AMD 1997 Annual Report Download - page 18

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 25, 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 K5 microprocessor, 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 also allege that Company
statements regarding its K6 and K7 series microprocessors were materially
misleading. 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. The trial is scheduled to
commence on January 11, 1999. 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.
3. Advanced Micro Devices, Inc. v. Altera Corporation (Case No. C-94-20567-
RMW, N. D. Cal.). This litigation, which began in 1994, involves multiple
claims and counterclaims for patent infringement relating to the Company's and
Altera Corporation's programmable logic devices. In a trial held in May of
1996, a jury found that at least five of the eight AMD patents-in-suit were
licensed to Altera. As a result of the bench trial held on August 11 and 13,
1997, the Court held that Altera is licensed to the three remaining AMD
patents-in-suit (U.S. Patent Nos. 5,015,884; 5,225,719; and 5,151,623). Seven
patents were asserted by Altera in its counterclaim against the Company. The
Court determined that AMD is licensed to five of the seven patents and two
remain in suit. Altera filed a motion to recover attorneys' fees on November
17, 1997. The Company then filed, and the Court granted, a motion to stay
determination of the attorney's fees motion until resolution of its appeal.
The Company has filed an appeal of the rulings of the jury and Court
determinations that Altera is licensed to each of the Company's eight patents-
in-suit. 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.
4. Other Matters. The Company is a defendant or plaintiff in various other
actions 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.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998