<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A (No. 2)
(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 28, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-7882
ADVANCED MICRO DEVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 94-1692300
(STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
ONE AMD PLACE 94086
SUNNYVALE, CALIFORNIA (ZIP CODE)
(Address of principal executive offices)
Registrant's telephone number, including area code: (408) 732-2400
Securities registered pursuant to Section 12(b) of the Act:
(Name of each exchange
(Title of each class) on which registered)
--------------------- -----------------------
$0.01 Par Value Common Stock New York Stock Exchange
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 X No________
-------
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 25, 1998.
$3,092,910,944
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
1) 142,646,957 shares as of February 25, 1998.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)
1. Financial Statements
The financial statements listed on page F-1 in the Index to Consolidated
Financial Statements and Financial Statement Schedule covered by Report of
Independent Auditors are set forth on pages F-2 through F-27 of this Annual
Report on Form 10-K.
2. Financial Statement Schedule
The financial statement schedule listed on page F-1 in the Index to
Consolidated Financial Statements and Financial Statement Schedule covered by
the Report of Independent Auditors is set forth on page S-1 of this Annual
Report on Form 10-K.
All other schedules have been omitted because 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.
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part
of, or incorporated by reference into, this Annual Report on Form 10-K. The
following is a list of such Exhibits:
Exhibit
Number Description of Exhibits
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2.1 Agreement and Plan of Merger dated October 20, 1995, as amended,
between the Company and NexGen, Inc., filed as Exhibit 2 to the
Company's Quarterly Report for the period ended October 1, 1995,
and as Exhibit 2.2 to the Company's Current Report on Form 8-K
dated January 17, 1996, is hereby incorporated by reference.
2.2 Amendment No. 2 to the Agreement and Plan of Merger, dated January
11, 1996, between Advanced Micro Devices, Inc. and NexGen, Inc.,
filed as Exhibit 2.2 to the Company's Current Report on Form 8-K
dated January 17, 1996, is hereby incorporated by reference.
3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to
the Company's Quarterly Report on Form 10-Q for the period ended
July 2, 1995, is hereby incorporated by reference.
3.2 By-Laws, as amended, filed as Exhibit 3.2 to the Company's Amendment
No. 1 to its Annual Report on Form 10-K/A for the fiscal year
ended December 31, 1995, is hereby incorporated by reference.
4.1 Form of Advanced Micro Devices, Inc. 11 percent Senior Secured Notes
due August 1, 2003, filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K dated August 13, 1996, is hereby incorporated
by reference.
4.2 Indenture, dated as of August 1, 1996, between Advanced Micro
Devices, Inc. and United States Trust Company of New York, as
trustee, filed as Exhibit 4.2 to the Company's Current Report on
Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.3 Intercreditor and Collateral Agent Agreement, dated as of August 1,
1996, among United States Trust Company of New York, as trustee,
Bank of America NT&SA, as agent for the banks under the Credit
Agreement of July 19, 1996, and IBJ Schroder Bank & Trust Company,
filed as Exhibit 4.3 to the Company's Current Report on Form 8-K
dated August 13, 1996, is hereby incorporated by reference.
2
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Exhibit
Number Description of Exhibits
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4.4 Payment, Reimbursement and Indemnity Agreement, dated as of
August 1, 1996, between Advanced Micro Devices, Inc. and IBJ
Schroder Bank & Trust Company, filed as Exhibit 4.4 to the
Company's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
4.5 Deed of Trust, Assignment, Security Agreement and Financing
Statement, dated as of August 1, 1996, among Advanced Micro
Devices, Inc., as grantor, IBJ Schroder Bank & Trust Company,
as grantee, and Shelley W Austin, as trustee, filed as Exhibit
4.5 to the Company's Current, Report on Form 8-K dated August
13, 1996, is hereby incorporated by reference.
4.6 Security Agreement, dated as of August 1, 1996, among Advanced
Micro Devices, Inc. and IBJ Schroder Bank & Trust Company, as
agent for United States Trust Company of New York, as Trustee,
and Bank of America NT&SA, as agent for banks, filed as
Exhibit 4.6 to the Company's Current Report on Form 8-K dated
August 13, 1996, is hereby incorporated by reference.
4.7 Lease, Option to Purchase and Put Option Agreement, dated as of
August 1, 1996, between Advanced Micro Devices, Inc., as
lessor, and AMD Texas Properties, LLC, as lessee, filed as
Exhibit 4.7 to the Company's Current Report on Form 8-K dated
August 13, 1996, is hereby incorporated by reference.
4.8 Reciprocal Easement Agreement, dated as of August 1, 1996,
between Advanced Micro Devices, Inc. and AMD Texas Properties,
LLC, filed as Exhibit 4.8 to the Company's Current Report on
Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.9 Sublease Agreement, dated as of August 1, 1996, between Advanced
Micro Devices, Inc., as sublessee, and AMD Texas Properties,
LLC, as sublessor, filed as Exhibit 4.9 to the Company's
Current Report on Form 8-K dated August 13, 1996, is hereby
incorporated by reference.
4.10 The Company 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 Company or any of its subsidiaries for
which the total amount of securities authorized under such
instruments does not exceed 10 percent of the total assets of
the Company and its subsidiaries on a consolidated basis.
*10.1 AMD 1982 Stock Option Plan, as amended, filed as Exhibit 10.1 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
*10.2 AMD 1986 Stock Option Plan, as amended, filed as Exhibit 10.2 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
*10.3 AMD 1992 Stock Incentive Plan, as amended, filed as Exhibit 10.3
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 26, 1993, is hereby incorporated by
reference.
*10.4 AMD 1980 Stock Appreciation Rights Plan, as amended, filed as
Exhibit 10.4 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
*10.6 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 29, 1991, are hereby incorporated by reference.
*10.7 Form of Limited Stock Appreciation Rights Agreement, filed as
Exhibit 4.11 to the Company's Registration Statement on Form
S-8 (No. 33-26266), is hereby incorporated by reference.
3
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Exhibit
Number Description of Exhibits
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*10.8 AMD 1987 Restricted Stock Award Plan, as amended, filed as
Exhibit 10.10 to the Company's Annual Report on Form 10-K for
the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
*10.9 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 29, 1991, are hereby incorporated by reference.
