AMD 1996 Annual Report Download

Download and view the complete annual report

Please find the complete 1996 AMD annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 255

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193
  • 194
  • 195
  • 196
  • 197
  • 198
  • 199
  • 200
  • 201
  • 202
  • 203
  • 204
  • 205
  • 206
  • 207
  • 208
  • 209
  • 210
  • 211
  • 212
  • 213
  • 214
  • 215
  • 216
  • 217
  • 218
  • 219
  • 220
  • 221
  • 222
  • 223
  • 224
  • 225
  • 226
  • 227
  • 228
  • 229
  • 230
  • 231
  • 232
  • 233
  • 234
  • 235
  • 236
  • 237
  • 238
  • 239
  • 240
  • 241
  • 242
  • 243
  • 244
  • 245
  • 246
  • 247
  • 248
  • 249
  • 250
  • 251
  • 252
  • 253
  • 254
  • 255

FORM 10-K
ADVANCED MICRO DEVICES INC - amd
Filed: March 20, 1997 (period: December 29, 1996)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    FORM 10-K ADVANCED MICRO DEVICES INC - amd Filed: March 20, 1997 (period: December 29, 1996) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ...1. Business...3 PART I Item 2. Properties...14 PART I Item 3. Legal Proceedings...15 PART I Item 4. Submission of Matters to a Vote of Security Holders...16 PART II Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters...17 PART II Item 6. Selected Financial Data...18...

  • Page 3
    ..., and Reports on Form 8-K...19 PART I ITEM 1. ITEM 2. ITEM 3. ITEM 4. BUSINESS PROPERTIES LEGAL PROCEEDINGS SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS PART II ITEM 5. ITEM 6. ITEM 7. ITEM 8. ITEM 9. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SELECTED FINANCIAL DATA MANAGEMENT...

  • Page 4
    ...) EX-10.36 (1995 STOCK PLAN OF NEXGEN) EX-10.49A (DESIGN/BUILD AGMT DATED 11/15/96) EX-10.49B (AMENDMENT TO DESIGN/BUILD AGMT DATED 1/16/97) EX-11 (COMPUTATION OF PER SHARE EARNINGS) EX-13 (ANNUAL REPORT FOR 1996) EX-21 (LIST OF SUBSIDIARIES) EX-24 (POWER OF ATTORNEY) EX-27 (FINANCIAL DATA SCHEDULE)

  • Page 5
    ... ONE AMD PLACE SUNNYVALE, CALIFORNIA (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) 94086 (ZIP CODE) Registrant's telephone number, including area code: (408) 732-2400 Securities registered pursuant to Section 12(b) of the Act: (NAME OF EACH EXCHANGE ON WHICH REGISTERED New York Stock Exchange (TITLE...

  • Page 6
    ADVANCED MICRO DEVICES, INC. FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 29, 1996 TABLE OF CONTENTS PAGE ---- PART I Item 1. Item 2. Item 3. Item 4. Business...Properties...Legal Proceedings...Submission of Matters to a Vote of Security Holders...Executive Officers of the Registrant... 3 14 15 ...

  • Page 7
    ...FUTURE BUSINESS PROSPECTS FOR MICROPROCESSORS, FLASH MEMORY DEVICE PRODUCTS AND OTHER PRODUCT LINES; THE EFFECT OF FOREIGN EXCHANGE CONTRACTS AND INTEREST RATE SWAPS; THE DEVELOPMENT, VALIDATION, CERTIFICATION, INTRODUCTION, MARKET ACCEPTANCE AND PRICING OF THE K86 PRODUCTS; THE COMPANY'S COMMITMENT...

  • Page 8
    ... personal computer software; and the increasing performance requirements of workstations, servers and networking and telecommunications equipment. The Company believes that Flash memory devices will be one of the fastest growing segments of the memory market in terms of both unit and dollar sales...

  • Page 9
    ... microprocessors' internal operations. Developments in circuit design and very large scale integration process technology have resulted in dramatic advances in microprocessor performance over the past ten years. Today, the greatest demand for microprocessors is from personal computer manufacturers...

  • Page 10
    ..., or 70%, of the Company's 1996 net sales) include Flash memory devices, EPROM devices, voice and data communications products, embedded processors, I/O devices and network products. FLASH MEMORY. Flash memory devices are used in cellular telephones, networking equipment and other applications which...

  • Page 11
    ... by Flash memory devices. COMMUNICATIONS PRODUCTS. The Company's communications products are used in public and private communications infrastructure systems. Specifically, the products are used in such equipment as central office switches, private branch exchange (PBX) equipment and voice/data...

  • Page 12
    ...addition to its dominant microprocessor market share, Intel also dominates the PC platform. The Company does not have the financial resources to compete with Intel on such a large scale. As Intel has expanded its dominance in designing and setting standards for PC systems, many PC original equipment...

  • Page 13
    ... years, these third-party designers and manufacturers have lost market share to Intel. To compete with Intel in this market in the future, the Company intends to continue to form closer relationships with third-party designers and manufacturers of core logic chip sets, motherboards, BIOS software...

  • Page 14
    ... in improving its process technologies. In particular, the Company has made and continues to make significant research and development investments in the technologies and equipment used in the fabrication of its microprocessor products and in the fabrication of Flash memory devices. Portions...

  • Page 15
    ...) formed a joint venture, FASL, 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. The facility began...

  • Page 16
    ... not materially exceed the proposed terms described herein. MARKETING AND SALES The Company's products are marketed and sold under the AMD trademark. AMD employs a direct sales force through its principal facilities in Sunnyvale, California, and field sales offices throughout the United States and...

  • Page 17
    ... controls, exchange rate fluctuations, changes in freight rates, and changes in rates and exemptions for taxes and tariffs. RAW MATERIALS Certain of the raw materials used by the Company in the manufacture of its products are available from a limited number of suppliers. For example, several types...

  • Page 18
    ...relationship with its employees is generally good. ITEM 2. PROPERTIES The Company's principal administrative facilities are located in Sunnyvale, square feet of this space engineering, manufacturing, warehouse and comprise approximately 3.11 million square feet and California and Austin, Texas. Over...

  • Page 19
    ... sales office in South America for its direct sales force. These offices are located in cities in major electronics markets where concentrations of the Company's customers are located. Leases covering the Company's facilities expire over terms of generally one to twenty years. The Company currently...

  • Page 20
    ... the Company from using the term "MMX" to identify, advertise or market its processors. Based upon information presently known to management, the Company does not believe that the ultimate resolution of these lawsuits will have a material adverse effect upon the financial condition or results of...

  • Page 21
    ... publicly traded on the New York Stock Exchange. The information regarding market price range, dividend information and number of holders of common stock of AMD appearing under the captions "Supplementary Financial Data" and "Financial Summary" on pages 38 and 39 of the Company's 1996 Annual Report...

  • Page 22
    ... regarding selected financial data for the fiscal years 1992 through 1996, under the caption "Financial Summary" on page 39 of the Company's 1996 Annual Report to Stockholders is incorporated herein by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF...

  • Page 23
    ... Financial Statements or Notes thereto. With the exception of the information specifically incorporated by reference into Parts II and IV of this Annual Report on Form 10-K, the 1996 Annual Report to Stockholders is not to be deemed filed as part of this report. 19 Source: ADVANCED MICRO DEVIC...

  • Page 24
    ... to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, is hereby incorporated by reference. Form of Advanced Micro Devices, Inc. 11% 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...

  • Page 25
    ... 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. Advanced Micro Devices, Inc. 1996 Stock Incentive Plan, as amended. Employment Agreement dated September 29...

  • Page 26
    .... 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. Form of Indemnification Agreements with former officers of Monolithic Memories, Inc...

  • Page 27
    ... 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. 23 Source: ADVANCED MICRO DEVIC...

