power of the
Company's then outstanding securities; or (ii) in any two-year period,
individuals who were members of the Board of Directors (the "Board")
at the beginning of such period plus each new director whose election
or nomination for election was approved by at least two-thirds of the
directors in office immediately prior to such election or nomination,
cease for any reason to constitute at least a majority of the Board;
or (iii) a majority of the members of the Board in office prior to the
happening of any event and who are still in office after such event,
determines in its sole discretion within one year after such event,
that as a result of such event there has been a Change of Control.
Notwithstanding the foregoing definition, "Change of Control"
shall exclude the acquisition of securities representing more than 20%
of the combined voting power of the Company by the Company, any of its
wholly-owned subsidiaries, or any trustee or other fiduciary holding
14
<PAGE> 15
securities of the Company under an employee benefit plan now or
hereafter established by the Company. As used herein, the term
"beneficial owner" shall have the same meaning as under Section 13(d)
of the Exchange Act and related case law.
The term "Constructive Termination" shall mean a resignation
by a Participant who has been elected by the Company's Board of
Directors as a corporate officer of the Company, due to diminution or
adverse change in the circumstances of such Participant's employment
with the Company, as determined in good faith by the Participant,
including, without limitation, reporting relationships, job
description, duties, responsibilities, compensation, perquisites,
office or location of employment. Constructive Termination shall be
communicated by written notice to the Company, and such termination
shall be deemed to occur on the date such notice is delivered to the
Company.
7. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right ("SAR") also may be granted with respect to
all or some of the stock covered by any option (the "Related Option"). Either
a General SAR, or a Limited SAR or both a General SAR and a Limited SAR may be
granted with respect to the same Related Option. Upon the exercise of
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a SAR, the Related Option will cease to be exercisable to the extent of the
stock with respect to which the SAR is exercised. Upon the Exercise or
termination of the Related Option the SAR that relates thereto will cease to be
exercisable. All terms and conditions pertaining to any SAR shall be governed
by the provisions of the 1980 Stock Appreciation Rights Plan of the Company, as
amended, provided, however, that SARs which are granted with respect to a
Related Option that is an ISO shall contain such terms and conditions as may
from time to time be necessary pursuant to applicable provisions of the Code
and Treasury Department regulations to permit such Related Option to qualify as
an ISO.
8. PAYMENTS AND LOANS UPON EXERCISE
(a) The purchase price of stock sold pursuant to an option shall
be paid either in full in cash or by certified check at the time the option is
exercised or pursuant to any deferred payment arrangement that the Board of
Directors in its discretion may approve.
(b) The Company may make loans or guarantee loans made by an
appropriate financial institution to individual optionees, including officers,
on such terms as may be approved by the Board of Directors for the purpose of
financing the exercise of options granted under the Plan and the payment of any
taxes that may be due by reason of such exercise.
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(c) In addition, if and to the extent authorized by the Board of
Directors, optionees may make all or any portion of any payment due to the
Company upon exercise of an option by delivery of any property (including
securities of the Company) other than cash, so long as such property
constitutes valid consideration for the stock under applicable law.
(d) Where, in the opinion of counsel to the Company, the Company
has or will have an obligation to withhold taxes relating to the exercise of
any stock option, the Board or its delegate may in its discretion require that
such tax obligation be satisfied in a manner satisfactory to the Company before
shares deliverable pursuant to the exercise of such option are transferred to
the option holder. An option holder may make a Withholding Election, to pay
required minimum withholding taxes by the withholding of shares from the total
number of shares deliverable pursuant to the exercise of the option or by
delivering a sufficient number of previously acquired shares to the Company and
may elect to have additional taxes paid by the delivery of previously acquired
shares, in each case in accordance with procedures established by the Board or
its delegate. Previously owned shares delivered in payment of such taxes must
have been held at least six months prior to the exercise date, or may be
subject to such other conditions as the Board or its delegate may require. The
value of shares withheld or delivered shall be the fair market value of such
shares on the date the exercise becomes taxable. Such Withholding Election
shall be
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subject to the approval of the Board or its delegate, and must be made pursuant
to rules established by the Board or its delegate.
9. USE OF PROCEED FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall be used for general corporate purposes.
10. ADJUSTMENT OF AND CHANGES IN THE STOCK
In the event that the shares of Common Stock of the Company, as
presently constituted, shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split-up, combination of shares, or
otherwise), or if the number of shares of Common Stock of the Company shall be
increased through the payment of a stock dividend, then there shall be
substituted for or added to each share of Common Stock of the Company
theretofore appropriated or thereafter subject or which may become subject to
an option under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock of the Company
shall be so changed, or for which each such share shall be exchanged, or to
which each such share shall be entitled, as the case may be. Outstanding
options shall also be amended as to price and other terms if necessary
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to reflect the foregoing events. In the event there shall be any other change
in the number or kind of the outstanding shares of Common Stock of the Company,
or of any stock or other securities into which such Common Stock shall have
changed, or for which it shall have been exchanged, then if the Board of
Directors shall, in its sole discretion, determine that such change equitably
requires an adjustment in any option theretofore granted or which may be
granted under the Plan, such adjustment shall be made in accordance with such
determination. No right to purchase fractional shares shall result from any
adjustment in options pursuant to this Section 10. In case of any such
adjustment, the shares subject to the option shall be rounded down to the
nearest whole share. Notice of any adjustment shall be given by the Company to
each holder of any option which shall have been so adjusted and such adjustment
(whether or not such notice is given) shall be effective and binding for all
purposes of the Plan.
11. AMENDMENT OF THE PLAN
The Board of Directors, at any time, and from time to time, may amend
the Plan, subject to the limitation, however, that, except as provided in
Section 10 (relating to adjustments upon changes in stock), no amendment shall
be effective unless approved, within twelve (12) months before or after the
date of such amendment's adoption, by the vote or
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written consent of a majority of the outstanding shares of the Company entitled
to vote, where such amendment will:
a) increase the number of shares reserved for options
under the Plan;
b) materially increase the benefits accruing to
Participants under the Plan; or
c) materially modify the requirements of Section 5 as to
eligibility for participation in the Plan.
It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employees with the maximum benefits
provided or to be provided under Section 422A of the Code and the regulations
promulgated thereunder relating to employee incentive stock options and/or to
bring the Plan or options granted under it into compliance therewith.
Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by amendment of the Plan, except
with the consent, which may be obtained in any manner that the Board or its
delegate deems appropriate, of the person to whom the option was granted.
12. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors at any time may suspend or terminate the Plan.
The Plan, unless sooner terminated, shall terminate at the end of ten (10)
years from the date the Plan
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is adopted by the Board of Directors or approved by the stockholders of the
Company, whichever is earlier. An option may not be granted under the Plan
while the Plan is suspended or after it is terminated.
Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted,
which may be obtained in any manner that the Board or its delegate deems
appropriate.
13. LISTING, QUALIFICATION OR APPROVAL OF STOCK; APPROVAL OF OPTIONS
All options granted under the Plan are subject to the requirement that
if at any time the Board of Directors shall determine in its discretion that
the listing or qualification of the shares of stock subject thereto on any
securities exchange or under any applicable law, or the consent or approval of
any governmental regulatory body or the Shareholders of the Company, is
necessary or desirable as a condition of or in connection with the issuance of
shares under the option, the option may not be exercised in whole or in part
unless such listing, qualification, consent or approval shall have been
effected or obtained free of any condition not acceptable to the Board of
Directors.
14. BINDING EFFECT OF CONDITIONS
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The conditions and stipulations hereinabove contained or in any option
granted pursuant to the Plan shall be and constitute a covenant running with
all the shares of the Company owned by the Participant at any time, directly or
indirectly whether the same have been issued or not, and those shares of the
Company owned by the Participant shall not be sold, assigned or transferred by
any person save and except in accordance with the terms and conditions herein
provided, and the Participant shall agree to use his best efforts to cause the
officers of the Company to refuse to record on the books of the Company any
assignments or transfer made or attempted to be made except as provided in the
Plan and to cause said officers to refuse to cancel old certificates or to
issue to deliver new certificates therefore where the purchaser or assignee has
acquired certificates for the stock represented thereby, except strictly in
accordance with the provisions of this Plan.
15. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective as determined by the Board but no
options granted under it shall be exercisable until the Plan has been approved
by the vote or written consent of the holders of a majority of the outstanding
shares of the Company entitled to vote.
16. MISCELLANEOUS
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The use of any masculine pronoun or similar term is intended to be
without legal significance as to gender.
The term "Board or its delegate" as used herein refers to the Board
of Directors of the Company or its delegate as set forth in Section
3(c) hereinabove.
Nothing in this Plan or in any option agreement shall confer on an
employee any right to continue in the employ of the Company or any subsidiary,
or shall interfere with or restrict the rights of the Company or any
subsidiary, which are hereby expressly reserved, to discharge an employee at
any time, with or without cause, or to adjust the compensation of any employee.
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<PAGE> 1
EXHIBIT 10.2
ADVANCED MICRO DEVICES, INC.
1986 STOCK OPTION PLAN
1. PURPOSE
(a) The purpose of the Plan is to provide a means whereby selected
eligible employees of Advanced Micro Devices, Inc., and its subsidiaries
(hereinafter called the "Company") may be given an opportunity to purchase the
$0.01 par value Common Stock of the Company (the "Common Stock"). The word
"subsidiary" or "parent," as used in this Plan, means a subsidiary or parent
corporation as defined in Section 425(f) of the Internal Revenue Code of 1954,
as amended. The Internal Revenue Code of 1954, as amended to date and as it
may be amended from time to time, is referred to herein as the "Code".
(b) The Company, by means of the Plan, seeks to retain the
services of current key employees, and to secure and retain the services of new
key employees necessary for the continued improvement of operations.
2. STOCK OPTIONS
Stock Options granted pursuant to the Plan may, at the discretion of
the Board, be granted either as Incentive Stock Options ("ISO") or as
Nonstatutory Stock Options ("NSO"). An ISO shall mean an option described in
section 422A(b) of the Code. A NSO shall mean an option not described in
Sections
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422(b), 422A(b), 423(b) or 424(b) of the Code. No option may be granted
alternatively as an ISO and as a NSO.
3. ADMINISTRATION
(a) The Board of Directors (the "Board"), whose authority shall be
plenary, shall administer the Plan and may delegate part or all of its
administrative powers with respect to part or all of the Plan pursuant to
Section 3(d); provided, however, that the Board of Directors shall delegate
administration of the Plan to the extent required by Section 3(e).
(b) The Board or its delegate shall have the power, subject to and
within the limits of the express provisions of the Plan:
(1) To grant Options and Rights pursuant to the Plan.
(2) To determine from time to time which of the eligible
persons shall be granted Options or Rights under the Plan, the number
of Shares for which each Option or Right shall be granted, the term of
each granted Option or Right and the time or times during the term of
each Option or Right within which all or portions of each Option or
Right may be exercised (which
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<PAGE> 3
at the discretion of the Board or its delegate may be accelerated).
(3) To grant Options and/or Rights in exchange for
cancellation of Options and/or Rights granted earlier at different
exercise prices, provided, however, nothing contained herein shall
empower the Board or its delegate to grant an ISO under conditions or
pursuant to terms that are inconsistent with the requirements of
Section 422 of the Code.
(4) To prescribe the terms and provisions of each Option
and/or Right granted (which need not be identical) and the form of
written instrument that shall constitute the Option and/or Right
agreement.
(5) To take appropriate action to amend any Option and/or
Right hereunder, including to cause any Option granted hereunder to
cease to be an ISO, provided that no such action may be taken by the
Board or its delegate without the written consent of the affected
Participant.
(c) The Board or its delegate shall also have the power, subject
to and within the limits of the express provisions of this Plan:
(1) To construe and interpret the Plan and Options
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<PAGE> 4
and Rights granted under the Plan, and to establish, amend and revoke
rules and regulations for administration of the Plan. The Board or
its delegate, in the exercise of this power, shall generally determine
all questions of policy and expediency that may arise and may correct
any defect, omission or inconsistency in the Plan or in any Option or
Right agreement in a manner and to the extent it shall deem necessary
or expedient to make the Plan fully effective.
(2) Generally, to exercise such powers and to perform
such acts as are deemed necessary or expedient to promote the best
interests of the Company.
(d) The Board of Directors may, by resolution, delegate
administration of the Plan (including, without limitation, the Board's powers
under Sections 3(b) and (c) above), under either or both of the following:
(1) with respect to the participation of or granting of
Options or Rights to an employee who is not subject to Section 16 of
the Exchange Act, to a committee of one or more members of the Board
of Directors, whether or not such members of the Board of Directors
are Disinterested Directors;
(2) with respect to matters other than the
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selection for participation in the Plan, substantive decisions
concerning the timing, pricing, amount or other material term of an
Option or Right, to a committee of one or more members of the Board of
Directors, whether or not such members of the Board of Directors are
Disinterested Directors, or to one or more officers of the Company.
(e) Unless each member of the Board is a Disinterested Director,
the Board shall, by resolution, delegate administration of the Plan with
respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of an Option or Right, to a
committee of two or more Disinterested Directors. Any committee to which
administration of the Plan is so delegated pursuant to this Section 3(e) may
also administer the Plan with respect to an employee described in Section
3(d)(1) above.
(f) Except as required by Section 3(e) above, the Board shall have
complete discretion to determine the composition, structure, form, term and
operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of
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<PAGE> 6
the Plan, all of the powers and discretion theretofore possessed by the Board
and delegable to such committee, subject to any constraints which may be
adopted by the Board from time to time and which are not inconsistent with the
provisions of the Plan. The Board, at any time, may revest in the Board any of
its administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 3(e) above.
(g) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
(h) The term "Disinterested Director" shall mean a member of the
Board of Directors of the Company who has not, during the one year prior to
service as an administrator of the Plan, or during such service, been granted
or awarded equity securities of the Company pursuant to this Plan (except for
automatic grants of options to Outside Directors pursuant to Section 8 of the
1992 Stock Incentive Plan) or any other plan of the Company or any of its
Affiliates.
4. SHARES SUBJECT TO PLAN AND TO OPTIONS
(a) The total sum of the stock which may be sold pursuant to
options granted under the Plan plus the Rights which may be exercised under the
1986 Stock Appreciation Rights
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Plan shall not exceed in the aggregate one million (1,000,000) shares of the
Company's authorized Common Stock. Such stock may be unissued shares or
reaquired shares or shares bought on the market for the purposes of issuance
under the Plan. This number of authorized shares shall take into account
adjustments pursuant to Section 10, and shall include stock dividends with
respect to shares previously issued pursuant to this Plan. If any options
granted under the Plan shall for any reason terminate or expire without having
been exercised in full, the stock not purchased under such options shall be
available again for the purposes of the Plan.
(b) The aggregate fair market value of the stock (determined at
the time of the grant of the option) for which any employee may be granted
ISO's in any calendar year under all plans of the Company and its parent or
subsidiaries shall not exceed $100,000 plus any unused limit carryover (as
defined in the Code) to such year or any other maximum aggregate fair market
value to be established in the future under the Code. Should it be determined
that any ISO granted under the Plan inadvertently exceeds such maximum, such
ISO grant shall be deemed to be a grant of a NSO to the extent, but only to the
extent, of such excess.
5. ELIGIBILITY
Options may be granted only to full or part time employees of the
Company and/or of any parent or subsidiary.
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Members of the Board of Directors of the Company who are not also employees of
the Company shall not be eligible for the benefits of the Plan. No ISO may be
granted to a person who, at the time of grant, owns stock possessing more than
10% of the total combined voting power of the Company or its parent or any
subsidiary unless the option price is at least 110% of the fair market value of
the stock subject to the option and the term of the option does not exceed five
(5) years from the date such ISO is granted. Any employee may hold more than
one option at any time.
6. TERMS OF OPTION AGREEMENT
Each option agreement shall be in such form and shall contain such
terms and conditions as the Board or its delegate from time to time shall deem
appropriate, subject to the following limitations:
(a) The term of any ISO shall not be greater than ten (10) years
from the date it was granted.
(b) The purchase price of each ISO shall be not less than the fair
market value of the stock subject to the ISO on the date the ISO is granted.
The purchase price of each option other than an ISO shall be established by the
Board or its delegate, but shall be in no event less than fifty percent (50%)
of the fair market value of the stock subject to such option on the date such
option is granted.
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(c) An option, by its terms shall not be transferable otherwise
than by will or by the laws of descent and distribution and may be exercisable
during the lifetime of the option holder only by the option holder, or by his
guardian or legal representative.
(d) An option (the "New Option") which is designated by the Board
or its delegate, as the case may be, as an ISO by its terms shall not be
exercisable, notwithstanding that such may be vested in whole or in part, with
respect to all or any part of the Shares subject thereto while there is
outstanding any other ISO, granted to the optionee prior to the grant of the
New Option, to purchase Common Stock in the Company or in a corporation that
is, at the time of granting of the New Option, a Parent or Subsidiary of the
Company, or in a predecessor corporation of any such corporations. For
purposes of the preceding sentence, an ISO shall be treated as "outstanding"
until such option is exercised in full or expires by reason of the lapse of
time.
(e) Upon the termination of a Participant's employment, his rights
to exercise an option then held by him shall be only as follows:
DEATH OR DISABILITY: If a Participant's employment is terminated by
death or disability, he or his estate, as the case may be, shall have
the right for a period of
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<PAGE> 10
twelve (12) months following the date of death or disability, or for
such longer period as the Board or its delegate may fix, to exercise
the option to the extent the Participant was entitled to exercise such
option on the date of his death or disability, or to the extent
otherwise specified by the Board or its delegate, which may so
specify, at a time that is subsequent to the date of his death or
disability, provided the actual date of exercise is in no event after
the expiration of the term of the option. A Participant's estate
shall mean his legal representative or any person who acquires the
right to exercise an option by reason of the Participant's death or
disability.
MISCONDUCT: If a Participant is determined by the Board or its
delegate to have committed an act of theft, embezzlement, fraud,
dishonesty, a breach of fiduciary duty to the Company (or affiliate),
or deliberate disregard of the rules of the Company (or affiliate), or
if a Participant makes any unauthorized disclosure of any of the trade
secrets or confidential information of the Company (or affiliate),
engages in any conduct which constitutes unfair competition with the
Company (or affiliate), induces any customer of the Company (or
affiliate) to break any contract with the Company (or affiliate) or
induces any principal for whom the Company (or affiliate) acts as
agent to terminate such agency
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relationship, neither the Participant nor his estate shall be entitled
to exercise any option with respect to any shares whatsoever, after
termination of employment, whether or not after termination of
employment, the Participant may receive payment from the Company (or
affiliate) for vacation pay, for services rendered prior to
termination, for services for the day on which termination occurs, for
salary in lieu of notice, or for any other benefits. In making such
determination, the Board or its delegate shall give the Participant an
opportunity to present evidence on his behalf. For the purposes of
this paragraph of this subsection 6(e), termination of employment
shall be deemed to occur when the Company (or affiliate) dispatches
notice or advice to Participant that his employment is terminated.
OTHER REASONS: If a Participant's employment is terminated for any
reason other than those mentioned above under "Death or Disability" or
"Misconduct", he or his estate may, within three (3) months following
such termination, or within such longer period as the Board or its
delegate may fix, exercise the option to the extent such option was
exercisable by the Participant on the date of termination of his
employment, or to the extent otherwise specified by the Board or its
delegate, which may so specify at a time that is subsequent to the
date of the termination of his employment, provided the
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date of exercise is in no event after the expiration of the term of
the option.
DIVORCE: If an Option or any portion thereof is transferred pursuant
to a qualified domestic relations order to a former spouse who is
neither a director nor an employee of the Company or any of its
Affiliates, the former spouse shall have the right for the period of
twelve months following the date of transfer, or such other period as
the Board or its delegate may fix, to exercise the Option to the
extent the Participant was entitled to exercise such option on the
date of transfer. Unless otherwise specified in the option agreement
or by court order, the date of transfer shall be the date the
qualified domestic relations order is executed.
(f) The vesting of options may be on such terms as the Board may
prescribe, and such vesting may be made automatically accelerated in the event
of a change of control of the Company.
If any Participant's employment is terminated by the Company for any
reason other than for Misconduct or, if applicable, by Constructive
Termination, within one year after a Change of Control has occurred, then all
Options held by such Participant shall become fully vested for exercise upon
the date of termination, irrespective of the vesting provisions of
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<PAGE> 13
the Participant's option agreement.
Unless otherwise specified in an individual's option agreement, the
term "Change of Control" shall mean a change of control of a nature that would
be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), or in response to any other form or report to the
Securities and Exchange Commission or any stock exchange on which the Company's
shares are listed which requires the reporting of a change of control. In
addition, a Change of Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the beneficial owner, directly or indirectly, of securities of
the Company representing more than 20% of the combined voting power of the
Company's then outstanding securities; or (ii) in any two-year period,
individuals who were members of the Board of Directors (the "Board") at the
beginning of such period plus each new director whose election or nomination
for election was approved by at least two-thirds of the directors in office
immediately prior to such election or nomination, cease for any reason to
constitute at least a majority of the Board; or (iii) a majority of the members
of the Board in office prior to the happening of any event and who are still in
office after such event, determines in its sole discretion within one year
after such event, that as a result of such event there has been a
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Change of Control.
Notwithstanding the foregoing definition, "Change of Control" shall
exclude the acquisition of securities representing more than 20% of the
combined voting power of the Company by the Company, any of its wholly-owned
subsidiaries, or any trustee or other fiduciary holding securities of the
Company under an employee benefit plan now or hereafter established by the
Company. As used herein, the term "beneficial owner" shall have the same
meaning as under Section 13(d) of the Exchange Act and related case law.
The term "Constructive Termination" shall mean a resignation by a
Participant who has been elected by the Company's Board of Directors as a
corporate officer of the Company, due to diminution or adverse change in the
circumstances of such Participant's employment with the Company, as determined
in good faith by the Participant, including, without limitation, reporting
relationships, job description, duties, responsibilities, compensation,
perquisites, office or location of employment. Constructive Termination shall
be communicated by written notice to the Company, and such termination shall be
deemed to occur on the date such notice is delivered to the Company.
(g) Options may also contain such other provisions, which shall
not be inconsistent with any of the foregoing
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<PAGE> 15
terms, as the Board or its delegate shall deem appropriate. No option,
however, nor anything contained in the Plan, shall confer upon any employee any
right to continue in the employ of the Company (or affiliate) nor limit in any
way the right of the Company (or affiliate) to terminate his employment at any
time.
7. STOCK APPRECIATION RIGHTS
A Stock Appreciation Right ("SAR") also may be granted with respect to
all or some of the stock covered by any option granted pursuant to the Plan
(the "Related Option"). Either a General SAR, or a Limited SAR or both a
General SAR and a Limited SAR may be granted with respect to the same Related
Option. All terms and conditions pertaining to any SAR shall be governed by
the provisions of the 1986 Stock Appreciation Rights Plan of the Company, as
amended. SARs which are granted with respect to a Related Option that is an
ISO shall contain such terms and conditions as may from time to time be
necessary pursuant to applicable provisions of the Code and Treasury Department
regulations to permit such Related Option to qualify as an ISO.
8. PAYMENTS AND LOANS UPON EXERCISE
(a) The purchase price of stock sold pursuant to an option shall
be paid either in full in cash or by certified check at the time the option is
exercised or pursuant to any deferred payment arrangement that the Board of
Directors in its
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discretion may approve.
(b) The Company may make loans or guarantee loans made by an
appropriate financial institution to individual optionees, including officers,
on such terms as may be approved by the Board of Directors for the purpose of
financing the exercise of options granted under the Plan and the payment of any
taxes that may be due by reason of such exercise.
(c) In addition, if and to the extent authorized by the Board of
Directors, optionees may make all or any portion of any payment due to the
Company upon exercise of an option by delivery of any property (including
securities of the Company) other than cash, so long as such property
constitutes valid consideration for the stock under applicable law.
(d) Where, in the opinion of counsel to the Company, the Company
has or will have a legal obligation to withhold taxes relating to the exercise
of any stock option, the Board or its delegate may in its discretion require
that such tax obligation be satisfied in a manner satisfactory to the Company
before shares deliverable pursuant to the exercise of such option are
transferred to the option holder. An option holder may make a Withholding
Election to pay required minimum withholding taxes by the withholding of shares
from the total number of shares deliverable pursuant to the exercise of the
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option or by delivering a sufficient number of previously acquired shares to
the Company and may elect to have additional taxes paid by the delivery of
previously acquired shares, in each case in accordance with rules and
procedures established by the Board or its delegate. Previously owned shares
delivered in payment for such taxes must have been owned for at least six
months prior to the exercise date, or may be subject to such other conditions
as the Board or its delegate may require. The value of shares withheld or
delivered shall be the fair market value of such shares on the date the
exercise becomes taxable. Such Withholding Election shall be subject to the
approval of the Board or its delegate, and must be in compliance with rules and
procedures established by the Board or its delegate.
9. USE OF PROCEED FROM STOCK
Proceeds from the sale of stock pursuant to options granted under the
Plan shall be used for general corporate purposes.
10. ADJUSTMENT OF AND CHANGES IN THE STOCK
In the event that the shares of Common Stock of the Company, as
presently constituted, shall be changed into or exchanged for a different
number or kind of shares of stock or other securities of the Company or of
another corporation (whether by reason of merger, consolidation,
recapitalization, reclassification, split- up, combination of shares, or
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otherwise), or if the number of shares of Common Stock of the Company shall be
increased through the payment of a stock dividend, then there shall be
substituted for or added to each share of the Common Stock of the Company
theretofore appropriated or thereafter subject or which may become subject to
an option under the Plan, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock of the Company
shall be so changed, or for which each such share shall be exchanged, or to
which each such share shall be entitled, as the case may be. Outstanding
options shall also be amended as to price and other terms if necessary to
reflect the foregoing events. In the event there shall be any other change in
the number or kind of the outstanding shares of Common Stock of the Company, or
of any stock or other securities into which such Common Stock shall have
changed, or for which it shall have been exchanged, then if the Board of
Directors shall, in its sole discretion, determine that such change equitably
requires an adjustment in any option theretofore granted or which may be
granted under the Plan, such adjustment shall be made in accordance with such
determination. No right to purchase fractional shares shall result from any
adjustment in options pursuant to this Section 10. In case of any such
adjustment, the shares subject to the option shall be rounded down to the
nearest whole share. Notice of any adjustment shall be given by the Company
to each holder of any option which shall have been so adjusted and such
adjustment (whether or not such notice is given) shall be
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effective and binding for all purposes of the Plan.
11. AMENDMENT OF THE PLAN
The Board of Directors, at any time, and from time to time, may amend
the Plan, subject to the limitation, however, that, except as provided in
Section 10 (relating to adjustments upon changes in stock), no amendment shall
be effective unless approved, within twelve (12) months before or after the
date of such amendment's adoption, by the vote or written consent of a majority
of the outstanding shares of the Company entitled to vote, where such amendment
will:
a) increase the number of shares reserved for options under the
Plan;
b) materially increase the benefits accruing to Participants
under the Plan; or
c) materially modify the requirements of Section 5 as to
eligibility for participation in the Plan.
The Board of Directors may amend the Plan in any respect necessary to
provide the Company's employees with the maximum benefits provided or to be
provided under Section 422A of the Code and the regulations promulgated
thereunder relating to employee incentive stock options and/or to bring the
Plan or options granted under it into compliance therewith.
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Rights and obligations under any option granted before any amendment
of the Plan shall not be altered or impaired by amendment of the Plan, except
with the consent of the person to whom the option was granted, which may be
obtained in any manner deemed by the Board or its delegate to be appropriate.
12. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors at any time may suspend or terminate the Plan.
The Plan, unless sooner terminated, shall terminate at the end of ten (10)
years from the date the Plan is adopted by the Board of Directors or approved
by the stockholders of the Company, whichever is earlier. An option may not be
granted under the Plan while the Plan is suspended or after it is terminated.
Rights and obligations under any option granted while the Plan is in
effect shall not be altered or impaired by suspension or termination of the
Plan, except with the consent of the person to whom the option was granted,
which may be obtained in any manner that the Board or its delegate deems
appropriate.
13. LISTING, QUALIFICATION OR APPROVAL OF STOCK; APPROVAL OF OPTIONS
All options granted under the Plan are subject to the requirement that
if at any time the Board of Directors shall determine in its discretion that
the listing or qualification
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of the shares of stock subject thereto on any securities exchange or under any
applicable law, or the consent or approval of any governmental regulatory body
or the Shareholders of the Company, is necessary or desirable as a condition of
or in connection with the issuance of shares under the option, the option may
not be exercised in whole or in part unless such listing, qualification,
consent or approval shall have been effected or obtained free of any condition
not acceptable to the Board of Directors.
14. BINDING EFFECT OF CONDITIONS
The conditions and stipulations hereinabove contained or in any option
granted pursuant to the Plan shall be and constitute a covenant running with
all the shares of the Company owned by the Participant at any time, directly or
indirectly whether the same have been issued or not, and those shares of the
Company owned by the Participant shall not be sold, assigned or transferred by
any person save and except in accordance with the terms and conditions herein
provided, and the Participant shall agree to use his best efforts to cause the
officers of the Company to refuse to record on the books of the Company any
assignments or transfer made or attempted to be made except as provided in the
Plan and to cause said officers to refuse to cancel old certificates or to
issue to deliver new certificates therefore where the purchaser or assignee has
acquired certificates for the stock represented thereby, except strictly in
accordance with the provisions of this Plan.
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15. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective as determined by the Board but no
options granted under it shall be exercisable until the Plan has been approved
by the vote or written consent of the holders of a majority of the outstanding
shares of the Company entitled to vote.
16. MISCELLANEOUS
The use of any masculine pronoun or similar term is intended to be
without legal significance as to gender.
The term "Board or its delegate" as used herein refers to the Board of
Directors of the Company or its delegate as set forth in Section 3(c)
hereinabove.
Nothing in this Plan or in any option agreement shall confer on an
employee any right to continue in the employ of the Company or any subsidiary,
which are hereby expressly reserved, to discharge an employee at any time, with
or without cause, or to adjust the compensation of any employee.
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EXHIBIT 10.3
ADVANCED MICRO DEVICES, INC.
1992 STOCK INCENTIVE PLAN
AS AMENDED
1. PURPOSE
The purpose of this Plan is to encourage key personnel, whose
long-term employment is considered essential to the Company's continued
progress, to remain in the employ of the Company or its subsidiaries. By means
of the Plan, the Company also seeks to attract new key employees whose future
services are necessary for the continued improvement of operations. The
Company intends future increases in the value of securities granted under this
Plan to form part of the compensation for services to be rendered by such
employees in the future.
2. DEFINITIONS
The terms defined in this Section 2 shall have the respective
meanings set forth herein, unless the context otherwise requires.
(a) Affiliate: The term "Affiliate" shall mean any
corporation, partnership, joint venture or other entity in which the Company
holds an equity, profits or voting interest of thirty percent (30%) or more.
(b) Award Price: The term "Award Price" shall mean a price
designated by the Board or its delegate and which is not less than the Fair
Market Value per Share on the date the Stock Appreciation Right is granted. In
the case of a General Right which is exercisable only in lieu of exercising a
Related Option, unless otherwise specified in the Right Agreement, the Award
Price shall be the exercise price of such Related Option.
(c) Board or its delegate: The term "Board or its delegate"
shall mean the Company's Board of Directors or its delegate as set forth in
Sections 3(d) and 3(e) hereinbelow.
(d) Change of Control: The term "Change of Control" shall
mean a change of control of a nature that would be required to be reported in
response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or in
response to any other form or report to the Securities and Exchange Commission
or any stock exchange on which the Company's shares are listed which requires
the reporting of a change of control. In addition, a Change of Control shall
be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial
owner, directly or indirectly, of securities of the Company representing more
than 20% of the combined voting power of the Company's then outstanding
securities; or (ii) in any two-year period, individuals who were members of the
Board of Directors (the "Board") at the beginning of such period plus each new
director whose election or nomination for election was approved by at least
two-thirds of the directors in office
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immediately prior to such election or nomination, cease for any reason to
constitute at least a majority of the Board; or (iii) a majority of the members
of the Board in office prior to the happening of any event and who are still in
office after such event, determines in its sole discretion within one year
after such event, that as a result of such event there has been a Change of
Control. The Board or its delegate may, at its discretion, define a Change of
Control differently for purposes of any individual option agreement.
Notwithstanding the foregoing definition, "Change of
Control" shall exclude the acquisition of securities representing more than 20%
of the combined voting power of the Company by the Company, any of its
wholly-owned subsidiaries, or any trustee or other fiduciary holding securities
of the Company under an employee benefit plan now or hereafter established by
the Company. As used herein, the term "beneficial owner" shall have the same
meaning as under Section 13(d) of the Exchange Act and related case law.
(e) Code: The term "Code" shall mean the Internal Revenue
Code of 1986, as amended to date and as it may be amended from time to time.
(f) Company: The term "Company" shall mean Advanced Micro
Devices, Inc., a Delaware corporation.
(g) Constructive Termination: The term "Constructive
Termination" shall mean a resignation by a Participant who has been elected by
the Company's Board of Directors as a corporate officer of the Company, due to
diminution or adverse change in the circumstances of such Participant's
employment with the Company, as determined in good faith by the Participant,
including, without limitation, reporting relationships, job description,
duties, responsibilities, compensation, perquisites, office or location of
employment. Constructive Termination shall be communicated by written notice
to the Company, and such termination shall be deemed to occur on the date such
notice is delivered to the Company.
(h) Disinterested Director: The term "Disinterested
Director" shall mean a member of the Board of Directors of the Company who has
not, during the one year prior to service as an administrator of the Plan, or
during such service, been granted or awarded equity securities of the Company
pursuant to this Plan (except for automatic grants of options to Outside
Directors pursuant to Section 8 hereof) or any other plan of the Company or any
of its Affiliates.
(i) Event Price per Share: The term "Event Price per Share"
as used in Section 12 with respect to the exercise of a Limited Right shall
mean the highest price per Share paid in connection with the event constituting
a Change of Control. Any securities or property which are part or all of the
consideration paid for Shares in connection with the event constituting a
Change of Control shall be valued in determining the Event Price per Share at
the highest of (A) the valuation placed on such securities or property by the
corporation, person or other entity which paid such price or (B) the valuation
placed on such securities or property by the Board of Directors.
(j) Fair Market Value per Share: The term "Fair Market
Value per Share" shall mean as of any day (i) the closing price for Shares on
the New York Stock Exchange as reported on the composite tape on the day as of
which such determination is being made or, if there was
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no sale of Shares reported on the composite tape on such day, on the most
recently preceding day on which there was such a sale, or (ii) if the Shares
are not listed or admitted to trading on the New York Stock Exchange on the day
as of which the determination is made, the amount determined by the Board or
its delegate to be the fair market value of a Share on such day.
(k) ISO: The term "ISO" shall mean a stock option described
in Section 422(b) of the Code.
(l) NSO: The term "NSO" shall mean a nonstatutory stock
option not described in Sections 422(b) or 423(a) of the Code.
(m) Option: The term "Option" shall mean (except as herein
otherwise provided) a stock option granted under this Plan.
(n) Outside Director: The term "Outside Director" shall
mean a member of the Board of Directors of the Company who is not also an
employee of the Company or an Affiliate.
(o) Participant: The term "Participant" shall mean any
person who holds an Option or a Stock Appreciation Right granted under this
Plan.
(p) Plan: The term "Plan" shall mean this Advanced Micro
Devices, Inc. 1992 Stock Incentive Plan, as amended from time to time.
(q) Shares: The term "Shares" shall mean shares of Common
Stock of the Company and any shares of stock or other securities received as a
result of the adjustments provided for in Section 14 of this Plan.
(r) Related Option: The term "Related Option" shall mean an
Option with respect to which a Right has been granted which is exercisable only
to the extent that such Option has not previously been exercised.
(s) Rights: The term "General Right" shall mean a Stock
Appreciation Right granted pursuant to the provisions of Section 11 of this
Plan. The term "Limited Right" shall mean a Stock Appreciation Right granted
pursuant to the provisions of Section 12 of this Plan. The term "Right" shall
mean any General Right or Limited Right.
(t) Stock Appreciation Right: The term "Stock Appreciation
Right" shall mean a right granted under this Plan to receive, without payment
to the Company, cash and/or Shares equivalent in value to the Spread as defined
in Sections 11 and 12 of this Plan.
(u) Window Period: The term "Window Period" shall mean the
period beginning on the third business day following the date of release for
publication of the quarterly and annual summary statements of sales and
earnings of the Company and ending on the twelfth business day following such
date.
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3. ADMINISTRATION
(a) The Board of Directors (the "Board"), whose authority
shall be plenary, shall administer the Plan and may delegate part or all of its
administrative powers with respect to part or all of the Plan pursuant to
Section 3(d); provided, however, that the Board of Directors shall delegate
administration of the Plan to the extent required by Section 3(e).
(b) Except for automatic grants of Options to Outside
Directors pursuant to Section 8 hereof, the Board or its delegate shall have
the power, subject to and within the limits of the express provisions of the
Plan:
(1) To grant Options and Rights pursuant to the
Plan.
(2) To determine from time to time which of the
eligible persons shall be granted Options or Rights under the Plan,
the number of Shares for which each Option or Right shall be
granted, the term of each granted Option or Right and the time or
times during the term of each Option or Right within which all or
portions of each Option or Right may be exercised (which at the
discretion of the Board or its delegate may be accelerated).
(3) With respect to persons who are not also
executive officers, to grant Options and/or Rights in exchange for
cancellation of Options and/or Rights granted earlier at different
exercise prices; provided, however, nothing contained herein shall
empower the Board or its delegate to grant an ISO under conditions
or pursuant to terms that are inconsistent with the requirements of
Section 422 of the Code.
(4) To prescribe the terms and provisions of each
Option and/or Right granted (which need not be identical) and the
form of written instrument that shall constitute the Option and/or
Right agreement.
(5) To take appropriate action to amend any
Option and/or Right hereunder, including to amend the vesting
schedule of any outstanding Option or Right, or to cause any Option
granted hereunder to cease to be an ISO, provided that no such
action adverse to a Participant's interest may be taken by the Board
or its delegate without the written consent of the affected
Participant.
(c) The Board or its delegate shall also have the power,
subject to and within the limits of the express provisions of this Plan:
(1) To construe and interpret the Plan and
Options and Rights granted under the Plan, and to establish, amend
and revoke rules and regulations for administration of the Plan.
The Board or its delegate, in the exercise of this power, shall
generally determine all questions of policy and expediency that may
arise and may correct any defect, omission or inconsistency in the
Plan or in any Option or Right agreement in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully
effective.
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(2) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote
the best interests of the Company.
(d) The Board of Directors may, by resolution, delegate
administration of the Plan (including, without limitation, the Board's powers
under Sections 3(b) and (c) above), under either or both of the following:
(1) with respect to the participation of or
granting of Options or Rights to an employee who is not subject to
Section 16 of the Exchange Act, to a committee of one or more
members of the Board of Directors, whether or not such members of
the Board of Directors are Disinterested Directors;
(2) with respect to matters other than the
selection for participation in the Plan, substantive decisions
concerning the timing, pricing, amount or other material term of an
Option or Right, to a committee of one or more members of the Board
of Directors, whether or not such members of the Board of Directors
are Disinterested Directors, or to one or more officers of the
Company.
(e) Unless each member of the Board is a Disinterested
Director, the Board shall, by resolution, delegate administration of the Plan
with respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of an Option or Right, to a
committee of two or more Disinterested Directors. Any committee to which
administration of the Plan is so delegated pursuant to this Section 3(e) may
also administer the Plan with respect to an employee described in Section
3(d)(1) above.
(f) Except as required by Section 3(e) above, the Board
shall have complete discretion to determine the composition, structure, form,
term and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board at any time may revest in the Board any of its
administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 3(e) above.
(g) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
4. SHARES SUBJECT TO PLAN
Subject to the provisions of Section 14 (relating to adjustments
upon changes in stock), the Shares which may be issued pursuant to the exercise
of Options or Rights granted under the Plan shall not exceed in the aggregate
ninemillion three hundred fifty thousand (9,350,000) Shares of the Company's
authorized Common Stock and may be unissued Shares or
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<PAGE> 6
reacquired Shares or Shares bought on the market for the purposes of issuance
under the Plan. If any Options or Rights granted under the Plan shall for any
reason be cancelled, terminate or expire without having been exercised in full,
the Shares subject to such Options or Rights shall be available again for the
purposes of the Plan, except for Shares subject to a Related Option which is
cancelled due to the exercise for Shares of a Right related to such Option, and
except for Shares subject to a Right which is cancelled due to the exercise for
Shares of an Option related to such Right. Shares which are delivered or
withheld from the Shares otherwise due on exercise of an Option or Right may be
reused and sold pursuant to Options or Rights granted to a Participant who is
not subject to Section 16 of the Exchange Act. If a Right is exercised for
cash, the Shares underlying the Right or cancelled related Option, if any,
shall become available again for the grant of Options or Rights to any
Participant.
5. ELIGIBILITY
Options and/or Rights may be granted only to full or part-time
employees of the Company and/or of any Affiliate. Outside Directors shall not
be eligible for the benefits of the Plan, except as provided in Section 8
hereof. Any employee or Outside Director may hold more than one Option and
Right at any time.
6. STOCK OPTIONS -- GENERAL PROVISIONS
(a) Except for automatic grants of Options to Outside
Directors under Section 8 hereof, each Option granted pursuant to the Plan may,
at the discretion of the Board or its delegate, be granted either as an ISO or
as an NSO. No option may be granted alternatively as an ISO and as an NSO.
(b) To the extent that the aggregate exercise price for ISOs
which are exercisable for the first time by a Participant during any calendar
year (under this Plan or any other plans of the Company or its Affiliates)
exceeds $100,000, such options shall be treated as NSOs.
(c) No ISO may be granted to a person who, at the time of
grant, owns stock possessing more than 10% of the total combined voting power
of the Company or any of its Affiliates unless the exercise price is at least
110% of the Fair Market Value per Share of the stock subject to the option and
the term of the option does not exceed five (5) years from the date such ISO is
granted.
7. TERMS OF OPTION AGREEMENT
Except as otherwise required by the terms of Section 8 hereof, each
option agreement shall be in such form and shall contain such terms and
conditions as the Board or its delegate from time to time shall deem
appropriate, subject to the following limitations:
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(a) The term of any Option (other than an ISO) shall not be
greater than ten (10) years and one day from the date it was granted. The term
of any ISO shall not be greater than ten (10) years from the date it was
granted.
(b) The exercise price of each Option shall be not less than
the Fair Market Value per Share of the stock subject to the Option on the date
the Option is granted.
(c) Unless otherwise specified in the option agreement, no
Option shall be transferable otherwise than by will, pursuant to the laws of
descent and distribution or pursuant to a qualified domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security Act,
or the rules thereunder, or as otherwise permitted by regulations and
interpretations under Section 16 of the Exchange Act.
(d) Except as otherwise provided in paragraph (e) of this
Section 7, the rights of a Participant other than an Outside Director to
exercise an Option shall be limited as follows:
(1) DEATH OR DISABILITY: If a Participant's
employment is terminated by Death or Disability, then the
Participant or the Participant's estate, or such other person as may
hold the option, as the case may be, shall have the right for a
period of twelve (12) months following the date of Death or
Disability, or for such other period as the Board or its delegate
may fix, to exercise the Option to the extent the Participant was
entitled to exercise such Option on the date of his Death or
Disability, or to such extent as may otherwise be specified by the
Board or its delegate (which may so specify after the date of his
Death or Disability but before expiration of the Option), provided
the actual date of exercise is in no event after the expiration of
the term of the Option. A Participant's estate shall mean his legal
representative or any person who acquires the right to exercise an
Option by reason of the Participant's Death or Disability.
(2) MISCONDUCT: If a Participant is determined
by the Board or its delegate to have committed an act of theft,
embezzlement, fraud, dishonesty, a breach of fiduciary duty to the
Company (or Affiliate), or deliberate disregard of the rules of the
Company (or Affiliate), or if a Participant makes any unauthorized
disclosure of any of the trade secrets or confidential information
of the Company (or Affiliate), engages in any conduct which
constitutes unfair competition with the Company (or Affiliate),
induces any customer of the Company (or Affiliate) to break any
contract with the Company (or Affiliate), or induces any principal
for whom the Company (or Affiliate) acts as agent to terminate such
agency relationship, neither the Participant, the Participant's
estate nor such other person who may then hold the Option shall be
entitled to exercise any Option with respect to any shares
whatsoever, after termination of employment, whether or not after
termination of employment the Participant may receive payment from
the Company (or Affiliate) for vacation pay, for services rendered
prior to termination, for services rendered for the day on which
termination occurs, for salary in lieu of notice, or for any other
benefits. In making such determination, the Board or its delegate
shall give the Participant an opportunity to present to the Board or
its delegate evidence on his behalf. For the purpose of this
paragraph, termination of employment shall be deemed to occur on the
date when the Company dispatches notice or advice to the Participant
that his employment is terminated.
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(3) TERMINATION FOR OTHER REASONS: If a
Participant's employment is terminated for any reason other than
those mentioned above under "DEATH OR DISABILITY" or "MISCONDUCT,"
the Participant, the Participant's estate, or such other person who
may then hold the Option may, within three months following such
termination, or within such longer period as the Board or its
delegate may fix, exercise the Option to the extent such Option was
exercisable by the Participant on the date of termination of his
employment, or to the extent otherwise specified by the Board or its
delegate (which may so specify after the date of the termination of
his employment but before expiration of the Option) provided the
date of exercise is in no event after the expiration of the term of
the Option.
(4) DIVORCE: If an Option or any portion thereof
is transferred pursuant to a qualified domestic relations order to a
former spouse who is neither an Outside Director nor an employee of
the Company or any of its Affiliates, the former spouse shall have
the right for the period of twelve months following the date of
transfer, or such other period as the Board or its delegate may fix,
to exercise the Option to the extent the Participant was entitled to
exercise such option on the date of transfer. Unless otherwise
specified in the option agreement or by court order, the date of
transfer shall be the date the qualified domestic relations order is
executed.
(e) If any Participant's employment is terminated by the
Company for any reason other than for Misconduct or, if applicable, by
Constructive Termination, within one year after a Change of Control has
occurred, then all Options held by such Participant shall become fully vested
for exercise upon the date of termination, irrespective of the vesting
provisions of the Participant's option agreement. For purposes of this
subsection (e), the term "Change of Control" shall have the meaning assigned by
this Plan, unless a different meaning is defined in an individual Participant's
option agreement.
(f) Options may also contain such other provisions, which
shall not be inconsistent with any of the foregoing terms, as the Board or its
delegate shall deem appropriate.
(g) The maximum number of shares which are subject to
Options granted to any individual, plus the maximum number of Rights which are
not associated with a Related Option and which are granted to any individual,
shall not exceed in the aggregate two million (2,000,000) shares over the full
ten-year life of the Plan.
8. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS
(a) On the date of adoption of this Plan by the Board, each
Outside Director shall be granted an option to purchase 12,000 Shares under the
Plan (the "First Option"). Thereafter, on the first business day coincident
with or following each annual meeting of the Company's stockholders, each
Outside Director reported as being elected shall be granted an additional
option to purchase 3,000 Shares under the Plan (the "Annual Option"); provided,
however, that an Outside Director who has not previously
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been elected as a member of the Board of Directors of the Company shall then be
granted a First Option; i.e., an option to purchase 12,000 Shares under the
Plan. Further, subject to the right of any Outside Director who has not
previously been elected as a member of the Board of Directors of the Company to
receive a First Option, if there are insufficient Shares available under the
Plan for each Outside Director to receive an Annual Option (as adjusted) in any
year, the number of Shares subject to each Annual Option in such year shall
equal the total number of available Shares then remaining under the Plan
divided by the number of Outside Directors on such date, as rounded down to
avoid fractional Shares. All Options granted to Outside Directors shall be
subject to the following terms and conditions of this Section 8.
(b) Nonstatutory Options. All Options granted to Outside
Directors pursuant to the Plan shall be NSOs.
(c) Exercise Price. The exercise price under each Option
granted to an Outside Director shall be one hundred percent of the Fair Market
Value per Share subject thereto on the date the Option is granted and shall be
payable in full at the time the Option is exercised (i) in cash or by certified
check, (ii) by delivery of Shares to the Company which shall have been owned
for at least six months and have a Fair Market Value per Share on the date of
surrender equal to the exercise price, or (iii) by delivery to the Company of a
properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Company from sale or loan proceeds the amount
required to pay the exercise price and any applicable tax withholding.
(d) Duration and Vesting of Options. Each Option granted to
an Outside Director shall be for a term of ten years plus one day. Each First
Option shall vest and become exercisable on July 15 of subsequent calendar
years, according to the following schedule: 4,800 shares in the first calendar
year following the date of grant; 3,600 shares in the second such calendar
year; 2,400 shares in the third such calendar year; and 1,200 shares in the
fourth such calendar year. Each Annual Option shall vest and become
exercisable on July 15 of subsequent calendar years according to the following
schedule: in equal installments of 1,000 shares each in the second, third and
fourth calendar years following the date of grant. Any Shares acquired by an
Outside Director upon exercise of an option shall not be freely transferable
until six months after the date stockholder approval referred to in Section 15
hereof is obtained.
(e) Termination of Tenure on the Board. The rights to
exercise an Option granted to an Outside Director shall be limited as follows:
(1) DEATH, DISABILITY OR TERMINATION: If an
Outside Director's tenure on the Board is terminated for any reason,
then the Outside Director or the Outside Director's estate, as the
case may be, shall have the right for a period of twelve months
following the date such tenure is terminated to exercise the Option
to the extent the Outside Director was entitled to exercise such
Option on the date the Outside Director's tenure terminated;
provided the actual date of exercise is in no event after the
expiration of the term of the Option. An Outside Director's
"estate" shall mean the Outside Director's legal representative or
any person who acquires the right to exercise an Option by reason of
the Outside Director's Death or Disability.
(2) DIVORCE: If an Option or any portion thereof
is transferred pursuant to a qualified domestic relations order to a
former spouse who is neither an Outside
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Director nor an employee of the Company or any of its Affiliates,
the former spouse shall have the right for the period of twelve
months following the date of transfer, or such other period as the
Board or its delegate may fix, to exercise the Option to the extent
the Participant was entitled to exercise such option on the date of
transfer. Unless otherwise specified in the option agreement or by
court order, the date of transfer shall be the date the qualified
domestic relations order is executed.
(f) The automatic grants to Outside Directors pursuant to
this Section 8 shall not be subject to the discretion of any person. The other
provisions of this Plan shall apply to the Options granted automatically
pursuant to this Section 8, except to the extent such other provisions are
inconsistent with this Section 8.
9. PAYMENTS AND LOANS UPON EXERCISE OF OPTIONS
With respect to Options other than Options granted to Outside
Directors pursuant to Section 8, the following provisions shall apply:
(a) The exercise price of Shares sold pursuant to an Option
shall be paid either in full in cash or by certified check at the time the
Option is exercised or in accordance with any deferred payment arrangement that
the Board or its delegate in its discretion may approve.
(b) In addition, if and to the extent authorized by the
Board or its delegate, Participants may make all or any portion of any payment
due to the Company upon exercise of an Option (i) by delivery of any property
(including securities of the Company) other than cash, so long as such property
constitutes valid consideration for the stock under applicable law and has a
fair market value on date of delivery equal to the exercise price, or (ii) by
delivery to the Company of a properly executed exercise notice together with
irrevocable instructions to a broker to promptly deliver to the Company from
sale or loan proceeds the amount required to pay the exercise price and any
applicable tax withholding. If securities of the Company are delivered in
payment of the exercise price pursuant to this paragraph, such securities shall
have been owned for at least six months (or such other period as the Board or
its delegate may require) and have a fair market value on the date of surrender
equal to the exercise price. Any securities delivered by a Participant who is
subject to Section 16 of the Exchange Act must be the same class of stock as
the stock to be received upon exercise of the Option.
(c) The Company may make loans or guarantee loans made by an
appropriate financial institution to individual Participants, including
officers, on such terms as may be approved by the Board of Directors for the
purpose of financing the exercise of Options granted under the Plan and the
payment of any taxes that may be due by reason of such exercise.
(d) In addition, a Participant may elect to have the Company
withhold from the number of Shares otherwise issuable upon exercise of an
Option, a sufficient number of Shares with an aggregate Fair Market Value per
Share on the date of exercise equal to the exercise price. Any such election
shall be subject to the approval of the Board or its delegate and must be made
in compliance with rules and procedures established by the Board or its
delegate.
10
<PAGE> 11
10. TAX WITHHOLDING
(a) Where, in the opinion of counsel to the Company, the
Company has or will have an obligation to withhold taxes relating to the
exercise of any Option or Right, the Board or its delegate may in its
discretion require that such tax obligation be satisfied in a manner
satisfactory to the Company. In satisfying such obligation with respect to a
General or Limited Right exercised for cash, the Company may withhold such
taxes from any cash award. With respect to the exercise of an Option or a
General Right, in whole or in part, for Shares, the Company may require the
payment of such taxes before Shares deliverable pursuant to such exercise are
transferred to the holder of the Option or General Right.
(b) With respect to the exercise of an Option or a General
Right, in whole or in part, for Shares, a Participant may elect (a "Withholding
Election") to pay his withholding tax obligation by the withholding of Shares
from the total number of Shares deliverable pursuant to the exercise of such
Option or General Right or by delivering to the Company a sufficient number of
previously acquired Shares, and may elect to have additional taxes paid by the
delivery of previously acquired shares, in each case in accordance with rules
and procedures established by the Board or its delegate. Previously owned
shares delivered in payment for such taxes must have been owned for at least
six months prior to the exercise date, or may be subject to such other
conditions as the Board or its delegate may require. The value of Shares
withheld or delivered shall be the Fair Market Value per Share on the date the
exercise becomes taxable. All Withholding Elections are subject to the
approval of the Board or its delegate and must be made in compliance with rules
and procedures established by the Board or its delegate.
11. STOCK APPRECIATION RIGHTS -- GENERAL RIGHTS
(a) The Board or its delegate shall have authority in its
discretion to grant a General Right to any eligible employee. A General Right
may be granted to a Participant irrespective of whether such Participant holds,
is being granted, or has been previously granted an Option, a Limited Right or
a General Right under the Plan. A General Right may be made exercisable
without regard to the exercisability of any Option or may be made exercisable
only to the extent of, and in lieu of, a Related Option. A General Right may
be granted with respect to some or all of the Shares issuable pursuant to the
Related Option.
(b) With respect to the exercise of any General Right for
Shares by any Participant, and with respect to the exercise of a General Right
for Shares or cash by a Participant who is not subject to Section 16 of the
Exchange Act, the term "Spread" as used in paragraph (c) of this Section 11
shall mean an amount equal to the product computed by multiplying (i) the
excess of (A) the Fair Market Value per Share on the date such General Right is
exercised over (B) the Award Price by (ii) the number of Shares with respect to
which such General Right is being exercised. With respect to the exercise of
any General Right for cash by a Participant who is subject to Section 16 of the
Exchange Act pursuant to an election made in accordance with paragraphs (c) and
(d) of this Section 11, the term "Spread" as used in paragraph (c) of this
Section 11 shall mean an amount equal to the product computed by multiplying
(i) the excess of (A) the highest Fair Market Value per Share during a Window
Period over (B) the
11
<PAGE> 12
Award Price by (ii) the number of Shares with respect to which such General
Right is being exercised. With respect to the exercise of a General Right for
cash pursuant to an election made in accordance with paragraph (f) of this
Section 11 by a Participant who is subject to Section 16 of the Exchange Act,
the term "Spread" as used in paragraph (c) of this Section 11 shall mean an
amount equal to the product computed by multiplying (i) the excess of (A) the
Fair Market Value per Share on the date the election becomes effective over (B)
the Award Price by (iii) the number of Shares with respect to which the General
Right is being exercised.
(c) On the exercise of a General Right as provided in
paragraph (g) of this Section 11, the holder thereof (subject to compliance
with paragraph (d) or paragraph (f) of this Section 11, if applicable) shall be
entitled at his election to receive either:
(i) a number of Shares equal to the quotient computed by
dividing the Spread by the Fair Market Value per Share on the date
of exercise of the General Right; provided, however, that in lieu of
fractional Shares the Company shall pay cash equal to the same
fraction of the Fair Market Value per Share on the date of exercise
of the General Right; or
(ii) an amount in cash equal to the Spread; or
(iii) a combination of cash in the amount specified in such
holder's notice of exercise, and a number of Shares calculated as
provided in clause (i) of this paragraph (c), after reducing the
Spread by such cash amount, plus cash in lieu of any fractional
Share as provided above.
(d) This paragraph (d) shall only apply to Participants who
are subject to Section 16 of the Exchange Act. Unless an election to receive
cash upon the exercise of a General Right is made pursuant to paragraph (f) of
this Section 11, the Board or its delegate shall have sole discretion to
consent to or disapprove, in whole or in part, the election pursuant to either
clause (ii) or (iii) of paragraph (c) of this Section 11 of a holder of a
General Right to receive cash upon the exercise of a General Right ("Cash
Election"). Such consent or disapproval may be given at any time after the
Cash Election to which it relates. If the Board or its delegate shall
disapprove a Cash Election, in lieu of paying the cash (or any portion thereof)
specified in such Cash Election, the Board or its delegate shall determine the
cash, if any, to be paid pursuant to such Cash Election and shall issue a
number of Shares calculated as provided in clause (i) of paragraph (c) of this
Section 11, after reducing the Spread by such cash to be paid plus cash in lieu
of any fractional Share. A Cash Election may be made only (x) with respect to
a General Right which has been held at least six months from the date of grant
of such General Right, and (y) during a Window Period. A Cash Election made in
advance of a Window Period shall be deemed to have been made and to take effect
on the first day of the first Window Period occurring after such election.
(e) Notwithstanding the provision of paragraph (c) of this
Section 11, if within one year after a Change of Control has occurred the
employment of any Participant is terminated by the Company for any reason other
than for Misconduct (or, if applicable, by Constructive Termination), then such
Participant's General Right shall become fully vested on the date of
12
<PAGE> 13
termination and may be exercised; provided, however, that with respect to a
General Right held by a Participant who is subject to Section 16 of the
Exchange Act, the event constituting a Change of Control shall have been
subject to stockholder approval by non-insider stockholders of the Company, as
determined under Rule 16(b)(3) of the Exchange Act, and if such General Right
has not been outstanding for at least six months on the date of termination,
then such grant shall not be exercisable until such six-month period elapses.
Upon an exercise for cash, a holder of a General Right shall be entitled to
receive an amount in cash equal to the Spread which, for purposes of this
paragraph (e) of this Section 11, shall mean an amount equal to the product
computed by multiplying (i) the excess of (A) the Fair Market Value per Share
on the date such General Right is exercised over (B) the Award Price, by (ii)
the number of Shares with respect to which such General Right is being
exercised.
(f) An election by a Participant who is subject to Section
16 of the Exchange Act to receive cash upon the exercise of a General Right may
be made without compliance with paragraph (d) of this Section 11, if such
election is irrevocable and the receipt of cash pursuant to such election
occurs no earlier than six months after such election is made. An election
made pursuant to this paragraph (f) may be changed only by a subsequent
irrevocable election to take effect no earlier than six months after the date
such subsequent election is made.
(g) To exercise a General Right, the holder shall (i) give
notice thereof to the Company in form satisfactory to the Board or its delegate
addressed to the Secretary of the Company specifying (A) the number of Shares
with respect to which such holder is exercising the General Right and (B) the
amount such holder elects to receive in cash, if any, and the amount he elects
to receive in Shares with respect to the exercise of the General Right;
provided, however, that notice of the exercise of a General Right pursuant to
paragraph (e) of this Section 11 shall only specify the number of Shares with
respect to which the General Right is being exercised for cash; and (ii) if
requested by the Company, deliver the Right Agreement relating to the General
Right being exercised and the Option Agreement for any Related Option to the
Secretary of the Company, who shall endorse thereon a notation of such exercise
and return the Right Agreement and Option Agreement to the Participant. The
date of exercise of a General Right which is validly exercised shall be the
date on which the Company shall have received the notice referred to in the
first sentence of this paragraph (g).
12. STOCK APPRECIATION RIGHTS -- LIMITED RIGHTS
(a) The Board or its delegate shall have authority in its
discretion to grant a Limited Right to the holder of a Related Option. A
Limited Right may be granted with respect to all or some of the Shares covered
by such Related Option. A Limited Right may be granted either at the time of
grant of the Related Option or at any time thereafter during its term. A
Limited Right may be granted to a Participant irrespective of whether such
Participant is being granted or has been granted a General Right with respect
to the same Related Option. Unless specified in the Right Agreement as an
Automatic Right, a Limited Right may be exercised only during a period of sixty
days beginning on the date of a Change of Control; provided, however, that with
respect to a Limited Right held by a Participant who is subject to Section 16
of the Exchange Act the event constituting a Change of Control shall have been
subject to stockholder approval by non-insider stockholders of the Company, as
determined under Rule 16(b)(3) of
13
<PAGE> 14
the Exchange Act, and if such Limited Right has not been outstanding for at
least six months on the date of the Change of Control, then the sixty-day
period shall not begin until the expiration of six months from the date of
grant of such Limited Right. Notwithstanding the provisions of the immediately
preceding sentence, each Limited Right shall be exercisable only if and to the
extent that the Related Option is exercisable. A Limited Right granted as an
Automatic Right, shall be exercised automatically and only for cash, on
satisfaction of conditions specified in the Right Agreement; provided that an
Automatic Right held by a participant who is subject to Section 16 of the
Exchange Act shall not be automatically exercised unless such Automatic Right
has been outstanding for at least six months from the date of grant of such
Right.
(b) The term "Spread" as used in this Section 12 with
respect to the exercise of any Limited Right shall mean an amount equal to the
product computed by multiplying (i) the excess of (A) either (x) the highest
Fair Market Value per Share during the sixty-day period ending on the date of
the Change of Control, or (y) the Event Price per Share, whichever is greater,
over (B) the exercise price per Share at which the Related Option is
exercisable, by (ii) the number of Shares with respect to which such Limited
Right is being exercised.
(c) Upon the exercise of a Limited Right as provided in
paragraph (e) of this Section 12, the holder thereof shall receive an amount in
cash equal to the Spread.
(d) Notwithstanding any other provision of this Plan, no
General Right which has a Related Option may be exercised for cash at any time
when any Limited Right which was granted with respect to the same Related
Option may be exercised.
(e) To exercise a Limited Right, the holder shall (i) give
notice thereof to the Company in form satisfactory to the Board or its delegate
specifying the number of Shares with respect to which such holder is exercising
the Limited Right, and (ii) if requested by the Company, deliver the Right
Agreement relating to the Limited Right being exercised and the Option
Agreement for the Related Option to the Secretary of the Company who shall
endorse thereon a notation of such exercise and return the Right Agreement and
the Option Agreement to the employee. The date of exercise of a Limited Right
which is validly exercised shall be deemed to be the date on which the Company
shall have received the notice referred to in the first sentence of this
paragraph (e).
13. STOCK APPRECIATION RIGHTS -- GENERAL PROVISIONS
(a) Either a General Right or a Limited Right, or both a
General Right and a Limited Right, may be granted with respect to the same
Related Option. Upon the exercise of a Right, any Related Option and any other
Right granted with respect to the same Related Option shall be considered
cancelled to the extent of the Shares with respect to which the Right is
exercised. Upon the exercise, cancelleation or termination of any Related
Option, the Right or Rights that relate thereto will cease to be exercisable to
the extent of the number of Shares with respect to which the Related Option is
exercised, cancelled or terminated.
