AMD 2002 Annual Report Download - page 67

Table of Contents
stock at a conversion price of $23.38 per share at any time. At this conversion price, each $1,000 principal amount of the 4.75% Debentures will be convertible
into approximately 43 shares of the Company’s common stock. Issuance costs incurred in the amount of approximately $14 million are being amortized ratably,
which approximates the interest method, over the term of the 4.75% Debentures as interest expense.
Beginning on February 5, 2005, the 4.75% Debentures are redeemable by the Company for cash at specified prices expressed as a percentage of the
outstanding principal amount plus accrued and unpaid interest at the Company’s option, provided that the Company may not redeem the 4.75% Debentures prior
to February 5, 2006 unless the last reported sale price of the Company’s common stock is at least 130 percent of the then effective conversion price for at least 20
trading days within a period of 30 consecutive trading days ending within five trading days of the date of the redemption notice.
The redemption prices are as follows for the specified periods:
Period Price
Beginning on February 5, 2005 through February 4, 2006 102.375%
Beginning on February 5, 2006 through February 4, 2007 101.583%
Beginning on February 5, 2007 through February 4, 2008 100.792%
Beginning on February 5, 2008 100.000%
In November 2002, the Company sold $402.5 million of 4.50% Convertible Senior Notes due December 1, 2007 (the 4.50% Notes) in a registered
offering. Interest on the 4.50% Notes is payable semiannually in arrears on December 1 and June 1 of each year, beginning June 1, 2003. Beginning on
December 4, 2005, the 4.50% Notes are redeemable by the Company at its option for cash at specified prices expressed as a percentage of the outstanding
principal amount plus accrued and unpaid interest provided that the Company may not redeem the 4.50% Notes unless the last reported sale price of its common
stock is at least 150 percent of the then effective conversion price for at least twenty trading days within a period of thirty trading days ending within five trading
days of the date of the redemption notice.
The redemption prices are as follows for the specified periods:
Period Price
Beginning on December 4, 2005 through November 30, 2006 101.8%
Beginning on December 1, 2006 through November 30, 2007 100.9%
On December 1, 2007 100.0%
The 4.50% Notes are convertible at the option of the holder at any time prior to the close of business on the business day immediately preceding the
maturity date of December 1, 2007, unless previously redeemed or repurchased, into shares of common stock at a conversion price of $7.37 per share, subject to
adjustment in certain circumstances. At this conversion price, each $1,000 principal amount of the 4.50% Notes will be convertible into approximately 135
shares of the Company’s common stock. Issuance costs incurred in the amount of approximately $12 million are being amortized ratably, which approximates
the interest method, over the term of the 4.50% Notes as interest expense.
Holders have the right to require the Company to repurchase all or a portion of its 4.50% Notes in the event that it undergoes specified fundamental
changes, including a change of control. In each such case, the redemption or repurchase price would be 100 percent of the principal amount of the 4.50% Notes
plus accrued and unpaid interest.
On September 27, 2002, the Company entered into a term loan and security agreement with a domestic financial institution (the September 2002 Loan
Agreement). Under the agreement, the Company can borrow up to
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Source: ADVANCED MICRO DEVIC, 10-K, March 14, 2003