  • Page 28
    ... NUMBER ------- DESCRIPTION OF EXHIBITS 10.26(d) Third Amendment to Building Lease dated August 21, 1995, by and between CIBC Inc. and AMD International Sales and Service, Inc. (amending the Building Lease filed as Exhibit 10.29(c) to the Company's Annual Report on Form 10-K for the fiscal year...

  • Page 29
    ... 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...

  • Page 30
    .... (B) REPORTS ON FORM 8-K. The following report on Form 8-K was filed during the fourth quarter of the Company's fiscal year ended December 29, 1996: 1. A Current Report on Form 8-K dated October 7, 1996, was filed announcing the Company's third quarter revenues. 26 Source: ADVANCED MICRO DEVIC, 10...

  • Page 31
    ... MICRO DEVICES, INC. Registrant March 17, 1997 By: /s/ Marvin D. Burkett Marvin D. Burkett Senior Vice President, Chief Financial and Administrative Officer and Treasurer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons...

  • Page 32
    27 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 33
    ... Financial Statements or Notes thereto. With the exception of the information specifically incorporated by reference into Parts II and IV of this Annual Report on Form 10-K, the 1996 Annual Report to Stockholders is not to be deemed filed as part of this report. F-1 Source: ADVANCED MICRO DEVIC...

  • Page 34
    ... reference in this Annual Report (Form 10K) of Advanced Micro Devices, Inc. of our report dated January 9, 1997, included in the 1996 Annual Report to Stockholders of Advanced Micro Devices, Inc. Our audits also included the financial statement schedule of Advanced Micro Devices, Inc. listed in Item...

  • Page 35
    SCHEDULE II ADVANCED MICRO DEVICES, INC. VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 25, 1994, DECEMBER 31, 1995 AND DECEMBER 29, 1996 (THOUSANDS) ADDITIONS CHARGED (REDUCTIONS BALANCE CREDITED) BALANCE BEGINNING TO END OF OF PERIOD OPERATIONS DEDUCTIONS(1) PERIOD Allowance for doubtful...

  • Page 36
    AMD-90286 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 37
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 38
    ... Common Stock of the Company or the combined voting power of the Company's then outstanding voting securities; (ii) during any period of two consecutive years, individuals who at the beginning of such period constituted the Board and any new director (other than a director designated by a person who...

  • Page 39
    ... of the Company under an employee benefit plan now or hereafter established by the Company. (d) "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. (e) "COMPANY" The term "Company" shall mean Advanced Micro Devices, Inc...

  • Page 40
    ... Plan. (o) "PLAN" The term "Plan" shall mean this Advanced Micro Devices, Inc. 1996 Stock Incentive Plan, as amended from time to time. (p) "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...

  • Page 41
    ... 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 may, by resolution, delegate administration of the Plan (including, without limitation, the Board's powers...

  • Page 42
    ...may be granted only to full or part-time employees, officers, directors, consultants and advisors of the Company and/or of any Affiliate; provided such consultants and advisors render bona fide services not in - -------connection with the offer and sale of securities in a capital-raising transaction...

  • Page 43
    ... 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 subsidiaries or parent (as such terms are defined in Section 424 of the Code) unless the exercise price is at least 110% of the Fair Market Value per Share of...

  • Page 44
    ... leave is guaranteed by contract or statute, or unless provided otherwise pursuant to formal policy adopted from time to time by the Company and issued and promulgated to employees in writing; or (v) in the case of transfer between locations of the Company or between the Company or its Affiliates...

  • Page 45
    ... or were not acquired, directly or indirectly, from the Company, and (y) have a Fair Market Value per Share on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised, (iv) delivery of Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 46
    ... to the aggregate exercise price of the Shares as to which said Option shall be exercised, (v) delivery of a properly executed exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale or Source: ADVANCED MICRO DEVIC, 10-K, March 20...

  • Page 47
    ...entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares; provided further that the portion of the exercise price equal to the par value, if any, of the Shares must be paid in cash; (b) The Company may make loans or guarantee loans...

  • Page 48
    ... such Shares. 13. EXCHANGE AND BUYOUT OF AWARDS; RULE 16b-3 The Board or its delegate may, at any time or from time to time, authorize the Company, with the consent of the respective Participants, to issue new Options in exchange for the surrender and cancellation of any or all outstanding Options...

  • Page 49
    ... compliance with all applicable federal and state securities laws, rules and regulations of any governmental body, and the requirements of any stock exchange or automated quotation system upon which the Shares may then be listed or quoted, as they are in effect on the date of grant of the award and...

  • Page 50
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 51
    ... (18th) months, respectively, following the Joint Venture Effective Date; and (iii) five additional sales and purchases [*] subject to Section 1.4, to be consummated prior to the last business day of the thirty[* Confidential Treatment Requested] Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 52
    ... an additional [*] of such shares may be resold or transferred at any time after the [*] of the consummation of such purchase. 3. Except as specifically amended by this Amendment, the Agreement shall remain in full force and effect and is hereby ratified and confirmed. On and after the date of this...

  • Page 53
    ... to be duly executed by their duly authorized officers as of the day and year first above written. FUJITSU LIMITED By /s/ Masamichi Ogura Masamichi Ogura Group Senior Vice President Administration & Business Operations Electronic Devices Group Its ADVANCED MICRO DEVICES, INC. By /s/ Marvin...

  • Page 54
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 55
    ..., and: (i) for the Initial Purchase, was 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, (ii) for the First...

  • Page 56
    ... D. Burkett Senior Vice President Its Chief Administrative Officer Chief Financial Officer and Treasurer FUJITSU LIMITED By /s/ Masamichi Ogura Masamichi Ogura Group Senior Vice President Administration & Business Operations Electronic Devices Group Source: ADVANCED MICRO DEVIC, 10-K, March 20...

  • Page 57
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 58
    EXHIBIT 10.36 1995 STOCK PLAN OF NEXGEN, INC As Amended October 2, 1996) Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 59
    ... Rules Outstanding Stock STOCK SUBJECT TO PLAN Basic Limitation Additional Shares TERMS AND CONDITIONS OF AWARDS OR SALES Stock Purchase Agreement Duration of Offers and Nontransferability of Rights Purchase Price Withholding Taxes 2 1 1 4 4 5 5 6 6 6 8 8 8 8 8 9 9 9 9 9 9 Source: ADVANCED MICRO...

  • Page 60
    ... on Transfer of Shares PAYMENT FOR SHARES General Rule Surrender of Stock Exercise/Sale Exercise/Pledge Services Rendered Promissory Note ADJUSTMENT OF SHARES General Reorganizations 3 10 10 10 10 10 10 11 11 11 11 11 12 12 12 12 12 13 13 13 13 14 Source: ADVANCED MICRO DEVIC, 10-K, March 20...

  • Page 61
    (c) SECTION 10. SECTION 11. SECTION 12. (a) (b) (c) Reservation of Rights SECURITIES LAWS NO RETENTION RIGHTS DURATION AND AMENDMENTS Term of the Plan Right to Amend or Terminate the Plan Effect of Amendment or Termination 4 14 14 14 15 15 15 15 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 62
    ... owned by such person any securities acquired directly from the Company or any of its affiliates) representing more than 20% of either the then outstanding shares of the Common Stock of the Company or the combined voting power of the Company's then outstanding voting securities; (ii) during any...

  • Page 63
    ... the then outstanding shares of the Common Stock of the Company or the combined voting power of the Company's then outstanding voting securities by the Company or any of its wholly owned subsidiaries, or any trustee or other fiduciary holding securities of the Company under an employee benefit plan...

  • Page 64
    ... of Fair Market Value by the Committee shall be conclusive and binding on all persons. "IPO" means the initial offering of stock to the public --pursuant to a registration statement filed with the Securities and Exchange Commission on Form S-1. 7 (j) (i) (h) Source: ADVANCED MICRO DEVIC, 10...