14
<PAGE> 15
(b) The Company intends that Sections 11, 12 and 13 shall
comply with the requirements of Rule 16b-3 (the "Rule") under the Exchange Act
during the term of this Plan. Should any provision of these Sections 11, 12
and 13 fail to comply with or be unnecessary to comply with the requirements of
the Rule, the Board may amend this Plan to add to or modify the provisions of
this Plan accordingly without seeking stockholder approval.
(c) Unless otherwise specified in the Right Agreement, no
General or Limited Right shall be transferable except by will, by the laws of
descent and distribution, or pursuant to a qualified domestic relations order
as defined in the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder, or as otherwise permitted by regulations and
interpretations under Section 16 of the Exchange Act; provided, however, that
the terms of a General or Limited Right granted with respect to an ISO shall
comply with the requirements of the Code as necessary to maintain the status of
the Related Option as an ISO including, without limitation, transferability and
exercisability restrictions.
(d) A person exercising a General Right shall not be treated
as having become the registered owner of any Shares issued on such exercise
until such Shares are issued.
(e) Each General or Limited Right shall be on such terms and
conditions not inconsistent with this Plan or the Related Option, if any, as
the Board or its delegate may determine and shall be evidenced by a Right
Agreement setting forth such terms and conditions executed by the Company and
the holder of the General or Limited Right. A General and/or Limited Rightr
granted with respect to a Related Option shall be exercisable only if and to
the extent the Related Option is exercisable.
14. ADJUSTMENTS OF AND CHANGES IN THE STOCK
If there is any change in the Common Stock of the Company by reason
of any stock dividend, stock split, spin-off, split up, merger, consolidation,
recapitalization, reclassification, combination or exchange of shares, or any
other similar corporate event, then the Board or its delegate shall make
appropriate adjustments to the number of Shares of Common Stock of the Company
theretofore appropriated or thereafter subject or which may become subject to
an Option or Right under the Plan. Outstanding Options and Rights shall also
be automatically converted as to price and other terms if necessary to reflect
the foregoing events. No right to purchase fractional shares shall result from
any adjustment in Options or Rights pursuant to this Section 14. In case of
any such adjustment, the Shares subject to the Option or Right shall be rounded
down to the nearest whole Share. Notice of any adjustment shall be given by
the Company to each holder of any Option or Right which shall have been so
adjusted and such adjustment (whether or not such notice is given) shall be
effective and binding for all purposes of the Plan.
15. EFFECTIVE DATE OF THE PLAN
The Plan shall become effective when adopted by the Board, but no
Option or Right granted under this Plan shall be exercisable until the Plan is
approved in the manner prescribed
15
<PAGE> 16
in section 16(a) of this Plan. Any amendment to the Plan shall become
effective when adopted by the Board, unless specified otherwise, but no Option
or Right granted under any increase in the number of shares authorized to be
issued under this Plan shall be exercisable until the increase is approved in
the manner prescribed in section 16(a) of this Plan. The amendments to Section
4 which pertain to shares available again for issuance to participants not
subject to Section 16 of the Exchange Act shall be effective from December 27,
1993.
16. AMENDMENT OF THE PLAN
(a) The Board of Directors at any time, and from time to
time, may amend the Plan, subject to the limitation, however, that, except as
provided in Section 14 (relating to adjustments upon changes in stock), no
amendment for which stockholder approval is required shall be effective unless
such approval is obtained within the required time period. Whether stockholder
approval is required shall be determined by the Board of Directors. Approval
of the stockholders may be obtained, at a meeting of stockholders duly called
and held, by the affirmative vote of a majority of the holders of the Company's
voting stock who are present or represented by proxy and entitled to vote on
the Plan, or by the written consent of the holders of a majority of the
outstanding voting stock of the Company. Shares which are present at the
meeting but not voted on the Plan are not counted in determining whether a
majority has been obtained.
(b) It is expressly contemplated that the Board may, without
seeking approval of the Company's stockholders, amend the Plan in any respect
necessary to provide the Company's employees with the maximum benefits provided
or to be provided under Section 422 of the Code or Section 16 of the Securities
and Exchange Act of 1934 and the regulations promulgated thereunder relating to
employee incentive stock options and/or to bring the Plan or Options granted
under it into compliance therewith.
(c) Rights and obligations under any Option or Right granted
before any amendment of the Plan shall not be altered or impaired by amendment
of the Plan, except with the consent of the person who holds the Option or
Right, which consent may be obtained in any manner that the Board or its
delegate deems appropriate.
(d) The Board of Directors may not amend the provisions of
Section 8 hereof more than once every six months, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the rules
thereunder.
17. TERMINATION OR SUSPENSION OF THE PLAN
The Board of Directors at any time may suspend or terminate the
Plan. The Plan, unless sooner terminated, shall terminate at the end of ten
years from the date the Plan is adopted by the Board or approved by the
stockholders of the Company, whichever is earlier. No Option or Right may be
granted under the Plan while the Plan is suspended or after it is terminated.
Rights and obligations under any Option or Right granted while the Plan is in
effect, including the maximum duration and vesting provisions, shall not be
altered or impaired by suspension
16
<PAGE> 17
or termination of the Plan, except with the consent of the person who holds the
Option or Right, which consent may be obtained in any manner that the Board or
its delegate deems appropriate.
18. REGISTRATION, LISTING, QUALIFICATION, APPROVAL OF STOCK AND OPTIONS
All Options and Rights granted under the Plan are subject to the
requirement that if at any time the Board shall determine in its discretion
that the registration, listing or qualification of the shares of stock subject
thereto on any securities exchange or under any applicable law, or the consent
or approval by any governmental regulatory body or the stockholders of the
Company, is necessary or desirable as a condition of or in connection with the
issuance of shares upon exercise of the Option or Right, the Option or Right
may not be exercised in whole or in part unless such registration, listing,
qualification, consent or approval shall have been effected or obtained free of
any condition not acceptable to the Board of Directors.
19. NO RIGHT TO EMPLOYMENT
Nothing in this Plan or in any Option or Right agreement shall be
deemed to confer on any employee any right to continue in the employ of the
Company or any Affiliate or to limit the rights of the Company or its
Affiliates, which are hereby expressly reserved, to discharge an employee at
any time, with or without cause, or to adjust the compensation of any employee.
20. MISCELLANEOUS
The use of any masculine pronoun or similar term is intended to be
without legal significance as to gender.
17
<PAGE> 18
ADVANCED MICRO DEVICES, INC.
1992 STOCK INCENTIVE PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. Shares Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
6. Stock Options -- General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7. Terms of Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
8. Automatic Grants to Outside Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9. Payments and Loans Upon Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10. Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11. Stock Appreciation Rights -- General Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12. Stock Appreciation Rights -- Limited Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
13. Stock Appreciation Rights -- General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
14. Adjustments of and Changes in the Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15. Effective Date of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
16. Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
17. Termination or Suspension of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
18. Registration, Listing, Qualification, Approval of Stock and Options . . . . . . . . . . . . . . . . . . 17
19. No Right to Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
20. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>
i
<PAGE> 1
EXHIBIT 10.4
ADVANCED MICRO DEVICES, INC.
SUNNYVALE, CALIFORNIA
-------------
1980 STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of this Plan is to advance the
interests of the Corporation and its stockholders by providing means by which
the Corporation and its subsidiaries may remain competitive in the search for
and in the motivation and retention of outstanding management personnel. The
Corporation seeks to attract and retain in its employ and in the employ of its
subsidiaries management personnel of training, experience and ability, and to
furnish additional incentive to executives upon whose judgment, initiative and
efforts the successful conduct of the business of the Corporation and its
subsidiaries largely depends. It is believed that the granting of stock
appreciation rights as provided herein will assist the Company in attracting
and retaining employees of unusual competence and, by increasing their equity
interests in the Company, will provide incentive and inducement to them to use
their best efforts in the Company's behalf.
2. Definitions. The terms defined in this Section 2 shall
have the respective meanings set forth herein, unless the context otherwise
requires.
(a) Committee. The term "Committee" shall mean a
committee to which administration of the Plan has been delegated, in whole or
in part, by the Board of Directors, pursuant to Sections 3(c) or 3(d) hereof.
(b) Disinterested Director: The term
"Disinterested Director" shall mean a member of the Board of Directors of the
Company who has not, during the one year prior to service as an administrator
of the Plan, or during such service, been granted or awarded equity securities
of the Company pursuant to this Plan or any other plan of the Company or any of
its affiliates, except for options granted automatically pursuant to the
formula set forth in the Advanced Micro Devices, Inc. 1992 Stock Incentive
Plan.
(c) 1969 Plan: The term "1969 Plan" shall mean
the Corporation's 1969 Stock Option Plan as amended.
(d) 1977 Plan: The term "1977 Plan" shall mean
the Corporation's 1977 Stock Option Plan as amended.
(e) 1979 Plan: The term "1979 Plan" shall mean
the Corporation's 1979 Stock Option Plan as amended.
(f) 1982 Plan: The term "1982 Plan" shall mean
the Corporation's 1982 Stock Option Plan as amended.
(g) Stock Option Plans: The term "Stock Option
Plans" shall mean collectively the 1969 Plan, the 1977 Plan, the 1979 Plan and
the 1982 Plan.
(h) Plan: The term "Plan" or this "Plan" shall
mean this 1980 Stock Appreciation Rights Plan, as originally adopted, and, if
amended or modified as herein provided, as so amended or modified as herein
provided, as so amended or modified.
(i) Stock Appreciation Right: The term "Stock
1
<PAGE> 2
Appreciation Right" shall mean the right to receive, without payment to the
Corporation, cash and/or Shares equivalent in value to the Spread as defined in
Sections 4 and 5 of this Plan.
(j) Rights: The term "General Right" shall mean
a Stock Appreciation Right granted by the Committee pursuant to the provisions
of Section 4 of this Plan. The term "Limited Right" shall mean a Stock
Appreciation Right granted by the Committee pursuant to the provisions of
Section 4 of this Plan. The term "Limited Right" shall mean a Stock
Appreciation Right granted by the Committee pursuant to the provisions of
Section 5 of this Plan. The term "Right" shall mean any General Right or
Limited Right.
(k) Stock Option: The term "Stock Option" shall
mean (except as herein otherwise provided) a stock option granted under the
1969 Plan, the 1977 Plan, 1979 Plan or the 1982 Plan.
(l) Shares: The term "Shares" shall mean shares
of Common Stock of the Corporation and any shares of Stock or other securities
received as a result of the adjustments provided for in Section 7 of this Plan.
(m) Optionee: The term "Optionee" shall mean any
person to whom a Stock Option has been granted.
(n) Fair Market Value per Share: The term "Fair
Market Value per Share" shall mean as of any day (i) the closing price for
Shares on the New York Stock Exchange as reported on the Composite Tape on the
day as of which such determination is being made or, if there was no sale of
Shares reported on the Composite Tape on such day, on the most recently
preceding day on which there was such a sale, or (ii) if the Shares are not
listed or admitted to trading on the New York Stock Exchange on the day as of
which the determination is being made, the amount determined by the Committee
to be the fair market value of a Share on such day.
3. Administration.
(a) The Board of Directors (the "Board"), whose
authority shall be plenary, shall administer the Plan and may delegate part or
all of the powers designated in Section 3(b) with respect to part or all of the
Plan pursuant to Section 3(c); provided, however, that the Board of Directors
shall delegate administration of the Plan to the extent required by Section
3(d).
(b) The Board shall have the power, subject to
and within the limits of the express provisions of the Plan:
(1) To grant Rights pursuant to the
Plan.
(2) To determine from time to time
which of the eligible persons shall be granted Rights under the Plan,
the number of Shares for which each Right shall be granted, the term
of each granted Right and the time or times during the term of each
Right within which all or portions of each Right may be exercised,
(which at the discretion of the Board may be accelerated).
(3) To grant Rights in exchange for
cancellation of Rights granted earlier at different exercise prices.
(4) To prescribe the terms and
provisions of each Right granted (which need not be identical) and
the form of written instrument that shall constitute the Right
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agreement.
(5) To take appropriate action to
amend any Right hereunder; provided, however, that no such action may
be taken by the Board without the written consent of the affected
holder of the Right.
(6) To construe and interpret the
Plan and Rights granted under the Plan, and to establish, amend and
revoke rules and regulations for administration of the Plan. The
Board, in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may correct any
defect, omission or inconsistency in the Plan or in any Right
agreement in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(7) Generally, to exercise such
powers and to perform such acts as are deemed necessary or expedient
to promote the best interests of the Company.
(c) Subject to the limits set forth below, the
Board may, by resolution, delegate its administrative powers set forth in
Section 3(b) above under either or both of the following:
(1) with respect to the participation
of or granting of Rights to an employee who is not subject to Section
16 of the Exchange Act, to a committee of one or more members of the
Board, whether or not such members of the Board are Disinterested
Directors;
(2) with respect to ministerial
matters, i.e., matters other than the selection for participation in
the Plan and substantive decisions concerning the timing, pricing,
amount or other material term of a Right, to a committee of one or
more members of the Board, whether or not such members of the Board
are Disinterested Directors, or to one or more officers of the
Company.
(d) Unless each member of the Board is a
Disinterested Director, the Board shall, by resolution, delegate administration
of the Plan with respect to the participation in the Plan of employees who are
subject to Section 16 of the Exchange Act, including its powers to select such
employees for participation in the Plan, to make substantive decisions
concerning the timing, pricing, amount or any other material term of a Right
granted to such an employee, to a committee of two or more Disinterested
Directors. Any committee to which administration of the Plan is so delegated
may also administer the Plan with respect to an employee described in Section
3(c)(1) above.
(e) Except as required by Section 3(d) above, the
Board shall have complete discretion to determine the composition, structure,
form, term and operations of any committee established to administer the Plan.
If administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board at any time may revest in the Board any of its
administrative powers under the Plan,
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except under circumstances where a committee is required to administer the Plan
under Section 3(d) above.
(f) The determinations of the Board or its
delegate shall be conclusive and binding on all persons having any interest in
this Plan or in any awards granted hereunder.
4. Stock Appreciation Rights - General Rights.
(a) The Committee shall have authority in its
discretion to grant a General Right to the holder of any Stock Option (the
"Related Option") with respect to all or some of the Shares covered by such
Related Option. A General Right may be granted either at the time of grant of
the Related Option or at any time thereafter during its term. A General Right
may be granted to an Optionee irrespective of whether such Optionee is being
granted or has been granted a Limited Right. Each General Right shall be
exercisable only if and to the extent that the Related Option is exercisable.
Notwithstanding the provisions of the preceding sentence, no General Right may
be exercised until the expiration of six months from the date of grant of such
General Right unless prior to the expiration of such six month period the
holder of the General Right ceases to be an employee of the Company because of
his death or physical or mental incapacity. Upon the exercise of a General
Right, the Related Option shall cease to be exercisable to the extent of the
Shares with respect to which such General Right is exercised, but the Related
Option shall be considered to have been exercised to such extent for purposes
of determining the number of Shares available for the grant of further Stock
Options pursuant to the Stock Option Plans. Upon the exercise or termination
of a Related Option, the General Right with respect to such Related Option
shall terminate to the extent of the Shares with respect to which the Related
Option is exercised or terminated.
(b) The term "Spread" as used in this Section 4
shall mean with respect to the exercise of any General Right an amount equal to
the product computed by multiplying (i) the excess of (A) the Fair Market
Value per Share on the date such General Right is exercised over (B) the
purchase price per Share at which the Related Option is exercisable by (ii) the
number of Shares with respect to which such General Right is being exercised.
(c) Upon the exercise of a General Right as
provided in Paragraph (j) of this Section 4, the holder thereof, except as
provided in Paragraph (d) of this Section 4, shall be entitled at his election
to receive either:
(i) a number of Shares equal to the quotient
computed by dividing the Spread by the Fair Market Value per Share on
the date of exercise of the General Right, provided, however, that in
lieu of fractional Shares the Corporation shall pay cash equal to the
same fraction of the Fair Market Value per Share on the date of
exercise of the General Right; or
(ii) an amount in cash equal to the Spread;
or
(iii) a combination of cash in the amount
specified in such holder's notice of exercise, and a number of Shares
calculated as provided in Clause (i) of this
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Paragraph (c), after reducing the Spread by such cash amount, plus
cash in lieu of any fractional Share as provided above.
(d) Notwithstanding the provisions of Paragraph
(c) of this Section 4, the Committee shall have sole discretion to consent to
or disapprove, in whole or in part, the election pursuant to either Clause (ii)
or (iii) of Paragraph (c) of this Section 4 of a holder of a General Right to
receive cash upon the exercise of a General Right ("Cash election"). Such
consent or disapproval may be given at any time after the Cash Election to
which it relates. If the Committee shall disapprove a Cash Election, in lieu
of paying the cash (or any portion thereof) specified in such Cash Election,
the Committee shall determine the cash, if any, to be paid pursuant to such
Cash Election and shall issue a number of Shares calculated as provided in
Clause (i) of Paragraph (c) of this Section 4, after reducing the Spread by
such cash to be paid plus cash in lieu of any fractional Share.
(e) Notwithstanding the provisions of Paragraph
(c) of this Section 4, a Cash Election may be made only during the period
beginning on the third business day following the date of release for
publication of the quarterly and annual summary statements of sales and
earnings of the Corporation and ending on the 12th business day following such
date.
(f) The Corporation intends that this Section 4
shall comply with the requirements of Rule 16b-3 (the "Rule") under the
Securities Exchange Act of 1934 during the term of this Plan. Should any
provision of this Section 4 be unnecessary to comply with the requirements of
the Rule or should any additional provisions be necessary for Section 4 to
comply with the requirements of the Rule, the Board of Directors of the
Corporation may amend this Plan to add to or modify the provisions of this Plan
accordingly.
(g) No General Right shall be transferable except
by will or by the laws of descent and distribution. During the life of a
holder of a General Right, the General Right shall be exercisable only by him
or his guardian or legal representative.
(h) A person exercising a General Right shall not
be treated as having become the registered owner of any Shares issued on such
exercise until such Shares are issued.
(i) Each General Right shall be on such terms and
conditions not inconsistent with this Plan as the Committee may determine and
shall be evidenced by a Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the General Right.
(j) To exercise a General Right, the holder shall
(i) give written notice thereof to the Corporation in form satisfactory to the
Committee addressed to the Secretary of the Corporation specifying (A) the
number of Shares with respect to which he is exercising the General Right and
(B) the amount he elects to receive in cash, if any, and the amount he elects
to receive in Shares with respect to the exercise of the General Right; (ii)
deliver to the Corporation such written representations, warranties and
covenants as the Corporation may require under Section 8 of this Plan; and
(iii) if requested by the Corporation, deliver the Right Agreement relating to
the
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General Right being exercised and the Option Agreement for the Related Option
to the Secretary of the Corporation who shall endorse thereon a notation of
such exercise and return the Right Agreement and the Option Agreement to the
Optionee. The date of exercise of a General Right which is validly exercised
shall be deemed to be the date on which the Corporation shall have received the
instruments referred to in the first sentence of this Paragraph (j).
5. Stock Appreciation Rights - Limited Rights.
(a) The Committee shall have authority in its
discretion to grant a Limited Right to the Holder of any Stock Option (the
"Related Option") granted under the Stock Option Plans with respect to all or
some of the Shares covered by such Related Option. A Limited Right may be
granted either at the time of grant of the Related Option or at any time
thereafter during its term. A Limited Right may be granted to an Optionee
irrespective of whether such Optionee is being granted or has been granted a
General Right. A Limited Right may be exercised only during the period
beginning on the first day following the date of expiration of any Offer (as
that term is defined in Paragraph (b) of this Section 5) for Shares and ending
on the thirtieth day following such date. Each Limited Right shall be
exercisable only if and to the extent that the Related Option is exercisable.
Notwithstanding the provisions of the two immediately preceding sentences, no
Limited Right may be exercised until the expiration of six months from the date
of grant of such Limited Right. Upon the exercise of a Limited Right, the
Related Option shall cease to be exercisable to the extent of the number of
Shares with respect to which such Limited Right is exercised, but such Related
Option shall be considered to have been exercised to such extent for purposes
of determining the number of shares available for the grant of further Stock
Options pursuant to the Stock Option Plans. Upon the exercise or termination
of a Related Option, the Limited Right with respect to such Related Option
shall terminate to the extent of the number of Shares with respect to which the
Related Option is exercised or terminated.
(b) The term "Offer" as used in this Section 5
shall mean any tender offer or exchange offer for Shares, other than one made
by the Company, provided that the corporation, person or other entity making
the offer acquires Shares pursuant to such offer and following expiration or
termination of the offer the offeror owns 25% of the outstanding Shares.
(c) The term "Offer Price per Share" as used in
this Section 5 with respect to the exercise of any Limited Right shall mean the
highest price per Share paid in any Offer which Offer is in effect at any time
during the period beginning on the sixtieth day prior to the date on which such
Limited Right is exercised and ending on the date on which such Limited Right
is exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity making such
Offer or (B) the valuation placed on such securities or property by the
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Committee.
(d) The term "Spread" as used in this Section 5
with respect to the exercise of any Limited Right shall mean an amount equal to
the product computed by multiplying (i) the excess of (A) the Offer Price per
Share over (B) the purchase price per Share at which the Related Option is
exercisable, by (ii) the number of Shares with respect to which such Limited
Right is being exercised.
(e) Upon the exercise of a Limited Right as
provided in Paragraph (j) of this Section 5, the holder thereof shall receive
an amount in cash equal to the Spread.
(f) Notwithstanding any other provision of this
Plan, no General Right may be exercised at a time when any Limited Right held
by the holder of such General Right may be exercised.
(g) The Corporation intends that this Section 5
shall comply with the requirements of the Rule during the term of this Plan.
Should any provision of this Section 5 be unnecessary to comply with the
requirements of the Rule or should any additional provisions be necessary for
this Section 5 to comply with the requirements of the Rule, the Board of
Directors of the Corporation may amend this Plan to add or to modify the
provisions of this Plan accordingly.
(h) No Limited Right shall be transferable except
by will or by the laws of descent and distribution. During the life of a
holder of a Limited Right, the Limited Right shall be exercisable only by him
or his guardian or legal representative.
(i) Each Limited Right shall be on such terms and
conditions not inconsistent with the Plan as the Committee may determine and
shall be evidenced by a Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the Limited Right.
(j) To exercise a Limited Right, the holder shall
(i) give written notice thereof to the Corporation in form satisfactory to the
Committee addressed to the Secretary of the Corporation specifying the number
of Shares with respect to which he is exercising the Limited Right, and (ii) if
requested by the Corporation, deliver the Right Agreement relating to the
Limited Right being exercised and the Option Agreement for a Related Option to
the Secretary of the Corporation who shall endorse thereon a notation of such
exercise and return the Right Agreement and the Option Agreement to the
employee. The date of exercise of a Limited Right which is validly exercised
shall be deemed to be the date on which the Corporation shall have received the
instruments referred to in the first sentence of this Paragraph (j).
6. Effectiveness and Term of the Plan.
(a) This Plan shall become effective on the date
on which it is approved by the holders of outstanding shares of Common Stock of
the Corporation constituting a majority of such shares present in person or
represented by proxy and entitled to vote at a meeting of stockholders of the
Corporation duly called and held.
(b) Unless previously terminated in accordance
with Section 9 of this Plan, this Plan shall terminate on the close of business
on January 25, 1992, after which no Rights shall be
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granted under this Plan. Such termination shall not affect any Stock Options
or Rights granted prior to such termination.
7. Certain Adjustments.
(a) In the event that the Company shall pay a
stock dividend in, or split-up, combine, reclassify or substitute other
securities for, its outstanding Shares, the Committee shall forthwith take such
action, if any, as is consistent with the provisions of this Plan and as in its
judgment shall be necessary to preserve to the holders of Rights such rights as
are substantially proportionate to the rights held by them immediately prior to
such event under such Rights. Any adjustment may provide for the elimination
of any fractional Shares which might otherwise become subject to a Right.
(b) In case the Corporation is merged or
consolidated with another corporation and the Corporation is not the surviving
corporation, or all or substantially all of the assets of the Corporation are
transferred to another corporation, such action shall be taken, if any, which
in the judgment of the Committee is necessary to substitute for Shares covered
by any outstanding Right the type of securities or property of the corporation
surviving such merger or consolidation or acquiring such assets which are
issuable by reason of such merger, consolidation or transfer to the holders of
the shares of Common Stock of the Corporation.
(c) Notwithstanding and in addition to the
provisions of this Plan, the Committee shall have the authority to provide in
any Right Agreement, either at the time of grant or by amendment, that, upon
the date of a determination by the Committee that within six months next
succeeding the date of such determination there is a reasonable possibility a
public market for the Shares may cease to exist, or such Shares may fail to
remain qualified for listing on the New York Stock Exchange, any General or
Limited Right related thereto shall become fully exercisable as to all Shares
subject thereto; provided, however, that except in the case of the death or
physical or mental incapacity of the Right holder, no Right shall be
exercisable prior to the expiration of six months following (i) the date of the
grant of the Related Option, or (ii) the date on which the Right was granted,
whichever is later.
(d) In addition to the authority conferred to the
Committee in (c) hereinabove, the Committee shall also have the authority to
modify or otherwise amend any Right Agreement as it deems necessary or
appropriate, provided that the holder of the Right subject to any such Right
Agreement to be modified or amended shall have consented thereto.
8. Compliance with Law.
(a) Each employee, to permit the Corporation to
comply with the Securities Act of 1933, as amended (the "Act"), and any
applicable blue sky or state securities laws, shall represent in writing to the
Company at the time of grant of a Right and at the time of the issuance of any
Shares thereunder that he does not contemplate and shall not make any transfer
of any Shares to be acquired under Rights except in compliance with
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<PAGE> 9
the Act, and he shall enter into such agreements and make such other
representations as, in the opinion of counsel to the Corporation, shall be
sufficient to enable the Corporation legally to issue the Shares. Certificates
representing Shares to be acquired under Rights shall bear such legends as
counsel for the Corporation may indicate are necessary or appropriate to
accomplish the purposes of Paragraphs (a) and (b) of this Section 8.
(b) If at any time the Committee shall determine
that the listing, registration or qualification of the Shares subject to any
Right upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory authority, is necessary or
desirable as a condition of, or in connection with, the granting of, or
issuance of Shares under, such Right, such Shares shall not be issued unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Committee.
(c) Where in the opinion of counsel to the
Company, the Company has or will have an obligation to withhold taxes relating
to the exercise of a Right, a Participant may elect (a "Withholding Election")
to pay his required minimum withholding tax obligation by the withholding of
Shares from the total number of Shares deliverable pursuant to the exercise
of a Right in whole or in part for Shares, or by delivering to the Company a
sufficient number of previously acquired Shares, and may elect to have
additional taxes paid by the delivery of previously acquired shares, in each
case in accordance with rules and procedures established by the Board or its
delegate. Previously owned shares delivered in payment for such taxes must
have been owned for at least six months prior to the exercise date, or may be
subject to such other conditions as the Board or its delegate may require.
The value of Shares withheld or delivered shall be the Fair Market Value per
Share on the date the exercise becomes taxable. All Withholding Elections are
subject to the approval of the Board or its delegate and must be made in
compliance with rules and procedures established by the Board or its delegate.
9. Amendment of the Plan. The Board of Directors of the
Corporation (i) may at any time and from time to time modify or amend this Plan
in any respect, except that without shareholder approval no such modification
or amendment may increase the maximum number of Shares as to which Rights may
be granted, or otherwise materially increase the benefits accruing to
participants under this Plan, and (ii) may at any time terminate this Plan.
The termination or any modification or amendment of this Plan shall not,
without the consent of any Optionee or holder of Rights involved, affect his
rights under a Stock Option or Right previously granted to him.
10. No Obligations. Neither this Plan nor the grant of any
Right shall confer any right on any employee to remain in the employ of the
Corporation or any subsidiary or restrict the right of the Corporation or any
subsidiary to terminate his employment.
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EXHIBIT 10.5
ADVANCED MICRO DEVICES, INC.
1986 STOCK APPRECIATION RIGHTS PLAN
1. Purpose. The purpose of this Plan is to advance the interests of
Advanced Micro Devices, Inc. ("the Corporation") and its stockholders by
providing means by which the Corporation and its subsidiaries may remain
competitive in the search for and in the motivation and retention of
outstanding management personnel. The Corporation seeks to attract and retain
in its employ and in the employ of its subsidiaries management personnel of
training, experience and ability, and to furnish additional incentive to
executives upon whose judgment, initiative and efforts the successful conduct
of the business of the Corporation and its subsidiaries largely depends. It is
believed that the granting of stock appreciation rights as provided herein will
assist the Company in attracting and retaining employees of unusual competence
and, by increasing their equity interests in the Corporation, will provide
incentive and inducement to them to use their best efforts in the Corporation's
behalf.
2. Definitions. The terms defined in this Section 2 shall have the
respective meanings set forth herein, unless the context otherwise requires.
(a) Award Price: The term "Award Price" shall mean a price
designated by the Board or its delegate and which is not less than fifty
percent (50%) of the Fair Market Value per Share on the date the Stock
Appreciation Right is granted. In the case of a General Right which is
exercisable only in lieu of exercising a Related Option, unless otherwise
specified in the Right Agreement the Award Price shall be the purchase price of
such Related Option.
(b) Board or its delegate: The term "Board or its delegate"
shall mean the Corporation's Board of Directors or its delegate as set forth in
Section 3(c) hereinbelow.
(c) Disinterested Director: The term "Disinterested
Director" shall mean a member of the Board of Directors of the Company who has
not, during the one year prior to service as an administrator of the Plan, or
during such service, been granted or awarded equity securities of the Company
pursuant to this Plan or any other plan of the Company or any of its
affiliates, except for options granted automatically pursuant to the formula
set forth in the Advanced Micro Devices, Inc. 1992 Stock Incentive Plan.
(d) Fair Market Value per Share: The term "Fair Market Value
per Share" shall mean as of any day (i) the closing price for Shares on the New
York Stock Exchange as reported on the Composite Tape on the day as of which
such determination is being made or, if there was no sale of Shares reported on
the Composite Tape on such day, on the most recently preceding day on which
there was such a sale, or (ii) if the Shares are not listed or admitted to
trading on the New York Stock Exchange on the day as of which the determination
is made, the amount determined by the Board or its
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delegate to be the fair market value of a Share on such day.
(e) 1986 Plan: The term "1986 Plan" shall mean the
Corporation's 1986 Stock Option Plan as amended.
(f) Optionee: The term "Optionee" shall mean any person
eligible to receive a Stock Option or a Stock Appreciation Right.
(g) Plan: The term "Plan" or this "Plan" shall mean this
1986 Stock Appreciation Rights Plan, as originally adopted, and, if amended or
modified as herein provided, as so amended or modified.
(h) Shares: The term "Shares" shall mean shares of Common
Stock of the Corporation and any shares of stock or other securities received
as a result of the adjustments provided for in Section 9 of this Plan.
(i) Stock Appreciation Right: The term "Stock Appreciation
Right" shall mean the right to receive, without payment to the Corporation,
cash and/or Shares equivalent in value to the Spread as defined in Sections 6
and 7 of this Plan.
(j) Stock Option: The term "Stock Option" shall mean (except
as herein otherwise provided) a stock option granted under the 1986 Plan.
(k) Stock Option Plans: The term "Stock Option Plan" shall
mean the 1986 Plan.
(l) Related Option: The term "Related Option" shall mean an
option, if any, with respect to which a Right has been granted.
(m) Rights: The term "General Right" shall mean a Stock
Appreciation Right granted by the Board or its delegate pursuant to the
provisions of Section 6 of this Plan. The term "Limited Right" shall mean a
Stock Appreciation Right granted by the Board or its delegate pursuant to the
provisions of Section 7 of this Plan. The term "Right" shall mean any General
Right or Limited Right.
3. Administration
(a) The Board of Directors (the "Board"), whose authority
shall be plenary, shall administer the Plan and may delegate part or all of the
powers designated in Section 3(b) with respect to part or all of the Plan
pursuant to Section 3(c); provided, however, that the Board of Directors shall
delegate administration of the Plan to the extent required by Section 3(d).
(b) The Board shall have the power, subject to and within the
limits of the express provisions of the Plan:
(1) To grant Rights pursuant to the Plan.
(2) To determine from time to time which of the
eligible persons shall be granted Rights under the Plan, the number of Shares
for which each Right shall be granted, the term of each
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granted Right and the time or times during the term of each Right within which
all or portions of each Right may be exercised, (which at the discretion of the
Board may be accelerated).
(3) To grant Rights in exchange for cancellation
of Rights granted earlier at different exercise prices.
(4) To prescribe the terms and provisions of each
Right granted (which need not be identical) and the form of written instrument
that shall constitute the Right agreement.
(5) To take appropriate action to amend any Right
hereunder; provided, however, that no such action may be taken by the Board
without the written consent of the affected holder of the Right.
(6) To construe and interpret the Plan and Rights
granted under the Plan, and to establish, amend and revoke rules and
regulations for administration of the Plan. The Board, in the exercise of this
power, shall generally determine all questions of policy and expediency that
may arise and may correct any defect, omission or inconsistency in the Plan or
in any Right agreement in a manner and to the extent it shall deem necessary or
expedient to make the Plan fully effective.
(7) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote the best
interests of the Company.
(c) Subject to the limits set forth below, the Board may, by
resolution, delegate its administrative powers set forth in Section 3(b) above
under either or both of the following:
(1) with respect to the participation of or
granting of Rights to an employee who is not subject to Section 16 of the
Exchange Act, to a committee of one or more members of the Board, whether or
not such members of the Board are Disinterested Directors;
(2) with respect to ministerial matters, i.e.,
matters other than the selection for participation in the Plan and substantive
decisions concerning the timing, pricing, amount or other material term of a
Right, to a committee of one or more members of the Board, whether or not such
members of the Board are Disinterested Directors, or to one or more officers of
the Company.
(d) Unless each member of the Board is a Disinterested
Director, the Board shall, by resolution, delegate administration of the Plan
with respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of a Right granted to such
an employee, to a committee of two or more Disinterested Directors. Any
committee to which administration of the Plan is so delegated may also
administer the Plan with respect to an employee
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described in Section 3(c)(1) above.
(e) Except as required by Section 3(d) above, the Board shall
have complete discretion to determine the composition, structure, form, term
and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board at any time may revest in the Board any of its
administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 3(d) above.
(f) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
4. Shares Subject to Plan and to Options.
(a) The total sum of the Shares with respect to which Rights
may be exercised under the Plan plus the Shares which may be sold pursuant to
options granted under the 1986 Stock Option Plan shall not exceed in the
aggregate one million (1,000,000) shares of the Corporation's authorized Common
Stock. This number of authorized Rights and options shall take into account
adjustments pursuant to Section 9, and shall include stock dividends with
respect to shares previously issued pursuant to this Plan. If any Rights
granted under the Plan shall for any reason terminate or expire without having
been exercised in full, the stock not purchased under such options shall be
available again for the purposes of the Plan.
(b) On the exercise of any General Right a Related Option
shall be considered to have been exercised to the extent such General Right is
exercised for the purpose of determining the number of shares and Rights
available for the grant of further stock options or Rights pursuant to the
Plan. On the exercise of a General Right, a Related Option, if any, shall
cease to be exercisable to the extent of the Shares with respect to which such
General Right is exercised, but such Related Option shall be considered to have
been exercised to such extent for purposes of determining the number of Shares
available for the grant of further Stock Options pursuant to the Stock Option
Plan.
5. Eligibility. Rights may be granted only to full or part time
employees of the Corporation and/or of any parent or subsidiary. Members of
the Board of Directors of the Corporation who are not also employees of the
Corporation shall not be eligible for the benefits of the Plan. Any employee
may hold more than one Right at any time.
6. Stock Appreciation Rights - General Rights.
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(a) The Board or its delegate shall have authority in its
discretion to grant a General Right to any eligible employee. A General Right
may be granted to an Optionee irrespective of whether such Optionee holds, is
being granted, or has been granted an option under any Stock Option Plan of the
Corporation. A General Right may be granted to an Optionee irrespective of
whether such Optionee holds, is being granted, or has been granted a Limited or
General Right. A General Right may be made exercisable without regard to the
exercisability of any option. On the exercise or termination of a Related
Option, the General Right with respect to such Related Option shall terminate
to the extent of the number of Shares with respect to which the Related Option
is exercised or terminated.
(b) With respect to the exercise of any General Right for
Shares, the term "Spread" as used in this Section 6 shall mean an amount equal
to the product computed by multiplying (i) the excess of (A) the Fair Market
Value per Share on the date such General Right is exercised over (B) the Award
Price by (ii) the number of Shares with respect to which such General Right is
being exercised. With respect to the exercise of any General Right for cash,
the term "Spread" as used in this Section 6 shall mean an amount equal to the
product computed by multiplying (i) the excess of (A) the highest Fair Market
Value per Share during the period described in paragraph (e) of this Section 6
over (B) the Award Price by (ii) the number of Shares with respect to which
such General Right is being exercised.
(c) On the exercise of a General Right as provided in
Paragraph (j) of this Section 6, the holder thereof, except as provided in
Paragraph (d) of this Section 6, shall be entitled at his election to receive
either:
(i) a number of Shares equal to the quotient computed by
dividing the Spread by the Fair Market Value per Share on the date of
exercise of the General Right, provided, however, that in lieu of
fractional Shares the Corporation shall pay cash equal to the same
fraction of the Fair Market Value per Share on the date of exercise
of the General Right; or
(ii) an amount in cash equal to the Spread; or
(iii) a combination of cash in the amount specified in
such holder's notice of exercise, and a number of Shares calculated
as provided in Clause (i) of this Paragraph (c), after reducing the
Spread by such cash amount, plus cash in lieu of any fractional Share
as provided above.
(d) Notwithstanding the provisions of Paragraph (c) of this
Section 6, the Board or its delegate shall have sole discretion to consent to
or disapprove, in whole or in part, the election pursuant to either Clause (ii)
or (iii) of Paragraph (c) of this Section 6 of a holder of a General Right to
receive cash upon the exercise of a General Right ("Cash election"). Such
consent or disapproval may be given at any time after the Cash Election to
which it relates. If the Board or its delegate shall disapprove a
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Cash Election, in lieu of paying the cash (or any portion thereof) specified
in such Cash Election, the Board or its delegate shall determine the cash, if
any, to be paid pursuant to such Cash Election and shall issue a number of
Shares calculated as provided in Clause (i) of Paragraph (c) of this Section
6, after reducing the Spread by such cash to be paid plus cash in lieu of any
fractional Share.
(e) Notwithstanding the provisions of Paragraph (c) of this
Section 6, a Cash Election may be made only during the period beginning on the
third business day following the date of release for publication of the
quarterly and annual summary statements of sales and earnings of the
Corporation and ending on the 12th business day following such date.
(f) The Corporation intends that this Section 6 shall comply
with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange
Act of 1934 during the term of this Plan. Should any provision of this Section
6 be unnecessary to comply with the requirements of the Rule, the Board of
Directors of the Corporation may amend this Plan to add to or modify the
provisions of this Plan accordingly.
(g) No General Right shall be transferable except by will or
by the laws of descent and distribution. During the life of a holder of a
General Right, the General Right shall be exercisable only by him or his
guardian or legal representative.
(h) A person exercising a General Right shall not be treated
as having become the registered owner of any Shares issued on such exercise
until such Shares are issued.
(i) Each General Right shall be on such terms and conditions
not inconsistent with this Plan as the Board or its delegate may determine and
shall be evidenced by Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the General Right.
(j) To exercise a General Right, the holder shall (i) give
notice thereof to the Corporation in form satisfactory to the Board or its
delegate addressed to the Secretary of the Corporation specifying (A) the
number of Shares with respect to which he is exercising the General Right and
(B) the amount he elects to receive in cash, if any, and the amount he elects
to receive in Shares with respect to the exercise of the General Right; (ii)
deliver to the Corporation such written representations, warranties and
covenants as the Corporation may require under Section 10 of this Plan; and
(iii) if requested by the Corporation, deliver the Right Agreement relating to
the General Right being exercised and the Option Agreement for the Related
Option to the Secretary of the Corporation who shall endorse thereon a notation
of such exercise and return the Right Agreement and the Option Agreement to the
Optionee. The date of exercise of a General Right which is validly exercised
shall be the date on which the Corporation shall have received the notice
referred to in the first sentence of this Paragraph (j).
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7. Stock Appreciation Rights - Limited Rights.
(a) The Board or its delegate shall have authority in its
discretion to grant a Limited Right to the Holder of any Stock Option (the
"Related Option") granted under the Stock Option Plans with respect to all or
some of the Shares covered by such Related Option. A Limited Right may be
granted either at the time of grant of the Related Option or at any time
thereafter during its term. A Limited Right may be granted to an Optionee
irrespective of whether such Optionee is being granted or has been granted a
General Right. A Limited Right may be exercised only during the period
beginning on the first day following the date of expiration of any Offer (as
that term is defined in Paragraph (b) of this Section 7) for Shares and ending
on the thirtieth day following such date. Each Limited Right shall be
exercisable for not more than the number of Shares that the Related Option is
exercisable. Notwithstanding the provisions of the two immediately preceding
sentences, no Limited Right may be exercised until the expiration of six months
from the date of grant of such Limited Right. On the exercise of a Limited
Right, the Related Option shall cease to be exercisable to the extent of the
number of Shares with respect to which such Limited Right is exercised, but
such Related Option shall be considered to have been exercised to such extent
for purposes of determining the number of shares available for the grant of
further Stock Options pursuant to the Stock Option Plans. Upon the exercise or
termination of a Related Option, the Limited Right with respect to such Related
Option shall terminate to the extent of the number of Shares with respect to
which the Related Option is exercised or terminated.
(b) The term "Offer" as used in this Section 7 shall mean any
tender offer or exchange offer for Shares, other than one made by the
Corporation, provided that the corporation, person or other entity making the
offer acquires Shares pursuant to such offer and following expiration or
termination of the Offer the offeror owns 25% or more of the outstanding
Shares.
(c) The term "Offer Price per Share" as used in this Section
7 with respect to the exercise of any Limited Right shall mean the highest
price per Share paid in any Offer which Offer is in effect at any time during
the period beginning on the sixtieth day prior to the date on which such
Limited Right is exercised and ending on the date on which such Limited Right
is exercised. Any securities or property which are part or all of the
consideration paid for Shares in the Offer shall be valued in determining the
Offer Price per Share at the higher of (A) the valuation placed on such
securities or property by the corporation, person or other entity making such
Offer or (B) the valuation placed on such securities or property by the Board
or its delegate.
(d) The term "Spread" as used in this Section 7 with respect
to the exercise of any Limited Right shall mean an amount equal to the product
computed by multiplying (i) the excess of (A) the Offer Price per Share over
(B) the Award Price per Share at which the Related Option is exercisable, by
(ii) the number of Shares with respect to which such Limited Right is being
exercised.
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(e) Upon the exercise of a Limited Right as provided in
Paragraph (j) of this Section 7, the holder thereof shall receive an amount in
cash equal to the Spread.
(f) Notwithstanding any other provision of this Plan, no
General Right may be exercised at a time when any Limited Right held by the
holder of such General Right may be exercised.
(g) The Corporation intends that this Section 7 shall comply
with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange
Act of 1934 during the term of this Plan. Should any provision of this Section
7 be unnecessary to comply with the requirements of the Rule or should any
additional provisions be necessary for this Section 7 to comply with the
requirements of the Rule, the Board of Directors of the Corporation may amend
this Plan to add or to modify the provisions of this Plan accordingly.
(h) No Limited Right shall be transferable except by will or
by the laws of descent and distribution. During the life of a holder of a
Limited Right, the Limited Right shall be exercisable only by him or his
guardian or legal representative.
(i) Each Limited Right shall be on such terms and conditions
not inconsistent with the Plan as the Board or its delegate may determine and
shall be evidenced by a Right Agreement setting forth such terms and conditions
executed by the Corporation and the holder of the Limited Right.
(j) To exercise a Limited Right, the holder shall (i) give
notice thereof to the Corporation in form satisfactory to the Board or its
delegate specifying the number of Shares with respect to which he is
exercising the Limited Right, and (ii) if requested by the Corporation, deliver
the Right Agreement relating to the Limited Right being exercised and the
Option Agreement for a Related Option to the Secretary of the Corporation who
shall endorse thereon a notation of such exercise and return the Right
Agreement and the Option Agreement to the employee. The date of exercise of a
Limited Right which is validly exercised shall be deemed to be the date on
which the Corporation shall have received the notice referred to in the first
sentence of this Paragraph (j).
8. Effectiveness and Term of the Plan.
(a) No Right granted under this Plan shall be exercisable
until the Plan is approved by the holders of outstanding shares of Common Stock
of the Corporation constituting a majority of such shares present in person or
represented by proxy and entitled to vote at a meeting of shareholders of the
Corporation duly called and held.
(b) Unless previously terminated in accordance with Section
11 of this Plan, this Plan shall terminate on the close of business on June 10,
1996, after which no Rights shall be granted under this Plan. Such termination
shall not affect any Stock Options or Rights granted prior to such termination.
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9. Certain Adjustments.
(a) In the event that the Corporation shall pay a stock
dividend in, or split-up, combine, reclassify or substitute other securities
for, its outstanding Shares, the Board or its delegate shall forthwith take
such action, if any, as is consistent with the provisions of this Plan and as
in its judgment shall be necessary to preserve to the holders of Rights such
rights as are substantially proportionate to the rights held by them
immediately prior to such an event. Any adjustment may provide for the
elimination of any fractional Shares which might otherwise become subject to a
Right.
(b) In case the Corporation is merged or consolidated with
another corporation and the Corporation is not the surviving corporation, or
all or substantially all of the assets of the Corporation are transferred to
another corporation, such action shall be taken, if any, which in the judgment
of the Board of Directors is necessary to substitute for Shares covered by any
outstanding Right the type of securities or property of the corporation
surviving such merger or consolidation or acquiring such assets which are
issuable by reason of such merger, consolidation or transfer to the holders of
the shares of Common Stock of the Corporation.
(c) Notwithstanding and in addition to the provisions of this
Plan, the Board or its delegate shall have the authority to provide in any
Right Agreement, either at the time of grant or by amendment, that, upon the
date of a determination by the Board of Directors that within six months next
succeeding the date of such determination there is a reasonable possibility a
public market for the Shares may cease to exist, or such Shares may fail to
remain qualified for listing on the New York Stock Exchange, any General or
Limited Right related thereto shall become fully exercisable as to all Shares
subject thereto; provided, however, that except in the case of the death or
physical or mental incapacity of the Right holder, no Right shall be
exercisable prior to the expiration of six months following (i) the date of the
grant of the Related Option, or (ii) the date on which the Right was granted,
whichever is later.
(d) In addition to the authority conferred to the Board or
its delegate in (c) hereinabove, the Board or its delegate shall also have the
authority to modify or otherwise amend any Right Agreement as it deems
necessary or appropriate, provided that the holder of the Right subject to any
such Right Agreement to be modified or amended shall have consented thereto.
10. Compliance with Law.
(a) Each employee, to permit the Corporation to comply with
the Securities Act of 1933, as amended (the "Act"), and any applicable blue sky
or state securities laws, may be required by the Corporation to represent in
writing to the Corporation at the time of grant of a Right and at the time of
the issuance of any Shares thereunder that he does not contemplate and shall
not make
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any transfer of any Shares to be acquired under Rights except in compliance
with the Act, and he shall enter into such agreements and make such other
representations as, in the opinion of counsel to the Corporation, shall be
sufficient to enable the Corporation legally to issue the Shares. Certificates
representing Shares to be acquired under Rights shall bear such legends as
counsel for the Corporation may indicate are necessary or appropriate to
accomplish the purposes of Paragraphs (a) and (b) of this Section 10.
(b) If at any time the Board of Directors shall determine
that the listing, registration or qualification of the Shares subject to any
Right upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory authority, is necessary or
desirable as a condition of, or in connection with, the granting of, or
issuance of Shares under, such Right, such Shares shall not be issued unless
such listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors.
(c) Where in the opinion of counsel to the Company, the
Company has or will have an obligation to withhold taxes relating to the
exercise of a Right, a Participant may elect (a "Withholding Election") to pay
his required minimum withholding tax obligation by the withholding of Shares
from the total number of Shares deliverable pursuant to the exercise of a Right
in whole or in part for Shares, or by delivering to the Company a sufficient
number of previously acquired Shares, and may elect to have additional taxes
paid by the delivery of previously acquired shares, in each case in accordance
with rules and procedures established by the Board or its delegate. Previously
owned shares delivered in payment for such taxes must have been owned for at
least six months prior to the exercise date, or may be subject to such other
conditions as the Board or its delegate may require. The value of Shares
withheld or delivered shall be the Fair Market Value per Share on the date the
exercise becomes taxable. All Withholding Elections are subject to the
approval of the Board or its delegate and must be made in compliance with rules
and procedures established by the Board or its delegate.
11. Amendment of the Plan. The Board of Directors at any
time and from time to time, may amend the Plan, subject to the limitation that,
except as provided in Section 9 (relating to adjustments upon changes in
stock), no amendment shall be effective unless approved within twelve (12)
months before or after the date of such amendment's adoption, by the vote or
written consent of a majority of the outstanding shares of the
Company/Corporation entitled to vote, where such amendment will:
(a) increase the number of Rights which may be exercised
under the Plan;
(b) materially increase the benefits accruing to participants
under the Plan; or
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(c) materially modify the requirements of Section 5 as to
eligibility for participation in the Plan.
It is expressly contemplated that the Board may amend the Plan in any
respect necessary to provide the Company's employees with the maximum benefits
provided or to be provided under Section 422A of the Code and the regulations
promulgated thereunder relating to employee incentive stock options and/or to
bring the Plan or Rights granted under it into compliance therewith.
Rights and obligations under any Right granted before any amendment
of the Plan shall not be altered or impaired by amendment of the Plan, except
with the consent, which may be obtained in any manner deemed by the Board or
its delegate to be appropriate, of the person to whom the Right was granted.
12. No Obligations. Neither this Plan nor the grant of any
Right shall confer any right on any employee to remain in the employ of the
Corporation or any subsidiary or restrict the right of the Corporation or any
subsidiary to terminate his employment.
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EXHIBIT 10.7
MONOLITHIC MEMORIES, INC.
1981 INCENTIVE STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option
Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to the Employees of
the Company and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock
Options or Nonstatutory Stock Options, at the discretion of the Board and as
reflected in the terms of the written option agreement.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Board" shall mean the Committee, if one has
been established, or the Board of Directors of the Company, if no Committee is
appointed.
(b) "Code" shall mean the Internal Revenue Code
of 1986, as amended.
(c) "Committee" shall mean the Board, and if such
is appointed by the Board in accordance with Section 4(a) of the Plan, any
Committee to which part or all of the Board's authority is delegated.
(d) "Common Stock" shall mean the Common Stock of
the Company.
(e) "Company" shall mean Advanced Micro Devices,
Inc., a Delaware corporation.
(f) "Continuous Status as an Employee" shall mean
the absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the
case of sick leave, military leave, or any other leave of absence approved by
the Board.
(g) "Employee" shall mean any person, including
officers and directors, employed by the Company or any Parent or Subsidiary of
the Company. The payment of directors' fees by the Company shall not be
sufficient to constitute "employment" by the Company.
(h) "Incentive Stock Option" shall mean an option
intended to qualify as an incentive stock option within the meaning of Section
422A of the Code.
(i) "Nonstatutory Stock Option" shall mean an
Option not
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intended to qualify as an Incentive Stock Option.
(j) "Option" shall mean a stock option granted
pursuant to the Plan.
(k) "Optioned Stock" shall mean the Common Stock
subject to an option.
(l) "Optionee" shall mean an Employee who
receives an Option.
(m) "Parent" shall mean a "parent corporation",
whether now or hereafter existing, as defined in Section 425 (e) of the Code.
(n) "Plan" shall mean this 1981 Incentive Stock
Option Plan.
(o) "Share" shall mean a share of the Common
Stock, as adjusted in accordance with Section 11 of the Plan.
(p) "Subsidiary" shall mean a "subsidiary
corporation," whether now or hereafter existing, as defined in Section 425(f)
of the Code.
3. Stock Subject to the Plan. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is 4,620,000 shares of Common Stock. The
Shares may be authorized, but unissued, or reacquired Common Stock.
If an Option should expire or become unexercisable for
any reason without having been exercised in full, the unpurchased shares which
were subject thereto shall, unless the Plan shall have been terminated, become
available for future grant under the Plan.
4. Administration.
(a) The Board of Directors (the "Board"), whose authority
shall be plenary, shall administer the Plan and may delegate part or all of its
administrative powers with respect to part or all of the Plan pursuant to
Section 4(d); provided, however, that the Board of directors shall delegate
administration of the Plan to the extent required by Section 4(e).
(b) The Board or its delegate shall have the power, subject
to and within the limits of the express provisions of the Plan:
(1) To make any determination under this Plan in
execution of its responsibilities.
(2) To determine from time to time the term of
each granted Option or Right and the time or times during the term of each
Option or Right within which all or portions of each Option or Right may be
exercised (which at the discretion of the Board or its
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delegate may be accelerated).
(3) To grant Options and/or Rights in exchange
for cancellation of Options and/or Rights granted earlier at different exercise
prices, provided, however, nothing contained herein shall empower the Board or
its delegate to grant an ISO under conditions or pursuant to terms that are
inconsistent with the requirements of Section 422 of the Code.
(4) To prescribe the terms and provisions of each
Option and/or Right granted (which need not be identical) and the form of
written instrument that shall constitute the Option and/or Right agreement.
(5) To take appropriate action to amend any
Option and/or Right hereunder, including to cause any Option granted hereunder
to cease to be an ISO, provided that no such action may be taken by the Board
or its delegate without the written consent of the affected Participant.
(c) The Board or its delegate shall also have the power,
subject to and within the limits of the express provisions of this Plan:
(1) To construe and interpret the Plan and
Options and Rights granted under the Plan, and to establish, amend and revoke
rules and regulations for administration of the Plan. The Board or its
delegate, in the exercise of this power, shall generally determine all
questions of policy and expediency that may arise and may correct any defect,
omission or inconsistency in the Plan or in any Option or Right agreement in a
manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.
(2) Generally, to exercise such powers and to
perform such acts as are deemed necessary or expedient to promote the best
interests of the Company.
(d) The Board of Directors may, by resolution, delegate
administration of the Plan (including, without limitation, the Board's powers
under Sections 4(b) and (c) above), under either or both of the following:
(1) with respect to the participation of or
granting of Options or Rights to an employee who is not subject to Section 16
of the Exchange Act, to a committee of one or more members of the Board of
Directors, whether or not such members of the Board of Directors are
Disinterested Directors;
(2) with respect to matters other than the
selection for participation in the Plan, substantive decisions concerning the
timing, pricing, amount or other material term of an Option or Right, to a
committee of one or more members of the Board of Directors, whether or not such
members of the Board of Directors are Disinterested Directors, or to one or
more officers of the Company.
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(e) Unless each member of the Board is a Disinterested
Director, the Board shall, by resolution, delegate administration of the Plan
with respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of an Option or Right, to a
committee of two or more Disinterested Directors. Any committee to which
administration of the Plan is so delegated pursuant to this Section 4(e) may
also administer the Plan with respect to an employee described in Section
4(d)(1) above.
(f) Except as required by Section 3(e) above, the Board shall
have complete discretion to determine the composition, structure, form, term
and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board, at any time, may revest in the Board any of its
administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 3(e) above.
(g) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
(h) The term "Disinterested Director" shall mean a member of
the Board of Directors of the Company who has not, during the one year prior to
service as an administrator of the Plan, or during such service, been granted
or awarded equity securities of the Company pursuant to this Plan (except for
automatic grants of options to Outside Directors pursuant to Section 8) of the
1992 Stock Incentive Plan or any other plan of the Company or any of its
Affiliates.
5. Eligibility.
(a) Options may be granted only to Employees. An
Employee who has been granted an Option may, if he is otherwise eligible, be
granted an additional Option or Options.
(b) No Incentive Stock Option may be granted to
an Employee which, when aggregated with all other incentive stock options
granted to such Employee by the Company or any Parent or Subsidiary, would
result in Shares having an aggregate fair market value (determined for each
Share as of the date of grant of the Option covering such Share) in excess of
$100,000 becoming first available upon exercise of one or more Incentive Stock
Option during any calendar year.
(c) Section 5(b) of the Plan shall apply only to an
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Incentive Stock Option evidenced by an "Incentive Stock Option Agreement" which
sets forth the intention of the Company and the Optionee that such Option shall
qualify as an Incentive Stock Option. Section 5(b) of the Plan shall not apply
to any Option evidenced by a "Nonstatutory Stock Option Agreement" which sets
forth the intention of the Company and the Optionee that such Option shall be a
Nonstatutory Stock Option.
(d) The Plan shall not confer upon any Optionee
any right with respect to continuation of employment by the Company, nor shall
it interfere in any way with his right or the Company's right to terminate his
employment at any time.
6. Term of Plan. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by vote of the
holders of a majority of the outstanding shares of the Company entitled to vote
on the adoption of the Plan. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 13 of the Plan.
7. Term of Option. The term of each Incentive Stock Option
shall be ten (10) years from the date of grant thereof or such shorter term as
may be provided in the Stock Option Agreement. The term of each Option that is
not an Incentive Stock Option shall be ten (10) years and one (1) day from the
date of grant thereof or such shorter term as may be provided in the Stock
Option Agreement. However, in the case of an Option granted to an Optionee
who, at the time the Option is granted, owns stock representing more than ten
percent (10%) of the voting power of all classes of stock of the Company or any
Parent or Subsidiary, (a) if the Option is an Incentive Stock Option, the term
of the Option shall be five (5) years from the date of grant thereof or such
shorter time as may be provided in the Stock Option Agreement, or (b) if the
Option is not an Incentive Stock Option, the term of the Option shall be five
(5) years and one (1) day from the date of grant thereof or such shorter term
as may be provided in the Stock Option Agreement.
8. Option Price and Consideration.
(a) The per Share purchase price of the Shares to
be issued pursuant to exercise of an Incentive Stock Option shall be such price
as is determined by the Board, but shall in no event be less than the fair
market value per Share on the date of grant of the Incentive Stock Option. The
per Share purchase price of the Shares to be issued pursuant to exercise of a
Nonstatutory Stock Option shall be such price as is determined by the Board,
but shall be in no event be less than the fair market value per Share on the
date of grant of the Nonstatutory Stock Option or the date the price is
amended, whichever is lower.
(b) The fair market value shall be determined by
the Board in its discretion; provided, however, that where there is a public
market for the Common Stock, the fair market value per Share shall be the mean
of the bid and asked prices of the Common Stock for the date of grant, as
reported in the Wall Street Journal, or,
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in the event the Common Stock is listed on a stock exchange or on the National
Association of Securities Dealers Automated Quotation (NASDAQ) National Market
System, the fair market value per Share shall be the closing price on the
exchange on the date of grant of the Option, as reported in the Wall Street
Journal.
(c) The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Board and may consist entirely of cash, check, promissory
note, other Shares of Common Stock of the Company having a fair market value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said option shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment for the issuance of
Shares to the extent permitted by the Delaware General Corporation Law.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a
Shareholder. Any Option granted hereunder shall be exercisable at such times
and under such conditions as determined by the Board, including performance
criteria with respect to the Company and/or the Optionee, and as shall be
permissible under the terms of the Plan; provided, however, that an Incentive
Stock Option granted prior to January 1, 1987 shall not be exercisable while
there is outstanding any Incentive Stock Option which was granted, before the
granting of such Incentive Stock Option, to the same Optionee to purchase stock
of the Company, or any Parent or Subsidiary, or any predecessor corporation of
such corporation. For purposes of this provision, an Incentive Stock Option
shall be treated as outstanding until such option is exercised in full or
expires by reason of lapse of time.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company in accordance with the
terms of the Option by the person entitled to exercise the Option and full
payment for the Shares with respect to which the Option is exercised has been
received by the Company. Full payment may, as authorized by the Board, consist
of any consideration and method of payment allowable under Section 8(c) of the
Plan. Until the Company receives written notice of such exercise and full
payment for the Shares, no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, and no
adjustment will be made for a dividend or other right for which the record date
is prior to the date the Company receives such notice and such payment, except
as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be available, both for
purposes of the Plan and for sale under the Option, by the number of Shares as
to which the Option is exercised.
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<PAGE> 7
(b) Termination of Status as an Employee. If an
Employee ceases to serve as an Employee, he may, but only within thirty (30)
days (or such other period of time as determined by the Board or its
delegate, and not extending beyond the original maximum term of the option)
after the date he ceases to be an Employee of the Company, exercise his Option
to the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of such termination, or if he does not exercise such Option (which he
was entitled to exercise) within the time specified herein, the Option shall
terminate.
(c) Death of Optionee. In the event of the death
of an Optionee:
(i) during the term of the Option who
is at the time of his death an Employee of the Company and who shall have been
in Continuous Status as an Employee since the date of grant of the Option, the
Option may be exercised, at any time within six (6) months following the date
of death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent of the
right to exercise that would have accrued had the Optionee continued living and
remained in Continuous Status as an Employee six months after the date of
death; or
(ii) within one (1) month after the
termination of Continuous Status as an Employee, the Option may be exercised,
at any time within six (6) months following the date of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, but only to the extent of the right to exercise that
had accrued at the date of termination.
(d) Divorce: If an Option or any portion thereof
is transferred pursuant to a qualified domestic relations order to a former
spouse who is neither a director nor an employee of the Company or any of its
Affiliates, the former spouse shall have the right for the period of twelve
months following the date of transfer, or such other period as the Board or its
delegate may fix, to exercise the Option to the extent the Participant was
entitled to exercise such option on the date of transfer. Unless otherwise
specified in the option agreement or by court order, the date of transfer shall
be the date the qualified domestic relations order is executed.
(e) Withholding Taxes. Where in the opinion of
counsel to the Company, the Company has or will have an obligation to withhold
taxes relating to the exercise of any stock option, the Board or its delegate
may in its discretion require that such tax obligation be satisfied in a manner
satisfactory to the Company before shares deliverable pursuant to the exercise
of such option are transferred to the option holder. An option holder may make
a Withholding Election, to pay required minimum withholding taxes by the
withholding of shares from the total number of shares deliverable pursuant to
the exercise of the option or by delivering
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<PAGE> 8
a sufficient number of previously acquired shares, in each case in accordance
with rules and procedures established by the Board or its delegate. Previously
owned shares delivered in payment for such taxes must have been owned for at
least six months prior to the exercise date, or may be subject to such other
conditions as the Board or its delegate may require. The value of shares
withheld or delivered shall be the fair market value of such shares on the date
the exercise becomes taxable. Such Withholding Election shall be subject to
the approval of the Board or its delegate, and must be in compliance with
rules and procedures established by the Board or its delegate.
(f) The vesting of options may be on such terms
as the Board may prescribe, and such vesting may be made automatically
accelerated in the event of a change of control of the Company.
If any Participant's employment is terminated by the
Company for any reason other than for Misconduct or, if applicable, by
Constructive Termination, within one year after a Change of Control has
occurred, then all Options held by such Participant shall become fully vested
for exercise upon the date of termination, irrespective of the vesting
provisions of the Participant's option agreement.
