AMD 2015 Annual Report Download - page 111

Shareholder Derivative Lawsuit
On March 20, 2014, a purported shareholder derivative lawsuit captioned Wessels v. Read, et al., Case
No. 1:14-cv-262486 (“Wessels”) was filed against the Company (as a nominal defendant only) and certain of the
Company’s directors and officers in the Santa Clara County Superior Court of the State of California. The
complaint purports to assert claims against the Company and certain individual directors and officers for breach
of fiduciary duty, waste of corporate assets and unjust enrichment. The complaint seeks damages allegedly
caused by alleged materially misleading statements and/or material omissions by the Company and the individual
directors and officers regarding its 32nm technology and “Llano” product, which statements and omissions, the
plaintiffs claim, allegedly operated to artificially inflate the price paid for the Company’s common stock during
the period. On April 27, 2015, a similar purported shareholder derivative lawsuit captioned Christopher Hamilton
and David Hamilton v. Barnes, et al., Case No. 5:15-cv-01890 (“Hamilton”) was filed against the Company (as a
nominal defendant only) and certain of the Company’s directors and officers in the United States District Court
for the Northern District of California. The case was transferred to the judge handling the Hatamian Lawsuit and
is now Case No. 4:15-cv-01890. On September 29, 2015, a similar purported shareholder derivative lawsuit
captioned Jake Ha v Caldwell, et al., Case No. 3:15-cv-04485 (“Ha”) was filed against the Company (as a
nominal defendant only) and certain of its directors and officers in the United States District Court for the
Northern District of California. The lawsuit also seeks a court order voiding the shareholder vote on AMD’s
2015 proxy. The case was transferred to the judge handling the Hatamian Lawsuit and is now Case No. 4:15-cv-
04485. The Wessels, Hamilton and Ha shareholder derivative lawsuits are currently stayed.
Based upon information presently known to management, the Company believes that the potential liability,
if any, will not have a material adverse effect on its financial condition, cash flows or results of operations.
Environmental Matters
The Company is named as a responsible party on Superfund clean-up orders for three sites in Sunnyvale,
California that are on the National Priorities List. Since 1981, the Company has discovered hazardous material
releases to the groundwater from former underground tanks and proceeded to investigate and conduct
remediation at these three sites. The chemicals released into the groundwater were commonly used in the
semiconductor industry in the United States in the wafer fabrication process prior to 1979.
In 1991, the Company received Final Site Clean-up Requirements Orders from the California Regional
Water Quality Control Board relating to the three sites. The Company has entered into settlement agreements
with other responsible parties on two of the orders. During the term of such agreements, other parties have agreed
to assume most of the foreseeable costs as well as the primary role in conducting remediation activities under the
orders. The Company remains responsible for additional costs beyond the scope of the agreements as well as all
remaining costs in the event that the other parties do not fulfill their obligations under the settlement agreements.
To address anticipated future remediation costs under the orders, the Company has computed and recorded
an estimated environmental liability of approximately $4 million and has not recorded any potential insurance
recoveries in determining the estimated costs of the cleanup. The progress of future remediation efforts cannot be
predicted with certainty and these costs may change. The Company believes that any amount in addition to what
has already been accrued would not be material.
Other Legal Matters
The Company is a defendant or plaintiff in various actions that arose in the normal course of business. With
respect to these matters, based on the management’s current knowledge, the Company believes that the amount
or range of reasonably possible loss, if any, will not, either individually or in the aggregate, have a material
adverse effect on the Company’s financial position, results of operations, or cash flows.
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