  • Page 65
    ... Director" shall mean a member of the Board of Directors who is not a common-law employee of the Company or of a Subsidiary. "Plan" shall mean this 1995 Stock Plan of NexGen, Inc., as it ---may be amended from time to time. "Purchase Price" shall mean the consideration for which one Share may be...

  • Page 66
    ... members of the Board of Directors who meet the requirements established from time to time by: (i) The Securities and Exchange Commission for plans intended to qualify for exemptions under Rule 16b-3 (or its successor) under the Exchange Act; and (ii) The Internal Revenue Service for plans intended...

  • Page 67
    ...the Offerees and Optionees; (vi) To determine the number of Shares to be offered to each Offeree or to be made subject to each Option; (vii) To prescribe the terms and conditions of each award or sale of Shares, including (without limitation) the Purchase Price, and to specify the provisions of the...

  • Page 68
    ... total combined voting power of all classes of outstanding stock of the Company or any of its Subsidiaries shall not be eligible for the grant of an ISO unless: (i) The Exercise Price is at least 110 percent of the Fair Market Value of a Share on the date of grant; and (ii) Such ISO by its terms is...

  • Page 69
    ... under the Plan. The Company, during the term of the Plan, shall at all times reserve and keep available sufficient Shares to satisfy the requirements of the Plan. Additional Shares. In the event that any outstanding option granted under this Plan or the 1987 Employee Stock Plan of NexGen, Inc...

  • Page 70
    ... would be issued to him or her or by her. Such Shares shall be valued at their Fair Market Value on the date when taxes otherwise would be withheld in cash. The payment of taxes by assigning Shares to the Company, if permitted by the 13 (d) (c) (b) (a) (e) Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 71
    ... in good faith by the Optionee, 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...

  • Page 72
    ...General Rule. The entire Purchase Price or Exercise Price of -----------Shares issued under the Plan shall be payable in lawful money of the United States of America at the time when such Shares are purchased, except as follows: Stock Purchases. In the case of Shares sold under the terms of a Stock...

  • Page 73
    ... the delivery (on a form prescribed by the Company) of an irrevocable direction to a securities broker approved by the Company to sell Shares and to deliver all or part of the sales proceeds to the Company in payment of all or part of the Exercise Price and any withholding taxes. Exercise/Pledge. To...

  • Page 74
    ... any way the right or power of the Company to make adjustments, reclassifications, reorganizations or changes of its capital or business structure, to merge or consolidate or to dissolve, liquidate, sell or transfer all or any part of its business or assets. SECTION 10. SECURITIES LAWS Shares shall...

  • Page 75
    ... any Option shall be deemed to give any individual a right to remain an employee or consultant of the Company or a Subsidiary. The Company and its Subsidiaries reserve the right to terminate the service of any employee or consultant at any time, with or without cause, subject to applicable laws and...

  • Page 76
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 77
    ... DOCUMENT HAVE BEEN DELETED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. EXHIBIT 10.49(a) DESIGN/BUILD AGREEMENT BETWEEN AMD SAXONY MANUFACTURING GmbH AND MEISSNER + WURST GmbH + CO. DATED AS OF NOVEMBER 15TH, 1996 PERTAINING...

  • Page 78
    ... Design And Engineering By Contractor...1.3.3 Latest Version Of Documents...1.3.4 Process Design...Construction And Construction Administration And Supervision Services...1.4.1 Construction And Construction Management Services By Contractor...1.4.2 Standards For Completion...Nature Of Company...

  • Page 79
    ......"Build Clean" Protocol...Equipment Standby...Construction By Company...Compatible Labor...Labor Agreement Practices...Overtime Labor...Identification...Commencement And Prosecution Of Construction Work...Contractor Responsible For Construction Means...Specialized Construction Manager...

  • Page 80
    ... Date For Final Completion...Delays And Extensions Of Time...14.3.1 Delays Caused By Change Order Or By Company Or By Force Majeure...14.3.2 Standard For Approving Extensions Of Time...Delays And Additional Costs...14.4.1 Additional Costs Caused By Company's Delay Or By Force Majeure...14.4.2 Notice...

  • Page 81
    ......21.2.1 Liability Coverage...21.2.2 Liability Limits...Insurance Certificates...Company As Additional Insured...Builders All Risk Insurance...Performance And Warranty Bank Guarantees...Advance Payment Bank Guarantees...Assignment Of Subcontractors' Warranties And Bank Guarantees...iv 34 34...

  • Page 82
    ...Data For Equipment And Systems...Article 30 Taxes...Taxes Assessed Against Facility...Taxes Affecting Employees...Taxes Not Part of Budgeted Cost...Article 31 Liens [Pfandrecht]...Liens [Pfandrecht]...Article 32 Patents and Confidentiality...Contractor's Responsibility...Design Process...Replacement...

  • Page 83
    ......Termination By Company...Actions Upon Receipt Of Notice...Guarantees Following Termination...Article 36 Default by the Contractor...Events Of Default...Company's Right To Take Over Work...Company's Right To Complete Work...Contractor's Action Upon Receipt of Notice...Remedies Cumulative...Limits...

  • Page 84
    ....2 40.3 40.4 40.5 40.6 Article 40 Force Majeure...Effect On Time For Performing Obligation...Effect On Compensation...Obligation To Mitigate...Notification...Failure to Notify...Article 41 Waiver, Severability and Remedies...Company's Rights Not Affected...Contractor's Waiver...No Waiver Of Breach...

  • Page 85
    ... AND SCHEDULES Exhibit A Schedule 7.1 Schedule 16.2.1.1 Facility Performance Criteria Site Studies Furnished By Company To Contractor Range Of Hourly Rates Of Contractor's Employees And Contractor's Established Travel And Living Expenses Reimbursement Policies Schedule Of Equipment Rental Rates [To...

  • Page 86
    ..."...17.1 "subcontractor"...1.6.8 "supplies"...1.6.9 "system"...1.6.10 "System Performance Test"...25.1 "vendor"...1.6.10 "Wafer Process Equipment"...1.3.2 "Warranty Commencement Date:...18.1 "work"...1.6.11, 1.6.12 "working days"...1.6.13 ix Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 87
    ... 1 SCOPE OF WORK FACILITY. The improvements and equipment to be planned, designed, -------engineered, developed, fabricated, constructed, furnished and/or installed, started up, tested, calibrated, adjusted and turned over under the Contract (which improvements and equipment are herein sometimes...

  • Page 88
    ... the ------design development, engineering, construction management, furnishing, fabrication, construction, erection, installation, equipping, starting up, testing, calibrating, and adjusting of the Facility, including without limitation all design services, all construction management services and...

  • Page 89
    ... COMPANY to monitor the progress and monetary cost of all aspects of the work including without limitation each Construction Phase, to identify the points in time at which specified events must occur and to anticipate potential problems in achieving scheduled completion dates. The Project Schedule...

  • Page 90
    ... Agreement. PROCESS DESIGN. COMPANY shall supply certain process design requirements for the tools used in the manufacturing process in the form of performance requirements and certain other design information as shown in the Contract Documents, including the Facility Performance Criteria described...

  • Page 91
    ... provide all construction management services and all construction for the entire Facility, including without limitation all require) at least monthly providing such updated reports, invoices and materials to be incorporated into the buildings, structures and other improvements and all labor, fuel...

  • Page 92
    ... CONTRACTOR and COMPANY. CONTRACTOR will coordinate construction schedules and shop and working drawing development, and insure that same are communicated to all of CONTRACTOR'S subcontractors. STANDARDS FOR COMPLETION. It is the intent of the Contract that the Facility shall be complete with all...

  • Page 93
    ...of the Site designated as such in the Contract Documents. 1.6.8 The term "SUBCONTRACTOR" where used herein shall mean a corporation, association, partnership, joint venture, limited liability company, trust or other business entity or individual (other than an employee) who contracts with CONTRACTOR...