Unless otherwise specified in an individual's option
agreement, the term "Change of Control" shall mean a change of control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), or in response to any other form
or report to the Securities and Exchange Commission or any stock exchange on
which the Company's shares are listed which requires the reporting of a change
of control. In addition, a Change of Control shall be deemed to have occurred
if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing more than 20% of the combined voting
power of the Company's then outstanding securities; or (ii) in any two-year
period, individual who were members of the Board of Directors (the "Board") at
the beginning of such period plus each new director whose election or
nomination for election was approved by at least two-thirds of the directors in
office immediately prior to such election or nomination, cease for any reason
to constitute at least a majority of the Board; or (iii) a majority of the
members of the Board in office prior to the happening of any event and who are
still in office after such event, determines in its sole discretion within one
year after such event, that as a result of such event there has been a Change
of Control.
Notwithstanding the foregoing definition, "Change of
Control" shall exclude the acquisition of securities representing more than 20%
of the combined voting power of the Company by the Company, any of its
wholly-owned subsidiaries, or any trustee or other fiduciary holding securities
of the Company under an employee benefit plan now or hereafter established by
the Company. As used
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<PAGE> 9
herein, the term "beneficial owner" shall have the same meaning as under
Section 13(d) of the Exchange Act and related case law.
The term "Constructive Termination" shall mean a
resignation by a Participant who has been elected by the Company's Board of
Directors as a corporate officer of the Company, due to diminution or adverse
change in the circumstances of such Participant's employment with the company,
as determined in good faith by the Participant, including, without limitation,
reporting relationships, job description, duties, responsibilities,
compensation, perquisites, office or location of employment. Constructive
Termination shall be communicated by written notice to the Company, and such
termination shall be deemed to occur on the date such notice is delivered to
the Company.
10. Non-Transferability of Options. The Option may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any
manner other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee.
11. Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the shareholders of the Company, the number
of shares of Common Stock covered by each outstanding Option, and the number of
shares of Common Stock which have been authorized for issuance under the Plan
but as to which no Options have yet been granted or which have been returned to
the Plan upon cancellation or expiration of an Option, as well as the price per
share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
shares of Common Stock resulting from a stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation
of the Company, or in the event of a proposed sale of substantially all of the
assets of the Company, or the merger of the Company with or into another
corporation, the Option will terminate unless otherwise provided by the Board.
The Board may, in the exercise of its sole discretion in such instances,
declare that any option shall terminate as of a date fixed by the Board and
give each Optionee the right to exercise his Option as to all or any part of
the Optioned Stock including Shares as to which the Option would not otherwise
be exercisable.
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<PAGE> 10
12. Time of Granting Options. The date of grant of an Option
shall, for all purposes, be the date on which the Board makes the determination
granting such Option. Notice of the determination shall be given to each
Employee to whom an Option is so granted within a reasonable time after the
date of such grant.
13. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may
amend or terminate the Plan from time to time in such respects as the Board may
deem advisable; provided that, the following revisions or amendments shall
require approval of the shareholders of the Company:
(1) any increase in the number of
Shares subject to the Plan, other
than in connection with an
adjustment under Section 11 of
the Plan;
(2) any change in the destination of
or the class of employees
eligible to the granted Options;
or
(3) any material increase in the
benefits accruing to participants
under the Plan.
(b) Effect of Amendment or Termination. Any such
amendment or termination of the Plan shall not affect Options already granted
and such Options shall remain in full force and effect as if this Plan had not
been amended or terminated, unless mutually agreed otherwise between the
Optionee and the Board, which agreement must be in writing and signed by the
Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be
issued with respect to the exercise of an Option unless the exercise of such
Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the rules and regulations promulgated thereunder,
and the requirements of any stock exchange upon which the Shares may then be
listed, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
As a condition to the exercise of an Option, the Company
may require the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such Shares
if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.
15. Reservation of Shares. The Company, during the term of
this Plan, will at all times reserve and keep available such number of Shares
as shall be sufficient to satisfy the requirements of the
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<PAGE> 11
Plan.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not
have been obtained.
16. Option Agreement. Options shall be evidenced by written
option agreements in such form as the Board shall approve.
17. Shareholder Approval.
(a) Any amendment of the Plan requiring
shareholder approval shall be obtained either at a duly held shareholders'
meeting or by written consent. If such shareholder approval is obtained at a
duly held shareholders' meeting, it must be obtained by the affirmative vote of
the holders of a majority of the outstanding shares of the Company, or if such
shareholder approval is obtained by written consent, it must be obtained by the
unanimous written consent of all shareholders of the Company; provided,
however, that approval at a meeting or by written consent may be obtained by a
lesser degree of shareholder approval if the Board determines, in its
discretion after consultation with the Company's legal counsel, that such a
lesser degree of shareholder approval will comply with all applicable laws and
will not adversely affect the qualification of the Plan under Section 422A of
the Code.
(b) Any required approval of the shareholders of
the Company obtained shall be solicited substantially in accordance with
Sections 14(a) of the Exchange Act and the rules and regulations promulgated
thereunder.
18. Information to Optionees. The Company shall provide to
each Optionee, during the period for which such Optionee has one or more
Options outstanding, copies of all annual reports and other information which
are provided to all shareholders of the Company. The Company shall not be
required to provide such information if the issuance of Options under the Plan
is limited to key employees whose duties in connection with the Company assure
their access to equivalent information.
11
<PAGE> 1
EXHIBIT 10.10
ADVANCED MICRO DEVICES, INC.
1987 RESTRICTED STOCK AWARD PLAN
1. PURPOSES OF THE PLAN.
The Advanced Micro Devices, Inc. 1987 Restricted Stock Award Plan
(the "Plan") is intended to attract and retain employees of Advanced Micro
Devices, Inc. (the "Corporation) and its subsidiaries who are and will be
contributing to the success of the business; to motivate and reward outstanding
employees who have made significant contributions to the success of the
Corporation and encourage them to continue to give their best efforts to its
future success; to provide competitive incentive compensation opportunities;
and to further opportunities for stock ownership by such employees in order to
increase their proprietary interest in the Corporation. Accordingly, the
Corporation may, from time to time, grant to selected employees awards of
shares of the Corporation's $0.01 par value Common Stock ("Common Stock")
subject to the terms and conditions hereinafter provided. Common Stock awarded
subject to such terms and conditions is hereinafter referred to as "Restricted
Stock".
2. ADMINISTRATION.
(a) The Board of Directors (the "Board") whose authority
shall be plenary, shall administer the Plan and may delegate part or all of its
administrative powers with respect to part or all of the Plan pursuant to
subsection 2(c) of the Plan, provided, however, that the Board of Directors
shall delegate administration of the Plan to the extent required by Section
2(d).
(b) Subject to the terms, provisions and conditions of this
Plan as set forth herein, the Board or its delegate shall have sole discretion
and authority:
(1) to select the employee directors, officers
and other employees to be awarded Restricted Stock pursuant to
Section 5 (it being understood that more than one award may be
granted to the same person), and in connection therewith:
(i) to determine the number of shares to
be awarded each recipient;
(ii) to determine the period of restriction
applicable to each award;
(iii) to determine the time or times when
awards may be granted and any additional terms and
conditions which may be placed on receiving such award;
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<PAGE> 2
(iv) to determine the amount and type
of consideration to be provided by the recipient, which
may include the rendering of service as an employee of
AMD or any of its subsidiaries but shall not include any
payment in the form of cash;
(v) to take appropriate action to
amend the terms or conditions of any award granted to an
employee under the Plan; provided that no such action may
be taken by the Board or its delegate without the written
consent of the affected participant;
(2) to prescribe the form of agreement, legend or
other instruments evidencing any awards granted under this Plan;
(3) to amend the Plan as provided in Section 8
and;
(4) to construe and interpret the provisions of
the Plan and the terms and conditions of the awards granted under the
Plan and to establish, amend and revoke rules and regulations for
carrying out the Plan as the Board or its delegate may deem
appropriate. In the exercise of this power, the Board or its
delegate shall generally determine all questions of policy and
expediency that may arise and may correct any defect, omission or
inconsistency in the Plan or in any agreement evidencing any award
granted under this Plan in a manner and to the extent it shall deem
necessary or expedient to make the Plan fully effective.
(c) The Board of Directors may, by resolution, delegate
administration of the Plan (including, without limitation, the Board's powers
under subsection 2(b) above), under either or both of the following:
(1) with respect to the participation of or
awarding shares to an employee who is not subject to Section 16 of
the Exchange Act, to a committee of one or more members of the Board
of Directors, whether or not such members of the Board of Directors
are Disinterested Directors.
(2) with respect to matters other than the
selection for participation in the Plan, substantive decisions
concerning the timing, pricing, amount or other material term of an
award, to a committee of one or more members of the Board of
Directors, whether or not such members of the Board of Directors are
Disinterested Directors, or to one or more officers of the Company.
(d) Unless each member of the Board is a Disinterested
Director, the Board shall, by resolution, delegate administration of the Plan
with respect to the participation in the Plan of employees who are subject to
Section 16 of the Exchange Act, including its powers to select such employees
for participation in the Plan, to make substantive decisions concerning the
timing, pricing, amount or any other material term of an award, to a
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<PAGE> 3
committee of two or more Disinterested Directors. Any committee to which
administration of the Plan is so delegated pursuant to this Section 2(d) may
also administer the Plan with respect to an employee described in Section
2(c)(1) above.
(e) Except as required by Section 2(d) above, the Board shall
have complete discretion to determine the composition, structure, form, term
and operations of any committee established to administer the Plan. If
administration is delegated to a committee, unless the Board otherwise
provides, the committee shall have, with respect to the administration of the
Plan, all of the powers and discretion theretofore possessed by the Board and
delegable to such committee, subject to any constraints which may be adopted by
the Board from time to time and which are not inconsistent with the provisions
of the Plan. The Board at any time may revest in the Board any of its
administrative powers under the Plan, except under circumstances where a
committee is required to administer the Plan under Section 2(d) above.
(f) The determinations of the Board or its delegate shall be
conclusive and binding on all persons having any interest in this Plan or in
any awards granted hereunder.
(g) The term "Disinterested Director" shall mean a member of
the Board of Directors of the Company who has not, during the one year prior to
service as an administrator of the Plan, or during such service, been granted
or awarded equity securities of the Company pursuant to this Plan or any other
plan of the Company or any of its Affiliates (except for automatic grants of
options to Outside Directors pursuant to Section 8 of the 1992 Stock Incentive
Plan).
3. STOCK SUBJECT TO THE PLAN.
The aggregate number of shares of Common Stock which may be awarded
under the Plan shall not exceed Two Million (2,000,000) shares. Shares to be
awarded under this Plan shall be made available, at the discretion of the Board
of Directors, either from the authorized but unissued shares of Common Stock of
the Corporation or from shares of Common Stock reacquired by the Corporation
including shares purchased in the open market for the purpose of issuance under
the Plan. If any shares of common Stock awarded under the Plan are reacquired
by the Corporation in accordance with Section 6(c) of the Plan, such shares
shall again become available for use under the Plan and shall be regarded as
not having been previously awarded.
4. ELIGIBILITY.
Restricted Stock shall be awarded by the Board or its delegate only
to employees of the Corporation or of a subsidiary of the Corporation. The
term "employees" shall include officers as well as other employees of the
Corporation and its subsidiaries and shall include directors who are also
employees of the Corporation or of a subsidiary of the Corporation.
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<PAGE> 4
5. AWARDS.
(a) The Board or its delegate shall have the authority to
award Restricted Stock to employ directors, officers and other employees.
(b) Common Stock awarded to employees pursuant to this
Section 5 shall be subject to the restrictions on transfer and other conditions
specified in Section 6. The Board or its delegate, in its sole discretion,
shall determine the terms or conditions under which such restrictions on
transfer shall lapse. Such terms or conditions may include attainment of
performance goals, passage of time, a change of control of the Corporation or
such other terms or conditions as the Board or its delegate may deem
appropriate. Subject to Section 8, the Board or its delegate may accelerate
the lapse of restrictions or otherwise waive any terms or conditions of an
award when it finds that such an acceleration or waiver would be in the best
interest of the Corporation.
(c) The Board or its delegate, in its sole discretion, shall
determine the terms or conditions under which, during the Restriction Period
(defined in Section 6), shares still subject to restriction shall be forfeited
by an employee. Such terms or conditions may include, but are not limited to,
termination of service.
(d) During the Restriction Period, recipients of awards of
restricted stock under this Section 5 shall be entitled to the rights incident
to such shares described in Section 6.
(e) Where in the opinion of counsel to the Corporation, the
Corporation has or will have an obligation to withhold taxes relating to any
restricted stock award, the Board or its delegate may in its discretion require
that such tax obligation be satisfied in a manner satisfactory to the
Corporation before shares deliverable pursuant to the award are transferred to
the award holder. An award holder may make an election to pay such tax by the
withholding of shares from the total number of shares deliverable pursuant to
the terms of the award or by delivering a sufficient number of previously
acquired shares to the Corporation (the "Withholding Election"), and may elect
to have additional taxes paid by the delivery of previously acquired shares in
accordance with rules and procedures established by the Board or its delegate.
Previously owned shares delivered in payment for such taxes must have been for
at least six months prior to the owned exercise date, or may be subject to such
other conditions as the Board or its delegate may require. The value of shares
withheld or delivered shall be the fair market value of such shares on the date
the award becomes taxable (the "Tax Date"). Such Withholding Election shall be
subject to the approval of the Board or its delegate, and must be in
compliance with rules and procedures established by the Board or its delegate.
An award holder who elects under Section 83(b) of the Internal Revenue Code to
be taxed at the time shares are issued subject to restrictions
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<PAGE> 5
may not elect to have a portion of those shares withheld, but may elect to
deliver previously acquired shares which are not subject to restrictions. In
the event that the award holder fails to satisfy his withholding obligation in
a timely manner and according to the rules established by the Board or its
delegate, the Corporation shall withhold a sufficient number of shares or
sufficient cash, from whatever source available, to satisfy the tax withholding
obligation.
(f) No employee or other person shall have any claim or right
to be granted shares of Restricted Stock under this Section 5.
6. RESTRICTIONS AND RIGHTS.
The shares of Common Stock awarded pursuant to the Plan shall be
subject to the following restrictions and conditions and shall entitle the
holder thereof to the following rights:
(a) During the Restriction Period, the participant will not
be permitted to sell, pledge, assign or otherwise transfer Restricted Stock
awarded under this Plan. The Restriction Period is the period between the date
the shares are awarded and the date on which all restrictions and conditions
are waived.
(b) Except as provided in Section 6(a), the participant shall
have with respect to the Restricted Stock all of the rights of a stockholder of
the Corporation, including the right to vote the shares and receive dividends
and other distributions.
(c) All shares of Restricted Stock which are forfeited by a
participant pursuant to the provisions of this Plan or any agreement required
hereunder will be re-acquired by the Corporation.
(d) Notwithstanding the other provisions of this Section 6,
the Board or its delegate may adopt rules which would permit a gift by a
participant of Restricted Stock to a spouse, lineal descendant or legal
dependent or to a trust whose beneficiary or beneficiaries shall be either such
a person or persons or the participant; provided that any restrictions on
further transfer and any requirement of continued service shall continue to
apply to the Restricted Stock in the hands of the donee.
(e) Any attempt to dispose of Restricted Stock in a manner
contrary to the restrictions shall be void and ineffective.
(f) Nothing in this Section 6 shall preclude a participant
from exchanging any Restricted Stock for any other shares of Common Stock that
are similarly restricted.
7. AGREEMENTS AND CERTIFICATES.
(a) Each recipient of an award under this Plan shall execute
an agreement or other instrument evidencing the award and shall deliver a fully
executed copy thereof to the Corporation.
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<PAGE> 6
(b) Each participant shall be issued a certificate in respect
of shares of Restricted Stock awarded under the Plan. Such certificate shall
be registered in the name of the participant, and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to such
award.
(c) All certificates for shares of Restricted Stock delivered
under this Plan shall be subject to such stop transfer orders and other
restrictions as the Board or its delegate may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange on which the Common Stock is then listed, and any applicable
federal or state securities law. The Board or its delegate may cause a legend
or legends to be placed on any such certificates to make appropriate reference
to such restrictions.
(d) The Board or its delegate may adopt rules which provide
that the stock certificates evidencing shares of Restricted Stock may be held
in custody by a third party fiduciary, or that the Corporation may itself hold
such shares in custody until the restrictions thereon shall have lapsed and may
require, as a condition of any award, that the participant shall have delivered
a stock power endorsed in blank relating to the stock covered by such award.
(e) Notwithstanding any other provision of this Plan, the
Board or its delegate may make awards under the Plan, pursuant to which the
certificate representing shares of Common Stock: (i) will only be issued
under an agreement that imposes restrictions and conditions on the issuance of
such certificate, and (ii) when issued will bear no restrictive legends and
will be freely transferable. In such cases the participant shall,
notwithstanding the provisions of Section 6(b) of this Plan, not have any of
the rights of a stockholder of the Corporation with respect to any shares of
Restricted Stock for which no certificate has been issued.
8. AMENDMENT OF THE PLAN.
The Board or its delegate may amend the Plan at any time, provided
that, unless approved by the stockholders within twelve months before or after
the adoption of the amendment, no amendment shall:
(i) materially increase the maximum number of
shares of Common Stock which are available for awards under the Plan
(other than to prevent dilution as provided for in Section 10(a));
(ii) materially increase the benefits accruing to
participants under the Plan;
(iii) materially modify the requirements as to
eligibility for participation in the Plan;
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<PAGE> 7
(iv) extend the period during which awards may be
granted under the Plan beyond June 9, 1997, or
(v) impair the rights of any participant under
any then outstanding award, except in accordance with the Plan or any
applicable agreement or applicable law or with the written consent of
the participant.
9. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board of Directors at any time may suspend or
terminate the Plan. Unless terminated sooner, the Plan shall automatically
terminate on June 9, 1997. Common Stock may not be awarded pursuant to this
Plan while the Plan is suspended or after it is terminated.
(b) Rights and obligations under any award granted while the
Plan is in effect shall not be impaired by suspension or termination of the
Plan, except with the consent of the person to whom the award was granted,
which may be obtained in any manner that the Board or its delegate deems
appropriate.
10. MISCELLANEOUS.
(a) In the event that the number of outstanding shares of
Common Stock of the Corporation shall be changed by reason of split-ups or
combinations of shares, any merger, consolidation, reorganization or
recapitalization, stock dividends or other capital adjustments, the number of
shares for which awards of restricted stock may be granted under this Plan
shall be appropriately adjusted as determined by the Board of Directors so as
to reflect such change.
(b) Neither the Plan nor any action taken hereunder shall be
construed as giving any participant, recipient, employee or other person any
right to be retained in the employ of the Corporation or any subsidiary or as
restricting the rights of the Corporation or any subsidiary, which are
expressly reserved, to discharge an employee at any time, with or without
cause, or to adjust the compensation of any employee.
(c) Income realized as a result of an award of Restricted
Stock shall not be included in the participant's earnings for the purpose of
any benefit plan in which the participant may be enrolled or for which the
participant may become eligible unless otherwise specifically provided for in
such plan.
(d) The terms "subsidiary" as used herein shall mean any
corporation fifty percent or more of the outstanding voting stock or voting
power of which is owned directly or indirectly by the Corporation.
(e) The term "Board or its delegate" as used herein refers to
the Board of Directors of the Corporation or any committee or committees to
which it delegates any of its administrative powers
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<PAGE> 8
under this Plan pursuant to Section 2(c) or any officers or other persons to
whom it may properly delegate any such powers pursuant to Section 2(c).
11. EFFECTIVE DATE.
(a) This Plan shall be submitted to the stockholders of the
Corporation at the Annual Meeting in 1987, and, if approved by the
stockholders, shall become effective June 10, 1987.
(b) No shares of Common Stock awarded pursuant to this Plan
may be sold, transferred, pledged or assigned unless or until the Plan has been
approved by the stockholders of the Corporation.
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<PAGE> 1
EXHIBIT 10.27(a)
----------------------------
JOINT VENTURE AGREEMENT
BETWEEN
ADVANCED MICRO DEVICES, INC.
AND
FUJITSU LIMITED
----------------------------
Confidential portions of this document have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
<PAGE> 2
JOINT VENTURE AGREEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Article 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 "AMD INVESTMENT AGREEMENT". . . . . . . . . . 2
Section 1.2 "APPLICABLE LAW". . . . . . . . . . . . . . . 2
Section 1.3 "ARTICLES OF INCORPORATION" . . . . . . . . . 2
Section 1.4 "ASSOCIATED AGREEMENTS" . . . . . . . . . . . 2
Section 1.5 "BOARD OF DIRECTORS". . . . . . . . . . . . . 2
Section 1.6 "BUSINESS PLAN" . . . . . . . . . . . . . . . 2
Section 1.7 "COMBINED FINANCIAL
CONTRIBUTION". . . . . . . . . . . . . . . . 3
Section 1.8 "CONFIDENTIAL INFORMATION". . . . . . . . . . 3
Section 1.9 "EFFECTIVE DATE". . . . . . . . . . . . . . . 3
Section 1.10 "EPROM". . . . . . . . . . . . . . . . . . . 3
Section 1.11 "FLASH MEMORY" . . . . . . . . . . . . . . . 3
Section 1.12 "FUJITSU INVESTMENT AGREEMENT" . . . . . . . 4
Section 1.13 "GOVERNMENTAL APPROVALS" . . . . . . . . . . 4
Section 1.14 "GOVERNMENTAL AUTHORITY" . . . . . . . . . . 4
Section 1.15 "INDEPENDENT ACCOUNTING FIRM". . . . . . . . 4
Section 1.16 "INVESTMENT AGREEMENTS". . . . . . . . . . . 4
Section 1.17 "JOINT DEVELOPMENT AGREEMENT". . . . . . . . 4
Section 1.18 "JOINT VENTURE LICENSE
AGREEMENT". . . . . . . . . . . . . . . . . 5
Section 1.19 "JV PRODUCT" . . . . . . . . . . . . . . . . 5
Section 1.20 "LAND LEASE" . . . . . . . . . . . . . . . . 5
Section 1.21 "NONDISCLOSURE AGREEMENTS" . . . . . . . . . 5
Section 1.22 "PERCENTAGE INTEREST". . . . . . . . . . . . 5
Section 1.23 "REGULATIONS OF THE BOARD OF
DIRECTORS". . . . . . . . . . . . . . . . . 5
Section 1.24 "TECHNOLOGY CROSS-LICENSE
AGREEMENT". . . . . . . . . . . . . . . . . 5
Article 2. INCORPORATION. . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.1 Formation of JV . . . . . . . . . . . . . . . 5
Section 2.2 The Name of JV. . . . . . . . . . . . . . . . 5
Section 2.3 Articles of Incorporation . . . . . . . . . . 6
Section 2.4 Capital Contributions . . . . . . . . . . . . 6
Section 2.5 Reimbursement of Incorporation
Expenses. . . . . . . . . . . . . . . . . . . 7
Article 3. MANAGEMENT OF JV . . . . . . . . . . . . . . . . . . . . . 7
Section 3.1 Meetings and Resolutions of
Shareholders. . . . . . . . . . . . . . . . . 7
Section 3.2 Election of Directors and
Statutory Auditors. . . . . . . . . . . . . . 8
Section 3.3 Representative Directors and
Directors with Titles . . . . . . . . . . . . 9
Section 3.4 Meetings and Resolutions of the
Board of Directors. . . . . . . . . . . . . . 9
Section 3.5 Statement of Policy.. . . . . . . . . . . . . 12
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
Section 3.6 Manufacturing Activity. . . . . . . . . . . . 12
Section 3.7 [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]. . . . . . . . . . . . 13
Section 3.8 Accounting and Reporting
Obligations . . . . . . . . . . . . . . . . . 13
Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES. . . . . . . . . . . . . 15
Section 4.1 Financing . . . . . . . . . . . . . . . . . . 15
Section 4.2 Land Lease. . . . . . . . . . . . . . . . . . 15
Section 4.3 Transfer of Shares;
Right of First Refusal. . . . . . . . . . . . 17
Section 4.4 Transfer of Fujitsu Employees . . . . . . . . 19
Section 4.5 Transfer and Assignment of AMD
Employees . . . . . . . . . . . . . . . . . . 19
Section 4.6 Confidentiality . . . . . . . . . . . . . . . 19
Article 5. ASSOCIATED AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 22
Article 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 23
Section 6.1 Representations and Warranties of
Fujitsu . . . . . . . . . . . . . . . . . . . 23
Section 6.2 Representations and Warranties
of AMD. . . . . . . . . . . . . . . . . . . . 24
Article 7. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . 26
Section 7.1 Effective Date. . . . . . . . . . . . . . . . 26
Section 7.2 Term. . . . . . . . . . . . . . . . . . . . . 26
Section 7.3 Triggering Events . . . . . . . . . . . . . . 27
Section 7.4. Causes of Dissolution . . . . . . . . . . . . 28
Section 7.5. Election of Non-Triggering
Party . . . . . . . . . . . . . . . . . . . . 29
Section 7.6 Noncompetition; Nonsolicitation . . . . . . . 29
Section 7.7. Name. . . . . . . . . . . . . . . . . . . . . 30
Section 7.8. Rights Under Associated
Agreements. . . . . . . . . . . . . . . . . . 30
Article 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.1. Force Majeure. . . . . . . . . . . . . . . . 31
Section 8.2. Assignment . . . . . . . . . . . . . . . . . 31
Section 8.3. Survival . . . . . . . . . . . . . . . . . . 31
Section 8.4. Notices. . . . . . . . . . . . . . . . . . . 32
Section 8.5. Export Control . . . . . . . . . . . . . . . 33
Section 8.6. Arbitration. . . . . . . . . . . . . . . . . 34
Section 8.7. Entire Agreement . . . . . . . . . . . . . . 35
Section 8.8. Modification . . . . . . . . . . . . . . . . 35
Section 8.9. Announcement . . . . . . . . . . . . . . . . 35
Section 8.10. Severability . . . . . . . . . . . . . . . . 35
Section 8.11. No Waiver. . . . . . . . . . . . . . . . . . 36
Section 8.12. Governing Law. . . . . . . . . . . . . . . . 36
Section 8.13. Language . . . . . . . . . . . . . . . . . . 36
Section 8.14. No Agency. . . . . . . . . . . . . . . . . . 36
Section 8.15. No Third Party Beneficiaries . . . . . . . . 37
Section 8.16. Headings . . . . . . . . . . . . . . . . . . 37
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
Section 8.17. Construction and Reference . . . . . . . . . 37
Section 8.18. Governmental Approvals . . . . . . . . . . . 37
Section 8.19. Counterparts . . . . . . . . . . . . . . . . 37
</TABLE>
iii
<PAGE> 5
JOINT VENTURE AGREEMENT
Joint Venture Agreement ("Agreement") dated as of
March 30, 1993, by and between ADVANCED MICRO
DEVICES, INC. ("AMD"), a Delaware corporation having its
principal place of business at 901 Thompson Place, Sunnyvale,
California 94088-3453, U.S.A., and FUJITSU LIMITED ("Fujitsu"), a
Japanese corporation having its registered place of business at
1015 Kamikodanaka, Nakahara-ku, Kawasaki-shi, Kanagawa-ken 211,
Japan.
INTRODUCTION
A. AMD is engaged in the manufacture and sale of
integrated circuit devices and has a wide and rich experience in
this field of industry.
B. Fujitsu is also engaged in the manufacture and sale of
integrated circuit devices and has a wide and rich experience in
this field of industry.
C. AMD and Fujitsu desire to form a company with limited
liability (kabushiki kaisha) under the laws of Japan ("JV") for
the purpose of manufacturing certain integrated circuit devices,
such as certain densities of erasable programmable read only
memory ("EPROM") and flash memory ("Flash Memory") as more
specifically defined by this Agreement.
D. AMD and Fujitsu desire to collaborate in developing
certain process technologies and designs to be utilized in
connection with such EPROM and Flash Memory.
E. AMD and Fujitsu desire to license to JV and to cross-
license to each other certain technologies which are necessary
1
<PAGE> 6
for JV to manufacture such integrated circuit devices.
ACCORDINGLY, in consideration of the foregoing premises and
the covenants contained herein, the parties agree as follows:
Article 1. DEFINITIONS.
For the purpose of this Agreement, the following terms shall
have the meanings hereinafter set forth:
Section 1.1 "AMD INVESTMENT AGREEMENT" shall have the
meaning set forth in Section 5.E.
Section 1.2 "APPLICABLE LAW" shall mean, with respect to a
party, any domestic or foreign, federal, state or local statute,
law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive, judgment, decree or other
requirement of any Governmental Authority applicable to such
party or its properties, business or assets.
Section 1.3 "ARTICLES OF INCORPORATION" shall mean articles
of incorporation of JV written in the Japanese language and
attached hereto as Exhibit A-1, as amended from time to time.
For the convenience of the parties an English translation of the
Articles of Incorporation is attached hereto as Exhibit A-2.
Section 1.4 "ASSOCIATED AGREEMENTS" shall have the meaning
ascribed to such term in Article 5.
Section 1.5 "BOARD OF DIRECTORS" shall mean the board of
directors of JV as from time to time constituted pursuant to the
terms of this Agreement.
Section 1.6 "BUSINESS PLAN" shall mean a business plan of
JV agreed to in writing by both parties hereto, as from time to
2
<PAGE> 7
time amended by a resolution of the Board of Directors.
Section 1.7 "COMBINED FINANCIAL CONTRIBUTION" shall mean,
with respect to a party, the sum of (i) capital contributions
made by such party pursuant to Section 2.4, (ii) loans to JV
guaranteed by such party pursuant to Sections 4.1.C. and 4.1.D.
and (iii) loans made directly to, or otherwise arranged by, such
party pursuant to Section 4.1.E.
Section 1.8 "CONFIDENTIAL INFORMATION" shall mean any trade
secrets, know-how, data, formulas, processes, intellectual
property or other information, tangible or intangible, of one
party that becomes known by the other party.
Section 1.9 "EFFECTIVE DATE" shall mean the latest to occur
of (a) the date of this Agreement, (b) the date on which all
requisite Governmental Approvals have been obtained, or (c) the
first date on which all of the Associated Agreements, other than
the Joint Venture License Agreement, are in effect.
Section 1.10 "EPROM" or "Electrically Programmable Read
Only Memory" shall mean a non-volatile semiconductor memory
device incorporating floating gate structure cells, which device
is electrically programmable and erasable by using ultraviolet
light. The device mainly consists of such floating gate
structure cells with auxiliary logic circuits, if any, when such
logic circuits are used solely for memory operation or interface
to other products. OTPROM or One Time PROM, which is a certain
non-volatile semiconductor device incorporating the same chip as
EPROM and packaged without transparent windows for ultraviolet
light, shall be included in the definition of EPROM.
Section 1.11 "FLASH MEMORY" shall mean a non-volatile
semiconductor memory device incorporating floating gate structure
cells, which device is programmable and erasable by electrically
3
<PAGE> 8
injecting and electrically discharging electric charges into and
from floating gates. The device mainly consists of such floating
gate structure cells, with auxiliary logic circuits, if any, when
such logic circuits are used solely for memory operation or
interface to other products.
Section 1.12 "FUJITSU INVESTMENT AGREEMENT" shall have the
meaning set forth in Section 5.D.
Section 1.13 "GOVERNMENTAL APPROVALS" means all approvals,
consents, authorizations and similar actions from all
Governmental Authorities that the parties agree are desirable in
order to consummate the transactions contemplated hereunder or
under any of the Associated Agreements.
Section 1.14 "GOVERNMENTAL AUTHORITY" shall mean any
foreign, domestic, federal, territorial, state or local
governmental authority, quasi-governmental authority, court,
government or self-regulatory organization, commission, tribunal,
organization or any regulatory, administrative or other agency,
or any political or other subdivision, department or branch of
any of the foregoing.
Section 1.15 "INDEPENDENT ACCOUNTING FIRM" shall mean a
certified public accountant at audit firm qualified under the
Japanese Certified Public Accountants Act, Law No. 103, 1948, as
amended.
Section 1.16 "INVESTMENT AGREEMENTS" shall have the meaning
set forth in Section 5.E.
Section 1.17 "JOINT DEVELOPMENT AGREEMENT" shall have the
meaning set forth in Section 5.A.
4
<PAGE> 9
Section 1.18 "JOINT VENTURE LICENSE AGREEMENT" shall have
the meaning set forth in Section 5.C.
Section 1.19 "JV PRODUCT" shall mean any product listed as
a JV Product in the Joint Development Agreement, or so designated
by the Board of Directors.
Section 1.20 "LAND LEASE" shall have the meaning set forth
in Section 4.2.A.
Section 1.21 "NONDISCLOSURE AGREEMENTS" shall mean the
Nondisclosure Agreements between Fujitsu and AMD dated March 12,
1992 and July 20, 1992 and the Confidentiality Agreement between
Fujitsu and AMD dated October 16, 1992.
Section 1.22 "PERCENTAGE INTEREST" shall mean with respect
to a party, the percentage of JV's issued and outstanding shares
held by such party.
Section 1.23 "REGULATIONS OF THE BOARD OF DIRECTORS" shall
have the meaning set forth in Section 3.4.F.
Section 1.24 "TECHNOLOGY CROSS-LICENSE AGREEMENT" shall
have the meaning set forth in Section 5.B.
Article 2. INCORPORATION.
Section 2.1 Formation of JV. Promptly following the
Effective Date, the parties shall form JV in Japan for the
purpose of the production, marketing and sale of JV Products.
Section 2.2 The Name of JV. The name of JV shall be as set
forth in the Articles of Incorporation in Japanese and "Fujitsu
AMD Semiconductor Limited" in English. Fujitsu shall file a
temporary application for registration to reserve JV's Japanese
5
<PAGE> 10
name in Japan.
Section 2.3 Articles of Incorporation. The Articles of
Incorporation are hereby incorporated herein and made a part
hereof. In the event of any ambiguity or conflict arising
between the terms and conditions of this Agreement and those of
the Articles of Incorporation, to the extent legally permissible,
the terms and conditions of this Agreement shall prevail.
Section 2.4 Capital Contributions.
A. As soon as practicable following the Effective
Date, each party shall purchase shares of common stock of JV as
follows:
<TABLE>
<CAPTION>
Party Number of Shares Consideration
----- ---------------- -------------
<S> <C> <C>
Fujitsu 1,001 Y50,050,000
AMD 999 Y49,950,000
</TABLE>
B. Pursuant to a separate schedule to be agreed
between the parties, the parties shall make additional capital
contributions to JV until the parties' aggregate capital
contributions reach Y40,000,000,000, and JV shall issue
additional shares reflecting such contributions. Additional
contributions shall be made by the parties in cash, in proportion
to their respective Percentage Interests.
C. The authorized capital of JV shall initially be
Y400,000,000, to be represented by 8,000 shares of common stock
with a par value of Y50,000 each. Thereafter, the authorized
capital of JV shall be increased from time to time in accordance
with a schedule to be agreed upon between the parties. As
specified in the Business Plan, the maximum authorized capital of
JV shall be Y40,000,000,000, to be represented by 800,000 shares
of such common stock.
6
<PAGE> 11
D. Unless otherwise agreed by both parties, Fujitsu
shall hold 50.05%, and AMD 49.95%, of the issued and outstanding
shares of JV. In the event that new shares of JV are issued,
each of the parties shall have the right to purchase such shares
in an amount that is proportionate to its respective Percentage
Interest.
Section 2.5 Reimbursement of Incorporation Expenses. JV
shall reimburse Fujitsu for expenses incurred directly by Fujitsu
in connection with the incorporation of JV to the extent
permitted under the laws of Japan.
Article 3. MANAGEMENT OF JV.
Section 3.1 Meetings and Resolutions of
Shareholders.
A. Each party, in its capacity as a shareholder, shall
have the right from time to time to call a meeting of the
shareholders.
B. The quorum required for a meeting of the
shareholders shall be shareholders representing, in person or by
proxy, not less than two thirds (2/3) of the total number of
issued and outstanding shares of JV.
C. Unless otherwise required by the laws of Japan or
otherwise explicitly provided herein, no shareholders'
resolutions shall be effective unless adopted by the affirmative
votes of shareholders holding a majority of the shares present at
a meeting of the shareholders.
D. Resolutions with respect to the following matters
shall be adopted by the affirmative vote of shareholders
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] of the issued and outstanding
7
<PAGE> 12
shares of JV:
(1) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
E. Interpreters may attend meetings of shareholders
upon the request of either party.
Section 3.2 Election of Directors and Statutory
Auditors.
A. JV shall be administered by a Board of Directors composed of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] directors, [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] directors of whom shall
be nominated by AMD, and [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of whom shall be [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of whom shall be nominated by Fujitsu.
B. If a vacancy occurs on the Board of Directors, a
new director shall be nominated by the party that nominated the
director whose office has been vacated, and an election to fill
such vacancy shall be held at a shareholders' meeting to be
called without delay.
C. JV shall have two (2) statutory auditors
(kansayaku), [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. The
full-time statutory auditor (jookin kansayaku) shall be the
statutory auditor nominated by Fujitsu.
8
<PAGE> 13
D. The parties agree to exercise their respective
voting rights as shareholders of JV so as to ensure that the
persons nominated as directors and statutory auditors by the
parties are elected.
E. Each individual nominated by one party as a
director or statutory auditor shall be subject to the reasonable
approval of the other party.
Section 3.3 Representative Directors and
Directors with Titles.
A. JV shall have a chairman and a vice chairman, each
of whom shall be a representative director. The chairman shall
be nominated by Fujitsu and the vice chairman by AMD.
B. Two full-time standing directors (jookin
torishimariyaku) shall be elected from among the directors
nominated by Fujitsu. The Board of Directors shall determine
whether such full-time standing directors shall be representative
directors and/or directors with titles such as president,
executive vice president, executive director or managing
director.
C. Each of the parties shall cause the directors it
has nominated to exercise their voting rights as members of the
Board of Directors so as to effect the election of the chairman,
vice chairman, representative directors and directors with titles
in accordance with Sections 3.3.A. and B. above.
Section 3.4 Meetings and Resolutions of the Board
of Directors.
A. A regular meeting of the Board of Directors shall
be held once each calendar quarter.
9
<PAGE> 14
B. The chairman, the vice chairman, or any two
directors acting together shall have the right to call, from time
to time, a special meeting of the Board of Directors.
C. The quorum required for a meeting of the Board of
Directors shall be two thirds (2/3) of all the directors of JV.
D. Resolutions of the Board of Directors shall be
adopted by the affirmative vote of a majority of the members of
the Board of Directors present at a meeting, except as provided
in Section 3.4.E. below.
E. Resolutions with respect to the following matters
shall be adopted by the affirmative vote of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of the entire Board of Directors:
(1) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(3) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(4) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
(5) Approval of:
a. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
b. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
10
<PAGE> 15
c. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
d. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
e. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
f. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
g. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
h. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(6) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(7) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(8) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(9) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(10) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(11) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
11
<PAGE> 16
F. Following the formation of JV, the Board of
Directors shall adopt Regulations of the Board of Directors
written in the Japanese language, in the form of Exhibit B-1
hereto (the "Regulations of the Board of Directors"). For the
convenience of the parties, an English translation of such
Regulations is attached hereto as Exhibit B-2.
G. When any issue cannot be resolved by the Board of
Directors at two consecutive meetings, the managements of AMD and
of Fujitsu (Electronic Devices Group, or its successor) shall
consult with each other in a good faith attempt to resolve such
issue.
H. Interpreters may attend meetings of the Board of
Directors upon the request of either party.
Section 3.5 Statement of Policy.
A. The business and affairs of JV shall be carried on
and conducted in a sound, prudent and constructive manner for the
purpose of building a successful and financially strong JV
corporation.
B. The day-to-day operations of JV shall be managed by
the full-time standing directors nominated and elected under
Section 3.3.B. above. Such operations shall be conducted in
accordance with this Agreement, the Business Plan and the
operating and capital budgets approved by the Board of Directors.
Section 3.6 Manufacturing Activity. JV shall construct a
semiconductor wafer fabrication facility capable of mass
production with eight-inch wafer line, and shall manufacture JV
Products in accordance with the Business Plan.
12
<PAGE> 17
Section 3.7 [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 3.8 Accounting and Reporting
Obligations.
A. JV's fiscal year shall be the twelve (12)
month period ending on March 31. Japanese accounting principles
shall be adopted.
B. JV shall provide the following reports and
statements to the parties in English and Japanese within the time
periods set forth below:
(i) Within twenty (20) days after the closing of each
month, a report on booking and billing monthly results, balance
sheet, profit and loss statement, cash flow, head count and
business operations.
(ii) Within thirty (30) days after the closing of each
quarter, a report on booking and billing quarterly results,
balance sheet, profit and loss statement, cash flow, head count,
financial change and business operations.
(iii) Within three (3) months after the end of each
fiscal year, a report on booking and billing annual results,
balance sheet, profit and loss statement, cash flow, inventory
of major properties, head count, shareholders' equity, business
operation, and annual proposals governing appropriation of
profits or covering losses.
C. The parties agree that JV shall designate Fujitsu's
Independent Accounting Firm, as approved by Fujitsu's
shareholders, as the Independent Accounting Firm of JV, unless
otherwise determined by the affirmative vote of shareholders
holding not less than two-thirds (2/3) of the issued and
13
<PAGE> 18
outstanding shares of JV.
D. The annual accounting report of JV shall be audited
at the expense of JV by its Independent Accounting Firm in
accordance with the laws of Japan.
E. Each party shall, upon reasonable written notice to
JV and to the other party, have access to JV's books, records,
procedures, employees and similar sources of data and information
concerning JV's financial operations.
F. Upon reasonable written notice to JV and the other
party, but not more often than once every twelve (12) months,
each party shall have a right to perform a special audit of JV by
independent outside auditors, at that party's own cost. In
addition, upon such reasonable notice each party shall have the
right to perform or have performed, at that party's own cost,
such audits as are necessary to meet such party's financial
reporting obligations.
G. The JV shall provide to each party full access to
the books and records of JV, and shall provide to each party the
accounting information such party requires to comply with its own
financial reporting requirements, provided that any cost involved
in providing such information shall be paid by the requesting
party.
H. The JV shall have the right, and each party hereto
shall have the right to compel JV, to have independent outside
auditors, upon reasonable written notice to the other party and
not more than once each twelve (12) months, at JV's cost, examine
the books and records of the other party for the purpose of
auditing the calculation of sales proceeds or any amounts due to
JV.
14
<PAGE> 19
Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES.
Section 4.1 Financing.
A. Except as otherwise explicitly agreed, the parties
shall bear equal responsibility for financing JV.
B. Both parties recognize that, in addition to the
capital contributions made pursuant to Section 2.4 above, JV will
need additional sums for working capital and for long term
capital, which shall be borrowed by JV pursuant to arrangements
to be made by the parties.
C. Until JV becomes self-financing, the parties shall
guarantee third-party loans made to JV in proportion to their
respective Percentage Interests.
D. Both parties shall use their best efforts to
arrange for JV to receive loans from Japanese government-related
financial institutions for JV's long-term capital. Such loans
shall be guaranteed by the parties in proportion to their
respective Percentage Interests.
E. In the event that JV is unable to secure necessary
financing, the parties themselves shall advance the necessary
funds to JV, each party lending that portion of the required
amount which is proportionate to such party's Percentage
Interest. Each party may arrange third-party financing, with or
without such party's guaranty, in lieu of any such advance.
Section 4.2 Land Lease.
A. JV shall construct its semiconductor wafer
fabrication facility on land to be leased from Fujitsu pursuant
to a 30-year lease (the "Land Lease"), which lease may be renewed
15
<PAGE> 20
for additional terms in accordance with Japan's Land and House
Leasing Act of 1991, as amended, and the terms and conditions of
such lease agreement.
B. (i) If all, or substantially all, of the assets of
JV are to be offered for sale (whether in connection with a
dissolution of JV or otherwise) Fujitsu shall have the right to
purchase JV's fabrication facility at a price equal to the book
value of such facility, as determined by JV's Independent
Accounting Firm as of the close of the preceding quarter, and
shall be given written notice of such intended sale not less than
one hundred and twenty (120) days prior to any such offering for
sale. Fujitsu shall either exercise or decline to exercise such
right, by a written statement delivered within one hundred and
twenty (120) days following the receipt of such notice. Failure
to deliver such notice within such period shall be considered a
declination by Fujitsu. If Fujitsu declines to exercise such
right to purchase, it will consent to the assignment of JV's
interest under the Land Lease to the purchaser of such assets.
(ii) AMD will take all action necessary to assure
that if it transfers shares of JV to any person or entity other
than Fujitsu or a wholly-owned subsidiary of Fujitsu, the
transferee shall agree in writing that Fujitsu shall be entitled
to exercise a right of first refusal to acquire all, but not less
than all, of the JV shares to be so transferred, at the purchase
price at which the transferee intends to sell such shares. AMD
agrees to review with Fujitsu the precise language to be
incorporated in appropriate documentation under the
circumstances, in an effort to perfect such statement of rights
to Fujitsu's reasonable satisfaction. Such documentation will
include a provision that if Fujitsu declines to acquire such
shares: (x) the seller shall be entitled to sell such shares at
the reported price, but not less than the reported price, within
ninety (90) days after the end of the period within which Fujitsu
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<PAGE> 21
may exercise its right to acquire such shares, (y) Fujitsu will
consent to the assignment of JV's interest under the Land Lease,
and (z) Fujitsu shall give such consents as may be required to
continue to operate the facility; provided, however, that Fujitsu
will not be required to incur any expense or obligation in order
to carry out the provisions of this sentence.
Section 4.3 Transfer of Shares;
Right of First Refusal.
A. Except as otherwise explicitly provided in Section
4.2 or 7.5, no share or any interest therein in JV shall be
validly sold, transferred or otherwise disposed of for
consideration or otherwise, and no purported transferee shall be
recognized as a shareholder of JV for any purpose whatsoever
unless such transfer is in accordance with this Section 4.3.
B. Neither party shall pledge or otherwise encumber
any of its shares or any interest therein in JV at any time
without the prior written consent of the other party.
C. Neither party shall sell or transfer any shares in
JV for a period of five (5) years following the Effective Date.
In the event that either party (the "Selling Party") desires to
sell or transfer its shares in JV following such five (5)-year
period, it shall first offer to sell the shares to the other
party (the "Nonselling Party") and, upon the request of such
Nonselling Party, to any third party designated by such
Nonselling Party, at a price equal to the lower of (i)
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] or (ii) [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]. No owner of JV shares may sell or transfer
less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of its shares in JV.
17
<PAGE> 22
D. (i) A Nonselling Party to which an offer is made
pursuant to Section 4.3.C. above and/or any third party
designated by such Nonselling Party, shall have one hundred and
twenty (120) days from the date of receipt of the offer, during
which period such Nonselling Party shall have reasonable access
to JV's books and records, within which to accept such offer.
(ii) In the event that the Nonselling Party and/or
its designee do not accept the offer to purchase all of the
Selling Party's shares, the Selling Party may, within ninety (90)
days following the expiration of such one hundred and twenty
(120) day period, seek the Board of Directors' approval, by not
less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] votes, of a sale or
transfer of its shares to a specified third party; provided,
however, that in the event that a sale or transfer to such third
party is proposed on terms less favorable to the Selling Party
than the terms of the offer made pursuant to Section 4.3.C.
above, the Nonselling Party and/or a third party designated by
such Nonselling Party shall have the right to purchase the shares
on such less favorable terms, which right may be exercised by
notice to the Selling Party within fourteen (14) days following
the date on which such sale or transfer is proposed to the Board
of Directors.
(iii) In the event that the Nonselling Party and/or
its designee elects to purchase the Selling Party's shares
pursuant to Section 4.3.D. (i) or (ii), payment shall be made
within sixty (60) days of such election.
E. It shall be a condition to any sale or transfer to
any third party other than a third party designated by the
Nonselling Party that such third party upon request of the
Nonselling Party shall become a party to this Agreement, the
Joint Development Agreement, the Joint Venture License Agreement
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<PAGE> 23
and/or any other agreements, and assume such obligations
reasonably deemed by the Nonselling Party to be necessary in
light of the identity and nature of the new shareholder.
F. In the event that either party transfers its shares
in JV pursuant to this Section 4.3, the Nonselling Party shall
have the right to terminate this Agreement and/or either or both
of the Investment Agreements.
G. All offers and acceptances pursuant to this Section
4.3 shall be made by written notice to the other party.
Section 4.4 Transfer of Fujitsu Employees. Fujitsu shall
have the right to designate Fujitsu employees to be transferred
to JV and to determine when such transferred employees shall
return to Fujitsu. AMD acknowledges and agrees that JV shall
accept and release such employees in accordance with Fujitsu's
instructions. It is understood that any retirement allowance
payments made to such employees will be prorated between JV and
Fujitsu based on total years of service.
Section 4.5 Transfer and Assignment of AMD Employees. AMD
may transfer or assign its personnel to JV [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION], subject to the approval of the full-time
standing directors, such approval not to be unreasonably
withheld. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 4.6 Confidentiality.
A. Except as expressly authorized by the other party,
each party agrees not to disclose, use or permit the disclosure
or use by others of any Confidential Information unless and to
the extent such Confidential Information (i) is not marked or
designated in writing as confidential and is provided for a
19
<PAGE> 24
purpose that reasonably contemplates disclosure to or use by
others, (ii) becomes a matter of public knowledge through no
action or inaction of the party receiving the Confidential
Information, (iii) was in the receiving party's possession before
receipt from the party providing such Confidential Information,
(iv) is rightfully received by the receiving party from a third
party without any duty of confidentiality, (v) is disclosed to a
third party by the party providing the Confidential Information
without a duty of confidentiality on the third party, (vi) is
disclosed by the receiving party despite the exercise of the same
degree of care used by the receiving party to safeguard its own
similar Confidential Information, but the receiving party shall
take all necessary action to prevent any further disclosure,
(vii) is disclosed with the prior written approval of the party
providing such Confidential Information, or (viii) is
independently developed by the receiving party without any use of
the other party's Confidential Information. Information shall
not be deemed to be available to the general public for the
purpose of the exclusion (ii) above with respect to each party
(x) merely because it is embraced by more general information in
the prior possession of recipient or others, or (y) merely
because it is expressed in public literature in general terms not
specifically in accordance with the Confidential Information.
B. In furtherance, and not in limitation of the
foregoing Section 4.6.A., each party agrees to do the following
with respect to any such Confidential Information: (i) exercise
the same degree of care to safeguard the confidentiality of, and
prevent the unauthorized use of, such information as that party
exercises to safeguard the confidentiality of its own
Confidential Information; (ii) restrict disclosure of such
information to those of its employees and agents who have a "need
to know", and (iii) instruct and require such employees,
sublicensees, and agents to maintain the confidentiality of such
information and not to use such Confidential Information except
20
<PAGE> 25
as expressly permitted herein. Each party further agrees not to
remove or destroy any proprietary or confidential legends or
markings placed upon any documentation or other materials.
C. The foregoing confidentiality obligation shall also
apply to the contents of this Agreement.
D. The obligations under this Section 4.6 shall not
prevent the parties from disclosing the Confidential Information
or terms of this Agreement to any Governmental Authority as
required by law (provided that the party intending to make such
disclosure in such circumstances has given the other party prompt
notice prior to making such disclosure so that the other party
may seek a protective order or other appropriate remedy prior to
such disclosure and cooperates fully with such other party in
seeking such order or remedy).
E. Notwithstanding anything else contained herein,
either party may disclose the catalog specifications generated
under Section 5.3(a) of the Joint Development Agreement to its
potential customers.
F. The obligations under this Section 4.6 shall apply
with respect to any Confidential Information for a period of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] years from the date of
disclosure of such Confidential Information to the other party,
unless with respect to any particular Confidential Information
the providing party in good faith notifies the receiving party
that a longer period shall apply, in which case the obligations
under this Section 4.6 with respect to such Confidential
Information shall apply for such longer period.
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Article 5. ASSOCIATED AGREEMENTS.
The following associated agreements (the "Associated
Agreements") shall be entered into on or prior to the Effective
Date; provided, however, that the Joint Venture License Agreement
only shall be entered into as soon after the Effective Date as is
reasonably practicable:
A. A Joint Development Agreement between AMD and
Fujitsu dated as of March 1993 providing for the joint
development of integrated circuit devices (the "Joint Development
Agreement").
B. A Technology Cross-License Agreement between AMD
and Fujitsu dated as of March 1993 providing for the cross-
licensing of certain of the parties' respective proprietary
semiconductor related intellectual property rights (the
"Technology Cross-License Agreement").
C. A Joint Venture License Agreement among AMD,
Fujitsu and JV dated as of March 1993 (or promptly thereafter)
providing for the license by the parties to JV of certain
proprietary technologies and sublicensable technologies necessary
for manufacturing JV Products (the "Joint Venture License
Agreement").
D. An Investment Agreement between AMD and Fujitsu
dated as of March 1993 providing for the purchase of stock in AMD
by Fujitsu (the "Fujitsu Investment Agreement").
E. An Investment Agreement between Fujitsu and AMD
dated as of March 1993 providing for the purchase of stock in
Fujitsu by AMD (the "AMD Investment Agreement," collectively with
the Fujitsu Investment Agreement, the "Investment Agreements").
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<PAGE> 27
F. Those certain letters from AMD to Fujitsu, signed
by both parties and dated as of March 1993, setting forth the
parties' agreement as to certain matters including the
Governmental Approvals referenced in Section 1.13 of this
Agreement.
Article 6. REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties of Fujitsu.
Fujitsu hereby represents and warrants to AMD, as of the date
hereof and as of the Effective Date, as follows:
A. Corporate Organization; Etc. Fujitsu is a
corporation duly organized and validly existing under the laws of
Japan.
B. Authorization; Etc. Fujitsu has full corporate
power and authority to enter into this Agreement and those of the
Associated Agreements to which it is a party and to carry out the
transactions contemplated hereby and thereby. Fujitsu has taken
all action required by law, its articles of incorporation or
otherwise to authorize the execution and delivery of this
Agreement and those of the Associated Agreements to which it is a
party. Each of this Agreement and the Associated Agreements to
which it is a party is or will be the valid and binding
obligation of Fujitsu, subject to receipt of necessary
Governmental Approvals, enforceable in accordance with its
respective terms, except that such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors'
rights and the remedy of specific performance and injunctive and
other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any
proceeding therefor may be brought.
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<PAGE> 28
C. No Violation. Neither the execution and delivery
by Fujitsu of this Agreement and those of the Associated
Agreements to which it is a party, nor the consummation of the
transactions contemplated hereby and thereby, will (i) conflict
with or result in a breach of any provision of Fujitsu's articles
of incorporation, (ii) conflict with or result in the breach of
any term, condition or provision of, or constitute a default
under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any
lien, charge or encumbrance upon any property or assets of
Fujitsu pursuant to, or otherwise require the consent of any
person under, any agreement or obligation to which Fujitsu is a
party or by which any of its properties or assets may be bound,
or (iii) violate or conflict with any Applicable Law applicable
to Fujitsu or any of its properties or assets, subject to
obtaining the requisite Governmental Approvals.
D. Consents and Approvals of Governmental Authorities.
Except for the Governmental Approvals, no consent, approval or
authorization of, or declaration, filing or registration with,
any Governmental Authority is required to be obtained by Fujitsu
in connection with the execution, delivery and performance of
this Agreement and those of the Associated Agreements to which it
is a party, and the consummation of the transactions contemplated
hereby and thereby.
E. Regulatory Applications. The information provided
by Fujitsu for use in the applications for the Governmental
Approvals will not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading.
Section 6.2 Representations and Warranties of AMD. AMD
hereby represents and warrants to Fujitsu, as of the date hereof
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<PAGE> 29
and as of the Effective Date, as follows:
A. Corporate Organization; Etc. AMD is a corporation
duly organized, validly existing and in good standing under the
laws of the State of Delaware.
B. Authorization; Etc. AMD has full corporate power
and authority to enter into this Agreement and those of the
Associated Agreements to which it is a party and to carry out the
transactions contemplated hereby and thereby. AMD has taken all
actions required by law, its certificate of incorporation and
bylaws or otherwise to authorize the execution and delivery of
this Agreement and those of the Associated Agreements to which it
is a party. Each of the Associated Agreements to which it is a
party and this Agreement is or will be the valid and binding
obligation of AMD, subject to receipt of necessary Governmental
Approvals, enforceable in accordance with their respective terms,
except that such enforcement may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights and the
remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may
be brought.
C. No Violation. Neither the execution and delivery
by AMD of this Agreement and those of the Associated Agreements
to which it is a party, nor the consummation of the transactions
contemplated hereby and thereby, will (i) conflict with or result
in a breach of any provision of the certificate of incorporation
or bylaws of AMD, (ii) conflict with or result in the breach of
any term, condition or provision of, or constitute a default
under, or give rise to any right of termination, cancellation or
acceleration with respect to, or result in the creation of any
lien, charge or encumbrance upon any property or assets of AMD
25
<PAGE> 30
pursuant to, or otherwise require the consent of any person
under, any agreement or obligation to which AMD is a party or by
which any of its properties or assets may be bound, or
(iii) violate or conflict with any Applicable Law applicable to
AMD or any of its properties or assets, subject to obtaining the
requisite Governmental Approvals.
D. Consents and Approvals of Governmental Authorities.
Except for the Governmental Approvals, no consent, approval or
authorization of, or declaration, filing or registration with,
any Governmental Authority is required to be obtained by AMD in
connection with the execution, delivery and performance of this
Agreement and those of the Associated Agreements to which it is a
party and the consummation of the transactions contemplated
hereby and thereby.
E. Regulatory Applications. The information provided
by AMD for use in the applications for the Governmental Approvals
will not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
Article 7. TERM AND TERMINATION.
Section 7.1 Effective Date. This Agreement shall come into
force on the Effective Date. If the Effective Date does not
occur within one (1) year of the date hereof, unless otherwise
agreed by the parties, either party may terminate this Agreement
effective upon written notice to the other party.
Section 7.2 Term. The term of this Agreement shall
continue for so long as JV remains in existence, unless earlier
terminated by mutual agreement of the parties or as provided
herein.
26
<PAGE> 31
Section 7.3 Triggering Events. The occurrence of any of the
following events shall constitute a triggering event ("Triggering
Event") hereunder on the part of the party with respect to which
such event occurs ("Triggering Party"); and each party shall
inform the other party in writing of the occurrence of any
Triggering Event when known to such party.
A. A material breach of this Agreement, the AMD
Investment Agreement, the Fujitsu Investment Agreement, the Joint
Development Agreement or the Joint Venture License Agreement by
the Triggering Party, or a material misrepresentation by the
Triggering Party with respect to any condition, warranty,
representation or agreement contained in this Agreement, the AMD
Investment Agreement, the Fujitsu Investment Agreement, the Joint
Development Agreement or the Joint Venture License Agreement is
not cured within ninety (90) days after the Triggering Party
receives written notice thereof from the non-Triggering Party;
provided that failure by either party to comply with the terms of
Section 4.1.E. shall not be considered a material default until
the earlier of (a) an aggregate of [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] months of delay, or (b) the non-complying party is in
default of a payment obligation that allows creditors to
accelerate the maturity date of indebtedness in an amount in
excess of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of such party's
shareholders' equity.
B. A Triggering Party becomes the subject of a
voluntary or involuntary petition in bankruptcy or any proceeding
relating to insolvency, or composition for the benefit of
creditors, which petition or proceeding is not dismissed within
sixty (60) days after filing.
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<PAGE> 32
C. A Triggering Party assigns all or substantially all
of the assets of its semiconductor business to any third party,
or incurs in one transaction or series of related transactions a
change in ownership of more than [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of its capital stock.
D. A third party (other than a bank, insurance company
or other financial or investment company or institution) acquires
a greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] ownership
interest in a Triggering Party and either a seat on the board of
directors or a position of management in such party where such
acquisition of ownership and management position or seat on the
board of directors in such Triggering Party is judged by the non-
Triggering Party after careful consideration to be detrimental.
E. The Percentage Interest of the Triggering Party
falls to one third (1/3), or less.
F. A change occurs in the management of the Triggering
Party as a result of a proxy solicitation contest, which change
is judged by the non-Triggering Party after careful consideration
to be detrimental to the affairs of JV.
Section 7.4. Causes of Dissolution.
JV shall be dissolved if:
A. A Triggering Event has occurred and the non-
Triggering Party elects to dissolve JV as provided in
Section 7.5.A.(ii)
B. The parties mutually agree to dissolve JV.
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<PAGE> 33
Section 7.5. Election of Non-Triggering Party.
A. Upon the occurrence of a Triggering Event, the non-
Triggering Party shall have the right:
(i) to acquire the Triggering Party's shares of JV
at a price equal to the lesser of (a) [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] or (b) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION];
(ii) to dissolve JV;
(iii) to terminate this Agreement;
(iv) to terminate either or both of the Investment
Agreements; and/or
(v) to pursue any other right or remedy available
to it.
B. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
C. The non-Triggering Party may exercise its rights
pursuant to Section 7.5.A. and/or Section 7.5.B. at any time
within one hundred and eighty (180) days after becoming aware of
a Triggering Event.
Section 7.6 Noncompetition; Nonsolicitation. If either
party sells its shares in JV within ten (10) years after the
Effective Date, whether pursuant to Section 4.3 or
Section 7.5.A., for a period of two (2) years following such
sale, such party shall be precluded from (a) manufacturing any
EPROM or Flash Memory device that is or may be competitive with
JV and is manufactured using wafer processes with geometries of
0.5 micron or less and that embodies, incorporates or is subject
29
<PAGE> 34
to any intellectual property right owned by the other party or
developed pursuant to the Joint Development Agreement or the
Joint Venture License Agreement, or (b) employing, soliciting for
employment or recommending for employment any person employed by
JV (excluding employees transferred to JV from either Fujitsu or
AMD who return to the party that transferred him or her). So
long as a party holds shares in JV, except as otherwise agreed by
the parties, such party shall be prohibited from (x)
manufacturing any EPROM or Flash Memory device that is or may be
competitive with JV and is manufactured using wafer processes
with geometries of 0.5 micron or less, or (y) employing,
soliciting for employment or recommending for employment any
person employed by JV (excluding employees transferred to JV from
either Fujitsu or AMD who return to the party that transferred
him or her). Notwithstanding the foregoing, if either party
sells its shares in JV, whether pursuant to Section 4.3 or
Section 7.5.A., such party shall be entitled to continue to
receive JV Products from JV and to sell JV Products to the extent
necessary in order to fulfill such party's commitments pursuant
to purchase orders issued by such party's customers and accepted
by such party prior to the date on which such party ceased to be
a shareholder.
Section 7.7. Name. In the event that either party sells
its shares in JV, whether pursuant to Section 4.3 or
Section 7.5.A., the name of JV shall promptly be amended to
eliminate any reference to such party.
Section 7.8. Rights Under Associated Agreements. The rights
and obligations of any Triggering Party under any of the
Associated Agreements, and any other agreements ancillary to JV's
operation, shall be specified in those agreements.
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Article 8. MISCELLANEOUS.
Section 8.1. Force Majeure. Neither party shall be liable
for failure to perform, in whole or in material part, its
obligations under this Agreement or any Associated Agreement if
such failure is caused by any event or condition not existing as
of the date of this Agreement and not reasonably within the
control of the affected party, including without limitation, by
fire, flood, typhoon, earthquake, explosion, strikes, labor
troubles or other industrial disturbances, unavoidable accidents,
war (declared or undeclared), acts of terrorism, sabotage,
embargoes, blockage, acts of Governmental Authorities, riots,
insurrections, or any other cause beyond the control of the
parties; provided, that the affected party promptly notifies the
other party of the occurrence of the event of force majeure and
takes all reasonable steps necessary to resume performance of its
obligations so interfered with.
