AMD 2003 Annual Report Download - page 101

Table of Contents
management. Any such repurchases will be made, from time to time, in the open market or in privately negotiated transactions in compliance with Rule 10b-18
of the Securities Exchange Act, subject to market conditions, applicable legal requirements and other factors. This program does not obligate the Company to
acquire any particular amount of its common stock, and the program may be suspended at any time at the Company’s discretion. The Company did not purchase
any shares under this program during fiscal 2003 or 2002. As of December 28, 2003, 6,310,580 shares had been repurchased at an aggregate price of
approximately $77 million under the program.
NOTE 16: Contingencies
I. Environmental Matters
Superfund Clean-Up Orders. The Company is 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, the Company has discovered hazardous material releases to the groundwater from former underground tanks and
proceeded to investigate and conduct remediation at these three sites. The chemicals released into the groundwater were commonly used in the semiconductor
industry in the United States in the wafer fabrication process prior to 1979.
In 1991, the Company received four Final Site Clean-up Requirements Orders from the California Regional Water Quality Control Board relating to the
three sites. The Company has entered into settlement agreements with other responsible parties on two of the orders. Under these agreements other parties have
assumed the costs and primary responsibility for conducting remediation activities under the orders. The Company remains responsible for these costs in the
event that the other parties do not fulfill their obligations under the settlement agreements.
To address anticipated future remediation costs under the orders, the Company has computed and recorded an estimated environmental liability of
approximately $3.3 million in accordance with applicable accounting rules and has not recorded any potential insurance recoveries in determining the estimated
costs of the cleanup. The progress of future remediation efforts cannot be predicted with certainty, and these costs may change. Environmental charges to
earnings have not been material during any of the last three fiscal years. The Company believes that the potential future liability, if any, in excess of amounts
already accrued will not have a material adverse effect on the Company’s financial condition or results of operations.
Potentially Responsible Party Designation. In 1998, the U.S. Environmental Protection Agency (EPA) identified the Company as one of hundreds of
Superfund “potentially responsible parties” (PRPs) as a result of the disposal of waste at a regulated landfill in Santa Barbara County, California that was later
abandoned by its owners and designated as a Superfund site by the EPA. The Company has reached a settlement agreement with the EPA and completed
payment. However, the public notification, judicial review and issuance of a consent decree remain pending. The amount of settlement did not have a material
adverse effect on the Company’s financial condition or results of operations.
II. Other Matters
The Company is a defendant or plaintiff in various other actions, which arose in the normal course of business. In the opinion of management, the ultimate
disposition of these matters will not have a material adverse effect on the Company’s financial condition or results of operations.
NOTE 17: Subsequent Event (unaudited)
Pursuant to the Company’s Tender Offer (Note 10), on January 30, 2004, the Company granted options to purchase 12,111,371 shares of common stock to
employees at an exercise price of $14.86, which represented the closing price of the Company’s common stock on that date, in exchange for options 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.
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Source: ADVANCED MICRO DEVIC, 10-K, March 09, 2004