  • Page 94
    ... install said materials at the job site. However, vendors may in some cases furnish erection engineers to supervise such erection or installation. 1.6.12 The term "WORK" where used herein shall mean all design development work, engineering work and Construction Work necessary or desirable to perform...

  • Page 95
    ... the Site. 2.3 CONSTRUCTION PERSONNEL 2.3.1 2.2.2 SUPERVISION OF CONSTRUCTION PERSONNEL. CONTRACTOR shall give efficient supervision to the work, using its best skill and attention. CONTRACTOR shall keep on the Construction Work, during its progress, competent supervisory personnel. COMPANY shall...

  • Page 96
    ... and guarantees shall control unless the construction involved therein would be unsafe in which case the parties hereto shall cooperate in revising one of the aforesaid alternatives to remove the objections of jeopardy to warranties and guarantees 10 3.2 3.1 2.8 2.7 2.6 Source: ADVANCED MICRO DEVIC...

  • Page 97
    ...design and specifications for the Facility shall be based on and conform to COMPANY'S Facility Performance Criteria and the Fab 30 Preliminary Design. PRE-CONTRACT DESIGN. CONTRACTOR commenced its design services prior to execution of this Agreement. For all of such work performed prior to the date...

  • Page 98
    ...obtaining proper materials and constructing and erecting the Facility. In addition to all other requirements of the Contract relating to specifications and drawings, CONTRACTOR shall submit to COMPANY two sets in electronic media form of all drawings and specifications developed by CONTRACTOR or any...

  • Page 99
    ... or associated with the performance of the Contract, including but not limited to all Design Documents, plans, specifications, drawings, data sheets, photos, negatives, film, diskettes, programs, copies, reports, calculations, summaries, maps, models and samples, in connection with the Facility or...

  • Page 100
    ...Work and use and occupy the Facility. CONTRACTOR shall comply with and give notices required by law and lawful orders of public authorities bearing on performance of the Construction Work. CONTRACTOR shall apply for the building permit and other permits in sufficient time to receive them by the time...

  • Page 101
    ...of all Design Documents and shop drawings and submittals within the Project Schedule. As regards all other engineering work performed by CONTRACTOR hereunder, COMPANY shall have the right to review said engineering work currently to the extent COMPANY finds desirable, and if any question shall arise...

  • Page 102
    ... In the event CONTRACTOR fails to deliver any Design Documents or other items, including without limitation submittals or shop drawings, to COMPANY by the dates agreed upon, CONTRACTOR shall develop a Schedule Recovery Plan. Should any additional costs to the Project occur as a result of such delay...

  • Page 103
    ... for their protection. CONTRACTOR shall install all utility and service lines and facilities required as a part of the Facility. Article 7 Acceptance of Site CONTRACTOR'S INSPECTION OF SITE. CONTRACTOR'S delivery to COMPANY of the Design Documents, the Project Schedule and the Project Budget shall...

  • Page 104
    ... Build Clean protocol at all times during construction of the Facility. EQUIPMENT STANDBY. In the event of a suspension of Construction Work pursuant to Article 34, CONTRACTOR shall submit to COMPANY, by 12:00 noon of ---------each working day, a complete listing of all equipment on standby. Said...

  • Page 105
    ... codes at all times while workers are employed at the Site. 8.15 SAFETY AND SECURITY CONTRACTOR'S RESPONSIBILITY FOR SAFETY. CONTRACTOR shall be solely and completely responsible for conditions of the job site, including safety of all persons (including employees) and property during performance...

  • Page 106
    ... and a type that will safely perform the work specified, and shall be maintained and used in a manner that will not create a hazard to persons or property, or cause a delay in the progress of the Construction Work. CONTRACTOR'S SAFETY REQUIREMENTS IN FACILITY. From and after the time CONTRACTOR...

  • Page 107
    ... and completely -------responsible for the security of the job site, including protection of personnel, the work and materials. 8.16 MATERIALS. --------NEW MATERIALS. All materials (including equipment) shall be new, unless otherwise agreed by COMPANY in writing. RESPONSIBILITY FOR INJURY CAUSED BY...

  • Page 108
    ... CONTRACTOR shall, at all times, keep the Site and all ----------adjacent property free from accumulations of waste material or rubbish caused by CONTRACTOR'S or any subcontractor's employees or by the Construction Work. Upon completion of the Construction Work, CONTRACTOR shall remove all temporary...

  • Page 109
    ... shall update, at least monthly, a list of all subcontractors and vendors involved in the Project. CONTRACTOR BIDDING ON SUBCONTRACTED WORK. If CONTRACTOR desires to perform any part of the Construction Work (including without limitation supplying any materials) on a cost plus fee basis, CONTRACTOR...

  • Page 110
    ... time to time suggest modifications in the design of the Facility or the performance of the Construction Work which (i) involve changes or additions in the construction (which as used in this Article 10 shall mean materials or work to be performed) ---------required by the Contract, or (ii) involve...

  • Page 111
    ... the latest date by which the Facility shall be finally completed (as set forth in Section 14.2) or a revision of the Project Schedule -- and for such use only. If such change, addition, or omission is authorized by COMPANY and actually incorporated in the construction, then: (x) all costs added or...

  • Page 112
    ... for the Facility that are designated in the Contract Documents to be tested by nondestructive means pursuant to a testing plan that will be developed by COMPANY and CONTRACTOR. CONTRACTOR shall insure that the testing plan is developed prior to CONTRACTOR'S purchasing materials or equipment that...

  • Page 113
    ...not specifically required to be tested or approved, may be ordered by COMPANY and, if so ordered, the Construction Work shall be uncovered by CONTRACTOR. If such Construction Work is found to be in accordance with the Contract Documents, COMPANY will pay the cost of reexamination and replacement. If...

  • Page 114
    ... or installed, man hours planned per unit, and scheduled progress anticipated on each of said items in order to complete the entire Facility within the contract time in accordance with the Project Schedule. Each schedule activity or line item will be identified as a direct work or indirect work...

  • Page 115
    ... Contract at the job site or in the engineering office during such last day worked, itemized by crafts or work classifications. MATERIALS STATUS REPORTS. In addition to the purchasing progress reports which are furnished by CONTRACTOR, CONTRACTOR shall furnish COMPANY, currently as issued, copies...

  • Page 116
    ... path set forth in the Project Schedule and an estimate of the duration of the delay and the possible time extension involved. Within seven (7) working days after the cause of delay has been remedied, in the case of a delay caused by COMPANY'S act or neglect, CONTRACTOR shall give notice to COMPANY...

  • Page 117
    ...respective officers, agents or employees. Changes in the Project Schedule shall be effected only by approved Change Order in accordance with Section 10.3 above 14.4 DELAYS AND ADDITIONAL COSTS ADDITIONAL COSTS CAUSED BY COMPANY'S DELAY OR BY FORCE MAJEURE COMPANY shall pay additional Reimbursable...

  • Page 118
    ... not relieve CONTRACTOR of the responsibility to complete all of the Construction Work in accordance with the Contract Documents. CONTRACTOR shall notify COMPANY in writing when all items on the Punch List have been completed. If, after 32 15.2.1 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 119
    ... the Construction Work has been completed in accordance with the Design Documents and authorized Change Orders will be charged to CONTRACTOR. Punch List items that could not lead to malfunction of a system or could not limit any of such system's functions or could not affect COMPANY'S continuous use...

  • Page 120
    ...Engineering, Purchasing, Construction, and Estimating Departments for the time actually and necessarily expended in performing the work hereunder in CONTRACTOR'S home offices for the time such employees are directly engaged in the work hereunder including time spent by said employees at the job site...

  • Page 121
    ... (Communications), (Clause 16.2.1.8 (Indirect Overhead) and Clause 16.2.1.10 (Other Direct Home Office Costs). The standard work week schedule at - --------CONTRACTOR'S home office is eight (8) hours per day, forty (40) hours per week. COMPANY shall reimburse CONTRACTOR for those employees who...