Section 8.2. Assignment. Neither this Agreement nor any of
the rights and obligations created hereunder may be assigned,
transferred, pledged, or otherwise encumbered or disposed of, in
whole or in part, whether voluntary or by operation of law, or
otherwise, by either party without the prior written consent of
the other party; provided, however, that each party may assign
its rights to acquire and hold shares in JV to a wholly-owned
subsidiary of such party so long as such assignee remains wholly-
owned, directly or indirectly, by such party. No such assignment
shall relieve the assigning party of any of its obligations
hereunder. This Agreement and the Associated Agreements shall
inure to the benefit of and be binding upon the parties'
permitted successors and assigns.
Section 8.3. Survival. If a party sells all of its shares
in JV, or if JV is dissolved, or if this Agreement is terminated,
the obligations hereunder of each party to the other and to JV
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<PAGE> 36
will terminate, except that the obligations of the parties
pursuant to Sections 2.5 ("Reimbursement of Incorporation
Expenses"), 4.2.B. ("Land Lease"), 4.3 ("Transfer of Shares;
Right of First Refusal"), 7.6 ("Noncompetition;
Nonsolicitation"), 8.3 ("Survival"), 8.4 ("Notices"), 8.6
("Arbitration"), 8.7 ("Entire Agreement"), 8.8 ("Modification"),
8.11 ("No Waiver"), 8.12 ("Governing Law"), 8.13 ("Language"),
8.15 ("No Third Party Beneficiaries"), and Article 6
("Representations and Warranties") shall survive indefinitely the
termination of this Agreement. The obligations of the parties
pursuant to Section 4.6 ("Confidentiality") shall survive as
provided in Section 4.6.F.
Section 8.4. Notices. All notices and communications
required, made or permitted hereunder shall be in writing and
shall be delivered by hand or by messenger, or by recognized
courier service (with written receipt confirming delivery), or by
postage prepaid, return receipt requested, registered or
certified airmail, addressed:
If to AMD:
Advanced Micro Devices, Inc.
915 De Guigne Drive
Sunnyvale, CA 94086, USA
Attn: Mr. Gene Conner
Senior Vice President,
Operations
with a copy to:
Thomas W. Armstrong, Esq.
Vice President, General
Counsel and Secretary
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<PAGE> 37
If to Fujitsu:
Fujitsu Limited
Furukawa Sogo Building
6-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Mr. Hirohiko Kondo
General Manager
Electronic Devices
Marketing Division
with a copy to:
Fujitsu Limited
Marunouchi Center Bldg.
6-1, Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Mr. Gen Iseki
General Manager
Legal Division
Each such notice or other communication shall for all
purposes hereunder be treated as effective or as having been
given as follows: (i) if delivered in person, when delivered,
(ii) if sent by airmail, at the earlier of its receipt or at
5 p.m. local time of the recipient, on the seventh day after
deposit in a regularly maintained receptacle for the deposit of
airmail, and (iii) if sent by a recognized courier service, on
the date shown in the written confirmation of delivery issued by
such delivery service. Either party may change the address(es)
and/or addressee(s) to whom notice may be given by giving notice
pursuant to this section at least seven (7) days prior to the
date the change becomes effective.
Section 8.5. Export Control. Without in any way limiting
the provisions of this Agreement, each of the parties agrees that
no products procured from or technical information disclosed by
the other party or JV under this Agreement are intended to or
shall be exported or re-exported, directly or indirectly, to any
destination restricted or prohibited by Applicable Law without
necessary authorization by the Governmental Authorities.
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Section 8.6. Arbitration.
A. Any and all disputes arising under or affecting
this Agreement shall be resolved exclusively by confidential
arbitration pursuant to the rules of the Japan Commercial
Arbitration Association in Tokyo, Japan, or such other location
as may be agreed between the parties; provided, however, that the
arbitrators shall be empowered to hold hearings at other
locations within and without Japan. Each of the parties shall
designate one arbitrator and the two arbitrators so designated
shall select the third arbitrator. Arbitration proceedings shall
be conducted in English with simultaneous translation into
Japanese. Among the remedies available to them, the arbitrators
shall be authorized to order the specific performance of
provisions of this Agreement and of the Associated Agreements.
The judgment upon award of the arbitrators shall be final and
binding and may be enforced in any court of competent
jurisdiction including any court of competent jurisdiction in the
United States or Japan, and each of the parties hereto
unconditionally submits to the jurisdiction of such court for the
purpose of any proceeding seeking such enforcement. Subject only
to the provisions of Applicable Law, the procedure described in
this Section 8.6 shall be the exclusive means of resolving
disputes arising under or affecting this Agreement.
B. All papers, documents or evidence, whether written
or oral, filed with or presented to the panel of arbitrators
shall be deemed by the parties and by the arbitrators to be
Confidential Information. No party or arbitrator shall disclose
in whole or in part to any other person any Confidential
Information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist
counsel in the arbitration or preparation for arbitration of the
dispute. Confidential Information may be disclosed (i) to
attorneys, (ii) to parties, and (iii) to outside experts
34
<PAGE> 39
requested by either party's counsel to furnish technical or
expert services or to give testimony at the arbitration
proceedings, subject, in the case of such experts, to execution
of a legally binding written statement that such expert is fully
familiar with the terms of this Section, agrees to comply with
the confidentiality terms of this Section, and will not use any
Confidential Information disclosed to such expert for personal or
business advantage.
Section 8.7. Entire Agreement. This Agreement, the
Associated Agreements and the exhibits hereto and thereto, embody
the entire agreement and understanding between the parties with
respect to the subject matter hereof, superseding, as of the
Effective Date, all previous and contemporaneous communications,
representations, agreements and understandings, whether written
or oral, in existence on the date this Agreement is executed,
including without limitation that certain Memorandum of
Understanding between Fujitsu and AMD dated July 13, 1992 and the
Nondisclosure Agreements. Neither party has relied upon any
representation or warranty of the other party except as expressly
set forth herein or in the Associated Agreements.
Section 8.8. Modification. This Agreement and the
surviving provisions thereof may not be modified or amended, in
whole or part, except by a writing executed by duly authorized
representatives of both parties.
Section 8.9. Announcement. The parties may announce the
existence of the parties' relationship and this Agreement at a
time to be mutually determined. Neither party shall unreasonably
withhold its consent to a time proposed by the other party.
Section 8.10. Severability. If any term or provision of
this Agreement shall be determined to be invalid or unenforceable
under Applicable Law, such provision shall be deemed severed from
35
<PAGE> 40
this Agreement, and a reasonable valid provision to be mutually
agreed upon shall be substituted. In the event that no
reasonable valid provision can be so substituted, the remaining
provisions of this Agreement shall remain in full force and
effect, and shall be construed and interpreted in a manner that
corresponds as far as possible with the intentions of the parties
as expressed in this Agreement.
Section 8.11. No Waiver. Except to the extent that a party
hereto may have otherwise agreed in writing, no waiver by that
party of any condition of this Agreement or breach by the other
party of any of its obligations or representations hereunder
shall be deemed to be a waiver of any other condition or
subsequent or prior breach of the same or any other obligation or
representation by the other party, nor shall any forbearance by
the first party to seek a remedy for any noncompliance or breach
by the other party be deemed to be a waiver by the first party of
its rights and remedies with respect to such noncompliance or
breach.
Section 8.12. Governing Law. The validity, construction,
performance and enforceability of this Agreement shall be
governed in all respects by the laws of Japan.
Section 8.13. Language. This Agreement, and the exhibits
and schedules hereto, except for the Articles of Incorporation
and the Regulations of the Board of Directors, are in the English
language, which language shall be controlling in all respects.
The Articles of Incorporation and the Regulations of the Board of
Directors are in the Japanese language, which language shall be
controlling in all respects.
Section 8.14. No Agency. This Agreement shall not
constitute an appointment of either party as the legal
representative or agent of the other party, nor shall either
36
<PAGE> 41
party have any right or authority to assume, create or incur in
any manner any obligation or other liability of any kind, express
or implied, against, in the name or on behalf of, the other
party. Nothing herein or in the transactions contemplated by
this Agreement shall be construed as, or deemed to be, the
formation of a partnership by or among the parties hereto.
Section 8.15. No Third Party Beneficiaries. No provisions
of this Agreement or any of the Associated Agreements are
intended to, or shall be construed to, confer upon or give to any
person other than the parties hereto and thereto, any rights,
remedies or other benefits under or by reason of this Agreement
or any Associated Agreement.
Section 8.16. Headings. The section and other headings
contained in this Agreement are for convenience of reference only
and shall not be deemed to be a part of this Agreement or to
affect the meaning or interpretation of this Agreement.
Section 8.17. Construction and Reference. Words used in
this Agreement, regardless of the number or gender specifically
used, shall be deemed and construed to include any other number,
singular or plural, and any other gender, masculine, feminine or
neuter, as the context shall require. Unless otherwise
specified, all references in this Agreement to Sections are
deemed references to be corresponding Sections in this Agreement,
and all references in this Agreement to Exhibits are references
to the corresponding Exhibits attached to this Agreement.
Section 8.18. Governmental Approvals. Each of the parties
shall use its reasonable best efforts to obtain all Governmental
Approvals and shall cooperate with the other in good faith.
Section 8.19. Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, and
37
<PAGE> 42
all of which shall be deemed to constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives
on the date set forth above.
ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED
/s/ W.J. SANDERS III /s/ TADASHI SEKIZAWA
____________________________ ___________________________
By: W.J. Sanders III By: Tadashi Sekizawa
Title: Chairman and CEO Title: President
Date: March 18, 1993 Date: March 30, 1993
38
<PAGE> 43
EXHIBITS
<TABLE>
<CAPTION>
<S> <C>
EXHIBIT A-1
Articles of Incorporation
(Japanese language)
EXHIBIT A-2
Articles of Incorporation
(English translation)
EXHIBIT B-1
Regulations of the Board of Directors (Japanese
language)
EXHIBIT B-2
Regulations of the Board of Directors (English
translation)
</TABLE>
1
<PAGE> 44
Exhibit 10.27(a)
SUBSTITUTE EXHIBIT A-1
Exhibit A-1 to the Joint Venture Agreement is a Japanese language
document. The registrant represents that Exhibit A-2 to the Joint Venuture
Agreement constitutes a fair and accurate English translation of Exhibit A-1.
ADVANCED MICRO DEVICES, INC.
By: /s/ MARVIN D. BURKETT
---------------------------------------
Marvin D. Burkett
Its: Senior Vice President
Chief Administrative Officer
and Secretary, Chief Financial
Officer and Treasurer
<PAGE> 45
EXHIBIT A-2
10-K Exhibit 10.27(a)
(TRANSLATION)
ARTICLES OF INCORPORATION
OF
FUJITSU AMD SEMICONDUCTOR K.K.
Chapter 1 General Provisions
Article 1 (Name)
The name of the Company shall be Fujitsu AMD
Semiconductor Kabushiki Kaisha in Japanese and Fujitsu AMD
Semiconductor Limited in English.
Article 2 (Object)
The object of the Company shall be to engage in the
following businesses:
(1) Manufacture and sales of semiconductor integrated
circuits
(2) All business incidental to or associated with the
preceding Item
Article 3 (Location of Head Office)
The Company shall have its head office in Kawasaki-shi,
Kanagawa-ken.
Article 4 (Method of Public Notice)
Public notice of the Company shall be made in the
Official Gazette (Kampo).
<PAGE> 46
Chapter 2 Shares
Article 5 (Number of Authorized Shares)
The total number of shares authorized to be issued by
the Company shall be eight thousand (8,000).
Article 6 (Par Value)
All shares to be issued by the Company shall be par
value common stock. The par value of each share shall be fifty
thousand yen (#50,000).
Article 7 (Kinds of Share Certificates)
Kinds of share certificates to be issued by the Company
shall be determined by the Board of Directors.
Article 8 (Restriction on Transfer of Shares)
Transfer of shares of the Company shall be subject to
the approval of [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the
entire Board of Directors.
Article 9 (Pre-emptive Right)
1. The shareholders shall have the pre-emptive right
to subscribe to new shares if new shares are issued.
2. The pre-emptive right in the preceding Paragraph
shall not be transferable separately from shares.
2
<PAGE> 47
Article 10 (Registration of Transfer of Shares, etc.)
Procedures of registration of transfer of shares,
registration or cancellation of a pledge, registration or
cancellation of a trust, re-issuance of share certificates or
other matters relating to shares of the Company shall be
determined by the Board of Directors.
Article 11 (Registration of Shareholders, etc.)
Shareholders, pledgees, trustees or their statutory
representatives shall notify the Company of their names,
addresses and seal impressions (specimen signature in case of a
foreigner with the custom of signature), or of any change to the
foregoing.
Article 12 (Record Date and Suspension of Entry to
Register of Shareholders)
1. The shareholders whose names are registered in the
register of shareholders at the end of each business term shall
be deemed to have the voting rights at the ordinary general
meeting of shareholders for such business term.
2. If necessity arises, the Company may, in
accordance with a resolution of the Board of Directors and after
giving public notice, set up a record date, whereby the
shareholders or pledgees who are registered at the record date
shall have such rights.
3. In addition to the preceding Paragraphs and if
necessity arises, the Company may, in accordance with a
resolution of the Board of Directors and after giving public
notice, suspend entry to the register of shareholders for a
certain period not exceeding three (3) months.
3
<PAGE> 48
Chapter 3 General Meeting of Shareholders
Article 13 (Convocation)
1. An ordinary general meeting of shareholders shall
be convened within three (3) months after the end of each
business term, and an extraordinary general meeting of
shareholders may be convened from time to time if necessity
arises.
2. Meetings of Shareholders shall be convened by the
Chairman or the Vice Chairman in accordance with resolutions of
the Board of Directors.
Article 14 (Place)
Meetings of Shareholders shall be held in the area
where the head office of the Company is located or at any other
place if agreed in writing by all shareholders.
Article 15 (Presiding Officer)
The Director-Chairman shall be the presiding officer of
a general meeting of shareholders. In the event that the
Director-Chairman is unable to perform his or her duties,
Director-Vice Chairman shall act in his or her place.
Article 16 (Notice)
1. Notice calling a general meeting of shareholders
shall be dispatched to each shareholder at least one month before
the day set for such meeting. The notice shall contain date,
time, place and agenda for the meeting.
2. The notice shall be prepared both in Japanese and
English and shall be dispatched to the registered address of each
4
<PAGE> 49
shareholder by registered mail. In case of shareholders not
residing in Japan, the notice shall be dispatched by registered
airmail.
3. The notice period provided for in Paragraph 1 may
be shortened to the period provided in the Commercial Code, if
all shareholders agree in writing.
Article 17 (Quorum)
The quorum of general meetings of shareholders shall be
attendance of shareholders having in total two thirds or more of
the total issued and outstanding common shares.
Article 18 (Ordinary Resolutions)
Except as otherwise provided in laws or in Article 19
of these Articles of Incorporation, resolutions at a general
meeting of shareholders shall be adopted by a majority of the
voting shares represented by the shareholders present.
Article 19 (Special Resolutions)
The following resolutions shall be made by the vote of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] the total issued and
outstanding common shares.
(1) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
(2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION]
5
<PAGE> 50
Article 20 (Proxy)
An individual acting as a proxy for a shareholder
shall, on a meeting-by-meeting basis, file a proxy with the
Company.
Chapter 4 Directors and Board of Directors
Article 21 (Number of Directors)
1. The Company shall have [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] Directors.
2. In case of vacancy caused by resignation or
otherwise, an extraordinary general meeting shall be promptly
convened in accordance with Articles 13 and 16 of these Articles
of Incorporation to fill the vacancy.
Article 22 (Election)
1. The Directors shall be elected at a general
meeting of shareholders under Article 19 of these Articles of
Incorporation.
2. The Directors shall not be elected by a method of
cumulative voting.
Article 23 (Term of Office)
1. The term of office of a Director shall expire at
the close of the ordinary general meeting of shareholders
covering the last business term within one (1) year after his or
her assumption of office.
6
<PAGE> 51
2. The term of office of a Director elected to fill a
vacancy shall be the remainder of the term of office of his or
her predecessor; and provided further that the term of office of
a newly added Director shall be the remainder of the term of
office of the other Directors.
Article 24 (Remuneration)
Remuneration of the Directors shall be determined by a
resolution of shareholders at a general meeting of shareholders.
Article 25 (Representative Directors and Directors with
Special Title)
1. The Company shall, by a resolution of the Board of
Directors, elect one (1) Chairman and one (1) Vice Chairman from
among the Directors. In case of necessity of business, the
Company may have a President, Vice President(s), Executive
Managing Director(s) or Managing Director(s).
2. The Chairman and Vice Chairman shall be
Representative Directors. The Board of Directors may appoint one
or more Representative Directors from among the Directors with
special title provided for in the preceding Paragraph.
3. Representative Directors shall represent the
Company and execute the Company's business in accordance with
resolutions of the Board of Directors. Director-Chairman shall
have the exclusive authority to operate day-to-day business, and
may delegate such authority to a full-time standing (Jokin)
Director provided for in the following Paragraph.
4. Except for Director-Chairman and Director-Vice
Chairman, all Directors with special title are elected from among
the full-time standing Directors.
7
<PAGE> 52
Article 26 (Person to Convene)
The Director-Chairman, Director-Vice Chairman or two
(2) Directors may convene a meeting of the Board of Directors.
Article 27 (Presiding Officer)
The Director-Chairman shall be the presiding officer of
a meeting of the Board of Directors. If the Director-Chairman is
unable to perform his or her duties, Director-Vice Chairman shall
act in his or her place.
Article 28 (Notice)
1. Notice calling a meeting of the Board of Directors
shall be dispatched to each Director at least two (2) weeks
before the date set for such meeting. The notice shall contain
date, time, place and agenda for the meeting.
2. The notice shall be prepared both in Japanese and
English and shall be dispatched by registered mail. In case of
Directors not residing in Japan, the notice shall be dispatched
by registered airmail.
3. The notice period provided for in Paragraph 1 may
be shortened or dispensed with, if all Directors agree in
writing.
Article 29 (Place)
Meetings of the Board of Directors shall be held in the
area where the head office of the Company is located or at any
other place if agreed in writing by all Directors.
8
<PAGE> 53
Article 30 (Resolutions)
1. Except as provided for by law or by the Articles
of Incorporation, the matters relating to the Board of Directors
shall be governed by the Regulations of the Board of Directors.
2. Resolutions of the Board shall be adopted by a
majority vote of the Directors present at a meeting at which
two-thirds or more of all Directors are present.
Chapter 5 Statutory Auditors
Article 31 (Number of Statutory Auditors)
The Company shall have two (2) Statutory Auditors.
Article 32 (Election)
The Statutory Auditors shall be elected by a resolution
of shareholders at a general meeting of shareholders in
accordance with Article 19 of these Articles of Incorporation.
Article 33 (Term of Office)
1. The term of office of a Statutory Auditor shall
expire at the close of the ordinary general meeting of
shareholders covering the last business term within two (2) years
after his or her assumption of office.
2. The term of office of a Statutory Auditor elected
to fill a vacancy shall be the remainder of the term of office of
his or her predecessor.
9
<PAGE> 54
Article 34 (Full-time Standing Statutory Auditor)
The Statutory Auditors shall elect from among
themselves a full-time standing (Jokin) Statutory Auditor.
Article 35 (Remuneration)
Remuneration of the Statutory Auditors shall be
determined by a resolution of shareholders at a general meeting
of shareholders.
Chapter 6 Accounting
Article 36 (Business Term)
The business term of the Company shall commence on
April 1 of each year and shall end on March 31 of the following
year.
Article 37 (Dividends)
Dividends shall be paid to the shareholders and
registered pledgees entered in the register of shareholders as of
the closing date of each business term of the Company.
Chapter 7 Supplementary Provisions
Article 38 (The total number of Shares to be Issued at
Time of Incorporation)
The total number of shares which the Company shall
issue at the time of the incorporation shall be two thousand
(2,000), and all such shares shall be common shares with par
value. The issue price per share of the above-mentioned shares
shall be fifty thousand yen ($50,000 Yen).
10
<PAGE> 55
Article 39 (First Business Term)
The first business term of the Company shall,
notwithstanding Article 36 of these Articles of Incorporation,
commence on the date of incorporation of the Company and shall
end on March 31, 1994.
Article 40 (Initial Term of Office of Directors and
Statutory Auditors)
The term of office of the initial Directors and
Statutory Auditors shall, notwithstanding Articles 23 and 33 of
these Articles of Incorporation, expire at the close of the
ordinary general meeting of shareholders covering the last
business term within one (1) year after their assumption of
office.
Article 41 (Name and Address of Promoter)
The name and address of the promoter and the number of
shares subscribed for by the promoter are as follows:
<TABLE>
<CAPTION>
Name and Address of Promoter Number of Share
- ---------------------------- ---------------
<S> <C>
Hirohiko Kondo 1
2-16-1 Tamanawa, Kamakura-shi
Kanagawa, Japan
</TABLE>
In order to certify the incorporation of Fujitsu AMD
Semiconductor K.K., these Articles of Incorporation have been
prepared and the promoter has affixed his seal hereto.
, 1993
----------------------
Promoter: Hirohiko Kondo
11
<PAGE> 56
10-K Exhibit 10.27(a)
SUBSTITUTE EXHIBIT B-1
Exhibit B-1 to the Joint Venture Agreement is a Japanese language
document. The registrant represents that Exhibit B-2 to the Joint Venture
Agreement constitutes a fair and accurate English translation of Exhibit B-1.
ADVANCED MICRO DEVICES, INC.
By: /s/ MARVIN D. BURKETT
________________________________________
Marvin D. Burkett
Its: Senior Vice President,
Chief Administrative Officer
and Secretary, Chief Financial
Officer and Treasurer
<PAGE> 57
EXHIBIT B-2
10-K Exhibit 10.27(a)
(TRANSLATION)
FUJITSU AMD SEMICONDUCTOR LIMITED
REGULATIONS OF THE BOARD OF DIRECTORS
As effective on ,1993
(Purpose)
Article 1.
Except as provided for by laws and ordinances or the Articles of
Incorporation, the matters relating to the Board of Directors shall be governed
by these Regulations.
(Composition)
Article 2.
The Board of Directors shall consist of all the Directors.
(Representative Directors and Directors with Titles)
Article 3.
1. A Chairman and a Vice Chairman, each of whom shall be a
Representative Director, shall be elected from among the Directors.
2. Two Full-time Standing Directors (Jookin Torishimariyaku) shall
be elected from among the Directors.
3. One or more additional Representative Directors may be elected
from among the Full-time Standing Directors.
<PAGE> 58
(Person to Convene)
Article 4.
A meeting of the Board of Directors may be convened by the Chairman,
the Vice-Chairman, or any two Directors acting together.
(Presiding Officer)
Article 5.
1. The Chairman will act as the presiding officer (Gicho) of all
meetings of the Board of Directors; provided that, if the office of the
Chairman is vacant or the Chairman is unable to attend the meeting, the Vice
Chairman will act as the presiding officer.
2. A meeting of the Board of Directors shall be presided over by
the presiding officer.
3. In case the presiding officer mentioned in the foregoing
Paragraph is unable to act, one of the other Directors will act in his place in
accordance with the order previously fixed by a resolution of the Board of
Directors.
(Kind of Meetings)
Article 6.
Meetings of the Board of Directors shall be ordinary meetings and
extraordinary meetings.
(Ordinary Meetings)
Article 7.
An ordinary meeting of the Board of Directors shall be held once each
quarter.
2
<PAGE> 59
(Extraordinary Meetings)
Article 8.
1. Extraordinary meetings of the Board of Directors shall be
convened whenever necessary.
2. Any Director may ask the Chairman or the Vice Chairman to
convene an extraordinary meeting showing the agenda and reason to convene a
meeting.
(Notices of Convocation of Meetings)
Article 9.
Notices of convocation of meetings of the Board of Directors shall be
sent in the manner provided for in the Articles of Incorporation.
(Method of Resolutions)
Article 10.
Resolutions of the Board of Directors shall be adopted by the
affirmative vote of a majority of the members of the Board of Directors present
at a meeting where not less than two-thirds (2/3) of all Directors are present.
(Interpreters)
Article 11.
Interpreters may attend meetings of the Board of Directors upon the
request of one of the Directors.
3
<PAGE> 60
(Postponement of Meetings of Board of Directors)
Article 12.
1. If the number in attendance at a meeting of the Board of
Directors properly convened is less than the number required for voting as
specified in Articles 10, the presiding officer of the meeting of the Board of
Directors can postpone the meeting of the Board of Directors, specifying a date
at least fourteen (14) days after the date of issuance of the postponement
notices specified in Paragraph 2 of this Article.
2. In the case of postponement specified in the preceding
Paragraph, the presiding officer shall, within two (2) business days after the
date when it was decided to postpone the meeting, issue a written notice to
each Director, stating the date, time and place of reconvocation of the
postponed meeting of the Board of Directors. The provisions of Article 9 shall
be applicable with the necessary modifications to the notices in question.
However, it shall be required that the entire text of the notices in question
must be transmitted by telegram simultaneously to each Director.
(Minutes of Meetings)
Article 13.
Outlines of the deliberations of meetings of the Board of Directors
as well as their results shall be recorded in minutes of meetings in both
Japanese and English. The presiding officer and all the Directors who attended
each meeting shall affix their signatures or their names and seals to them, and
they shall be retained by the Company.
4
<PAGE> 1
EXHIBIT 10.27(b)
TECHNOLOGY CROSS-LICENSE AGREEMENT
Confidential portions of this document have been deleted and filed
separately with the Securities and Exchange Commission pursuant to a
request for confidential treatment.
<PAGE> 2
TECHNOLOGY CROSS-LICENSE AGREEMENT
This Technology Cross-License Agreement (this
"Agreement"), dated as of March 26, 1993, is between
ADVANCED MICRO DEVICES, INC. ("AMD"), a Delaware corporation
having its principal officeat 901 Thompson Place, Sunnyvale,
California, 94088-3453, U.S.A., and FUJITSU LIMITED ("Fujitsu"),
a Japanese corporation having its registered office at
1015 Kamikodanaka, Nakahara-ku, Kawasaki 211, Japan.
INTRODUCTION
A. Fujitsu and AMD each own or control various patent
and other intellectual property rights to which the other party
wishes to acquire a license.
B. Fujitsu and AMD are engaged in continuing
research, development and engineering with regard to Licensed
Products (as defined below).
C. Fujitsu and AMD desire to establish an amicable
and mutually beneficial relationship and, more specifically,
desire to grant licenses and exchange semiconductor technology in
accordance with the following terms and conditions.
ACCORDINGLY, in consideration of the mutual covenants
and promises contained herein, the parties hereto agree as
follows:
Article 1. DEFINITIONS.
As used in this Agreement, the following terms
shall have the following meanings:
Section 1.1. "Affiliate", with respect to a
party, shall mean the companies affiliated with such party as
specified in Attachment A hereto, which may be amended from time
to time upon the agreement of the parties.
Section 1.2. "Applicable Law" shall mean, with
respect to a party, any statute, law, ordinance, rule,
administrative interpretation, regulation, order, writ,
injunction, directive, judgment, decree or other requirement of
any Governmental Authority applicable to such party or its
properties, business or assets.
Section 1.3. "Auxiliary Part" shall mean
input/output means, supporting means, terminal members,
conductors or equivalent interconnecting members, housing means,
any environmental controlling means included within such housing
means or unitary with such housing means, and active and/or
1
<PAGE> 3
passive elements unitarily or separately combined with a
Semiconductor Product and any other parts, primarily usable in or
for manufacturing Semiconductor Products.
Section 1.4. "Confidential Information" shall
mean information or materials disclosed to a party by the other
party that are identified as, or provided under circumstances
indicating the information or materials are, confidential or
proprietary.
Section 1.5. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Section 1.6. "Effective Date" shall mean the
later to occur of (a) the date of this Agreement or (b) the date
which all required Governmental Approvals have been obtained.
Section 1.7. "EPROM" or "Electrically
Programmable Read Only Memory" shall mean a non-volatile
semiconductor memory device incorporating floating gate structure
cells, which device is electrically programmable and erasable by
using ultraviolet light. The device mainly consists of such
floating gate structure cells, with auxiliary logic circuits, if
any, where such logic circuits are used solely for memory
operation or interface to other products. OTPROM or One Time
PROM, which is a certain non-volatile semiconductor device
incorporating the same chip as EPROM and packaged without
transparent windows for ultraviolet light, shall be included in
the definition of EPROM.
Section 1.8. "Flash Memory" shall mean a non-
volatile semiconductor memory device incorporating floating gate
structure cells, which device is programmable and erasable by
electrically injecting and electrically discharging electric
charges into and from floating gates. The device mainly consists
of such floating gate structure cells, with auxiliary logic
circuits, if any, where such logic circuits are used solely for
memory operation or interface to other products.
Section 1.9. "Governmental Approvals" shall mean
all approvals, consents, authorizations and similar actions from
all Governmental Authorities that the parties agree are desirable
in order to consummate the transactions hereunder.
Section 1.10. "Governmental Authority" shall mean
any foreign, domestic, national, federal, territorial,
prefectural, state or local governmental authority, quasi-
governmental authority, court, government or self-regulatory,
administrative or other agency, or any political or other
subdivision, department, or branch of any of the foregoing.
Section 1.11. "Incorporated Product", with
respect to a party, shall mean a product, other than an NVM or a
Memory Card, into which such party has incorporated NVM(s) made
by or for such party or JV, or portions of such NVM(s). Without
limitation, Incorporated Product shall include both (a) an
2
<PAGE> 4
information handling system, circuit board or multichip module
that incorporates such NVM(s) or (b) a Semiconductor Product that
incorporates circuits of such NVM(s) with other circuits.
Section 1.12. "IPR" or "Intellectual Property
Rights", (a) with respect to a party, shall mean such party's
Patents, Proprietary Information and Other IPR, and (b) with
respect to a third party, shall mean the equivalents of the
foregoing, except that, in any case, IPR shall exclude
trademarks, service marks, trade names and their equivalents, and
any contraction, abbreviation, or simulation thereof.
Section 1.13. "Joint Development Agreement" shall
mean the Joint Development Agreement as defined in the Joint
Venture Agreement, and any amendments or modifications thereto.
Section 1.14. "Joint Venture Agreement" shall
mean that certain joint venture agreement to be entered into by
the parties concurrently with this Agreement, and any amendments
or modifications thereto.
Section 1.15. "Joint Venture License Agreement"
shall mean the Joint Venture License Agreement as defined in the
Joint Venture Agreement, and any amendments or modifications
thereto.
Section 1.16. "JV" shall mean Fujitsu AMD
Semiconductor Limited, a Japanese corporation being formed by AMD
and Fujitsu pursuant to the Joint Venture Agreement.
Section 1.17. [Intentionally omitted]
Section 1.18. "Licensed Product" shall mean any
of the items described in the following clauses (a) through (c)
and/or parts thereof:
(a) Semiconductive Material;
(b) Auxiliary Part; or
(c) Semiconductor Product.
Licensed Products shall include NVMs and Memory Cards, unless
otherwise expressly provided herein.
Section 1.19. "Manufacturing Apparatus" shall
mean any instrumentality or aggregate of instrumentalities
primarily designated for use in the fabrication of Licensed
Products.
Section 1.20. "Memory Card" shall mean an EPROM
or Flash Memory card, module or board which consists mainly of
NVM(s) and auxiliary semiconductor logic, if any, where such
auxiliary semiconductor logic is used solely for memory operation
or interface to other products.
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<PAGE> 5
Section 1.21. "Nondisclosure Agreements" shall
mean the Nondisclosure Agreements between Fujitsu and AMD dated
March 12, 1992 and July 20, 1992 and the Confidentiality
Agreement between Fujitsu and AMD dated October 16, 1992.
Section 1.22. "Non-Semiconductor Group", with
respect to a party, shall mean the party's internal group or
other organization that is not the Semiconductor Group of such
party. It is understood that AMD currently does not have such a
Non-Semiconductor Group. Should AMD elect to form a Non-
Semiconductor Group in the future, such Group shall at that time
have all of the rights and privileges, subject to the
obligations, of a Non-Semiconductor Group hereunder.
Section 1.23. "NVM" or "Non-Volatile Memory",
with respect to a party, shall mean any EPROM or Flash Memory in
wafer, die or packaged device form manufactured using wafer
processes with geometries of 0.5 micron or less that embodies,
incorporates or is subject to (or is manufactured through
processes or methods that embody, incorporate or are subject to)
IPR of the other party.
Section 1.24. "Other IPR", with respect to a
party, shall mean all mask work rights and copyrights relating to
software or microcode, and the equivalents of the foregoing
(under the laws of any jurisdiction, including without
limitation, all applications and registrations with respect
thereto) that both (a) are covered, embodied, or incorporated in
the materials or information deliberately provided by such party
to the other party in accordance with the Joint Development
Agreement or the Nondisclosure Agreements, or deliberately
provided by such party to JV or by JV to such party in accordance
with the Joint Venture License Agreement and (b) are wholly owned
by such party or as to which, and only to the extent and subject
to the conditions under which, such party has the right, as of
the Effective Date or thereafter during the term of this
Agreement, to grant licenses or sublicenses of the scope granted
herein, without such grant resulting in the payment of royalties
or other consideration to third parties (unless and until the
other party undertakes to reimburse such party for any payments
so made, in which case such mask work rights and copyrights and
equivalents shall be included within such party's Other IPR),
except for payments to a Subsidiary of such party sublicensed
hereunder or payments to third parties for Other IPR developed or
created by such third parties while employed by such party or any
Subsidiary of such party sublicensed hereunder.
Section 1.25. "Patents", with respect to a party,
shall mean all classes or types of patents, utility models,
design patents and reissues, importations and confirmations
thereof, and other indicia of ownership, and respective
applications therefor of all countries of the world, provided
such indicia of ownership or applications therefor meet both the
following conditions: (a) have a filing date, or claim the
benefit of a filing date, prior to the expiration or termination
of this Agreement, and (b) are wholly owned by such party prior
to the expiration or termination of this Agreement, or as to
4
<PAGE> 6
which, and only to the extent and subject to the conditions under
which, such party has the right, as of the Effective Date or
thereafter during the term of this Agreement, to grant licenses
or sublicenses of the scope granted herein, without such grant
resulting in the payment of royalties or other consideration to
third parties (unless and until the other party undertakes to
reimburse such party for any payments so made, in which case such
patents shall be included within such party's Patents), except
for payments to a Subsidiary of such party sublicensed hereunder
or payments to third parties for inventions made by such third
parties while employed by such party or any Subsidiary of such
party sublicensed hereunder.
Section 1.26. "Pilot Product", with respect to a
party, shall mean (i) an NVM wafer manufactured by or for (except
by the JV) such party or (ii) an NVM die or packaged device made
by or for (except by the JV) such party from such NVM wafer.
Section 1.27. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Section 1.28. "Proprietary Information", with
respect to a party, shall mean any trade secrets, copyrighted
material (except as is otherwise provided in this Section 1.28),
know-how, data, formula, processes, confidential information, or
other information, tangible or otherwise, of such party that both
(a) comes to the knowledge of the other party (whether or not
deliberately provided by such party) in the course of performing
the Joint Development Agreement or the Joint Venture License
Agreement or pursuant to the Nondisclosure Agreements, and (b) is
wholly owned by such party or as to which, and only to the extent
and subject to the conditions under which, such party has the
right, as of the Effective Date or thereafter during the term of
this Agreement, to grant licenses or sublicenses of the scope
granted herein, without such grant resulting in the payment of
royalties or other consideration to third parties (unless and
until the other party undertakes to reimburse such party for any
payments so made, in which case such information shall be
included within such party's Proprietary Information), except for
payments to a Subsidiary of such party sublicensed hereunder or
payments to third parties for Proprietary Information developed
or created by such third parties while employed by such party or
any Subsidiary of such party sublicensed hereunder. Proprietary
Information does not include mask work rights or copyrights
relating to software or microcode or the equivalents of such
rights.
Section 1.29. "Semiconductor Group", with respect
to a party, shall mean the internal group or other organization
of such party currently having as its primary activities the
research and development, making and selling of Semiconductor
Products to the semiconductor merchant market, and controlling
semiconductor-related IPR arising by virtue of such activities.
Section 1.29.1. The Fujitsu Semiconductor Group
currently consists of (and is limited to) the Electronic Devices
5
<PAGE> 7
Group of Fujitsu, and will consist in the future of any successor
organization(s) which succeeds to the semiconductor-related
research and development, making, selling and/or IPR of the
Electronic Devices Group.
Section 1.29.2. The AMD Semiconductor Group
currently consists of AMD in its entirety, and will consist in
the future of any successor organization(s) which succeeds to the
semiconductor-related research and development, making, selling
and/or IPR of any current AMD operations.
Section 1.30. "Semiconductor Product" shall mean:
(a) a Semiconductive Element; or
(b) a Semiconductive Element and one or more
films of conductive, semiconductive or insulating materials
formed on a surface or surfaces of such Semiconductive Element,
said film or films comprising one or more conductors, active or
passive electrical circuit elements, or any combination thereof;
or
(c) a unitary assembly consisting of one or more
of the elements described in clauses (a) and/or (b) of this
Section 1.30 having a fixed permanent physical relationship
established therebetween; or
(d) a unitary assembly consisting primarily of
(i) one or more of the elements described in clauses (a), (b)
and/or (c) of this Section , and (ii) one or more film
devices having a fixed permanent physical relationship
established therebetween.
Semiconductor Product includes, if provided therewith as a part
thereof, (i) Auxiliary Parts and (ii) additional electrical
circuits constituted thereby and integrally included therein,
provided that such Auxiliary Parts and additional electrical
circuits are incidental to the functionality of such
Semiconductor Products.
Section 1.31. "Semiconductive Element" shall mean
an element consisting primarily of a body of Semiconductive
Material having a plurality of electrodes associated therewith,
whether or not said body consists of a single Semiconductive
Material or of a multiplicity of such materials, whether or not
said body has, therein and/or thereon, one or more junctions and
whether or not said body includes one or more layers or other
regions (constituting substantially less than the whole of said
body) of a material or materials which are of a type other than
Semiconductive Material, and if provided as a part thereof, said
element includes passivating means thereof.
Section 1.32. "Semiconductive Material" shall
mean any material whose conductivity is intermediate to that of
metals and insulators at room temperature and whose conductivity
increases with increasing temperature over some temperature
range.
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<PAGE> 8
Section 1.33. "Subsidiary", with respect to a
party, shall mean any corporation, partnership or other entity,
more than fifty percent (50%) of whose shares or ownership
interests entitled to vote for the election of directors (other
than any shares whose voting rights are subject to restriction)
or, in the case of a noncorporate entity, the equivalent
interests, are owned or controlled by such party, directly or
indirectly, now or hereafter, but such corporation, partnership
or other entity shall be deemed to be a Subsidiary only for so
long as such ownership or control exists.
Section 1.34. "Transitional Event" shall mean the
earlier to occur of (i) termination or expiration of the Joint
Venture Agreement, (ii) dissolution of the JV, or (iii) Fujitsu
or AMD ceasing to be a shareholder of the JV.
Article 2. MUTUAL RELEASE.
Section 2.1. Fujitsu hereby releases, acquits and
forever discharges AMD hereunder from any and all claims or
liability for infringement or alleged infringement of any Fujitsu
IPR by performance of acts prior to the Effective Date which, if
performed on or after the Effective Date, would be acts licensed,
sublicensed or immunized hereunder.
Section 2.2. AMD hereby releases, acquits and
forever discharges Fujitsu hereunder from any and all claims or
liability for infringement or alleged infringement of any AMD IPR
by performance of acts prior to the Effective Date which, if
performed on or after the Effective Date, would be acts licensed,
sublicensed or immunized hereunder.
Article 3. GRANTS OF LICENSE.
Section 3.1. Fujitsu hereby grants to AMD a non-
exclusive and non-transferable license under Fujitsu IPR:
(a) to make, have made (it being understood that
for purposes of this Agreement the terms "make" and "have made"
shall include the acts of assembling, packaging, and/or testing),
use, sell, lease, or otherwise dispose of Licensed Products and
Incorporated Products anywhere in the world, but excluding
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], NVMs and Memory Cards,
except as otherwise specified in Attachment B; and
(b) to make, have made and use Manufacturing
Apparatuses anywhere in the world, and to sell, lease, or
otherwise dispose of such Manufacturing Apparatuses anywhere in
the world, provided that such sale, lease or other disposition is
incidental to a technology license to make Licensed Products to
which such Manufacturing Apparatuses relate.
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<PAGE> 9
Section 3.2. AMD hereby grants to Fujitsu a non-
exclusive and non-transferable license under AMD IPR:
(a) to make, have made, use, sell, lease, or
otherwise dispose of Licensed Products and Incorporated Products
anywhere in the world, but excluding [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION], NVMs and Memory Cards, except as otherwise specified
in Attachment B; and
(b) to make, have made and use Manufacturing
Apparatuses anywhere in the world, and to sell, lease, or
otherwise dispose of such Manufacturing Apparatuses anywhere in
the world, provided that such sale, lease or other disposition is
incidental to a technology license to make Licensed Products to
which such Manufacturing Apparatuses relate.
Section 3.3. Fujitsu and AMD agree that upon the
occurrence of a Transitional Event, whether or not it results in
termination under Article 9, or upon the assumption by or on
behalf of a party (including a bankruptcy trustee or
representative or debtor in possession) of the rights and
obligations of this Agreement in a bankruptcy or insolvency
proceeding involving such party, the licenses under Sections 3.1
and 3.2, respectively, shall automatically, without further
action by either party, be changed so that the licenses become
licenses to make, have made, use, sell, lease or otherwise
dispose of any volume of Licensed Products, including NVMs and
Memory Cards, anywhere in the world not subject to the conditions
of Attachment B, but excluding, in the case of Section 3.1,
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION], and, in the case of
Section 3.2, [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 3.4.
Section 3.4.1. Notwithstanding anything to the
contrary in Sections 1.12 and 3.1, Articles 4 and 5, or any other
provision of this Agreement:
(a) The rights, licenses and immunities granted
by Fujitsu hereunder to AMD (and the definition of "IPR" included
in such grant) shall exclude IPR of any Fujitsu Non-Semiconductor
Group except that:
(i) Such Fujitsu Non-Semiconductor Group, at
its option, may grant to the AMD Semiconductor Group a license of
such Fujitsu Non-Semiconductor Group's Patents that relate to (A)
processes for manufacturing Licensed Products, (B) the device
structure (but not circuits) of Licensed Products, or (C) the
materials comprising Licensed Products (collectively,
"Semiconductor-Related"). Unless such Fujitsu Non-Semiconductor
Group grants such a license to the AMD Semiconductor Group and
such license is otherwise of a scope that is equivalent to that
of Section 3.1, such Fujitsu Non-Semiconductor Group may not
exercise the rights, licenses and immunities granted hereunder to
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<PAGE> 10
Fujitsu with respect to Licensed Products, except Licensed
Products that are made by or for Fujitsu Semiconductor Group, a
Subsidiary sublicensed hereunder, the JV or another Non-
Semiconductor Group that has acquired the right (pursuant to this
Section 3.4.1(a)(i)) to exercise such rights, licenses and
immunities granted hereunder to Fujitsu.
(ii) If the Fujitsu Semiconductor Group
provides or makes available to AMD information, material or
technology in connection with activities related to the Joint
Development Agreement or the Joint Venture License Agreement, and
such information, material or technology embodies, incorporates
or is subject to any Semiconductor-Related IPR of a Fujitsu Non-
Semiconductor Group that is used by the Fujitsu Semiconductor
Group, the Fujitsu Semiconductor Group shall (unless such Fujitsu
Non-Semiconductor Group has granted a license of such IPR
pursuant to clause (i)) arrange for a license or immunity from
suit under such IPR to the AMD Semiconductor Group, provided that
AMD shall pay any related reasonable license fees or royalties.
Such license or immunity shall otherwise be of a scope equivalent
to that of Section 3.1, but shall be no broader than the rights
of the Fujitsu Semiconductor Group to such IPR.
(b) An AMD Non-Semiconductor Group may, at
its option, obtain a license hereunder of the circuit Patents of
the Fujitsu Semiconductor Group. Such license shall be of a
scope equivalent to that of Section 3.1. If such AMD Non-
Semiconductor Group obtains such a license, it shall grant back
to the Fujitsu Semiconductor Group a license hereunder of such
AMD Non-Semiconductor Group's circuit Patents. Such license
shall otherwise be of a scope equivalent to that of Section 3.2.
Section 3.4.2. Notwithstanding anything to the
contrary in Sections 1.12 and 3.2, Articles 4 and 5, or any other
provision of this Agreement:
(a) The rights, licenses and immunities granted
by AMD hereunder to Fujitsu (and the definition of "IPR" included
in such grant) shall exclude IPR of any AMD Non-Semiconductor
Group except that:
(i) Such AMD Non-Semiconductor Group, at its option, may
grant to the Fujitsu Semiconductor Group a license of such AMD
Non-Semiconductor Group's Semiconductor-Related Patents. Unless such AMD
Non-Semiconductor Group grants such a license to the Fujitsu Semiconductor
Group and such license is otherwise of a scope that is equivalent to that of
Section 3.2, such AMD Non- Semiconductor Group may not exercise the rights,
licenses and immunities granted hereunder to AMD with respect to Licensed
Products, except Licensed Products that are made by or for AMD Semiconductor
Group, a Subsidiary sublicensed hereunder, the JV or another Non-Semiconductor
Group that has acquired the right (pursuant to this Section 3.4.2(a)(i)) to
exercise such rights, licenses and immunities granted hereunder to AMD.
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<PAGE> 11
(ii) If the AMD Semiconductor Group provides
or makes available to Fujitsu information, material or technology
in connection with activities related to the Joint Development
Agreement or the Joint Venture License Agreement, and such
information, material or technology embodies, incorporates or is
subject to any Semiconductor-Related IPR of an AMD Non-
Semiconductor Group that is used by the AMD Semiconductor Group,
the AMD Semiconductor Group shall (unless such AMD Non-
Semiconductor Group has granted a license of such IPR pursuant to
clause (i)) arrange for a license or immunity from suit under
such IPR to the Fujitsu Semiconductor Group, provided that
Fujitsu shall pay any related reasonable license fees or
royalties. Such license or immunity shall otherwise be of a
scope equivalent to that of Section 3.2, but shall be no broader
than the rights of the AMD Semiconductor Group to such IPR.
(b) A Fujitsu Non-Semiconductor Group may, at its
option, obtain a license hereunder of the circuit Patents of the
AMD Semiconductor Group. Such license shall be of a scope
equivalent to that of Section 3.2. If such Fujitsu Non-
Semiconductor Group obtains such a license, it shall grant back
to the AMD Semiconductor Group a license hereunder of such
Fujitsu Non-Semiconductor Group's circuit Patents. Such license
shall otherwise be of a scope equivalent to that of Section 3.1.
Section 3.5. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Section 3.6. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Article 4. IMMUNITY FOR CUSTOMERS AND USERS.
Section 4.1. Fujitsu hereby forever grants to the
customers and users of Licensed Products or Incorporated Products
that are sold, leased or otherwise disposed of by AMD pursuant
to, and subject to the conditions of, this Agreement a worldwide,
royalty-free and non-exclusive immunity from suit, damages and
claims by Fujitsu under Fujitsu IPR to use, sell, lease or
otherwise dispose of such Licensed Products or Incorporated
Products, provided that such royalty-free immunity for such
customers and users shall extend only to the use, sale, lease or
other disposition of such particular Licensed Products or
Incorporated Products that such customers and users obtained
directly or indirectly from AMD. [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. The sale, lease, or other disposition to customers
and users of Licensed Products or Incorporated Products by AMD
does not convey any license, by implication, estoppel, or
otherwise, to such customers and users under Patent claims
covering combinations of such Products with other devices or
elements.
Section 4.2. AMD hereby forever grants to the
customers and users of Licensed Products or Incorporated Products
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<PAGE> 12
that are sold, leased or otherwise disposed of by Fujitsu
pursuant to, and subject to the conditions of, this Agreement a
worldwide, royalty-free and non-exclusive immunity from suit,
damages and claims by AMD under AMD IPR to use, sell, lease or
otherwise dispose of such Licensed Products or Incorporated
Product, provided that such royalty-free immunity for such
customers and users shall extend only to the use, sale, lease or
other disposition of such particular Licensed Products or
Incorporated Products that such customers and users obtained
directly or indirectly from Fujitsu. [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. The sale, lease, or other disposition to customers
and users of Licensed Products or Incorporated Products by
Fujitsu does not convey any license, by implication, estoppel, or
otherwise, to such customers and users under Patent claims
covering combinations of such Products with other devices or
elements.
Article 5. SUBLICENSE.
Section 5.1. Each party shall have the right to
grant sublicenses of the rights, licenses and immunities granted
to such party under Section 3.1 or 3.2, as well as Articles 2 and
4 and this Article 5, to a Subsidiary of such party but subject
to the condition that such Subsidiary grants a license to the
other party hereunder of the Patents, if any, of such Subsidiary,
as follows: If such Subsidiary is subject to control by a Non-
Semiconductor Group, such grant-back license (a) shall be to the
Semiconductor Group of the other party and (b) shall be of
Semiconductor-Related (as defined in Section 3.4.1(a)(i))
Patents. If such Subsidiary is subject to control by the
Semiconductor Group, such license (a) shall be to the other party
as a whole and (b) shall be of all Patents of such Subsidiary.
Any such license shall otherwise be of a scope equivalent to that
of Section 3.1 or 3.2 (as applicable). It is hereby stated, for
confirmation purposes, that (i) it is an option, and not an
obligation, for a Subsidiary to grant such a license, unless and
until such Subsidiary elects to be granted a sublicense of such
rights, licenses and immunities, and (ii) even without obtaining
such a sublicense, a Subsidiary of a party may exercise the
rights, licenses and immunities granted hereunder to the same
extent as a Non-Semiconductor Group of such party that has not
granted a license to the other party's Semiconductor Group under
Section 3.4.1(a)(i) or 3.4.2(a)(i).
Section 5.2. If requested by a party, the other
party shall cause a Subsidiary actually controlled by the
Semiconductor Group of such other party to grant a license to
such party under Section 5.1.
Section 5.3. If the Semiconductor Group of a
party provides or makes available to the other party information,
material or technology in connection with activities related to
the Joint Development Agreement or the Joint Venture License
Agreement, and such information, material or technology embodies,
incorporates or is subject to any Semiconductor-Related (as
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<PAGE> 13
defined in Section 3.4.1(a)(i)) IPR of a Subsidiary of such party
that is used by such Semiconductor Group, such Semiconductor
Group shall (unless such Subsidiary has granted a license to such
other party pursuant to Section 5.1) arrange for a license or
immunity from suit under such IPR to the Semiconductor Group of
such other party, provided that such other party shall pay any
related reasonable license fees or royalties. Such license or
immunity shall otherwise be of a scope equivalent to that of
Section 3.1 or 3.2.
Section 5.4. A party shall not have the right to
grant sublicenses hereunder except as provided herein.
Article 6. CONFIDENTIALITY.
Section 6.1. Except as expressly authorized by
the other party (including without limitation the exercise of the
rights granted to a party under this Agreement, the Joint
Development Agreement and the Joint Venture License Agreement)
each party agrees not to disclose, use or permit the disclosure
or use by others of any Confidential Information unless and to
the extent such Confidential Information (i) is not marked or
designated in writing as confidential and is provided for a
purpose that reasonably contemplates disclosure to or use by
others, (ii) becomes a matter of public knowledge through no
action or inaction of the party receiving the Confidential
Information, (iii) was in the receiving party's possession before
receipt from the party providing such Confidential Information,
(iv) is rightfully received by the receiving party from a third
party without any duty of confidentiality, (v) is disclosed to a
third party by the party providing the Confidential Information
without a duty of confidentiality on the third party, (vi) is
disclosed by the receiving party despite the exercise of the same
degree of care used by the receiving party to safeguard its own
similar Confidential Information, but the receiving party shall
take all necessary steps to prevent any further disclosure, (vii)
is disclosed with the prior written approval of the party
providing such Confidential Information, or (viii) is
independently developed by the receiving party without any use of
the other party's Confidential Information. Confidential
Information shall not be deemed to be available to the general
public for the purpose of exclusion (ii) above with respect to
each party (x) merely because it is embraced by more general
information in the prior possession of the receiving party or
others, or (y) merely because it is expressed in public
literature in general terms not specifically in accordance with
the Confidential Information.
Section 6.2. In furtherance, and not in
limitation of the foregoing Section 6.1, each party agrees to do
the following with respect to any such Confidential Information:
(i) exercise the same degree of care to safeguard the
confidentiality of, and prevent the unauthorized use of, such
information as that party exercises to safeguard the
confidentiality of its own Confidential Information, (ii)
restrict disclosure of such information to those of its
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<PAGE> 14
employees, agents and sublicensees who have a "need to know", and
(iii) instruct and require such employees, agents and
sublicensees to maintain the confidentiality of such information
and not to use such information except as expressly permitted
herein. Each party further agrees not to remove or destroy any
proprietary or confidential legends or markings placed upon any
documentation or other materials.
Section 6.3. The foregoing confidentiality
obligations shall also apply to the contents of this Agreement.
Section 6.4. The obligations under this Article 6
shall not prevent the parties from disclosing the Confidential
Information or terms of this Agreement to any government agency
or body as required by law (provided that the party required to
make such disclosure in such circumstances has given the other
party prompt notice prior to making such disclosure so that the
other party may seek a protective order or other appropriate
remedy prior to such disclosure and cooperates fully with such
other party in seeking such order or remedy).
Section 6.5. The obligations under this Article 6
shall apply with respect to any Confidential Information for a
period of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] from the date of
disclosure of such Confidential Information to the receiving
party, unless with respect to any particular Confidential
Information the providing party in good faith notifies the
receiving party in writing that a longer period shall apply, in
which case the obligations under this Article 6 with respect to
such Confidential Information shall apply for such longer period.
Article 7. USE OF PROPRIETARY INFORMATION AND COMMINGLED
TECHNOLOGY.
Section 7.1. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Section 7.2. [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION].
Article 8. WARRANTIES, LIMITATION ON LIABILITY, AND
COVENANTS.
Section 8.1. Each party hereto represents and
warrants to the other party that it has the right, and will
continue during the term of this Agreement to have the right, to
grant to or for the benefit of the other party the rights and
licenses granted hereunder in accordance with the terms of this
Agreement and such grant of rights and licenses does not, and
will not during the term of this Agreement, conflict with the
rights and obligations of such party under any other license,
agreement, contract or other undertaking. Each party shall
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<PAGE> 15
indemnify, hold harmless and defend the other party against a
breach by such party of this Section 8.1.
Section 8.2. Nothing contained in this Agreement
shall be construed as:
(a) a warranty or representation by any of the
parties hereto or its Subsidiaries sublicensed hereunder as to
the validity or scope of any Fujitsu IPR or AMD IPR, as the case
may be; or
(b) conferring upon any party hereto or its
Subsidiaries sublicensed hereunder any license, right or
privilege under any patents, utility models, design patents,
copyrights, mask work rights or trade secrets except the
licenses, rights and privileges expressly granted hereunder; or
(c) a warranty or representation that any acts
licensed or sublicensed hereunder will be free from infringement
of patents, utility models, design patents, copyrights, mask work
rights or trade secrets other than those under which licenses,
rights and privileges have been expressly granted hereunder; or
(d) an arrangement to bring or prosecute actions
or suits against third parties for infringement or conferring any
right to bring or prosecute actions or suits against third
parties for infringement; or
(e) conferring any right to use in advertising,
publicly or otherwise, any trademark, service mark, trade name or
their equivalent, or any contraction, abbreviation or simulation
thereof, of either party hereto or their Subsidiaries sublicensed
hereunder.
Section 8.3. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER PARTY HERETO MAKES ANY WARRANTIES, WHETHER EXPRESS OR
OTHERWISE, CONCERNING ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES,
DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED
PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WARRANTIES OF FREEDOM FROM ERRORS OR DEFECTS, OR
WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL
PROPERTY RIGHTS, AND NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, ON
ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY WAY OUT
OF THIS AGREEMENT OR ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES,
DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED
PURSUANT TO THIS AGREEMENT.
Article 9. TERM AND TERMINATION.
Section 9.1. Term. This Agreement shall become
effective on the Effective Date and shall, unless and until
earlier terminated hereunder, remain in effect until the later to
occur of (i) the tenth anniversary date of the Effective Date and
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<PAGE> 16
(ii) the date of a Transitional Event, at which time this
Agreement shall terminate. At the request of either party, both
parties shall negotiate in good faith to extend the term of this
Agreement, with or without amendment to the provisions hereof.
Section 9.2. Termination. Termination of this
Agreement may result from the events listed below. Each party
agrees to give prompt written notice to the other party of the
happening of any such event.
(a) If either party hereto defaults in the
performance of any material obligation hereunder, the non-
defaulting party may give written notice thereof and the parties
shall discuss the problem arising from such default in good faith
and seek to resolve such problem. If such default is not
corrected or otherwise addressed by the defaulting party to the
reasonable satisfaction of the non-defaulting party within ninety
(90) days after the written notice of such default, then the non-
defaulting party may, in addition to any other remedies it may
have, terminate this Agreement by written notice. This Agreement
shall terminate on the thirtieth (30th) day after such notice of
termination.
(b) Each party hereto may terminate this
Agreement, by giving written notice of termination to the other
party at any time, upon or after:
(i) the filing by such other party of a
petition in bankruptcy or insolvency;
(ii) any adjudication that such other party
is bankrupt or insolvent;
(iii) the filing by such other party of any
legal action or document seeking reorganization, readjustment or
arrangement of such other party's business under any law relating
to bankruptcy or insolvency;
(iv) the appointment of a receiver or
bankruptcy trustee for all or substantially all of the property
of such other party;
(v) the making by such other party of a
general assignment for the benefit of creditors; or
(vi) the institution of any proceedings for
the liquidation or winding up of such other party's business or
for the termination of its corporate charter, provided, in the
event such proceedings are involuntary, the proceedings are not
dismissed within ninety (90) days.
(c) If at any time during the term of this
Agreement, (i) a party incurs in one transaction or a series of
related transactions a change in ownership of more than
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] of its capital stock, (ii) a
party consolidates with or merges with or into another
15
<PAGE> 17
corporation, partnership or other entity, whether or not such
party is the surviving entity of such transaction, unless
immediately after such consolidation or merger shareholders of
such party prior to the transaction continue to own more than
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] of the outstanding shares of
stock entitled to vote for the election of directors of such new
or surviving entity, or (iii) a party sells, assigns or otherwise
transfers all or substantially all of the business or assets of
such party relating to its semiconductor merchant market business
to a third party, the other party may terminate this Agreement
upon thirty (30) days' advance written notice to such party,
provided, in each case, that the terminating party must exercise
such right no later than one (1) year after receiving written
notice from the other party of such transaction.
Section 9.3. Effect of Termination.
(a) Except as otherwise provided in this Section
9.3, all rights and obligations of the parties hereunder shall
cease upon termination or expiration of this Agreement, with the
exception of the rights and obligations of the parties under
Articles 2, 4, 6, 7, 8, 9 and 10 and Sections 3.3 and 3.5, which
shall survive termination or expiration of this Agreement.
(b) In the event of termination of this Agreement
pursuant to Section 9.1, the licenses granted by a party under
Article 3 or any sublicenses granted by a party under Article 5,
including the modification pursuant to Section 3.3, shall survive
such termination of this Agreement with respect to any IPR
licensed as of the date of such termination of this Agreement
until expiration of such IPR. Should any of the events described
in clauses (i) through (iii) of Section 9.2(c) ("Change of
Control") occur with respect to a party during the period in
which license rights are surviving pursuant to this Section
9.3(b), the other party shall have the right to exercise the
rights of a Terminating Party as described in Sections 9.3(c) and
(d), and the rights of the parties shall thereafter be as set
forth in Sections 9.3(c) and (d) rather than this Section 9.3(b).
(c) If a party (the "Terminating Party")
terminates this Agreement pursuant to Section 9.2, the licenses
granted by the Terminating Party to the other party (the
"Terminated Party") under Article 3, or any sublicenses granted
by the Terminated Party under Article 5, shall survive such
termination with respect to IPR licensed as of the date of such
termination of this Agreement until expiration of such IPR,
except that with respect to Patents such post-termination
licenses and sublicenses shall be limited solely to (i)
Incorporated Products and Licensed Products being made or have
made and sold by the Terminated Party and its Subsidiaries
sublicensed hereunder at the time of such termination and
modifications thereof that do not add functionality ("Existing
Products") and (ii) process Patents licensed at the time of such
termination ("Existing Process Patents"), whether such Existing
Process Patents are used in the manufacture of Existing Products
16
<PAGE> 18
or other Incorporated Products or Licensed Products, but subject
in any event to the requirements of Section 9.3(d).
(d) If a Change of Control occurs with respect to
the Terminated Party, whether in connection with termination of
this Agreement or thereafter:
(i) beginning on the date of such Change of
Control, the licenses granted by the Terminating Party to the
Terminated Party under Article 3, or any sublicenses granted by
the Terminated Party under Article 5, with respect to Patents
shall be limited solely to manufacture and sale of Existing
Products and (notwithstanding Section 9.3 (c)(ii)) use of
Existing Process Patents to make or have made only Existing
Products, in each case only in the operations of the Terminated
Party as such operations existed at the time of such Change of
Control, and
(ii) such licenses or sublicenses shall
terminate on the date of such Change of Control or five years
after termination of this Agreement (whichever is later), unless
(and only for so long as) the Terminating Party, its Subsidiaries
sublicensed hereunder and their customers have a world-wide,
royalty-free and non-exclusive immunity from suit, damages and
claims under all patents and patent applications of the
Terminated Party and the third party that, directly or
indirectly, controls the Terminated Party relating to Licensed
Products or Incorporated Products.
(e) Upon termination of this Agreement by the
Terminating Party pursuant to Section 9.2, the licenses granted
by the Terminated Party to the Terminating Party under Article 3,
or any sublicenses granted by the Terminating Party under
Article 5, shall survive such termination of this Agreement with
respect to any IPR licensed as of such termination until
expiration of such IPR, as if such termination had occurred as
described in Sections 9.1 and 9.3(b), except that with respect to
Patents such post-termination licenses and sublicenses shall be
subject to the requirements of Section 9.3(f).
(f) If a Change of Control occurs with respect to
the Terminating Party, whether in connection with termination of
this Agreement or thereafter:
(i) beginning on the date of such Change
of Control, the licenses granted by the Terminated Party to the
Terminating Party under Article 3, or any sublicenses granted by
the Terminating Party under Article 5, with respect to Patents
shall be limited solely to manufacture and sale of Existing
Products and use of Existing Process Patents to make or have made
only Existing Products, in each case only in the operations of
the Terminating Party as such operations existed at the time of
such Change of Control, and
(ii) such licenses or sublicenses shall
terminate on the date of such Change of Control or five years
after termination of this Agreement (whichever is later), unless
17
<PAGE> 19
(and only for so long as) the Terminated Party, its Subsidiaries
sublicensed hereunder and their customers have a world-wide,
royalty-free and non-exclusive immunity from suit, damages and
claims under all patents and patent applications of the
Terminating Party and the third party that, directly or
indirectly, controls the Terminating Party relating to Licensed
Products or Incorporated Products.
Article 10. MISCELLANEOUS.
