AMD 1993 Annual Report Download - page 15

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ITEM 3. LEGAL PROCEEDINGS
1. Environmental Matters. Since 1981, the Corporation has discovered,
investigated and begun remediation of three sites where releases from
underground chemical tanks at its facilities in Santa Clara County, California
adversely affected the groundwater. There is no indication, however, that any
public drinking water supplies have been affected. The chemicals released into
the groundwater were commonly in use in the semiconductor industry in the wafer
fabrication process prior to 1979. At least one of the released chemicals (which
is no longer used by the Corporation) has been identified as a probable
carcinogen.
In 1991, the Corporation received four Final Site Clean-up Requirements
Orders from the California Regional Water Quality Control Board, San Francisco
Bay Region (RWQCB) relating to the three sites. One of the sites (Final Site
Clean-up Requirements Order No. 91-102) includes clean-up of groundwater
contamination from TRW Microwave, Inc. (TRW), Philips Semiconductor (formerly
Signetics Corporation) and the Corporation which the RWQCB claims merged. The
Corporation is proceeding jointly with Philips and TRW to clean-up the merged
contamination and the parties are contributing to the clean-up equally. Another
of the sites (Final Site Clean-up Requirements Order Nos. 91-139 and 91-140)
includes clean-up of groundwater contamination from National Semiconductor
Corporation, the Corporation and others, which the RWQCB claims merged. National
Semiconductor Corporation and the Corporation have been named in the orders as
primarily responsible and have commenced clean-up efforts in accordance with
their respective orders. However, there has been no allocation of responsibility
for the groundwater contamination. The third site (Final Site Clean-up
Requirements Order No. 91-101) is primarily the responsibility of the
Corporation.
In each instance mentioned above, the Corporation conducted appropriate
programs of remedial action that involved soil removal, installation of
monitoring and extraction wells and water treatment systems, disposal of
inoperative tank systems, and repair and alterations to existing facilities. The
final clean-up plan includes continued groundwater monitoring, extraction and
treatment and, in one instance, soil vapor extraction. Federal and State
governmental agencies have approved the final clean-up plans being implemented.
The Corporation has not yet determined to what extent the costs of such remedial
actions will be covered by insurance. The three sites are on the National
Priorities List (Superfund).
If the Corporation fails to satisfy federal compliance requirements or
inadequately performs the compliance measures, the government (a) can bring an
action to enforce compliance, or (b) can undertake the desired response actions
itself and later bring an action to recover its costs and penalties, up to three
times the costs of clean-up activities, if appropriate. It is expected that
these matters will not have a material adverse effect on the financial condition
or results of operations of the Corporation.
In addition, homeowners residing in the vicinity of two of the Superfund
sites filed a class action lawsuit against the Corporation, TRW and Signetics in
the Superior Court of Santa Clara County, California (Case No. 716064). The
class action suit alleged that groundwater contamination caused by the
defendants lowered property values and that the plaintiff class suffered
emotional distress and fear. In May 1993, the action was settled and the
complaint was dismissed with prejudice in July 1993.
2. AMD/Intel Technology Agreement Arbitration. A 1982 technology exchange
agreement (the "1982 Agreement") between AMD and Intel Corporation has been the
subject of a dispute which was submitted to Arbitration through the Superior
Court of Santa Clara County, California and the matter is now at the California
Supreme Court on appeal. The dispute centers around issues relating to whether
Intel breached its agreement with AMD and whether that breach injured AMD, as
well as the remedies available for such a breach to AMD.
In February 1992, the Arbitrator awarded AMD several remedies including the
following: a permanent, royalty-free, nonexclusive, nontransferable worldwide
right to all Intel copyrights, patents, trade secrets and mask work rights, if
any, contained in the then-current version of AMD's Am80386 family of
microprocessors; and a two-year extension, until December 31, 1997, of the
copyright and patent rights granted to AMD. Intel appealed this decision as it
relates to the technology award. On May 22, 1992, the Superior Court in Santa
Clara County confirmed the Arbitrator's award and entered judgment in the
Corporation's favor on June 1, 1992. Intel appealed the decision confirming the
Arbitrator's award in state court. On June 4, 1993, the
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994