  • Page 122
    ... by the Contract Documents to pay; (iii) fees of testing laboratories for tests required by the Contract Documents, except those related to defective or non-conforming work; (iv) royalties and license fees approved in writing by COMPANY and paid for the use of a particular design, process or product...

  • Page 123
    ...shipped to the Site and shall terminate when said item is shipped away from the Site or at such time as the item is no longer needed or necessarily kept at the Site for the proper and economical prosecution of the job, except that the periods when the item is out of use for making major overhauls or...

  • Page 124
    ... established by collective bargaining agreements in effect in the area in which the work is being performed and shall be within the range of rates set forth in Schedule 16.2.1.1 attached hereto, subject to 38 16.2.2.7 16.2.2.6 16.2.2.5 16.2.2.4 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 125
    ... WAGES AND SALARIES. The services performed by CONTRACTOR'S field staff employees who are permanent employees of CONTRACTOR, including, but not limited to, Field Construction Superintendent, Assistant Superintendent, Construction Engineer, Field Office Manager, Field Accountant, Material Supervisor...

  • Page 126
    ...maintaining its construction office and other temporary buildings needed at the Site for or in connection with the work to be performed hereunder-- it being understood that such office furniture and equipment purchased by CONTRACTOR shall become COMPANY'S property when construction is completed; the...

  • Page 127
    ... or non-conforming work, disposal and replacement of materials incorrectly ordered or supplied, and making good damage to property not forming part of the Construction Work. 16.2.3.4 OTHER COSTS. ----------Any cost not specifically and expressly 41 16.2.3.3 16.2.3.2 Source: ADVANCED MICRO DEVIC, 10...

  • Page 128
    ... due to COMPANY'S delay. HOME OFFICE COMPUTERS. Costs of personal computers, work stations, printers, software and related computer equipment used in CONTRACTOR'S home office. Depreciation related to such computer equipment is included in the hourly rates set forth in Schedule 16.2.1.1. SECTION...

  • Page 129
    ...) of --DEM16,675,000 (which does not include value added taxes associated with such Fee). For purposes of calculating the foregoing increase in the Fee, if CONTRACTOR performs directly (i.e., without any subcontractor) the Construction --Work for the Clean Room, that portion of the total Budgeted...

  • Page 130
    ... of the total hours expended by job or worker classification of all employees who have performed work hereunder during the preceding month whose time is chargeable to COMPANY under the provisions of Section 16.2 above. (CONTRACTOR shall maintain individual time cards and rate sheets for all of its...

  • Page 131
    ... CONTRACTOR at actual cost. Upon completion of its Construction Work hereunder, CONTRACTOR shall remove all of said materials, supplies, and items to places of storage or disposal to be designated by COMPANY; however, if requested by COMPANY, CONTRACTOR shall make a reasonable effort to arrange with...

  • Page 132
    ..., and such agreement shall be evidenced in writing. If there is any increase or decrease in the Fee, the Budgeted Fee shall be adjusted accordingly. ARTICLE 17 TERMS OF PAYMENT 17.1 PAYMENT OF CONTRACT AMOUNT Based upon Applications for Payment 46 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 133
    ...down by Reimbursable Costs and Budgeted Fee attributable to each Construction Phase. Each Application for Payment will show the total hours worked by employees in each classification set forth in Schedule 16.2.1.1 multiplied by the corresponding hourly rate in Schedule 16.2.1.1. As soon as each such...

  • Page 134
    ... completed prior to or on the date for Final Completion set forth in Section ------14.2. CONTRACTOR shall submit a separate invoice to COMPANY covering such payment at the time the Facility is taken over for operation and maintenance as aforesaid, and COMPANY shall pay CONTRACTOR the amount of said...

  • Page 135
    ... other quality requirements of COMPANY. The foregoing warranties and guarantees exclude the Wafer Process Equipment and materials purchased directly by COMPANY. If any failures of the Facility or any Construction Phase or any system within the 49 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 136
    ...of the System Performance Test pursuant to Section 25.2 and (ii) in the case of any other part of the Facility, upon Final Completion of the Facility. 18.2 COMPANY'S RIGHT TO REPAIR. If CONTRACTOR fails or refuses to comply with a demand to repair defects within a reasonable time set by COMPANY or...

  • Page 137
    ... way of limitation, that all materials will have capacities (in terms of heat capacities, duty cycles, rates of flow, volumes, and the like) at operating conditions as set forth in the plans, specifications, drawings, data sheets and other Construction Documents approved by COMPANY, under which said...

  • Page 138
    ...'S guarantee and warranty (including without limitation any work pursuant to guarantees and warranties provided by subcontractors and vendors), CONTRACTOR'S or its subcontractors', vendors' or agents' activities on the Site, or CONTRACTOR'S breach of this Agreement. 52 Source: ADVANCED MICRO DEVIC...

  • Page 139
    ... vendor), or the property of any person or persons (including existing property of COMPANY and the Facility) caused by or arising out of any occurrence in any manner connected with the performance of such subcontract or purchase order, regardless of whether or not it is caused in part by a party or...

  • Page 140
    ...any persons present therein, and which occur during the performance of work under this Contract and during the warranty periods referenced herein. Under no circumstances shall CONTRACTOR be liable to COMPANY for consequential damages in the nature of lost profits, loss of revenue, loss of production...

  • Page 141
    ... and Automobile Liability Insurance Contractor ---------DEM7,500,000 each occurrence, combined single limit bodily injury and property damage 2. DEM15,000,000 aggregate combined single limit bodily injury and property damage Subcontractors 55 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 142
    ... Manager, One AMD Place, Post Office Box 3453, M/S 89, Sunnyvale, California 94088-3453, before any cancellation or CONTRACTOR initiated change of this policy shall be effective." 21.4 COMPANY AS ADDITIONAL INSURED. CONTRACTOR shall,and shall make best efforts to cause each Subcontractor to, name...

  • Page 143
    ... for the benefit of COMPANY and those provided by any subcontractor or vendor, and any and all warranty claims and claims for performance CONTRACTOR may have against its subcontractors, vendors, architects, building engineers, project planners and any other building tradesmen and persons involved in...

  • Page 144
    ... OF THE FACILITY FOR OCCUPANCY AND TESTING CONTRACTOR'S PREPARATION OF FACILITY. At such time as COMPANY may occupy or utilize the Facility for the installation of the Wafer Process Equipment or in preparation for the conduct of any System Performance Test, 58 24.1 Source: ADVANCED MICRO DEVIC, 10...

  • Page 145
    ... that said instrument employees shall limit their work to the checking and performance testing of instruments and controls. COMPANY'S employees shall report to CONTRACTOR'S chief instrument supervisor all faulty equipment or installation errors found, and CONTRACTOR shall make all necessary...

  • Page 146
    ..., replacements or other corrections or for any other reason before any System Performance Test is satisfactorily completed, COMPANY at CONTRACTOR'S cost shall service the Facility (or such portions thereof as are involved in or affected by the shutdown) for resuming testing after said shutdown...

  • Page 147
    ... in electronic form) presentation of factual information on the completed Project, defining what, how, and where Construction Work was installed, together with any other relevant information, including without limitation two sets of electronic media of all drawings and specifications developed by...

  • Page 148
    facilitate COMPANY'S future use, service, modification, and/or replacement of completed Construction Work, and which complements information furnished under Operation and Maintenance Data (defined in Section 29.1). CONTRACTOR must submit record documents to COMPANY for review and approval prior to ...

  • Page 149
    ... the following information: 29.3.1 tables. wiring. 29.3.2 29.3.3 For equipment and systems, CONTRACTOR Manufacturer's parts lists and spare parts recommendations. Manufacturer's published performance ratings, curves or Manufacturer's diagrams or drawings of control and power 29.3.4 Control system...

