AMD 2001 Annual Report Download - page 173

. Cash Purchase
You can pay for the options yourself or arrange for your broker to pay for them.
On the next business day after receipt of your completed Stock Option Exercise
form, Treasury Services will notify you of the cost for the exercised options
plus applicable federal, state, Social Security and Medicare tax withholding.
You must give Treasury Services a cashier's check or money order for the
exercise cost plus taxes within two weeks from the exercise date. You may elect
to receive either a stock certificate or have your shares electronically
transferred to your brokerage account.
. Financing through a Broker (also known as "Same Day Sale and Exercise")
You can contact any of AMD's designated brokers or you can do an electronic
trade through E*Trade (refer to the E*Trade OptionsLink brochure). If you elect
a "same day exercise and sale," you may:
. Sell all shares.
. Sell enough shares to cover the cost of the exercise and associated
required taxes. You will then receive the remaining shares from
your exercise.
. Sell only the number of shares you decide on and receive the balance of the
shares. If the shares sold do not cover all the costs of exercising the
options and associated required taxes, you must pay the balance through
sending a certified check or bank wire to Treasury Services on the next
business day following your exercise date. This option may not be available
through E*Trade.
. Stock Swap Exercise
You can use AMD shares you have owned at least six months to pay for the
exercise price of the options. To initiate a stock swap, you must complete and
submit a Share Withholding/Delivery Election form in addition to a Stock Option
Exercise form to Treasury Services.
. Stock Withholding Exercise
You can exercise options and pay the required tax withholding from the shares of
AMD stock that you would otherwise receive through exercising your options. You
receive the balance of the AMD shares obtained through the purchased options. To
withhold shares to pay your taxes, you must send a completed Share
Withholding/Delivery Election form and a Stock Option Exercise form to Treasury
Services. You may not pay the exercise price of your options by having Treasury
Services withhold some of the shares that would otherwise be issued to you.
. When To Exercise
It is entirely your decision when to exercise vested options, keeping in mind
the expiration date for your options. (See the sections Exercising Stock Options
and When You Leave AMD.)
The timing of an exercise and/or sale can have a large impact on any value you
ultimately obtain from the option. In deciding when to exercise you may wish to
consult with your financial advisor, stockbroker, or reputable publications in
which stock market analysts voice their opinions about future potential stock
values. It is also prudent to consult with a tax advisor to determine the impact
of exercising stock options on your tax obligations.
. Taxes
Your stock options are what the IRS calls "nonqualified" options. The table on
the next page summarizes the current U.S. federal tax consequences associated
with these options. Depending on your state of residence, you may also owe state
and local taxes when you exercise your options or sell the shares obtained by
exercising your options.
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002