AMD 2011 Annual Report Download - page 86

At the Closing, the Company and ATIC owned 1,090,950, or 83%, and 218,190, or 17%, respectively, of
Class A Preferred Shares, and ATIC owned 100% of the Class B Preferred Shares and 100% of the Class A
Notes and Class B Notes.
In November 2009, upon the settlement of the Intel litigation (discussed in Note 11) and the execution of a
patent cross license agreement between the Company and Intel, the requirements satisfying the Reconciliation
Event were met. As a result, GF’s Class A and Class B Preferred Shares vote on an as converted basis with any
outstanding GF Ordinary Shares.
Class B Preferred Shares. The Class B Preferred Shares rank senior in right of payment to all other classes
or series of equity securities of GF for purposes of dividends, distributions and upon a liquidation, dissolution or
winding up of GF (Liquidation Event). Each Class B Preferred Share is deemed to accrete in value at a rate of
12% per year, compounded semiannually, of the initial purchase price per such share. The accreted value accrues
daily from the Closing and is taken into account upon certain distributions to the holders of Class B Preferred
Shares or upon conversion of the Class B Preferred Shares. Upon a Liquidation Event, each Class B Preferred
Share will be entitled to receive, prior to any distribution to the holders of any other classes or series of equity
securities, an amount equal to its accreted value. Upon completion of the above distribution to the holders of
Class B Preferred Shares, each Class A Preferred Share will be entitled to receive its liquidation preference
amount out of any remaining assets of GF. Upon completion of the above distributions to the holders of Preferred
Shares, all of the remaining assets of GF, if any, will be distributed pro rata among the holders of Ordinary
Shares. Each Class B Preferred Share is convertible, at the option of the holder thereof, into Class B Ordinary
Shares at the then applicable Class B Conversion Rate (as hereinafter defined) upon a Liquidation Event. Each
Class B Preferred Share automatically converts into Class B Ordinary Shares at the then applicable Class B
Conversion Rate upon the earlier of (i) an initial public offering of GF (IPO) or (ii) a change of control
transaction of GF. The initial “Class B Conversion Rate” is 100 Class B Ordinary Shares for each Class B
Preferred Share converted, subject to customary anti-dilution adjustments. As a result of the Reconciliation Event
(discussed above), each Class B Preferred Share now votes on an as-converted basis with the Ordinary Shares,
voting together as a single class, with respect to any question upon which holders of Ordinary Shares have the
right to vote.
Class A Preferred Shares. The Class A Preferred Shares rank senior in right of payment to the Ordinary
Shares of GF and junior in right of payment to the Class B Preferred Shares for purposes of dividends,
distributions and upon a Liquidation Event. The Class A Preferred Shares are not entitled to any dividend or
pre-determined accretion in value. Upon a Liquidation Event, each Class A Preferred Share will be entitled to
receive, after the distribution to the holders of the Class B Preferred Shares but prior to any distribution to the
holders of Ordinary Shares, out of the remaining assets of GF, if any, an amount equal to the initial purchase
price per share of the Class A Preferred Shares. Each Class A Preferred Share is convertible, at the option of the
holder thereof, into Class B Ordinary Shares at the then applicable Class A Conversion Rate upon a Liquidation
Event. Each Class A Preferred Share will automatically convert into Class B Ordinary Shares at the then
applicable Class A Conversion Rate upon the earlier of (i) an IPO or (ii) a change of control transaction of GF.
The initial “Class A Conversion Rate” is 100 Class B Ordinary Shares for each Class A Preferred Share
converted, subject to customary anti-dilution adjustments. As a result of the Reconciliation Event (discussed
above), each Class A Preferred Share now votes on an as-converted basis with the Ordinary Shares, voting
together as a single class, with respect to any question upon which holders of Ordinary Shares have the right to
vote.
Class A Subordinated Convertible Notes. The Class A Notes accrue interest at a rate of 4% per annum,
compounded semiannually, and mature ten years from the date of issuance. Interest on the Class A Notes is
payable semiannually in additional Class A Notes. The Class A Notes are the unsecured obligations of GF and
rank subordinated in right of payment to any current or future senior indebtedness of GF. The Class A Notes are
not redeemable by GF without the note holder’s consent. The Class A Notes are convertible, in whole or in part,
in multiples of $1,000, into GF Class A Preferred Shares at the option of the holder at any time prior to the close
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