  • Page 150
    ...on account of the execution of the work under the Contract or CONTRACTOR'S receipts therefrom or on the materials furnished by CONTRACTOR therefor or on the manufacture, storage, sale, receipts from sale, use, tariffs, licenses, royalties, value added, transportation, inspection, or delivery of said...

  • Page 151
    ... use of the Facility or any element or combination of elements thereof, or to the performance of any work hereunder; provided, however, that COMPANY promptly notifies CONTRACTOR in writing of the institution of such action or suit and permits CONTRACTOR to control its defense. CONTRACTOR shall pay...

  • Page 152
    .... All persons issued CONTRACTOR badges shall execute confidentiality agreements in form satisfactory to COMPANY. PROPRIETARY INFORMATION. As used herein "PROPRIETARY INFORMATION" refers to all information relating to processes, operations, plans, products, know-how, equipment or trade secrets or...

  • Page 153
    ... event of termination of the Contract pursuant to Section 33.1 above, COMPANY shall pay CONTRACTOR in -----------accordance with the terms of Section 35.1 hereof for all work which has been -----------performed, and shall pay CONTRACTOR a pro rata share of CONTRACTOR'S Fee as set forth in Section...

  • Page 154
    ...termination, CONTRACTOR shall deliver, and COMPANY and any Affiliate of Company shall have the right to make use for the completion of the work and the other purposes identified in Section 4.11 of all Design Documents, including without limitation -----------all plans, specifications, drawings, data...

  • Page 155
    ... any, terminate the Contract in whole or in part by giving written notice to CONTRACTOR specifying the part or parts of the work to be terminated and the effective date of the termination. Upon any such termination, CONTRACTOR shall discontinue work as soon as possible and minimize associated costs...

  • Page 156
    ... in the notice. 35.2.2 Deliver to COMPANY copies of all Design Documents, including without limitation all plans, specifications, drawings and data sheets and all data, reports, completed work, work in process, and such other information and materials relating to the terminated part of the work as...

  • Page 157
    ... work on the date and to the extent specified in the notice. DELIVER DESIGN DOCUMENTS, ETC. Deliver to COMPANY, the Site and any plans, specifications, drawings, data sheets, data, reports, completed work, work in process, and such other information and materials relating to the terminated work...

  • Page 158
    ... by which CONTRACTOR culpably exceeds the Latest Date For Substantial Completion Of The Facility, CONTRACTOR shall pay COMPANY a contract penalty in the amount listed below: 37.1 Week Following The Week Ending On The Latest Date For Substantial Completion Of The Facility 1st 2nd 3rd 4th 5th Week...

  • Page 159
    ... claim. SET-OFF OF CONTRACT PENALTIES. Any contract penalty actually paid by CONTRACTOR shall be set off against the amount of any damages actually paid to COMPANY by virtue of CONTRACTOR'S failure to execute the design and engineering services or the Construction Work in a timely manner. ARTICLE...

  • Page 160
    ... by CONTRACTOR or its subcontractors, vendors or their respective officers, agents, representatives or employees in such execution or performance of the work hereunder. 38.3 CHOICE OF LAW. This Agreement and the Contract (including without limitation the enforcement of all rights and duties of the...

  • Page 161
    ..., additions and omissions. 39.3 AUDIT BY PROJECT LENDER. The lender or lenders providing part or all of the financing for the Facility and their agents and representatives shall have the same rights to inspect the Construction Work and to review and 75 38.4.8 38.4.7 Source: ADVANCED MICRO DEVIC...

  • Page 162
    ... installation of all equipment and materials. Therefore, delays by vendors in manufacture or delivery of materials, which delays are not caused by force majeure, or shortages of labor or materials resulting from general market conditions shall not be considered as a just cause for delay. 40.2 EFFECT...

  • Page 163
    ... under the Contract shall not be affected in any way whatsoever by any inspection by COMPANY or by COMPANY'S Inspector or Representative, nor any payment by COMPANY, nor any payment for, or acceptance of, the whole or any part of the Construction Work by COMPANY, nor any extension of time, nor any...

  • Page 164
    ...been properly served if deposited in the German Mail properly stamped with the required postage and addressed to: AMD Saxony Manufacturing GmbH At the Site Attn: Jack Saltich, General Manager With copies to: AMD Saxony Manufacturing GmbH c/o Advanced Micro Devices, Inc. 5204 East Ben White Boulevard...

  • Page 165
    ... hereto have caused this Contract to be duly executed on their behalf, effective as of the day and year first above written. COMPANY AMD SAXONY MANUFACTURING GmBH By: /s/ Jack Saltich Name: Jack Saltich Title: Vice President and General Manager Fab 30 Date: November 15, 1996 CONTRACTOR MEISSNER...

  • Page 166
    SCHEDULE 16.2.4 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 167
    ... rule, COMPANY shall pay for the design, labor and materials involved in designing, purchasing and installing each element of the Project once. If CONTRACTOR forgets to design in a part that the Facility requires, then COMPANY will pay for the added design and construction cost (but not the added...

  • Page 168
    SCHEDULE 21.6 & 21.7 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 169
    SCHEDULE 21.6 & 21.7 CRITERIA FOR BANK GUARANTEES The minimum requirements for the performance bond and the warranty and advance payment guarantees (in addition to those already set out in Section 21.6 and 21.7) are as follows: 1) For guarantees furnished by CONTRACTOR, as well as guarantees ...

  • Page 170
    Exhibit A Fab 30 Facility Performance Criteria ALL CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 171
    Schedule 7.1 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 172
    ... radar measurement from selected geological sections Geotechnical Reports BAUGEO 05/09/96 6 pages Report No. 56 962 Ingenieurbuero fur 7 appendices - -1/st/ completion Baugrund und Geotechnik GmbH; Leipzig Stand October 15, 1996 page 1 of 3 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 173
    ... Structural Physics, Fellbach/Stuttgart Vibration Report Brussau Bauphysik 05/09/96 9 appendices (Preliminary report of the vibration test) GmbH Acoustics-DynamicsStructural Physics, Fellbach/Stuttgart Stand October 15, 1996 page 2 of 3 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 174
    AMD Fab 30 Dresden SUBJECT AUTHOR DATE REMARKS Military-historical study about the situation of Wilschdorf during the Second World War and investigation of... calculation of the clean room ceiling construction Stand October 15, 1996 page 3 of 3 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 175
    Schedule 16.2.1.1 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 176
    ... Manager 109,00 Accounting Administration 71,00 Secretary 77,00 Travel See attached Contractor's "Travel Expenses - Guideline Headquarter Policy". Notes Rates apply from 01/01/1996 on and are subject to revision from time to time. All rate increases to be approved by AMD. Source: ADVANCED MICRO...

  • Page 177
    ... with a single contract (not related to trade union agreements/40 hours per week). Current Actual Annual Salary for each employee scheduled to work on the project is divided by 1792 hours to obtain the effective hourly salary rate. Total hours for the year - 2080 is reduced by 30 days vacation times...

  • Page 178
    ... Personnel Costs: CC 5434 CC 6400 CC 6020 Selling Expense Personnel Costs (B) Net M + W OVERHEAD COSTS Overhead Rate B / A = 5,852,786 22,932,395 305,945 5,823,045 1,767,223 --------- 7,896,213 4,617,662 DM 35,446,270 74.7% USE: 75% Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 179
    ... expenses are defined as additional expenses due to business trips, including but not limited to: -accomodations -air travel -airport taxes/fees -train travel -communication costs (telephone/fax) -taxi fare -costs, related to use of private cars -car rental -parking -storage of baggage 2.2 All such...

  • Page 180
    ...DEFINITION OF BUSINESS TRIP 3.1 3.2 The fact of working as an employee temporarily outside the own permanent office is defined as business trip. In case a business trip exceeds the time period of six (6) months, the responsible management may decide to require a project specific employment contract...

