AMD 1997 Annual Report Download - page 48

termination occurs and for the following fiscal year, plus the amount of any
Unpaid Contingent Bonus then remaining unpaid. In addition, all time-based
options will vest and performance-accelerated vesting options may vest for the
year of termination or constructive termination and for the year following
termination, if the performance milestones are attained by the Company within
such periods.
Under the Agreement, the Company is obligated to guarantee the repayment of
any loan (including interest) obtained by Mr. Sanders for the purpose of
exercising options or warrants to purchase stock of the Company up to the
lesser of: (a) the exercise price of the options plus taxes paid by Mr.
Sanders by reason of the exercise, or (b) three and one-half million dollars
($3,500,000). The Company's obligation to guarantee such loans continues for a
period of two years after the applicable event. If Mr. Sanders enters into
loan agreements for any other reason, the Company is obligated to guarantee
repayment of such loans up to $3,500,000 for a period ending 180 days after
termination of service.
Mr. Sanders is also entitled to receive certain benefits upon his disability
(as that term is defined in the Agreement) and upon his death while employed
by the Company. Mr. Sanders is also entitled to receive such other benefits of
employment with the Company as are generally available to members of the
Company's management. For ten years following any termination, disability,
termination without cause or such other event, Mr. Sanders will receive health
and welfare benefits comparable to those he was receiving and reimbursements
for all income taxes due on the receipt of such benefits.
In the event that Mr. Sanders terminates his employment following a change
in control, Mr. Sanders will receive the greater of the salary payable for the
remaining term of the Agreement or three times base salary, bonus payments
equal to the average of the two highest annual bonuses paid during the last
five calendar years immediately prior to the change of control (plus, as soon
as can be determined, any excess over such amount of the sum of the bonuses
which would otherwise have been payable to Mr. Sanders for the year in which
the termination occurred and the following year), vesting of all time-based
options and vesting of time-based performance-accelerated options if the
performance milestones are satisfied on the basis of the acquisition price or
such options otherwise would have vested in the year of such change in
control. Mr. Sanders will also be entitled to an additional payment necessary
to reimburse him for any federal excise tax imposed on him by reason of his
receipt of payments under his employment agreement or otherwise, so that he
will be placed in the same after-tax position as he would have been in had no
such tax been imposed.
If Mr. Sanders' employment is terminated by reason of his disability or
death, he or his estate is entitled to his full base salary under the
Agreement through 2001, the incentive compensation for the fiscal year in
which such termination occurred and for the following fiscal year, the amount
of any Unpaid Contingent Bonus then remaining unpaid and, in the case of
death, an additional year's salary. Any time-based options Mr. Sanders has
been granted that would otherwise vest within two years following termination
will vest, and all time-based performance-accelerated options which otherwise
would have vested prior to the end of the fiscal year following the death or
disability will vest if the performance milestones are met as described above.
In addition, his beneficiaries will be entitled to receive that portion of the
death benefit payable under a $1,000,000 face amount policy which exceeds the
aggregate premiums paid by the Company on that policy.
Pursuant to the Agreement, the Company will accrue an additional $400,000
per year in deferred retirement compensation for five years, payable to Mr.
Sanders only if he is Chief Executive Officer on September 12, 2001. Accrued
amounts will be credited with interest at the rate of 9 percent per annum. The
payment of $2,000,000 plus interest will be made to Mr. Sanders following his
termination in a manner that ensures that the retirement payments will be
deductible under Section 162(m) of the Code. If Mr. Sanders terminates his
employment by reason of a change of control or because of a constructive
termination or the Company terminates Mr. Sanders' employment (other than "for
cause"), all retirement deferrals will immediately accelerate and will be
payable following termination in a manner that ensures that the retirement
payments will be deductible under Section 162(m). Upon death or disability
before December 31, 2001, a prorated amount will be payable to Mr. Sanders or
his estate following his death or disability.
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Source: ADVANCED MICRO DEVIC, 10-K405, March 03, 1998