*10.10 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
Company's Annual Report on Form 10-K for the fiscal year ended
March 31, 1985, is hereby incorporated by reference.
*10.11 Advanced Micro Devices, Inc. 1996 Stock Incentive Plan, as
amended, filed as Exhibit 10.11 to the Company's Annual Report
on Form 10-K for the fiscal year ended December 29, 1996, is
hereby incorporated by reference.
*10.12 Employment Agreement dated September 29, 1996, between the
Company and W. J. Sanders III, filed as Exhibit 10.11(a) to
the Company's Quarterly Report on Form 10-Q for the period
ended September 29, 1996, is hereby incorporated by reference.
*10.13 Management Continuity Agreement between the Company and W. J.
Sanders III, filed as Exhibit 10.14 to the Company's Annual
Report on Form 10-K for the fiscal year ended December 29,
1991, is hereby incorporated by reference.
*10.14 Bonus Agreement between the Company and Richard Previte, filed
as Exhibit 10.15 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 29, 1991, is hereby
incorporated by reference.
*10.15 Executive Bonus Plan, as amended, filed as Exhibit 10.16 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1994, is hereby incorporated by reference.
*10.16 Advanced Micro Devices, Inc. Executive Incentive Plan, filed as
Exhibit 10.14(b) to the Company's Quarterly Report on Form 10-
Q for the period ended June 30, 1996, is hereby incorporated
by reference.
*10.17 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the
Company's Annual Report on Form 10-K for the fiscal year ended
March 30, 1986, is hereby incorporated by reference.
*10.18 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, is hereby incorporated by reference.
*10.19 Director Deferral Agreement of R. Gene Brown, filed as Exhibit
10.18 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989, is hereby incorporated by
reference.
10.20 Intellectual Property Agreements with Intel Corporation, filed
as Exhibit 10.21 to the Company's Annual Report on Form 10-K
for the fiscal year ended December 29, 1991, are hereby
incorporated by reference.
*10.21 Form of Indemnification Agreements with former officers of
Monolithic Memories, Inc., filed as Exhibit 10.22 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 27, 1987, is hereby incorporated by reference.
*10.22 Form of Management Continuity Agreement, filed as Exhibit 10.25
to the Company's Annual Report on Form 10-K for the fiscal
year ended December 29, 1991, is hereby incorporated by
reference.
4
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Exhibit
Number Description of Exhibits
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**10.23(a) Joint Venture Agreement between the Company and Fujitsu Limited,
filed as Exhibit 10.27(a) to the Company's Amendment No. 1 to
its Annual Report on Form 10-K for the fiscal year ended
December 26, 1993, is hereby incorporated by reference.
**10.23(b) Technology Cross-License Agreement between the Company and
Fujitsu Limited, filed as Exhibit 10.27(b) to the Company's
Amendment No. 1 to its Annual Report on Form 10-K for the
fiscal year ended December 26, 1993, is hereby incorporated by
reference.
**10.23(c) AMD Investment Agreement between the Company and Fujitsu
Limited, filed as Exhibit 10.27(c) to the Company's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
**10.23(d) Fujitsu Investment Agreement between the Company and Fujitsu
Limited, filed as Exhibit 10.27(d) to the Company's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
**10.23(e) First Amendment to Fujitsu Investment Agreement dated April 28,
1995, filed as Exhibit 10.23(e) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 29, 1996, is
hereby incorporated by reference.
10.23(f) Second Amendment to Fujitsu Investment Agreement, dated February
27, 1996, filed as Exhibit 10.23(f) to the Company's Annual
Report on Form 10-K for the fiscal year ended December 29,
1996, is hereby incorporated by reference.
**10.23(g) Joint Venture License Agreement between the Company and Fujitsu
Limited, filed as Exhibit 10.27(e) to the Company's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
**10.23(h) Joint Development Agreement between the Company and Fujitsu
Limited, filed as Exhibit 10.27(f) to the Company's Amendment
No. 1 to its Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
**10.23(i) Fujitsu Joint Development Agreement Amendment, filed as Exhibit
10.23(g) to the Company's Quarterly Report on Form 10-Q for
the period ended March 31, 1996, is hereby incorporated by
reference.
10.24(a) Credit Agreement, dated as of July 19, 1996, among Advanced
Micro Devices, Inc., Bank of America NT&SA, as administrative
agent and lender, ABN AMRO Bank N.V., as syndication agent and
lender, and Canadian Imperial Bank of Commerce, as
documentation agent and lender, filed as Exhibit 99.1 to the
Company's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
10.24(b) First Amendment to Credit Agreement, dated as of August 7, 1996,
among Advanced Micro Devices, Inc. Bank of America NT&SA, as
administrative agent and lender, ABN AMRO Bank N.V., as
syndication agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as Exhibit
99.2 to the Company's Current Report on Form 8-K dated August
13, 1996, is hereby incorporated by reference.
10.24(c) Second Amendment to Credit Agreement, dated as of September 9,
1996, among Advanced Micro Devices, Inc., Bank of America
NT&SA, as administrative agent and lender, ABN AMRO Bank N.V.,
as syndication agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as Exhibit
10.24(b) to the Company's Quarterly Report on Form 10-Q for
the period ended September 29, 1996, is hereby incorporated by
reference.
5
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Exhibit
Number Description of Exhibits
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10.24(d) Third Amendment to Credit Agreement, dated as of October 1,
1997, among Advanced Micro Devices, Inc., Bank of America NT &
SA, as administrative agent and lender, ABN AMRO Bank N.V., as
syndicated agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as Exhibit
10.24(d) to the Company's Quarterly Report on Form 10-Q for
the period ended September 28, 1997, is hereby incorporated by
reference.
10.24(e) Fourth Amendment to Credit Agreement, dated as of January 26,
1998, among Advanced Micro Devices, Inc., Bank of America NT &
SA, as administrative agent and lender, ABN AMRO Bank N.V., as
syndicated agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as Exhibit
10.24(e) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1997, is hereby incorporated by
reference.
10.24(f) Fifth Amendment to Credit Agreement, dated as of February 26,
1998, among Advanced Micro Devices, Inc., Bank of America NT &
SA, as administrative agent and lender, ABN AMRO Bank, N.V.,
as syndicated agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as Exhibit
10.24(f) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1997, is hereby incorporated by
reference.
