AMD 1998 Annual Report Download - page 96

developed retroactive to October 1, 1998 through each party's fiscal year-end
1998, presented by the Program Managers to the Executive Board and approved by
the Executive Board by December 3, 1998.
The 4Q98 Cost Equalization payment will be due on December 31, 1998 via
electronic funds transfer as defined in section 1.5.2 below. Time is of the
essence for the receipt of this payment.
The parties agree to establish a Statement of Work by quarter through
its completion for each Project continuing into 1999 and for any Project that
will commence in 1999 and gain approval for each Statement of Work prior to the
beginning of 1999. The parties agree that this does not preclude the addition of
new Projects during 1999.
1.5.2. FOR 1999 AND SUBSEQUENT YEARS. Thirty days after the conclusion
of each quarter, each party will provide a statement to the other stating the
Cost Equalization determination for each Project then pending, including a
summary breakdown of the cost elements.
Processing of device and product test structures or test vehicles,
including equal quantities of transfer wafers for each party, are included in
the scope of Project requirements and, as such, are intended to be included in
the Statements of Work and are subject to Cost Equalization.
Except as set forth in the preceeding paragraph with respect to
transfer wafers, each party will bear its own costs in connection with
technology transfer and installation into production facilities and such costs
will not be subject to the Cost Equalization determination. Costs not subject to
Cost Equalization include process documentation, all reasonable personnel
expenses, including travel, for personnel assigned to assist in a process
transfer, and other similar costs. In the event that one party (first party)
requires more transfer wafers than the other (second party), the quantity of
transfer wafers required by the first party in excess of that required by the
second party will not be subject to Cost Equallization and the cost thereof
shall be borne by the first party.
If either party requests the other party to process material either
because it requires a quantity of transfer wafers in excess of that required by
the other party or for a purpose beyond the scope of a Project such as for the
transfer of a technology, verification of designs, additional processing for
technology evaluation, or product qualification, the non-requesting party will
make commercially reasonable efforts to comply with the request and will charge
the requesting party a price not to exceed actual costs.
Pre-production, pilot production, risk starts, or other product specific
processing are outside the scope of Projects and are not to be included in the
Statements of Work or included in the Cost Equalization determination. This type
of processing by one party on behalf of the other party would be considered
Foundry.
The parties will compare the Cost Equalization statements and the party
with the smaller amount for the quarter will pay the other party fifty percent
(50%) of the difference between the two parties' Cost Equalization amounts
within forty-five (45) days after the end of the quarter. Payment will be made
by electronic funds transfer:
To AMD at:
Bank of America, San Francisco
Source: ADVANCED MICRO DEVIC, 10-K, March 29, 1999