AMD 2000 Annual Report Download - page 339

It is the intention of the parties hereto that from and after the Effective
Date AMD Holding shall purchase Products which it orders from AMD Saxonia and
are Shipped by AMD Saxonia in accordance with the requirements of this
Agreement. The purchase price for the Products will be set at a price per Wafer
equal to the Selling Price Per Wafer, which will be determined on a "cost-plus"
basis for any Month.
For all Products Shipped during any Month, AMD Holding shall make payments
to AMD Saxonia based on the Selling Price Per Wafer. In the event no shipments
of Products are made during any Month following the Effective Date, AMD Holding
shall at the end of such Month make advance payments to AMD Saxonia, against
Products to be Shipped during the following Month, in an amount corresponding to
the Applicable Percentage (as defined in Section 3.03(b)) of AMD Saxonia's Total
Costs incurred in that Month. Such advance payments shall be included as Total
Costs in the next Month in which Products are Shipped.
Within 25 days after the end of each Month (other than one in which no
Products are Shipped), AMD Saxonia shall determine the Selling Price Per Wafer
for such Month on the basis of its Total Costs actually incurred during that
Month and the Applicable Percentage in accordance with Section 3.03. The
parties acknowledge that this pricing mechanism may have the result of dictating
a high price per Wafer for any Month in which only relatively few Wafers are
Shipped and that after the Effective Date it will result in a full cost
reimbursement during each year (except for the first twelve Months after the
Effective Date during which the Applicable Percentage is 75%).
In the event Start-up Cost Savings are realized or Excess Start-up Costs
are incurred prior to the Effective Date, these will be compensated in eight
equal quarterly-payments after the Effective Date pursuant to Section 3.04.
Section 3.02. Intentionally Deleted.
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Section 3.03. Definition of Selling Price Per Wafer.
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(a) Promptly, but in any event not later than 25 days after the end of
each Month, the Selling Price Per Wafer for that Month shall be calculated in
accordance with the formula contained in Section 3.03(b). Such calculation shall
be based on the Total Costs actually incurred during such Month and the Actual
Volume for such Month.
(b) For any Month the "Selling Price Per Wafer" shall be calculated in
accordance with the following formula:-
Selling Price Applicable
Per Wafer = TC x Percentage
----------------
AV
where:
"Applicable
Percentage" shall be (i) 75% in the case of the first twelve Months,
(ii) 105% in the case of the next twelve Months and (iii)
110% in the case of each subsequent Month;
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Source: ADVANCED MICRO DEVIC, 10-K405, March 20, 2001