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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the fiscal year ended December 26, 1999
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
For the transition period from to
Commission File Number 1-7882
ADVANCED MICRO DEVICES, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1692300
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One AMD Place,
Sunnyvale, California 94086
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 732-2400
Securities registered pursuant to Section 12(b) of the Act:
(Name of each exchange
(Title of each class) on which registered)
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$.01 Par Value Common Stock New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [X]
Aggregate market value of the voting stock held by non-affiliates as of
February 28, 2000.
$5,725,334,007
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
152,006,873 shares as of February 28, 2000.
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DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Annual Report to Stockholders for the fiscal year ended
December 26, 1999, are incorporated into Parts II and IV hereof.
(2) Portions of the Proxy Statement for the Annual Meeting of Stockholders to
be held on April 27, 2000, are incorporated into Part III hereof.
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AMD, Advanced Micro Devices, K86, AMD-K6, AMD Athlon and 3DNow! are either
our trademarks or our registered trademarks. Vantis is a trademark of Lattice
Semiconductor Corporation. Microsoft, Windows, Windows NT and MS-DOS are
either registered trademarks or trademarks of Microsoft Corporation. Alpha is
a trademark of Compaq Computer Corporation. Pentium is a registered trademark
of Intel Corporation. Other terms used to identify companies and products may
be trademarks of their respective owners.
PART I
ITEM 1. BUSINESS
Cautionary Statement Regarding Forward-Looking Statements
The statements in this report that are forward-looking are based on current
expectations and beliefs and involve numerous risks and uncertainties that
could cause actual results to differ materially. The forward-looking
statements relate to, among other things, operating results; anticipated cash
flows; capital expenditures; adequacy of resources to fund operations and
capital investments; our ability to transition to new process technologies;
our ability to produce AMD Athlon(TM) microprocessors in the volume required
by customers on a timely basis; our ability, and the ability of third parties,
to provide timely infrastructure solutions (motherboards and chipsets) to
support AMD Athlon microprocessors; our ability to increase customer and
market acceptance of AMD Athlon microprocessors; our ability to maintain
average selling prices for AMD Athlon microprocessors; our ability to increase
manufacturing capacity to meet the demand for Flash memory products; the
effect of foreign currency hedging transactions; our new submicron integrated
circuit manufacturing and design facility located in Dresden, Germany (Dresden
Fab 30); and the Fujitsu AMD Semiconductor Limited (FASL) manufacturing
facilities. For a discussion of the factors that could cause actual results to
differ materially from the forward-looking statements, see "Financial
Condition" and "Risk Factors" and such other risks and uncertainties as set
forth below in this report or detailed in our other Securities and Exchange
Commission reports and filings.
General
Advanced Micro Devices, Inc. was incorporated under the laws of Delaware on
May 1, 1969. Our mailing address and executive offices are located at One AMD
Place, Sunnyvale, California 94086, and our telephone number is (408) 732-
2400. Unless otherwise indicated, references to "AMD," "we" and "us" in this
report include our subsidiaries.
We are a semiconductor manufacturer with manufacturing facilities in the
U.S., Europe and Asia and sales offices throughout the world. Our products
include a wide variety of industry-standard integrated circuits (ICs) which
are used in many diverse product applications such as telecommunications
equipment, data and network communications equipment, consumer electronics,
personal computers (PCs) and workstations.
For segment information with respect to sales, operating results and
identifiable assets, refer to the information set forth in Note 9 of the
Consolidated Financial Statements contained in our 1999 Annual Report to
Stockholders.
For a discussion of the risk factors related to our business operations,
please see the "Cautionary Statement Regarding Forward-Looking Statements" and
"Risk Factors" and "Financial Condition" sections set forth in Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in our 1999 Annual Report to Stockholders.
The IC Industry
The IC market has grown dramatically over the past ten years, driven
primarily by the demand for electronic business and consumer products. Today,
virtually all electronic products use ICs, including PCs and related
peripherals, voice and data communications and networking products, facsimile
and photocopy machines, home entertainment equipment, industrial control
equipment and automobiles.
The market for ICs can be divided into separate markets for digital and
analog devices. We participate primarily in the market for digital ICs. The
three types of digital ICs used in most electronic systems are:
. microprocessors, which are used for control and computing tasks;
. memory circuits, which are used to store data and programming
instructions; and
. logic circuits, which are employed to manage the interchange and
manipulation of digital signals within a system.
A discussion of the principal parts of the digital IC market in which we
participate follows.
2
The Microprocessor Market
The microprocessor, an IC generally consisting of millions of transistors,
serves as the central processing unit, or brain, of a computer system. The
microprocessor is typically the most critical component to the performance and
efficiency of a PC. The microprocessor controls data flowing through the
electronic system and manipulates such data as specified by the hardware or
software which controls the system. In 1981, IBM introduced its first PC
containing a microprocessor based upon the x86 instruction set developed by
Intel Corporation and utilizing the Microsoft(R) Corporation MS-DOS(R)
operating system. As circuit design and very large scale integration process
technology have evolved, performance and functionality of each new generation
of x86 microprocessors have increased.
