AMD 1996 Annual Report Download - page 19

AMD leases 28 sales offices in North America, 9 sales offices in Asia
Pacific, 12 sales offices in Europe and one 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 does not anticipate significant
difficulty in either retaining occupancy of any of its facilities through
lease renewals prior to expiration or through month-to-month occupancy, or
replacing them with equivalent facilities.
ITEM 3. LEGAL PROCEEDINGS
1. ENVIRONMENTAL MATTERS. Since 1981, the Company has discovered,
investigated and begun remediation of three sites where releases from
underground chemical tanks at its facilities in Santa Clara County,
California, adversely affected the groundwater. The chemicals released into
the groundwater were commonly in use in the semiconductor industry in the
wafer fabrication process prior to 1979. At least one of the released
chemicals (which is no longer used by the Company) has been identified as a
probable carcinogen.
In 1991, the Company received four Final Site Clean-up Requirements Orders
from the California Regional Water Quality Control Board, San Francisco Bay
Region, relating to the three sites. One of the orders named the Company as
well as TRW Microwave, Inc. and Philips Semiconductors Corporation. Another of
the orders named the Company as well as National Semiconductor Corporation.
The three sites in Santa Clara County are on the National Priorities List
(Superfund). If the Company fails to satisfy federal compliance requirements
or inadequately performs the compliance measures, the government (a) can bring
an action to enforce compliance, or (b) can undertake the desired response
actions itself and later bring an action to recover its costs, and penalties,
which is up to three times the costs of clean-up activities, if appropriate.
With regard to certain claims related to this matter the statute of
limitations has been tolled.
The Company has computed and recorded the estimated environmental liability
in accordance with applicable accounting rules and has not recorded any
potential insurance recoveries in determining the estimated costs of the
cleanup. The amount of environmental charges to earnings has not been material
during any of the last three fiscal years. The Company believes that the
potential liability, if any, in excess of amounts already accrued with respect
to the foregoing environmental matters will not have a material adverse effect
on the financial condition or results of operations of the Company.
2. MCDAID V. SANDERS, ET AL. (CASE NO. C-95-20750-JW, N.D. CAL.); KOZLOWSKI,
ET AL. V. SANDERS, ET AL. (CASE NO. C-95-20829-JW, N.D. CAL.). The McDaid
complaint was filed November 3, 1995 and the Kozlowski complaint was filed
November 15, 1995. Both actions allege violations of Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, against
the Company and certain individual officers and directors (the Individual
Defendants), and purportedly were filed on behalf of all persons who purchased
or otherwise acquired common stock of the Company during the period April 11,
1995 through September 22, 1995. The complaints seek damages allegedly caused
by alleged materially misleading statements and/or material omissions by the
Company and the Individual Defendants regarding the Company's development of
its AMD-K5, -K6 and -K7 microprocessors, which statements and omissions, the
plaintiffs claim, allegedly operated to inflate artificially the price paid
for the Company's common stock during the period. The complaints seek
compensatory damages in an amount to be proven at trial, fees and costs, and
extraordinary equitable and/or injunctive relief. The court has consolidated
both actions into one. Defendants filed answers in the consolidated action in
May, 1996 and discovery has begun. Based upon information presently known to
management, the Company does not believe that the ultimate resolution of this
lawsuit will have a material adverse effect on the financial condition or
results of operations of the Company.
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Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997