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FORM 10-K
ADVANCED MICRO DEVICES INC - amd
Filed: March 09, 2004 (period: December 28, 2003)
Annual report which provides a comprehensive overview of the company for the past year

Table of contents

  • Page 1
    FORM 10-K ADVANCED MICRO DEVICES INC - amd Filed: March 09, 2004 (period: December 28, 2003) Annual report which provides a comprehensive overview of the company for the past year

  • Page 2
    ... EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS PRINCIPAL ACCOUNTING FEES AND SERVICES PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K SIGNATURES...

  • Page 3
    ...(L-5) (FOURTH AMENDMENT TO AMD SAXONIA WAFER PURCHASE AGREEMENT) EX-10.56 (LOAN AGREEMENT) EX-10.58 (AGREEMENT BETWEEN SI INVESTMENT LIMITED LIABILITY COMPANY CO KG) EX-10.59 (COOPERATION AGREEMENT) EX-21 (LIST OF AMD SUBSIDIARIES) EX-23 (CONSENT OF INDEPENDENT AUDITORS) EX-24 (POWER OF ATTORNEY) EX...

  • Page 4
    ... 1-7882 ADVANCED MICRO DEVICES, INC. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Delaware (I.R.S. Employer Identification No.) 94-1692300 94088 One AMD Place, Sunnyvale, California (Address of principal executive offices...

  • Page 5
    ... STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT EXECUTIVE COMPENSATION SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS PRINCIPAL ACCOUNTING FEES AND SERVICES...

  • Page 6
    ... facilities in the United States, Europe and Asia and sales offices throughout the world. We design, manufacture and market industry-standard digital integrated circuits that are used in many diverse product applications such as desktop and mobile personal computers, or PCs, workstations, servers...

  • Page 7
    ... the distributors of FASL LLC's Spansion Flash memory products. As part of this transaction, we contributed to FASL LLC our Flash memory inventory, our manufacturing facility located in Austin, Texas, known as Fab 25, our Flash memory research and development facility in Sunnyvale, California, known...

  • Page 8
    ... is a better indicator of CPU capability than simply clock speed. Improvements in the performance characteristics of microprocessors and decreases in production costs resulting from advances in manufacturing process technology as well as a corresponding decrease in selling prices have increased the...

  • Page 9
    ... designed mobile processor products for high-performance computing and wireless connectivity. They feature advanced power management from AMD PowerNow!â„¢ technology which offers reduced power consumption and extended system battery life. During 2003, we primarily provided mobile computing products...

  • Page 10
    ... management, and supply chain management) and business intelligence. AMD Opteron processors are also available in one- to four-way workstation solutions that can be used in workstation applications such as engineering and digital content creation software, and other information technology...

  • Page 11
    ...based on MirrorBit technology, a proprietary technology that stores two bits of data in a single memory cell thereby doubling the density, or storage capacity, of each memory cell. Products based on MirrorBit technology require fewer wafer fabrication process steps to 6 Source: ADVANCED MICRO DEVIC...

  • Page 12
    ... Mobile phone manufacturers require devices that allow them to make feature-rich products in small packages. They are especially interested in MCPs due to the single, space-saving package, low power consumption, and high performance. Our MCP products incorporate Spansion Flash memory devices ranging...

  • Page 13
    ..." with low power consumption and minimal memory that leverage application software from a centralized server; low-cost network appliances; set-top boxes; and personal access devices. With the AMD Geode family of microprocessors, we are able to extend the range of our x86-based product offerings to...

  • Page 14
    ... to non-volatile memory technology used for manufacturing Spansion Flash memory products is conducted primarily at FASL LLC's SDC facility located in Sunnyvale, California and at its facilities in Japan. Currently, FASL LLC is developing new non-volatile memory process technology, including 90...

  • Page 15
    ... the production of our Personal Connectivity Solutions and chipset products. The current assembly and test facilities for our microprocessor products are described in the chart set forth below: Approximate Facility Square Footage Facility Location Activity Penang, Malaysia Singapore (1) (2) 239...

  • Page 16
    ... competitive. Products compete on performance, quality, reliability, price, adherence to industry standards, software and hardware compatibility, marketing and distribution capability, brand recognition and availability. Technological advances in the industry result in frequent product introductions...

  • Page 17
    ..., Intel currently manufactures certain of its microprocessor products on 300-millimeter wafers using 90-nanometer process technology. Use of 90-nanometer technology can result in products that are higher performing, use less power and that cost less to manufacture. Use of 300-millimeter wafers can...

  • Page 18
    ... on developing low-power embedded solutions. Marketing and Sales We market and sell our products, other than Flash memory products, under the AMD trademark. We employ a direct sales force through our principal facilities in Sunnyvale, California, and field sales offices throughout the United...

  • Page 19
    ...Administration GmbH and Co., KG, (BAC), two joint ventures with Infineon Technologies AG and Dupont Photomasks, Inc., for the purpose of constructing and operating an advanced photomask facility in Dresden, Germany. Photomasks are used during the production of integrated circuits. The purpose of the...

  • Page 20
    ... concluded. Backlog We manufacture and market standard lines of products. Consequently, a significant portion of our sales are made from inventory on a current basis. Sales are made primarily pursuant to purchase orders for current delivery or agreements covering purchases over a period of...

  • Page 21
    ... replacing them with equivalent facilities. ITEM 3. LEGAL PROCEEDINGS Environmental Matters We are named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale, California that are on the National Priorities List. Since 1981, we have discovered hazardous material releases...

  • Page 22
    Table of Contents To address anticipated future remediation costs...course of business. In the opinion of management, the ...SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report. 17 Source: ADVANCED MICRO DEVIC...

  • Page 23
    ...the "Notes Payable to Banks" section set forth in, "Management's Discussion and Analysis of Financial Condition and Results of Operations," beginning on page 20, below. The high and low sales price per share of common stock were as follows: High Low Fiscal year ended December 29, 2002 First quarter...

  • Page 24
    Table of Contents ITEM 6. SELECTED FINANCIAL DATA Five Years Ended December 28, 2003 (Thousands except per share amounts) 2003(1) 2002 2001 2000 1999 Net Sales Expenses: Cost of sales Research and development Marketing, general and administrative Restructuring and other special charges, net $ ...

  • Page 25
    ... are used in diverse product applications such as desktop and mobile PCs, workstations and servers, communications equipment, and automotive and consumer electronics. Our products include microprocessors, Flash memory devices, and Personal Connectivity Solutions products. The semiconductor industry...

  • Page 26
    ... activities following formally approved plans that identify the actions and timeline over which the restructuring activities will occur. Restructuring charges include estimates pertaining to employee severance and fringe benefit costs, facility exit 21 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 27
    ... operating income (loss) because Memory Products segment operating income (loss) includes operations incremental to those of FASL LLC. In addition, the minority interest calculation is based on FASL LLC's net income (loss) rather than operating income (loss). 22 Source: ADVANCED MICRO DEVIC, 10...

  • Page 28
    ... sales territories between AMD and Fujitsu. All Other net sales of $140 million in 2003 decreased 30 percent compared to net sales of $200 million in 2002 and consisted primarily of net sales of our Personal Connectivity Solutions products. The decrease was due 23 Source: ADVANCED MICRO DEVIC...

  • Page 29
    ... PC sales, competitive pricing pressure, and the execution of our plan to align our microprocessor inventory in the supply chain with forecasted customer demand, which included our decision to limit shipments and accept receipt of product returns from certain customers. Memory Products net sales of...

  • Page 30
    ... sales of PC processors and Flash memory products, as a result of lower unit demand and average selling prices due to weakened customer demand and industry-wide excess inventory, partially offset by cost savings realized from the closure of certain facilities pursuant to the 2001 Restructuring Plan...

  • Page 31
    ... benefits until 2004 and for employees who were pre-notified in 2003 of their employment terminations, which will occur in 2004. With the exception of exit costs consisting primarily of remaining lease payments on abandoned facilities, net of estimated sublease income that are payable through...

  • Page 32
    ... Plan as of December 28, 2003. During 2003, we reduced the estimated accrual of the facility and equipment decommission costs by $12.2 million based on the most current information available. During 2003, we also realized a recovery of approximately $3.9 million for the excess of the sale price...

  • Page 33
    ...primarily due to a decrease in net sales. The decrease was primarily due to a decline in average selling prices of 13 percent and a decline in unit sales of 16 percent for microprocessors as a result of the sustained downturn in the PC industry. 28 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 34
    ...the operating result was primarily due to decrease in net sales of $392 million as a result of a 36 percent decline in average selling prices due to continued weakness in the Flash memory market. Our All Other operating loss of $21 million in 2003 improved by $384 million compared to 2002, primarily...

  • Page 35
    ... Employee Stock Purchase Plan and employee stock option exercises, offset by $137 million in payments on debt and capital lease obligations, $77 million used to repurchase our common stock and a $91 million increase in the compensating cash balance discussed above. 30 Source: ADVANCED MICRO DEVIC...

  • Page 36
    ...$125 million: • restrictions on our ability to pay cash dividends on our common stock; • maintain an adjusted tangible net worth (as defined in the July 2003 Loan Agreement) as follows: Measurement Date Amount December 31, 2003 Last day of each calendar quarter in 2004 Last day of each calendar...

  • Page 37
    ... case, the redemption or repurchase price would be 100 percent of the principal amount of the 4.75% Debentures plus accrued and unpaid interest. The 4.75% Debentures are convertible by the holders into our common stock at a conversion price of $23.38 per share at any 32 Source: ADVANCED MICRO DEVIC...