10.24(g) Sixth Amendment to Credit Agreement, dated as of June 30, 1998,
among Advanced Micro Devices, Inc., Bank of America NT & SA,
as administrative agent and lender, ABN AMRO Bank N.V., as
syndicated agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender, filed as exhibit
10.24(g) to the Company's Current Report on Form 8-K dated
July 8, 1998, is hereby incorporated by reference.
10.25(a) Third Amended and Restated Guaranty, dated as of August 21,
1995, made by the Company in favor of CIBC Inc. (replacing in
entirety the Amended and Restated Guaranty and the First
Amendment thereto filed as Exhibits 10.29(a) and 10.29(b),
respectively, to the Company's Annual Report on Form 10-K for
the fiscal year ended December 25, 1994) filed as Exhibit
10.29(a) to the Company's Quarterly Report on Form 10-Q for
the period ended October 1, 1995, is hereby incorporated by
reference.
10.25(b) First Amendment to Third Amended and Restated Guaranty, dated as
of October 20, 1995, (amending the Third Amended and Restated
Guaranty, dated as of August 21, 1995, made by the Company in
favor of CIBC Inc.), filed as Exhibit 10.29(d) to the
Company's Quarterly Report on Form 10-Q for the period ended
October 1, 1995, is hereby incorporated by reference.
10.25(c) Second Amendment to Third Amended and Restated Guaranty, dated
as of January 12, 1996, (amending the Third Amended and
Restated Guaranty, dated as of August 21, 1995, as amended,
made by the Company in favor of CIBC Inc.), filed as Exhibit
10.25(c) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, is hereby incorporated by
reference.
10.25(d) Third Amendment to Third Amended and Restated Guaranty, dated as
of May 10, 1996, (amending the Third Amended and Restated
Guaranty, dated as of August 21, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 10.25(n) to
the Company's Quarterly Report on Form 10-Q for the period
ended September 29, 1996, is hereby incorporated by reference.
10.25(e) Fourth Amendment to Third Amended and Restated Guaranty, dated
as of June 20, 1996, (amending the Third Amended and Restated
Guaranty, dated as of August 21, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 10.25(o) to
the Company's Quarterly Report on Form 10-Q for the period
ended September 29, 1996, is hereby incorporated by reference.
6
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Exhibit
Number Description of Exhibits
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10.25(f) Fifth Amendment to Third Amended and Restated Guaranty, dated as
of August 1, 1996, (amending the Third Amended and Restated
Guaranty, dated as of August 25, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 99.3 to the
Company's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
10.25(g) Sixth Amendment to Third Amended and Restated Guaranty, dated as
of February 6, 1998, (amending the Third Amended and Restated
Guaranty, dated as of August 25, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 10.25(g) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 28, 1997, is hereby incorporated by reference.
10.25(h) Seventh Amendment to Third Amended and Restated Guaranty, dated as
of February 27, 1998, (amending the Third Amended and Restated
Guaranty, dated as of August 25, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 10.25(h) to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 28, 1997, is hereby incorporated by reference.
10.25(i) Eighth Amendment to Third Amended and Restated Guaranty, dated as
of June 30, 1998, (amending the Third Amended and Restated
Guaranty, dated as of August 25, 1995, as amended, made by the
Company in favor of CIBC Inc.), filed as Exhibit 10.25(i) to
the Company's Current Report on Form 8-K dated July 8, 1998, is
hereby incorporated by reference.
10.26(a) 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 Company's Annual Report on Form 10-K
for the fiscal year ended December 27, 1992, is hereby
incorporated by reference.
10.26(b) 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 Company's Annual Report on
Form 10-K for the fiscal year ended December 27, 1992, is
hereby incorporated by reference.
10.26(c) Second Amendment to Building Lease dated December 17, 1993, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.,
filed as Exhibit 10.29(e) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 25, 1994, is
hereby incorporated by reference.
10.26(d) Third Amendment to Building Lease dated August 21, 1995, by and
between CIBC Inc. and AMD International Sales and Service, Ltd.
(amending the Building Lease filed as Exhibit 10.29(c) to the
Annual Report on Form 10-K for the fiscal year ended December
25, 1994), filed as Exhibit 10.29(b) to the Company's Quarterly
Report on Form 10-Q for the period ended October 1, 1995, is
hereby incorporated by reference.
10.26(e) Fourth Amendment to Building Lease dated November 10, 1995, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.
(amending the Building Lease filed as Exhibit 10.29(c) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 24, 1994), filed as Exhibit 10.25(h) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, is hereby incorporated by reference.
10.26(f) Fifth Amendment to Building Lease dated August 1, 1996, (amending
the Building Lease dated as of September 22, 1992, by and
between AMD International Sales & Service, Ltd. and CIBC Inc.),
filed as Exhibit 99.4 to the Company's Current Report on Form
8-K dated August 13, 1996, is hereby incorporated by reference.
7
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Exhibit
Number Description of Exhibits
------- -----------------------
10.26(g) Sixth Amendment to Building Lease dated June 30, 1998, (amending
the Building Lease dated as of September 22, 1992, by and
between AMD International Sales & Service, Ltd. and CIBC Inc.),
filed as Exhibit 10.26(g) to the Company's Current Report on
Form 8-K dated July 8, 1998, is hereby incorporated by
reference.
10.27(a) 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 Company's Annual Report on Form 10-K for the
fiscal year ended December 27, 1992, is hereby incorporated by
reference.
10.27(b) 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 Company's Annual Report on
Form 10-K for the fiscal year ended December 27, 1992, is
hereby incorporated by reference.
10.27(c) Second Amendment to Land Lease dated December 17, 1993, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.,
filed as Exhibit 10.29(h) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 25, 1994, is
hereby incorporated by reference.
10.27(d) Third Amendment to Land Lease dated August 21, 1995, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.
(amending the Land Lease filed as Exhibit 10.29(f) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1994), filed as Exhibit 10.29(c) to the Company's
Quarterly Report on Form 10-Q for the period ended October 1,
1995, is hereby incorporated by reference.