Section 10.1. Force Majeure. Neither party shall
be liable for failure to perform, in whole or in material part,
its obligations under this Agreement if such failure is caused by
any event or condition not existing as of the date of this
Agreement and not reasonably within the control of the affected
party, including, without limitation, by fire, flood, typhoon,
earthquake, explosion, strikes, labor troubles or other
industrial disturbances, unavoidable accidents, war (declared or
undeclared), acts of terrorism, sabotage, embargoes, blockage,
acts of Governmental Authorities, riots, insurrections, or any
other cause beyond the control of the parties; provided, that the
affected party promptly notifies the other party of the
occurrence of the event of force majeure and takes all reasonable
steps necessary to resume performance of its obligations so
interfered with.
Section 10.2. Assignment. Neither this Agreement
nor any of the rights and obligations created hereunder may be
assigned, transferred, pledged, or otherwise encumbered or
disposed of, in whole or in part, whether voluntary or by
operation of law, or otherwise, by either party without the prior
written consent of the other party. This Agreement shall inure
to the benefit of and be binding upon the parties' permitted
successors and assigns.
Section 10.3. Notices. All notices and
communications required, permitted or made hereunder or in
connection herewith shall be in writing and shall be mailed by
first class, registered or certified air mail, postage prepaid,
or otherwise delivered by hand or by messenger, or by recognized
courier service (with written receipt confirming delivery),
addressed:
(a) If to FUJITSU, to:
Mail or Hand Delivery:
FUJITSU LIMITED
1015 Kamikodanaka, Nakahara-ku
Kawasaki-shi 211, JAPAN
Attn: Masaichi Shinoda
General Manager
Business Development Division
Electronic Devices
with a copy to:
18
<PAGE> 20
Mail or Hand Delivery:
FUJITSU LIMITED
Marunouchi Center Bldg., 6-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, JAPAN
Attn: Gen Iseki
General Manager, Legal Division
(b) If to AMD, to:
Mail:
Mikio Ishimaru, Esq.
Director of Technology Law
Advanced Micro Devices, Inc., MS 68
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Hand Delivery:
3625 Peterson Way
Santa Clara, CA 95054
U.S.A.
with a copy to:
Mail:
Senior Vice President, Operations
Advanced Micro Devices, Inc.
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Attn: Gene Conner
Hand Delivery:
915 DeGuigne Drive
Sunnyvale, CA 94086
U.S.A.
Each such notice or other communication shall for all
purposes hereunder be treated as effective or as having been
given as follows: (i) if delivered in person, when delivered;
(ii) if sent by airmail, at the earlier of its receipt or at
5 pm, local time of the recipient, on the seventh day after
deposit in a regularly maintained receptacle for the deposition
of airmail; and (iii) if sent by recognized courier service, on
the date shown in the written confirmation of delivery issued by
such delivery service. Either party may change the address
and/or addressee(s) to whom notice must be given by giving
appropriate written notice at least seven (7) days prior to the
date the change becomes effective.
19
<PAGE> 21
Section 10.4 Export Control. Without in any way
limiting the provisions of this Agreement, each of the parties
hereto agrees that no products, items, commodities or technical
data or information obtained from a party hereto nor any direct
product of such technical data or information is intended to or
shall be exported or reexported, directly or indirectly, to any
destination restricted or prohibited by Applicable Law without
necessary authorization by the Governmental Authorities,
including (without limitation) the Japanese Ministry of
International Trade and Industry, the United States Bureau of
Export Administration (the "BEA") or other Governmental
Authorities of the United States with jurisdiction with respect
to export matters. Without limiting the generality of the
foregoing, each party hereto agrees that it will not, without
authorization from the Office of Export Licensing of the BEA,
knowingly export or reexport to a destination outside of the
United States General License GTDR technical data or information
of United States origin subject to this Agreement, or the direct
product thereof, or the product of a plant or major component of
a plant that is the direct product thereof, without first
providing any applicable export assurances to the exporting
party.
Section 10.5. Arbitration.
(a) Any and all disputes arising under or
affecting this Agreement shall be resolved exclusively by
confidential arbitration pursuant to the rules of the Japan
Commercial Arbitration Association in Tokyo, Japan, or such other
location as may be agreed between the parties; provided, however,
that the arbitrators shall be empowered to hold hearings at other
locations within and without Japan. Each of the parties shall
designate one arbitrator and the two arbitrators so designated
shall select the third arbitrator. Arbitration proceedings shall
be conducted in English with simultaneous translation into
Japanese. The judgment upon award of the arbitrators shall be
final and binding and may be enforced in any court of competent
jurisdiction in the United States or Japan, and each of the
parties hereto unconditionally submits to the jurisdiction of
such court for the purpose of any proceeding seeking such
enforcement. Subject only to the provision of Applicable Law,
the procedure described in this Section 10.5 shall be the
exclusive means of resolving disputes arising under or affecting
this Agreement.
(b) All papers, documents, or evidence, whether
written or oral, filed with or presented to the panel of
arbitrators shall be deemed by the parties and by the arbitrators
to be Confidential Information. No party or arbitrator shall
disclose in whole or in part to any other person any Confidential
Information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist
counsel in the arbitration or preparation for arbitration of the
dispute. Confidential Information may be disclosed (i) to
attorneys, (ii) to parties, and (iii) to outside experts
requested by either party's counsel to furnish technical or
20
<PAGE> 22
expert services or to give testimony at the arbitration
proceedings, subject, in the case of such experts, to execution
of a legally binding written statement that such expert is fully
familiar with the terms of this section, agrees to comply with
the confidentiality terms of this section, and will not use any
Confidential Information disclosed to such expert for personal or
business advantage.
Section 10.6. Entire Agreement. This Agreement
and the attachments hereto embody the entire agreement and
understanding between the parties with respect to the subject
matter hereof, superseding all previous communications,
agreements and understandings, whether written or oral. Neither
party has relied upon any representation or warranty of the other
party except as expressly set forth herein.
Section 10.7. Modification. This Agreement may
not be modified or amended, in whole or part, except by a writing
executed by duly authorized representatives of both parties.
Section 10.8. Announcement. The parties may
announce the existence of the parties' relationship and this
Agreement at a time and in a form to be mutually determined.
Neither party shall unreasonably withhold its consent to a time
proposed by the other party.
Section 10.9. Severability. If any term or
provision of this Agreement shall be determined to be invalid or
unenforceable under Applicable Law, such provision shall be
deemed severed from this Agreement, and a reasonable valid
provision to be mutually agreed upon shall be substituted. In
the event that no reasonable valid provision can be so
substituted, the remaining provisions of this Agreement shall
remain in full force and effect, and shall be construed and
interpreted in a manner that corresponds as far as possible with
the intentions of the parties as expressed in this Agreement.
Section 10.10. No Waiver. Except to the extent
that a party hereto may have otherwise agreed in writing, no
waiver by that party of any condition of this Agreement or breach
by the other party of any of its obligations or representations
hereunder shall be deemed to be a waiver of any other condition
or subsequent or prior breach of the same or any other obligation
or representation by the other party, nor shall any forbearance
by the first party to seek a remedy for any noncompliance or
breach by the other party be deemed to be a waiver by the first
party of its rights and remedies with respect to such
noncompliance or breach.
Section 10.11. Nature of Rights. Each party
shall have the right to the other party's IPR licensed under this
Agreement when created, developed or invented, regardless of
whether physically delivered to such party. All rights and
licenses granted under or pursuant to this Agreement by a party
("licensor party") to the other party ("licensee party") are, for
purposes of Section 365(n) of the U.S. Bankruptcy Code (the
"Bankruptcy Code"), licenses of "intellectual property" within
21
<PAGE> 23
the scope of Section 101 of the Bankruptcy Code. The parties
agree that the licensee party, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of its
rights and elections under the Bankruptcy Code. The parties
further agree that, in the event of the commencement of a
bankruptcy or insolvency proceeding by or against the licensor
party, the licensee party shall be entitled to a complete
duplicate of (and complete access to) any such intellectual
property and all embodiments thereof. If not already in the
licensee party's possession, the licensee party has the right to
immediate delivery of such intellectual property and embodiments
upon written request of the licensee party (i) upon any such
commencement of bankruptcy proceedings, unless the licensor party
or its representative or trustee elects to continue to perform
all of its obligations under this Agreement, or (ii) if not
delivered under clause (i) above, upon the rejection of this
Agreement by or on behalf of the licensor party.
Section 10.12. Tangible Property. The parties
agree that the tangible portion of the property delivered and to
be delivered by AMD to Fujitsu is valued at [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] and by Fujitsu to AMD is valued at
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
Section 10.13. Governing Law. The validity,
construction, performance and enforceability of this Agreement
shall be governed in all respects by the laws of the State of
California, U.S.A.
Section 10.14. Language. This Agreement and the
attachments hereto are in the English language, which language
shall be controlling in all respects.
Section 10.15. No Agency or Partnership. This
Agreement shall not constitute an appointment of either party as
the legal representative or agent of the other party, nor shall
either party have any right or authority to assume, create or
incur in any manner any obligation or other liability of any
kind, express or implied, against, in the name or on behalf of,
the other party. Nothing herein or in the transactions
contemplated by this Agreement shall be construed as, or deemed
to be, the formation of a partnership, association, joint venture
or similar entity by or among the parties hereto.
Section 10.16. Headings. The section and other
headings contained in this Agreement are for convenience of
reference only and shall not be deemed to be a part of this
Agreement or to affect the meaning or interpretation of this
Agreement.
22
<PAGE> 24
Section 10.17. Counterparts. This Agreement may
be executed in counterparts, each of which shall be deemed an
original, and all of which shall be deemed to constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized representatives
on the date set forth above.
ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED
/s/ Gene Conner /s/ Hikotara Masunaga
- ----------------------------- -----------------------------
By: Gene Conner By: Hikotaro Masunaga
Title: Senior Vice President, Title: Managing Director
Operations
23
<PAGE> 25
ATTACHMENT A
TO
TECHNOLOGY CROSS-LICENSE AGREEMENT
FUJITSU AFFILIATES
1. Amdahl Corporation
2. HaL Computer Corporation
3. Such other companies (in which Fujitsu has not less
than a five percent (5%) stock ownership) as may be requested by
Fujitsu and approved (which approval shall not be unreasonably
withheld) by AMD for addition to this Attachment A.
AMD AFFILIATES
1. Such companies (in which AMD has not less than a five
percent (5%) stock ownership) as may be requested by AMD and
approved (which approval shall not be unreasonably withheld) by
Fujitsu for addition to this Attachment A.
24
<PAGE> 26
ATTACHMENT B
TO
TECHNOLOGY CROSS-LICENSE AGREEMENT
Each party is licensed under Section 3.1 or 3.2:
1. With regard to NVMs:
(i) Fujitsu: to sell, lease, or otherwise dispose of NVMs in the
countries [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] Ireland, the United Kingdom,
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
(ii) AMD: to sell, lease, or otherwise dispose of NVMs in the
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] countries in Europe (except
Ireland and the United Kingdom) [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
(iii) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION].
(iv) Each party: to assemble, package and test, [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] and to use, NVMs anywhere in the world.
2. With regard to Pilot Products:
(i) Each party: to make [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] Pilot
Products, [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] and to use such Pilot
Products, anywhere in the world.
(ii) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION].
3. With regard to Memory Cards:
(i) Each party: to make [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] and to
use Memory Cards anywhere in the world.
(ii) Each party: to sell, lease or otherwise dispose of Memory
Cards as provided for NVMs in 1. above or 4. below. [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION].
4. With regard to the European Community ("EC") (and, if the
European Economic Area ("EEA") Agreement comes into effect, the EEA):
Each party: commencing five years after the first commercial sale
of each new NVM or Memory Card in the EC (and, if the EEA Agreement
comes into effect, the EEA), and notwithstanding anything else in this
25
<PAGE> 27
Attachment B, to sell, lease or otherwise dispose of such NVM or
Memory Card anywhere in the EC (and, if the EEA Agreement comes into
effect, the EEA). Notwithstanding the foregoing or anything else in
this Attachment B, (i) for the first five years from such first
commercial sale, each party may solicit orders, advertise, set up or
appoint distributors or sales representatives, establish warehouses,
and otherwise engage in active sales and marketing for such NVM or
Memory Card only in the countries of the EC (and, if the EEA Agreement
comes into effect, the EEA) specified for such party in 1.(i) or
1.(ii), as applicable, above, and (ii) at any time, the unsolicited
sale, lease or other disposition of NVMs or Memory Cards shall be
permitted between Member States of the EC (and, if the EEA Agreement
comes into effect, the EEA).
26
<PAGE> 28
TECHNOLOGY CROSS-LICENSE AGREEMENT
Table of Contents
<TABLE>
<S> <C>
INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
2. MUTUAL RELEASE . . . . . . . . . . . . . . . . . . . . . 6
3. GRANTS OF LICENSE. . . . . . . . . . . . . . . . . . . . 6
4. IMMUNITY FOR CUSTOMERS AND USERS . . . . . . . . . . . . 9
5. SUBLICENSE . . . . . . . . . . . . . . . . . . . . . . . 10
6. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . 11
7. USE OF PROPRIETARY INFORMATION AND COMMINGLED TECHNOLOGY 12
8. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS . . . 12
9. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . 13
10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 16
ATTACHMENT A. . . . . . . . . . . . . . . . . . . . . . . . . 22
ATTACHMENT B. . . . . . . . . . . . . . . . . . . . . . . . . 25
</TABLE>
i
<PAGE> 1
EXHIBIT 10.27(c)
AMD INVESTMENT AGREEMENT
ADVANCED MICRO DEVICES, INC.
investing in
FUJITSU LIMITED
March 26, 1993
Confidential portions of this document have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
<PAGE> 2
AMD INVESTMENT AGREEMENT
This AMD INVESTMENT AGREEMENT (the "Agreement") is made this
26th day of March, 1993 between FUJITSU LIMITED, a Japanese stock
company or kabushiki kaisha ("FUJITSU") and ADVANCED MICRO
DEVICES, INC., a Delaware corporation ("AMD").
AMD and FUJITSU have entered into a Memorandum of
Understanding dated July 13, 1992 regarding (a) the formation,
funding and implementation of a joint venture between AMD and
FUJITSU to manufacture integrated circuits (the "Joint Venture")
and (b) the purchase by each party of common stock of the other
party and/or its subsidiaries.
1.1 Purchases of Fujitsu Securities. Upon the terms and
conditions set forth in this Agreement, AMD shall purchase bonds
and/or shares of the common stock of FUJITSU having a total price
of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] (the "Fujitsu
Securities"). All Fujitsu Securities shall be purchased in the
open market in Japan, unless otherwise agreed between the
parties. The selection between the purchase of bonds, or the
purchase of equity securities such as common stock or bonds
convertible into common stock, shall be initially at FUJITSU'S
discretion, provided that AMD shall have the sole discretion to
vary such selection to the extent necessary for the Joint Venture
to be or not to be, at AMD's discretion, a "controlled foreign
corporation" of AMD (within the meaning of Chapter 1, Subchapter
N, Part III, Subpart F of the Internal Revenue Code of 1986, as
amended), with a reasonable margin to ensure that AMD's objective
is achieved. To the extent consistent with this objective, at
FUJITSU's election the parties will negotiate the terms under
which AMD shall purchase publicly traded bonds issued by FUJITSU
1
<PAGE> 3
and convertible into common stock of FUJITSU, instead of
purchasing common stock.
1.2 Timing of Purchase. FUJITSU shall provide written
notice to AMD regarding the extent to which FUJITSU elects to
exercise its option to request AMD purchase convertible bonds
rather than Fujitsu common stock within ten (10) days after the
Effective Date of the Joint Venture Agreement between FUJITSU and
AMD. AMD shall purchase Fujitsu Securities within thirty (30)
days after receipt of such notice.
1.3 Timing of Permitted Resales or Transfers. Unless AMD
enters into a firm commitment to replace the FUJITSU Securities
purchased under Section 1.1 with FUJITSU Securities of equal
value within 30 days after disposition, the FUJITSU Securities
purchased under Section 1.1 may not be resold, hypothecated or
transferred except in the following manner. Up to [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] of the Fujitsu Securities purchased in
accordance with the Agreement may be resold or transferred at any
time after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of the consummation
of such purchase. All remaining Fujitsu Securities may be
resold or transferred at any time after [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of the consummation of such purchase.
1.4 Information on Issuances. FUJITSU shall, to the extent
legally permissible (i) provide AMD with a statement, on December
1 of each year during the term of the Joint Venture Agreement, of
the number and type of voting shares and convertible debt of
FUJITSU outstanding as of a date within the preceding 45 days,
and (ii) provide AMD with at least seven days advance notice
2
<PAGE> 4
prior to the issuance of additional shares (other than shares
issued pursuant to conversion of debt) which would cause the
number of FUJITSU voting shares outstanding at December 31 of
such year to be in excess of 110% of the number of shares
specified in FUJITSU's December 1 statement to AMD.
1.5 Communications. All notices and communications
required, made or permitted hereunder or in connection herewith
shall be in writing and shall be delivered by hand, or by
messenger, or by recognized courier service (with written receipt
confirming delivery), or by postage prepaid registered or
certified airmail (return receipt requested), and addressed:
(a) If to FUJITSU, to:
FUJITSU LIMITED
Furukawa Sogo Building
6-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Mr. Hirohiko Kondo
General Manager
Electronic Devices Marketing Division
with a copy to
FUJITSU LIMITED
Marunouchi Center Bldg.
6-1, Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Mr. Gen Iseki
General Manager
Legal Division
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<PAGE> 5
(b) If to AMD, to:
(Mail)
ADVANCED MICRO DEVICES, INC.
P.O. Box 3453
Sunnyvale, CA 94088-3453
Attn: Marvin D. Burkett
Senior Vice President and
Chief Financial Officer
(Hand Delivery)
915 De Guigne Drive
Sunnyvale, CA
Attn: Marvin D. Burkett
Senior Vice President and
Chief Financial Officer
With a copy to:
(same addresses)
Attn: Thomas W. Armstrong, Esq.
Vice President, General Counsel and
Secretary
Each such notice or other communication shall for all
purposes hereunder be treated as effective or as having been
given as follows: (i) if delivered in person, when delivered
(ii) if sent by airmail, at the earlier of its receipt or at 5
p.m. local time of the recipient, on the seventh (7th) day after
deposit in a regularly maintained receptacle for the deposit of
airmail, and (iii) if sent by a recognized courier service, on
the date shown in the written confirmation of delivery issued by
such courier service. Either party may change the address(es)
and/or addressee(s) to whom notice must be given by giving notice
pursuant to this section at least seven days prior to the date
the change becomes effective.
1.6 Costs and Expenses. FUJITSU and AMD each shall bear
their own costs and expenses of the transactions contemplated
hereby.
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<PAGE> 6
1.7 Successors and Assigns. This Agreement shall inure to
the benefit of, and be binding on, the parties hereto and their
respective successors and assigns. This Agreement may not be
assigned by either party without the prior written consent of the
other party.
1.8 Entire Agreement; Modification. This Agreement and all
exhibits hereto and other documents delivered pursuant hereto
constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof, and
neither party shall be liable or bound to the other party in any
manner by any warranties, representations or covenants except as
specifically set forth herein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written
instrument signed by a corporate officer of the party against
whom enforcement of any such amendment, waiver, discharge or
termination is sought.
1.9 Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be executed by fewer
than all of the parties, each of which shall be enforceable
against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.
1.10 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision;
provided, that no such severability shall be effective if it
materially changes the economic impact of this Agreement on any
party.
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<PAGE> 7
1.11 Cooperation; Best Efforts. The parties agree to
cooperate and to use their best efforts to consummate the
purchase of Fujitsu Shares authorized by this Agreement. Such
cooperation shall include, but not be limited to, the diligent
and prompt filing and pursuit of all governmental consents,
reviews or clearances required by law to be obtained by either
party with respect to any or all purchases under this Agreement.
1.12 Governing Law, Language. This Agreement shall be
governed in all respects by the laws of Japan. This Agreement is
in the English language only, which shall be controlling in all
respects. No translations, if any, of this Agreement into
Japanese or any other language shall be of any force or effect in
the interpretation of this Agreement as to either party hereto or
in any determination of the interest of either of such parties.
1.13 Dispute Resolution.
(a) Any and all disputes arising under or
affecting this Agreement or any other agreement to be executed in
accordance herewith shall be resolved, except as expressly
provided otherwise in such other agreement, exclusively by
confidential arbitration pursuant to the rules of the Japan
Commercial Arbitration Association in Tokyo, Japan, or such other
location as may be agreed between the parties; provided, however,
that the arbitrators shall be empowered to hold hearings at other
locations within and without Japan. Each of the parties shall
designate one arbitrator and the two arbitrators so designated
shall select the third arbitrator. Arbitration proceedings shall
be conducted in English with simultaneous translation into
Japanese. Among the remedies available to them, the arbitrators
shall be authorized to require specific performance of provisions
of this Agreement. The judgment upon award of the arbitrators
shall be final and binding and may be enforced in any court of
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<PAGE> 8
competent jurisdiction in the United States or Japan, and each of
the parties hereto unconditionally submits to the jurisdiction of
such court for the purpose of any proceeding seeking such
enforcement. Subject only to the provisions of Applicable Law
and, except as aforesaid, the procedure described in this Section
1.13 shall be the exclusive means of resolving disputes arising
under or affecting this Agreement and all other agreements to be
executed in accordance herewith.
(b) All papers, documents or evidence, whether
written or oral, filed with or presented to the panel of
arbitrators shall be deemed by the parties and by the arbitrators
to be confidential information. No party or arbitrator shall
disclose in whole or in part to any other person any confidential
information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist
counsel in the arbitration or preparation for arbitration of the
dispute. Confidential information may be disclosed (i) to
attorneys, (ii) to parties, and (iii) to outside experts
requested by either party's counsel to furnish technical or
expert services or to give testimony at the arbitration
proceedings, subject, in the case of such experts, to execution
of a legally binding written statement that such expert agrees to
comply with the confidentiality terms of this Section, and that
such expert will not use any confidential information disclosed
to such expert for personal or business advantage.
1.14 Termination. If either party transfers its shares in
the Joint Venture pursuant to the Joint venture Agreement, or is
a Triggering Party under the Joint Venture Agreement, the other
party shall have the right to terminate this Agreement. This
agreement may be terminated by either party pursuant to the
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<PAGE> 9
rights given it under subsection 7.5.A of the Joint Venture
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers
as of the day and year first above written.
FUJITSU LIMITED
By: /s/ HIKOTARO MASUNAGA
________________________________
Hikotaro Masunaga
ADVANCED MICRO DEVICES, INC.
By: /s/ MARVIN D. BURKETT
_________________________________
Marvin D. Burkett
Chief Financial Officer
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<PAGE> 10
AMD INVESTMENT AGREEMENT
TABLE OF CONTENTS
<TABLE>
<S> <C>
1.1 Purchases of Fujitsu Securities . . . . . . . . . . . . . 1
1.2 Timing of Purchase. . . . . . . . . . . . . . . . . . . . 2
1.3 Timing of Permitted Resales or Transfers. . . . . . . . . 2
1.4 Information on Issuances. . . . . . . . . . . . . . . . . 2
1.5 Communications. . . . . . . . . . . . . . . . . . . . . . 3
1.6 Costs and Expenses. . . . . . . . . . . . . . . . . . . . 4
1.7 Successors and Assigns. . . . . . . . . . . . . . . . . . 5
1.8 Entire Agreement; Modification. . . . . . . . . . . . . . 5
1.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 5
1.10 Severability. . . . . . . . . . . . . . . . . . . . . . . 5
1.11 Cooperation; Best Efforts . . . . . . . . . . . . . . . . 6
1.12 Governing Law, Language . . . . . . . . . . . . . . . . . 6
1.13 Dispute Resolution. . . . . . . . . . . . . . . . . . . . 6
1.14 Termination . . . . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
i
<PAGE> 1
EXHIBIT 10.27(d)
FUJITSU INVESTMENT AGREEMENT
INVESTMENT AGREEMENT
of
FUJITSU LIMITED
investing in
ADVANCED MICRO DEVICES, INC.
March 26, 1993
Confidential portions of this document have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
<PAGE> 2
FUJITSU INVESTMENT AGREEMENT
This INVESTMENT AGREEMENT (the "Agreement") is made this
26th day of March, 1993 between FUJITSU LIMITED, a Japanese stock
company or kabushiki kaisha ("FUJITSU") and ADVANCED MICRO
DEVICES, INC., a Delaware corporation ("AMD").
RECITALS
WHEREAS, AMD and FUJITSU have entered into a Memorandum of
Understanding dated July 13, 1992 (the "MOU") regarding (a) the
formation, funding and implementation of a joint venture between
AMD and FUJITSU to manufacture integrated circuits and (b) the
purchase by each party of common stock of the other party and/or
its subsidiaries.
ARTICLE I
PURCHASES AND SALES OF AMD SHARES
1.1 Purchase of AMD Shares. Upon the terms and subject to
the conditions set forth in this Agreement, FUJITSU agrees to
purchase from AMD, and AMD agrees to sell to FUJITSU, up to
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] shares (the "AMD Shares") of
the $.01 par value common stock of AMD (the "AMD Common Stock");
provided that FUJITSU will not be required to purchase more than
five percent (5%) of the issued and outstanding shares of AMD
common stock. The AMD Shares shall be purchased and sold in
installments as set forth in Section 1.2 below, and the exact
number of AMD Shares to be sold and purchased and the price or
2
<PAGE> 3
prices at which such AMD Shares shall be sold and purchased shall
be determined pursuant to Section 1.4 below.
1.2 Timing of Purchases. The AMD Shares shall be sold and purchased in
nine (9) installments, as follows: (i) an initial sale and purchase of
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] shares (the "Initial Purchase") which shall be consummated
within thirty (30) business days following the Effective Date of the Joint
Venture Agreement, dated March 30, 1993, between the parties ("the Joint
Venture Effective Date"), as anticipated in the MOU, and (ii) eight (8)
additional sales and purchases of up to [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shares each
(collectively, the "Subsequent Purchases"), to be consummated by two (2) annual
purchases of such amount, the first such purchase to be consummated prior to
the last business day of the sixth (6th) month following the Joint Venture
Effective Date (the "First Subsequent Purchase") and the second annual purchase
to be consummated prior to the last business day of the twelfth (12th) month
following the Joint Venture Effective Date (the "Second Subsequent Purchase"),
with the Third through Eighth Subsequent Purchases being made in the same
manner as the First and Second Subsequent Purchases, i.e., prior to the last
business day of the eighteenth (18th), twenty-fourth (24th), thirtieth (30th),
thirty-sixth (36th), forty-second (42nd) and forty-eighth (48th) months,
respectively, following the Joint Venture Effective Date. Unless the parties
agree otherwise in writing, each of the purchases of AMD Shares authorized by
this Agreement shall be closed at the AMD main corporate offices, currently 915
DeGuigne Drive, Sunnyvale, California, at 9:00 a.m. local time on the date
designated herein for each purchase. If at the time or times scheduled for a
purchase of AMD Shares FUJITSU's financial
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<PAGE> 4
condition is so constrained that it would, in the good faith judgement
of FUJITSU, be imprudent for such purchase to be closed on the scheduled date,
FUJITSU shall notify AMD not less than thirty (30) days prior to the date
scheduled for such purchase. If such notice is given, the parties will
negotiate in good faith to reschedule the closing in question, but the
determination of the purchase price for such closing shall not be affected by
any such rescheduling. Participation in such negotiations shall not affect the
obligations of FUJITSU to effect the aggregate purchases of AMD Shares pursuant
to this section. FUJITSU will not be in default under this Agreement, the
Joint Venture Agreement, or other agreements between the parties, as a result
of failing to meet the closing schedule in question, so long as the aggregate
delay in meeting the original schedule for such purchases (as set forth in this
section 1.2) does not exceed twelve (12) months.
1.3 Manner of Sale. The offer and sale of the AMD Shares to FUJITSU
shall not be registered under Section 4(2) of the Securities Act of 1933, as
amended (the "1933 Act"). The AMD Shares shall not involve a public offering,
but shall be issued pursuant to an exemption under Section 4(2) of the 1933
Act. The AMD Shares when issued in accordance with this Agreement shall be
deemed to be "restricted shares" within the meaning of Rule 144 under the 1933
Act, the resale of which shall comply with applicable provisions of Article II
of the Agreement. The parties agree to cooperate with respect to the closing
of each installment purchase and to deliver and execute all such records,
documents and instruments necessary or desirable to facilitate each such sale
and purchase as either party shall reasonably request.
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<PAGE> 5
1.4 Purchase Price(s) of AMD Shares; Limitation on Total
Purchase Price and Total Number of AMD Shares. The purchase
price of each installment of the AMD Shares shall be payable in
United States dollars by wire transfer or otherwise as AMD shall
reasonably request, and: (i) for the Initial Purchase, shall be
equal to the number of AMD Shares acquired in the installment
times the average of the closing sales prices of AMD common stock
on the New York Stock Exchange for the sixty (60) trading days
ending on the Joint Venture Effective Date, and (ii) for the
First through Eighth Subsequent Purchases, the average of the
closing sales prices on the New York Exchange for the sixty (60)
trading days ending on the twentieth day of the month preceding
the month in which the purchase is scheduled, or if the Exchange
is not open for trading on such date, on the trading day
preceding such date. AMD shall provide FUJITSU with a
calculation of each such purchase price within three days
following the end of the relevant sixty-day period. Such
calculation shall be provided by facsimile, the numbers of which
shall be designated by Fujitsu in advance, as well as pursuant to
section 5.3 below. Notwithstanding the foregoing sentence,
FUJITSU shall not be required, except in its own discretion, to
pay for the AMD Shares acquired in the Initial Purchase and
Subsequent Purchases a total amount in excess of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] or an amount in excess of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] in any twelve-month period. In the event
the total purchase price of the AMD Shares exceeds [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] and FUJITSU elects not to pay more than
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] for the AMD Shares, the
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<PAGE> 6
number of AMD Shares which AMD shall be required to deliver to
FUJITSU shall be reduced proportionately.
1.5 Suspension of Obligation to Purchase. FUJITSU and AMD
are contemporaneously executing a separate agreement providing
for the purchase of Common Stock or bonds of FUJITSU by AMD.
Further, FUJITSU and AMD are parties to a Joint Venture Agreement
pursuant to which each party agrees to advance funds to the joint
venture if the joint venture is unable to secure necessary
financing. If AMD does not make any such advance when required
to do so, FUJITSU's obligations to purchase shares of AMD stock
pursuant to this Agreement shall be suspended until AMD makes
such advances, and the purchase dates and corresponding time
periods used to calculate the purchase prices as specified in
sections 1.2 and 1.4 shall be extended by the number of months
that Fujitsu's purchase obligation was suspended.
ARTICLE II
RESTRICTIONS ON RESALE AND VOTING OF AMD SHARES
2.1 No Rights of Registration, Repurchase, First Refusal or
Redemption. FUJITSU shall have no right at any time to require
AMD to register or qualify the sale of any of the AMD Shares
under the 1933 Act or the securities laws of any state, country
or other jurisdiction, or to include the AMD Shares under any
other registration by AMD of its securities. AMD shall have no
obligation to repurchase the AMD Shares or, except as provided
herein, in any manner to cooperate or assist in the resale of the
AMD Shares by FUJITSU to any other party. The AMD Shares shall
not be subject to redemption by AMD, and AMD shall have no right
or obligation, commonly known as a "right of first refusal" or
"right of first offer," to acquire any of the AMD Shares either
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<PAGE> 7
upon the terms and conditions first agreed upon by and between
FUJITSU and any other party or prior to any such agreement
relating to such terms and conditions.
2.2 Restricted Nature of AMD Shares; Legend; Manner and
Timing of Permitted Resales or Transfers.
(a) The AMD Shares shall be deemed to be "restricted
shares" within the meaning of Rule 144 under the 1933 Act, and
may not be resold, hypothecated, pledged, otherwise encumbered or
transferred by FUJITSU except as provided herein. In order to
assure compliance with this Agreement and with the 1933 Act and
regulations thereunder, AMD before delivering to FUJITSU
certificates representing the AMD Shares shall cause such
certificates to be legended with the following legend to indicate
the restrictions placed upon their resale or transfer:
THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS AS SET
FORTH IN AN AGREEMENT DATED MARCH 26, 1993, A
COPY OF WHICH IS ON FILE WITH THE SECRETARY
OF ADVANCED MICRO DEVICES, INC., AND MAY NOT
BE RESOLD PRIOR TO [DATE]*. THE SHARES
REPRESENTED BY THIS CERTIFICATE ARE DEEMED TO
BE RESTRICTED SHARES FOR PURPOSES OF RULE 144
UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). NO TRANSFER OF THESE SHARES MAY
BE MADE EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT, UNLESS
ADVANCED MICRO DEVICES HAS RECEIVED AN
OPINION OF COUNSEL SATISFACTORY TO IT THAT
SUCH TRANSFER DOES NOT REQUIRE REGISTRATION
UNDER THE ACT.
(b) The AMD Shares shall not be resold or transferred
by FUJITSU except pursuant to a valid and effective registration
- ----------
* [DATE] refers to the dates specified in 202(c), below
7
<PAGE> 8
thereof under the 1933 Act or an exemption from registration
which is available thereunder. AMD and/or its transfer agent
shall have the right to require, prior to resale or transfer
under any such exemption, that FUJITSU provide to AMD and for its
and/or its transfer agent's benefit an opinion of counsel, in
form and substance reasonably satisfactory to AMD, stating and
opining that registration is not required.
(c) Except as provided in subsections (d) and (e)
below, the AMD Shares may not be resold or transferred except in
the following manner. Up to [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
of the AMD Shares purchased in the Initial Purchase or any
Subsequent Purchase may be resold or transferred at any time
after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION] of the consummation of
such purchase. Up to an additional [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of such shares may be resold or transferred at any
time after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of the consummation
of such purchase
(d) FUJITSU may tender or sell any of the AMD Shares
then owned by it, without restriction under this Agreement, in
the event of, and in accordance with the terms and conditions of,
(i) a tender or exchange offer for shares of common stock of AMD
commenced by AMD, or (ii) a tender, exchange or other offer for
such shares of common stock commenced by a third party and
approved by the Board of Directors of AMD.
(e) Except for the resales or other transfers
permitted by subsections (c) or (d) above, FUJITSU may not
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<PAGE> 9
transfer any of the AMD Shares to any other person or entity
including an affiliate of FUJITSU, by gift or otherwise, without
the prior written consent of AMD. This restriction shall expire
on the earlier of [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], or
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PARTIES
3.1 Representations and Warranties of AMD. Except as
provided in Section 4.2(b) hereof, AMD does not make and shall
not be required to make to FUJITSU any representations or
warranties of any kind in connection with its sale of the AMD
Shares, including but not limited to representations or
warranties regarding the AMD Shares or the financial condition or
results of operations of AMD.
3.2 Representations and Warranties of FUJITSU.
(a) Except as provided in this Section 3.2 and in
Section 4.1(a) hereof, FUJITSU does not make and shall not be
required to make to AMD any representations or warranties of any
kind in connection with its purchases of the AMD Shares.
(b) FUJITSU represents and warrants to AMD as follows:
(i) FUJITSU is and shall be as of the closing
of each of the Initial Purchase and the Subsequent Purchases an
"accredited investor" within the meaning of Rule 501(a)(3) under
the 1933 Act.
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<PAGE> 10
(ii) FUJITSU is acquiring and will acquire the
AMD Shares for its own account for the purpose of investment and
not with a view to or for resale in connection with any
distribution thereof.
(iii) FUJITSU has such knowledge and experience
in financial and business matters as to be capable of evaluating
on its own the merits and risks of investment in the AMD Shares.
(iv) FUJITSU has had opportunity to ask
questions of and receive answers from AMD concerning the terms
and conditions of the offer and sale of the AMD Shares, and to
obtain all additional information from AMD which FUJITSU deems
necessary to verify the accuracy of the information contained in
the following, copies of which (including all exhibits filed with
or incorporated by reference therein except, at AMD's option, any
exhibit with respect to which confidential treatment has been
granted) FUJITSU acknowledges to have received from AMD:
(1) AMD's annual report on Form 10-K
filed with the Securities and Exchange Commission (the
"Commission") for its most recent fiscal year.
(2) AMD's filings with the Commission
on Forms 10-Q and 8-K since the filing of its report on Form 10-K
for the most recent fiscal year.
10
<PAGE> 11
ARTICLE IV
CONDITIONS TO CLOSINGS OF PURCHASES OF AMD SHARES
4.1 Conditions to AMD's Obligations. The obligations of
AMD to close the Initial Purchase and the Subsequent Purchases
shall be subject to the fulfillment of the following conditions,
any or all of which may be waived in writing by AMD:
(a) AMD shall have received from FUJITSU an officers'
certificate dated the date of closing in substantially the form
set forth in Exhibit A hereto, signed by an authorized
representative of FUJITSU who is at least department manager
management level ("bucho") or above.
(b) All required consents, clearances and permits of
any governmental entity applicable to the purchase shall have
been obtained and be in effect and not withdrawn, and all
applicable waiting periods shall have expired, including but not
limited to any consents or waiting periods required by the Hart-
Scott-Rodino Antitrust Improvements Act and Section 5021 of the
Omnibus Trade and Competitiveness Act of 1988 (50 U.S.C. App.
Section 2170) and regulations issued by the Department of the
Treasury thereunder.
(c) The Joint Venture Agreement shall have been
executed by the parties and be in full force and effect, and no
notice shall have been given by AMD to FUJITSU of any material
breach of this Agreement or the Joint Venture Agreement by
FUJITSU which shall not have been corrected to the reasonable
satisfaction of AMD.
(d) The agreement relating to the purchase of equity
of FUJITSU by AMD shall have been executed by the parties
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<PAGE> 12
thereto, and no notice shall have been given by AMD to FUJITSU of
any material breach thereof, that shall not have been corrected
to the reasonable satisfaction of AMD.
4.2 Conditions to FUJITSU's Obligations. The obligations
of FUJITSU to close the Initial Purchase and the Subsequent
Purchases shall be subject to the fulfillment of the following
conditions, any or all of which may be waived in writing by
FUJITSU:
(a) AMD shall continue to be listed on the New York
Stock Exchange, NASDAQ, or the American Stock Exchange, or any
successor of such exchange recognized by the U.S. Securities and
Exchange Commission.
(b) FUJITSU shall have received from AMD an officers'
certificate dated the date of closing in substantially the form
set forth in Exhibit B hereto, signed by an authorized
representative of AMD.
(c) All required consents, clearances and permits of
any governmental entity applicable to the purchase shall have
been obtained and be in effect and not withdrawn and all
applicable waiting periods shall have expired, including but not
limited to any consents or waiting periods required by the
Hart-Scott-Rodino Antitrust Improvements Act and Section 5021 of
the Omnibus Trade and Competitiveness Act of 1988 (50 U.S.C. App.
Section 2170) and regulations issued by the Department of the Treasury
thereunder.
(d) The Joint Venture Agreement shall have been
executed by the parties and be in full force and effect, and no
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<PAGE> 13
notice shall have been given by FUJITSU to AMD of any material
breach of this Agreement or the Joint Venture Agreement by AMD
which shall not have been corrected to the reasonable
satisfaction of FUJITSU.
(e) The agreement relating to the purchase of equity
of FUJITSU by AMD shall have been executed by the parties
thereto, and no notice shall have been given by FUJITSU to AMD of
any material breach thereof that shall not have been corrected to
the reasonable satisfaction of FUJITSU.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 Costs and Expenses. AMD and FUJITSU each shall bear
their own costs and expenses incurred with respect to this
Agreement, including but not limited to the costs and expenses of
each installment purchase of AMD Shares contemplated hereby.
5.2 Successors and Assigns. This Agreement shall inure to
the benefit of, and be binding upon, the parties hereto and their
respective successors and assigns. This Agreement may not be
assigned by either party without the prior written consent of the
other party.
5.3 Communications. All notices and communications
required, made or permitted hereunder shall be in writing and
shall be delivered by hand, or by messenger, or by recognized
courier service (with written receipt confirming delivery), or by
postage prepaid registered or certified airmail (return receipt
requested), addressed:
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<PAGE> 14
(a) If to FUJITSU, to:
FUJITSU LIMITED
Furukawa Sogo Bldg.
6-1, Marunouchi 2-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Hirohiko Kondo
General Manager,
Electronic Devices Marketing Division
with a copy to:
FUJITSU LIMITED
Marunouchi Center Bldg.
6-1, Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, Japan
Attn: Gen Iseki
General Manager, Legal Division
(b) If to AMD, to:
(Mail)
ADVANCED MICRO DEVICES, INC.
P.O. Box 3453
Sunnyvale, CA 94088-3453
Attn: Marvin D. Burkett
Senior Vice President,
Chief Financial Officer
(Hand Delivery)
ADVANCED MICRO DEVICES, INC.
915 DeGuigne Drive
Sunnyvale, CA
With a copy to:
(same addresses as above)
Attn: Thomas W. Armstrong, Esq.
Vice President, General Counsel and
Secretary
14
<PAGE> 15
Each such notice or other communication shall for all
purposes hereunder be treated as effective or as having been
given as follows: (i) if delivered in person, when delivered;
(ii) if sent by airmail, at the earlier of its receipt or at 5 pm
local time of the recipient, on the seventh day after deposit in
a regularly maintained receptacle for the deposit of airmail; and
(iii) if sent by recognized courier service, on the date shown in
the written confirmation of delivery issued by such delivery
service. Either party may change the addresses and/or addressees
to whom notice must be given by giving notice pursuant to this
section at least seven days prior to the date the change becomes
effective.
5.4 Entire Agreement; Modification. This Agreement and
all exhibits hereto and other documents delivered pursuant hereto
constitute the full and entire understanding and agreement
between the parties with regard to the subject matter hereof, and
neither party shall be liable or bound to the other party in any
manner by any warranties, representations or covenants except as
specifically set forth herein. Except as expressly provided
herein, neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated other than by a written
instrument signed by a corporate officer of the party against
whom enforcement of any such amendment, waiver, discharge or
termination is sought.
5.5 Captions. Headings of the various sections of this
Agreement have been inserted for convenience of reference only
and shall not be relied upon to limit the construction of this
Agreement.
15
<PAGE> 16
5.6 Counterparts. This Agreement may be executed in any
number of counterparts, each of which may be executed by fewer
than all of the parties, each of which shall be enforceable
against the parties actually executing such counterparts, and all
of which together shall constitute one instrument.
5.7 Severability. In the event that any provision of this
Agreement becomes or is declared by a court of competent juris-
diction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision;
provided, that no such severability shall be effective if it
materially changes the economic impact of this Agreement on any
party.
5.8 Governing Law, Language. This Agreement shall be
governed in all respects by the laws of the United States and the
State of Delaware. This Agreement is in the English language
only, which shall be controlling in all respects. No transla-
tion, if any, of this Agreement into Japanese or any other
language shall be of any force or effect in the interpretation of
this Agreement as to either party hereto or in any determination
of the intent of either of such parties.
5.9 Notice and Correction of Breach. Either party
believing that the other party has materially breached this
Agreement, prior to institution of any proceeding for specific
performance pursuant to Section 5.10, shall give notice to the
other party specifying the nature of the breach and requesting
that it be corrected. If within sixty (60) days after such
notice is given the accused party has not to the satisfaction of
the accusing party responded and materially commenced or
completed the correction of the breach asserted, the party giving
16
<PAGE> 17
notice may take such other action permitted to it by this
Agreement or in law or equity.
5.10 Dispute Resolution.
(a) Any and all disputes arising under or
affecting this Agreement or any other agreement to be executed in
accordance herewith shall be resolved, except as expressly
provided otherwise in such other agreement, exclusively by
confidential arbitration pursuant to the rules of the Japan
Commercial Arbitration Association in Tokyo, Japan, or such other
location as may be agreed between the parties; provided, however,
that the arbitrators shall be empowered to hold hearings at other
locations within and without Japan. Each of the parties shall
designate one arbitrator and the two arbitrators so designated
shall select the third arbitrator. Arbitration proceedings shall
be conducted in English with simultaneous translation into
Japanese. Among the remedies available to them, the arbitrators
shall be authorized to require specific performance of provisions
of this Agreement. The judgment upon award of the arbitrators
shall be final and binding and may be enforced in any court of
competent jurisdiction in the United States or Japan, and each of
the parties hereto unconditionally submits to the jurisdiction of
such court for the purpose of any proceeding seeking such
enforcement. Subject only to the provisions of Applicable Law
and, except as aforesaid, the procedure described in this Section
5.10 shall be the exclusive means of resolving disputes arising
under or affecting this Agreement and all other agreements to be
executed in accordance herewith.
(b) All papers, documents or evidence, whether
written or oral, filed with or presented to the panel of
arbitrators shall be deemed by the parties and by the arbitrators
to be confidential information. No party or arbitrator shall
17
<PAGE> 18
disclose in whole or in part to any other person any confidential
information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist
counsel in the arbitration or preparation for arbitration of the
dispute. Confidential information may be disclosed (i) to
attorneys, (ii) to parties, and (iii) to outside experts
requested by either party's counsel to furnish technical or
expert services or to give testimony at the arbitration
proceedings, subject, in the case of such experts, to execution
of a legally binding written statement that such expert agrees to
comply with the confidentiality terms of this Section, and that
such expert will not use any confidential information disclosed
to such expert for personal or business advantage.
5.11 Termination. If either party transfers its shares in
the Joint Venture pursuant to the Joint Venture Agreement, or is
a Triggering Party under the Joint Venture Agreement, the other
party shall have the right to terminate this Agreement. This
agreement may be terminated by either party pursuant to the
rights given it under subsection 7.5.A of the Joint Venture
Agreement.
5.12 Cooperation; Best Efforts. The parties agree to
cooperate and to use their best efforts to consummate all
purchases of AMD Shares authorized by this Agreement. Such
cooperation shall include, but not be limited to, the diligent
and prompt filing and pursuit of all governmental consents,
reviews or clearances required by law to be obtained by either
party with respect to any or all of the Initial Purchase and the
Subsequent Purchases.
18
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their duly authorized officers
as of the day and year first above written.
FUJITSU LIMITED
By /s/ HIKOTARO MASUNAGA
____________________________
Hikotaro Masunaga
ADVANCED MICRO DEVICES, INC.
By /S/ MARVIN D. BURKETT
_____________________________
Marvin D. Burkett
Chief Financial Officer
19
<PAGE> 20
EXHIBIT A
CLOSING CERTIFICATE OF OFFICERS
OF
FUJITSU LIMITED
I am the duly elected, qualified and acting
______________________ (bucho) of Fujitsu Limited, a Japanese stock
company ("Fujitsu").
I hereby certify that, to the best of my knowledge, the
representations and warranties contained in section 6.1 of the
Joint Venture Agreement by and between Advanced Micro Devices, Inc.
and Fujitsu, Limited, dated ___________ and the representations and
warranties contained in section 3.2 of the Investment Agreement of
Fujitsu Limited into Advanced Micro Devices, Inc., dated
____________, remain true and correct as of the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate on this
___ day of ____________, 199__.
20
<PAGE> 21
EXHIBIT B
CLOSING CERTIFICATE OF OFFICERS
OF
ADVANCED MICRO DEVICES, INC.
I am the duly elected, qualified and acting
______________________, of Advanced Micro Devices, Inc., a Delaware
corporation ("AMD").
I hereby certify that, to the best of my knowledge, the
representations and warranties contained in section 6.2 of the
Joint Venture Agreement by and between Advanced Micro Devices, Inc.
and Fujitsu, Limited, dated __________, and the representation and
warranties contained in section 3.1 of the Investment Agreement of
Fujitsu Limited into Advanced Micro Devices, Inc., dated
____________, remain true and correct as of the date hereof.
IN WITNESS WHEREOF, I have executed this Certificate on this
___ day of ________, 199___.
21
<PAGE> 22
FUJITSU INVESTMENT AGREEMENT
FUJITSU LIMITED
investing in
ADVANCED MICRO DEVICES, INC.
Table of Contents
<TABLE>
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
PURCHASES AND SALES OF AMD SHARES. . . . . . . . . . . . . . . 1
1.1 Purchase of AMD Shares . . . . . . . . . . . . . . . 1
1.2 Timing of Purchases. . . . . . . . . . . . . . . . . 2
1.3 Manner of Sale . . . . . . . . . . . . . . . . . . . 3
1.4 Purchase Price(s) of AMD Shares; Limitation on
Total Purchase Price and Total Number of AMD
Shares . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 Suspension of Obligation to Purchase.. . . . . . . . 5
RESTRICTIONS ON RESALE AND VOTING OF AMD SHARES. . . . . . . . 5
2.1 No Rights of Registration, Repurchase, First
Refusal or Redemption. . . . . . . . . . . . . . . . 5
2.2 Restricted Nature of AMD Shares; Legend; Manner and
Timing of Permitted Resales or Transfers . . . . . . 6
REPRESENTATIONS AND WARRANTIES OF THE PARTIES. . . . . . . . . 8
3.1 Representations and Warranties of AMD. . . . . . . . 8
3.2 Representations and Warranties of FUJITSU. . . . . . 8
CONDITIONS TO CLOSINGS OF PURCHASES OF AMD SHARES. . . . . . . 10
4.1 Conditions to AMD's Obligations. . . . . . . . . . . 10
4.2 Conditions to FUJITSU's Obligations. . . . . . . . . 11
MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 12
5.1 Costs and Expenses. . . . . . . . . . . . . . . . . 12
5.2 Successors and Assigns. . . . . . . . . . . . . . . 12
5.3 Communications. . . . . . . . . . . . . . . . . . . 12
5.4 Entire Agreement; Modification. . . . . . . . . . . 14
5.5 Captions. . . . . . . . . . . . . . . . . . . . . . 14
5.6 Counterparts. . . . . . . . . . . . . . . . . . . . 15
5.7 Severability. . . . . . . . . . . . . . . . . . . . 15
5.8 Governing Law, Language . . . . . . . . . . . . . . 15
5.9 Notice and Correction of Breach . . . . . . . . . . 15
5.10 Dispute Resolution. . . . . . . . . . . . . . . . . 16
5.11 Termination . . . . . . . . . . . . . . . . . . . . 17
5.12 Cooperation; Best Efforts . . . . . . . . . . . . . 17
</TABLE>
i
<PAGE> 1
EXHIBIT 10.27(e)
JOINT VENTURE LICENSE AGREEMENT
Confidential portions of this document have been deleted and
filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
<PAGE> 2
JOINT VENTURE LICENSE AGREEMENT
This Joint Venture License Agreement (this "Agreement"), dated as of
April 16, 1993, is among ADVANCED MICRO DEVICES, INC. ("AMD"), a
Delaware corporation having its principal office at 901 Thompson Place,
Sunnyvale, California 94088-3453, U.S.A., FUJITSU LIMITED ("Fujitsu"), a
Japanese corporation having its registered office at 1015 Kamikodanaka,
Nakahara-ku, Kawasaki 211, Japan, and FUJITSU AMD SEMICONDUCTOR LIMITED ("JV"),
a Japanese corporation having its registered office at 1263 Kamikodanaka,
Nakahara-ku, Kawasaki 211, Japan.
INTRODUCTION
A. Fujitsu and AMD have entered into a joint venture agreement dated
March 30, 1993 (the "Joint Venture Agreement"), and other related agreements
to establish JV to manufacture and supply certain integrated circuits.
B. Fujitsu is, among other things, in the business of designing,
developing, manufacturing and selling semiconductor products.
C. AMD is, among other things, in the business of designing, developing,
manufacturing and selling semiconductor products.
D. JV desires Fujitsu and AMD to grant to JV, and Fujitsu and AMD are
willing to grant to JV, a limited license to use their respective intellectual
property rights for manufacturing and supplying certain JV Products (as defined
in the Joint Development Agreement), subject to the terms and conditions as
hereinafter set forth.
E. JV desires to obtain from Fujitsu and AMD, and Fujitsu and AMD are
willing to supply JV, certain relevant technology, technical training and
support for such JV Products.
F. Fujitsu and AMD desire JV to grant to Fujitsu and AMD, and JV is
willing to grant to Fujitsu and AMD, a license to use JV's intellectual
property rights to make, use or sell products, subject to the terms and
conditions as hereinafter set forth.
ACCORDINGLY, in consideration of the mutual covenants and promises
contained herein, Fujitsu, AMD and JV agree as follows:
Article 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
1
<PAGE> 3
Section 1.1 The following words as used herein have the meanings
defined in the Technology Cross-License Agreement between AMD and Fujitsu
("Technology Cross-License") dated as of March 1993 (except that, for purposes
of this Agreement, references in Sections 1.9 and 1.25 of the Technology
Cross-License to "this Agreement" shall mean this Agreement).
<TABLE>
<CAPTION>
Technology Cross-
Definition License Section
---------- -----------------
<S> <C>
"Affiliate" 1.1.
"Applicable Law" 1.2.
"Confidential Information" 1.4.
"EPROM" or "Electrically Programmable
Read Only Memory" 1.7.
"Flash Memory" 1.8.
"Governmental Approvals" 1.9.
"Governmental Authority" 1.10.
"Incorporated Product" 1.11.
"Joint Development Agreement" 1.13.
"Memory Card" 1.20.
"Nondisclosure Agreements" 1.21.
"NVM" or "Non-Volatile Memory" 1.23.
"Other IPR" 1.24.
"Patents" 1.25.
"Pilot Product" 1.26.
"Proprietary Information" 1.28.
"Subsidiary" 1.33.
"Transitional Event" 1.34.
</TABLE>
Section 1.2. "AMD/Fujitsu Technology" shall mean the front-end
manufacturing process technology for manufacturing JV Products and the product
design data for JV Products owned or developed by Fujitsu and/or AMD and
provided or transferred to JV by AMD or Fujitsu in accordance with this
Agreement. The major elements of AMD/Fujitsu Technology to be provided are
currently anticipated as set forth in Attachment D hereto.
Section 1.3. "Effective Date" shall mean the later to occur of
(a) the date of this Agreement or (b) the date on which all required
Governmental Approvals have been obtained.
Section 1.4. "IPR" or "Intellectual Property Rights", (a) with
respect to Fujitsu or AMD, shall have the meaning set forth in the Technology
Cross-License, and (b) with respect to JV, shall mean all Patents of JV and all
copyrights, mask works, trade secrets, know-how, data, formula, processes,
confidential information, or other information, tangible or otherwise, that are
wholly owned by JV or as to which, and only to the extent and subject to the
conditions under which, JV has the right, as of the Effective Date or
thereafter during the term of this Agreement, to grant licenses or sublicenses
of the scope granted herein, without such grant resulting in the payment of
royalties or other consideration to third parties (unless and until JV is
reimbursed for any payments so made, in which case such information shall be
included within IPR for any license or sublicense to the party providing the
2
<PAGE> 4
reimbursement) except for payments to a Subsidiary of JV, if any, or payments
to third parties for IPR developed or created by such third parties while
employed by JV or any Subsidiary thereof.
Section 1.5. [Intentionally omitted]
Section 1.6. "JV Product" shall have the meaning set forth in
Section 1.4 of the Joint Development Agreement.
Section 1.7. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]
Section 1.8. "Subject Technology IPR" shall have the meaning
set forth in Section 1.6 of the Joint Development Agreement.
Section 1.9. "Tripartite IPR" shall mean IPR which, during the
term of this Agreement, all of AMD, Fujitsu, and JV jointly own and/or control
as a result of the joint development and design work done by all three parties
hereunder.
Article 2. GRANTS OF LICENSE.
Section 2.1. Fujitsu hereby grants to JV a non-exclusive, non-
transferable license under Fujitsu IPR, with no right to sublicense:
(a) to make, have made (it being understood that for purposes
of this Agreement the terms "make" and "have made" shall include the acts of
assembling and/or testing) and use JV Products and to use Pilot Products
anywhere in the world; and
(b) to sell, lease or otherwise dispose of JV Products and Pilot
Products solely in the countries specified in Attachment A.
Section 2.2. AMD hereby grants to JV a non-exclusive, non-
transferable license under AMD IPR, with no right to sublicense:
(a) to make, have made and use JV Products and to use Pilot
Products anywhere in the world; and
(b) to sell, lease and otherwise dispose of JV Products and
Pilot Products solely in the countries specified in Attachment B.
Section 2.3. JV hereby grants to AMD and Fujitsu a non-
exclusive, non-transferable, perpetual, irrevocable, [CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION],
worldwide license, with the right to sublicense freely, under JV IPR to make,
have made, use, sell, lease or otherwise dispose of any processes, manufacturing
apparatus, or products anywhere in the world.
3
<PAGE> 5
Section 2.4. JV agrees that it shall notify AMD and Fujitsu of
any significant modifications to AMD/Fujitsu Technology or JV technology.
Article 3. SUPPORT AND TRAINING.
Section 3.1. AMD and Fujitsu shall use their best efforts to
provide AMD/Fujitsu Technology to JV in accordance with the schedule set forth
in Attachment C hereto, as such schedule may be modified from time to time upon
mutual agreement of the parties.
Section 3.2. AMD and Fujitsu agree to cooperate with each other
and with JV in providing to JV the AMD/Fujitsu Technology.
Section 3.3. Either AMD or Fujitsu may, upon the consent of AMD
in the case of Fujitsu or Fujitsu in the case of AMD, provide JV with new
AMD/Fujitsu Technology as a replacement for previously provided AMD/Fujitsu
Technology.
Section 3.4. Each of Fujitsu and AMD shall use best efforts to
provide to JV without charge initial technical training or support as required
in connection with the delivery of AMD/Fujitsu Technology. Such technical
training shall be provided in accordance with a schedule to be mutually agreed
upon by the JV and the party responsible for providing such Technology, but in
any event such training or support shall last no longer than ninety (90) days
from the date of the first delivery of the relevant Technology.
Section 3.5. From time to time after the provision of technical
training or support contemplated by Section 3.4, JV may request and Fujitsu
and/or AMD, as the case may be, may provide, additional technical training or
support upon terms and conditions as agreed between or among Fujitsu and/or AMD
and the JV. The responsible party as set forth in Section 3.4 above shall be
responsible for such additional technical training or support.
Section 3.6. JV shall assign one or more of its employees to be
responsible for receiving and managing AMD/Fujitsu Technology, and shall notify
AMD and Fujitsu of the name of such employee(s) prior to the delivery of any
AMD/Fujitsu Technology. When JV changes such responsible employee(s), JV shall
notify Fujitsu and AMD of such change in writing without delay.
Article 4. CONSIDERATION.
Section 4.1. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 4.2. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 4.3. [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shall be payable
semi-annually within sixty (60) days after the end of each half of JV's fiscal
year.
4
<PAGE> 6
On or before the date of such payment JV shall send to Fujitsu and AMD a
report describing the basis for its [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] calculation.
Notwithstanding Sections 4.1 and 4.2 and any other provisions hereof, no
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] shall be payable by JV to a party on JV Products if such
JV Products do not embody, do not incorporate or are not otherwise subject to
(or are not manufactured through processes or methods that embody, incorporate
or are otherwise subject to) the IPR of such party, Subject Technology IPR, or
Tripartite IPR.
Section 4.4. JV shall pay to Fujitsu and/or AMD, as the case may
be, a fee for any technical training provided to JV by Fujitsu and/or AMD
pursuant to Section 3.5 at a rate to be mutually agreed by the JV, Fujitsu and
AMD, which shall include a fee for the services of any employees provided and
all actual costs incurred by Fujitsu and/or AMD, as the case may be, in
providing such training, including but not limited to, travel, hotel and per
diem expenses of such employee(s) and any costs of translation and reproduction
of written materials. JV shall pay such fee to Fujitsu and/or AMD, as the case
may be, within thirty (30) days of the date of the invoice issued by Fujitsu or
AMD.
Section 4.5. All payments made hereunder pursuant to Section 4.3
and 4.4 above shall be free and clear of all deductions, withholding taxes or
other charges, except as provided in Article 5, and shall be made by JV in
Japanese yen to Fujitsu or US dollars to AMD, by wire transfer to a bank
account(s) designated by Fujitsu or AMD, as the case may be, unless otherwise
mutually agreed upon. Any currency conversion required in connection with
payment to Fujitsu or AMD, as the case may be, shall be at the rate received by
JV at the time of such payment from the bank it utilizes to make such payment.
Section 4.6. Fujitsu and AMD shall each have the right, at its
own expense, upon reasonable notice and at reasonable times, but not more than
once each fiscal year for each party, to inspect, through an independent
auditor or another person reasonably acceptable to JV, JV's records for the
purpose of verifying the accuracy of JV's calculations of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]. JV shall keep records showing the JV Products sold or otherwise
disposed of under the licenses granted herein and the calculation of Net Sales
in sufficient detail to enable the [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] payable to Fujitsu or
AMD to be determined. Such records shall be maintained for a period of at
least [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION] after the date when payment is due by JV.
Section 4.7. In the event Fujitsu or AMD, as the case may be, is
required to pay a fee to a third party pursuant to any license agreement or
amendment to an existing license agreement for sublicensing such third party's
intellectual property rights to JV, JV shall be responsible for such fee to the
extent such fee is a separate [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] on sales by JV. Where
such fee is part of a general lump sum payment, the sublicensing party and JV
shall agree upon a mutually acceptable allocation of such payment.
5
<PAGE> 7
Section 4.8. The parties have established the [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] rates set forth in Sections 4.1 and 4.2 based on what they believe
are commercially appropriate arm's-length [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] rates given the
anticipated economic performance of JV. If the profits of JV exceed, or fall
short of, those reasonably contemplated by the parties, the parties agree to
make appropriate adjustments to the [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] rates.
Article 5. TAXATION.
Section 5.1. If required by applicable laws, JV may withhold
income tax from any payment to AMD or Fujitsu, as the case may be. In the case
of such withholding, JV shall, without delay, pay the withheld tax to the
appropriate tax office and furnish Fujitsu or AMD, as the case may be, with
appropriate evidence of the tax payment.
Section 5.2. JV shall bear all sales, use and other governmental
taxes or transaction charges imposed in any jurisdiction which arise in
connection with the delivery or use of AMD/Fujitsu Technology, or the
manufacture or sale of JV Products by JV hereunder.
Section 5.3. The parties agree that the tangible portion of the
property delivered and to be delivered by AMD to JV is valued at [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] and by Fujitsu to JV is valued at [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Article 6. INTELLECTUAL PROPERTY RIGHTS.
Section 6.1. Except as provided in Section 6.2, all Tripartite
IPR hereunder shall be jointly owned by JV, AMD and Fujitsu. None of the
parties hereto may file an application for a Patent, with respect to such
Tripartite IPR without the prior written consent of the other parties hereto.
The parties agree to cooperate in applying for, prosecuting and maintaining any
Patents as may be mutually agreed and in protecting such Tripartite IPR, and in
each case, to equally divide the expenses thereof. Except for the
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] payments required by Sections 4.1 and 4.2, each of
Fujitsu, AMD and JV shall have the right to make, have made, use and sell
products and processes using the Tripartite IPR and to license (except in case
of JV, any such license to be subject to appropriate Board of Directors
approval) Tripartite IPR without accounting to the other parties unless
otherwise mutually agreed upon in writing, except that neither Fujitsu, AMD nor
JV shall assign its ownership interest in any Tripartite IPR to a third party
without the prior written consent of the other parties.
Section 6.2. Where any technology related to JV Products is
developed independently by any party hereto, or by JV jointly with either
Fujitsu or AMD,
6
<PAGE> 8
without use of the Confidential Information of the other party(ies), in the
course of development and design work in accordance with the terms of this
Agreement, the ownership and the right to file for a Patent for such
technology shall rest solely with the party(ies) developing such technology.