The x86 microprocessor market is characterized by short product life cycles,
intense price competition and rapid advances in product design and process
technology. Today, the greatest demand for microprocessors is from PC
manufacturers. In particular, PC manufacturers require microprocessors which
are Microsoft Windows(R) compatible and are based on the x86 instruction set.
Improvements in the performance characteristics of microprocessors and
decreases in production costs resulting from advances in process technology
have broadened the market for PCs and increased the demand for
microprocessors. The microprocessor market has been dominated by Intel for
many years.
The PC original equipment manufacturer (OEM) market is highly competitive.
Most PC suppliers have evolved from fully integrated manufacturers with
proprietary system designs to vendors focused on building brand recognition
and distribution capabilities. Almost all of these suppliers now rely on Intel
or on third-party manufacturers for the major subsystems of their PCs, such as
the motherboard. These suppliers are also increasingly outsourcing the design
and manufacture of complete systems. The third-party manufacturers of these
subsystems, based primarily in Asia, are focused on providing PCs and
motherboards that incorporate the latest trends in features and performance at
low prices. Increasingly, these third-party manufacturers are also supplying
fully configured PC systems through alternative distribution channels.
Embedded processors are also an important part of the microprocessor market.
Embedded processors are general purpose devices used to carry out a single
application with limited user interface and programmability. A system designed
around an embedded processor usually cannot be programmed by an end user
because the system is preprogrammed to execute a specific task. Key markets
for embedded processors include telecommunications, networking, office
automation, storage, automotive applications and industrial control.
The Memory Market
Memory ICs store data and programs, and are characterized as either volatile
or non-volatile. Volatile devices lose their stored information after
electrical power is shut off, while non-volatile devices retain their stored
information. The three most significant categories of semiconductor memory are
(1) Dynamic Random Access Memory (DRAM) and (2) Static Random Access Memory
(SRAM), both of which are volatile memories, and (3) non-volatile memory,
which includes Read-Only Memory (ROM), Erasable Programmable Read-Only Memory
(EPROM), Electrically Erasable Electrically Programmable Read-Only Memory
(EEPROM) and Flash memory devices. DRAM provides large capacity main memory,
and SRAM provides specialized high-speed memory. We do not produce any DRAM
products, which are the largest part of the memory market, or SRAM products.
Flash and other non-volatile memory devices are used in applications in which
data must be retained after power is turned off. However, ROM cannot be
rewritten, EPROM requires ultraviolet light as part of an erasure step before
it can be rewritten, and EEPROM utilizes a larger, more expensive, memory
cell.
Several factors have contributed to an increasing demand for memory devices
in recent years, including the:
. expanding unit sales of PCs in the business and consumer markets;
. increasing use of cellular phones;
. increasing use of PCs to perform memory-intensive graphics and
multimedia functions;
3
. volume of memory required to support faster microprocessors;
. proliferation of increasingly complex PC software; and
. increasing performance requirements of workstations, servers and
networking and telecommunications equipment.
Flash memory devices are being utilized for an expanding range of uses.
Flash memory devices have a size and cost advantage over EEPROM devices, and
the ability of Flash memory devices to be electrically rewritten to update
parameters or system software provides greater flexibility and ease of use
than other non-volatile memory devices, such as ROM or EPROM devices. Flash
memory devices can be used to provide storage of control programs and system-
critical data in communication devices such as cellular telephones and routers
(devices used to transfer data between local area networks). Another common
application for Flash memory product is in PC cards, which are inserted into
notebook and subnotebook computers or personal digital assistants to provide
added data storage.
The Logic Market
Logic devices consist of structurally interconnected groupings of simple
logical "AND" and logical "OR" functions, commonly described as "gates."
Typically, complex combinations of individual gates are required to implement
the specialized logic functions required for system applications. The greater
the number of gates on a logic device, the higher that logic device's density
and, in general, device cost (for a particular process and architecture).
Logic devices are generally grouped into five families of products (from
lowest density to highest density):
. standard logic devices;
. programmable logic devices (PLDs);
. conventional gate-arrays;
. standard cells; and
. full custom ICs.
Conventional gate-arrays, standard cells and full-custom ICs are often
referred to as application-specific ICs (ASICs).
Many manufacturers of electronic systems are striving to develop new and
increasingly complex products to rapidly address evolving market
opportunities. Achievement of this goal often precludes the use of standard
logic ICs and ASICs. Standard logic ICs generally perform simple functions and
are not customizable, limiting a manufacturer's ability to adequately tailor
an end-product system. Although ASICs can be manufactured to perform
customized functions, they generally involve relatively high initial design,
engineering and manufacturing costs, significant design risks, and may
increase an end-product's time to market. As a result, ASICs are generally
limited to high-volume products and products for which time to market may be
less critical.
