AMD 2008 Annual Report Download - page 159

Under the Master Transaction Agreement, the cash consideration that WCH and ATIC will pay and the
securities that they will receive are as follows:
• Cash to be paid by WCH to AMD for the purchase of 58 million shares of AMD common stock and
warrants: estimated to be $124 million, assuming a $2.15 per share price (which was the average of the
closing prices per share of the Company’s common stock on the NYSE during the 20 trading days
immediately prior to and including December 12, 2008);
• Cash to be paid by ATIC to The Foundry Company for 4% Class A Convertible Subordinated Notes of
The Foundry Company, convertible into 201,810 Class A Preferred Shares: $202 million;
• Cash to be paid by ATIC to The Foundry Company for 11% Class B Convertible Subordinated Notes of
The Foundry Company, convertible into 807,240 Class B Preferred Shares: $807 million;
• Cash to be paid by ATIC to The Foundry Company for 218,190 Class A Preferred Shares of The
Foundry Company: $218 million;
• Cash to be paid by ATIC for 872,760 Class B Preferred Shares of The Foundry Company: $873 million,
which includes $700 million paid to the Company for 700,000 Class B Preferred Shares of The Foundry
Company. The Class B Preferred Shares are, by their terms, deemed to accrete in value at a rate of
12% per year, compounded semiannually. This accreted value will be taken into account upon certain
distributions to the holders or upon conversion of the Class B Preferred Shares.
Upon closing of the transactions contemplated by the Master Transaction Agreement, the Company and
ATIC will hold 1,090,950, or 83.3%, and 218,190, or 16.7%, respectively, of The Foundry Company Class A
Preferred Shares and ATIC will own 100% of the Class B Preferred Shares and the Convertible Notes.
NOTE 19: Subsequent Events
In January 2009, the Company completed the sale of certain graphics and multimedia technology assets and
intellectual property that were formerly part of its Handheld business unit to Qualcomm Incorporated for $65
million in cash. In addition, certain employees of the Handheld business were transferred to Qualcomm. The
assets the Company sold to Qualcomm had a carrying value of approximately $32 million and were classified as
assets held for sale and included in the caption “Prepaid expenses and other current assets” in the Company’s
2008 consolidated balance sheet. As part of the Company’s agreement with Qualcomm, the Company retained
the AMD Imageon™ media processor brand and the rights to continue selling the products that were part of the
Handheld business unit. The Company intends to support existing handheld products and customers through the
current product lifecycles. However, the Company does not intend to develop any new handheld products or
engage new customer programs beyond those already committed.
In January 2009, the Company announced additional headcount reductions, primarily focused on back-end
manufacturing and sales, marketing, and general and administrative functions, and cost reduction activities
including temporary salary reductions for employees in the United States and Canada and suspension of certain
employment benefits such as the Company’s 401(k) plan matching program. These additional cost reduction
actions will result in an additional restructuring charges in the first and second quarters of 2009.
In February 2009, the Company repurchased approximately $158 million in principal amount of the 6.00%
Notes by paying approximately $57 million cash which will result in a gain in the first quarter of 2009.
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