All Other IPR and Proprietary Information in such technology shall be owned
jointly by the parties, shall be considered Tripartite IPR and shall be
subject to the provisions of this Agreement regarding Tripartite IPR. Pursuant
to the Technology Cross-License and the Joint Development Agreement and
Article 2 of this Agreement, each of Fujitsu, AMD, and JV will grant to the
others a license to the IPR covering any such technology developed
independently by such party and patented by such party in accordance with this
Section 6.2.
Article 7. EXCHANGE OF INFORMATION AND CONFIDENTIALITY.
Section 7.1. During the term of this Agreement, Fujitsu, AMD and
JV shall exchange their Confidential Information relevant to NVMs as necessary
(but only to the extent as legally permitted) to enable the parties to
cooperate fully in developing NVMs.
Section 7.2. Except as expressly authorized among the parties,
(including, without limitation, the exercise of the rights granted to a party
under this Agreement, the Technology Cross-License and the Joint Development
Agreement), each party agrees not to disclose, use or permit the disclosure or
use by others of any Confidential Information, unless and to the extent such
Confidential Information (i) is not marked or designated in writing as
confidential and is provided for a purpose that reasonably contemplates
disclosure to or use any others, (ii) or becomes a matter of public knowledge
through no action or inaction of the party receiving the Confidential
Information, (iii) was in the receiving party's possession before receipt from
the party providing such Confidential Information, (iv) is rightfully received
by the receiving party from a third party without any duty of confidentiality,
(v) is disclosed to a third party by the party providing the Confidential
Information without a duty of confidentiality on the third party, (vi) is
disclosed by the receiving party despite the exercise of the same degree of
care used by the receiving party to safeguard its own similar Confidential
Information, but the receiving party shall take all necessary steps to prevent
any further disclosure, (vii) is disclosed with the prior written approval of
the party providing such Confidential Information or (viii) is independently
developed by the receiving party without any use of the other party's
Confidential Information. Information shall not be deemed to be available to
the general public for the purpose of exclusion (ii) above with respect to each
party (x) merely because it is embraced by more general information in the
prior possession of recipient or others, or (y) merely because it is expressed
in public literature in general terms not specifically in accordance with the
Confidential Information.
Section 7.3. In furtherance, and not in limitation of the
foregoing Section 7.2, each party agrees to do the following with respect to
any such Confidential Information: (i) exercise the same degree of care to
safeguard the confidentiality of, and prevent the unauthorized use of, such
information as that party exercises to safeguard the confidentiality of its own
information, (ii) restrict disclosure of such information to those of its
employees, agents and sublicensees who have a "need to know", and (iii)
instruct and require such employees, agents and sublicensees to maintain the
confidentiality of such information and not to use such information except as
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<PAGE> 9
expressly permitted herein. Each party further agrees not to remove or
destroy any proprietary or confidential legends or markings placed upon any
documentation or other materials.
Section 7.4. The foregoing confidentiality obligation shall also
apply to the contents of this Agreement.
Section 7.5. The obligations under this Article 7 shall not
prevent the parties from disclosing the Confidential Information or the terms
of this Agreement to any government agency as required by law (provided that
the party intending to make such disclosure in such circumstances has given
prompt notice to the party providing such Confidential Information prior to
making such disclosure so that such party may seek a protective order or other
appropriate remedy prior to such disclosure and cooperates fully with such
other party in seeking such order or remedy).
Section 7.6. The obligations under this Article 7 shall apply
with respect to any Confidential Information for a period of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] from the date of disclosure of such Confidential Information to the
receiving party, unless, with respect to any particular Confidential
Information, the providing party in good faith notifies the receiving party
that a longer period shall apply, in which case the obligations under this
Article 7 with respect to such Confidential Information shall apply for such
longer period.
Article 8. RESIDENCE AT JV FACILITY.
Fujitsu and/or AMD shall be permitted to have a limited number
of engineers and technical personnel reside at JV's facilities at such party's
own cost to enhance information exchange among Fujitsu, AMD and JV. The number
of engineers, and technical personnel, shall be subject to JV's prior
reasonable approval. Any JV IPR obtained or learned by such engineers, and
technical personnel, during such period shall be included within the licenses
granted under Section 2.3.
Article 9. THIRD PARTY CLAIM.
Section 9.1. JV shall indemnify and hold harmless AMD, Fujitsu,
and their Subsidiaries from any loss or damages (including reasonable
attorney's fees) arising from any and all claims or actions brought against JV,
Fujitsu or AMD, based upon any JV Product sold by JV. JV shall control the
defense of such claims or actions and AMD and Fujitsu shall render reasonable
support to JV.
Section 9.2. Fujitsu and AMD shall indemnify and hold harmless
JV from any loss or damages (including reasonable attorney's fees) arising from
any and all claims or actions brought against JV based upon the AMD/Fujitsu
Technology as and to the extent hereinafter provided. With respect to
AMD/Fujitsu Technology that is owned jointly by AMD and Fujitsu, AMD and
Fujitsu shall jointly (but not severally) indemnify JV. With respect to
AMD/Fujitsu Technology that is transferred to JV and that is owned solely by
either AMD or Fujitsu, such transferring party shall indemnify JV. In the
8
<PAGE> 10
event of the joint indemnification, AMD and Fujitsu shall cooperate
fully in the defense of such claims or actions and the costs and expenses
(including any losses or damages (including reasonable attorney's fees)) shall
be shared equally. In the event the indemnity is by either AMD or Fujitsu, such
party shall control the defense of such claims or actions. The JV and the other
party shall render reasonable support to the party or parties indemnifying JV
hereunder.
Article 10. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS.
Section 10.1. Each of the parties hereto represents and warrants
to each other party that it has the right, and will continue during the term of
this Agreement to have the right, to grant to or for the benefit of the other
parties the rights and licenses granted hereunder in accordance with the terms
of this Agreement and such grant of rights and licenses does not, and will not
during the term of this Agreement, conflict with the rights and obligations of
such party under any other license, agreement, contract or other undertaking.
Each party shall indemnify, hold harmless and defend the other parties against
a breach by such party of this Section 10.1.
Section 10.2. Nothing contained in this Agreement shall be
construed as:
(a) a warranty or representation by any of the parties hereto
or its Subsidiaries sublicensed hereunder as to the validity or scope of any JV
IPR, Tripartite IPR, Fujitsu IPR or AMD IPR, as the case may be; or
(b) conferring upon any party hereto or its Subsidiaries
sublicensed hereunder any license, right or privilege under any patents,
utility models, design patents, copyrights, mask work rights or trade secrets
except the licenses, rights and privileges expressly granted hereunder; or
(c) a warranty or representation that any acts licensed or
sublicensed hereunder will be free from infringement of patents, utility
models, design patents, copyrights, mask work rights or trade secrets other
than those under which licenses, rights and privileges have been expressly
granted hereunder; or
(d) an arrangement to bring or prosecute actions or suits
against third parties for infringement or conferring any right to bring or
prosecute actions or suits against third parties for infringement; or
(e) conferring any right to use in advertising, publicity or
otherwise, any trademark, service mark, trade name or their equivalent, or any
contraction, abbreviation or simulation thereof, of either party hereto or
their Subsidiaries sublicensed hereunder.
Section 10.3. EXCEPT AS EXPRESSLY PROVIDED HEREIN, NONE OF THE
PARTIES HERETO MAKES ANY WARRANTIES, WHETHER EXPRESS OR OTHERWISE, CONCERNING
ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES, DESIGNS, DOCUMENTS OR INFORMATION
LICENSED OR OTHERWISE PROVIDED PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
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<PAGE> 11
PURPOSE, WARRANTIES OF FREEDOM FROM ERRORS OR DEFECTS, OR WARRANTIES OF
NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, AND NONE OF THE
PARTIES HERETO SHALL BE RESPONSIBLE FOR ANY INCIDENTAL, SPECIAL OR CONSEQUENTIAL
DAMAGES, HOWEVER CAUSED, ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY WAY
OUT OF THIS AGREEMENT OR ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES, DESIGNS,
DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED PURSUANT TO THIS
AGREEMENT.
Article 11. TERM AND TERMINATION.
Section 11.1. Term. This Agreement shall become effective as of
the Effective Date and, unless and until terminated hereunder, shall continue
until the occurrence of a Transitional Event, at which time this Agreement
shall terminate.
Section 11.2. Termination. Termination of this Agreement may
result from the events listed below. Each party agrees to give prompt written
notice to the other parties of the happening of any such event.
(a) If any party hereto defaults in the performance of any
material obligation hereunder, a non-defaulting party may give written notice
thereof and the parties shall discuss the problem arising from such default in
good faith and seek to resolve such problem. If such default is not corrected
or otherwise addressed by the defaulting party to the satisfaction of all of
the non-defaulting parties within ninety (90) days after the written notice of
such default then a non-defaulting party may, in addition to any other remedies
it or they may have, terminate this Agreement by written notice. This
Agreement shall terminate on the thirtieth (30th) day after such notice of
termination.
(b) Any party hereto may terminate this Agreement by giving
written notice of termination to the other parties at any time, upon or after:
(i) the filing by such other party of a petition in
bankruptcy or insolvency;
(ii) any adjudication that such other party is bankrupt or
insolvent;
(iii) the filing by such other party of any legal action or
document seeking reorganization, readjustment or arrangement of such other
party's business under any law relating to bankruptcy or insolvency;
(iv) the appointment of a receiver or bankruptcy trustee
for all or substantially all of the property of such other party;
(v) the making by such other party of any general
assignment for the benefit of creditors; or
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(vi) the institution of any proceedings for the liquidation
or winding up of such other party's business or for the termination of its
corporate charter, provided, in the event such proceedings are involuntary, the
proceedings are not dismissed within ninety (90) days.
(c) If at any time during the term of this Agreement, (i) AMD
or Fujitsu incurs in one transaction or a series of related transactions a
change in ownership of more than [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of its capital stock,
(ii) AMD or Fujitsu consolidates with or merges with or into another
corporation, partnership or other entity, whether or not such party is the
surviving entity of such transaction, unless immediately after such
consolidation or merger, shareholders of such party prior to the transaction
continue to own more than [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the outstanding
shares of stock entitled to vote for the election of directors of such new or
surviving entity, or (iii) AMD or Fujitsu sells, assigns or otherwise transfers
all or substantially all of the business or assets of such party relating to
its semiconductor merchant market business to a third party, any other party
may terminate this Agreement upon thirty (30) days' advance written notice to
the other parties, provided, in each case, that the terminating party must
exercise such right no later than one (1) year after receiving written notice
of such transaction from the affected party.
(d) In the event that a third party (other than a bank,
insurance company or other financial or investment company or institution)
acquires greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] ownership of AMD or Fujitsu and
either a position on the board of directors or a position of management in such
party, where such acquisition of ownership and management position or board
position in such party is judged by any other party hereto after careful
consideration to be detrimental to such other party, such other party may
terminate this Agreement upon thirty (30) days' advance written notice to such
party, provided that the terminating party must exercise such right not later
than one (1) year after receiving written notice of such transaction from the
affected party.
(e) AMD or Fujitsu may terminate this Agreement upon thirty
(30) days' written advanced notice to the other party and JV where such other
party ceases to own more than [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the issued and
outstanding capital stock of JV.
(f) In the event that a change occurs in the management of AMD
or Fujitsu as a result of a proxy solicitation contest, which change is judged
by any other party after careful consideration to be detrimental to the affairs
of JV, either of the other parties may terminate this Agreement upon thirty
(30) days' written advance notice to the other parties, provided that the
terminating party must exercise such right not later than one (1) year after
receiving written notice of such event from the affected party.
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Section 11.3. Effect of Termination.
(a) Except as otherwise provided in this Section 11.3, all
rights and obligations of the parties hereunder shall cease upon termination or
expiration of this Agreement, with the exception of the rights and obligations
of the parties under Articles 5, 6, 7, 9, 10, 11 and 12, and Sections 2.3, 4.6,
4.7 and 4.8 which shall survive termination or expiration of this Agreement.
(b) Upon termination of this Agreement for whatever reason, (i)
all IPR licensed pursuant to this Agreement prior to its termination shall
continue in full force and effect, and (ii) JV, Fujitsu and AMD shall (A)
jointly own all JV IPR and Tripartite IPR, (B) cooperate (if agreed by AMD and
Fujitsu) in applying for, prosecuting and maintaining any Patents, and
protecting such IPR developed prior to termination of this Agreement and
equally dividing the expenses thereof, and (C) except as otherwise provided in
Section 11.3.(c), have the unlimited right to use and to license such JV IPR
and Tripartite IPR and the right to make, have made, use, reproduce, modify,
distribute, sell, lease or otherwise dispose of any processes and products
based upon or incorporating such IPR without restriction or accounting to the
other party unless otherwise mutually agreed upon in writing, except that
neither Fujitsu nor AMD shall assign its ownership interest in any such IPR to
a third party without the prior written consent of the other party.
(c) [CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Article 12. MISCELLANEOUS.
Section 12.1. Force Majeure. No party shall be liable for
failure to perform, in whole or in material part, its obligations under this
Agreement if such failure is caused by any event or condition not existing as
of the date of this Agreement and not reasonably within the control of the
affected party, including, without limitation, by fire, flood, typhoon,
earthquake, explosion, strikes, labor troubles or other industrial
disturbances, unavoidable accidents, war (declared or undeclared), acts of
terrorism, sabotage, embargoes, blockage, acts of Governmental Authorities,
riots, insurrections, or any other cause beyond the control of the parties;
provided that the affected party promptly notifies the other parties of the
occurrence of the event of force majeure and takes all reasonable steps
necessary to resume performance of its obligations so interfered with.
Section 12.2. Assignment. Neither this Agreement nor any of the
rights and obligations created hereunder may be assigned, transferred, pledged,
or otherwise encumbered or disposed of, in whole or in part, whether
voluntarily or by operation of law, or otherwise, by any party without the
prior written consent of the other parties. This Agreement shall inure to the
benefit of and be binding upon the parties' permitted successors and assigns.
Section 12.3. Notices. All notices and communications required,
permitted or made hereunder or in connection herewith shall be in writing and
shall be mailed by first class, registered or certified mail (and if overseas,
by airmail), postage prepaid, or otherwise delivered by hand or by messenger,
or by recognized courier service (with written receipt confirming delivery),
addressed:
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<PAGE> 14
(a) If to FUJITSU, to:
Mail or Hand Delivery:
FUJITSU LIMITED
1015 Kamikodanaka, Nakahara-ku
Kawasaki-shi 211, JAPAN
Attn:Masaichi Shinoda
General Manager
Business Development Division
Electronic Devices
with a copy to:
Mail or Hand Delivery:
FUJITSU LIMITED
Marunouchi Center Bldg., 6-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, JAPAN
Attn:Gen Iseki
General Manager, Legal Division
(b) If to AMD, to:
Senior Vice President,
Operations Advanced Micro Devices, Inc.
P.O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Attn: Gene Conner
Mail:
Mikio Ishimaru, Esq.
Director of Technology Law
Advanced Micro Devices, Inc., MS 68
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Hand Delivery:
3625 Peterson Way
Santa Clara, CA 95054
U.S.A.
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<PAGE> 15
with a copy to:
Mail:
Senior Vice President, Operations
Advanced Micro Devices, Inc.
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Attn: Gene Conner
Hand Delivery:
915 DeGuigne Drive
Sunnyvale, CA 94086
U.S.A.
(c) If to JV:
Mail or Hand Delivery:
Fujitsu AMD Semiconductor, Limited
1015 Kamikodanaka
Nakahara-Ku
Kawasaki 211
Japan
Attn: Kimio Yanagida, President
with two copies to:
Mail or Hand Delivery:
FUJITSU LIMITED
1015 Kamikodanaka, Nakahara-ku
Kawasaki-shi 211, JAPAN
Attn:Masaichi Shinoda
General Manager
Business Development Division
Electronic Devices
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<PAGE> 16
with a copy to:
Mail or Hand Delivery:
FUJITSU LIMITED
Marunouchi Center Bldg., 6-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, JAPAN
Attn:Gen Iseki
General Manager, Legal Division
with two copies to:
Mail:
Mikio Ishimaru, Esq.
Director of Technology Law
Advanced Micro Devices, Inc., MS 68
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Hand Delivery:
3625 Peterson Way
Santa Clara, CA 95054
U.S.A.
with a copy to:
Mail:
Senior Vice President, Operations
Advanced Micro Devices, Inc.
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Attn: Gene Conner
Hand Delivery:
915 DeGuigne Drive
Sunnyvale, CA 94086
U.S.A.
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<PAGE> 17
Each such notice or other communication shall for all purposes hereunder
be treated as effective or as having been given as follows: (i) if delivered
in person, when delivered; (ii) if sent by mail or airmail, at the earlier of
its receipt or at 5 pm, local time of the recipient, on the seventh day after
deposit in a regularly maintained receptacle for the deposition of mail or
airmail, as the case may be; and (iii) if sent by recognized courier service,
on the date shown in the written confirmation of delivery issued by such
delivery service. Either party may change the address and/or addressee(s) to
whom notice must be given by giving appropriate written notice at least seven
(7) days prior to the date the change becomes effective.
Section 12.4. Export Control. Without in any way limiting the
provisions of this Agreement, each of the parties hereto agrees that no
products, items, commodities or technical data or information obtained from a
party hereto nor any direct product of such technical data or information is
intended to or shall be exported or reexported, directly or indirectly, to any
destination restricted or prohibited by Applicable Law without necessary
authorization by the Governmental Authorities, including (without limitation)
the Japanese Ministry of International Trade and Industry, the United States
Bureau of Export Administration (the "BEA") or other Governmental Authorities
of the United States with jurisdiction with respect to export matters. Without
limiting the generality of the foregoing, each party hereto agrees that it will
not, without authorization from the Office of Export Licensing of the BEA,
knowingly export or reexport to a destination outside of the United States
General License GTDR technical data or information of United States origin
subject to this Agreement, or the direct product thereof, or the product of a
plant or major component of a plant that is the direct product thereof, without
first providing any applicable export assurances to the exporting party.
Section 12.5. Arbitration.
(a) Any and all disputes arising under or affecting this
Agreement shall be resolved exclusively by confidential arbitration pursuant to
the rules of the Japan Commercial Arbitration Association in Tokyo, Japan, or
such other location agreed between the parties; provided, however, that the
arbitrators shall be empowered to hold hearings at other locations within or
without Japan. Fujitsu and AMD shall each designate one arbitrator and the two
arbitrators so designated shall select the third arbitrator. Arbitration
proceedings shall be conducted in English with simultaneous translations into
Japanese. The judgment upon award of the arbitrators shall be final and
binding and may be enforced in any court of competent jurisdiction in the
United States or Japan, and each of the parties hereto unconditionally submits
to the jurisdiction of such court for the purpose of any proceeding seeking
such enforcement. Subject only to the provision of Applicable Law, the
procedure described in this Section 12.5 shall be the exclusive means of
resolving disputes involving AMD and arising under this Agreement.
(b) All papers, documents or evidence, whether written or oral,
filed with or presented to the panel of arbitrators shall be deemed by the
parties and by the arbitrators to be Confidential Information. No party or
arbitrator shall disclose in whole or in part to any other person any
Confidential Information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist counsel in the
arbitration or preparation for arbitration of the dispute. Confidential
Information may be disclosed (i) to attorneys, (ii) to parties, and (iii) to
outside experts requested by any party's counsel to furnish technical or expert
services or to give testimony at the arbitration proceedings, subject, in the
case of such experts, to execution of a legally binding written statement that
such expert is fully familiar with the terms of this section, that such expert
agrees to comply with the confidentiality terms of this section, and that such
expert will not use any Confidential Information disclosed to such expert for
personal or business advantage.
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<PAGE> 18
Section 12.6. Entire Agreement. This Agreement, the Joint
Venture Agreement, the other Associated Agreements (as defined in the Joint
Venture Agreement), and the attachments and exhibits hereto and thereto, embody
the entire agreement and understanding between the parties with respect to the
subject matter hereof, superseding all previous and contemporaneous
communications, representations, agreements and understandings, whether written
or oral, including without limitation that certain Memorandum of Understanding
between Fujitsu and AMD dated July 13, 1992 and the Nondisclosure Agreements.
No party has relied upon any representation or warranty of any other party
except as expressly set forth herein, in the Joint Venture Agreement and in the
Associated Agreements.
Section 12.7. Modification. This Agreement may not be modified
or amended, in whole or part, except by a writing executed by duty authorized
representatives of all parties.
Section 12.8. Announcement. The parties may announce the
existence of the parties' relationship and this Agreement at a time and in a
form to be mutually determined. No party shall unreasonably withhold its
consent to a time proposed by any other party.
Section 12.9. Severability. If any term or provision of this
Agreement shall be determined to be invalid or unenforceable under Applicable
Law, such provision shall be deemed severed from this Agreement, and a
reasonable valid provision to be mutually agreed upon shall be substituted. In
the event that no reasonable valid provision can be so substituted, the
remaining provisions of this Agreement shall remain in full force and effect,
and shall be construed and interpreted in a manner that corresponds as far as
possible with the intentions of the parties as expressed in this Agreement.
Section 12.10. No Waiver. Except to the extent that a party
hereto may have otherwise agreed in writing, no waiver by that party of any
condition of this Agreement or breach by any other party of any of its
obligations or representations hereunder shall be deemed to be a waiver of any
other condition or subsequent or prior breach of the same or any other
obligation or representation by any other party, nor shall any forbearance by
the first party to seek a remedy for any noncompliance or breach by any other
party be deemed to be a waiver by the first party of its rights and remedies
with respect to such noncompliance or breach.
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<PAGE> 19
Section 12.11. Nature of Rights. Each party shall have the
rights licensed under this Agreement to any other party's technology and the
related IPR when created, developed or invented regardless of whether
physically delivered to such party. All rights and licenses granted under or
pursuant to this Agreement by a party ("licensor party") to another party
("licensee party") are, for purposes of Section 365(n) of the U.S. Bankruptcy
Code (the "Bankruptcy Code"), licenses of "intellectual property" within the
scope of Section 101 of the Bankruptcy Code. The parties agree that each
licensee party, as a licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the Bankruptcy
Code. The parties further agree that, in the event of the commencement of a
bankruptcy or insolvency proceeding by or against the licensor party, each
licensee party shall be entitled to a complete duplicate of (and complete
access to) any such intellectual property and all embodiments thereof. If not
already in the licensee party's possession, such licensee party has the right
to immediate delivery of such intellectual property and embodiments upon
written request of the licensee party (i) upon any such commencement of
bankruptcy proceedings, unless the licensor party or its representative or
trustee elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under clause (i) above, upon the rejection
of this Agreement by or on behalf of the licensor party.
Section 12.12. Tangible Property. The parties agree that the
tangible portion of the property delivered and to be delivered by AMD to
Fujitsu is valued at [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] and by Fujitsu to AMD is valued at
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION].
Section 12.13. Governing Law. The validity, construction,
performance and enforceability of this Agreement shall be governed in all
respects by the laws of the State of California, U.S.A.
Section 12.14. Language. This Agreement, and the attachments
hereto, are in the English language, which language shall be controlling in all
respects.
Section 12.15. No Agency or Partnership. This Agreement shall
not constitute an appointment of any party as the legal representative or agent
of any other party, nor shall any party have any right or authority to assume,
create or incur in any manner any obligation or other liability of any kind,
express or implied, against, in the name or on behalf of, any other party.
Nothing herein or in the transactions contemplated by this Agreement shall be
construed as, or deemed to be, the formation of a partnership, association,
joint venture, or similar entity by or among the parties hereto.
Section 12.16. Headings. The section and other headings
contained in this Agreement are for convenience of reference only and shall not
be deemed to be a part of this Agreement or to affect the meaning or
interpretation of this Agreement.
18
<PAGE> 20
Section 12.17. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed in triplicate by their duly authorized representatives on the date
set forth above.
ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED
/s/ GENE CONNER /s/ HIKOTARO MASUNAGA
By: Gene Conner By: Hikotaro Masunaga
Title: Senior Vice President, Operations Title: ManagingDirector
FUJITSU AMD SEMICONDUCTOR LIMITED
/s/ K. YANAGIDA
By: KIMO YANAGIDA
Title: President
19
<PAGE> 21
ATTACHMENT A
TO
JOINT VENTURE LICENSE AGREEMENT
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
20
<PAGE> 22
ATTACHMENT B
TO
JOINT VENTURE LICENSE AGREEMENT
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
21
<PAGE> 23
ATTACHMENT C
TO
JOINT VENTURE LICENSE AGREEMENT
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
22
<PAGE> 24
ATTACHMENT D
TO
JOINT VENTURE LICENSE AGREEMENT
1. Process Information
A. Basic Process Data
B. Manufacturing Specifications
C. Process Evaluation Data
2. Device Design Information for Each JV Product
A. Product Specifications
B. Design Data
C. Device Evaluation Data
23
<PAGE> 25
JOINT VENTURE LICENSE AGREEMENT
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 2
2. GRANTS OF LICENSE . . . . . . . . . . . . . . . . . . . . 3
3. SUPPORT AND TRAINING. . . . . . . . . . . . . . . . . . . 4
4. CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . 4
5. TAXATION. . . . . . . . . . . . . . . . . . . . . . . . . 6
6. INTELLECTUAL PROPERTY RIGHTS. . . . . . . . . . . . . . . 6
7. EXCHANGE OF INFORMATION AND CONFIDENTIALITY . . . . . . . 7
8. RESIDENCE AT JV FACILITY. . . . . . . . . . . . . . . . . 8
9. THIRD PARTY CLAIM . . . . . . . . . . . . . . . . . . . . 8
10. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS. . . . 9
11. TERM AND TERMINATION. . . . . . . . . . . . . . . . . . . 10
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 12
ATTACHMENT A . . . . . . . . . . . . . . . . . . . . . . . . . 20
ATTACHMENT B . . . . . . . . . . . . . . . . . . . . . . . . . 21
ATTACHMENT C . . . . . . . . . . . . . . . . . . . . . . . . . 22
ATTACHMENT D . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
i
<PAGE> 1
EXHIBIT 10.27(f)
JOINT DEVELOPMENT AGREEMENT
#################################################################
# Confidential portions of this document have been deleted and #
# filed separately with the Securities and Exchange Commission #
# pursuant to a request for confidential treatment. #
#################################################################
<PAGE> 2
JOINT DEVELOPMENT AGREEMENT
This Joint Development Agreement (this "Agreement"), dated as of March 26,
1993, is between ADVANCED MICRO DEVICES, INC. ("AMD"), a Delaware corporation
having its principal office at 901 Thompson Place, Sunnyvale, California
94088-3453, U.S.A. and FUJITSU LIMITED ("Fujitsu"), a Japanese corporation
having its registered office at 1015 Kamikodanaka, Nakahara-ku, Kawasaki 211,
Japan.
INTRODUCTION
A. Fujitsu and AMD are entering into a joint venture agreement (the
"Joint Venture Agreement") to be effective as therein provided and other
related agreements to establish a new Japanese joint venture corporation,
Fujitsu AMD Semiconductor Limited ("JV"), to manufacture and supply certain
integrated circuits subject to certain regulatory approvals and other
conditions precedent.
B. Fujitsu and AMD desire to cooperate fully to develop and transfer to
the JV certain design and process technologies necessary for JV to manufacture
and supply such integrated circuits.
ACCORDINGLY, in consideration of the mutual covenants and promises
contained herein, the parties agree as follows:
Article 1. DEFINITIONS.
As used in this Agreement, the following terms shall have the
following meanings:
Section 1.1.The following words as used herein have the meanings
defined in the Technology Cross-License Agreement ("Technology Cross-License")
between AMD and Fujitsu dated as of March 1993 (except that, for purposes of
this Agreement, the references in Sections 1.9 and 1.25 to "this Agreement"
shall mean this Agreement).
<TABLE>
<CAPTION>
Technology Cross-
Definition License Section
---------- ---------------
<S> <C>
"Affiliate" 1.1.
"Applicable Law" 1.2.
"Confidential Information" 1.4.
"EPROM" or "Electrically Programmable
Read Only Memory" 1.7.
"Flash Memory" 1.8.
"Governmental Approvals" 1.9.
"Governmental Authority" 1.10.
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
"IPR" or "Intellectual Property Rights" 1.12.
"Joint Venture License Agreement" 1.15.
"Nondisclosure Agreements" 1.21.
"NVM" or "Non-Volatile Memory" 1.23.
"Other IPR" 1.24.
"Patents" 1.25.
"Proprietary Information" 1.28.
"Subsidiary" 1.33.
"Transitional Event" 1.34.
</TABLE>
Section 1.2. "Commingled Technology" shall have the meaning
given such term in Section 9.1.
Section 1.3. "Effective Date" shall mean the later to occur of
(a) the date of this Agreement or (b) the date which all required Governmental
Approvals have been obtained.
Section 1.4. "JV Product" shall mean an NVM designated as a JV
Product pursuant to Section 2.1 herein.
Section 1.5. "Subject Technology" shall mean any technology
developed by Fujitsu and/or AMD in the course of the development and design
work conducted hereunder. It is understood by the parties that the Subject
Technology initially will consist of NVM eight-inch diameter wafer process
technologies with geometries of 0.5- micron and 0.35-micron, and device design
data for the JV Products. The major elements of the Subject Technology
currently anticipated are set forth in Attachment B hereto.
Section 1.6. "Subject Technology IPR" shall mean IPR that
covers or protects, or is contained, embodied or incorporated in, the Subject
Technology.
Article 2. GENERAL RULES FOR JOINT DEVELOPMENT.
Section 2.1. Joint Development Committee. Attachment A lists
the JV Products to be developed for, and manufactured and sold by, the JV. In
order to amend Attachment A to add or delete a JV Product, the parties shall
establish a committee consisting of engineering managers from each party (the
"Joint Development Committee") who may amend Attachment A prior to the
formation of the JV and make amendment recommendations to the board of
directors of the JV thereafter. The Joint Development Committee may also amend
Attachment B, catalog specifications, and Attachment C, scheduling. The Joint
Development Committee shall meet at the request of either party, or in the
absence of such request, semi-annually. The Joint Development Committee shall
agree unanimously before making any amendments or recommendations as provided
above.
Section 2.2. Development Teams. In order to develop the Subject
Technology, the parties shall establish as soon as practicable after the
Effective Date one or more process development teams and device design teams
consisting of engineers from each party. Fujitsu and AMD shall each assign a
team co-leader for each team. Either party may
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<PAGE> 4
change its team co-leaders from time to time upon thirty (30) days' written
notice to the other party.
Section 2.3. Cooperative Efforts. The parties shall fully
cooperate with each other in performing such development and design work and
will jointly conduct such work at the same location to the extent possible to
enable Fujitsu and AMD to develop a better understanding of each other's
technological culture and methodology. In the event that, during the term of
this Agreement, any portion of such work is required to be performed
independently by one party, such party shall provide the other party with
regular progress reports on the status of such work so that the other party
might join in such work and shall inform the other party of all results of such
work immediately upon its completion. In the event that development or design
work is performed at one party's facility or facilities, the other party may at
all reasonable times visit the facility or facilities, observe the development
or design work being performed, and bring back to such other party's facilities
all information and results obtained in the course of such work. The major
responsibilities of device design work for the initial JV Products are
specified in Attachment A hereto.
Section 2.4. Settlement of Technical Differences. If the
Development Teams have a difference of technical opinion in the course of
development and design work hereunder, the development teams shall resolve such
difference of opinion by mutual agreement with the goal of developing the best
Subject Technology and achieving the best productivity of JV Products for the
JV.
Section 2.5. Personnel Assignments. Fujitsu may assign
personnel to Fujitsu Microelectronics, Inc. or other Subsidiaries in the United
States, and AMD may assign personnel to its Subsidiaries in Japan, to carry out
the activities contemplated by this Agreement. Each party shall cooperate with
the other in arranging such assignments.
Article 3. TARGET SCHEDULE FOR JOINT DEVELOPMENT.
Attachment C hereto contains an initial schedule for the
development of Subject Technology (the "Target Schedule"). Fujitsu and AMD
agree to use their best efforts to adhere to the Target Schedule.
Article 4. PROCESS DEVELOPMENT.
Section 4.1. Development Steps for the 0.5 micron Process.
The development steps for the Subject Technology related to the 0.5-micron
process shall be as follows:
(a) The parties shall first compare and evaluate each unit
process of both parties' existing 0.5-micron wafer process to assess their
applicability to the production of JV Products at JV's facility.
(b) The parties shall then establish a target process flow for
the 0.5- micron wafer process for JV (the "0.5-micron JV Process") considering
the structural requirements of JV Products and, based upon the results of
Section 4.1(a) and upon mutual
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<PAGE> 5
discussion, the parties shall decide whether any of the following can be
adapted for the 0.5-micron JV process: (i) an existing unit process of either
party; (ii) a modified unit process of either party; or (iii) any
newly-developed unit process.
(c) In the event that (ii) or (iii) of Section 4.1(b) is
selected, the parties shall discuss and decide how to perform such modification
or development and at which facility the work will be performed (in case of
modification, the facility having the original unit process will be selected,
unless otherwise agreed by the parties).
(d) The parties shall then perform the necessary modifications
and developments in accordance with Section 4.1(c).
(e) The parties shall then assemble all unit processes
selected, modified and developed in accordance with Section 4.1(b) through
4.1(d) into the 0.5-micron JV Process at a mutually-agreed location or
locations, conduct a test run with a JV Product or a test chip on the
0.5-micron JV Process, and evaluate the results thereof (the test run will be
conducted at the site of the party designated in Attachment A, unless otherwise
agreed by the parties).
(f) If a test run does not succeed, the relevant process team
shall discuss the failure with the relevant device design team, apply the
necessary design changes or process adjustments and repeat the test run.
(g) Once both parties have confirmed the successful completion
of the 0.5-micron JV Process, the parties shall decide which party is
responsible for taking the lead in transferring the confirmed Subject
Technology to JV, including documentation for each unit process (in the case of
Section 4.1(b) (i) or (ii), the lead party will be the party that developed the
original unit process, unless otherwise agreed by the parties). A complete set
of such confirmed Subject Technology in tangible form shall be kept by each
party.
Section 4.2. Development Steps for the [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] Process. The development steps for the Subject Technology
related to the [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] process shall be as follows:
(a) The parties shall establish a target process flow for the
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION] wafer process for JV (the "[CONFIDENTIAL INFORMATION
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] JV
Process") considering the structural requirements of JV Products and, based
upon mutual discussion, the parties shall decide whether any of the following
can be adapted to a corresponding unit process for the [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] JV Process: (i) the then-existing unit process of the 0.5-micron
JV Process; (ii) a modified unit process of the 0.5-micron JV Process; (iii) a
then-existing unit process of either party; (iv) a modified unit process of
either party; or (v) any newly-developed unit process; and
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<PAGE> 6
(b) After Section 4.2(a), the parties shall proceed through
Sections 4.1(c) through 4.1(g) mutatis mutandis.
Article 5. PRODUCT DEVELOPMENT.
Section 5.1. Design Methodology. The parties shall compare and
evaluate both parties' existing design tools (e.g., CAD tools) and
methodologies to assess their relative effectiveness for jointly designing the
JV Products. If the parties agree, they will adopt an appropriate common
design tool and methodology for the purpose of jointly designing the JV
Products. If necessary, both parties shall jointly modify an existing design
tool (including libraries) or develop a new design tool considering the
features of the newly-developed 0.5-micron JV Process or [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] JV Process, as the case may be.
Section 5.2. Design Interface. The parties shall decide and
adopt machine-readable interface formats of design data (circuit data, layout
data and test data) for the purpose of transferring the design data to JV and
sharing the design results between both parties.
Section 5.3. Design Steps of JV Products. The design steps of
the JV Products shall be as follows:
(a) The parties shall develop the catalog specification of each
JV Product.
(b) The parties shall develop the architectural features and
functional and electrical characteristics of each JV Product. These internal
detailed specifications shall be determined by taking into account the
performance of the wafer sort tool and reliability assurance tool, customers'
requirements, the design and evaluation tool and the final test tool.
(c) Based upon such architectural, functional and electrical
characteristics, the parties shall generate and verify the circuit and physical
layout pattern of the JV Product.
(d) Based upon such circuit, the parties shall generate the
test specification and the test program conforming with such test specification.
(e) The parties shall conduct a test run of the JV Product on
the relevant JV Process and evaluate the results thereof.
(f) If a test run does not succeed, the relevant device design
team shall discuss the failure with the relevant process design team, apply the
necessary design changes or process adjustments and repeat the test run.
(g) Once both parties have confirmed the successful completion
of the JV Product, the parties shall decide which party is responsible for
taking the lead in transferring the confirmed design data, including
documentation thereof, to JV. A complete
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<PAGE> 7
set of such confirmed design data in tangible form shall be kept by each party.
If the lead party is not the party conducting the test run described in
Sections 5.3(e) and (f), the lead party shall conduct a test run on its own to
ensure its ability to support the contemplated technology transfer to JV.
Article 6. DEVELOPMENT COSTS.
Each party shall bear all costs incurred by such party in the
course of the development and design work contemplated by this Agreement.
Article 7. INTELLECTUAL PROPERTY RIGHTS.
Section 7.1. Pursuant to the Joint Venture License Agreement to
be entered into among Fujitsu, AMD and the JV, each of Fujitsu and AMD will
grant to the JV certain licenses to the technology being developed hereunder
and previously existing related technology.
Section 7.2. Pursuant to the Technology Cross-License, each of
Fujitsu and AMD will grant to the other certain licenses to the technology
being developed hereunder and previously existing related technology.
Section 7.3. Except as provided in Section 7.4 of this
Agreement, all Subject Technology IPR hereunder shall be jointly owned by
Fujitsu and AMD. Neither party hereto may file an application for a Patent
with respect to such Subject Technology IPR without the prior written consent
of the other party. The parties agree to cooperate in applying for,
prosecuting and maintaining any Patents, as may be mutually agreed and in
protecting such Subject Technology IPR, and, in each case, to equally divide
the expenses thereof. Each of Fujitsu and AMD shall have the right to make,
have made, use and sell products and processes using the Subject Technology IPR
and to license such Subject Technology IPR without restriction or accounting to
the other party unless otherwise mutually agreed upon in writing, except that
neither Fujitsu nor AMD shall assign its ownership interest in any Subject
Technology IPR to a third party without the prior written consent of the other
party.
Section 7.4. Where any technology included in the Subject
Technology IPR is developed independently hereunder by either party hereto,
without use of the Confidential Information of the other party, in the course
of development and design work conducted in accordance with the terms of this
Agreement, the ownership and the right to file for a Patent for such technology
shall rest solely with the party developing such technology. All Other IPR and
Propriety Information in such technology shall be owned jointly by the parties,
shall be considered Subject Technology IPR and shall be subject to the
provisions of this Agreement regarding jointly owned Subject Technology IPR.
Pursuant to the Technology Cross-License and the Joint Venture License, each of
Fujitsu and AMD will grant to the other and the JV a license to such IPR
covering any such technology developed independently by such party and patented
by such party in accordance with this Section 7.4.
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<PAGE> 8
Article 8. EXCHANGE OF INFORMATION AND CONFIDENTIALITY.
Section 8.1. During the term of this Agreement, Fujitsu and AMD
shall exchange their Confidential Information relevant to NVMs as necessary
(but only to the extent legally permitted) to enable the parties to cooperate
fully in developing NVMs.
Section 8.2. Except as expressly authorized by the other party
(including without limitation the exercise of the rights granted to a party
under this Agreement, the Technology Cross-License and the Joint Venture
License Agreement), each party agrees not to disclose, use or permit the
disclosure or use by others of any Confidential Information unless and to the
extent such Confidential Information (i) is not marked or designated in writing
as confidential and is provided for a purpose that reasonably contemplates
disclosure to or use by others, (ii) becomes a matter of public knowledge
through no action or inaction of the party receiving the Confidential
Information, (iii) was in the receiving party's possession before receipt from
the party providing such Confidential Information, (iv) is rightfully received
by the receiving party from a third party without any duty of confidentiality,
(v) is disclosed to a third party by the party providing the Confidential
Information without a duty of confidentiality on the third party, (vi) is
disclosed by the receiving party despite the exercise of the same degree of
care used by the receiving party to safeguard its own similar Confidential
Information, but the receiving party shall take all necessary steps to prevent
any further disclosure, (vii) is disclosed with the prior written approval of
the party providing such Confidential Information, or (viii) is independently
developed by the receiving party without any use of the other party's
Confidential Information. Information shall not be deemed to be available to
the general public for the purpose of exclusion (ii) above with respect to each
party (x) merely because it is embraced by more general information in the
prior possession of the receiving party or others, or (y) merely because it is
expressed in public literature in general terms not specifically in accordance
with the Confidential Information.
Section 8.3. In furtherance, and not in limitation of the
foregoing Section 8.2, each party agrees to do the following with respect to
any such Confidential Information: (i) exercise the same degree of care to
safeguard the confidentiality of, and prevent the unauthorized use of, such
information as that party exercises to safeguard the confidentiality of its own
Confidential Information; (ii) restrict disclosure of such information to those
of its employees, agents and sublicensees who have a "need to know"; and (iii)
instruct and require such employees, agents and sublicensees to maintain the
confidentiality of such information and not to use such information except as
expressly permitted herein. Each party further agrees not to remove or destroy
any proprietary or confidential legends or markings placed upon any
documentation or other materials.
Section 8.4. The foregoing confidentiality obligations shall
also apply to the contents of this Agreement.
Section 8.5. The obligations under this Article 8 shall not
prevent the parties from disclosing the Confidential Information or terms of
this Agreement to any government agency or body as required by law (provided
that the party intending to make such disclosure in such circumstances has
given the other party prompt notice prior to making such disclosure so that the
other party may seek a protective order or other appropriate
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<PAGE> 9
remedy prior to such disclosure and cooperates fully with such other party in
seeking such order or remedy).
Section 8.6. Notwithstanding anything else contained herein,
either party may disclose the catalog specifications generated under Section
5.3(a) to its potential customers.
Section 8.7. The obligations under this Article 8 shall apply
with respect to any Confidential Information for a period of [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] from the date of disclosure of such Confidential Information to the
receiving party unless, with respect to any particular Confidential
Information, the providing party in good faith notifies the receiving party
that a longer period shall apply, in which case the obligations under this
Article 8 with respect to such Confidential Information shall apply for such
longer period.
Article 9. USE OF PROPRIETARY INFORMATION AND COMMINGLED
TECHNOLOGY.
Section 9.1. [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Section 9.2. [CONFIDENTIAL INFORMATION OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION].
Article 10. THIRD PARTY CLAIM.
In the event any claim or action is brought against one party
based upon information received from the other party or the Subject Technology,
the party against whom the claim or action is brought shall defend at its sole
expense such claim or action and the other party shall render reasonable
support to such party.
Article 11. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS.
Section 11.1. Each party hereto represents and warrants to the
other party that it has the right, and will continue during the term of this
Agreement to have the right, to grant to or for the benefit of the other party
the rights and licenses granted hereunder in accordance with the terms of this
Agreement and such grant of rights and licenses does not, and will not during
the term of this Agreement, conflict with the rights and obligations of such
party under any other license, agreement, contract or other undertaking.
Notwithstanding Article 10, each party shall indemnify, hold harmless and
defend the other party against a breach by such party of this Section 11.1.
Section 11.2. Nothing contained in this Agreement shall be
construed as:
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<PAGE> 10
(a) a warranty or representation by any of the parties hereto
or its Subsidiaries sublicensed hereunder as to the validity or scope of any
IPR, including Subject Technology IPR.
(b) conferring upon either party hereto or its Subsidiaries any
licenses, right or privilege under any patents, utility models, design patents,
copyrights, mask work rights or trade secrets except the licenses, rights and
privileges expressly granted hereunder; or
(c) a warranty or representation that any acts permitted
hereunder will be free from infringement of patents, utility models, design
patents, copyrights, mask work rights or trade secrets other than those under
which licenses, rights and privileges have been expressly granted hereunder; or
(d) an arrangement to bring or prosecute actions or suits
against third parties for infringement or conferring any right to bring or
prosecute actions or suits against third parties for infringement; or
(e) conferring any right to use in advertising, publicity or
otherwise, any trademark, service mark, trade name or their equivalent, or any
contraction, abbreviation or simulation thereof, of either party hereto or
their Subsidiaries sublicensed hereunder.
Section 11.3. EXCEPT AS EXPRESSLY PROVIDED HEREIN,
NEITHER PARTY MAKES ANY WARRANTIES, WHETHER EXPRESS OR
OTHERWISE, CONCERNING ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES,
DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED
PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OR MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE, WARRANTIES OF FREEDOM FROM ERRORS OR DEFECTS, OR
WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL
PROPERTY RIGHTS, AND NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY
INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED,
ON ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY WAY
OUT OF THIS AGREEMENT OR ANY TECHNOLOGY, PRODUCTS, PROCESSES,
DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED
PURSUANT TO THIS AGREEMENT.
Article 12. TERM AND TERMINATION.
Section 12.1. Term. This Agreement shall become effective as of
the Effective Date and, unless and until terminated hereunder, shall continue
until the occurrence of a Transitional Event or termination of the Joint
Venture License Agreement, at which time this Agreement shall terminate.
Section 12.2. Termination. Termination of this Agreement may
result from the events listed below. Each party agrees to give prompt written
notice to the other party of the happening of any such event.
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<PAGE> 11
(a) In the event that the Joint Venture Agreement does not
become effective within one year from the date hereof, either party may
terminate this Agreement effective upon written notice to the other party.
(b) If any party hereto defaults in the performance of any
material obligation hereunder, the non-defaulting party may give written notice
thereof and the parties shall discuss the problem arising from such default in
good faith and seek to resolve such problem. If such default is not corrected
or otherwise addressed by the defaulting party to the satisfaction of the
non-defaulting party within ninety (90) days after the written notice of such
default, then the non-defaulting party may, in addition to any other remedies
it may have, terminate this Agreement by written notice. This Agreement shall
terminate on the thirtieth (30th) day after such notice of termination.
(c) Each party hereto may terminate this Agreement, by giving
written notice of termination to the other party at any time, upon or after:
(i) the filing by such other party of a petition in
bankruptcy or insolvency;
(ii) any adjudication that such other party is bankrupt or
insolvent;
(iii) the filing by such other party of any legal action
or document seeking reorganization, readjustment or arrangement of such other
party's business under any law relating to bankruptcy or insolvency;
(iv) the appointment of a receiver or bankruptcy trustee
for all or substantially all of the property of such other party;
(v) the making by such other party of any general
assignment for the benefit of creditors; or
(vi) the institution of any proceedings for the
liquidation or winding up of such other party's business or for the termination
of its corporate charter, provided, in the event such proceedings are
involuntary, the proceedings are not dismissed within ninety (90) days.
(d) If at any time during the term of this Agreement, (i) a
party incurs in one transaction or a series of related transactions a change in
ownership of more than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of its capital stock, (ii) a party
consolidates with or merges with or into another corporation, partnership or
other entity, whether or not such party is the surviving entity of such
transaction, unless immediately after such consolidation or merger shareholders
of such party prior to the transaction continue to own more than [CONFIDENTIAL
INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION] of the outstanding shares of stock entitled to vote for the
election of directors of such new or surviving entity, or (iii) a party sells,
assigns or otherwise transfers all or substantially all of the business or
assets of such party relating to its semiconductor merchant market business to
a third party, the other party may terminate this Agreement upon thirty (30)
days' advance written notice to such
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party, provided, in each case, that the terminating party must exercise
such right not later than one (1) year after receiving written notice from the
other party of such transaction.
(e) In the event that a third party (other than a bank,
insurance company or other financial or investment company or institution)
acquires greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] ownership of either party and
either a position on the board of directors or a position of management in such
party, where such acquisition of ownership and management position or board
position in such party is judged by the other party after a careful
consideration to be detrimental to such other party, such other party may
terminate this Agreement upon thirty (30) days' advance written notice to such
party, provided that the terminating party must exercise such right not later
than one (1) year after receiving written notice from the other party of such
transaction.
(f) Either party hereto may terminate this Agreement upon
thirty (30) days' written advance notice to the other party where such party
ceases to own more than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] of the issued and outstanding
capital stock of JV.
(g) In the event that a change occurs in the management of one
party as a result of a proxy solicitation contest, which change is judged by
the other party after careful consideration to be detrimental to the affairs of
JV, the other party may terminate this Agreement upon thirty (30) days' written
advance notice to such party, provided that the terminating party must exercise
such right not later than one (1) year after receiving written notice from the
other party of such event.
Section 12.3. Effect of Termination.
(a) Except as provided in this Section 12.3, all rights and
obligations of the parties hereunder shall cease upon termination or expiration
of this Agreement, with the exception of the rights and obligations of the
parties under Articles 6, 8, 9, 10, 11, 12 and 13, and Sections 7.3 and 7.4,
which shall survive termination or expiration of this Agreement.
(b) Upon termination of this Agreement, Fujitsu and AMD shall
(i) continue to jointly own all the jointly-owned Subject Technology IPR, (ii)
if agreed to by the parties, cooperate in applying for, prosecuting and
maintaining any Patents, and protecting such IPR developed prior to termination
of this Agreement and equally dividing the expenses thereof, and (iii) have the
unlimited right to use and to license such IPR and the right to make, have
made, reproduce, modify, distribute, sell, lease or otherwise dispose of any
processes and products based upon or incorporating such IPR without restriction
or accounting to the other party unless otherwise mutually agreed upon in
writing, except that neither Fujitsu nor AMD shall assign its ownership
interest in such IPR to a third party without the prior written consent of the
other party.
Article 13. MISCELLANEOUS.
Section 13.1. Force Majeure. Neither party shall be liable for
failure to perform, in whole or in material part, its obligations under this
Agreement if such failure is
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caused by any event or condition not existing as of the date of this
Agreement and not reasonably within the control of the affected party,
including, without limitation, by fire, flood, typhoon, earthquake, explosion,
strikes, labor troubles or other industrial disturbances, unavoidable
accidents, war (declared or undeclared), acts of terrorism, sabotage,
embargoes, blockage, acts of Governmental Authorities, riots, insurrections, or
any other cause beyond the control of the parties; provided, that the affected
party promptly notifies the other party of the occurrence of the event of force
majeure and takes all reasonable steps necessary to resume performance of its
obligations so interfered with.
Section 13.2. Assignment. Neither this Agreement nor any of
the rights and obligations created hereunder may be assigned, transferred,
pledged, or otherwise encumbered or disposed of, in whole or in part, whether
voluntary or by operation of law, or otherwise, by either party without the
prior written consent of the other party. This Agreement shall inure to the
benefit of and be binding upon the parties' permitted successors and assigns.
Section 13.3. Notices. All notices and communications
required, permitted or made hereunder or in connection herewith shall be in
writing and shall be mailed by first class, registered or certified air mail,
postage prepaid, or otherwise delivered by hand or by messenger, or by
recognized courier service (with written receipt confirming delivery),
addressed:
(a) If to FUJITSU, to:
Mail or Hand Delivery:
FUJITSU LIMITED
1015 Kamikodanaka, Nakahara-ku
Kawasaki-shi 211, JAPAN
Attn: Masaichi Shinoda
General Manager
Business Development Division
Electronic Devices
with a copy to:
Mail or Hand Delivery:
FUJITSU LIMITED
Marunouchi Center Bldg., 6-1
Marunouchi 1-chome
Chiyoda-ku, Tokyo 100, JAPAN
Attn: Gen Iseki
General Manager, Legal Division
(b) If to AMD, to:
Mail:
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Senior Vice President, Operations
Advanced Micro Devices, Inc.
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Attn: Gene Conner
Hand Delivery:
915 DeGuigne Drive
Sunnyvale, CA 94086
U.S.A.
with a copy to:
Mail:
Mikio Ishimaru, Esq.
Director of Technology Law
Advanced Micro Devices, Inc., MS 68
P. O. Box 3453
Sunnyvale, CA 94088-3453
U.S.A.
Hand Delivery:
3625 Peterson Way
Santa Clara, CA 95054
U.S.A.
Each such notice or other communication shall for all purposes hereunder
be treated as effective or as having been given as follows: (i) if delivered
in person, when delivered; (ii) if sent by airmail, at the earlier of its
receipt or at 5 pm, local time of the recipient, on the seventh day after
deposit in a regularly maintained receptacle for the deposition of airmail; and
(iii) if sent by recognized courier service, on the date shown in the written
confirmation of delivery issued by such delivery service. Either party may
change the addresss and/or addressee(s) to whom notice must be given by giving
appropriate written notice at least seven (7) days prior to the date the change
becomes effective.
Section 13.4. Export Control. Without in any way limiting the
provisions of this Agreement, each of the parties hereto agrees that no
products, items, commodities or technical data or information obtained from a
party hereto nor any direct product of such technical data or information is
intended to or shall be exported or reexported, directly or indirectly, to any
destination restricted or prohibited by Applicable Law without necessary
authorization by the Governmental Authorities, including (without limitation)
the Japanese Ministry of International Trade and Industry, the United States
Bureau of Export Administration (the "BEA") or other Governmental Authorities
of the United States with jurisdiction with respect to export matters. Without
limiting the generality of the foregoing, each party hereto agrees that it will
not, without authorization from the
13
<PAGE> 15
Office of Export Licensing of the BEA, knowingly export or reexport to a
destination outside of the United States General License GTDR technical data or
information of United States origin subject to this Agreement, or the direct
product thereof, or the product of a plant or major component of a plant that
is the direct product thereof, without first providing any applicable export
assurances to the exporting party.
Section 13.5. Arbitration.
(a) Any and all disputes arising under or affecting this
Agreement shall be resolved exclusively by confidential arbitration pursuant to
the rules of the Japan Commercial Arbitration Association in Tokyo, Japan, or
such other location agreed between the parties; provided, however, that the
arbitrators shall be empowered to hold hearings at other locations within or
without Japan. Each of the parties shall designate one arbitrator and the two
arbitrators so designated shall select the third arbitrator. Arbitration
proceedings shall be conducted in English with simultaneous translation into
Japanese. The judgment upon award of the arbitrators shall be final and
binding and may be enforced in any court of competent jurisdiction in the
United States or Japan, and each of the parties hereto unconditionally submits
to the jurisdiction of such court for the purpose of any proceeding seeking
such enforcement. Subject only to the provision of Applicable Law, the
procedure described in this Section 13.5 shall be the exclusive means of
resolving disputes arising under or affecting this Agreement.
(b) All papers, documents or evidence, whether written or oral,
filed with or presented to the panel of arbitrators shall be deemed by the
parties and by the arbitrators to be Confidential Information. No party or
arbitrator shall disclose in whole or in part to any other person any
Confidential Information submitted in connection with the arbitration
proceedings, except to the extent reasonably necessary to assist counsel in the
arbitration or preparation for arbitration of the dispute. Confidential
Information may be disclosed (i) to attorneys, (ii) to parties, and (iii) to
outside experts requested by either party's counsel to furnish technical or
expert services or to give testimony at the arbitration proceedings, subject,
in the case of such experts, to execution of a legally binding written
statement that such expert is fully familiar with the terms of this section,
that such expert agrees to comply with the confidentiality terms of this
section, and that such expert will not use any Confidential Information
disclosed to such expert for personal or business advantage.
Section 13.6. Entire Agreement. This Agreement, the Joint
Venture Agreement, the other Associated Agreements (as defined in the Joint
Venture Agreement), and the attachments and exhibits hereto and thereto, embody
the entire agreement and understanding between the parties with respect to the
subject matter hereof, superseding all previous and contemporaneous
communications, representations, agreements and understandings, whether written
or oral, including without limitation that certain Memorandum of Understanding
between Fujitsu and AMD dated July 13, 1992 and the Nondisclosure Agreements.
Neither party has relied upon any representation or warranty of the other party
except as expressly set forth herein, in the Joint Venture Agreement, and in
the Associated Agreements.
Section 13.7. Modification. This Agreement may not be modified
or amended, in whole or part, except by a writing executed by duly authorized
representatives of both parties.
14
<PAGE> 16
Section 13.8. Announcement. The parties may announce the
existence of the parties' relationship and this Agreement at a time and in a
form to be mutually determined. Neither party shall unreasonably withhold its
consent to a time proposed by the other party.
Section 13.9. Severability. If any term or provision of this
Agreement shall be determined to be invalid or unenforceable under Applicable
Law, such provision shall be deemed severed from this Agreement, and a
reasonable valid provision to be mutually agreed upon shall be substituted. In
the event that no reasonable valid provision can be so substituted, the
remaining provisions of this Agreement shall remain in full force and effect,
and shall be construed and interpreted in a manner that corresponds as far as
possible with the intentions of the parties as expressed in this Agreement.
Section 13.10. No Waiver. Except to the extent that a party
hereto may have otherwise agreed in writing, no waiver by that party of any
condition of this Agreement or breach by the other party of any of its
obligations or representations hereunder shall be deemed to be a waiver of any
other condition or subsequent or prior breach of the same or any other
obligation or representation by the other party, nor shall any forbearance by
the first party to seek a remedy for any noncompliance or breach by the other
party be deemed to be a waiver by the first party of its rights and remedies
with respect to such noncompliance or breach.
Section 13.11. Governing Law. The validity, construction,
performance and enforceability of this Agreement shall be governed in all
respects by their laws of the State of California, U.S.A.
Section 13.12. Nature of Rights. Each party shall have the
rights licensed under this Agreement to the other party's technology and
related IPR when created, developed or invented, regardless of whether
physically delivered to such party. All rights and licenses granted under or
pursuant to this Agreement by a party ("licensor party") to the other party
("licensee party") are, for purposes of Section 365(n) of the U.S. Bankruptcy
Code (the "Bankruptcy Code"), licenses of "intellectual property" within the
scope of Section 101 of the Bankruptcy Code. The parties agree that the
licensee party, as a licensee of such rights under this Agreement, shall retain
and may fully exercise all of its rights and elections under the Bankruptcy
Code. The parties further agree that, in the event of the commencement of a
bankruptcy or insolvency proceeding by or against the licensor party, the
licensee party shall be entitled to a complete duplicate of (and complete
access to) any such intellectual property and all embodiments thereof. If not
already in the licensee party's possession, the licensee party has the right to
immediate delivery of such intellectual property and embodiments upon written
request of the licensee party (i) upon any such commencement of bankruptcy
proceedings, unless the licensor party or its representative or trustee elects
to continue to perform all of its obligations under this Agreement, or (ii) if
not delivered under clause (i) above, upon the rejection of this Agreement by
or on behalf of the licensor party.
Section 13.13. Tangible Property. The parties agree that the
tangible portion of the property delivered and to be delivered by AMD to
Fujitsu is valued at [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION] and by Fujitsu to AMD is valued at
15
<PAGE> 17
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION].
Section 13.14. Language. This Agreement and the attachments
hereto are in the English language, which language shall be controlling in all
respects.
Section 13.15. No Agency or Partnership. This Agreement shall
not constitute an appointment of either party as the legal representative or
agent of the other party, nor shall either party have any right or authority to
assume, create or incur in any manner any obligation or other liability of any
kind, express or implied, against, in the name or on behalf of, the other
party. Nothing herein or in the transactions contemplated by this Agreement
shall be construed as, or deemed to be, the formation of a partnership,
association, joint venture or similar entity by or among the parties hereto.
Section 13.16. Headings. The section and other headings
contained in this Agreement are for convenience of reference only and shall not
be deemed to be a part of this Agreement or to affect the meaning or
interpretation of this Agreement.
Section 13.17. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which shall
be deemed to constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on the date set forth
above.
ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED
/s/ GENE CONNER /s/ HIKOTARO MASUNAGA
- ----------------------------- --------------------------
By: Gene Conner By: Hikotaro Masunaga
Title: Senior Vice President, Title: Managing Director
Operations
16
<PAGE> 18
ATTACHMENT A
TO
JOINT DEVELOPMENT AGREEMENT
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
17
<PAGE> 19
ATTACHMENT B
TO
JOINT DEVELOPMENT AGREEMENT
Major Items of Subject Technology
1. Process Information
A. Basic Process Data
a) Design rule
b) Transistor parameters
c) Process parameters
d) Mask sequence, etc.
B. Manufacturing Specifications
a) Process flow
b) Process conditions for each unit process, etc.
C. Process Evaluation Data
a) Reliability data on interconnection materials, etc.
2. Device Design Information for Each JV Product
A. Product Specifications
a) Catalog specification
b) Device full specification (internal specification)
c) Architectural information
B. Design Data
a) Circuits diagrams
b) Transistor-level circuits
c) Mask layout data
d) Mask layout data supplemental information
e) Test specification (wafer sort)
f) Test program (wafer sort)
C. Device Evaluation Data
a) Functional test results of samples
b) Electrical characteristics of samples
c) Reliability data of samples
d) Control parameters and their tolerance
18
<PAGE> 20
ATTACHMENT C
TO
JOINT DEVELOPMENT AGREEMENT
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION]
19
<PAGE> 21
JOINT DEVELOPMENT AGREEMENT
Table of Contents
<TABLE>
<S> <C>
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 1
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . 1
2. GENERAL RULES FOR JOINT DEVELOPMENT . . . . . . . . . . . 2
3. TARGET SCHEDULE FOR JOINT DEVELOPMENT . . . . . . . . . . 3
4. PROCESS DEVELOPMENT . . . . . . . . . . . . . . . . . . . 3
5. PRODUCT DEVELOPMENT . . . . . . . . . . . . . . . . . . . 5
6. DEVELOPMENT COSTS . . . . . . . . . . . . . . . . . . . . 6
7. INTELLECTUAL PROPERTY RIGHTS. . . . . . . . . . . . . . . 6
8. EXCHANGE OF INFORMATION AND CONFIDENTIALITY . . . . . . . 7
9. USE OF PROPRIETARY INFORMATION AND COMMINGLED
TECHNOLOGY. . . . . . . . . . . . . . . . . . . . . . . . 8
10. THIRD PARTY CLAIM . . . . . . . . . . . . . . . . . . . . 8
11. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS. . . . 8
12. TERM AND TERMINATION. . . . . . . . . . . . . . . . . . . 9
13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . 12
ATTACHMENT A . . . . . . . . . . . . . . . . . . . . . . . . . 17
ATTACHMENT B . . . . . . . . . . . . . . . . . . . . . . . . . 18
ATTACHMENT C . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
i
<PAGE> 1
EXHIBIT 10.30
ADVANCED MICRO DEVICES
EXECUTIVE SAVINGS PLAN
WHEREAS, ADVANCED MICRO DEVICES, INC. (the "Company")
desires to establish a deferred compensation plan to provide supplemental
retirement income benefits through deferrals of salary, commissions and
bonuses; and
WHEREAS, it is believed that the adoption of this plan
providing for deferred compensation at the election of each executive will be
in the best interests of the Company;
NOW, THEREFORE, it is hereby declared as follows:
ARTICLE I
TITLE AND DEFINITIONS
1.1 - Title.
This Plan shall be known as the Advanced Micro Devices
Executive Savings Plan.
1.2 - Definitions.
Whenever the following words and phrases are used in this
Plan, with the first letter capitalized, they shall have the meanings specified
below.
"Account" or "Accounts" shall mean a Participant's
Deferral Account and/or Company Matching Account.