  • Page 38
    ... Notes will be convertible into approximately 135 shares of our common stock. Issuance costs incurred in the amount of approximately $12 million are amortized ratably, over the term of the 4.50% Notes, as interest expense, approximating the effective interest method. 33 Source: ADVANCED MICRO DEVIC...

  • Page 39
    ... the Dresden Loan Agreements, in the form of: • guarantees equal to 65 percent of AMD Saxony bank debt, or $432 million; • capital investment grants and allowances totaling up to approximately $453 million; and • interest subsidies totaling $191 million. 34 Source: ADVANCED MICRO DEVIC, 10...

  • Page 40
    ... include: • our failure to fund equity contributions or loans or otherwise comply with our obligations relating to the Dresden Loan Agreements; • the sale of shares in AMD Saxony or AMD Holding; • the failure to pay material obligations; 35 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 41
    ... the July 2003 Loan Agreement; and • AMD Saxony's noncompliance with certain financial covenants, including minimum tangible net worth, minimum interest cover ratio, asset cover ratio and a minimum liquidity covenant. Generally, any default with respect to borrowings made or guaranteed by AMD that...

  • Page 42
    ... that is determined by Fujitsu's current debt rating and FASL JAPAN's non-consolidated net asset value as of the last day of its fiscal year. The interest rate was 0.98 percent as of December 28, 2003. Repayment occurs in equal, consecutive, quarterly principal installments ending in June 2007. FASL...

  • Page 43
    ... acquired real property and improvements at its manufacturing facilities located in Aizu-Wakamatsu, Japan, is not less than: Period Percentage First through Fourth Fiscal Quarters of 2003 First Fiscal Quarter of 2004 Second Fiscal Quarter of 2004 Third and Fourth Fiscal Quarters of 2004 Fiscal Year...

  • Page 44
    ... We lease certain of our facilities, including our executive offices in Sunnyvale, California, under lease agreements that expire at various dates through 2018. We lease certain of our manufacturing and office equipment for terms ranging from one to five years. Total future lease obligations as...

  • Page 45
    ... 28, 2003. The amounts guaranteed are reduced by the actual amount of lease payments paid by FASL LLC over the lease terms. AMTC and BAC Guarantees The Advanced Mask Technology Center GmbH & Co. KG (AMTC) and Maskhouse Building Administration GmbH & Co., KG (BAC) are joint ventures formed by us...

  • Page 46
    ... of products based on MirrorBit technology. In the aggregate, we believe seasonal patterns will prevail and aggregate net sales will decline slightly in the first quarter of 2004. We expect our capital investments in 2004 to increase in comparison with 2003. We plan to make capital investments of...

  • Page 47
    ... $14.70, the market value of AMD's common stock, on the last trading day of the year, December 26, 2003. Includes 404,344 shares outstanding from treasury stock as non-plan grants. Weighted average exercise price information is not available. 42 (2) (3) Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 48
    ... 16.51% Options grants are net of options canceled. Outstanding shares as of December 28, 2003, December 29, 2002 and December 30, 2001. The "listed officers" are those executive officers listed in the summary compensation table in our proxy statements for our annual meeting of stockholders held in...

  • Page 49
    ... to successfully transition to 90-nanometer manufacturing process technology on a timely basis; • the availability, performance and feature set of motherboards and chipsets designed for these processors; and • the support of operating system and application program providers for our 64-bit...

  • Page 50
    ...our capital requirements cannot be precisely determined at this time and will depend on a number of factors, including demand for products, product mix, changes in semiconductor industry conditions and competitive factors. We regularly assess markets for external 45 Source: ADVANCED MICRO DEVIC, 10...

  • Page 51
    ..., including related inventory, cash, and its Flash memory assembly and test operations in Malaysia. In addition, both we and Fujitsu contributed our respective investments in our previous Manufacturing Joint Venture, Fujitsu AMD Semiconductor Limited, located in Aizu-Wakamatsu, Japan, which became...

  • Page 52
    ..., its position in the Flash memory market and its business practices may limit our ability to compete effectively. Intel has dominated the market for microprocessors used in desktop and mobile PCs for many years. Intel is also a significant competitor in the server segment of the microprocessor...

  • Page 53
    ..., Intel currently manufactures certain of its microprocessor products on 300-millimeter wafers using 90-nanometer process technology. Use of 90-nanometer technology can result in products that are higher performing, use less power and that cost less to manufacture. Use of 300-millimeter wafers can...

  • Page 54
    ... our market share in Flash memory devices as the market develops and other competitors introduce new competing products. A decline in unit sales of our Flash memory devices, lower average selling prices, a downturn in the mobile phone market or a loss of a significant mobile phone customer, would...

  • Page 55
    ... example, Intel currently manufactures certain microprocessor products on 300-millimeter wafers using 90-nanometer process technology. Use of 90-nanometer technology can result in products that are higher performing, use less power and that cost less to manufacture. Use of 300-millimeter wafers can...

  • Page 56
    ... competitive. Products compete on performance, quality, reliability, price, adherence to industry standards, software and hardware compatibility, marketing and distribution capability, brand recognition, and availability. After a product is introduced, costs and average selling prices normally...

  • Page 57
    ... of Spansion products are performed at FASL LLC's facilities in Malaysia, Thailand, and China. We manufacture our microprocessors in Germany. We also depend on foreign foundry suppliers for the production of our Personal Connectivity Solutions and chipset products, international joint ventures for...

  • Page 58
    ... in India to provide certain information technology services to us, including helpdesk support, desktop application services, business and software support applications, server and storage administration, data center operations, database administration, and voice, video and remote access. Our...

  • Page 59
    ... us if distributors exercise these rights as a result of an unexpected significant decline in the price of our products or otherwise. If we cannot adequately protect our technology or other intellectual property, in the United States and abroad, through patents, copyrights, trade secrets, trademarks...

  • Page 60
    ... ensure the safety and preservation of our invested funds by limiting default risk and market risk. We use proceeds from debt obligations primarily to support general corporate purposes, including capital expenditures and working capital needs. 55 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 61
    ... rate movements on our operating results and on the cost of capital asset acquisitions. Our accounting policy for these instruments is based on our designation of such instruments as hedges of underlying exposure to variability in cash flows. We do not use these contracts for speculative or trading...

  • Page 62
    ... (Thousands except contract rates) $ - 199,458 58,260 163,400 421,118 57 - 1.1398 115.00 1.1671 $ - 17,616 4,605 11,034 33,255 $ 30,394 224,267 29,600 207,450 491,711 123.38 0.9344 125.00 0.9430 $ 872 24,328 1,326 20,064 46,590 $ $ $ $ Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 63
    ... Joint Venture Provision (benefit) for income taxes Loss before equity in net income of Manufacturing Joint Venture Equity in net income of Manufacturing Joint Venture Net loss Net loss per common share: Basic Diluted Shares used in per share calculations: Basic Diluted See accompanying notes...

  • Page 64
    ... Property, plant and equipment, net Investment in Manufacturing Joint Venture Other assets Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Notes payable to banks Accounts payable Accounts payable to related party (see Note 3) Accrued compensation and benefits Accrued...

  • Page 65
    ...shares: Employee stock plans Conversion of 6% Subordinated Notes Common stock repurchases Premium from put options issued in Company stock Compensation recognized under employee stock plans December 30, 2001 Comprehensive loss: Net loss Other comprehensive income: Net unrealized gains on investments...

  • Page 66
    See accompanying notes 60 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 67
    ...to FASL LLC (see Note 3) Net loss on equipment sale and lease back transaction (see Note 7) Net loss on disposal of property, plant and equipment Net loss (gain) realized on sale of available-for-sale securities Compensation recognized under employee stock plans Undistributed income of joint venture...

  • Page 68
    ... converted to common stock Equipment sale leaseback transaction Equipment capital leases Non-cash investing activities: Equipment purchased through acquisition Formation and consolidation of FASL LLC (see Note 3): Total non-cash net assets from Manufacturing Joint Venture Total non-cash net assets...

  • Page 69
    ... and mobile personal computers, workstations, servers, communications equipment and automotive and consumer electronics. The Company's products include microprocessors, Flash memory devices and Personal Connectivity Solutions products. NOTE 2: Summary of Significant Accounting Policies Fiscal Year...

  • Page 70
    ... readily convertible into cash and have original maturities of three months or less at the time of acquisition. Investments. The Company classifies its marketable debt and equity securities at the date of acquisition as either held to maturity or available for sale. 64 Source: ADVANCED MICRO DEVIC...

  • Page 71
    ... using the cost method. For reissuance of treasury stock, to the extent that the reissuance price is more than the cost, the excess is recorded as an increase to Paid in Capital. If the reissuance price is less than the cost, the difference is also recorded to Paid 65 Source: ADVANCED MICRO DEVIC...

  • Page 72
    ... resulting from the sale of treasury stock below cost is recorded to Retained Earnings. Product Warranties. The Company generally offers a three-year limited warranty to end users for certain of its boxed microprocessor products and a one-year limited warranty to direct purchasers for all other...

  • Page 73
    ... is the pro forma effect on net income (loss) and net income (loss) per share for all periods presented had the Company applied SFAS 123's fair value method of accounting for stock-based awards issued to its employees. 2003 2002 2001 Net income (loss)-as reported Plus: compensation expense recorded...

  • Page 74
    ...Manufacturing Joint Venture's net assets was recorded at historical carrying value. The Company also contributed its Flash memory inventory, its manufacturing facility located in Austin, Texas (Fab 25), its Flash memory research and development facility in Sunnyvale, California, and its Flash memory...

  • Page 75
    ...repaid quarterly. The following table summarizes the final purchase price allocation to the assets and liabilities of FASL LLC at June 30, 2003, the effective date of the transaction, including the fair values of the assets and liabilities attributable to the Manufacturing Joint Venture, the Company...

