AMD 1994 Annual Report Download - page 14

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.
A notice dated October 3, 1994 was received by the Corporation from the
Department of Ecology of the State of Washington indicating that the Department
had determined the Corporation to be a potentially liable person for the release
of hazardous substances on a site located in Yakima, Washington. The
Corporation is currently investigating this claim. The Corporation believes
that the foregoing environmental matter will not have a material adverse effect
on the financial condition or results of operations of the Corporation.
2. AMD/Intel Litigations and Settlement. On January 11, 1995, the
Corporation reached an agreement with Intel Corporation ("Intel") to settle all
currently outstanding litigation between the companies. The terms of the
settlement include the following:
(1) AMD will have a fully paid-up, nonexclusive, world-wide, royalty-
free, perpetual license to copy and distribute the microcode and
control code in the Intel287(TM), Intel386(TM) and Intel486(TM)
microprocessor product families.
(2) AMD agreed that it has no right to copy any other Intel microcode
including the Pentium(TM) Processor microcode, the P6 microcode and
the 486 ICE (in-circuit emulation) microcode.
(3) The companies agreed to negotiate a new patent cross-license
agreement to become effective January 1, 1996.
(4) AMD agreed to pay Intel $58 million in settlement of claims for past
damages related to AMD's distribution of Am486(R) microprocessors
containing Intel's 486 ICE microcode. As ordered in a 1992
arbitration between the companies, Intel will pay AMD approximately
$18 million in damages (which includes interest) awarded by the
arbitrator for breach of contract and will not contest certain
rights granted AMD in the arbitration which are described more fully
below under "AMD/Intel Technology Agreement Arbitration." The
Corporation recorded both the ICE case damages and the arbitration
award in 1994.
(5) Intel and AMD will drop all cases against each other, including
appeals, currently pending in the courts.
(6) AMD will have the right to use foundries for Am486 products
containing Intel microcode for up to 20 percent of annual total unit
shipments of Am486 microprocessors.
(7) AMD and its customers will receive a license for Intel's "Crawford
'338" patent, covering memory management.
(8) The two companies agreed not to initiate legal action against one
another for any activity occurring prior to January 6, 1995.
The settlement agreement resolved the following legal proceedings which had
been pending between the companies:
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1995