AMD 2001 Annual Report Download - page 174

On the date... You Owe Federal Taxes on...
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Your stock option No taxes are due.
grant is approved.
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You exercise your The difference (gain) between the market value of the shares
options and sell of AMD common stock on the exercise date, and the exercise
the shares of AMD price of the options upon purchasing the options. The
stock at a later gain is taxable as ordinary income and subject to mandatory
date. withholding for federal income, FICA, Medicare and
applicable state and local taxes.
When you sell the shares of stock, you owe tax on the
difference between the market value of the shares on the
sale date and the market value of the shares on the option
exercise date. Gains are taxed at the short-term or long-
term capital gains rate based on how long you have held the
shares. The holding period starts on the option exercise
date.
Months Held Capital Gains Rate
12 or less short-term
more than 12 long-term
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You exercise your The difference between the market value of the shares and
options and sell the exercise price of the options. The gain is taxable as
the shares on the ordinary income and subject to mandatory withholding for
same day. federal income, FICA, Medicare and applicable state and
local taxes.
If You Die or Become Totally Disabled
If you have at least 15 years of AMD service and your AMD employment is
terminated because of your death or total disability, here's what happens on
your termination date:
. If you are on an unpaid leave of absence, any options that would have become
vested in the calendar year in which your leave began are immediately vested.
. If you are not on an unpaid leave of absence, you become immediately vested
in any options that would have become vested in that calendar year.
This accelerated vesting of options does not occur if your AMD employment is
terminated because of your death or disability and you have less than 15 years
of service. See the section When You Leave AMD for information on length of time
to exercise after termination.
If You Take a Leave of Absence
You may not exercise any options during an unpaid leave of absence. Also, if
your unpaid leave of absence exceeds 30 consecutive days, the vesting dates for
your unvested options are automatically extended by the number of days by which
your unpaid leave exceeds 30 days. "Unpaid" means that AMD is not paying you a
salary. Unpaid leaves include personal leaves as well as disability, medical,
pregnancy and workers compensation leaves during which you are receiving
disability or workers' compensation benefits through AMD's benefit plans or
insurance. For more details, check with Treasury Services.
When You Leave AMD
You forfeit all unvested options when you leave AMD. If you are not a Vice
President or Officer of AMD, you normally have three months from your
termination date in which to exercise vested options that have not expired. For
example, if March 14 is your final day as an AMD employee, your last day to
purchase vested options is June 14 if it is a regular business day at AMD. If
June 14 is not a regular business day, the final day to buy your options is the
last regular AMD business day before June 14.
However, you (or your beneficiary) have a longer period to exercise options
under the circumstances shown in the table below.
Months to Exercise Vested Options
After Termination
If you Are Not a VP or Officer
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Months to Exercise
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Termination
is Due to
Age at Years of Death or Total Other
Termination Service Disability Terminations +
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less than 50 Any 12 3
50 or more less than 15 12 3
50 or more 15 but less than 20 24* 15*
50 or more 20 or more 36* 27*
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Source: ADVANCED MICRO DEVIC, 10-K, March 07, 2002