AMD 1994 Annual Report Download - page 45

AMD EXECUTIVE BONUS PLAN
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IV. LONG-TERM PERFORMANCE PLAN (LTPP)
The LTPP has a target bonus of 30% of base salary and a maximum
opportunity of 60% for all participants. It is based on sustained
Corporate performance on both financial and sales growth measures relative
to AMD's competitive marketplace over a rolling three-year period.
The actual LTPP bonus as a percent of salary is the product of two
multipliers (the Financial Performance Multiplier and the Sales
Performance Multiplier) times the 30% target payout. The multipliers are
derived from a Financial Performance Delta and a Sales Performance Delta,
both representing comparisons against the external marketplace. Their
derivations are described as follows:
A. Financial Performance Delta is the difference between AMD's Return
on Equity, ROE (AMD), over a three-year period and the three-year
average Return on Equity for the Standard and Poor's 500, ROE (S&P),
for the same period.
The Financial Performance Delta is calculated as follows:
3-Year ROE (AMD) - 3-Year ROE (S&P) = Financial Performance Delta
Three-year ROE (AMD) is calculated by dividing AMD's total Net Income
(N.I.) earned over the three-year period (Year 1 through Year 3) by the
sum of AMD's average annual Shareholders' Equity (S.E.) over the same
period. Average annual S.E. is the simple average of the year-beginning
and year-ending S.E.
Three-year ROE (S&P) is calculated by averaging ROE reported for the S&P
500 for the period (Year 1 through Year 3):
3-Year ROE (S&P) = ROE Year 1 + ROE Year 2 + ROE Year 3
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 1995