  • Page 76
    ...the Manufacturing Joint Venture as though the Manufacturing Joint Venture had been consolidated by the Company at the beginning of the years ended December 28, 2003 and December 29, 2002. The historically reported operating results of the Manufacturing Joint Venture do not include Flash memory sales...

  • Page 77
    ... the compensation that FASL LLC pays to Fujitsu for being a distributor of Spansion â„¢ Flash memory products. The Company's transactions with Fujitsu are based on terms that are consistent with those of similar arms-length transactions executed with third parties. 71 Source: ADVANCED MICRO DEVIC...

  • Page 78
    Table of Contents NOTE 4: Financial Instruments Available-for-sale securities held by the Company as of December 28, 2003 and December 29, 2002 are as follows: Gross unrealized gains Gross unrealized losses Fair market value Cost 2003 Cash equivalents: Time deposits Federal agency notes Money ...

  • Page 79
    ...599,734 1,636,963 70,192 244,641 1,846,982 2,091,623 192,725 $ 1,898,898 $ $ 1,899,674 1,568,707 $ 1,566,771 The fair value of the Company's accounts receivable and accounts payable approximate book value based on existing payment terms. 73 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 80
    ... better, and investments in repurchase agreements must have securities of the type and quality listed above as collateral. Concentrations of credit risk with respect to trade receivables are limited because a large number of geographically diverse customers make up the Company's customer base, thus...

  • Page 81
    ...the Company's net deferred tax assets in the United States. Approximately $33 million of the valuation allowance for deferred tax assets as of December 28, 2003 is for the stock option deduction arising from activity under the Company's stock option plans, the benefits of which will increase capital...

  • Page 82
    ... Rate 2003 Statutory federal income tax benefit State taxes, net of federal benefit Tax-exempt foreign sales corporation income Foreign income at other than U.S. rates Residual U.S. tax on previously reinvested earnings Restructuring charges at other than U.S. rates Tax credits Net operating losses...

  • Page 83
    ...$125 million: • restrictions on its ability to pay cash dividends on its common stock; • maintain an adjusted tangible net worth (as defined in the July 2003 Loan Agreement) as follows: Measurement Date Amount December 31, 2003 Last day of each calendar quarter in 2004 Last day of each calendar...

  • Page 84
    ...last reported sale price of the Company's common stock is at least 130 percent of the then effective conversion price for at least 20 trading days within a period of 30 consecutive trading days ending within five trading days of the date of the redemption notice. 78 Source: ADVANCED MICRO DEVIC, 10...

  • Page 85
    ... the Company may not redeem the 4.50% Notes unless the last reported sale price of its common stock is as least 150 percent of the then-effective conversion price for at least 20 trading days within a period of 30 trading days ending within five trading days of the date of the redemption notice. The...

  • Page 86
    ... that is determined by Fujitsu's current debt rating and FASL JAPAN's non-consolidated net asset value as of the last day of its fiscal year. The interest rate was 0.98 percent as of December 28, 2003. Repayment occurs in equal, consecutive, quarterly principal installments ending in June 2007. FASL...

  • Page 87
    ... on July 16, 2003) of cash proceeds. Upon execution of the agreement, the equipment had a net book value of approximately $168 million. As the term on the leaseback transaction was more than 75 percent of the remaining estimated economic lives of the equipment, the Company is accounting for the...

  • Page 88
    ... Agreements and interest on the Company's 6% Convertible Subordinated Notes due 2005 issued in May 1998, which were redeemed in May 2001. Interest capitalized is associated with conversion of Fab 25 to a Flash memory facility and facilitization activities at Fab 30. 82 Source: ADVANCED MICRO DEVIC...

  • Page 89
    ...in the third quarter of 2003, the Company changed its reportable segments to: the Computation Products segment, which includes microprocessor products for desktop and mobile PCs, servers and workstations and chipset products, and the Memory Products segment, which includes Flash memory products. The...

  • Page 90
    ... net sales in 2003, 2002 and 2001. NOTE 10: Stock-Based Incentive Compensation Plans Stock Option Plans. The Company has several stock option plans under which key employees have been granted incentive (ISOs) and nonqualified (NSOs) stock options to purchase the Company's common stock. Compensation...

  • Page 91
    ... to purchase approximately 19 million shares of the Company's common stock were tendered for exchange and cancelled on July 28, 2003 (see Note 17). The following table summarizes stock option activity and related information for the fiscal years presented: 2003 Weightedaverage exercise price 2002...

  • Page 92
    ... December 28, 2003 for issuance under employee stock option plans and the ESPP, including restricted stock awards. Stock-Based Compensation-Pro Forma Disclosures. For pro forma disclosure purposes only, the Company estimates the fair value of its stock-based awards to employees using a Black-Scholes...

  • Page 93
    Table of Contents NOTE 11: Other Employee Benefit Plans Profit Sharing Program. The Company has a profit sharing program to which the Board of Directors may authorize quarterly contributions. All employees who have worked with the Company for three months or more are eligible to participate in this ...

  • Page 94
    ... 28, 2003, the Company's purchase commitments also included $80 million representing future payments to IBM under the Company's joint development agreement, which calls for a quarterly payment of $10 million. As the services are being performed ratably over the life of the agreement, the Company...

  • Page 95
    .... The Dresden Loan Agreements require that the Company partially fund Fab 30 project costs in the form of subordinated and revolving loans to, or equity investments in, AMD Saxony. In accordance with the terms of the Dresden Loan Agreements, as of December 28, 2003 the Company had provided $179...

  • Page 96
    ... respect to the Company, AMD Saxony or AMD Holding; • the occurrence of a default under the July 2003 Loan Agreement; and • AMD Saxony's noncompliance with certain financial covenants, including minimum tangible net worth, minimum interest cover ratio, asset cover ratio and a minimum liquidity...

  • Page 97
    ... than one joint venture partner under its rental agreement guarantee obligations, the maximum potential amount of the Company's obligations under the rental agreement guarantee is approximately $146 million. As of December 28, 2003, $73 million was drawn under the revolving credit facility, and $81...

  • Page 98
    ...) $ 146,346 38,000 25,169 112,567 - 1,615 323,697 $ $ Customer deposits are related to multi-year supply agreements for Spansion Flash memory products that will be repaid through 2005, which guarantee customers' purchases of these products. 92 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 99
    ... in 2003 of their employment terminations, which will occur in 2004. With exception of the exit costs, which are payable through 2011, the Company has substantially completed the activities associated with the 2002 Restructuring Plan as of December 28, 2003. 93 Source: ADVANCED MICRO DEVIC, 10...

  • Page 100
    ...estimated accrual of the facility and equipment decommission costs by $12.2 million based on the most current information available. During 2003, the Company also realized a recovery of approximately $3.9 million for the excess of the sale price over the estimated fair value of equipment impaired as...

  • Page 101
    ... cancelled. The Company also granted options to purchase 25,165 shares of our common stock at an exercise price of $15.55 in exchange for options cancelled. The Company did not record a compensation expense as a result of the tender offer and exchange. 95 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 102
    ... Advanced Micro Devices, Inc. as of December 28, 2003 and December 29, 2002, and the related consolidated statements of operations, stockholders' equity and cash flows for each of the three years in the period ended December 28, 2003. Our audits also included the financial statement schedule listed...

  • Page 103
    ... Provision (benefit) for income taxes Income (loss) before equity in net income of joint venture Equity in net income (loss) of joint venture Net income (loss) Net income (loss) per share Basic Diluted Shares used in per share calculation Basic Diluted Common stock market price range High Low...

  • Page 104
    ...rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures...

  • Page 105
    ...foregoing, the information under the captions, "Board Compensation Committee Report on Executive Compensation," "Board Audit Committee Report" and "Performance Graph" in our 2004 Proxy Statement is not incorporated by reference in this Annual Report on Form 10-K. 99 Source: ADVANCED MICRO DEVIC, 10...

  • Page 106
    ..., this Annual Report on Form 10-K. The following is a list of such Exhibits: Exhibit Number Description of Exhibits 2.1 2.2 2.3 2.3(a) 2.3(b) 2.4 2.5 3.1 3.2 3.3 Agreement and Plan of Merger dated October 20, 1995, between AMD and NexGen, Inc., filed as Exhibit 2 to AMD's Quarterly Report for the...

  • Page 107
    ... 29, 2003, is hereby incorporated by reference. AMD's U.S. Stock Option Program for options granted after April 25, 2000, filed as Exhibit 10.14 to AMD's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, is hereby incorporated by reference. 101 Source: ADVANCED MICRO DEVIC, 10...

  • Page 108
    ..., is hereby incorporated by reference. Form of Management Continuity Agreement, filed as Exhibit 10.21 to AMD's Annual Report on Form 10-K for the fiscal year ended December 29, 2002, is hereby incorporated by reference. AMD's Stock Option Program for Employees Outside the U.S. for options granted...

  • Page 109
    ... the Use of Land between AMD (Suzhou) Limited and China-Singapore Suzhou Industrial Park Development Co., Ltd., filed as Exhibit 10.39 to AMD's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, is hereby incorporated by reference. NexGen, Inc. 1987 Employee Stock Plan, filed as...

  • Page 110
    ...to the Syndicated Loan Agreement, dated as of December 20, 2002, among AMD Saxony Limited Liability Company and Co. KG, Dresdner Bank Luxembourg, S.A., Dresdner Bank AG, and the banks party thereto, filed as Exhibit 10.43(a-5) to AMD's Annual Report on Form 10-K for the fiscal year ended December 29...