"Beneficiary" means the person or persons, including a
trustee, personal representative or other fiduciary, last designated in writing
by a Participant and filed with the Committee in accordance with procedures
established by the Committee to receive the benefits specified hereunder in the
event of the Participant's death. If there is no valid Beneficiary designation
in effect, or if there is no surviving designated Beneficiary, then the
Participant's surviving spouse shall be the Beneficiary. If there is no
surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal
representative of the Participant's estate (which shall include either the
Participant's probate estate or living trust) shall be the Beneficiary. In any
case where there is no such personal representative of the Participant's estate
duly appointed and acting in that capacity within 90 days after the
Participant's death (or such extended period as the Committee determines is
reasonably necessary to allow such personal representative to be appointed, but
not to exceed 180 days after the Participant's death), then Beneficiary shall
mean the person or persons who can verify by affidavit
<PAGE> 2
or court order to the satisfaction of the Committee that they are legally
entitled to receive the benefits specified hereunder. In the event any amount
is payable under the Plan to a minor, payment shall not be made to the minor,
but instead be paid (a) to that person's living parent(s) to act as
custodian, (b) if that person's parents are then divorced, and one parent is
the sole custodial parent, to such custodial parent, or (c) if no parent of
that person is then living, to a custodian selected by the Committee to hold
the funds for the minor under the Uniform Transfers or Gifts to Minors Act in
effect in the jurisdiction in which the minor resides. If no parent is
living and the Committee decides not to select another custodian to hold the
funds for the minor, then payment shall be made to the duly appointed and curr
ently acting guardian of the estate for the minor or, if no guardian of the
estate for the minor is duly appointed and currently acting within 60 days
after the date the amount becomes payable, payment shall be deposited with
the court having jurisdiction over the estate of the minor.
"Board of Directors" or "Board" shall mean the Board of
Directors of the Company.
"Bonus" shall mean any incentive compensation, excluding
commissions, payable to a Participant in addition to the Participant's Salary.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Committee" shall mean the Retirement Savings Plan
Administrative Committee.
"Company" shall mean Advanced Micro Devices, any
successor corporation and each corporation which is a member of a controlled
group of corporations (within the meaning of Section 1563(a) of the Code,
determined without regard to Section 1563(a)(4) and (e)(3)(C) thereof and by
substituting the phrase "at least 50 percent" for the phrase "at least 80
percent" each time it appears in Section 1563(a)(1)) of which Advanced Micro
Devices is a component member.
"Company Matching Account" shall mean the bookkeeping
account maintained by the Committee for each Participant that is credited with
an amount equal to 50% of a Participant's Salary Deferrals (subject to certain
limitations) and interest pursuant to Section 4.2.
"Compensation" shall mean the Salary, commissions and
Bonus that the Participant is entitled to for services rendered to the Company.
2
<PAGE> 3
"Deferral Account" shall mean the bookkeeping account
maintained by the Committee for each Participant that is credited with amounts
equal to (1) the portion of the Participant's Salary and/or commissions that he
elects to defer, (2) the portion of the Participant's Bonus that he elects to
defer, and (3) interest pursuant to Section 4.1.
"Effective Date" shall mean August 1, 1993.
"Election Date" shall mean December 15 or such earlier
date as is specified by the Committee and communicated to the Participant with
at least thirty (30) days advance notice.
"Eligible Employee" shall mean each employee of the
Company who is at or above the level of director.
"Fiscal Year" shall mean the fiscal year of the Company.
"Fund" or "Funds" shall mean one or more of the mutual
funds or contracts selected by the Committee pursuant to Section 3.2(b).
"Initial Election Period" for an Eligible Employee shall
mean the 30-day period following the later of July 31, 1993 or the date the
employee becomes an Eligible Employee.
"Interest Rate" shall mean, for each Fund, an amount
equal to the gross rate of gain or loss on the assets of such Fund during the
month (1) reduced by administrative and investment fees charged to investors in
such Fund during the month and (2) further reduced by one-twelfth (1/12th) of
one percentage point.
"Loan Account" shall mean the bookkeeping account
maintained by the Committee for each Participant who obtains a hardship loan
from the Committee in accordance with Article VII that is credited with (1) an
amount equal to the amount of the loan and (2) interest pursuant to Section
7.1(d).
"Participant" shall mean any Eligible Employee who
elects to defer Compensation in accordance with Section 3.1.
"Payment Eligibility Date" shall mean the first day of
the month following the end of the fiscal quarter following the fiscal quarter
in which a Participant terminates employment or dies.
"Plan" shall mean the Advanced Micro Devices Executive
Savings Plan set forth herein, now in effect, or as amended from time to time.
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<PAGE> 4
"Plan Year" shall mean the 12 consecutive month period
beginning on January 1 each year, except that the first Plan Year shall be a
short Plan Year beginning on August 1, 1993 and ending on December 31, 1993.
"Salary" shall mean the Participant's base pay.
"Tax Adjustment Factor" shall mean a number, determined
by the Committee, which is equal to one minus the sum of (1) the highest
marginal federal personal income tax rate then in effect and (2) the effective
highest marginal state income tax rate in the state in which the Participant
resides, net after the effect of the deduction for such state income tax for
the federal income purposes.
ARTICLE II
PARTICIPATION
2.1 Participation.
An Eligible Employee shall become a Participant in the
Plan by electing to defer all or a portion of his or her Compensation in
accordance with Section 3.1.
ARTICLE III
DEFERRAL ELECTIONS
3.1 - Elections to Defer Compensation.
(a) General Rule. The amount of Compensation
which an Eligible Employee may elect to defer is as follows:
(1) Any percentage of Salary up to
50%, provided that such Eligible Employee's Salary is not
reduced to an amount less than the Social Security wage
base for the plan year; plus
(2) Any percentage or dollar amount of
Bonus and commissions up to 100%.
(b) Initial Election. Each Eligible Employee may
elect to defer Compensation by filing with the Committee an election, on a form
provided by the Committee, no later than the last day of his or her Initial
Election Period. An election to defer Compensation during an Initial Election
Period shall be irrevocable and shall be effective with respect to Salary and
commissions earned during the first pay period beginning after the later of
August 1, 1993, or
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<PAGE> 5
the date of the election, and to each Bonus the amount of which first becomes
fixed and determinable after the date of the election.
(c) Elections other than Elections during the
Initial Election Period. Any Eligible Employee who fails to elect to defer
Compensation during his or her Initial Election Period may subsequently become
a Participant, and any Eligible Employee who has terminated a prior Salary,
commissions or Bonus deferral election may elect to again defer Salary,
commissions or Bonuses or any combination thereof, by filing an appropriate
election, on a form provided by the Committee, to defer Compensation. An
election to defer Salary and/or commissions must be filed on or before the
Election Date and will be effective for Salary and/or commissions earned during
pay periods beginning after the following December 25. An election to defer a
portion of each Bonus for a Fiscal Year must be filed on or before the Election
Date preceding the date the Bonus first becomes fixed and determinable.
(d) Duration of Salary Deferral Election. Any Salary
deferral election made under paragraph (b) or paragraph (c) of this Section 3.1
shall remain in effect, notwithstanding any change in the Participant's Salary,
until changed or terminated in accordance with the terms of this paragraph (d);
provided, however, that such election shall terminate for Salary or commissions
paid while the Participant is not an Eligible Employee. A Participant may
increase, decrease or terminate his or her Salary and/or commission deferral
election, effective for Salary and/or commissions earned during pay periods
beginning after any December 25, by filing a new election, in accordance with
the terms of this Section 3.1, with the Committee on or before the preceding
Election Date.
(e) Duration of Bonus Deferral Election. Any
Bonus deferral election made under paragraph (b) or paragraph (c) of this
Section 3.1 shall be irrevocable and shall apply only to the Bonus or Bonuses
payable with respect to services performed during the Fiscal Year for which the
election is made. For each subsequent Fiscal Year, an Eligible Employee may
make a new election to defer a percentage of each of his or her Bonuses for
that Fiscal Year. Such election shall be on forms provided by the Committee
and shall be made on or before the Election Date of the Fiscal Year preceding
the Fiscal Year in which the Bonus otherwise would be paid.
5
<PAGE> 6
3.2 - Investment Elections.
(a) At the time of making the deferral elections
described in Section 3.1, the Participant shall designate, on a form provided
by the Committee, which of the types of mutual funds or contracts the
Participant's Accounts will be deemed to be invested in for purposes of
determining the amount of earnings to be credited to those Accounts. In making
the designation pursuant to this Section 3.2, the Participant may specify that
all or any 10% multiple of his or her Deferral Account or Company Matching
Account be deemed to be invested in one or more of the types of mutual funds or
contracts available. Effective as of the end of any calendar quarter, a
Participant may change the designation made under this Section 3.2 by filing an
election, on a form provided by the Committee, at least 30 days prior to the
end of such quarter. If a Participant fails to elect a type of fund under this
Section 3.2, he or she shall be deemed to have elected the Fund determined by
the Administrator to most closely approximate a money market fund.
(b) Although the Participant may designate the
type of mutual funds in paragraph (a) above, the Committee shall select from
time to time, in its sole discretion, a commercially available fund or contract
of each of the available types to be the Funds. The Interest Rate of each such
commercially available fund or contract shall be used to determine the amount
of earnings to be credited to Participants' Accounts under Article IV.
ARTICLE IV
PARTICIPANT ACCOUNTS
4.1 - Deferral Account.
The Committee shall establish and maintain a Deferral
Account for each Participant under the Plan. Each Participant's Deferral
Account shall be further divided into separate subaccounts ("mutual fund
subaccounts"), each of which corresponds to a mutual fund or contract elected
by the Participant pursuant to Section 3.2(a). A Participant's Deferral
Account shall be credited as follows:
(a) As of the last day of each month, the
Committee shall credit the mutual fund subaccounts of the
Participant's Deferral Account with an amount equal to Salary and/or
commissions deferred by the Participant during each pay period ending
in that month in accordance with the Participant's election under
Section 3.2(a); that is, the portion of the
6
<PAGE> 7
Participant's deferred Salary that the Participant has elected to be
deemed to be invested in a certain type of mutual fund shall be
credited to the mutual fund subaccount corresponding to that mutual
fund;
(b) As of the last day of the month in which the
Bonus or partial Bonus would have been paid, the Committee shall
credit the mutual fund subaccounts of the Participant's Deferral
Account with an amount equal to the portion of the Bonus deferred by
the Participant for such Plan Year in accordance with the
Participant's election under Section 3.2(a); that is, the portion of
the Participant's deferred Bonus that the Participant has elected to
be deemed to be invested in a particular type of mutual fund shall be
credited to the mutual fund subaccount corresponding to that mutual
fund; and
(c) As of the last day of each month, each mutual
fund subaccount of a Participant's Deferral Account shall be credited
with earnings in an amount equal to that determined by multiplying
the balance credited to such mutual fund subaccount as of the last
day of the preceding month by the Interest Rate for the corresponding
Fund selected by the Company pursuant to Section 3.2(b).
4.2 - Company Matching Account.
The Committee shall establish and maintain a Company
Matching Account for each Participant under the Plan. Each Participant's
Company Matching Account shall be further divided into separate mutual fund
subaccounts corresponding to the type of mutual fund or contract elected by the
Participant pursuant to Section 3.2(a). A Participant's Company Matching
Account shall be credited as follows:
(a) As of the last day of each Plan Year, the
Committee shall credit the mutual fund subaccounts of the
Participant's Company Matching Account with an amount equal to 50% of
the amount of the Salary deferred by the Participant during each pay
period ending in that Plan Year (the "Company Matching Amount") in
accordance with the Participant's election under Section 3.2(a); that
is, the portion of the Company Matching Amount which the Participant
elected to be deemed to be invested in a certain type of mutual fund
shall be credited to the corresponding mutual fund subaccount.
Notwithstanding the foregoing, in no event shall the Company Matching
Amount for a Plan Year, when combined with the maximum Company
Matching Contribution which the Participant could have received under
the Advanced Micro Devices, Inc. Retirement Savings Plan
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<PAGE> 8
for the same year (assuming deferrals at the maximum permissible
rate), exceed 1.5% of the Participant's Salary during such Plan Year.
(b) As of the last day of each month, each mutual
fund subaccount of a Participant's Company Matching Account shall be credited
with earnings in an amount equal to that determined by multiplying the balance
credited to such mutual fund subaccount as of the last day of the preceding
month by the Interest Rate for the corresponding Fund selected by the Company
pursuant to Section 3.2(b).
ARTICLE V
VESTING
5.1 - Deferral Account.
A Participant's Deferral Account shall at all times be
100% vested.
5.2 - Company Matching Account.
A Participant's Company Matching Account shall at all
times be 100% vested.
ARTICLE VI
DISTRIBUTIONS
6.1 - Amount and Time of Distribution.
Each Participant (or, in the case of his or her death,
Beneficiary) shall be entitled to receive a distribution of benefits under this
Plan as soon as practicable following his or her Payment Eligibility Date. The
amount payable to a Participant shall be the sum of the amount credited to his
or her Deferral Account and Company Matching Account as of his or her Payment
Eligibility Date. No amount credited to a Participant's Loan Account
established under Article VII shall be distributed to the Participant, but such
amount shall instead be forfeited, as provided in paragraph 7.1(f).
6.2 - Form of Distribution.
The form of the distribution of benefits to a Participant
(or his or her Beneficiary) shall be a cash lump sum payment.
8
<PAGE> 9
6.3 - Termination of Participation
The Company reserves the unilateral right to terminate a
Participant's participation at any time, and distribute all amounts due to such
Participant.
ARTICLE VII
PARTICIPANT LOANS
7.1 - Hardship Loans to Participants.
(a) Subject to the approval of the Committee and
guidelines promulgated by the Committee, each Participant may borrow from the
Company in order to meet a financial hardship to the Participant resulting from
(1) an illness or accident of the Participant or a dependent of the
Participant, (2) loss of the Participant's property due to casualty or (3)
other similar circumstances arising as a result of events beyond the control of
the Participant. Each loan made pursuant to this Section 7.1 shall be
evidenced by a note from the Participant on a form provided by the Committee.
Such note shall bear interest at a rate equal to that necessary to avoid
imputed interest under Sections 7872 and 1274(d) of the Code and have such
other terms as the Committee shall determine.
(b) The Committee may make a loan under this
Section 7.1 only if the amount of the loans outstanding does not exceed the
amount required to meet the immediate financial need created by such hardship
and does not exceed 65% of the combined balance of the Participant's Deferral
Account and Loan Account as of the first day of the month next following the
Committee's acceptance of the Participant's written application for a hardship
loan.
(c) The Committee shall, upon making a loan to a
Participant, establish and maintain a Loan Account for the Participant. The
Committee shall debit the mutual fund subaccounts maintained under the
Participant's Deferral Account on a pro-rata basis or on such other basis as
the Committee deems appropriate or desirable and shall credit the Participant's
Loan Account in an amount equal to the amount of the loan. The amount credited
to a Participant's Loan Account shall not be deemed to be invested as directed
by the Participant under Section 3.2(a) but shall be deemed to be invested in
the note given to the Company by the Participant under this Section 7.1.
(d) As of the last day of each month, the
Participant's Loan Account will be credited with interest for the period since
the last day of the preceding month,
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<PAGE> 10
calculated on the balance of the Loan Account as of such date, at the rate of
interest on the note as specified in paragraph (a) above.
(e) Upon any payment of principal and/or interest
on a loan made pursuant to this Section 7.1, the Committee shall debit the
Participant's Loan Account and shall credit the mutual fund subaccounts
maintained under the Participant's Deferral Account with the amount of such
payment on a pro-rata basis or on such other basis as the Committee deems
appropriate or desirable.
(f) Any outstanding balance in a Participant's
Loan Account on the Participant's Payment Eligibility Date shall be forfeited,
and the obligation to repay the hardship loan shall be cancelled.
ARTICLE VIII
ADMINISTRATION
8.1 - Committee Action.
The Committee shall act at meetings by affirmative vote
of a majority of the members of the Committee. Any action permitted to be
taken at a meeting may be taken without a meeting if, prior to such action, a
written consent to the action is signed by all members of the Committee and
such written consent is filed with the minutes of the proceedings of the
Committee. A member of the Committee shall not vote or act upon any matter
which relates solely to himself or herself as a Participant. The Chairman or
any other member or members of the Committee designated by the Chairman may
execute any certificate or other written direction on behalf of the Committee.
8.2 - Powers and Duties of the Committee.
(a) The Committee, on behalf of the Participants and
their Beneficiaries, shall enforce the Plan in accordance with its terms, shall
be charged with the general administration of the Plan, and shall have all
powers necessary to accomplish its purposes, including, but not by way of
limitation, the following:
(1) To determine all questions relating to
the eligibility of employees to participate;
(2) To select the funds or contracts to be
the Funds in accordance with Section 3.2(b) hereof;
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<PAGE> 11
(3) To construe and interpret the terms and
provisions of this Plan;
(4) To compute and certify to the amount and
kind of benefits payable to Participants and their Beneficiaries;
(5) To maintain all records that may be
necessary for the administration of the Plan;
(6) To provide for the disclosure of all
information and the filing or provision of all reports and statements
to Participants, Beneficiaries or governmental agencies as shall be
required by law;
(7) To make and publish such rules for the
regulation of the Plan and procedures for the administration of the
Plan as are not inconsistent with the terms hereof; and
(8) To appoint a plan administrator or, any
other agent, and to delegate to them such powers and duties in
connection with the administration of the Plan as the Committee may
from time to time prescribe.
8.3 - Construction and Interpretation.
The Committee shall have full discretion to construe and
interpret the terms and provisions of this Plan, which interpretation or
construction shall be final and binding on all parties, including but not
limited to the Company and any Participant or Beneficiary. The Committee shall
administer such terms and provisions in a uniform and nondiscriminatory manner
and in full accordance with any and all laws applicable to the Plan.
8.4 - Information.
To enable the Committee to perform its functions, the
Company shall supply full and timely information to the Committee on all
matters relating to the Compensation of all Participants, their death or other
cause of termination, and such other pertinent facts as the Committee may
require.
8.5 - Compensation, Expenses and Indemnity.
(a) The members of the Committee shall serve
without compensation for their services hereunder.
(b) The Committee is authorized at the expense of
the Company to employ such legal counsel as it may deem advisable to assist in
the performance of its duties
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<PAGE> 12
hereunder. Expenses and fees in connection with the administration of the Plan
shall be paid by the Company.
(c) To the extent permitted by applicable state
law, the Company shall indemnify and save harmless the Committee and each
member thereof, the Board of Directors and any delegate of the Committee who is
an employee of the Company against any and all expenses, liabilities and
claims, including legal fees to defend against such liabilities and claims
arising out of their discharge in good faith of responsibilities under or
incident to the Plan, other than expenses and liabilities arising out of
willful misconduct. This indemnity shall not preclude such further indemnities
as may be available under insurance purchased by the Company or provided by the
Company under any bylaw, agreement or otherwise, as such indemnities are
permitted under state law.
8.6 - Quarterly Statements.
Under procedures established by the Committee, a
Participant shall receive a statement with respect to such Participant's
Accounts as soon as practicable following the end of each calendar quarter.
ARTICLE IX
MISCELLANEOUS
9.1 - Unsecured General Creditor.
Participants and their Beneficiaries, heirs, successors,
and assigns shall have no legal or equitable rights, claims, or interest in any
specific property or assets of the Company. No assets of the Company shall be
held under any trust, or held in any way as collateral security for the
fulfilling of the obligations of the Company under this Plan. Any and all of
the Company's assets shall be, and remain, the general, unpledged, unrestricted
assets of the Company. The Company's obligation under the Plan shall be merely
that of an unfunded and unsecured promise of the Company to pay money in the
future, and the rights of the Participants and Beneficiaries shall be no
greater than those of unsecured general creditors.
9.2 - Restriction Against Assignment.
The Company shall pay all amounts payable hereunder only
to the person or persons designated by the Plan and not to any other person or
corporation. No part of a Participant's Accounts shall be liable for the
debts,
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<PAGE> 13
contracts, or engagements of any Participant, his or her Beneficiary, or
successors in interest, nor shall a Participant's Accounts be subject to
execution by levy, attachment, or garnishment or by any other legal or
equitable proceeding, nor shall any such person have any right to alienate,
anticipate, commute, pledge, encumber, or assign any benefits or payments
hereunder in any manner whatsoever. If any Participant, Beneficiary or
successor in interest is adjudicated bankrupt or purports to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge any distribution
or payment from the Plan, voluntarily or involuntarily, the Committee, in its
discretion, may cancel such distribution or payment (or any part thereof) to or
for the benefit of such Participant, Beneficiary or successor in interest in
such manner as the Committee shall direct.
9.3 - Withholding.
There shall be deducted from each payment made under the
Plan all taxes which are required to be withheld by the Company in respect to
such payment. The Company shall have the right to reduce any payment by the
amount of cash sufficient to provide the amount of said taxes.
9.4 - Amendment, Modification, Suspension or Termination.
The Company may amend, modify, suspend or terminate the
Plan in whole or in part, except that no amendment, modification, suspension or
termination shall reduce any amounts then allocated previously to a
Participant's Accounts. In the event that this Plan is terminated, the amounts
credited to a Participant's Deferral Account and Company Matching Account shall
be distributed to the Participant or, in the event of his or her death, to his
or her Beneficiary in a lump sum within thirty (30) days following the date of
termination.
9.5 - Governing Law.
This Plan shall be construed, governed and administered
in accordance with the laws of the State of California.
9.6 - Receipt or Release.
Any payment to a Participant or the Participant's
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Committee and the
Company. The Committee may require such Participant or Beneficiary, as a
condition precedent to such payment, to execute a receipt and release to such
effect.
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<PAGE> 14
9.7 - Headings, etc. Not Part of Agreement.
Headings and subheadings in this Plan are inserted for
convenience of reference only and are not to be considered in the construction
of the provisions hereof.
9.8 - Limitation on Participants' Rights.
Participation in this Plan shall not give any Eligible
Employee the right to be retained in the Company's employ or any right or
interest in the Plan other than as herein provided. The Company reserves the
right to dismiss any Eligible Employee without any liability for any claim
against the Company, except to the extent provided herein.
ARTICLE X
BENEFIT OFFSET
10.1 - Offset for Certain Benefits Payable Under Split-Dollar Life
Insurance Policies.
(a) Notwithstanding anything contained herein to
the contrary, any benefits payable under this Plan shall be offset by the value
of benefits received by the Participants under certain life insurance policies
as set forth in this Section. Participants in this Plan may own life insurance
policies (the "Policies") purchased on their behalf by the Company. The
exercise of ownership rights under these Policies by each Participant is,
however, subject to certain conditions (set forth in a "Split-Dollar Life
Insurance Agreement" between each Participant and the Company pursuant to which
the Company holds a security interest on the Policy) and, if the Participant
fails to meet the conditions set forth in the Split-Dollar Life Insurance
Agreement, the Company may exercise its security interest in the Policy and
cause the Participant to lose certain benefits under the Policy. In the event
that a Participant satisfies the conditions specified in Section 4 or 5 of the
Split-Dollar Life Insurance Agreement, so that the Participant or his or her
beneficiary becomes entitled to exercise rights under one of those sections
free from the Company's security interest, the value of those benefits shall
constitute an offset to any benefits otherwise payable under this Plan. As the
case may be, this offset (the "Offset Value") shall be equal to the value of
benefits payable under the Split- Dollar Life Insurance Agreement, that is, the
cash surrender value of the Policy or, in the case of the Participant's death,
the death benefit payable to the beneficiary under the Policy as limited by the
Split Dollar Agreement. The Offset Value shall then be compared to the
Participant's Accounts, and the amounts credited to the Accounts shall be
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<PAGE> 15
reduced, but not to less than zero, by the Offset Value. This offset shall
first be applied to the Participant's Company Matching Account and then to the
Participant's Deferral Account.
(b) If the Policy in subsection (a) is not on the
life of the Participant and the insured dies prior to distribution of benefits
under this Plan, then the value of the benefits received by the Participant
under the Policy will offset the Participant's Accounts under this Plan. This
offset ("Offset Value") shall be equal to the amount of death benefit payable
to the Participant divided by the Tax Adjustment Factor. This Offset Value
shall then be compared to the Participant's Accounts, and the amounts credited
to the Accounts shall be reduced, but not to be less than zero, by the Offset
Value. This offset shall first be applied to the Participant's Company
Matching Account and then to the Participant's Deferral Account.
IN WITNESS WHEREOF, the Company has caused this Executive
Savings Plan to be executed by its duly authorized officers on this _____ day
of ________, 19__.
ADVANCED MICRO DEVICES, INC.
By___________________________
Stanley Winvick
Senior Vice President,
Human Resources
By___________________________
Marvin D. Burkett
Senior Vice President
and Chief Financial Officer
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<PAGE> 1
EXHIBIT 10.31
SPLIT-DOLLAR LIFE INSURANCE AGREEMENT
This Agreement is entered into as of __________, 19__ by
and between Advanced Micro Devices, Inc. (the "Company") and
_______________________ ("Employee") in reference to the following facts:
1. Employee is a valued employee of __________
_______________________.
2. The Company has simultaneously with the
execution of this Agreement caused Manufacturer's Life Insurance Company (the
"Insurance Company") to issue policy number ___________________ (the "Policy")
on the life of Employee. Employee is the owner of the Policy. The first
three-month premium has been paid by the Company as of the date of this
Agreement.
3. For purposes of this Agreement, the Company
and its subsidiaries shall constitute the "Employer." For this purpose, a
subsidiary is a corporation of which the Company owns, directly or indirectly,
more than 50% of such corporation's outstanding securities. If Employee is
employed by a corporation which, as a result of a sale or other corporate
reorganization, ceases to be a subsidiary, such sale or other corporate
reorganization shall be treated as a termination of Employee by Employer
without Cause (as defined in Section 8) unless immediately following the event
and without any break in employment the Employee remains employed by the
Company or another corporation which is a subsidiary.
NOW THEREFORE, in consideration of the facts set forth
above and the various promises and covenants set forth below, the parties to
this Agreement agree as follows:
1. Ownership of Policy.
The Company acknowledges that Employee is the owner of the Policy and
that Employee is entitled to exercise all of his or her ownership rights
granted by the terms of the Policy, except to the extent that the power of the
Employee to exercise those rights is specifically limited by this Agreement.
Except as so limited, it is the expressed intention of the parties to reserve
to Employee all rights in and to the Policy granted to its owner by the terms
thereof, including, but not limited to, the right to change the beneficiary of
that portion of the proceeds to which the Employee is entitled under Section 4
of the Agreement and the right to exercise settlement options.
<PAGE> 2
2. The Company's Security Interest.
The Company's security interest in the Policy is conditioned upon its
satisfactorily performing all of the covenants under this Agreement. Each
period covered by any individual premium payment described in Section 3 shall
be considered a discrete extension of the Company's security interest in the
Policy. The Company shall not have nor exercise any right in and to the Policy
which could, in any way, endanger, defeat, or impair any of the rights of
Employee in the Policy, including by way of illustration any right to collect
the proceeds of the Policy in excess of the amount due the Company as provided
in this Agreement and in the Policy. The only rights in and to the Policy
granted to the Company in this Agreement shall be limited to the Company's
security interest in and to the cash value of the Policy, as defined herein,
and a portion of the death benefit of the Policy as hereinafter provided (the
"Security Interest"). The Company shall not assign any of its Security
Interest in the Policy to anyone other than Employee.
3. Premium payments.
So long as Employee is employed by the Employer and the Company's
Security Interest has not been released, the Company agrees to pay premiums
under the Policy in an amount such that cumulative premiums (not counting the
initial three months' premiums) received by the first of each month are at
least equal to the cumulative "cost of term insurance" (as defined under the
Policy) from the first anniversary through the end of the third month of
coverage provided by the initial three months' premium. The premium payment
shall be transmitted directly by the Company to the Insurance Company.
Consistent with the preceding sentences, prior to the release of the Company's
Security Interest in the Policy, Employee and the Company agree that the
Company shall from time to time designate one or more individuals (the
"Designee"), who may be officers of the Company, who shall be entitled to
adjust the death benefit under the Policy and to administer the investments
under the Policy; provided, however, that the Designee may only increase, but
not decrease, the death benefit in effect on the date that the Policy is
issued; provided further, that the Designee may only direct the investments
under the Policies in funds offered by the Insurance Company under the Policy.
During the period of time that this Agreement is in effect, Employee
irrevocably agrees that all dividends paid on the Policy shall be applied to
purchase from the Insurance Company additional paid up life insurance on the
life of Employee.
4. Death of Employee while employed by Employer.
(a) If Employee dies prior to termination of employment with
Employer and prior to his or her Security Release Date (as defined in Section
10 below), Employee's designated beneficiary
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<PAGE> 3
shall be entitled to receive as a death benefit an amount equal to three times
the Employee's annual base salary at the time of death, subject to a maximum
benefit of the lesser of (i) two million dollars ($2,000,000), or (ii) the
amount of insurance approved by Insurance Company. The amount described in the
preceding sentence shall be paid from the proceeds of the Policy; to the extent
such amount exceeds such proceeds, the difference shall be paid from any other
source that the Company may designate, which may be either another life
insurance policy on the life of Employee or the general assets of the Company.
To the extent that the death benefit under the Policy exceeds such amount, the
balance of the death benefit shall be payable to the Company. The designation
of the beneficiaries under the Policy shall be in accordance with this Section.
(b) Employee agrees that, during the period of this
Agreement, Employee will obtain and provide to the Company and/or the Insurance
Company the written consent of the spouse of the Employee, in the form attached
hereto as Exhibit C, to any designation by Employee of anyone other than the
Employee's spouse as the beneficiary to receive the benefits under this Section
4.
5. Employee's attaining his or her Security Release Date or termination
of Employee's employment on account of a Qualifying Termination.
(a) By making timely payment of the premiums described in
Section 3, the Company may renew its Security Interest in the Policy for the
period commencing with the due date of such payment until the later of (1) the
due date of the next payment described in Section 3, or (2) the date that
Employee attains his or her Security Release Date or terminates employment with
the Employer on account of a Qualifying Termination (either of which events
described in this clause 2 is referred to herein as a "Qualifying Event"). The
Company may not extend its Security Interest in the Policy under the Collateral
Security Assignment Agreement attached as Exhibit A after the occurrence of a
Qualifying Event. After such Qualifying Event, Employee shall be entitled to
exercise all of his or her ownership rights in the Policy without any
limitation and this Agreement and its accompanying Collateral Security
Assignment Agreement shall no longer constitute a restriction on Employee's
rights.
(b) Notwithstanding paragraph (a), the Company shall continue to
have its Security Interest in the Policy, to the extent required to satisfy its
withholding obligations as described in Section 12 and to recover any amounts
owed by Employee as described in paragraph (c) below.
(c) Employee agrees that if, at the time of the occurrence of
a Qualifying Event, Employee has any outstanding balances on any loans made by
the Company to Employee, then, unless Employee
3
<PAGE> 4
otherwise pays such outstanding balances, Employee shall cause, either by
withdrawing from or borrowing on a non-recourse basis against the Policy, to be
transferred to the Company, that portion of the cash value of the Policy which
is equal to the sum of the outstanding balances on all such loans.
6. Termination of an Employee for a reason other than a Qualifying
Termination.
If the employment of Employee with Employer is terminated prior to
his or her Security Release Date for a reason other than a Qualifying
Termination (as described below), Employee shall cause, either by withdrawing
from or borrowing against the Policy, on a nonrecourse basis, to be transferred
to the Company an amount equal to the maximum amount that may then be obtained
under the Policy; provided that, the amount to be transferred to the Company
shall be reduced to the extent the Employee has previously transferred to the
Company an amount equal to any difference that then exists between the cash
value of the Policy and the amount that may be borrowed against the Policy. In
no event shall Employee's voluntary resignation prior to attaining his or her
Security Release Date (as such concept is further defined below) ever
constitute a Qualifying Termination, except in certain situations following a
Change in Control (see Section 9).
7. Definition of a Qualifying Termination.
A Qualifying Termination is either of the following events: the
termination of Employee by Employer for any reason other than "Cause," as
described in Section 8; or the termination of Employee after a Change in
Control under the circumstances described in Section 9(a). Both of these
concepts are further defined below.
8. Qualifying Termination because Employee is terminated for a reason
other than "Cause".
For purposes of this Section, "Cause" shall mean (1) an act or acts
of dishonesty or moral turpitude (including but not limited to conviction of a
felony) taken by Employee which materially injures or damages the Employer;
(2) Employee's willful failure to substantially perform Employee's duties where
such willful failure results in demonstrable material injury and damage to the
Employer; (3) Employee's misrepresentation or concealment of a material fact
for the purpose of securing employment with the Employer; or (4) performance by
Employee which is substantially below the standard of performance which can
reasonably be expected from an individual occupying Employee's position or
Employee's substantially failing to meet performance objectives (such as
performance objectives relating to profit) which have been previously agreed to
between Employee and Employer.
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<PAGE> 5
9. Qualifying Termination on account of a Change in Control.
(a) A Qualifying Termination shall be treated as occurring on
account of a "Change in Control" (as defined below) if within six (6) months
prior to or 36 months following such Change in Control, either (1) Employee's
employment with the Employer is terminated without "Cause" (as defined in
Section 8) or (2) Employee terminates his or her employment with the Employer
for "Good Reason" (as defined in subsection (c) below).
(b) For purposes of this Section, a "Change in Control" shall mean a
change of control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act"), or in response to
any other form or report to the Securities and Exchange Commission or any stock
exchange on which the Company's shares are listed which requires the reporting
of a change of control. In addition, a Change of Control shall be deemed to
have occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company representing more than 20% of the
combined voting power of the Company's then outstanding securities; or (ii) in
any two-year period, individuals who were members of the Board of Directors
(the "Board') at the beginning of such period plus each new director whose
election or nomination for election was approved by at least two-thirds of the
directors in office immediately prior to such election or nomination, cease for
any reason to constitute at least a majority of the Board; or (iii) a majority
of the members of the Board in office prior to the happening of any event and
who are still in office after such event, determines in its sole discretion
within one year after such event, that as a result of such event there has been
a Change of Control. Not-withstanding the foregoing definition, "Change of
Control" shall exclude the acquisition of securities representing more than 20%
of the combined voting power of the Company by the Company, any of its
wholly-owned subsidiaries, or any trustee or other fiduciary holding securities
of the Company under an employee benefit plan now or hereafter established by
the Company. As used herein, the term "beneficial owner" shall have the same
meaning as under Section 13(d) of the Exchange Act and related case law.
(c) For purposes of this Section, "Good Reason" shall mean the
occurrence of one of the following events without Employee's consent:
(1) An adverse and significant change in the
Employee's position, duties,
responsibilities, or status with the
Employer, or a change in
5
<PAGE> 6
Employee's office location to a point which
is more than 30 miles from his or her office
location prior to the Change in Control.
(2) A reduction by the Employer in Employee's
base salary or incentive compensation
opportunity not agreed to by Employee; and
(3) The taking of any action by the Employer to
eliminate benefit plans without providing
substitutes therefor, to reduce benefits
thereunder or to substantially diminish the
aggregate value of incentive awards or other
fringe benefits.
(d) A termination of employment by Employee shall be for Good Reason
if one of the occurrences specified in paragraph (c) shall have occurred,
notwithstanding that Employee may have other reasons for terminating
employment, including employment by another employer which Employee desires to
accept.
10. Employee's attaining his or her Security Release Date.
(a) Employee's "Security Release Date" shall mean the later
of: (i) the date which is two years following the date on which the Company
receives from Employee a completed notice in the form attached hereto as
Exhibit B or (ii) the date specified in such notice as the Security Release
Date; provided that Employee continues to be employed by Employer until such
date. Employee's Security Release Date may be changed to a later date by a
subsequent election, but no more than twice, and may not be accelerated.
(b) Employee shall attain his or her Security Release Date upon
becoming disabled while employed by the Employer. Employee shall be considered
"disabled" at the time that the Administrator (as defined in Section 13(a)
below) determines, based upon competent medical advice, that an Employee is
incapable of rendering substantial services to the Employer by reason of mental
or physical disability.
(c) The Company's Security Interest in the Policy is
contingent upon the timely payment of premiums under Section 3 of this
Agreement. Each period covered by any individual premium payment shall be
considered an independent extension of the Company's Security Interest in the
Policy. In the event that the Company waives its rights by reason of failure
to make payments under Section 3 of this Agreement, Employee shall immediately
attain his or her Security Release Date. The Company's failure to extend its
rights in no way affects the Company's duties and obligations under this
Agreement.
6
<PAGE> 7
11. Limitation on Employee's rights prior to a Qualifying Event.
In order to protect the Company's Security Interest and
notwithstanding any other provisions in this Agreement, prior to a Qualifying
Event, Employee agrees that he or she will not modify the death benefit under
the Policy, borrow against the Policy, assign the Policy, direct the investment
of the cash surrender value of the Policy, or obtain any portion of the cash
value of the Policy. Notwithstanding the preceding sentence, if Section 6
applies to a termination, Employee may borrow or withdraw from the Policy, so
long as the borrowing or withdrawal request is submitted to the Insurance
Company along with a directive that the borrowed or withdrawn amount be
transferred directly to the Company.
12. Tax Withholding.
It is recognized by the parties that the rights of Employee in the
Policy (as modified by the Agreement) may cause Employee to be treated under
certain circumstances as in receipt of gross income. These circumstances may
also impose upon the Company an obligation to deduct and withhold federal,
state or local taxes. Unless Employee otherwise provides the Company the
amounts it is required to withhold, Employee shall cause, either by withdrawing
from or borrowing on a nonrecourse basis against the Policy, to be transferred
to the Company that portion of the cash value of the Policy which is equal to
the amount of any federal, state or local taxes required to be withheld.
13. Disputes.
(a) The Compensation Committee of the Board of Directors
shall be the "Administrator" if Employee is a member of the Board of Directors.
In all other cases, the plan administrator of the Corporation's 401(k) Plans
shall be the "Administrator." The Administrator (either directly or through
its designees) will have power and authority to interpret, construe, and
administer this Agreement (for the purpose of this section, the Agreement shall
include the Collateral Security Assignment Agreement); provided that, the
Administrator's authority to interpret this Agreement shall not cause the
Administrator's decisions in this regard to be entitled to a deferential
standard of review in the event that Employee or his or her beneficiary seeks
review of the Administrator's decision as described below.
(b) Neither the Administrator, its designee nor its advisors,
shall be liable to any person for any action taken or omitted in connection
with the interpretation and administration of this Agreement.
7
<PAGE> 8
(c) Because it is agreed that time will be of the essence in
detepmining whether any payments are due to Employee or his or her beneficiary
under this Agreement, Employee or his or her beneficiary may, if he or she
desires, submit any claim for payment under this Agreement or dispute regarding
the interpretation of this Agreement to arbitration. This right to select
arbitration shall be solely that of Employee or his or her beneficiary and
Employee or his or her beneficiary may decide whether or not to arbitrate in
his or her discretion. The "right to select arbitration" is not mandatory on
Employee or his or her beneficiary and Employee or his or her beneficiary may
choose in lieu thereof to bring an action in an appropriate civil court. Once
an arbitration is commenced, however, it may not be discontinued without the
mutual consent of both parties to the arbitration. During the lifetime of the
Employee only he or she can use the arbitration procedure set forth in this
section.
(d) Any claim for arbitration may be submitted as follows:
if Employee or his or her beneficiary disagrees with the Administrator
regarding the interpretation of this Agreement and the claim is finally denied
by the Administrator in whole or in part, such claim may be filed in writing
with an arbitrator of Employee's or beneficiary's choice who is selected by the
method described in the next four sentences. The first step of the selection
shall consist of Employee or his or her beneficiary submitting a list of five
potential arbitrators to the Administrator. Each of the five arbitrators must
be either (1) a member of the National Academy of Arbitrators located in the
State of California or (2) a retired California Superior Court or Appellate
Court judge. Within one week after receipt of the list, the Administrator
shall select one of the five arbitrators as the arbitrator for the dispute in
question. If the Administrator fails to select an arbitrator in a timely
manner, Employee or his or her beneficiary shall then designate one of the five
arbitrators as the arbitrator for the dispute in question.
(e) The arbitration hearing shall be held within seven days
(or as soon thereafter as possible) after the picking of the arbitrator. No
continuance of said hearing shall be allowed without the mutual consent of
Employee or his or her beneficiary and the Administrator. Absence from or
nonparticipation at the hearing by either party shall not prevent the issuance
of an award. Hearing procedures which will expedite the hearing may be ordered
at the arbitrator's discretion, and the arbitrator may close the hearing in his
or her sole discretion when he or she decides he or she has heard sufficient
evidence to satisfy issuance of an award.
(f) The arbitrator's award shall be rendered as expeditiously
as possible and in no event later than one week after the close of the hearing.
In the event the arbitrator finds that the Company has breached this Agreement,
he or she shall order the
8
<PAGE> 9
Company to immediately take the necessary steps to remedy the breach. The
award of the arbitrator shall be final and binding upon the parties. The award
may be enforced in any appropriate court as soon as possible after its
rendition. If an action is brought to confirm the award, both the Company and
Employee agree that no appeal shall be taken by either party from any decision
rendered in such action.
(g) Solely for purposes of determining the allocation of the
costs described in this subsection, the Administrator will be considered the
prevailing party in a dispute if the arbitrator determines (1) that the Company
has not breached this Agreement and (2) the claim by Employee or his or her
beneficiary was not made in good faith. Otherwise, Employee or his or her
beneficiary will be considered the prevailing party. In the event that the
Company is the prevailing party, the fee of the arbitrator and all necessary
expenses of the hearing (excluding any attorneys' fees incurred by the Company)
including stenographic reporter, if employed, shall be paid by the other party.
In the event that Employee or his or her beneficiary is the prevailing party,
the fee of the arbitrator and all necessary expenses of the hearing (including
all attorneys' fees incurred by Employee or his or her beneficiary in pursuing
his or her claim), including the fees of a stenographic reporter if employed,
shall be paid by the Company.
14. Collateral Security Assignment of Policy to the Company.
In consideration of the promises contained herein, the Employee has
contemporaneously herewith granted the Security Interest in the Policy to the
Company as collateral, under the form of Collateral Security Assignment
attached hereto as Exhibit A, which Collateral Security Assignment gives the
Company the limited power to enforce its rights to recover the cash value of
the Policy under the circumstances defined herein, or a portion of the death
benefit thereof. The Company's Security Interest in the Policy shall be
specifically limited to the rights set forth above in this Agreement,
notwithstanding the provisions of any other documents including the Policy.
Employee agrees to execute any notice prepared by the Company requesting a
withdrawal or non-recourse loan in an amount equal to the amount to which the
Company is entitled under Sections 5, 6 or 12 of this Agreement.
15. Employee's beneficiary rights and security interest.
(a) The Company and Employee intend that in no event shall
the Company have any power or interest related to the Policy or its proceeds,
except as provided herein and in the Collateral Security Assignment. In the
event that the Company ever receives or may be deemed to have received any
9
<PAGE> 10
right or interest in the Policy or its proceeds beyond the limited rights
described herein and in the Collateral Security Assignment, such right or
interest shall be held in trust for the benefit of Employee and be held
separate from the property of the Company.
(b) In order to further protect the rights of the Employee, the
Company agrees that its rights to the Policy and proceeds thereof shall serve
as security for the Company's obligations as provided in this Agreement to
Employee. The Company grants to Employee a security interest in and
collaterally assigns to Employee any and all rights the Company has in the
Policy, and products and proceeds thereof whether now existing or hereafter
arising pursuant to the provisions of the Policy, this Agreement, the
Collateral Security Assignment or otherwise, to secure any and all obligations
owed by the Company to Employee under this Agreement. In no event shall this
provision be interpreted to reduce Employee's rights to the Policy or expand in
any way the rights or benefits of the Company under this Agreement, the Policy
or the Collateral Security Assignment. This security interest granted to
Employee from the Company shall automatically expire and be deemed waived if
Employee terminates employment with Employer prior to a Qualifying Event.
Nothing in this provision shall prevent the Company from receiving its share of
the death benefits under the Policy as provided in Section 4 of this Agreement.
16. Amendment of Agreement.
Except as provided in a written instrument signed by the Company and
Employee, this Agreement may not be cancelled, amended, altered, or modified.
17. Notice under Agreement.
Any notice, consent, or demand required or permitted to be given
under the provisions of this Agreement by one party to another shall be in
writing, signed by the party giving or making it, and may be given either by
delivering it to such other party personally or by mailing it, by United States
Certified mail, postage prepaid, to such party, addressed to its last known
address as shown on the records of the Company. The date of such mailing shall
be deemed the date of such mailed notice, consent, or demand.
18. Binding Agreement.
This Agreement shall bind the parties hereto and their respective
successors, heirs, executor, administrators, and transferees, and any Policy
beneficiary.
10
<PAGE> 11
19. Controlling law and characterization of Agreement.
(a) To the extent not governed by federal law, this Agreement
and the right to the parties hereunder shall be controlled by the laws of the
State of California.
(b) If this Agreement is considered a "plan" under the
Employee Retirement Income Security Act of 1974 (ERISA), both the Company and
Employee acknowledge and agree that for all purposes the Agreement shall be
treated as a "welfare plan" within the meaning of section 3(1) of ERISA.
Consistent with the preceding sentence, Employee further acknowledges that his
or her rights to the Policy and the release of the Company's Security Interest
are strictly limited to those rights set forth in this Agreement. In
furtherance of this acknowledgement and in consideration of the Company's
payment of the initial premiums for this Policy, Employee voluntarily and
irrevocably relinquishes and waives any additional rights in the Policy or any
different restrictions on the release of the Company's Security Interest that
he or she might otherwise argue to exist under either state, federal, or other
law. Employee further agrees that he or she will not argue in any judicial or
arbitration proceeding that any such additional rights or different
restrictions exist. Similarly, the Company acknowledges that its Security
Interest is strictly limited as set forth in this Agreement and voluntarily and
irrevocably relinquishes and waives any additional interest or different
interest or advantages that the Company would have or enjoy if the Agreement
were not treated as a "welfare plan" within the meaning of Section 3(1) of
ERISA.
20. The Company and Employee agree to execute any and all
documents necessary to effectuate the terms of this
Agreement.
EMPLOYEE ADVANCED MICRO DEVICES, INC.
____________________ By: __________________________
Its __________________________
11
<PAGE> 12
EXHIBIT B
SPLIT-DOLLAR LIFE INSURANCE SECURITY RELEASE NOTICE
Pursuant to the Split-Dollar Life Insurance Agreement
entered into between Advanced Micro Devices, Inc. ("the Company") and me on
______________, 199__ (the "Agreement"), I hereby notify the Company that I
request to be released on __________, ____ ("Security Release Date") from the
Company's collateral security interest in Policy Number ________ issued by
Manufacturer's Life Insurance Company. I understand that my Security Release
Date must be at least two years from the date the Company receives this Notice.
I also understand that my Security Release Date may be changed no more than
twice, and then only to a later date, not an earlier date. I further understand
that in order for the Company's collateral security interest to be released on
my Security Release Date, I must continue to be employed by the Employer (as
defined in the Agreement) until such date.
______________________
Participant
Date:_________________
Received by the Company on ____________________________
by ___________________
12
<PAGE> 13
EXHIBIT C
SPOUSAL CONSENT TO DESIGNATION OF NONSPOUSAL BENEFICIARY
My spouse is _____________________. I hereby consent to
the designation made by my spouse of _______________________ as the beneficiary
(subject to any rights collaterally assigned to Advanced Micro Devices, Inc.)
under Life Insurance Policy No. _________________ which Advanced Micro
Devices, Inc. has caused Manufacturer's Life Insurance Company to issue to
him/her. I also understand that this consent is valid only with respect to the
naming of the beneficiary indicated above and that the designation of any other
beneficiary will not be valid unless I consent in writing to such designation.
This consent is being voluntarily given, and no undue
influence or coercion has been exercised in connection with my consent to the
designation made by my spouse of the beneficiary named above rather than myself
as the beneficiary under the Split-Dollar Life Insurance Policy.
___________________________
Spouse's Signature
___________________________
Print Spouse's Name
Date: ______________________________
13
<PAGE> 1
EXHIBIT 10.32
EXHIBIT A
COLLATERAL SECURITY ASSIGNMENT AGREEMENT
This Collateral Security Assignment is made and entered
into effective as of __________, 19__, by the undersigned as the owner (the
"Owner") of Life Insurance Policy Number ______________ (the "Policy") issued
by Manufacturer's Life Insurance Company (the "Insurer") upon the life of Owner
and by Advanced Micro Devices, Inc. a __________ corporation (the "Assignee").
WHEREAS, the Owner is a valued employee of Assignee or a subsidiary
of Assignee, and the Assignee wishes to retain him or her in its or its
subsidiary's employ; and
WHEREAS, to encourage the Owner's continued employment, the Assignee
wishes to pay premiums on the Policy, as more specifically provided for in that
certain Split-Dollar Life Insurance Agreement dated as of ________________,
19__, and entered into between the Owner and the Assignee as such agreement may
be hereafter amended or modified (the "Agreement") (unless otherwise indicated
the terms herein shall have the definitions ascribed thereto in the Agreement);
WHEREAS, in consideration of the Assignee agreeing to make the
premium payments, the Owner agrees to grant the Assignee a security interest in
the Policy as collateral security; and
WHEREAS, the Owner and Assignee intend that the Assignee have no
greater interest in the Policy than that prescribed herein and in the Agreement
and that if the Assignee ever obtains any right or interest in the Policy or
the proceeds thereof, except as provided herein and in the Agreement, such
right or interest shall be held in trust for the Owner to satisfy the
obligations of Assignee to Owner under the Agreement and the Assignee
additionally agrees that its rights to the Policy shall serve as security for
its obligations to the Owner under the Agreement;
NOW, THEREFORE, the Owner hereby assigns, transfers and sets over to
the Assignee for security the following specific rights in the Policy, subject
to the following terms, agreements and conditions:
1. This Collateral Security Assignment is made, and the
Policy is to be held, as collateral security for all liabilities of the Owner
to the Assignee pursuant to the terms of the Agreement, whether now existing or
hereafter arising (the "Secured Obligations"). The Secured Obligations
include: (i) the obligation of the Owner to transfer an amount equal to the
entire cash value in the event that the Owner terminates employment with
Employer for a reason other than a Qualifying Termination and before attaining
his or her Security Release Date; (ii) the obligation of the Owner to pay an
amount of cash to the Company or transfer to the Company that portion of the
cash value which is
<PAGE> 2
equal to any federal, state or local taxes that Assignee may be required
to withhold and collect (as set forth in Section 12 of the Agreement); (iii)
the obligation of the Owner to pay an amount of cash to the Company or transfer
to the Company that portion of the cash surrender value of the Policy which is
equal to the sum of the outstanding balances on any loans made by Assignee to
the Owner in the event of a Qualifying Event (as set forth in Section 5(c) of
the Agreement; and (iv) the obligation of the Owner to name the Assignee as
beneficiary for a portion of the death benefit under the Policy in the event of
the death of the insured prior to Owner's termination of employment with
Employer in accordance with Section 4 of the Agreement.
2. The Owner hereby grants to Assignee a security interest
in and collaterally assigns to Assignee the Policy and the cash value to secure
the Secured Obligations. However, the Assignee's interest in the Policy shall
be strictly limited to:
(a) The right to be paid the Assignee's portion of the death
benefit in the event of the death of the Owner prior to Owner's termination of
employment with Employer in accordance with Section 4 of the Agreement;
(b) The right to receive an amount equal to the entire cash
value of the Policy (which right may be realized by Assignee's receiving a
portion of the death benefit under the Policy or Owner's causing such amount to
be transferred to Assignee (through withdrawing from or borrowing against the
Policy), in accordance with the terms of the Agreement) if the Owner terminates
employment with Employer for a reason other than a Qualifying Termination
(unless he or she has previously attained his or her Security Release Date);
(c) The right to receive an amount equal to the sum of the outstanding
balances on any loans made by Assignee to the Owner in the event of a
Qualifying Event (as set forth in Section 5(c) of the Agreement); and
(d) The right to receive an amount equal to any federal,
state or local taxes that Assignee may be required to withhold and collect (as
set forth in Section 12 of the Agreement).
3. (a) Owner shall retain all incidents of ownership in the
Policy, and may exercise such incidents of ownership except as otherwise
limited by the Agreement and hereunder. The Insurer is only authorized to
recognize (and is fully protected in recognizing) the exercise of any ownership
rights by Owner if the Insurer determines that the Assignee has been given
notice of Owner's purported exercise of ownership rights in compliance with the
provisions of Section 3(b) hereof and as of the date thirty days after such
notice is given, the Insurer has not received written notification from the
Assignee of Assignee's objection to such exercise; provided that,
2
<PAGE> 3
the designation of the beneficiary to receive the death benefits not otherwise
payable to Assignee pursuant to Section 4 of the Agreement may be changed by
the Owner without prior notification of Assignee. The Insurer shall not be
responsible to ensure that the actions of the Owner conform to the Agreement.
(b) Assignee hereby acknowledges that for purposes of this
Collateral Security Assignment, Assignee shall be conclusively deemed to have
been properly notified of Owner's purported exercise of his or her ownership
rights as of the third business day following either of the following events:
(1) Owner mails written notice of such exercise to Assignee by United States
certified mail, postage paid, at the address below and provides the Insurer
with a copy of such notice and a copy of the certified mail receipt or (2) the
Insurer mails written notice of such exercise to Assignee by regular United
States mail, postage paid, at the address set forth below:
Advanced Micro Devices, Inc.
One AMD Place, M/S 181
Sunnyvale, California 94088
Attn: Corporate Compensation Manager
The foregoing address shall be the appropriate address for such notices to be
sent unless and until the receipt by both Owner and the Insured of a written
notice from Assignee of a change in such address.
(c) Notwithstanding the foregoing, Owner and Assignee hereby
agree that, until Assignee's security interest in the Policy is released,
Assignee shall from time to time designate one or more individuals (the
"Designee"), who may be officers of Assignee, who shall be entitled to adjust
the death benefit under the Policy and to administer the investments under the
Policy; provided, however, that the Designee may only increase, but not
decrease, the death benefit in effect on the date that the Policy is issued;
provided further, that the Designee may only direct the investments under the
Policy in funds offered by the Insurer under the Policy. Assignee shall notify
the Insurer in writing of the identity of the Designee and any changes in the
identity of the Designee. Until Assignee's security interest in the Policy is
released, no other party may adjust the death benefit or direct the investments
under the Policy without the consent of the Assignee and the Owner.
4. If the Policy is in the possession of the Assignee, the
Assignee shall, upon request, forward the Policy to the Insurer without
unreasonable delay for endorsement of any designation or change of beneficiary
or the exercise of any other right reserved by the Owner.
3
<PAGE> 4
5.(a) Assignee shall be entitled to exercise its rights under the
Agreement by delivering a written notice to Insurer, executed by the Assignee
and the Owner or the Owner's beneficiary, requesting either (1) a withdrawal or
nonrecourse policy loan equal to the amount to which Assignee is entitled under
Sections 5, 6 or 12 of the Agreement and transfer of such withdrawn or borrowed
amount to Assignee or (2) the payment to the Assignee of that portion of the
death benefit under the Policy to which the Assignee is entitled under Section
4 of the Agreement. So long as the notice is also signed by Owner or his or
her beneficiary, Insurer shall pay or loan the specified amounts to Assignee
without the need for any additional documentation.
(b) Upon receipt of a properly executed notice complying with
the requirements of subsection (a) above, the Insurer is hereby authorized to
recognize the Assignee's claims to rights hereunder without the need for any
additional documentation and without investigating (1) the reason for such
action taken by the Assignee; (2) the validity or the amount of any of the
liabilities of the Owner to the Assignee under the Agreement; (3) the existence
of any default therein; (4) the giving of any notice required herein; or (5)
the application to be made by the Assignee of any amounts to be paid to the
Assignee. The receipt of the Assignee for any sums received by it shall be a
full discharge and release therefor to the Insurer.
6. Upon the full payment of the liabilities of the Owner to
the Assignee pursuant to the Agreement, the Assignee shall execute an
appropriate release of this Collateral Security Assignment.
7. The Assignee shall have the right to request of the
Insurer and/or the Owner notice of any action taken with respect to the Policy
by the Owner.
8.(a) The Assignee and the Owner intend that in no event shall the
Assignee have any power or interest related to the Policy or its proceeds,
except as provided herein and in the Agreement, notwithstanding the provisions
of any other documents including the Policy. In the event that the Assignee
ever receives or may be deemed to have received any right or interest beyond
the limited rights described herein and in the Agreement, such right or
interest shall be held in trust for the benefit of the Owner and be held
separate from the property of the Assignee.
(b) In order to further protect the rights of the Owner, the
Assignee agrees that its rights to the Policy and proceeds thereof shall serve
as security for the Assignee's obligations to the Owner as provided in the
Agreement. Assignee hereby grants to Owner a security interest in and
collaterally assigns to Owner any and all rights it has in the Policy, and
products
4
<PAGE> 5
and proceeds thereof, whether now existing or hereafter arising pursuant to the
provisions of the Policy, the Agreement, this Collateral Security Assignment or
otherwise, to secure Assignee's obligations ("Assignee Obligations") to Owner
under the Agreement, whether now existing or hereafter arising. The Assignee
Obligations include all obligations owed by the Assignee to Owner under the
Agreement, including without limitation: (i) the obligation to purchase the
Policy designating Owner as the owner and to make the premium payments required
under Section 3 of the Agreement and (ii) the obligation to do nothing which
may, in any way, endanger, defeat or impair any of the rights of Owner in the
Policy as provided in the Agreement. In no event shall this provision be
interpreted to reduce Owner's rights in the Policy or expand in any way the
rights or benefits of the Assignee under the Agreement. In the event that
Owner terminates employment with Employer for any reason prior to a Qualifying
Event, this security interest and collateral assignment granted by Assignee to
Owner shall automatically expire and be deemed waived. Nothing in this
provision shall prevent the Assignee from receiving its share of the death
benefits under the Policy as provided in Section 4 of the Agreement.
9. Assignee and Owner agree to execute any documents
necessary to effectuate this Collateral Security Assignment pursuant to the
provisions of the Agreement. All disputes shall be settled as provided in
Section 13 of the Agreement. The rights under this Collateral Security
Assignment may be enforced pursuant to the terms of the Agreement.
IN WITNESS WHEREOF, the Owner and Assignee have executed this
Collateral Security Assignment effective the day and year first above written.
___________________________________
, Owner
ADVANCED MICRO DEVICES, INC.
By: ______________________________
Title: ___________________________
5
<PAGE> 1
EXHIBIT 11.1
ADVANCED MICRO DEVICES, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
THREE YEARS ENDED DECEMBER 26, 1993
(THOUSANDS EXCEPT PER SHARE)
<TABLE>
<CAPTION>
PRIMARY 1991 1992 1993
-------- -------- -------
<S> <C> <C> <C>
Weighted average number of common shares
outstanding during the year . . . . . . . . . . . . . . . . . . 83,270 87,068 90,660
Incremental common shares attributable to
shares issuable under employee stock
plans (assuming proceeds would be used
to purchase treasury stock) . . . . . . . . . . . . . . . . . . 4,926 4,315 4,448
-------- -------- -------
Total shares . . . . . . . . . . . . . . . . . . . . . . . . . . 88,196 91,383 95,108
======== ======== =======
Net income:
Amount applicable to common shares . . . . . . . . . . . . . . . $134,937 $234,661 $218,431
Per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.53 $ 2.57 $ 2.30
FULLY DILUTED
Weighted average number of common shares
outstanding during the year . . . . . . . . . . . . . . . . . . 83,270 87,068 90,660
Incremental common shares attributable to
shares issuable under employee stock
plans (assuming proceeds would be used
to purchase treasury stock) . . . . . . . . . . . . . . . . . . 5,414 4,551 4,547
Preferred stock . . . . . . . . . . . . . . . . . . . . . . . . . 6,856 6,856 6,856
-------- -------- -------
Total shares . . . . . . . . . . . . . . . . . . . . . . . . . . 95,540 98,475 102,063
======== ======== =======
Net income:
Amount applicable to common shares . . . . . . . . . . . . . . . $134,937 $234,661 $218,431
Preferred stock dividends . . . . . . . . . . . . . . . . . . . 10,350 10,350 10,350
-------- -------- -------
Net adjusted income . . . . . . . . . . . . . . . . . . . . . . $145,287 $245,011 $228,781
Per share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.52 $ 2.49 $ 2.24
</TABLE>
- ---------------------
<PAGE> 1
EXHIBIT 13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
RESULTS OF OPERATIONS
Net sales of $1,648.3 million for 1993 rose by 9 percent from sales of $1,514.5
million for 1992. This growth was principally related to a sharp increase in
sales of flash memory devices and higher sales in most other product lines
partially offset by a decline in Am386(R) microprocessor sales. AMD's non-X86
business grew approximately 23 percent compared to 1992. Even though volume
shipments did not commence until the second half of 1993, the company achieved
substantial sales of Am486(TM) devices in 1993. However, revenues generated by
Am486 products were insufficient to offset declining sales of Am386 devices.
Net sales in 1992 increased by 23 percent from sales of $1,226.6 million in
1991, primarily due to significant growth in Am386 microprocessor sales. Net
sales for the rest of the product lines were relatively flat, except for
network and telecommunications products, and embedded processors, which rose by
21 percent from 1991 to 1992.
Sales of CMOS products continued to grow in both absolute dollars and as a
percentage of sales from 1991 through 1993. Sales of products manufactured with
CMOS process technology accounted for approximately 76 percent of net sales in
1993, 70 percent in 1992 and 56 percent in 1991. Sales to international
customers were 54 percent in 1993, and 55 percent in 1992 and 1991. The
European market showed strong growth in 1993, while the Asia-Pacific market
decreased slightly as compared to 1992.
Am386 and Am486 microprocessors were AMD's most significant X86 products in
1993. Since its introduction in 1991, the Am386 family has been a major
contributor to AMD revenues. Am386 family sales ramped up to their highest
levels in 1992; however, this product has been on a downward trend through 1993
because of its maturing life cycle. Over the past three years, the Am386 family
has experienced significant price erosion in response to intense competition
and the introduction of more advanced technology. Nevertheless, unit shipments
reached their peak in the first quarter of 1993. Management anticipates Am386
microprocessor revenue will continue on its downward trend in 1994, resulting
from both unit-shipment and average-selling-price declines, since the market
has transitioned to 486 technology as the microprocessor standard.
The company's Am386 and Am486 products have been the subject of litigation
with Intel Corporation (see 1993 Annual Report on Form 10K, Item 3, Legal
Proceedings). An unfavorable decision in the 287, 386 or 486 microcode
litigation could result in a material monetary damages award to Intel and/or
preclude the company from continuing to produce those Am386 and Am486 products
adjudicated to contain any copyrighted Intel microcode. Therefore, such
litigations could have a materially adverse impact on the financial condition
and results of operations of the company.
During 1993, the company's X86 business transitioned from Am386 to Am486
products. The company began shipments of its Am486DX microprocessors during the
second quarter of 1993. Since this time, Am486DX unit shipments have grown
significantly, exceeding 550,000 units, while average selling prices have
remained relatively constant. Management anticipates a further increase in
Am486DX unit shipments in 1994; however, as volume increases, normal price
declines are anticipated due to competitive pressures. The company has
initiated an aggressive manufacturing plan in the Submicron Development Center
(SDC); nevertheless, Am486 product demand is expected to exceed production
capacity during 1994. In February 1994, the company entered into a foundry
agreement with Digital Equipment Corporation (DEC) for AMD's Am486
microprocessor family. The agreement is for two years with an option for
extension at the end of that period. However, both parties have certain rights
to terminate this agreement earlier in the event of adverse developments in the
company's microprocessor-related litigations. Initial shipments of Am486
products from wafers manufactured by DEC are expected to begin in the fourth
quarter of 1994. The company anticipates that shipments of Am486
microprocessors from the foundry will reach an annual run-rate of 2 million
units in the first half of 1995. AMD may enter into additional foundry
arrangements in order to supplement internal capacity based on business
conditions. Regardless of these foundry arrangements, the company's production
capacity is expected to increase in 1995 due to the completion of its 700,000
square-foot submicron semiconductor manufacturing complex in Austin, Texas (Fab
25).