10.27(e) Fourth Amendment to Land Lease dated November 10, 1995, by and
between CIBC Inc. and AMD International Sales & Service, Ltd.
(amending the Land Lease filed as Exhibit 10.29(f) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1994), filed as Exhibit 10.25(m) to the Company's
Annual Report on Form 10-K for the fiscal year ended December
31, 1995, is hereby incorporated by reference.
10.27(f) Fifth Amendment to Land Lease dated as of August 1, 1996,
(amending the Land Lease dated as of September 22, 1992, by and
between AMD International Sales & Service, Ltd. and CIBC Inc.),
filed as Exhibit 99.5 to the Company's Current Report on Form
8-K dated August 13, 1996, is hereby incorporated by reference.
10.27(g) Sixth Amendment to Land Lease dated as of June 30, 1998, (amending
the Land Lease dated as of September 22, 1992, by and between
AMD International Sales & Service, Ltd. and CIBC Inc.), filed
as Exhibit 10.27(g) to the Company's Current Report on Form 8-K
dated July 8, 1998, is hereby incorporated by reference.
*10.28(a) Advanced Micro Devices Executive Savings Plan (Amendment and
Restatement, effective as of August 1, 1993), filed as Exhibit
10.30 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 25, 1994, is hereby incorporated by
reference.
*10.28(b) First Amendment to the Advanced Micro Devices Executive Savings
Plan (as amended and restated, effective as of August 1, 1993),
filed as Exhibit 10.28(b) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1997, is
hereby incorporated by reference.
*10.28(c) Second Amendment to the Advanced Micro Devices Executive Savings
Plan (as amended and restated, Effective as of August 1, 1993),
filed as Exhibit 10.28(c) to the Company's Annual Report on
Form 10-K for the fiscal year ended December 28, 1997, is
hereby incorporated by reference.
*10.29 Form of Split Dollar Agreement, as amended, filed as Exhibit 10.31
to the Company's Annual Report on Form 10-K for the fiscal year
ended December 25, 1994, is hereby incorporated by reference.
8
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Exhibit
Number Description of Exhibits
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*10.30 Form of Collateral Security Assignment Agreement, filed as Exhibit
10.32 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 26, 1993, is hereby incorporated by
reference.
*10.31 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan,
filed as Exhibit 4.3 to the Company's Registration Statement on
Form S-8 (No. 33-46577), are hereby incorporated by reference.
*10.32 1992 United Kingdom Share Option Scheme, filed as Exhibit 4.2 to
the Company's Registration Statement on Form S-8 (No. 33-
46577), is hereby incorporated by reference.
**10.33 Compaq Computer Company/Advanced Micro Devices, Inc. Agreement,
filed as Exhibit 10.35 to the Company's Annual Report on Form
10-K for the fiscal year ended December 25, 1994, is hereby
incorporated by reference.
*10.34 Form of indemnification agreements with current officers and
directors of the Company, filed as Exhibit 10.38 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 25, 1994, is hereby incorporated by reference.
*10.35 Agreement to Preserve Goodwill dated January 15, 1996, between the
Company and S. Atiq Raza, filed as Exhibit 10.36 to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, is hereby incorporated by reference.
*10.36 1995 Stock Plan of NexGen, Inc., as amended, filed as Exhibit
10.36 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 29, 1996, is hereby incorporated by
reference.
**10.37 Patent Cross-License Agreement dated December 20, 1995, between
the Company and Intel Corporation, filed as Exhibit 10.38 to
the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, is hereby incorporated by reference.
10.38 Contract for Transfer of the Right to the Use of Land between
Advanced Micro Devices (Suzhou) Limited and China-Singapore
Suzhou Industrial Park Development Co., Ltd., filed as Exhibit
10.39 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, is hereby incorporated by
reference.
*10.39 NexGen, Inc. 1987 Employee Stock Plan, filed as Exhibit 99.3 to
Post-Effective Amendment No. 1 on Form S-8 to the Company's
Registration Statement on Form S-4 (No. 33-64911), is hereby
incorporated by reference.
*10.40 1995 Stock Plan of NexGen, Inc. (assumed by Advanced Micro
Devices, Inc.), as amended, filed as Exhibit 10.37 to the
Company's Quarterly Report on Form 10-Q for the period ended
June 30, 1996, is hereby incorporated by reference.
*10.41 Form of indemnity agreement between NexGen, Inc. and its directors
and officers, filed as Exhibit 10.5 to the Registration
Statement of NexGen, Inc. on Form S-1 (No. 33-90750), is hereby
incorporated by reference.
10.42 Series E Preferred Stock Purchase Warrant of NexGen, Inc. issued
to PaineWebber Incorporated, filed as Exhibit 10.14 to the
Registration Statement of NexGen, Inc. on Form S-1 (No. 33-
90750), is hereby incorporated by reference.
10.43 Series F Preferred Stock Purchase Warrant of NexGen, Inc., filed
as Exhibit 10.15 to the Registration Statement of NexGen, Inc.
on Form S-1 (No. 33-90750), is hereby incorporated by
reference.
9
<PAGE>
Exhibit
Number Description of Exhibits
------- -----------------------
10.44 Series G Preferred Stock Purchase Warrant of NexGen, Inc., filed
as Exhibit 10.16 to the Registration Statement of NexGen, Inc.
on Form S-1 (No. 33-90750), is hereby incorporated by
reference.
**10.45 Agreement for Purchase of IBM Products between IBM and NexGen,
Inc. dated June 2, 1994, filed as Exhibit 10.17 to the
Registration Statement of NexGen, Inc. on Form S-1 (No. 33-
90750), is hereby incorporated by reference.
*10.46 Letter Agreement dated as of September, 1988, between NexGen, Inc.
and S. Atiq Raza, First Promissory Note dated October 17, 1988,
and Second Promissory Note dated October 17, 1988, as amended,
filed as Exhibit 10.20 to the Registration Statement of NexGen,
Inc. on Form S-1 (No. 33-90750), are hereby incorporated by
reference.
10.47 Series B Preferred Stock Purchase Warrant of NexGen, Inc. issued
to Kleiner, Perkins, Caufield and Byers IV, as amended, filed
as Exhibit 10.23 to the Registration Statement of NexGen, Inc.
on Form S-1 (No. 33-90750), is hereby incorporated by
reference.