  • Page 111
    ...'s Annual Report on Form 10-K for the fiscal year ended December 28, 1997, is hereby incorporated by reference. Second Amendment to Sponsors' Loan Agreement, dated as of June 25, 1999, among AMD and AMD Saxony Holding GmbH and AMD Saxony Manufacturing GmbH, filed as Exhibit 10.50(g-3) to the Company...

  • Page 112
    ...incorporated by reference. First Amendment to AMD Saxonia Wafer Purchase Agreement, dated as of February 6, 1998, between AMD Saxony Holding GmbH and AMD Saxony Manufacturing GmbH, filed as Exhibit 10.50 (l-2) to AMD's Annual Report on Form 10-K for the fiscal year ended December 28, 1997, is hereby...

  • Page 113
    ... AMD Saxony Manufacturing GmbH, filed as Exhibit 10.50(p-2) to AMD's Annual Report on Form 10-K for the fiscal year ended December 28, 1997, is hereby incorporated by reference. Amended and Restated Loan and Security Agreement, dated as of July 7, 2003, among AMD, AMD International Sales and Service...

  • Page 114
    ... AMD's Quarterly Report on Form 10-Q for the period ended September 28, 2003, is hereby incorporated by reference. Agreement between SI Investment Limited Liability Company & Co KG and M+W Zander Facility Engineering GmbH, dated November 20, 2003. Cooperation Agreement between Advanced Micro Devices...

  • Page 115
    ... such exhibit. (b) Reports on Form 8-K. 1. A Current Report on Form 8-K dated November 20, 2003 reporting under Item 5-Other Events was filed announcing the ground-breaking of a new 300-millimeter wafer fabrication facility in Dresden, Germany. 109 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 116
    ... Vice President, Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons, on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date * W. J. Sanders III Chairman...

  • Page 117
    Table of Contents ADVANCED MICRO DEVICES, INC. VALUATION AND QUALIFYING ACCOUNTS Years Ended December 30, 2001, December 29, 2002 and December 28, 2003 (in thousands) Additions Charged (Reductions Credited) To Operations SCHEDULE II Balance Beginning of Period Deductions(1) Balance End of Period...

  • Page 118
    ...) Relative Profitability Corporate Operating Profit vs. Plan Group Operating Profit vs. Plan Performance against Balanced Scorecard AMD Return on Equity (ROE) vs. S&P 500 Return on Equity (ROE) over 3 years LTP Relative Sales Growth • AMD Sales Growth vs. WSTS Sales Growth over 3 years The...

  • Page 119
    ... in each half-year performance period, a pool of funds is created using a percentage of the OP above Planned OP. This percentage is determined each year by the Office of the CEO. • This pool is used to pay individual discretionary awards beyond target performance. Source: ADVANCED MICRO DEVIC, 10...

  • Page 120
    ...) The GPA depends on Actual Group Operating Profit (OP) versus Planned Group OP. Similar to the CPA, for each half-year performance period a multiplier is derived based on Actual Group OP vs. Planned Group OP as illustrated in the following graph: Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 121
    ...or revised in any Plan Year at the discretion of the CEO. • The annual GPA is derived by taking the average of the two half year multipliers. The following table illustrates four sample payout calculations for a participant with a 25% GPA target: First Half Planned Group Profit Planned Group Mult...

  • Page 122
    ... in any given Plan Year based on the performance of the Company, competitive practices and/or the role of a particular executive. STP Award Calculation The total STP award is calculated as follows: STP Award = CPA + GPA + IPA The following table illustrates this payment calculation, combining the...

  • Page 123
    ... WSTS Sales Growth % (3-year) 50% -6% 0 6% 50% -30% 0 20% 2 Semiconductor industry data may be modified to be more representative of AMD's product offerings. For instance, the DRAM market segment may be excluded from the Total Semiconductor Sales data. Source: ADVANCED MICRO DEVIC, 10...

  • Page 124
    ... by a maximum of three percent of AMD's adjusted Operating Profit, as defined in section VIII, for any given Plan Year. In the aggregate, if the Corporate awards exceed the 3 percent limit, each Participant's award will be scaled back to conform. Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 125
    ... out by the end of the first quarter following the close of a Plan Year. For the LTP, awards are paid as soon as possible after actual external performance data become available. Typically this will be in the 4 th quarter following the plan year. Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 126
    ...the CEO, all non-Sales Vice Presidents, Officers, Sr. Vice Presidents, and Group Vice Presidents are Participants in the Plan. To be eligible to receive any accrued award under the Plan, a participant must be actively employed by AMD or FASL LLC on the actual date of payment of the award. Payment to...

  • Page 127
    ... sole discretion, with or without notice or cause. H. I. J. VIII. Definition of Terms Base Salary is defined as the Participant's annualized base pay rate at the end of the Plan Year or, in the case of Plan tier changes, the Participant's annualized base pay rate at the end of the participation...

  • Page 128
    ... by executive management for the Plan Year in question.) Mid-Year Update is defined as the update of the Corporate Financial Budget established in the 2 nd quarter of the current year, generally in May (unless defined otherwise by executive management for the Plan Year in question.) Plan Year is...

  • Page 129
    ... BANK AG and the other Banks and Financial Institutions named herein and DRESDNER BANK LUXEMBOURG S.A. to the SYNDICATED LOAN AGREEMENT dated 11 March 1997 (as amended from time to time) AND OTHER OPERATIVE DOCUMENTS Baker & McKenzie Frankfurt Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 130
    ... to the AMD Saxonia Wafer Purchase Agreement Consent of the parties to the AMD Holding Wafer Purchase Agreement Legal Opinion of O'Melveny & Myers LLP Legal Opinion of Nörr Stiefenhofer Lutz Legal Opinion of Baker & McKenzie Legal Opinion of White & Case, Feddersen Source: ADVANCED MICRO DEVIC, 10...

  • Page 131
    ... TO THE SYNDICATED LOAN AGREEMENT DATED 11 MARCH 1997 (AS AMENDED FROM TIME TO TIME) between 1. AMD SAXONY LIMITED LIABILITY COMPANY & CO. KG, Dresden, (formerly AMD Saxony Manufacturing GmbH) registered in the Commercial Register of the local court of Dresden under HRA 4896, - hereinafter referred...

  • Page 132
    ... business compatible with the purpose set out in the first paragraph of the preamble to this Agreement as well as management services and technological assistance previously rendered or to be rendered by AMD Saxonia to AMD Fab 36 Limited Liability Company & Co. KG;"; Source: ADVANCED MICRO DEVIC...

  • Page 133
    ... Paragraph 2.3 of Schedule 17 shall be deleted in its entirety and shall be replaced by a new paragraph 2.3, as follows: "2.3 Minimum Interest Cover Ratio The Interest Cover Ratio calculated on a Rolling Quarter Basis shall not at the end of any Fiscal Quarter be less than the amount set out below...

  • Page 134
    ...üfungsgesellschaft Aktiengesellschaft, as set out in Schedule 2 to this Agreement. 2.2 Save to the extent amended by § 2.1 above, the terms and conditions of the Loan Agreement, including the Schedules thereto, shall remain in full force and effect. Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 135
    ... benefit of the AMD group. The Banks, the Agent, the Paying Agent and the Security Agent acknowledge and consent to: 3.3.1 the sale and transfer of the area, framed blue in the map set out in Schedule 1 to this Agreement, by AMD Saxonia to AMD Fab 36 Limited Liability Company & Co. KG and a release...

  • Page 136
    ... Agent has received the agreements and documents referred to in §§ 4.1.1 to 4.1.10. The agreements and documents referred to in §§ 4.1.1 and 4.1.2 shall be executed in legally binding form and delivered and their effectiveness shall not be 3.5 3.6 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 137
    ... the form set out in Schedule 3 to this Agreement; Amendment agreement to the AMD Saxonia Wafer Purchase Agreement in the form set out in Schedule 4 to this Agreement and the consent and acknowledgement to such amendment agreement by the parties under the AMD Holding Wafer Purchase Agreement as set...

  • Page 138
    ... Security Agent in appropriate form. 5.2 AMD Saxonia shall deliver a copy of the sale and transfer agreement referred to in § 3.3.1 above to the Agent without undue delay upon execution. §6 Representations and Warranties 6.1 AMD Saxonia hereby represents and warrants to the Banks as at the date...

  • Page 139
    ... mutandis, to this Agreement. All references in the Operative Documents to the standard terms and conditions of business of the Security Agent shall be deemed to be a reference to those terms and conditions in force from time to time. 7.2 7.3 7.4 7.5 7.6 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 140
    AMD SAXONY LIMITED LIABILITY COMPANY & CO. KG represented by its general partner AMD Saxony LLC By: /s/ Hans-Raimund Deppe DRESDNER BANK AG, (as Security Agent and Bank) /s/... Debiol BAYERISCHE HYPO- UND VEREINSBANK AG; MÃœNCHEN /s/ Brigitte Debiol Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 141
    ... N.V., Niederlassung Deutschland /s/ Brigitte Debiol BANK AUSTRIA CREDITANSTALT AG, Wien /s/ Brigitte Debiol WESTFALENBANK AG /s/ Brigitte Debiol DRESDNER BANK LUXEMBOURG S.A. (as Agent and Paying Agent) /s/ Christian Kogge /s/ Brigitte Debiol Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 142
    ... "Amendment"), dated 24 February 2004, is made between ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the laws of the State of Delaware, United States of America, with its chief executive office and principal place of business at One AMD Place, Sunnyvale, California 94088...

  • Page 143
    ... Agreement in its entirety and replacing said Section 3 (iii) as follows: "(iii) those payments to AMD Inc. made by AMD Saxonia in respect of purchases of equipment, materials, supply and third party services in the ordinary course of business and on an arm's length basis the aggregate book value...