An adverse result in the 287 microcode litigation or the 486 microcode
litigation could preclude the company from shipping its Am486DX products
adjudicated to contain any copyrighted Intel microcode. In that event, the
company's revenues and earnings will be materially adversely impacted until the
company is able to manufacture and introduce new members of its Am486 family in
lieu of the DX that obtain the same level of market acceptance and
profitability currently generated by the Am486DX.
The company is in the process of developing new Am486 products. Development
of such Am486 products is expected to be completed by the end of 1994.
The company is also currently developing its next generation of
microprocessors, referred to as the K series, based on superscalar RISC-type
architecture. Development of these products is expected to be completed in the
fourth quarter of 1994 or early 1995.
In addition to the above-mentioned litigations, the future outlook for AMD's
microprocessor business is highly dependent upon microprocessor market
conditions, which are subject to both demand and price elasticity. Future
growth will rely on the market demand of Am486 products and AMD's future
generation microprocessors.
Revenues of network and telecommunication products achieved record levels in
1993, growing 30 percent from 1992 and 58 percent from 1991. Growth was
particularly strong in telecommunications products, driven by higher European
market demand in 1993. Management expects continued strong growth in network
products driven by Ethernet products in 1994. Sales of embedded processors in
1993 rose 22 percent as compared to 1992 and 46 percent as compared to 1991.
This growth was primarily attributable to record sales of both 29K(TM) RISC
microprocessor and microcontroller products.
Sales of flash memory devices grew substantially from 1991 to 1993. However,
in the fourth quarter of 1993, flash sales decreased as compared to the
immediate prior quarter due
14
<PAGE> 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
primarily to pricing pressures caused by increased competition. These pricing
pressures are expected to continue in 1994. Management anticipates flash memory
unit shipments will resume growth in the first quarter of 1994, as the company
ramps up the production of its new 4-megabit flash memory devices introduced in
the fourth quarter of 1993. The company plans to meet projected long-term
demand for flash memory through a manufacturing joint venture with Fujitsu
Limited of Japan, which is expected to begin volume production in 1995.
EPROM sales declined from 1992 because of lower unit shipments due to
capacity constraints created by allocating internal capacity to flash memory
devices. However, in the fourth quarter of 1993, EPROM revenue grew
considerably as compared to the third quarter of 1993 due to higher unit
shipments produced by increased foundry capacity. Management anticipates this
demand will continue in 1994, and increased EPROM foundry production will
expand current capacity levels consistent with market demand in 1994.
Sales of programmable logic devices (PLDs) rose slightly in 1993 from 1992
and 1991 due to an increase in sales of CMOS PLDs, which currently represent a
substantial portion of total PLD sales. Sales of CMOS PLDs in 1993 grew
significantly from 1992 and 1991, with MACH(R) family products (mid-density
PLDs) acting as the driving force. However, in the fourth quarter, CMOS PLD
sales declined as compared to the immediate prior quarter. The company believes
that one of the factors causing this CMOS PLD sales decline may have been
customers' temporary inventory build-up. During 1993, bipolar PLD sales
declined as compared to 1992 and 1991. Management anticipates flat PLD sales
in 1994 with strong growth in MACH family products offset by declining bipolar
PLD sales.
Cost of sales of $789.6 million for 1993 contributed to a gross margin of 52
percent as compared to a gross margin of 51 percent in 1992 and 46 percent in
1991. These gross margin improvements were related to a richer product mix,
improved capacity utilization, and better manufacturing yields which more than
offset declining Am386 device prices and increased manufacturing costs. Gross
margins may decrease in 1994 due to increased competition, increased foundry
costs principally related to EPROMs, changes in product mix and the impact of
litigation.
Research and development expense for 1993 increased to $262.8 million from
$227.9 million in 1992 and $213.8 million in 1991. This increase is mainly due
to higher spending on process and product development in the SDC and its
supporting engineering organizations, and microprocessor development. Research
and development expense exceeded 15 percent of net sales in each of the last
three years. The company anticipates a slight increase in research and
development expense in 1994.
Marketing, general and administrative expense was $290.9 million for 1993,
$270.2 million for 1992, and $244.9 million for 1991. The increase from 1992
to 1993 was primarily attributable to increased legal expenses relating to
litigation with Intel, and microprocessor advertising rebates. The incremental
change from 1991 to 1992 was mainly related to higher sales commissions and
advertising expense and larger bonus and profit-sharing accruals. Marketing,
general and administrative expense was 18 percent of sales in 1993 and 1992 and
20 percent in 1991.
In summary, total operating expenses were $1,343.2 million in 1993, $1,244.5
million in 1992 and $1,117.5 million in 1991. Operating expenses as a
percentage of sales were on a downward trend from 1991 through 1993. As a
result of this trend, operating income as a percentage of sales rose to 19
percent in 1993 as compared to 18 percent in 1992 and 9 percent in 1991.
Although the company is continuing to focus on cost-containment, operating
expenses may rise in 1994 due to further increases in depreciation and to
foundry expenses, which are dependent on product demand.
Interest and other income was $16.5 million in 1993, down from $18.9 million
in 1992, and $57.0 million in 1991. While cash balances increased, interest
income declined to $16.0 million in 1993 from $16.6 million in 1992, due to
lower interest rates during 1993. Interest income increased by $8.0 million
from 1991 because of higher cash available for investment. Interest and other
income included the net gain on sale of assets for all three years. A net gain
of $46.1 million was realized in 1991 on the sale or disposition of assets,
primarily attributable to the sale of 3.5 million shares of Xilinx, Inc. Net
interest expense was $3.8 million in 1993, down from $17.2 million in 1992 and
$20.9 million in 1991 due to lower average outstanding debt and lower interest
rates.
Provision for taxes on income was $89.0 million in 1993, $26.6 million in
1992 and zero in 1991. The 1993 income tax provision increased to 28 percent
from 10 percent in the prior year as book net operating loss carryforwards were
fully utilized in 1992. The 1991 income tax provision included a reduction of
previously provided taxes recorded in deferred income taxes as a result of the
settlement of various tax audits during the year. Management anticipates that
the provision for taxes on income will be between 30 and 32 percent in 1994.
Effective December 28, 1992, the company changed its method of accounting
for income taxes to the liability method required by Statement of Financial
Accounting Standards No. 109 (SFAS No. 109). As permitted by SFAS No. 109,
prior periods' financial statements have not been restated. A valuation
allowance of approximately $26 million was provided at December 26, 1993, for
certain deferred tax assets related to stock-option deductions. The company
believes that the realization of remaining deferred tax assets (approximately
$100 million at December 26, 1993) is more likely than not to be realized
because of offsetting deferred tax liabilities (approximately $65 million at
December 26, 1993) and potential tax carrybacks. There was no effect on net
income by adopting SFAS No. 109 in 1993.
The company recorded net income before preferred stock dividends of $228.8
million in 1993, $245.0 million in 1992 and $145.3 million in 1991. After
preferred stock dividends of $10.4 million for each of the three years, the
primary net income per common share was $2.30 for 1993, $2.57 for 1992 and
$1.53 for 1991.
FACTORS THAT MAY AFFECT FUTURE RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
The semiconductor industry is generally characterized by a highly competitive
and rapidly changing environment in which operating results are often subject
to the effects of new product introductions, manufacturing technology
innovations, rapid
15
<PAGE> 3
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
fluctuations in product demand, and the ability to secure intellectual property
rights. While the company attempts to identify and respond to these changes as
soon as possible, the rapidity of their onset makes prediction of and reaction
to such events an ongoing challenge.
The company believes that its future results of operations and financial
condition could be impacted by the following factors: market acceptance and
timing of new products, trends in the personal computer marketplace, capacity
constraints, intense price competition, interruption of manufacturing materials
supply, negative changes in international economic conditions and decisions in
legal disputes relating to intellectual property rights.
Due to the factors noted above, the company's future operations, financial
condition and stock price may be subject to volatility. In addition, a
shortfall in revenue or earnings from securities analysts' expectations could
have an immediate adverse effect on the trading price of the company's common
stock in any given period.
FINANCIAL CONDITION
The company's financial condition improved during 1993. Cash and cash
equivalents and temporary cash investments rose by $157.1 million to $488.2
million from 1992 to 1993. Net cash provided from operating activities was
offset by the purchase of property, plant and equipment of $323.7 million in
1993 to expand manufacturing capacity and also by the purchase of temporary
cash investments. Capital acquisitions have been on an upward trend in each of
the three years, and this trend is expected to continue in excess of $500
million in 1994 mainly for Fab 25 (see following discussion). In summary,
positive cash flow of $8.4 million was generated in 1993 as compared to
negative cash flow of $101.9 in 1992. This cash flow improvement was due to
higher net cash provided by operating activities, proceeds from stock issuances
to employees and Fujitsu Limited in 1993 and retirement of long-term debt in
1992.
Restricted cash totaling approximately $33.2 million was pledged by the
company to stay execution of a $27.4 million judgment, plus interest, in favor
of Brooktree Corporation. In the first quarter of 1993, the company and
Brooktree Corporation settled all pending litigation and agreed that AMD would
pay Brooktree $26.8 million. AMD made full payment on this settlement in the
second quarter of 1993.
In 1993, the company's current ratio grew to 2.12 from 2.09 in 1992 and 1.38
in 1991. Working capital grew by $124.5 million from $385.1 million in 1992 to
$509.6 million in 1993. This growth is primarily due to an increase in
temporary cash investments and accounts receivable resulting from higher sales
that more than offset higher accounts payable in 1993.
The company is currently involved in litigations with Intel Corporation (see
Note 12 of the Consolidated Financial Statements and 1993 Annual Report on Form
10K, Item 3, Legal Proceedings). While it is impossible to predict the
resolutions of the AMD/Intel litigations, there could be a material adverse
effect on the financial condition, or trends in results of operations of the
company, or the ability to raise necessary capital, or some combination of the
foregoing if the outcome of the Intel litigations either results in an award to
Intel of material monetary damages, or the company's intellectual property
rights are not sustained with regard to the Am386 or the Am486 products such
that the company is precluded from producing and selling Am386, Am486 and
future generations of microprocessors that are adjudicated to contain Intel
intellectual property, or from selling such products at competitive prices.
In July 1993, the company commenced construction of its 700,000 square-foot
submicron semiconductor manufacturing complex in Austin, Texas. Known as Fab
25, the new facility is expected to cost approximately $1 billion when fully
equipped. The first phase of construction and initial equipment installation is
expected to cost approximately $400 million through 1994.
Volume production is scheduled to begin in late 1995.
The company and Fujitsu Limited are cooperating in building and operating an
approximately $800 million wafer fabrication facility in Aizu-Wakamatsu, Japan
through their joint venture "Fujitsu-AMD Semiconductor Limited (FASL)." The
forecasted joint venture costs are denominated in yen and therefore are subject
to change due to fluctuations of foreign exchange rates. Each company will
contribute equally toward funding and supporting FASL. AMD is expected to
contribute approximately half of its share of funding in cash and guarantee
third-party loans made to FASL for the remaining half. However, to the extent
debt cannot be secured by FASL, AMD is required to contribute its portion in
cash. During 1993, the company's investment in FASL was immaterial; however,
management anticipates this investment will increase substantially, to
approximately $135 million in 1994. The company is also required under the
terms of the joint venture to contribute approximately one-half of such
additional amounts as may be necessary to sustain FASL's operations. The
facility, which will be capable of producing flash memory devices utilizing
CMOS process technology, is expected to begin operations in the fourth quarter
of 1994. Volume production is expected to begin in the first half of 1995.
As of the end of 1993, the company had the following financing arrangements:
unsecured committed bank lines of credit of $105 million, unutilized; long-term
secured equipment lease lines of $110 million, of which $65 million were
utilized; and short-term, unsecured uncommitted bank credit in the amount of
$83 million, of which $31 million was outstanding.
The company's current capital plan and requirements are based on various
product-mix, selling-price and unit-demand assumptions and are, therefore,
subject to revision due to future market changes and litigation outcomes.
Management believes that, absent unfavorable litigation outcomes, cash flows
from operations and current cash balances, together with current and
anticipated available long-term financing, will be sufficient to fund
operations, capital investments, and research and development projects
currently planned for the next several years.
16
<PAGE> 4
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three years ended December 26, 1993, in thousands except per share amounts 1993 1992 1991
<S> <C> <C> <C>
NET SALES $ 1,648,280 $ 1,514,489 $ 1,226,649
Expenses:
Cost of sales 789,564 746,486 658,824
Research and development 262,802 227,860 213,765
Marketing, general and administrative 290,861 270,198 244,900
--------- --------- ---------
1,343,227 1,244,544 1,117,489
--------- --------- ---------
Operating income 305,053 269,945 109,160
Interest and other income 16,490 18,913 57,007
Interest expense (3,791) (17,227) (20,880)
--------- --------- ---------
Income before taxes on income 317,752 271,631 145,287
Provision for taxes on income 88,971 26,620 -
--------- --------- ---------
NET INCOME 228,781 245,011 145,287
Preferred stock dividends 10,350 10,350 10,350
--------- --------- ---------
NET INCOME APPLICABLE TO COMMON SHAREHOLDERS $ 218,431 $ 234,661 $ 134,937
---------- ---------- ----------
NET INCOME PER COMMON SHARE
Primary $ 2.30 $ 2.57 $ 1.53
---------- ---------- ----------
Fully diluted $ 2.24 $ 2.49 $ 1.52
---------- ---------- ----------
Shares used in per share calculation
Primary 95,108 91,383 88,196
Fully diluted 102,063 98,475 95,540
See accompanying notes.
17
</TABLE>
<PAGE> 5
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 26, 1993, and December 27, 1992, in thousands except share and per share amounts 1993 1992
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 60,423 $ 52,027
Temporary cash investments 427,775 279,061
Restricted cash - 32,695
----------- -----------
Total cash, temporary cash investments and restricted cash 488,198 363,783
Accounts receivable, net of allowance for doubtful accounts
of $7,492 in 1993, and $6,679 in 1992 263,617 202,072
Inventories:
Raw materials 15,371 16,793
Work-in-process 56,504 43,572
Finished goods 32,175 25,683
----------- -----------
Total inventories 104,050 86,048
Deferred income taxes 77,922 37,199
Prepaid expenses and other current assets 30,399 48,556
----------- -----------
Total current assets 964,186 737,658
PROPERTY, PLANT AND EQUIPMENT:
Land 26,272 22,192
Buildings and leasehold improvements 444,299 422,089
Equipment 1,335,251 1,162,558
Construction in progress 192,541 77,526
----------- -----------
Total property, plant and equipment 1,998,363 1,684,365
Accumulated depreciation and amortization (1,094,037) (991,082)
----------- -----------
Net property, plant and equipment 904,326 693,283
OTHER ASSETS 60,719 17,154
----------- -----------
$ 1,929,231 $ 1,448,095
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable to banks $ 30,994 $ 40,659
Accounts payable 127,151 61,680
Accrued compensation and benefits 81,860 76,922
Accrued liabilities 83,982 69,665
Income tax payable 34,991 8,122
Deferred income on shipments to distributors 74,436 56,717
Long-term debt and capital lease obligations due within one year 21,205 6,084
Litigation judgment liability - 32,695
---------- ----------
Total current liabilities 454,619 352,544
DEFERRED INCOME TAXES 42,837 29,135
LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS DUE AFTER ONE YEAR 79,504 19,676
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Capital stock:
Serial preferred stock, par value $.10; 1,000,000 shares authorized;
345,000 shares issued and outstanding ($172,500 aggregate liquidation preference) 35 35
Common stock, par value $.01; 250,000,000 shares authorized;
92,443,911 shares issued and outstanding in 1993, and 88,225,587 in 1992 926 885
Capital in excess of par value 619,733 532,674
Retained earnings 731,577 513,146
----------- -----------
Total shareholders' equity 1,352,271 1,046,740
----------- -----------
$ 1,929,231 $ 1,448,095
----------- -----------
See accompanying notes.
18
</TABLE>
<PAGE> 6
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three years ended December 26, 1993, in thousands 1993 1992 1991
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 228,781 $ 245,011 $ 145,287
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 175,067 152,313 155,935
Net (gain) loss on sale of property, plant and equipment (2,943) 1,325 (2,467)
Write-down of property, plant and equipment 366 222 1,409
Gain on sale of securities - (10,689) (54,915)
Net equity investment income in Xilinx, Inc. - - (2,342)
Compensation recognized on employee stock plans 1,313 3,039 2,859
Decrease in deferred income taxes (27,021) (19,109) (15,497)
Increase in income tax payable 70,255 13,386 5,399
Changes in operating assets and liabilities:
Net increase in restricted cash, receivables,
inventories, prepaids and other assets (59,340) (2,471) (71,759)
Net increase in payables and accrued liabilities 69,750 16,212 25,175
--------- --------- ---------
Net cash provided by operating activities 456,228 399,239 189,084
--------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (323,669) (222,064) (111,025)
Proceeds from sale of property, plant and equipment 4,648 1,261 3,002
Proceeds from sale of securities - 21,263 84,000
Purchase of temporary cash investments (715,487) (594,801) (147,271)
Proceeds from sale of temporary cash investments 566,773 432,590 96,421
---------- ---------- ---------
Net cash used in investing activities (467,735) (361,751) (74,873)
---------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 5,941 8,898 25,679
Principal payments on borrowings (18,089) (153,094) (33,590)
Proceeds from issuance of stock 42,401 15,145 8,917
Payments of preferred stock dividends (10,350) (10,350) (10,350)
---------- ---------- ---------
Net cash provided by (used in) financing activities 19,903 (139,401) (9,344)
---------- ---------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 8,396 (101,913) 104,867
Cash and cash equivalents at beginning of year 52,027 153,940 49,073
---------- ---------- ---------
Cash and cash equivalents at end of year $ 60,423 $ 52,027 $ 153,940
---------- ---------- ---------
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amounts capitalized) $ 2,123 $ 15,136 $ 17,827
---------- ---------- ---------
Income taxes $ 44,433 $ 32,149 $ 9,906
---------- ---------- ---------
Non-cash financing activities:
Equipment capital leases $ 64,512 $ - $ 26,200
---------- ---------- ---------
See accompanying notes.
19
</TABLE>
<PAGE> 7
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 26, 1993, December 27, 1992, and December 29, 1991
1. ACCOUNTING POLICIES
Fiscal Year. Advanced Micro Devices' fiscal year ends on the last Sunday in
December, which resulted in a 52-week year ended December 26, 1993. This
compares with a 52-week fiscal year for 1992 and 1991, which ended on December
27 and 29, respectively.
Principles of Consolidation. The consolidated financial statements include the
accounts of Advanced Micro Devices, Inc. and its subsidiaries. Upon
consolidation, all significant intercompany accounts and transactions are
eliminated. Realized and unrealized foreign exchange gains and losses, which
have not been material, are included in results of operations.
Cash Equivalents. Cash equivalents consist of short-term financial instruments
which are readily convertible to cash and generally have original maturities of
three months or less at the time of acquisition.
Temporary Cash Investments. Temporary cash investments consist of commercial
paper, time deposits, certificates of deposit, bankers' acceptances and
marketable direct obligations of the United States Treasury, maturing within
one year. Investments in time deposits and certificates of deposit are acquired
from banks having combined capital, surplus and undivided profits of not less
than $200 million. Investments in commercial paper of industrial firms and
financial institutions are rated A1, P1 or better. Temporary cash investments
are carried at cost which approximates market.
Inventories. Inventories are stated principally at standard costs adjusted to
approximate the lower of cost (first-in, first-out) or market (net realizable
value).
Property, Plant and Equipment. Property, plant and equipment is stated at cost.
Depreciation and amortization are provided principally on the straight-line
method for financial reporting purposes and on accelerated methods for tax
purposes.
Investment in Joint Venture. In 1993, the company and Fujitsu Limited
established a joint venture, "Fujitsu-AMD Semiconductor Limited." AMD's share
of the joint venture is 49.95 percent and the investment is being accounted for
under the equity method. As of December 26, 1993, the amount invested in the
joint venture and the company's share of its results of operations were
immaterial.
Pursuant to a cross-equity provision between AMD and Fujitsu Limited, the
company purchased $10.8 million of Fujitsu Limited shares, with certain resale
restrictions. This investment is accounted for under the cost method. Under the
same provision, Fujitsu Limited has purchased 1 million shares of AMD common
stock and is required to purchase an additional 3.5 million shares over the
next several years for a total investment not to exceed $100 million.
Deferred Income on Shipments to Distributors. A portion of sales is made to
distributors under terms allowing certain rights of return and price protection
on unsold merchandise held by the distributors. These agreements can be
canceled by either party upon written notice, at which time the company
generally repurchases unsold inventory. Accordingly, recognition of sales to
distributors and related gross profits are deferred until the merchandise is
resold by the distributors.
Income Taxes. Effective December 28, 1992, the company adopted Statement of
Financial Accounting Standards No. 109 (SFAS No. 109), "Accounting for Income
Taxes." As permitted by SFAS No. 109, the company has elected not to restate
its financial statements for any periods prior to December 28, 1992. There was
no effect of adopting SFAS No. 109 on net income for the year ended December
26, 1993.
Net Income per Common Share. Primary net income per common share is based upon
weighted average common and dilutive common equivalent shares outstanding using
the treasury stock method. Dilutive common equivalent shares include stock
options and restricted stock. Fully diluted net income per common share is
computed using the weighted average common and dilutive common equivalent
shares outstanding, plus other dilutive shares outstanding which are not common
equivalent shares. Other dilutive shares which are not common equivalent shares
include convertible preferred stock.
Off-Balance-Sheet Risk. The company enters into various off-balance-sheet
financial transactions, including currency-forward contracts and interest rate
swaps to hedge its currency and interest-rate exposures. These instruments
involve, to a varying degree, elements of market and interest rate risk not
recognized in the consolidated financial statements.
Gains and losses associated with currency rate changes on forward contracts
are recorded currently in income unless the contract hedges a firm commitment,
in which case any gains and losses are deferred and included as a component of
the related transaction. Generally, the interest element of the forward
contract is recognized over the life of the contract.
As of December 26, 1993, the company had approximately $33.8 million in net
forward contracts outstanding. Based on quotes from brokers, the carrying
amounts of these contracts approximate their fair values.
While the contract or notional amounts often are used to express the volume
of these transactions, the amounts potentially subject to credit risk are
generally limited to the amounts, if any, by which the counterparties'
obligations under the contracts exceed the obligations of the company to the
counterparties.
The company controls credit risk through credit approvals, limits, and
monitoring procedures. Credit rating policies similar to those for investments
are followed for off-balance-sheet transactions.
20
<PAGE> 8
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Concentrations of Credit Risk. Financial instruments which potentially expose
the company to concentrations of credit risk consist primarily of investments
and trade receivables. The company places its investments with
high-credit-quality financial institutions and, by policy, limits the amount of
credit exposure to any one financial institution. Concentrations of credit
risk with respect to trade receivables are limited because a large number of
geographically diverse customers make up the company's customer base, thus
spreading the trade-credit risk. Due to the company's credit evaluation and
collection process, bad debt expenses have been insignificant. The company
performs in-depth credit evaluations for all customers and requires advanced
payments or secures transactions when deemed necessary.
Financial Presentation. Certain prior-year amounts on the Consolidated
Financial Statements have been reclassified to conform to the 1993
presentation.
2. SHAREHOLDERS' EQUITY
The following is a summary of the changes in the components of consolidated
shareholders' equity for the three years ended December 26, 1993.
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK
--------------- ------------
NUMBER NUMBER CAPITAL IN TOTAL
OF OF EXCESS OF RETAINED SHAREHOLDERS'
Thousands SHARES AMOUNT SHARES AMOUNT PAR VALUE EARNINGS EQUITY
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
December 30, 1990 345 $ 35 82,338 $ 826 $ 491,895 $ 143,548 $ 636,304
Issuance of shares under
employee stock plans - - 1,693 16 8,901 - 8,917
Compensation recognized under
employee stock plans - - - - 2,859 - 2,859
Income tax benefits realized from
employee stock option exercises - - - - 339 - 339
Preferred stock dividends - - - - - (10,350) (10,350)
Net income - - - - - 145,287 145,287
------ ------ -------- ------ --------- --------- ----------
December 29, 1991 345 35 84,031 842 503,994 278,485 783,356
Issuance of shares under
employee stock plans - - 4,195 43 15,102 - 15,145
Compensation recognized under
employee stock plans - - - - 3,039 - 3,039
Income tax benefits realized from
employee stock option exercises - - - - 10,539 - 10,539
Preferred stock dividends - - - - - (10,350) (10,350)
Net income - - - - - 245,011 245,011
------ ------ -------- ------ --------- --------- ----------
December 27, 1992 345 35 88,226 885 532,674 513,146 1,046,740
Issuance of shares:
employee stock plans - - 3,218 31 19,408 - 19,439
to Fujitsu Limited - - 1,000 10 22,952 - 22,962
Compensation recognized under
employee stock plans - - - - 1,313 - 1,313
Income tax benefits realized from
employee stock option exercises - - - - 43,386 - 43,386
Preferred stock dividends - - - - - (10,350) (10,350)
Net income - - - - - 228,781 228,781
------ ------ -------- ------ --------- --------- ----------
December 26, 1993 345 $ 35 92,444 $ 926 $ 619,733 $ 731,577 $ 1,352,271
- ---------------------------------------------------------------------------------------------------------------------------------
21
</TABLE>
<PAGE> 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SALE OF SERIAL PREFERRED STOCK
In March 1987, the company sold 345,000 shares of Convertible Exchangeable
Preferred Stock, $.10 par value. Dividends at an annual rate of $30 per share
(6 percent) on the preferred stock are cumulative from the date of original
issue and are payable quarterly in arrears, when and as declared by the
company's Board of Directors. Voluntary and involuntary liquidation value of
each preferred share is $500 plus unpaid dividends. The preferred stock is
convertible at any time at the option of the holder into common stock at the
initial conversion rate of 19.873 common shares for each preferred share. The
preferred stock is exchangeable at the option of the company, in whole but not
in part, on any dividend payment date commencing March 15, 1989, for 6 percent
Convertible Subordinated Debentures due 2012 at the rate of $500 principal
amount of debentures for each preferred share. If exchanged, commencing the
first March 15 following the date of initial issuance of the debentures, the
company is required to make annual payments into a sinking fund to provide for
the redemption of the debentures.
The preferred stock is redeemable for cash at any time at the option of the
company, in whole or in part, at prices declining to $500 per share at March
15, 1997, plus unpaid dividends. Holders of preferred stock are entitled to
limited voting rights under certain conditions.
The preferred stock is held by a depository and 3,450,000 depository shares
have been issued and are listed on the New York Stock Exchange. Each depository
share represents one-tenth of a preferred share, with the holder entitled,
proportionately, to all the rights and preferences of the underlying preferred
stock.
4. STOCKHOLDER RIGHTS PLAN
In February 1990, the company adopted a stockholder rights plan. The plan is
intended to enhance stockholders' value by encouraging potential acquirers to
negotiate directly with the company's Board of Directors, and to protect
stockholders from unfair or coercive takeover practices. In accordance with
this plan, the company declared a dividend distribution of preferred stock
purchase rights at the rate of one right for each share of common stock.
Each right entitles the registered holder to purchase from the company a unit
consisting of one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $.10 per share, at a purchase price of $65, subject
to adjustment.
The rights will not be exercisable, or transferable apart from
the common stock, until certain events occur. The rights are redeemable by the
company and expire on December 31, 2000.
5. TAXES ON INCOME
Provision for taxes on income consists of:
<TABLE>
<CAPTION>
1993 1992 1991
SFAS 109 SFAS 96 SFAS 96
Thousands METHOD METHOD METHOD
- --------------------------------------------------------------------
<S> <C> <C> <C>
Current:
U.S. Federal $ 83,351 $ 48,161 $ (7,425)
U.S. State and Local 3,640 7,835 4,611
Foreign National
and Local 2,332 1,863 294
Deferred (prepaid):
U.S. Federal (1,947) (31,239) 2,520
U.S. State and Local 1,798 - -
Foreign National
and Local (203) - -
-------- -------- -------
Provision for taxes
on income $ 88,971 $ 26,620 $ -
- --------------------------------------------------------------------
</TABLE>
Included in the current tax provisions reflected above are $43.4 million, $10.5
million and $.3 million for 1993, 1992 and 1991, respectively, of stock option
deduction benefits recorded as a credit to shareholders' equity.
Under SFAS No. 109, deferred income taxes reflect the net tax effects of tax
carryforwards and temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Significant components of the company's deferred tax
assets and liabilities as of December 26, 1993 and December 28, 1992 as
restated under SFAS No. 109 are as follows:
<TABLE>
<CAPTION>
Thousands 1993 1992
- --------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Deferred distributor income $ 31,349 $ 22,402
Inventory reserves 14,935 16,690
Accrued expenses not
currently deductible 21,799 33,995
Federal tax credit carryovers 30,888 52,208
Other 27,569 31,600
-------- --------
Total deferred tax assets 126,540 156,895
Valuation allowance for
deferred tax assets (26,415) (47,427)
Net deferred tax assets 100,125 109,468
-------- --------
Deferred tax liabilities:
Depreciation (44,886) (43,742)
Other (20,154) (30,993)
-------- --------
Total deferred tax liabilities (65,040) (74,735)
-------- --------
Total net deferred tax assets $ 35,085 $ 34,733
- --------------------------------------------------------------------
</TABLE>
The valuation allowance for deferred tax assets is attributable to stock option
deductions, the benefit of which will be credited to equity when realized.
22
<PAGE> 10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Under SFAS 96, the components of the deferred (prepaid) taxes for 1992 and 1991
consist of:
<TABLE>
<CAPTION>
Thousands 1992 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred distributor income $ (22,402) $ -
Inventory reserves (16,690) -
Accrued expenses not currently deductible (31,686) -
Depreciation 41,502 2,347
Other (1,963) 173
---------- -------
$ (31,239) $ 2,520
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Pretax income from foreign operations was $40.0 million in 1993, $32.0 million
in 1992, and $18.9 million in 1991.
The following is a reconciliation between statutory federal income taxes and
the total provision for taxes on income.
<TABLE>
<CAPTION>
1993 SFAS 109 METHOD 1992 SFAS 96 METHOD 1991 SFAS 96 METHOD
-------------------- ------------------- -------------------
Thousands except percent TAX RATE TAX RATE TAX RATE
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Statutory federal income tax provision $ 111,213 35.0% $ 92,355 34.0% $ 49,398 34.0%
Operating losses utilized - - (46,534) (17.1) (30,392) (20.9)
State taxes net of federal benefit 3,535 1.1 5,228 1.9 4,611 3.2
Tax exempt Foreign Sales
Corporation income (7,236) (2.3) (6,175) (2.3) (5,040) (3.5)
Tax credits utilized (5,004) (1.5) (12,306) (4.5) - -
Foreign income at other than U.S. rates (10,398) (3.3) (5,948) (2.2) (6,301) (4.3)
Adjustment of previously provided taxes - - - - (12,276) (8.5)
Other (3,139) (1.0) - - - -
---------- -------- -------- ------- -------- --------
$ 88,971 28.0% $ 26,620 9.8% $ - -%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
No provision has been made for income taxes on approximately $203 million of
cumulative undistributed earnings of certain foreign subsidiaries because it is
the company's intention to permanently invest such earnings. If such earnings
were distributed, additional taxes of $71 million would accrue.
For federal income tax purposes, the company has general business credit
carryforwards of $19.0 million which will expire from 2000 to 2002. The company
also has alternative minimum tax credits of $11.3 million that can be carried
forward indefinitely.
The company's Far East assembly and test plants in Singapore and Thailand are
operated under various tax holidays which expire in whole or in part during
1994 and 1998. Possible extensions of the holiday period, as well as other tax
incentives, are anticipated to result in minimal tax liabilities in these
countries through 1998. The net impact of these tax holidays was an increase to
net income of approximately $5.1 million ($.05 per share) in 1993.
6. DEBT
The company has certain debt agreements that contain provisions regarding
restrictions on cash dividends, maintenance of specified working capital and
net worth levels and specific financial ratio requirements. At December 26,
1993, the company was in compliance with all restrictive covenants of such debt
agreements and all retained earnings were restricted as to payments of cash
dividends on common stock.
Significant elements of committed and uncommitted, unsecured revolving
lines of credit are:
<TABLE>
<CAPTION>
Thousands except percent 1993 1992 1991
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Total lines of credit $ 188,200 $ 100,946 $ 105,780
Portion of lines of credit
available to foreign
subsidiaries 83,200 100,946 105,650
Amounts outstanding at
year-end: Short-term 30,994 40,659 51,421
Short-term borrowings:
Average daily borrowings 35,783 45,381 50,612
Maximum amount
outstanding at any
month-end 38,009 52,026 52,278
Weighted daily average
interest rate 5.81% 7.84% 9.43%
Average interest rate
on amounts outstanding
at year-end 4.54% 6.94% 8.34%
- ----------------------------------------------------------------------------------
</TABLE>
Interest on foreign and short-term domestic borrowings is negotiated at the
time of the borrowing.
23
<PAGE> 11
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Information with respect to the company's long debt at year-end is:
<TABLE>
<CAPTION>
Thousands 1993 1992
- ---------------------------------------------------------------------
<S> <C> <C>
6.88% promissory notes with
principal and interest payable
annually through January 2000,
secured by a partnership interest $ 12,920 $ -
9.88% mortgage with principal
and interest payable in monthly
installments through April 2007 2,577 2,754
Obligations under capital leases 76,392 22,133
Obligations secured by equipment 7,997 -
Other 823 873
-------- --------
100,709 25,760
Less: amount due within one year (21,205) (6,084)
-------- --------
Long-term debt due after one year $ 79,504 $ 19,676
- --------------------------------------------------------------------
</TABLE>
For each of the next five years and beyond, long-term debt and capital lease
obligations are:
<TABLE>
<CAPTION>
LONG-TERM
DEBT CAPITAL
Thousands (PRINCIPAL ONLY) LEASES
- --------------------------------------------------------------------
<S> <C> <C>
1994 $ 2,610 $ 21,630
1995 3,430 21,415
1996 3,680 15,090
1997 3,835 14,051
1998 4,066 9,123
Beyond 1998 6,696 6,670
-------- -------
Total 24,317 87,979
Less: Amount representing interest - (11,587)
-------- -------
Total at present value $ 24,317 $ 76,392
- ---------------------------------------------------------------------
</TABLE>
The company has capital lease commitments through 2012. Cost and accumulated
amortization of capital leases, plus installation costs, included in property,
plant and equipment at December 26, 1993 were $97.7 million and $27.1 million,
respectively; at December 27, 1992, these costs were $43.6 million and $18.9
million, respectively.
7. INTEREST AND OTHER INCOME
<TABLE>
<CAPTION>
Thousands 1993 1992 1991
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Net gain on sale of
assets and other $ 500 $ 2,342 $ 46,115
Interest income 15,990 16,571 8,550
Net equity investment
income in Xilinx, Inc. - - 2,342
-------- -------- --------
$ 16,490 $ 18,913 $ 57,007
- ---------------------------------------------------------------------------------
</TABLE>
During 1992, the company realized a net gain of $2.3 million on the sale or
other disposition of assets, including the sale of its shares of Xilinx, Inc.
As a result of this sale, the company no longer has a significant investment in
Xilinx, Inc.
In December 1991, a net gain of $46.1 million on the sale or other
disposition of assets was realized, primarily attributable to the sale of 3.5
million shares of Xilinx, Inc. stock. Prior to the sale, the company owned 21
percent of Xilinx and this investment was accounted for on the equity method.
After the sale, the remaining investment represented 5.6 percent of outstanding
Xilinx shares and was accounted for on the cost method.
8. INTEREST EXPENSE
<TABLE>
<CAPTION>
Thousands 1993 1992 1991
- ---------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest expense $ 9,785 $ 23,253 $ 25,179
Interest capitalized (7,084) (6,026) (4,299)
Other expense 1,090 - -
------- -------- --------
$ 3,791 $ 17,227 $ 20,880
- ---------------------------------------------------------------------------------
</TABLE>
9. FOREIGN AND DOMESTIC OPERATIONS AND EXPORT SALES
The company is engaged principally in designing, developing,
manufacturing and marketing complex monolithic integrated circuits.
Operations outside the United States include both manufacturing and sales.
Manufacturing subsidiaries are located in Malaysia, Singapore, Thailand and the
United Kingdom. Sales subsidiaries are in Western Europe and the Far East.
24
<PAGE> 12
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following is a summary of operations by entities within geographic areas
for the three years ended December 26, 1993.
<TABLE>
<CAPTION>
Thousands 1993 1992 1991
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Sales to unaffiliated customers:
United States $ 1,174,410 $ 1,106,245 $ 862,698
Europe 343,600 279,430 231,900
Asia 130,270 128,814 132,051
----------- ----------- -----------
$ 1,648,280 $ 1,514,489 $ 1,226,649
- ----------------------------------------------------------------------------------------------------------------------
Transfers between geographic areas (eliminated in consolidation):
United States $ 444,378 $ 360,844 $ 326,966
Asia 277,496 300,773 248,611
---------- ---------- ----------
$ 721,874 $ 661,617 $ 575,577
- ----------------------------------------------------------------------------------------------------------------------
Operating income:
United States $ 265,676 $ 235,802 $ 87,799
Europe 8,376 5,165 2,405
Asia 31,001 28,940 18,647
Eliminations - 38 309
----------- ----------- -----------
$ 305,053 $ 269,945 $ 109,160
- ----------------------------------------------------------------------------------------------------------------------
Identifiable assets:
United States $ 1,647,477 $ 1,193,543 $ 1,052,422
Europe 90,582 71,510 69,333
Asia 362,108 311,481 273,642
Eliminations (170,936) (128,439) (103,639)
----------- ----------- -----------
$ 1,929,231 $ 1,448,095 $ 1,291,758
- ----------------------------------------------------------------------------------------------------------------------
U.S. export sales:
Asia $ 314,268 $ 360,357 $ 250,472
Europe 109,226 99,635 79,444
---------- ---------- -----------
$ 423,494 $ 459,992 $ 329,916
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Sales to unaffiliated customers are based on the AMD location. Transfers
between geographic areas consist of products and services that are sold at
amounts generally above cost and are consistent with governing tax regulations.
Operating income is total sales less operating expenses. Identifiable assets
are those assets used in each geographic area. Export sales are United States
foreign direct sales to unaffiliated customers primarily in Europe and the Far
East.
10. EMPLOYEE BENEFIT PLANS
Stock Option Plans. The company has several stock option plans under which key
employees have been granted incentive (ISOs) and nonqualified (NSOs) stock
options to purchase the company's common stock. Generally, options are
exercisable within four years from the date of grant and expire five to 10
years after the date of grant. ISOs granted under the plans have exercise
prices of not less than 100 percent of the fair market value of the common
stock at the date of grant. Exercise prices of NSOs may not be less than 50
percent of the fair market value of the common stock at the date of grant. At
December 26, 1993, 2,739 employees were eligible and participating in the
plans.
The following is a summary of stock option exercises.
<TABLE>
<CAPTION>
Thousands 1993 1992 1991
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Aggregate exercise price $14,029 $13,803 $4,410
Options exercised 2,749 3,119 948
- ----------------------------------------------------------------------------------------------------------------------
25
</TABLE>
<PAGE> 13
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A summary of the stock option plans at December 26, 1993 is shown below.
<TABLE>
<CAPTION>
Thousands except per share amounts
- ------------------------------------------------------------------------
<S> <C>
Options:
Outstanding at beginning of year 11,927
Granted 2,088
Canceled (305)
Exercised (2,749)
----------
Outstanding at end of year 10,961
----------
Exercisable at beginning of year 5,289
Exercisable at end of year 4,852
Available for grant at beginning of year 2,921
Available for grant at end of year 963
Aggregate exercise price of options
outstanding at end of year $ 131,374
Average exercise price of options
outstanding at end of year $ 11.99
- ------------------------------------------------------------------------
</TABLE>
Stock Appreciation Rights Plans. The company maintains three stock
appreciation rights plans under which stock appreciation rights (SARs) either
have been or may be granted to key employees. The number of SARs exercised plus
common stock issued under the stock option plans may not exceed the number of
shares authorized under the stock option plans. SARs may be granted in tandem
with outstanding stock options, in tandem with future stock option grants or
independently of any stock options. Generally, the terms of SARs granted under
the plans are similar to those of options granted under the stock option plans,
including exercise prices, exercise dates and expiration dates. To date, the
company has granted only limited SARs, which become exercisable only in the
event of certain changes in control of the company.
Stock Purchase Plan. The company has a stock purchase plan that allows
participating employees to purchase, through payroll deductions, shares of the
company's common stock at 85 percent of the fair market value at specified
dates. At December 26, 1993, 5,621 employees were eligible to participate in
the plan and 1,361,252 common shares remained available for issuance under the
plan. A summary of stock purchased under the plan is shown below.
<TABLE>
<CAPTION>
Thousands except
employee participants 1993 1992 1991
- ----------------------------------------------------------------
<S> <C> <C> <C>
Aggregate purchase price $ 6,413 $ 4,614 $ 4,207
Shares purchased 387 483 689
Employee participants 1,684 1,349 1,065
- ----------------------------------------------------------------
</TABLE>
Profit Sharing Program. The company has a profit sharing program to which the
Board of Directors has authorized semiannual contributions. Profit sharing
contributions were $33.9 million in 1993, $30.0 million in 1992 and $12.1
million in 1991.
Retirement Savings Plan. The company has a retirement savings plan, commonly
known as a 401(k) plan, that allows participating United States employees to
contribute from 1 percent to 15 percent of their pre-tax salary subject to
I.R.S. limits. The company makes a matching contribution calculated at 50 cents
on each dollar of the first 3 percent of participant contributions, to a
maximum of 1.5 percent of eligible compensation. The company's contributions to
the 401(k) plan were $3.2 million, $2.7 million and $2.6 million for 1993, 1992
and 1991, respectively. There are three investment funds in which each employee
may invest contributions in increments of 10 percent.
Restricted Stock Award Plan. The company established the 1987 restricted stock
award plan under which up to 2 million shares of common stock may be issued to
employees, subject to terms and conditions determined at the discretion of the
Board of Directors. The company entered into agreements to issue 19,000 and
564,650 shares in 1992 and 1991, respectively. To date, agreements covering
210,212 shares have been canceled without issuance and 1,049,964 shares have
been issued pursuant to prior agreements. At December 26, 1993, agreements
covering 235,000 shares were outstanding under the plan and 715,036 shares
remained available for future awards. Outstanding awards vest under varying
terms within five years. As of December 26, 1993, there were 186 employees
eligible and participating in the plan.
11. COMMITMENTS
The company leases certain of its facilities under agreements which expire at
various dates through 2010. The company also leases certain of its
manufacturing and office equipment for terms ranging from three to six years.
Rent expense was $31.9 million, $29.4 million and $29.7 million in 1993, 1992
and 1991, respectively.
For each of the next five years and beyond, non-cancelable long-term
operating lease obligations and commitments to purchase manufacturing supplies
and services are as follows:
<TABLE>
<CAPTION>
OPERATING PURCHASE
Thousands LEASES COMMITMENTS
- ------------------------------------------------------------
<S> <C> <C>
1994 $ 23,515 $ 4,928
1995 15,663 3,454
1996 11,823 2,549
1997 7,497 2,549
1998 6,750 2,289
Beyond 1998 15,022 2,465
- ------------------------------------------------------------
</TABLE>
The company had commitments at December 26, 1993 to expend approximately $70.8
million for the construction or acquisition of additional property, plant and
equipment.
26
<PAGE> 14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12. CONTINGENCIES
AMD/INTEL LITIGATIONS
AMD is currently involved in the following disputes with Intel Corporation: (1)
the AMD/Intel Technology Exchange Agreement Arbitration, (the "Arbitration");
(2) the 287 Microcode Litigation; (3) the 386 Microcode Litigation; (4) the 486
Microcode Litigation; (5) the Intel Business Interference Case; (6) the Intel
Antitrust Case, and (7) the International Trade Commission Proceeding ("ITC
Proceeding").
Technology Agreement Arbitration. A 1982 technology exchange agreement (the
"1982 Agreement") between Advanced Micro Devices and Intel Corporation has been
the subject of a dispute which was submitted to Arbitration through the
Superior Court of Santa Clara County, California, and it is now at the
California Supreme Court on appeal. The dispute centers around issues relating
to whether Intel breached its agreement with AMD, whether that breach injured
AMD, and what the remedies should be for the injuries caused to AMD. The
California Supreme Court is expected to render its decision by the end of 1994.
The company believes it has the right to use Intel technology to manufacture
and sell AMD's microprocessor products based on a variety of factors including:
(i) the 1982 Agreement, (ii) the Arbitrator's award in the Arbitration which is
pending review by the California Supreme Court and (iii) the terms of the 1976
patent and copyright agreement providing AMD patent and copyrights to Intel
products (the "1976 Agreement"). An unfavorable decision by the California
Supreme Court could materially adversely affect the company's financial
condition and results of operations as well as other AMD/Intel Microcode
Litigations discussed herein. The AMD/Intel Litigations involve multiple
interrelated and complex issues of fact and law. Therefore, the ultimate
outcome of the AMD/Intel Litigations cannot presently be determined.
Accordingly, no provision for any liability that may result upon the
adjudication of the AMD/Intel Litigations has been made in the company's
financial statements.
Microcode Litigations. Intel Corporation has filed three suits against the
company, alleging copyright infringement involving AMD's use of Intel microcode
in the Am80C287(TM) math coprocessors, the Am386 microprocessors and the Am486
microprocessors. The suits generally allege that the company violated
copyrights on Intel microcode and concern two agreements between Intel and the
company: (1) the 1976 Agreement and (2) the 1982 Agreement. The Microcode
Litigations are all in various stages of litigation.
Depending on the result and the status of the Microcode Litigations, an
unfavorable decision in any single or combination of the Microcode Litigations
could result in a material monetary damages award to Intel and/or preclude the
company from continuing to produce Am386 and Am486 products containing Intel
copyrighted microcode, and thus could materially adversely impact the company's
financial condition and results of operations. The AMD/Intel Litigations
involve multiple interrelated and complex issues of fact and law. Therefore,
the ultimate outcome of the AMD/Intel Litigations cannot presently be
determined. Accordingly, no provision for any liability that may result upon
the adjudication of the AMD/Intel Litigations has been made in the company's
financial statements.
Intel Antitrust, Business Interference and ITC Cases. The company filed an
antitrust suit against Intel Corporation in 1991, alleging that Intel engaged
in a series of unlawful acts designed to secure and maintain a monopoly in iAPX
microprocessor chips ("Intel Antitrust Case"). AMD seeks significant monetary
damages (which may be trebled) and an injunction requiring Intel to license the
80386 and 80486 to AMD, or other appropriate relief.
In November 1992, the company filed an action in the Superior Court of
California against Intel for tortious interference with prospective economic
advantage, violation of California's Unfair Competition Act, breach of contract
and declaratory relief arising out of Intel's efforts to require licensees of
an Intel patent to pay royalties if they purchased 386 and 486 microprocessors
from suppliers of those components other than Intel (the "Business Interference
Case"). No trial date has been set.
The United States International Trade Commission Proceeding ("ITC
Proceeding") was filed by Intel Corporation in May 1993, against Twinhead, a
Taiwan-based manufacturer which is a customer of both AMD and Intel. Intel
claims that Twinhead induces computer end-users to infringe on what is known as
the Crawford '338 patent when its computers, containing non-Intel 386 and 486
microprocessors, are used with multi-tasking software such as Windows, Unix or
OS/2. Intel seeks a permanent exclusion order from entry into the United States
of certain Twinhead personal computers and an order directing Twinhead to cease
and desist from demonstrating, testing or otherwise using such computers in the
United States. AMD's dispute with Intel in the Intel Business Interference Case
(discussed above) requests a declaration that the Crawford '338 patent is
invalid; accordingly, AMD intervened in the ITC Proceeding as a real party in
interest by filing a motion with the ITC to intervene on the side of the
respondents, and such motion was granted. The company has vigorously contested
the relief Intel seeks. An unfavorable outcome in the ITC Proceeding could have
an adverse effect on the company's ability to sell microprocessors to Twinhead
and other computer manufacturers in Taiwan and potentially, other countries.
ENVIRONMENTAL MATTERS
Cleanup Orders. Since 1981, the company has discovered, investigated and begun
remediation of three sites where releases from underground chemical tanks at
its facilities in Santa Clara County, California adversely affected the
groundwater. There is no indication, however, that any public drinking water
supplies have been affected. The chemicals released into the groundwater were
commonly in use in the semiconductor industry in the wafer fabrication process
prior to 1979.
27
<PAGE> 15
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
At least one of the released chemicals (which is no longer used by the
company) has been identified as a probable carcinogen.
In 1991, the company received four Final Site Cleanup Requirements Orders
from the California Regional Water Quality Control Board, San Francisco Bay
Region ("RWQCB") relating to the three sites. The orders named the company, as
well as TRW Microwave, Inc., and Philips Semiconductors, (formerly Signetics
Company) in various combinations and degrees of responsibility.
The company has not yet determined to what extent the costs of any related
remedial actions will be covered by insurance. The three sites are on the
National Priorities List (Superfund). If the company fails to satisfy federal
compliance requirements or inadequately performs the compliance measures, the
government (a) can bring an action to enforce compliance, or (b) can undertake
the desired response actions itself and later bring an action to recover its
costs, plus penalties - which are up to three times the costs of clean-up
activities - if appropriate. Certain class actions related to this matter have
been settled or the statute of limitations has been tolled. It is expected that
the foregoing environmental matters or any related litigation will not have a
material adverse effect on the financial condition or results of operations of
the company.
SHAREHOLDERS AND SECURITIES CLASS ACTIONS
In Re Advanced Micro Devices Securities Litigation. In September 1993 five
class actions were filed, purportedly on behalf of purchasers of the company's
stock, alleging that the company and various of its officers and directors
violated sections of the Securities and Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, by issuing allegedly false and misleading statements
concerning the circumstances surrounding the company's development of microcode
for one of its Am486 microprocessor products. The complaints also alleged that
the company's conduct constituted fraud and negligent misrepresentation.
The five cases were consolidated and an amended class action complaint was
filed containing the allegations described above and an additional allegation
that the company made false and misleading statements about its revenues and
earnings during the third quarter of its 1993 fiscal year. The amended
complaint seeks damages in an unspecified amount. The company believes that the
ultimate outcome of this litigation will not have a material adverse effect
upon the financial condition or trends in results of operations of the company.
George A. Bilunka, et al. v. Sanders, et al. In September 1993, an AMD
shareholder, George A. Bilunka, purported to commence an action derivatively on
the company's behalf against all of the company's directors and certain of the
company's officers. The company is named as a nominal defendant. This purported
derivative action essentially alleges that the individual defendants breached
their fiduciary duties to the company by causing or permitting the company to
make allegedly false and misleading statements about the development of
microcode for one of the company's Am486 microprocessor products. Damages are
sought against the individual defendants in an unspecified amount. The company
believes that the ultimate outcome of this litigation will not have a material
adverse effect upon the financial condition or trends in results of operations
of the company.
SEC Investigation. The Securities and Exchange Commission (SEC) has notified
the company that it is conducting an informal investigation of the company
concerning the company's disclosures relating to the development of microcode
for one of its Am486 products. The company is cooperating fully with the SEC.
OTHER MATTERS
The company is a defendant or plaintiff in various other actions which arose in
the normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the
financial condition or overall trends in the results of operations of the
company.
13. DISCLOSURES ABOUT FAIR VALUE OF
FINANCIAL INSTRUMENTS
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments for which it is practicable to estimate
that value:
Cash and Cash Equivalents
The carrying amount approximates fair value.
Temporary Cash Investments
The carrying amount approximates fair value because of the short maturity of
these instruments.
Short-Term Debt
The carrying values of these variable-rate borrowings approximate fair values
due to their short-term nature.
Long-Term Debt
The company has a 9.88 percent, $2.6 million mortgage with principal and
interest payable in monthly installments through April 2007. The fair value for
this mortgage loan is estimated using discounted cash flow analysis based on an
estimated interest rate of 9 percent for similar types of borrowing
arrangements. The company also obtained $20.9 million long-term borrowings at
the end of 1993. Due to the recent acquisition of these borrowings, the
carrying amounts approximate their fair value.
The estimated fair values of the company's financial instruments are as
follows:
<TABLE>
<CAPTION>
1993
----------------------
CARRYING FAIR
Thousands AMOUNT VALUE
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash and cash equivalents $ 60,423 $ 60,423
Temporary investments 427,775 427,775
Short-term debt:
Notes payable 30,994 30,994
Long-term debt 23,494 24,321
- ------------------------------------------------------------------------------------------------
28
</TABLE>
<PAGE> 16
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Advanced Micro Devices, Inc.
We have audited the accompanying consolidated balance sheets of Advanced Micro
Devices, Inc. as of December 26, 1993 and December 27, 1992, and the related
consolidated statements of operations and cash flows for each of the three
years in the period ended December 26, 1993. These financial statements are the
responsibility of the company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Advanced Micro
Devices, Inc. as of December 26, 1993, and December 27, 1992, and the
consolidated results of its operations and its cash flows for each of the three
years in the period ended December 26, 1993, in conformity with generally
accepted accounting principles.
As discussed in note 12 to the financial statements, the company is a
defendant in various lawsuits with Intel Corporation regarding intellectual
property rights. The ultimate outcome of these lawsuits cannot presently be
determined. Accordingly, no provision for any liability that may result has
been made in the consolidated financial statements.
/S/ Ernst & Young
San Jose, California
January 6, 1994
29
<PAGE> 17
SUPPLEMENTARY FINANCIAL DATA
<TABLE>
<CAPTION>
1993 and 1992 by quarter, DEC. 26, SEPT. 26, JUNE 27,
unaudited, in thousands 1993 1993 1993
except per share amounts
<S> <C> <C> <C>
NET SALES $ 413,404 $ 418,351 $ 409,092
Expenses:
Cost of sales 208,552 199,999 186,931
Research and development 66,747 64,905 69,323
Marketing, general and administrative 83,148 71,979 67,253
---------- ---------- ----------
358,447 336,883 323,507
---------- ---------- ----------
Operating income 54,957 81,468 85,585
Interest and other income 4,647 4,413 4,043
Interest expense (1,772) (691) (246)
---------- ---------- ----------
Income before taxes on income 57,832 85,190 89,382
Provision for taxes on income 16,193 23,852 25,029
---------- ---------- ----------
NET INCOME 41,639 61,338 64,353
Preferred stock dividends 2,588 2,587 2,588
---------- ---------- ----------
NET INCOME APPLICABLE
TO COMMON SHAREHOLDERS $ 39,051 $ 58,751 $ 61,765
---------- ---------- ----------
NET INCOME PER COMMON SHARE
- Primary $ .41 $ .61 $ .65
---------- ---------- ----------
- Fully diluted $ .41 $ .60 $ .63
---------- ---------- ----------
Shares used in per
share calculation
- Primary 95,895 95,706 95,079
---------- ---------- ----------
- Fully diluted 102,751 102,743 101,937
---------- ---------- ----------
Common stock market price range
- High $ 30.00 $ 32.38 $ 31.00
- Low $ 17.13 $ 22.13 $ 20.63
</TABLE>
FINANCIAL SUMMARY
<TABLE>
<CAPTION>
Five years ended
December 26, 1993, in thousands
except per share amounts 1993 1992 1991
<S> <C> <C> <C>
NET SALES $1,648,280 $1,514,489 $1,226,649
Expenses:
Cost of sales 789,564 746,486 658,824
Research and development 262,802 227,860 213,765
Marketing, general and administrative 290,861 270,198 244,900
---------- ---------- ----------
1,343,227 1,244,544 1,117,489
---------- ---------- ----------
Operating income (loss) 305,053 269,945 109,160
Litigation judgment - - -
Interest and other income 16,490 18,913 57,007
Interest expense (3,791) (17,227) (20,880)
---------- ---------- ----------
Income (loss) before
taxes on income 317,752 271,631 145,287
Provision for taxes on income 88,971 26,620 -
---------- ---------- ----------
NET INCOME (LOSS) 228,781 245,011 145,287
Preferred stock dividends 10,350 10,350 10,350
---------- ---------- ----------
NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ 218,431 $ 234,661 $ 134,937
---------- ---------- ----------
NET INCOME (LOSS)
PER COMMON SHARE - Primary $ 2.30 $ 2.57 $ 1.53
---------- ---------- ----------
- Fully diluted $ 2.24 $ 2.49 $ 1.52
---------- ---------- ----------
Shares used in per
share calculation - Primary 95,108 91,383 88,196
---------- ---------- ----------
- Fully diluted 102,063 98,475 95,540
---------- ---------- ----------
Long-term debt due
after one year $ 79,504 $ 19,676 $ 42,039
Total assets $1,929,231 $1,448,095 $1,291,758
30
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
1993 and 1992 by quarter, MAR. 28, DEC. 27, SEPT. 27, JUNE 28, MAR. 29,
unaudited, in thousands 1993 1992 1992 1992 1992
except per share amounts
<S> <C> <C> <C> <C> <C>
NET SALES $ 407,433 $ 400,224 $ 356,677 $ 350,180 $ 407,408
Expenses:
Cost of sales 194,082 198,298 182,792 182,182 183,214
Research and development 61,827 59,194 56,802 56,395 55,469
Marketing, general
and administrative 68,481 69,545 65,362 67,553 67,738
---------- ---------- ---------- ---------- ----------
324,390 327,037 304,956 306,130 306,421
---------- ---------- ---------- ---------- ----------
Operating income 83,043 73,187 51,721 44,050 100,987
Interest and other income 3,387 5,695 5,110 4,486 3,622
Interest expense (1,082) (3,061) (4,597) (4,840) (4,729)
---------- ---------- ---------- ---------- ----------
Income before taxes on income 85,348 75,821 52,234 43,696 99,880
Provision for taxes on income 23,897 6,257 3,134 2,247 14,982
---------- ---------- ---------- ---------- ----------
NET INCOME 61,451 69,564 49,100 41,449 84,898
Preferred stock dividends 2,587 2,587 2,588 2,587 2,588
---------- ---------- ---------- ---------- ----------
NET INCOME APPLICABLE
TO COMMON SHAREHOLDERS $ 58,864 $ 66,977 $ 46,512 $ 38,862 $ 82,310
---------- ---------- ---------- ---------- ----------
NET INCOME PER COMMON SHARE
- Primary $ .63 $ .73 $ .51 $ .43 $ .90
---------- ---------- ---------- ---------- ----------
- Fully diluted $ .61 $ .70 $ .50 $ .42 $ .86
---------- ---------- ---------- ---------- ----------
Shares used in per
share calculation
- Primary 93,751 92,297 90,387 91,415 91,434
---------- ---------- ---------- ---------- ----------
- Fully diluted 100,820 99,603 97,733 98,272 98,290
---------- ---------- ---------- ---------- ----------
Common stock market price range
- High $ 24.00 $ 18.75 $ 12.50 $ 19.50 $ 21.38
- Low $ 17.63 $ 10.63 $ 7.38 $ 8.50 $ 16.25
</TABLE>
FINANCIAL SUMMARY
<TABLE>
<CAPTION>
Five years ended
December 26, 1993, in thousands
except per share amounts 1990 1989
<S> <C> <C>
NET SALES $1,059,242 $1,104,606
Expenses:
Cost of sales 678,507 643,427
Research and development 203,651 201,764
Marketing, general
and administrative 228,204 220,983
---------- ----------
1,110,362 1,066,174
---------- ----------
Operating income (loss) (51,120) 38,432
Litigation judgment (27,738) -
Interest and other income 33,588 27,213
Interest expense (8,282) (15,790)
---------- ----------
Income (loss) before
taxes on income (53,552) 49,855
Provision for taxes on income - 3,803
---------- ----------
NET INCOME (LOSS) (53,552) 46,052
Preferred stock dividends 10,350 10,350
---------- ----------
NET INCOME (LOSS) APPLICABLE
TO COMMON SHAREHOLDERS $ (63,902) $ 35,702
---------- ----------
NET INCOME (LOSS)
PER COMMON SHARE - Primary $ (.78) $ .44
---------- ----------
- Fully diluted $ (.78) $ .43
---------- ----------
Shares used in per
share calculation - Primary 81,878 82,048
---------- ----------
- Fully diluted 81,878 82,197
---------- ----------
Long-term debt due
after one year $ 131,307 $ 126,431
Total assets $1,111,692 $1,122,415
31
</TABLE>
<PAGE> 1
EXHIBIT 22
LIST OF FOREIGN SUBSIDIARIES
Advanced Micro Devices (U.K.) Limited
Advanced Micro Devices S.A. (France)
Advanced Micro Devices S.A. (Switzerland)(1)
Advanced Micro Devices GmbH
Advanced Micro Devices S.p.A.
Advanced Micro Devices AB
Advanced Micro Devices Belgium S.A.N.V.
Advanced Micro Devices (Canada) Limited
AMD Japan Ltd.
Advanced Micro Devices Sdn. Bhd.
Advanced Micro Devices Export Sdn. Bhd.(2)
Advanced Micro Devices (Singapore) Pte. Ltd.
AMD (Thailand) Limited (3)
AMD Foreign Sales Corporation
Advanced Micro Devices Products Sdn. Bhd.(2)
Advanced Micro Devices Technology Sdn. Bhd.(2)
MMI Integrated Circuits (Singapore) Pte. Ltd.
LIST OF DOMESTIC SUBSIDIARIES
Advanced Micro, Ltd.
AMD Corporation
AMD Far East Ltd.
AMD International Sales and Service, Ltd.
________________________
(1)Subsidiary of AMD International Sales and Service, Ltd.
(2)Subsidiary of Advanced Micro Devices Sdn. Bhd.
(3)Subsidiary of Advanced Micro Devices (Singapore) Pte. Ltd.
<PAGE> 1
EXHIBIT 25
POWER OF ATTORNEY
Know All Men By These Presents, that each person whose signature appears below
constitutes and appoints W. J. Sanders III and Marvin D. Burkett, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign Advanced Micro Devices, Inc.'s Annual Report on
Form 10-K for the fiscal year ended December 26, 1993, and any and all
amendments thereto and to file the same, with all exhibits thereto and
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitutes, may lawfully do or cause to be done by virtue hereof.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ W.J. SANDERS III Chairman of the Board February 18, 1994
- --------------------------- and Chief Executive Officer --
W. J. Sanders III (Principal Executive Officer)
/s/ ANTHONY B. HOLBROOK Vice Chairman of the Board February 18, 1994
- --------------------------- and Chief Technical Officer --
Anthony B. Holbrook
/s/ RICHARD PREVITE Director, President and February 18, 1994
- --------------------------- Chief Operating Officer --
Richard Previte
/s/ CHARLES M. BLALACK Director February 18, 1994
- --------------------------- --
Charles M. Blalack
/s/ GENE BROWN Director February 18, 1994
- --------------------------- ---
R. Gene Brown
/s/ JOE L. ROBY Director February 18, 1994
- --------------------------- --
Joe L. Roby
/s/ MARVIN D. BURKETT Senior Vice President, February 18, 1994
- --------------------------- Chief Financial Officer --
Marvin D. Burkett and Treasurer
(Principal Financial Officer)
Vice President and February 18, 1994
- --------------------------- Corporate Controller --
Larry R. Carter (Principal Accounting Officer)
</TABLE>