  • Page 181
    ... by management (e. g. dept. manager, project manager). Use of personal aircrafts is strictly prohibited for company business trips. Free tickets offered by airlines based on the amount of miles accumulated, remain the property of the employee. 6.5 6.6 6.7 6.8 Source: ADVANCED MICRO DEVIC, 10...

  • Page 182
    ... be checked from time to time. In case the stated amount of km is found incorrect, the shortest possible connection + 10% will be determined in order to reimburse such trip. Exception may be made in regard of said limitation, if approved by management. Source: ADVANCED MICRO DEVIC, 10-K, March 20...

  • Page 183
    ...An exception may be made due to baggage or equipment to be transported, or in case of transportation to other people. In such case the employee will be provided with such a car (see 11.4). For employees travelling in groups up to three (3) persons, middle class cars, four doors is required, such as...

  • Page 184
    ... 10.3 10.4 In general the company will book and directly pay train travel tickets. In the event an employee had to pay the ticket by himself, such amount will be reimbursed due to the ticket attached to the expense report. 11. EXPENSE REPORTS 11.1 11.2 All business trips have to be billed latest...

  • Page 185
    ... has to be issued and signed by the employee. Such down payment will be deducted from the expense reports amount which has to be paid to the employee. Signed and authorized M. Beigl Project manager Signed and authorized F. Hahn Authorized manager Source: ADVANCED MICRO DEVIC, 10-K, March 20...

  • Page 186
    Schedule 16.2.1.1 (Exhibit A) Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 187
    ... 78 DM 52 DM 26 DM - --------------------------------------------------------------------------------------------(China) Taiwan 84 DM 56 DM 28 DM - --------------------------------------------------------------------------------------------- Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 188
    ...Island 96 DM 64 DM 32 DM - --------------------------------------------------------------------------------------------Israel 72 DM 48 DM 24 DM - --------------------------------------------------------------------------------------------- Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 189
    ...DM 16 DM - --------------------------------------------------------------------------------------------Malaysia 60 DM 40 DM...Mali 60 DM 40 DM 20 DM - --------------------------------------------------------------------------------------------- Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 190
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 191
    ... Foderation 108 DM 72 DM 36 DM - --------------------------------------------------------------------------------------------- Moskau 108 DM 72 DM 36 DM - --------------------------------------------------------------------------------------------- Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 192
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 193
    ...Ungam 48 DM 32 DM 16 DM - --------------------------------------------------------------------------------------------Uruguay 66 DM 44 DM 22 DM - --------------------------------------------------------------------------------------------- Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 194
    ... DM - --------------------------------------------------------------------------------------------/1)/ /2)/ einschliesslich der Departements Haute-Seine, Seine-Saint Denis und Val-de-Marne einschliesslich Alexandria/Virginia und Arlington/Virginia Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 195
    Schedule 16.2.1.1 (Exhibit B) Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 196
    ... der Bewirtung (genaue Bezeichnung. Anschrift). - -------------------------------------------------------------------------------Bewirtele Person(en...Zutreffendes bitte ankreuzen Source: ADVANCED MICRO DEVIC, 10-K, March 20,...

  • Page 197
    ...MEISSNER+WURST - -----------------------------------------------------------------------------------------------------------------------------------Name Abteilung Personal-Nr. Kostenstelle ...10 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 198
    ...gesamle Reisekosten DM abz. erh. VorschuB DM auszuzahlen/zuruckzuzahlen DM - -----------------------------------------------------------------------------------------------------------------------------------Reisekosten 1/96 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 199
    Schedule 16.2.2.3 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 200
    ... of the work of this project. Contractor may submit its own rental equipment list providing the conditions set forth herein are met. Include separate sheets if necessary. We do not foresee to own any of these Construction Equipments and Tools! Page 2 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 201
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 202
    ... JACK SALTICH for AMD Saxony Manufacturing, GmbH Jack Saltich Vice President and General Manager Fab 30 ACKNOWLEDGED & AGREED: Signature /s/ FRANK HAHN for Meissner & Wurst FRANK HAHN Date 07.02.97 ---------- Printed Name Title Vice President dept Commercial Source: ADVANCED MICRO DEVIC, 10...

  • Page 203
    ..., installation, performance, calibration, adjustment and turnover of the Facility, and for the start up and performance testing of the Facility and for the execution of all other construction work included as a part of the Project. All such construction management services and all construction work...

  • Page 204
    ...of the Site designated as such in the Contract Documents. 1.6.8 The term "SUBCONTRACTOR" where used herein shall mean a corporation, association, partnership, joint venture, limited liability company, trust or other business entity or individual (other than an employee) who contracts with CONTRACTOR...

  • Page 205
    ... and guarantees shall control unless the construction involved therein would be unsafe in which case the parties hereto shall cooperate in revising one of the aforesaid alternatives to remove the objections of jeopardy to warranties and guarantees 10 3.2 3.1 2.8 2.7 2.6 Source: ADVANCED MICRO DEVIC...

  • Page 206
    ... the Construction Work has been completed in accordance with the Design Documents and authorized Change Orders will be charged to CONTRACTOR. Punch List items that could not lead to malfunction of a system or could not limit any of such system's functions or could not affect COMPANY'S continuous use...

  • Page 207
    ... Micro Devices, Inc., ATTN: Risk Manager, One AMD Place, Post Office Box 3453, M/S 89, Sunnyvale, California 94088-3453, before any cancellation or CONTRACTOR initiated change of this policy shall be effective." COMPANY AS ADDITIONAL INSURED. CONTRACTOR shall, and shall make best efforts to cause...

  • Page 208
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 209
    ... 11 ADVANCED MICRO DEVICES, INC. STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS Three Years Ended December 29, 1996 (Thousands except per share) PRIMARY Weighted average number of common shares outstanding during the year...Incremental common shares attributable to shares issuable under employee...

  • Page 210
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 211
    ... prospects for microprocessors, Flash memory device products and other product lines; the effect of foreign exchange contracts and interest rate swaps; the development, validation, certification, introduction, market acceptance and pricing of the K86/(TM)/ products; the Company's commitment to...

  • Page 212
    ... gross margin in 1996 was primarily due to lower sales, the underutilization of certain production facilities, and increased purchases by the Company of Flash memory devices from its manufacturing joint venture with Fujitsu Limited, Fujitsu AMD Semiconductor Limited (FASL), at prices higher than the...

  • Page 213
    ...the sale of the Senior Secured Notes, the Company's capital investments and its recent operating performance have resulted in significant negative cash flow. In 1996 the Company made substantial capital investments in its process technology and manufacturing capacity based, in part, upon Company and...

  • Page 214
    ...exchange exposure for the Dresden Facility. The Company's total cash investment in FASL was $160 million at the end of 1996 and at the end of 1995. No additional cash investment is currently planned for 1997. In March of 1996, FASL began construction of a second Flash memory device wafer fabrication...

  • Page 215
    ... used in personal computers (PCs). Intel Corporation's dominant market position has to date allowed it to set and control x86 microprocessor standards and thus dictate the type of product the market requires of Intel Corporation's competitors. In addition, Intel Corporation's financial...

  • Page 216
    12 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 217
    ... to produce the Company's AMD-K6 processors for its own use or for sale to third parties, such production could reduce the potential market for microprocessor products produced by AMD, the profit margin achievable with respect to such products, or both. 13 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 218
    ... substantial investments in improving its process technologies. In particular, the Company has made and continues to make significant research and development investments in the technologies and equipment used to fabricate its microprocessor products and its Flash memory devices. Portions of these...

  • Page 219
    ...the Company's products are performed at the Company's manufacturing facilities in Penang, Malaysia; Bangkok, Thailand; and Singapore; or by subcontractors in Asia. AMD has a 50-year land lease in Suzhou, China, to be used for the construction and operation of an additional assembly and test facility...