  • Page 144
    ... under and for purposes of the Sponsors' Support Agreement. The form and execution of this Amendment and all rights and obligations of the parties arising hereunder shall be governed by the laws of the Federal Republic of Germany. -3- (b) (c) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 145
    ... be deemed to constitute one and the same instrument. Sections 20, and21 of the Sponsors' Subordination Agreement shall apply,mutatis mutandis, to this Amendment, as if set out herein in full. [Remainder of page intentionally left blank] -4- (e) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 146
    ... of the parties set out below has caused this Amendment to be duly executed and delivered by its respective officer or agent thereunto duly authorised as of the date first above written. ADVANCED MICRO DEVICES, INC. By Its /s/ Robert J. Rivet Senior VP, Chief Financial Officer AMD SAXONY HOLDING...

  • Page 147
    ... and sell Wafers to AMD Holding; WHEREAS, the parties now desire to amend the AMD Saxonia Wafer Purchase Agreement to revise the definition of "Total Costs" set forth therein, all on the terms and conditions more particularly set forth in this Fourth Amendment; and Source: ADVANCED MICRO DEVIC, 10...

  • Page 148
    ... The execution and delivery by it of this Fourth Amendment, and the performance by it following the Amendment No. 6 Effective Date of its obligations under the AMD Saxonia Wafer Purchase Agreement, as... by-laws; or (ii) result in a breach of, result Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 149
    ... together shall constitute one agreement. (e)Sections 7.07,7.08,7.09, and7.10 of the AMD Saxonia Wafer Purchase Agreement shall apply, mutatis mutandis, to this Amendment, as if set out herein in full. [Remainder of page intentionally left blank] Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 150
    ...-Raimund Deppe Dr. Hans-Raimund Deppe Its: Managing Director (Geschäftsführer) AMD SAXONY LIMITED LIABILITY COMPANY & CO. KG, represented by its General Partner AMD SAXONY LLC By: /s/ Hans-Raimund Deppe Name: Dr. Hans-Raimund Deppe Its: Manager Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 151
    ... original, the Japanese original shall prevail. ***Confidential treatment has been requested as to certain portions of this agreement. Such omitted confidential information has been designated by asterisks and has been filed separately with the Securities and Exchange Commission pursuant to Rule 25b...

  • Page 152
    ... RECEIVABLES COLLECTION FROM THIRD PARTY TERMINATION OF THIS AGREEMENT GENERAL PROVISIONS SCHEDULE ONE SCHEDULE TWO SCHEDULE THREE SCHEDULE FOUR SCHEDULE FIVE i 1 6 7 7 8 8 9 9 9 10 10 10 11 12 12 12 13 15 17 20 21 22 24 25 26 28 29 29 30 31 32 32 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 153
    ..., copyright, trademarks, trade names, franchises, goodwill, and other similar intangibles and (c) unamortized debt discount and expense. Adjusted Tangible Net Worth" means, at any date, (a) the book value (after deducting related depreciation, obsolescence, amortization, valuation, and other proper...

  • Page 154
    ...(11) o'clock A.M. of the second Business Day prior to the commencement date of each Interest Period or the nearest time prior thereto. "Break Funding Cost" means, in cases where the principal is repaid or set off before the Due Date of the Individual Loan, and where the Reinvestment Rate falls below...

  • Page 155
    ...of such person, the deferred and unpaid purchase price of any property or business (other than trade accounts payable incurred in the ordinary course of business and constituting current liabilities) and all obligation under the Lease. "Drawdown Date" means September 30, 2003. "Due Date" means, with...

  • Page 156
    ... Payment Date" means an interest payment date set forth in Schedule TWO, and if such corresponding day falls on a day other than a Business Day, the following Business Day shall be the Interest Payment Date. If such following Business Day occurs in the next month, the immediately preceding Business...

  • Page 157
    ... set forth in the Schedule TWO, and if such corresponding day falls on a day other than a Business Day, the following Business Day shall be the Repayment Date. If such following Business Day occurs in the next month, the immediately preceding Business Day shall be the Repayment Date. "Reports" means...

  • Page 158
    ..." of a person means any corporation, association, partnership, joint venture or other business entity of which more than fifty percent of the voting stock or other equity interest (in the case of person other than corporation), is owned or controlled directly or indirectly by the person, or one...

  • Page 159
    ... by the representative director of the Borrower and certifying that all internal procedures of the company necessary for the execution of this Agreement and the drawdown pursuant to this Agreement have completed. 7 2.4 3. 4. (b) (c) (d) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 160
    ... eleven (11) o'clock of the Drawdown Date, and if such remittance is not completed by that time, the Lender shall, promptly upon the Agent's request, pay to the Agent the Temporary Advancement Costs making required in such Temporary Advancement. 8 6.2 6.3 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 161
    ... Increased Lender under this Agreement, the relevant provisions of this Agreement regarding the performance of such obligations shall remain in full force and effect with respect to the Costs Increased Lender. 9 7.2 8. 8.1 8.2 9. 9.1 9.2 9.3 9.4 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 162
    ..., the Borrower shall give a written notice to the Agent by the tenth Business Day prior to the date the Borrower desires to make the Prepayment (the "Desired Prepayment Date"), stating (a) the principal 10 11. 11.1 11.2 11.3 12. 12.1 12.2 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 163
    ... the Agent of the Break Funding Cost by the second Business Day prior to the Desired Prepayment Date. After receiving such notice, the Agent shall notify the Borrower of the same by the first Business Day prior to the Desired Prepayment Date. The Borrower shall pay, in accordance with Clause 16, the...

  • Page 164
    ...) that have been granted in favour of a Lender as the secured party of the floating security interest, and directly pays to that Lender the proceeds it receives from such disposal in order to perform its obligations under this Agreement, such direct payment shall be considered to constitute the due...

  • Page 165
    ..., the Borrower shall additionally pay the amount necessary in order for the Lender to be able to receive the amount that it would receive if no Taxes and Public Charges were imposed. In such cases, the Borrower shall, within thirty (30) days from the date of payment, directly send to the Lender the...

  • Page 166
    ... Borrower, the Assignor and the Assignee that such procedures have been completed. If the Assignee or any other third party suffers Damages due to such treatment by the Agent, 14 (b) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 167
    ...'S REPRESENTATIONS AND WARRANTIES The Borrower represents and warrants to a Lender and the Agent that each of the following matters is true and correct at the execution date of this Agreement and at 15 17.4 17.5 17.6 17.7 18. Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 168
    ... will or may materially cause adverse effects on the performance of its obligations under this Agreement. No matter described in the items of Clauses 22.1 and 22.2 has occurred or is likely to occur. 16 (iii) (iv) (v) (vi) (vii) (viii) (ix) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 169
    .... Upon a request made by the Agent or a Lender through the Agent, the Borrower shall immediately notify to the Agent of the conditions of the assets, management, or businesses of the Borrower, its Subsidiary and FASL 17 (ii) (iii) (iv) (v) (vi) (vii) Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 170
    ... of any of its debts under this Agreement to the payment of any unsecured debts (including any secured debts that will not be fully collected after the foreclosure sale of the collateral), or at least will treat them equally. 18 19.3 (ii) (iii) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 171
    ... 3 billion yen in the aggregate); (d) sales or other dispositions of assets where the aggregate book value of assets so sold by the Borrower and its Subsidiaries, together, shall not exceed 6 billion yen from and after the execution date of this Agreement; (e) mergers or consolidations between the...

  • Page 172
    ... Ordinances. The cases where the Borrower offers, regarding loans taken for the purpose of acquiring assets, such assets as collateral. The cases where the Borrower newly acquires assets on which security interests have already been established. 20 20. (ii) (iii) Source: ADVANCED MICRO DEVIC, 10...

  • Page 173
    ... capital expenditures for Aizu Facility, to less than: Period Percentage 2-4 quarter fiscal year 2003 1 quarter fiscal year 2004 2 quarter fiscal year 2004 3-4 quarter fiscal year 2004 Full fiscal year 2005 Full fiscal year 2006 21 90% 100% 110% 120% 120% 120% Source: ADVANCED MICRO DEVIC...

  • Page 174
    ...All Lenders' Lending Obligations shall cease to be effective: (i) If the Borrower or the Guarantor has failed to perform its payment obligations when due, whether under this Agreement or not, payable to a Lender or the Agent in whole or in part; 22 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 175
    ... of the Borrower's debts under this Agreement shall become due and payable by the time such request or notice should have been delivered, and the Borrower shall immediately pay the principal and the interest of the Loan, the Break Funding Costs 23 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 176
    ...involved in such a set-off or application to payment shall be calculated up to the time of such calculation, and in such calculation, the interest rate and default interest rate shall be in accordance with each agreement, and the foreign exchange rate...: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 177
    .... If any damage, loss, or expenses are incurred by the Lender or the Agent due to delay of such notice without any reasonable cause, either the Lender or the Borrower who has failed to give such notice shall bear such damages. ARRANGEMENTS AMONG LENDERS If a set-off is performed by a Lender pursuant...

  • Page 178
    ... of this Agreement, nor shall be liable for any non-performance of obligations by the Lenders under this Agreement. The Agent shall be an agent of the Lenders and, unless otherwise provided, shall never act as an agent of the Borrower. 26 24.4 25. 25.1 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 179
    ... as a Lender, the calculation of the amounts to be distributed to each Lender pursuant to the provisions of Clause 17 shall be made in accordance with the following: (i) for amounts to be distributed to each Lender 27 25.3 25.4 25.5 25.6 25.7 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 180
    ... shall immediately inform the Borrower or All Lenders, as the case may be, of the details of such notice. The Agent shall make any documents, which the Agent has obtained from the Borrower and has kept, available for review by a Lender during the ordinary business hours. RESIGNATION AND DISMISSAL...

