AMD 1996 Annual Report Download - page 121

classification using the weighted average actual hourly salary and social
benefits costs of all employees assigned to the work hereunder within each job
classification, and the application of an overhead rate to this weighted actual
hourly salary and social benefits cost. The method followed in calculating this
overhead rate is included herein as an addendum to Schedule 16.2.1.1. The
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initial hourly rates and job classifications and all revisions of Schedule
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16.2.1.1 shall be based on CONTRACTOR'S current salary schedules and job
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classifications and shall in each instance be approved by COMPANY before
establishing or revising Schedule 16.2.1.1. COMPANY shall have the right to
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audit such of CONTRACTOR'S books and records as may be reasonably necessary to
enable COMPANY to approve such salary schedules and job classifications.
Included as part of the hourly rates set forth in Schedule 16.2.1.1 are amounts
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paid by CONTRACTOR for sick leave, vacation and holiday pay, CONTRACTOR'S
contributions to its employee pension and medical hospitalization plans, if any,
and any other statutory social security expenditure such as employer's
contribution to social insurance and unemployment insurance as well as social
expenditure on the basis of collective bargaining agreements. Also included in
the hourly rates are all overhead costs provided for in Clause 16.2.1.4 (Prints
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and Reproductions), Clause 16.2.1.6 (Shipping And Providing Offices), Clause
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16.2.1.7 (Communications), (Clause 16.2.1.8 (Indirect Overhead) and Clause
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16.2.1.10 (Other Direct Home Office Costs). The standard work week schedule at
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CONTRACTOR'S home office is eight (8) hours per day, forty (40) hours per week.
COMPANY shall reimburse CONTRACTOR for those employees who are paid on an hourly
basis, where applicable, for all hours worked over forty (40) hours per week on
a scheduled overtime basis per Schedule 16.2.1.1. Furthermore, CONTRACTOR shall
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be reimbursed at the applicable hourly rate for all scheduled overtime hours
worked by CONTRACTOR'S salaried employees on the work hereunder but only if
those employees customarily receive overtime payments. Any additional overtime
shall be subject to COMPANY'S prior approval. It is understood that if
established rates for overtime are not available for any of CONTRACTOR'S
employees, the wages or salaries which are paid to employees therefor shall be
subject to COMPANY'S prior written approval.
16.2.1.2 HOME OFFICE TRAVEL. The actual and reasonable amounts paid
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by CONTRACTOR for traveling and living expenses to employees whose salaries and
wages are chargeable to COMPANY under the provisions of Clause 16.2.1.1 above,
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for trips made in connection with the work hereunder-- it being understood that
(i) payment of such traveling and living expenses shall be in accordance with
CONTRACTOR'S travel reimbursement policies, which are detailed on Schedule
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16.2.1.1 attached hereto, and which shall in all cases be consistent with
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COMPANY'S policies on travel and on traveling and living expenses and said
expenses shall be approved by the senior Project construction superintendent or
his designee in CONTRACTOR'S organization before being billed to COMPANY, (ii)
in those cases where an employee divides his time between this and other jobs,
the aforesaid expenses for the period involved shall be prorated to the
respective jobs on the basis of the number of such employee's working hours
properly chargeable to each job, and this job shall be charged only its proper
share of such expenses, and (iii) all such trips shall be subject to COMPANY'S
prior written approval. The traveling and living expenses for any individual or
classification of employee shall in no event exceed the corresponding amounts
authorized by COMPANY'S policy for individuals or classifications of employees
at the same or an equivalent level. If any expense of CONTRACTOR at any time
exceeds COMPANY'S authorized amount, the expense of CONTRACTOR shall be
retroactively reduced to an amount not exceeding COMPANY'S authorized amount.
16.2.1.3 CONSULTANTS. The actual and reasonable amounts paid by
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997