**10.48(a) C-4 Technology Transfer and Licensing Agreement dated June 11,
1996, between the Company and IBM Corporation, filed as Exhibit
10.48 to the Company's Amendment No. 1 to its Quarterly Report
on Form 10-Q/A for the period ended September 29, 1996, is
hereby incorporated by reference.
**10.48(b) Amendment No. 1 to the C-4 Technology Transfer and Licensing
Agreement, dated as of February 23, 1997, between the Company
and International Business Machine Corporation, filed as
Exhibit 10.48(a) to the Company's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
**10.49(a) Design and Build Agreement dated November 15, 1996, between AMD
Saxony Manufacturing GmbH and Meissner and Wurst GmbH, filed as
Exhibit 10.49(a) to the Company's Annual Report on Form 10-K
for the fiscal year ended December 29, 1996, is hereby
incorporated by reference.
10.49(b) Amendment to Design and Build Agreement dated January 16, 1997,
between AMD Saxony Manufacturing GmbH and Meissner and Wurst
GmbH filed as Exhibit 10.49(b) to the Company's Annual Report
on Form 10-K for the fiscal year ended December 29, 1996, is
hereby incorporated by reference.
**10.50(a-1) Syndicated Loan Agreement with Schedules 1, 2 and 17, dated as of
March 11, 1997, among AMD Saxony Manufacturing GmbH, Dresdner
Bank AG and Dresdner Bank Luxemborg S.A., filed as Exhibit
10.50(a) to the Company's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(a-2) Supplemental Agreement to the Syndicated Loan Agreement dated
February 6, 1998, among AMD Saxony Manufacturing GmbH, Dresdner
Bank AG and Dresdner Bank Luxemborg S.A., filed as Exhibit
10.50(a-2) to the Company's Annual Report on Form 10-K/A (No.1)
for the fiscal year ended December 28, 1997, is hereby
incorporated by reference.
**10.50(b) Determination Regarding the Request for a Guarantee by AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(b) to the Company's
Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference, filed as Exhibit
10.50(b) to the Company's Annual Report on Form 10-K for the
fiscal year ended December 28, 1997, is hereby incorporated by
reference.
**10.50(c) AMD Subsidy Agreement, between AMD Saxony Manufacturing GmbH and
Dresdner Bank AG, filed as Exhibit 10.50(c) to the Company's
Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
10
<PAGE>
Exhibit
Number Description of Exhibits
------- -----------------------
**10.50(d) Subsidy Agreement, dated February 12, 1997, between Sachsische
Aufbaubank and Dresdner Bank AG, with Appendices 1, 2a, 2b, 3
and 4, filed as Exhibit 10.50(d) to the Company's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
10.50(e) AMD, Inc. Guaranty, dated as of March 11, 1997, among the Company,
Saxony Manufacturing GmbH and Dresdner Bank AG, filed as
Exhibit 10.50(e) to the Company's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
10.50(f-1) Sponsors' Support Agreement, dated as of March 11, 1997, among the
Company, AMD Saxony Holding GmbH and Dresdner Bank AG, filed as
Exhibit 10.50(f) to the Company's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
10.50(f-2) First Amendment to Sponsors' Support Agreement, dated as of
February 6, 1998, among the Company, AMD Saxony Holding GmbH
and Dresdner Bank AG, filed as Exhibit 10.50(f-2) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, is hereby incorporated by reference.
10.50(g-1) Sponsors' Loan Agreement, dated as of March 11, 1997, among the
Company, AMD Saxony Holding GmbH and AMD Saxony Manufacturing
GmbH, filed as Exhibit 10.50(g) to the Company's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
10.50(g-2) First Amendment to Sponsors' Loan Agreement, dated as of February
6, 1998, among the Company, AMD Saxony Holding GmbH and AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50(g-2) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, is hereby incorporated by reference.
10.50(h) Sponsors' Subordination Agreement, dated as of March 11, 1997,
among the Company, AMD Saxony Holding GmbH, AMD Saxony
Manufacturing GmbH and Dresdner Bank AG, filed as Exhibit
10.50(h) to the Company's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
10.50(i) Sponsors' Guaranty, dated as of March 11, 1997, among the Company,
AMD Saxony Holding GmbH and Dresdner Bank AG, filed as Exhibit
10.50(i) to the Company's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(j) AMD Holding Wafer Purchase Agreement, dated as of March 11, 1997,
among the Company and AMD Saxony Holding GmbH, filed as Exhibit
10.50(j) to the Company's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(k) AMD Holding Research, Design and Development Agreement, dated as
of March 11, 1997, between AMD Saxony Holding GmbH and the
Company, filed as Exhibit 10.50(k) to the Company's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
**10.50(l-1) AMD Saxonia Wafer Purchase Agreement, dated as of March 11, 1997,
between AMD Saxony Holding GmbH and AMD Saxony Manufacturing
GmbH, filed as Exhibit 10.50(l) to the Company's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
10.50(l-2) First Amendment to AMD Saxonia Wafer Purchase Agreement, dated as
of February 6, 1998, between AMD Saxony Holding GmbH and AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50 (l-2) to the
Company's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, is hereby incorporated by reference.
11
<PAGE>
Exhibit
Number Description of Exhibits
------- -----------------------
**10.50(m) AMD Saxonia Research, Design and Development Agreement, dated as
of March 11, 1997, between AMD Saxony Manufacturing GmbH and
AMD Saxony Holding GmbH, filed as Exhibit 10.50(m) to the
Company's Quarterly Report on Form 10-Q for the period ended
March 30, 1997, is hereby incorporated by reference.
10.50(n) License Agreement, dated March 11, 1997, among the Company, AMD
Saxony Holding GmbH and AMD Saxony Manufacturing GmbH, filed as
Exhibit 10.50(n) to the Company's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
10.50(o) AMD, Inc. Subordination Agreement, dated March 11, 1997, among the
Company, AMD Saxony Holding GmbH and Dresdner Bank AG, filed as
Exhibit 10.50(o) to the Company's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(p-1) ISDA Agreement, dated March 11, 1997, between the Company and AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50(p) to the
Company's Quarterly Report on Form 10-Q for the period ended
March 30, 1997, is hereby incorporated by reference.