  • Page 181
    ... instructions of the Majority Lenders in this Agreement has occurred, such Lender may give notice to the Agent to request the clarification of the intention of the Majority... of the precedent condition set forth in Clause 4 and Clause 5. 29 28. Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 182
    ... Obligations.) The Assignee is a company located in Japan (any of the head office, branch office or business office thereof shall be established in Japan and be registered under the Japanese laws), and is either a financial institution 30 (ii) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 183
    ...third party is a company located in Japan (any of the head office, branch office, or business office thereof shall be established in Japan and be registered under the Japanese laws), and is a financial institution (bank, 31 30. 30.1 30.2 30.3 (ii) (iii) Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 184
    ... regard to this Agreement to the Assignee or a person considering becoming an Assignee (including an intermediary of such assignment), on the condition that those agree to be bound by the confidentiality obligations. The information with regard to 32 32. 32.1 (ii) Source: ADVANCED MICRO DEVIC, 10...

  • Page 185
    ... by any of the methods described in (a) to (d) below to the address of the receiving party described in Schedule ONE. Each party to this Agreement may change its address by giving notice thereof to the Agent. (a) Personal delivery; 33 32.4 32.5 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 186
    ...the Agent, such as the trade name, representative, agent, signature, seal, or address, the Lender and the Borrower shall immediately notify the Agent of such changes in writing. In the case of any such change to the Agent, or upon such change to any contact information of the Borrower or the Lenders...

  • Page 187
    ... Any matters not provided for in this Agreement, or in the case of any doubt among the parties with respect to the interpretation, the Borrower and the Lenders shall consult through the Agent and shall determine the response therefor. 35 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 188
    ...representatives or the agents of the parties hereto have caused this Agreement to be signed and sealed herein, and the ... LIFE INSURANCE COMPANY THE LENDER: By: /s/ JYUNICHI HATTORI SHINKIN CENTRAL BANK. THE LENDER: By: /s/ SHINOBU SUZUKI THE BANK OF YOKOHAMA, LTD. 36 Source: ADVANCED MICRO DEVIC,...

  • Page 189
    ... Current deposit (toza yokin) Account Number: [***]* Account Holder: The Dai-ichi Mutual Life Insurance Company 90 Billion Yen 90/180 50 Billion Yen 50/180 * Confidential treatment has been requested pursuant to the Confidential Treatment Request dated November 26, 2003. Source: ADVANCED MICRO...

  • Page 190
    ... is the Participation Ratio at the time of entering into this Agreement, and it may be amended pursuant to the provisions of this Agreement. * Confidential treatment has been requested pursuant to the Confidential Treatment Request dated November 26, 2003. Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 191
    ... TWO Repayment Schedule The Repayment Date and the Interest Payment Date The repayment amount of the principal December 31, 2003 March 31, 2004 June 30, 2004 September 30, 2004 December 31, 2004...,000,000 \1,200,000,000 \1,200,000,000 \1,200,000,000 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 192
    ... chart. Figures for the Borrower's non-consolidated net asset value shown in the above chart shall be the value as of the final day of each fiscal year-end, and the relevant spread will be applied to the next coming Interest Payment Date on June 30 every year. The spread applied to the Loan shall be...

  • Page 193
    SCHEDULE FOUR Status of Establishment of Collateral (as of September 25, 2003) Description of Security Interest by Assignment (Mortgage by Transfer) Locations: 6, 5-4, 5-11, 31-6, Kogyo Danchi, Monden-machi, Aizu-Wakamatsu City Building No. 1 ( JV#1 ) Asset No. Product Name Drawing No. Manufacturer ...

  • Page 194
    ... 199703 199704 199705 199807 199408 199408 199408 199408 199408 199408 199408 199408 199408 199508 199508 199603 199603 199603 199603 199603 199603 199603 199604 199604 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 195
    ... Screen Tokyo Electron Tokyo Electron Tokyo Electron Tokyo Electron Tokyo Electron Tokyo Electron M-FSI Tokyo Electron Tokyo Electron SC Semicon Technology Applied Materials ... 199512 199512 199603 199708 199806 199408 199408 199507 199603 199604 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 196
    ...developer Coater / developer Process gas monitor Process gas monitor Process gas monitor Process gas monitor Process gas monitor Process gas monitor Vertical diffusion Vertical diffusion...199605 199605 199605 199610 199408 199408 199408 199408 199408 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 197
    ... 199603 199603 199603 199603 199603 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199703 199703 199703 199703 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 198
    ... 199604 199604 199604 199604 199604 199604 199604 199604 199604 199604 199606 199607 199607 199703 199703 199705 199706 199706 199709 199806 199806 199408 199408 199408 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 199
    ... 199602 199602 199602 199602 199602 199602 199602 199603 199603 199603 199606 199607 199711 199408 199408 199408 199408 199408 199408 199408 199602 199602 199602 199602 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 200
    ... Patterned wafer inspection system Non-contact-type sheet ...Electronics Ryokosha AMD Nishikawa Keisoku Tokyo Electron Tokyo Electron Tokyo Electron Tokyo Electron...Electron Tokyo Electron Hitachi Electronics Engineering KLA Tencor Hitachi Electronics Engineering...ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 201
    ...roof, 1 floor 54.24 m2 Location: Building no.: Main building Type: Construction: Floor areas: Attached building: Type: Construction: Floor area: Attached building: Type: Construction: Floor area: Attached building: Type: Construction: Floor area: Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 202
    ... room, business offices Building with steel-frame construction, galvanized sheet iron roof, 5 floors 1st floor 877.92 m2 2nd floor 109.80 m2 3rd floor 877.50 m2 4th floor 865.62 m2 5th floor 865.62 m2 Location: Building no.: Type: Construction: Floor areas: Source: ADVANCED MICRO DEVIC, 10...

  • Page 203
    ..., 1 floor 25.22 m2 Location: Building no.: Main building Type: Construction: Floor areas: Attached building: Type: Construction: Floor areas: Attached building: Type: Construction: Floor area: Attached building: Type: Construction: Floor area: Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 204
    ... with concrete block construction, galvanized sheet iron roof, 1 floor 47.77 m2 No. 6 Guard's room Building with steel-frame construction, flat roof, 1 floor 72.00 m2 No. 7 Garage Building with steel-frame construction, flat roof, 1 floor 78.23 m2 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 205
    SCHEDULE FIVE Guarantee Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 206
    ... due or demanded, the Guarantor shall, in accordance with the procedure set forth under Clause 16 of the Agreement, fully pay to the Agent, which has become payable to the Agent, and to the Lender via the Agent, which has become payable to the Lender. 1 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 207
    ...due or demanded, the Guarantor shall, in accordance with the procedure set forth under Clause 16 of the Agreement, immediately and fully pay to the Agent, which has become payable to ... and other internal company rules of the Guarantor. 2 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 208
    ..., which will cause a material deterioration of the business, assets, or financial condition of the Guarantor described in the audited fiscal statement of that fiscal year and which may materially affect the performance of the obligations of the Guarantor under this Guarantee, has occurred. (viii) No...

  • Page 209
    ...or is found to be likely to occur with the passage of time, to the conditions of the assets, management, or businesses of the Guarantor, or if any lawsuit, arbitration, administrative procedure, or any other dispute, which will materially affect, or is likely to materially affect, the performance of...

  • Page 210
    ... of its long-term debt by Rating and Investment Information, Inc. to BBB- or higher. 3.3 (ii) (iii) (iv) (v) (vi) (vii) The Guarantor will maintain the shareholding ratio of FMH shares by the Guarantor to 100%, will maintain the shareholding ratio of FASL LLC shares by FMH to not less than...

  • Page 211
    ... through the Agreement, this Guarantee or an agreement other than this Guarantee, to the extent reasonably required. Upon the assignment of the Loan Receivables pursuant to Clause 29 of the Agreement, a Lender may disclose any information with regard to 6 (ii) Source: ADVANCED MICRO DEVIC, 10...

  • Page 212
    ...as incidents or natural disasters, the Guarantor shall, upon consultation with the Agent, perform its obligations under this Guarantee based on the records, such as books and vouchers, of the Lender or the Agent. The Guarantor shall, upon request of the Agent or a Lender through the Agent, forthwith...

  • Page 213
    ... this Agreement to be signed and sealed herein and has delivered to the Agent, and the Agent has kept the original and has distributed a copy thereof to the Borrower, the Guarantor and All Lenders upon confirming that such copy is the same content as its original. 8 Source: ADVANCED MICRO DEVIC, 10...

  • Page 214
    Exhibit 10.58 Redacted Version Confidential Treatment Marked AGREEMENT between SI INVESTMENT LIMITED LIABILITY COMPANY & CO KG and M + W ZANDER FACILITY ENGINEERING GMBH Pertaining to the Design and Construction of Fab X, Dresden, Germany Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 215
    ... Conduct of Executing Works 2.4. Materials 2.5. Company's inspections 2.6. Obligations 2.6.1. Staturory and like Requirements 2.6.2. Progress Updates 2.6.3. Construction Diary 2.6.4. Calibrating, Adjusting, Testing 2.6.5. Permits 2.6.6. Construction Management 2.6.7. Planning, Engineering, Designing...

  • Page 216
    ...calculated based on lump sum price calculation 4.1.1. Works to be executed in addition 4.1.2. Works not to be executed 4.1.3. Changes leading to Reductions and Additions 4.2. Adjustment can not be based on lump sum price calculation 4.3. Payments...41 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 217
    ...'s Responsibility for Construction Means 15. Identification 16. Liens (Rechte Dritter) 17. Confidentiality 18. Section 648 BGB not applicable 19. Law and Jurisdiction Miscellaneous 20. Condition Subsequent 41 42 42 42 43 44 45 45 46 46 46 48 48 49 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 218
    ... and associated support facilities to be located on the Site. The result (Werkerfolg) of the works and services to be executed or rendered under this Agreement is referred to as "Fab X" (also referred to as "S.I.L.K."). Company commissions Contractor to plan, design, construct, erect, install, equip...

