AMD 2010 Annual Report Download - page 91

company established under the laws of the Emirate of Abu Dhabi and wholly owned by the Government of the
Emirate of Abu Dhabi, and WCH, acting through its general partner, West Coast Hitech G.P., Ltd., a corporation
organized under the laws of the Cayman Islands, pursuant to which the Company formed GF. At the closing of
these transactions (Closing), the Company contributed certain assets and liabilities to GF, including, among other
things, shares of the groups of German subsidiaries owning Fab 1 Module 1 (formerly Fab 36) and Fab 1 Module
2 (formerly Fab 30/38) (Dresden Subsidiaries), certain manufacturing assets, real property, tangible personal
property, employees, inventories, books and records, a portion of the Company’s patent portfolio, intellectual
property and technology, rights under certain material contracts and authorizations necessary for GF to carry on
its business. In exchange, the Company received GF securities consisting of one Class A Ordinary Share,
1,090,950 Class A Preferred Shares and 700,000 Class B Preferred Shares, and the assumption of certain
liabilities by GF. ATIC contributed $1.4 billion of cash to GF in exchange for GF securities consisting of one
Class A Ordinary Share, 218,190 Class A Preferred Shares, 172,760 Class B Preferred Shares, $202 million
aggregate principal amount of 4% Class A Subordinated Convertible Notes (the Class A Notes) and $807 million
aggregate principal amount of 11% Class B Subordinated Convertible Notes (the Class B Notes), and transferred
$700 million of cash to the Company in exchange for the transfer by the Company of 700,000 GF Class B
Preferred Shares.
At the Closing, the Company also issued to WCH, for an aggregate purchase price of $125 million,
58 million shares of its common stock and warrants to purchase 35 million shares of its common stock at an
exercise price of $0.01 per share (the Warrants). The Warrants are currently exercisable and expire on March 2,
2019. The shares issuable under these Warrants have been included in the Company’s basic and diluted earnings
per share (EPS) calculation since the third quarter of 2009 when the Warrants became exercisable. The Company
classifies the Warrants as permanent equity in the consolidated balance sheet.
Under the Master Transaction Agreement, the cash consideration that WCH and ATIC paid and the
securities that they received are as follows:
• Cash paid by WCH to AMD for the purchase of 58 million shares of AMD common stock and
Warrants: $125 million;
• Cash paid by ATIC to GF for the aggregate principal amount of Class A Notes, which are convertible
into 201,810 Class A Preferred Shares: $202 million;
• Cash paid by ATIC to GF for the aggregate principal amount of Class B Notes, which are convertible
into 807,240 Class B Preferred Shares: $807 million;
• Cash paid by ATIC to GF for 218,190 Class A Preferred Shares: $218 million;
• Cash paid by ATIC to GF for 172,760 Class B Preferred Shares: $173 million; and
• Cash paid by ATIC to AMD for 700,000 Class B Preferred Shares: $700 million.
At the Closing, the Company and ATIC owned 1,090,950, or 83%, and 218,190, or 17%, respectively, of
Class A Preferred Shares, and ATIC owned 100% of the Class B Preferred Shares and 100% of the Class A
Notes and Class B Notes.
In November 2009, upon the settlement of the Intel litigation (discussed in Note 11) and the execution of a
patent cross license agreement between the Company and Intel, the requirements satisfying the Reconciliation
Event were met. As a result, GF’s Class A and Class B Preferred Shares vote on an as converted basis with any
outstanding GF Ordinary Shares.
Class B Preferred Shares. The Class B Preferred Shares rank senior in right of payment to all other classes
or series of equity securities of GF for purposes of dividends, distributions and upon a liquidation, dissolution or
winding up of GF (Liquidation Event). Each Class B Preferred Share is deemed to accrete in value at a rate of
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