**10.50(p-2) Confirmation to ISDA Agreement, dated February 6, 1998, between
the Company and AMD Saxony Manufacturing GmbH, filed as Exhibit
10.50(p-2) to the Company's Annual Report on Form 10-K/A (No.1)
for the fiscal year ended December 28, 1997, is hereby
incorporated by reference.
****21 List of AMD subsidiaries.
****23 Consent of Ernst & Young LLP, Independent Auditors.
****23 Power of Attorney.
****27 Financial Data Schedule.
- ----------------
* 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 granted as to certain portions of these
Exhibits.
**** Previously filed.
The Company will furnish a copy of any exhibit on request and payment of
the Company's reasonable expenses of furnishing such exhibit.
12
<PAGE>
(b) REPORTS ON FORM 8-K.
The following reports on Form 8-K were filed during the fourth quarter of the
Company's fiscal year ended December 28, 1997:
1. Current Report on Form 8-K dated October 7, 1997 reporting under Item 5--
Other Events--third-quarter earnings.
2. Current Report on Form 8-K dated September 30, 1997 reporting under Item
5--Other Events--third-quarter loss expected to be larger than anticipated.
(d) FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Ernst & Young, Independent Auditors............................................... 23
Statements of Income for the three years ended March 31, 1998............................... 14
Balance Sheets at March 31, 1998 and March 31, 1997......................................... 15
Statements of Stockholders' Equity for the three years ended March 31, 1998................. 16
Statements of Cash Flows for the three years ended March 31, 1998........................... 17
Notes to Financial Statements............................................................... 18
</TABLE>
13
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
STATEMENTS OF INCOME
FOR THE THREE YEARS ENDED MARCH 31, 1998
- --------------------------------------------------------------------------------
(THOUSANDS EXCEPT SHARE AND PER SHARE AMOUNTS)
1998 1997 1996
(Unaudited)
Net sales $ 483,937 $ 367,103 $ 379,749
Expenses:
Cost of sales 294,849 219,079 149,916
Selling, general and administrative 47,976 42,153 35,844
---------- ---------- ---------
342,825 261,232 185,760
---------- ---------- ---------
Operating income 141,112 105,871 193,989
Interest income 24 161 198
Interest expense (881) (322) -
Other (expense) income, net (1,967) 412 (950)
---------- ---------- ---------
Income before income taxes 138,288 106,122 193,237
Provision for income taxes 62,902 53,850 98,661
---------- ---------- ---------
Net income $ 75,386 $ 52,272 $ 94,576
========== ========== =========
Net income per common share $ 118.53 $ 82.19 $ 148.70
Shares used in per share calculation 636,000 636,000 636,000
See accompanying notes
14
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
<TABLE>
<CAPTION>
BALANCE SHEETS
MARCH 31, 1998 AND 1997
- ----------------------------------------------------------------------------
(Thousands except share and per share amounts)
1998 1997
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 11,453 $ 4,067
Accounts receivable from affiliates 74,837 47,115
Inventories:
Raw materials and supplies 4,921 4,123
Work-in-process 35,693 23,573
Finished goods 8,471 2,009
--------- ---------
Total inventories 49,085 29,705
Other current assets 1,960 314
--------- ---------
Total current assets 137,335 81,201
Property, plant and equipment:
Equipment 764,921 543,261
Buildings 117,449 72,506
Construction in progress 5,708 33,388
--------- ---------
Total property, plant and equipment 888,078 649,155
Accumulated depreciation (288,342) (164,122)
--------- ---------
Property, plant and equipment, net 599,736 485,033
Other assets 9,955 2,445
--------- ---------
TOTAL $ 747,026 $ 568,679
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Loan payable to affiliates $ 93,868 $ 52,447
Accounts payable 105,473 40,118
Payables to affiliates 33,331 20,124
Accrued liabilities 8,047 4,112
Income taxes payable 31,908 30,161
--------- ---------
Total current liabilities 272,627 146,962
Deferred income taxes 62,097 57,344
Other accrued liabilities 772 468
Commitments - -
Stockholders' equity:
Common stock, par value $500; 636,000 shares
issued and outstanding in 1998 and 1997 318,790 318,790
Retained earnings 203,931 128,545
Cumulative translation adjustments (111,191) (83,430)
--------- ---------
Total stockholders' equity 411,530 363,905
--------- ---------
TOTAL $ 747,026 $ 568,679
========= =========
</TABLE>
See accompanying notes
15
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED MARCH 31, 1998
- --------------------------------------------------------------------------------
(Thousands except share amounts)
<TABLE>
<CAPTION>
Common Stock
-----------------------
Number Cumulative Total
of Retained Translation Stockholders'
Shares Amount Earnings Adjustments Equity
---------- ---------- ------------ --------------- ----------------
<S> <C> <C> <C> <C>
March 31, 1995 (Unaudited) 636,000 $ 318,790 $ (18,303) $ 36,181 $ 336,668
Net income - - 94,576 - 94,576
Net change in cumulative
translation adjustments - - - (62,842) (62,842)
---------- ---------- ------------ --------------- ----------------
March 31, 1996 (Unaudited) 636,000 318,790 76,273 (26,661) 368,402
Net income - - 52,272 - 52,272
Net change in cumulative
translation adjustments - - - (56,769) (56,769)
---------- ---------- ------------ --------------- ----------------
March 31, 1997 636,000 318,790 128,545 (83,430) 363,905
Net income - - 75,386 - 75,386
Net change in cumulative
translation adjustments - - - (27,761) (27,761)
---------- ---------- ------------ --------------- ----------------
March 31, 1998 636,000 $ 318,790 $ 203,931 $ (111,191) $ 411,530
========== ========== ============ =============== ================
</TABLE>
See accompanying notes
16
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
<TABLE>
<CAPTION>
STATEMENTS OF CASH FLOWS
FOR THE THREE YEARS ENDED MARCH 31, 1998
- ---------------------------------------------------------------------------------------------------
(Thousands)
1998 1997 1996
(Unaudited)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 75,386 $ 52,272 $ 94,576
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 146,637 117,287 63,604
Net loss on disposal of property, plant and equipment 433 - -
Changes in operating assets and liabilities:
Net (increase) decrease in receivables, inventories,
prepaid expenses and other assets (65,570) 32,268 (106,720)
Net increase in deferred income tax liabilities 11,719 12,668 69,674
Increase in income taxes payable 3,893 12,813 20,188
Net increase (decrease) in payables
and accrued liabilities 90,721 (152,059) 234,715
-------- -------- --------
Net cash provided by operating activities 263,219 75,249 376,037