  • Page 219
    ... therefore, including, but not limited, to all and any items which could have an impact on productivity, yield or ease of use but excluding any works and services explicitly excluded in this Agreement. D. Contractor desires to plan, design, construct, erect, install, equip, start up, certify...

  • Page 220
    ...reduce its activities, work force or personnel and executing other projects or contracts will not detrimentally impact the project.. * Confidential treatment has been requested pursuant to section IV.1.(a) of the Confidential Treatment Request dated March 9, 2004. 7 Source: ADVANCED MICRO DEVIC, 10...

  • Page 221
    ... Data Exhibit 9: EHS Program Exhibit 10: Clean Protocol Exhibit 11: Lump Sum Price Calculation Exhibit 12: List of Subcontractors consented to Exhibit 13: Workforce Regulations Exhibit 14: Milestone Definitions Exhibit 15: Time Schedule 8 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 222
    ... wafers (65 nm technology defined in the roadmap attached hereto as Exhibit 2 ITRS Roadmap) and associated support facilities to be located on the Site. Contractor shall plan, design, construct, erect, install, equip, start up, calibrate, adjust and turn over Fab X and execute all Works...

  • Page 223
    ... under no. 4. The Contractor shall with regard to planning, designing, constructing, erecting, installing, equipping, starting up, calibrating, adjusting and turning over use best efforts to secure maximum possible value added and to execute the Works in a manner that there is no detrimental impact...

  • Page 224
    ... within 24 hours from Company´s receipt of such notice, the particular document shall be deemed to be approved by Company. Contractor shall not be entitled to an extension of time because of Company´s justified refusal to approve a certain document. 11 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 225
    ... for expulsion of the employee or the subcontractor from the Site. Materials Contractor shall, on demand of Company, submit for Company's approval, detailed information, including, but not limited to, model number, quality, manufacturer, about all materials Contractor intends to use. In addition...

  • Page 226
    ... information related to the execution of the Works to be executed. Exhibit 6 Company's Inspections shall apply accordingly to any Works to be executed under this Agreement. Obligations The Parties clarify and acknowledge that the obligations which form part of the Works include, but are not limited...

  • Page 227
    ... with this Agreement, including, but not limited to, the building permit, necessary permits under water law (wasserrechtliche Genehmigungen, Erlaubnisse etc.), permits required under the Working Hours Law (Arbeitszeitgesetz) (e.g. for work on Sundays). 14 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 228
    ...obligation to coordinate with persons, including but not limited to work or services performed by Company and with other contractors employed by Company, acting on the Site on behalf of Company. Such person acting on behalf of Company shall obey Contractor´s construction site rules and shall attend...

  • Page 229
    ... this Agreement. 2.6.10.Letter of Intent The works and services rendered under the letter of intent of May 16, 2003 as amended under the letters of August 13, 2003 and November 3, 2003. 2.6.11. Health and Savety Plan/Site Rules Contractor shall formulate a health and safety plan and a set of site...

  • Page 230
    ...observe Rules Contractor shall place its employees and any subcontractors employed under a written obligation to observe the safety and discipline rules in force at that location and Contractor shall clearly mark the rooms and areas used by it with its company name. 2.6.14.Acceptances by Authorities...

  • Page 231
    ... of the name, address and contact details of the construction supervisor in good time and may only object to such person for good cause. 2.6.18.Clean Roads Public roads and works roads shall be kept clean at all times, with any soiling to be cleaned up immediately. 2.6.19.Security Contractor shall...

  • Page 232
    ... submitting to Company the performance guarantee provided for in no. 10.2, the refined lump sum price estimate provided for in no. 4 and Contractor submitting to Company a declaration (Freistellungserklärung) meeting the requirements of 19 3.3. 3.4. Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 233
    ... entitled to request Contractor not to execute certain Works or to reduce the scope of work. In this case Contractor is obliged to * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 20 Source: ADVANCED MICRO DEVIC, 10...

  • Page 234
    ... attached as Exhibit 11 Lump Sum Price Calculation. 4.1.1. Works to be executed in addition If due to a request for changes or Additional Works works, services or deliveries which are not part of the Works which form part of the wafer fabrication facility to be completed as described under...

  • Page 235
    ... of Fab X: Contractor shall - based on tender documents approved by Company - ask potential subcontractors for competitive bids (generally three) based on a lump sum approach for such works, services or deliveries. Contractor shall also be 22 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 236
    ....2 of this Agreement, Contractor shall be only entitled to the remuneration provided for in these termination provisions. * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 23 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 237
    ... which equally compensate their employees by minimum wage. Contractor will - on demand - provide Company with the necessary documentation that Contractor as well as any subcontractor or entities providing workers have paid and will pay such minimum wage. 24 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 238
    ... Deputy Project Manager [***]* Commercial Manager on site [***]* Executive Sponsor [***]* Executive Sponsor [***]* Executive Sponsor * Confidential treatment has been requested pursuant to section IV.3. of the Confidential Treatment Request dated March 9, 2004. 25 Source: ADVANCED MICRO DEVIC, 10...

  • Page 239
    ... the Acceptance Certificate) by Company or by anybody acting on behalf of Company or any third party (as a 6.2. * Confidential treatment has been requested pursuant to section IV.3. of the Confidential Treatment Request dated March 9, 2004. 26 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 240
    .../B. No acceptance - whether partial or final - to be granted in accordance with this agreement shall be unreasonably withheld. Shortcomings and defects identified in the course of an acceptance shall be noted in a mutually developed punch list 27 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 241
    ... applicable (however, the date(s) of the respective milestone(s) shall be postponed in accordance to this no. 7.1). * Confidential treatment has been requested pursuant to section IV.1.(a) of the Confidential Treatment Request dated March 9, 2004. 28 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 242
    ... in no. 7.1.c) of this Agreement for more than [***]*, Company shall be entitled to a contractual penalty of b) c) * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 29 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 243
    ... Milestone Definitions) by the following dates: Milestone Date Spine weathertight Office weathertight Office ready for Occupation * Confidential treatment has been requested pursuant to section IV.1.(a) of the Confidential Treatment Request dated March 9, 2004. 30 Source: ADVANCED MICRO DEVIC...

  • Page 244
    ... to the party's delays or other fault and excluding proper exercise of the police power response to an 7.5. * Confidential treatment has been requested pursuant to section IV.1.(a) of the Confidential Treatment Request dated March 9, 2004. 31 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 245
    ...Site were unable to work, and (iii) resulted in delay that affected the critical path set forth in the schedule provided for in no. 7.4 of this Agreement. Notwithstanding anything herein to the contrary, events of "force majeure" shall not include the following: (I) delays caused by general economic...

  • Page 246
    ... this Agreement. Warranties Contractor has carefully examined and is aware of the location of all and any means for supply of Fab 30 and of Fab X and for disposal of substances, including, but not limited to, water, bulk gas, gas, light or electromagnetic 33 9.3. Source: ADVANCED MICRO DEVIC, 10...

  • Page 247
    ... processors, within Fab 30 or Fab X; (iv) that Contractor has carefully examined and reviewed any and all means and methods to be employed for the execution of the Works any changes and Additional Works to be executed under this Agreement; (v) that Contractor 34 Source: ADVANCED MICRO DEVIC...

  • Page 248
    ...from any payment to be made under this Agreement an amount equal to a total of [***]* of the gross remuneration due at the relevant * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 35 Source: ADVANCED MICRO DEVIC, 10...

  • Page 249
    ...this Agreement - be returned upon expiry of the limitation period for defects liability as provided for in no. 9 of this Agreement. * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 36 Source: ADVANCED MICRO DEVIC, 10...

  • Page 250
    ... for in no. 10.2 and 10.3 and shall assign the rights and claims for security purposes corresponding to no. 10.4. * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 37 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 251
    ...Contractor shall inform Company for giving Company the opportunity to take care of such transfer which Contractor shall support with all reasonable means) during the course of this Agreement and/or related to Fab X which relate in any manner to Company´s business and/or the Works to be executed, or...

  • Page 252
    ... and that Company shall have the right to use such third party intellectual property or pre-existing Contractor intellectual property in any Works executed or any products of Works executed and any items furnished by Contractor under this Agreement 39 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 253
    ... for procuring the right for Company to use the Ideas from the remuneration Contractor is entitled to under this Agreement. Upon Company's request, Contractor shall, at Contractor's reasonable cost, either itself defend or settle or provide any reasonable support for Company to defend or settle any...

  • Page 254
    ... proves that the respective commitment or the resulting remuneration can not be avoided or reduced. Contractor shall not be entitled to any profits relating to the works not executed. Section 649 German Civil Code (BGB) shall not apply. 41 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 255
    ...the officers and employees of Advanced Micro Devices Inc., AMD Saxony LLC & Co. KG, AMD Saxony LLC, AMD Saxony Holding GmbH and AMD Saxony Admin GmbH from and against all claims, damages, losses, expenses and the like arising from, or in connection with or related to, this Agreement or the execution...

  • Page 256
    ...Company, Advanced Micro Devices Inc., AMD Saxony LLC & Co. KG, AMD Saxony LLC, AMD Saxony Holding GmbH and AMD Saxony Admin GmbH in the economic position in which they would have been without the detrimental impact of such conduct. Advanced Micro Devices Inc., AMD Saxony LLC & Co. KG, AMD Saxony LLC...

