AMD 1993 Annual Report Download - page 374

9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. SALE OF SERIAL PREFERRED STOCK
In March 1987, the company sold 345,000 shares of Convertible Exchangeable
Preferred Stock, $.10 par value. Dividends at an annual rate of $30 per share
(6 percent) on the preferred stock are cumulative from the date of original
issue and are payable quarterly in arrears, when and as declared by the
company's Board of Directors. Voluntary and involuntary liquidation value of
each preferred share is $500 plus unpaid dividends. The preferred stock is
convertible at any time at the option of the holder into common stock at the
initial conversion rate of 19.873 common shares for each preferred share. The
preferred stock is exchangeable at the option of the company, in whole but not
in part, on any dividend payment date commencing March 15, 1989, for 6 percent
Convertible Subordinated Debentures due 2012 at the rate of $500 principal
amount of debentures for each preferred share. If exchanged, commencing the
first March 15 following the date of initial issuance of the debentures, the
company is required to make annual payments into a sinking fund to provide for
the redemption of the debentures.
The preferred stock is redeemable for cash at any time at the option of the
company, in whole or in part, at prices declining to $500 per share at March
15, 1997, plus unpaid dividends. Holders of preferred stock are entitled to
limited voting rights under certain conditions.
The preferred stock is held by a depository and 3,450,000 depository shares
have been issued and are listed on the New York Stock Exchange. Each depository
share represents one-tenth of a preferred share, with the holder entitled,
proportionately, to all the rights and preferences of the underlying preferred
stock.
4. STOCKHOLDER RIGHTS PLAN
In February 1990, the company adopted a stockholder rights plan. The plan is
intended to enhance stockholders' value by encouraging potential acquirers to
negotiate directly with the company's Board of Directors, and to protect
stockholders from unfair or coercive takeover practices. In accordance with
this plan, the company declared a dividend distribution of preferred stock
purchase rights at the rate of one right for each share of common stock.
Each right entitles the registered holder to purchase from the company a unit
consisting of one-thousandth of a share of Series A Junior Participating
Preferred Stock, par value $.10 per share, at a purchase price of $65, subject
to adjustment.
The rights will not be exercisable, or transferable apart from
the common stock, until certain events occur. The rights are redeemable by the
company and expire on December 31, 2000.
5. TAXES ON INCOME
Provision for taxes on income consists of:
1993 1992 1991
SFAS 109 SFAS 96 SFAS 96
Thousands METHOD METHOD METHOD
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Current:
U.S. Federal $ 83,351 $ 48,161 $ (7,425)
U.S. State and Local 3,640 7,835 4,611
Foreign National
and Local 2,332 1,863 294
Deferred (prepaid):
U.S. Federal (1,947) (31,239) 2,520
U.S. State and Local 1,798 - -
Foreign National
and Local (203) - -
-------- -------- -------
Provision for taxes
on income $ 88,971 $ 26,620 $ -
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Included in the current tax provisions reflected above are $43.4 million, $10.5
million and $.3 million for 1993, 1992 and 1991, respectively, of stock option
deduction benefits recorded as a credit to shareholders' equity.
Under SFAS No. 109, deferred income taxes reflect the net tax effects of tax
carryforwards and temporary differences between the carrying amounts of assets
and liabilities for financial reporting purposes and the amounts used for
income tax purposes. Significant components of the company's deferred tax
assets and liabilities as of December 26, 1993 and December 28, 1992 as
restated under SFAS No. 109 are as follows:
Thousands 1993 1992
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1994