AMD 1996 Annual Report Download - page 243

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of these options were $13.44 and $5.15, respectively. A total of 912,994 options
were granted during 1996 with exercise prices less than the market price of the
stock on the grant date. The weighted-average exercise price and weighted-
average fair value of these options were $7.49 and $12.14, respectively.
The weighted-average fair value of stock purchase rights during 1996 was $4.07
per share.
NOTE 13. OTHER EMPLOYEE BENEFIT PLANS
PROFIT SHARING PROGRAM
The Company has a profit sharing program to which the Board of Directors has
authorized semiannual contributions. There were no profit sharing contributions
in 1996. Profit sharing contributions were approximately $45 million in 1995 and
$57 million in 1994.
RETIREMENT SAVINGS PLAN
The Company has a retirement savings plan, commonly known as a 401(k) plan, that
allows participating United States employees to contribute from 1 percent to 15
percent of their pre-tax salary subject to I.R.S. limits. The Company makes a
matching contribution calculated at 50 cents on each dollar of the first 3
percent of participant contributions, to a maximum of 1.5 percent of eligible
compensation. The Company's contributions to the 401(k) plan were approximately
$5 million, $4 million and $4 million for 1996, 1995 and 1994, respectively.
There are four investment funds in which each employee may invest contributions
in whole percentage increments. NexGen had a 401(k) plan which allowed employees
to contribute from one percent to ten percent of their pre-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 from one to five years.
Rent expense was approximately $40 million, $37 million and $32 million in 1996,
1995 and 1994, respectively.
For each of the next five years and beyond, noncancelable long-term operating
lease obligations and commitments to purchase manufacturing supplies and
services are as follows:
Operating Purchase
(Thousands) Leases Commitments
------------------------------
1997 $30,943 $4,945
1998 22,721 4,945
1999 15,779 4,745
2000 11,180 3,674
2001 4,384 2,977
Beyond 2001 10,017 8,392
------- ------
The operating leases of the Company's corporate marketing, general and
administrative facility expire in December, 1998. The leases provide the
Company with an option to purchase the facility for $40 million during the lease
term. At the end of the lease term, the Company is obligated to either purchase
the facility or to arrange for its sale to a third party with a guarantee of
residual value to the seller equal to the option purchase price.
At December 29, 1996, the Company had commitments of approximately $105 million
for the construction or acquisition of additional property, plant, and
equipment.
AMD Saxony Manufacturing GmbH (AMD Saxony), a German subsidiary wholly owned by
the Company through a German holding company, is building a 900,000 square foot
submicron integrated circuit manufacturing and design facility in Dresden, in
the State of Saxony, Germany (the Dresden Facility) over the next five years at
a presently estimated cost of approximately $1.5 billion. The Dresden Facility
is being designed for the production of microprocessors and other advanced logic
products. The Federal Republic of Germany and the State of Saxony have agreed to
support the project in the form of (i) a guarantee of 65% of the bank debt to be
incurred by AMD Saxony up to a maximum of DM1.65 billion, (ii) investment grants
and subsidies totaling DM500.5 million, and (iii) interest subsidies from the
State of Saxony totaling DM300 million. In March, 1997 AMD Saxony will be
entering into a loan agreement with a consortium of banks led by Dresdner Bank
AG under which facilities totaling DM1.65 billion will be made available. In
connection with the financing, the Company has agreed to invest
34
Source: ADVANCED MICRO DEVIC, 10-K, March 20, 1997