  • Page 257
    ... consequential damage, e.g. loss of profit, loss of production, loss of use, loss of interest, plant downtime costs, occurs and does not result from gross negligent or intentional conduct the liability of Contractor shall be limited to [***]*. Contractor assigns to Company (and Company accepts this...

  • Page 258
    ... changes with respect to the insurance policy. In this case Company shall have the right to pay the amounts due and to deduct these amounts from any payments to be rendered to Contractor under, or connected to, this Agreement. The Parties shall - on request of either Party - in good faith enter into...

  • Page 259
    ... set by Company and all of Contractor's officers or employees shall display proper identification at all times while entering the Site or while on the Site. Moreover, Contractor shall impose the same obligations on Contractor's subcontractors and on anybody involved in relation to the execution...

  • Page 260
    ... shall provide a copy of such agreement to Company. Disclosing information reasonably required for the performance of the subcontractors work to nominated subcontractors as listed in no. 5.1 shall be deemed to be consented to by Company. 47 b) c) Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 261
    ... not publish or cause to be disseminated through any press release, public statement or marketing or selling effort any information which relates to this Agreement without the prior written approval of Company. At the completion of the execution of the Works, Contractor shall return to Company all...

  • Page 262
    ...terms occur, the German terms or explanations shall prevail for the interpretation of this Agreement. 20. Condition Subsequent This Agreement is subject to the condition subsequent (auflösende Bedingung) that to the Co-operation Agreement between the Free State of Saxony, Advanced Micro Devices Inc...

  • Page 263
    ... to as "Saxony" and 2. Advanced Micro Devices, Inc., One AMD Place, Sunnyvale, CA 94088, USA - hereinafter referred to as "AMD" and 3. M+W Zander Fünfte Verwaltungsgesellschaft mbH, Lotterbergstr. 30, 70499 Stuttgart, entered under HRB 23351 in the Commercial Register of the Stuttgart Local Court...

  • Page 264
    ...Plus Agreement Service Agreements Arbitrator Non-Discrimination Warranty by AMD Liability Interest EU Reservation Conditions Precedent Duration and Termination Confidentiality Responsibility for Costs and Expenses Press Release Arbitration Agreement Final Provisions Source: ADVANCED MICRO DEVIC, 10...

  • Page 265
    ... JDA in a new wafer production facility in particular for micro processors to be built in Dresden (hereinafter referred to as "Fab X") with the support and participation of Saxony, to develop them to the industrial production stage and to manufacture them. The manufacturing technology is intended to...

  • Page 266
    ... extent possible and financially reasonable. This also includes the License Agreement attached as Appendix 1.2. 1.2 * Confidential treatment has been requested pursuant to section IV.2. of the Confidential Treatment Request dated March 9, 2004. 4 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 267
    ...costs shall be in accordance with the project description attached hereto as Appendix 1.3. Formation of a Joint Undertaking AMD has formed a limited liability partnership Limited Liability Company & Co. KG for the realization of the project. The joint undertaking will be conducted in the name of AMD...

  • Page 268
    ...or Holding Company M+W Total Capital Contribution Capital Contribution Capital Contribution Limited Partners' Capital Contributions I * Confidential treatment has been requested pursuant to section IV.1.(c) of the Confidential Treatment Request dated March 9, 2004. 6 Source: ADVANCED MICRO DEVIC...

  • Page 269
    ... Contribution I and the first installment of Capital Contri* Confidential treatment has been requested pursuant to section IV.1.(c) of the Confidential Treatment Request dated March 9, 2004. 7 AMD subsidiaries Saxony or Holding Company M+W Total Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 270
    ...more detail. However, the first installment of each silent partner capital contribution will become due no earlier than at such date when transfer of title to the real estate as described in Appendix 4.2.2 of AMD Saxony Limited Liability Company & Co. KG ("AMD Saxony") to AMD Fab X has been effected...

  • Page 271
    ... Companies with a direct or indirect interests in a Competing Entity are strictly prohibited from disclosing to the Competing Entity technical information, including information regarding the technology to manufacture Wafers. M+W Zander Facility Engineering GmbH 9 4.4 Source: ADVANCED MICRO DEVIC...

  • Page 272
    ... will at all times be financially funded such that it is able to perform its liabilities; this does not include any liabilities incurred by the Second General Partner by virtue of his position as personally liable partner of AMD Fab X 10 4.6 4.7 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 273
    ... EUR 658 million Another investment allowance of EUR 46 million is expected to be paid in 2008. * Confidential treatment has been requested pursuant to sections IV.1.(b) and IV.1.(c) of the Confidential Treatment Request dated March 9, 2004. 11 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 274
    ... the EU ruling, the investment allowances granted in a legally binding way are to be used first. 5.3 5.4 §6 * Confidential treatment has been requested pursuant to section IV.1.(b) of the Confidential Treatment Request dated March 9, 2004. 12 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 275
    ... implementation of the following technology generations also through its own development. * * §8 8.1 8.2 §9 9.1 9.2 * Confidential treatment has been requested pursuant to section IV.2. of the Confidential Treatment Request dated March 9, 2004. 13 Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 276
    ... on an arbitrator and will instruct such arbitrator in the name of all the Parties for him to determine the disputed * Confidential treatment has been requested pursuant to section IV.2. of the Confidential Treatment Request dated March 9, 2004. 14 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 277
    ... of â,¬ 700 million) has been achieved. 14.2 In the event of the breach of warranty, the other Parties are initially each entitled and obliged to demand that AMD provide proper performance within a 15 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 278
    ... Agreements, shall be calculated pursuant to the 365/360 method. § 17 EU Reservation The grant of the allowances envisioned in this Agreement (investment grants, investment allowances and guarantee) require the approval of the Commission of the European Union. 16 Source: ADVANCED MICRO DEVIC...

  • Page 279
    ... 31, 2004, even in consideration of Section 18.2, any later occurrence of the conditions shall be excluded. * Confidential treatment has been requested pursuant to section IV.1.(c) of the Confidential Treatment Request dated March 9, 2004. 17 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 280
    ... 19.7 This Agreement shall terminate, except for Sections 20 and 23, without a notice of termination being required, upon the full withdrawal of Saxony and of M+W as direct or indirect partners (i.e. both as limited and as silent partners) of AMD Fab X. 18 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 281
    ..., except to the extent that such information relates to the U.S. income tax treatment and the U.S. income tax structure of the transaction as set out in this Agreement or in the agreements related herewith; (iii) the existence or status of 19 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 282
    ... Company by Rechtsanwälte Clifford Chance Pünder, in connection with this Cooperation Agreement for the period from June 4, 2003 until signing of this Cooperation Agreement. In addition, from the date of signing of this Cooperation Agreement until December 31, 20 Source: ADVANCED MICRO DEVIC...

  • Page 283
    2003 the amount of [***]* will be borne for expenses and costs of Saxony and/or the Saxony Holding Company. § 22 Press Release The Parties will publish a joint press release, which is reached in mutual agreement between them, concerning this project at a date also to be agreed upon between them. In...

  • Page 284
    ... the Parties would have intended or which would have been agreed by the Parties according to the meaning and purpose of this Agreement, if they had been aware of the invalidity or unenforceability of the relevant provision or of the omission. 22 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 285
    Place, Date: Dresden, November 20, 2003 /s/ ROBERT J. RIVET /s/ HORST METZ /s/ ANDREA FISCHER (Advanced Micro Devices, Inc.) /s/ JUERGEN GIESSMANN /s/ HELMUT LAUB (Saxony) (M+W Zander Fünfte Verwaltungsgesellschaft mbH) 23 Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004

  • Page 286
    ... 36 LLC Foreign Subsidiaries Advanced Micro Devices Belgium N.V. (4) AMD South America LTDA Advanced Micro Devices (Canada) Limited (5) FASL (Suzhou) Limited AMD International Trading (Shanghai) Co. Ltd. Advanced Micro Devices S.A. Advanced Micro Devices GmbH (6) AMD FAB 36 Limited Liability Company...

  • Page 287
    ...and schedule of Advanced Micro Devices, Inc., included in this Annual Report (Form 10-K) for the year ended December 28, 2003: • Registration Statements on Forms S-8 (Nos. 33-10319, 33-26266, 33-36596 and 33-46578) pertaining to the Advanced Micro Devices, Inc. 1982 and 1986 Stock Option Plans and...

  • Page 288
    ...) pertaining to the 4.75% convertible debentures; and • Post-Effective Amendment No. 11 to the Registration Statement on Form S-3 (No. 333-84028) pertaining to the 4.75% convertible debentures. /s/ San Jose, California March 4, 2004 ERNST & YOUNG LLP Source: ADVANCED MICRO DEVIC, 10-K, March 09...

  • Page 289
    ...-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign Advanced Micro Devices, Inc.'s Annual Report on Form 10-K for the fiscal year ended December 28, 2003, and any and all amendments thereto, and to file...

  • Page 290
    ...CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Hector de J. Ruiz, certify that: 1. I have reviewed this annual report on Form 10-K of Advanced Micro Devices, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or...

  • Page 291
    ... that: 1. I have reviewed this annual report on Form 10-K of Advanced Micro Devices, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which...

  • Page 292
    ...and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. /s/ HECTOR DE J. RUIZ Hector de J. Ruiz President and Chief Executive Officer Date: March 8, 2004 Source: ADVANCED MICRO DEVIC, 10-K, March...

  • Page 293
    ...-Oxley Act of 2002, the undersigned officer of Advanced Micro Devices, Inc. (the "Company") hereby certifies, to such officer's knowledge, that: (i) the Annual Report on Form 10-K of the Company for the annual period ended December 28, 2003 (the "Report") fully complies with the requirements of...