-------- -------- --------
Cash flows from investing activities:
Purchase of property (303,834) (233,817) (283,914)
Proceeds from sale of property, plant and equipment 702 - -
-------- -------- --------
Net cash used for investing activities (303,132) (233,817) (283,914)
-------- -------- --------
Cash flows from financing activities:
Proceeds from borrowings 242,368 92,791 -
Payments on debt (194,221) (44,758) -
-------- -------- --------
Net cash provided by financing activities 48,147 48,033 -
-------- -------- --------
Net increase (decrease) in cash 8,234 (110,535) 92,123
Net effect of exchange rate changes on cash (848) (4,919) 10,844
Cash at beginning of year 4,067 119,521 16,554
-------- -------- --------
Cash at end of year $ 11,453 $ 4,067 $119,521
======== ======== ========
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 881 $ 322 $ -
======== ======== ========
Income taxes $ 47,225 $ 27,034 $ -
======== ======== ========
See accompanying notes
</TABLE>
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Information for the year ended March 31, 1996 is unaudited)
1. NATURE OF OPERATIONS
In 1993, Advanced Micro Devices (AMD) and Fujitsu Limited (Fujitsu) formed a
joint venture, Fujitsu AMD Semiconductor Limited (FASL or the Company), for the
development and manufacture of non-volatile memory devices. Through FASL, the
two companies have constructed and are operating an advanced integrated circuit
manufacturing facility in Aizu-Wakamatsu, Japan, to produce Flash memory
devices. AMD has a 49.992% interest in FASL, and Fujitsu has the remaining
interest.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ACCOUNTING PRINCIPLES. The accounting records of the Company are maintained in
accordance with accounting practices prevailing in Japan. The accompanying
financial statements, however, include adjustments that have not been recorded
in the legal books of account of the Company but are necessary to conform to
generally accepted accounting principles in the United States of America (U.S.
GAAP). These adjustments consist principally of depreciation under a different
method and its impact on the valuation of inventories, provision of deferred
income taxes, and adjustments stemming from the translation of the Company's
financial statements into the U.S. dollar for reporting purposes.
FOREIGN CURRENCY TRANSLATION. The functional currency of the Company is the
Japanese yen. Financial statements are translated into the U.S. dollar using the
exchange rate at each balance sheet date for assets and liabilities and a
weighted-average exchange rate for each period for income statement items.
Translation adjustments are recorded as a separate component of stockholders'
equity in the U.S. dollar financial statements.
INVENTORIES. Inventories are stated at standard cost adjusted to approximate the
lower of cost (average method) or market (net realizable value).
PROPERTY, PLANT AND EQUIPMENT. Property, plant and equipment is stated at cost.
Depreciation for U.S. GAAP purposes is provided principally on the straight-line
basis over the estimated useful lives of the assets for financial reporting
purposes and on accelerated methods for tax purposes. Estimated useful lives
for financial reporting purposes are as follows: machinery and equipment 3 to 5
years; buildings up to 26 years.
NET INCOME PER COMMON SHARE. In February 1997, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 128 (SFAS
128), "Earnings per Share." SFAS 128 supersedes Accounting Principles Board
Opinion No. 15 (APB 15), "Earnings per Share," and other related Interpretations
and is effective for the periods ending after December 15, 1997. Net income per
share has been computed using the weighted-average common shares outstanding.
The Company has no potentially dilutive securities.
RECENT ACCOUNTING PRONOUNCEMENTS. In June 1997, the FASB issued Statement of
Financial Accounting Standards No. 130 (SFAS 130), "Reporting Comprehensive
Income." This
18
<PAGE>
FUJITSU AMD SEMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Information for the year ended March 31, 1996 is unaudited)
Statement establishes standards for the reporting and display of
comprehensive income and its components. SFAS 130 will be effective for the
Company's fiscal year 1999 and requires restatement of all previously reported
information for comparative purposes. This Statement will require additional
disclosure but will have no impact on the Company's financial position, results
of operations or cash flows.
USE OF ESTIMATES. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results inevitably will differ from those estimates,
and such differences may be material to the financial statements.
3. RELATED PARTY TRANSACTIONS
The Company is 100 percent owned by AMD and Fujitsu, with AMD having a 49.992%
interest, and Fujitsu having the remaining interest. Under the terms of the
joint venture agreement, FASL production is allocated nearly equally between AMD
and Fujitsu. All of the Company's accounts receivable and sales as of and for
the years ended March 31, 1998, 1997 and 1996 were with these related parties.
In 1998, 1997 and 1996, FASL made purchases from AMD and Fujitsu totaling $12
million, $14 million and $14 million, respectively. At March 31, 1998 and 1997,
FASL owed AMD, Fujitsu and Fujitsu's subsidiaries $125 million and $73 million,
respectively, which consisted of loan, trade and royalty payables.
The Company has an agreement with Fujitsu Capital Limited (FCAP), a wholly owned
subsidiary of Fujitsu, to provide financing to FASL at lower interest rates than
banks. Had the Company obtained financing from a lender other than FCAP, the
additional interest expense would have been immaterial. FASL completed
construction of the building for a second Flash memory device wafer fabrication
facility, FASL II, in the third quarter of 1997 at a site contiguous to the
existing FASL facility in Aizu-Wakamatsu, Japan. Equipment installation is in
progress and the facility including equipment, the completion of which is
anticipated in the second quarter of 2000, is expected to cost approximately
$1.1 billion. Approximately $260 million of such cost has been funded as of
March 31, 1998. Capital expenditures for FASL II construction to date have been
funded by cash generated from FASL operations and borrowings by FASL. However,
to the extent that FASL is unable to secure the necessary funds for FASL II, AMD
and Fujitsu may be required to contribute cash or guarantee third-party loans in
proportion to their respective interests in FASL. At March 31, 1998, AMD and
Fujitsu had loan guarantees outstanding totaling $94 million with respect to
such loans. The planned FASL II costs are denominated in yen and are therefore
subject to change due to foreign exchange rate fluctuations.