  • Page 220
    ...affect the Company's quarterly or annual operating results. Order Revision and Cancellation Policies. AMD manufactures and markets standard lines of products. Sales are made primarily pursuant to purchase orders for current delivery, or agreements covering purchases over a period of time, which are...

  • Page 221
    ... immediate effect on the trading price of AMD common stock in any given period. Earthquake Danger. The Company's corporate headquarters, a portion of its manufacturing facilities, assembly and research and development activities and certain other critical business operations are located near major...

  • Page 222
    ... (loss) ...Preferred stock dividends ...Net income (loss) applicable to common stockholders ...Net income (loss) per common share: Primary ...Fully diluted ...Shares used in per share calculation: Primary ...Fully diluted ... See accompanying notes 18 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 223
    ... materials ...Work-in-process ...Finished goods ...Total inventories ...Deferred income taxes ...Tax refund receivable ...Prepaid expenses and other current assets ...Total current assets ...Property, plant, and equipment: Land ...Buildings and leasehold improvements ...Equipment ...Construction in...

  • Page 224
    ... from available-for-sale investments and translation adjustment ...December 31, 1995 ...Issuance of shares: Employee stock plans ...Fujitsu Limited ...Compensation recognized under employee stock plans ...Warrants exercised ...Income tax benefits realized from employee stock option exercises ...Net...

  • Page 225
    ...sale of property, plant, and equipment ...Write-down of property, plant, and equipment ...Net gain realized on sale of available-for-sale securities ...Compensation recognized under employee stock... 106,201 =========== See accompanying notes 21 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 226
    ...manufacturing facilities in the U.S. and Asia and sales offices throughout the world. The Company's products include a wide variety of industry-standard integrated circuits (ICs) which are used in many diverse product applications such as telecommunications equipment, data and network communications...

  • Page 227
    ... acceptances, and marketable direct obligations of the United States Treasury. FOREIGN EXCHANGE FORWARD CONTRACTS Foreign exchange forward contracts are used to hedge the Company's net monetary asset positions in its foreign subsidiaries and the Company's liabilities for products purchased from FASL...

  • Page 228
    ...: machinery and equipment 3 to 5 years; buildings up to 26 years; and leasehold improvements are the shorter of the remaining terms of the leases or the estimated economic useful lives of the improvements. Effective January 1, 1996 the Company adopted Statement of Financial Accounting Standards No...

  • Page 229
    Certain prior year amounts on the Consolidated Financial Statements have been reclassified to conform to the 1996 presentation. 24 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 230
    ... Corporate notes Treasury notes Commercial paper Money market auction preferred stocks Total short-term investments On November 15, 1995, the FASB staff issued a Special Report, "A Guide to Implementation of Statement 115 on Accounting for Certain Investments in Debt Source: ADVANCED MICRO DEVIC...

  • Page 231
    ... 31, 1995 were short-term in nature, changes in market interest rates did not have a significant impact on the fair value of these securities. The net unrealized gains on these securities at December 29,1996 and December 31,1995 were immaterial. 25 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 232
    ... failed to perform is limited to the amounts, if any, by which the counterparties' obligations under the contracts exceed the obligations of the Company to the counterparties. NOTE 6. OTHER RISKS PRODUCTS Flash memory devices contributed a significant portion of the Company's revenues in 1996...

  • Page 233
    ... Notes and Preferred Stock Offering, expiring on January 17, 20000 Warrants issued in connection with consulting services, expiring on July 15, 1997 Warrants issued to sales agent, expiring on August 17, 1998 Total warrants issued and outstanding as of December 29, 1996 Source: ADVANCED MICRO DEVIC...

  • Page 234
    For the year ended December 29, 1996 warrants previously issued to purchase 136,944 shares of common stock were exercised on a cashless basis for 79,849 shares of common stock. All warrants are currently exercisable at December 29, 1996. 27 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 235
    ... result of certain ownership changes as defined in Section 382 of the Internal Revenue Code. Availability of these carryovers generally occurs ratably from 1996 through 2001. The federal and state tax credit carryovers expire beginning in the year 2003 through 2011. 28 Source: ADVANCED MICRO DEVIC...

  • Page 236
    ..., additional taxes of approximately $102 million would accrue. The Company's assembly and test plant in Thailand is operated under a tax holiday which expires in 1998. The net impact of this tax holiday was a decrease in the net loss of approximately $3 million ($0.02 per share) in 1996. NOTE...

  • Page 237
    NOTES TO CONSOLIDATED FINANCIAL STATEMENTS In August, 1996 the Company sold $400 million of Senior Secured Notes due August 1, 2003 under its shelf registration declared effective by the Securities and Exchange Commission on May 17, 1994. Due to the sale of the Senior Secured Notes, the Company ...

  • Page 238
    30 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 239
    ...NOTE 11. FOREIGN AND DOMESTIC OPERATIONS AMD manufactures and markets standard lines of products. The Company's products include a wide variety of industry-standard ICs which are used in many diverse product applications such as telecommunications equipment, data and network communications equipment...

  • Page 240
    ...July 10, 1996, the Compensation Committee of the Board of Directors of AMD approved a stock option repricing program pursuant to which employees of the Company (excluding officers) could elect to cancel certain unexercised stock options in exchange for new stock options with an exercise price of $11...

  • Page 241
    32 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 242
    ... terms within five years. STOCK-BASED COMPENSATION As permitted under Statement of Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based Compensation," the Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees...

  • Page 243
    ...tax salary subject to I.R.S. limits. NexGen did not match employee contributions. NOTE 14. COMMITMENTS The Company leases certain of its facilities under agreements which expire at various dates through 2011. The Company also leases certain of its manufacturing and office equipment for terms ranging...

  • Page 244
    ... AMD Semiconductor Limited (FASL), for the development and manufacture of nonvolatile memory devices. Through FASL, the two companies have constructed and are operating an advanced integrated circuit manufacturing facility in AizuWakamatsu, Japan, to produce Flash memory devices. The Company's share...

  • Page 245
    tax expense (benefit) and the Statements of Operations reflects the tax AMD would expect to pay if the Company's share of FASL profits were remitted to AMD as a dividend. 35 Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 246
    ... 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 results of operations of the Company. 36 CONTINGENCIES Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 247
    REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS The Board of Directors and Stockholders Advanced Micro Devices, Inc. We have audited the accompanying consolidated balance sheets of Advanced Micro Devices, Inc. at December 29, 1996 and December 31, 1995, and the related consolidated statements of ...

  • Page 248
    ... FINANCIAL DATA 1996 and 1995 by Quarter (Unaudited) Dec. 29, Sep. 29, Jun. 30, Mar. 31, Dec. 31, Oct. 1, Jul. 2, Apr. 2, (Thousands except per share and market 1996 1996 1996 1996 1995 1995 1995 1995 price amounts Net sales ...$496,868 Expenses: Cost of sales ...354,622 Research and development...

  • Page 249
    ...(symbol AMD) is listed on the New York Stock Exchange. The Company has never paid cash dividends on common stock and has no present plans to do so. The number of stockholders of record at January 31, 1997 was 9,963. AMD, the AMD logo, and combinations thereof are trademarks of Advanced Micro Devices...

  • Page 250
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 251
    ... AMD Holdings (Singapore) Pte. Ltd. (6) Advanced Micro Devices AB Advanced Micro Devices S.A. (7) AMD (Thailand) Limited (5) Advanced Micro Devices (U.K.) Limited DOMESTIC SUBSIDIARIES Advanced Micro Ltd. AMD Corporation AMD Far East Ltd. AMD International Sales & Service, Ltd. AMD Texas Properties...

  • Page 252
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 253
    ..., to sign Advanced Micro Devices, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 29, 1996, and any and all amendments thereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting...

  • Page 254
    Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997

  • Page 255
    ...-TYPE>