The Company has a severance benefit package for employees formerly employed by
Fujitsu. FASL accrues the Company's share of severance benefits at year-end in
an amount to be settled with Fujitsu if the eligible employee terminates their
service with FASL and returns to Fujitsu or another Fujitsu group company.
19
<PAGE>
FUJITSU AMD SEIMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Information for the year ended March 31, 1996 is unaudited)
4. OTHER RISKS
PRODUCTS. At present the only type of product produced by the Company is a Flash
memory device. The Company expects that its ability to maintain or expand its
current levels of revenues in the future will depend upon, among other things,
its dependence on AMD and Fujitsu in developing and marketing in a timely manner
its future generations of Flash memory devices.
MARKETS. The markets for the Company's products are characterized by rapid
technological developments, evolving industry standards, changes in customer
requirements, frequent new product introductions and enhancements and short
product life cycles. The market for Flash memory devices is primarily dependent
upon the market for communications devices, such as cellular phones and routers
(devices used to transfer data between local area networks).
CUSTOMERS. The Company derives all of its revenues from sales to AMD and
Fujitsu. Under the terms of the joint venture, the production is allocated
nearly equally to AMD and Fujitsu. The Company is dependent on the demand of
Flash memory devices from AMD and Fujitsu.
MATERIALS. Certain of the raw materials used by the Company in the manufacture
of its products are available from a limited number of suppliers. Shortages
could occur in various essential materials due to interruption of supply or
increased demand in the industry. If FASL were unable to procure certain of
such materials, it would be required to reduce its manufacturing operations,
which could have a material adverse effect on the Company. To date, FASL has
not experienced significant difficulty in obtaining the necessary raw materials.
5. INCOME TAXES
Provision for income taxes consists of:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
(Thousands) 1998 1997 1996
--------------------------------------------
<S> <C> <C> <C>
Current:
Foreign National $33,935 $27,415 $14,868
Foreign Local 17,248 13,841 7,632
Deferred:
Foreign National and Local 11,719 12,594 76,161
------- ------- -------
Provision for income taxes $62,902 $53,850 $98,661
======= ======= =======
</TABLE>
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 March 31, 1998 and 1997 are as follows:
20
<PAGE>
FUJITSU AMD SEIMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Information for the year ended March 31, 1996 is unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
(Thousands) 1998 1997
------- -------
Deferred tax assets:
<S> <C> <C>
Inventory reserves $ 2,672 $ 2,606
Sales reserves - 84
Accrued expenses not currently deductible 5,995 3,365
-------- --------
Total deferred tax assets 8,667 6,055
-------- --------
Deferred tax liabilities:
Depreciation (63,967) (62,985)
Sales reserves (9,553) -
Other - (414)
-------- --------
Total deferred tax liabilities (73,520) (63,399)
-------- --------
Net deferred tax liabilities $(64,853) $(57,344)
======== ========
- ---------------------------------------------------------------------------------------------
</TABLE>
The following is a reconciliation between statutory Japanese income taxes and
the total provision for income taxes:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
1998 1997 1996
---------------------- -------------------------- --------------------------
(Thousands except percent) Tax Rate Tax Rate Tax Rate
---------------------- -------------------------- --------------------------
<S> <C>
Statutory income tax provision $69,700 50.4 % $53,492 50.4 % $97,387 50.4 %
Permanent book/tax differences 49 0.0 (36) (0.0) 84 0.1
Inhabitant tax per capita 33 0.0 36 0.0 42 0.0
Effect of tax rate change (5,533) (4.0) 0 0.0 0 0.0
Other (1,347) (0.9) 358 0.3 1,148 0.6
-------- ------ ------- ------ ------- ----
$62,902 45.5 % $53,850 50.7 % $98,661 51.1 %
======= ===== ======= ====== ======= ====
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
6. COMMITMENTS
At March 31, 1998, the Company had commitments of approximately $75 million for
the purchase and installation of equipment in FASL facilities.
The Company leases the land from Fujitsu under an agreement that expires May 31,
2023. The lease fee is revised every three years based on the fair market value
of the land. For each of the next five years and beyond, lease obligations are:
21
<PAGE>
FUJITSU AMD SEIMICONDUCTOR LIMITED
NOTES TO FINANCIAL STATEMENTS
March 31, 1998
(Information for the year ended March 31, 1996 is unaudited)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------
(Thousands) Leases
--------------
<S> <C>
1999 $ 363
2000 363
2001 363
2002 363
2003 363
Beyond 2003 7,352
------
Total $9,167
======
- -----------------------------------------------------------------
</TABLE>
Rent expense was $1,151, $573 and $661 in 1998, 1997 and 1996, respectively.
7. RETAINED EARNINGS
The amount of retained earnings available for dividends under the Commercial
Code in Japan is based on the amount recorded in the Company's books maintained
in accordance with Japanese accounting practices. The adjustments included in
the accompanying financial statements but not recorded in the books as explained
in Note 2 have no effect on the determination of retained earnings available for
dividends under the Commercial Code in Japan.
22
<PAGE>
[LOGO OF ERNST & YOUNG]
Report of Independent Auditors
The Board of Directors and Stockholders
Fujitsu AMD Semiconductor Limited
We have audited the accompanying balance sheets of Fujitsu AMD Semiconductor
Limited as of March 31, 1998 and 1997, and the related statements of income,
stockholders' equity and cash flows for the years then ended. 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 auditing standards generally accepted
in the United States of America. 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.
We have also reported separately on the financial statements of Fujitsu AMD
Semiconductor Limited for the same years prepared in accordance with accounting
principles generally accepted in Japan.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Fujitsu AMD Semiconductor
Limited at March 31, 1998 and 1997, and the results of its operations and its
cash flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
/s/ Ernst & Young
Tokyo, Japan
September 18, 1998
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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
September 23, 1998
By: /s/ Richard Previte
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Richard Previte
Director, President,
Chief Operating Officer,
Chief Administrative Officer
and Treasurer
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