Unlike ASICs and standard logic ICs, PLDs are standard products, purchased
by system manufacturers in an unprogrammed or blank state. Each system
manufacturer may then program the PLDs to perform a variety of specific logic
functions. Certain PLDs are reprogrammable. This means that the logic
configuration can be modified after the device is initially programmed, and,
sometimes, while the PLD remains in the end-product system. The programmable
and reprogrammable characteristics of PLDs reduce the risk of inventory
obsolescence for system designers and distributors. The risk is reduced
because systems designers and distributors can stock a large number of
standard PLDs that may be programmed for a variety of applications. In
addition, system designers may make last minute design changes, reduce time to
market and accelerate design cycle time. Compared to standard logic ICs and
ASICs, PLDs allow system designers to more quickly design and implement custom
logic. On June 15, 1999, we sold Vantis Corporation, our programmable logic
subsidiary, and we now function as a foundry and provide administrative
services to Vantis.
4
Product Groups
In 1999, we participated in all three technology areas within the digital IC
market--microprocessors, memory circuits and logic circuits--through our
product groups--Computation Products Group (CPG), Memory Group, Communications
Group and our programmable logic subsidiary, Vantis Corporation. On June 15,
1999, we sold Vantis to Lattice Semiconductor Corporation.
Computation Products Group
CPG products ($1.7 billion, or 58 percent, of our 1999 net sales) include
microprocessors and core logic products, with the majority of CPG's net sales
being derived from Microsoft Windows compatible microprocessors, which are
used primarily in PCs.
In 1999, our most significant microprocessor product was the AMD-K6-2(R)
processor with 3DNow!(TM) technology, a sixth-generation microprocessor
product and a member of the K86(TM) microprocessor family. The K86
microprocessors are based on superscalar RISC architecture and are designed to
be compatible with operating system software such as Windows NT(R), Windows 98
and their predecessor operating systems, Linux, Netware and UNIX. The AMD-K6
microprocessor was designed to be competitive in performance to Intel's sixth-
generation microprocessor, the Pentium(R) II, which was designed by Intel
specifically for desktop PCs.
We commenced initial shipments of AMD Athlon(TM) microprocessors in June
1999 and began volume shipments in the second half of 1999. The AMD Athlon
processor is an x86-compatible, seventh-generation design featuring:
. a superpipelined, nine-issue superscalar microarchitecture optimized for
high clock frequency;
. a fully pipelined, superscalar floating point unit;
. high-performance backside L2 cache interface;
. enhanced 3DNow!(TM) technology with 24 additional instructions designed
to improve integer math calculations, data movements for Internet
streaming, and digital signal processor (DSP) communications; and
. a system bus which is a 200 MHz system interface based on the Alpha(TM)
EV6 bus protocol with support for scalable multiprocessing.
Sales of AMD Athlon processors are highly dependent in 2000 upon the
successful design, manufacture and delivery of processor modules by
subcontractors. Overall CPG sales growth in 2000 is dependent upon a
successful production ramp to .18 micron process technology and copper
interconnect technology, availability of chipsets and motherboards from third
party suppliers and expanding market acceptance of AMD Athlon microprocessors.
Our microprocessor products have in the past significantly impacted, and
will continue in 2000 to significantly impact, our overall revenues, profit
margins and operating results. We plan to continue to make significant capital
expenditures to support our microprocessor products both in the near and long
term. Our ability to increase microprocessor product revenues, and benefit
fully from the substantial financial investments and commitments that we have
made and continue to make related to microprocessors, depends upon the success
of AMD Athlon, AMD-K6 and future generations of K86 microprocessors. The
microprocessor market is characterized by short product life cycles and
migration to ever higher performance microprocessors. To compete successfully
against Intel in this market, we must transition to new process technologies
at a faster pace than before and offer higher performance microprocessors in
significantly greater volumes.
Intel has dominated the market for microprocessors used in PCs for many
years. Because of its dominant market position, Intel has historically set and
controlled x86 microprocessor standards and, thus, dictated the type of
product the market requires of Intel's competitors. In addition, Intel may
vary prices on its microprocessors and other products at will and thereby
affect the margins and profitability of its competitors due to its financial
5
strength and dominant position. Given Intel's industry dominance and brand
strength, Intel's processor marketing and pricing can impact and have impacted
the average selling prices of AMD-K6 and AMD Athlon microprocessors, and
consequently, can impact and has impacted our overall margins. As an extension
of its dominant microprocessor market share, Intel also dominates the PC
platform. As a result, it is difficult for PC manufacturers to innovate and
differentiate their product offerings. We do not have the financial resources
to compete with Intel on such a large scale.
As Intel expanded its dominance over the entirety of the PC system platform,
many PC original equipment manufacturers (OEMs) reduced their system
development expenditures and now purchase microprocessors in conjunction with
core logic chipsets or in assembled motherboards from Intel. PC OEMs are
increasingly dependent on Intel, less innovative on their own and, to a large
extent, distributors of Intel technology. In marketing our microprocessors to
these OEMs and dealers, we depend upon companies other than Intel for the
design and manufacture of chipsets, motherboards, basic input/output system
(BIOS) software and other components. In recent years, many of these third-
party designers and manufacturers have lost significant market share to Intel.
In addition, these companies produce chipsets, motherboards, BIOS software and
other components to support each new generation of Intel's microprocessors
only if Intel makes information about its products available to them in time
to address market opportunities. Delay in the availability of such information
makes, and will continue to make, it increasingly difficult for these third
parties to retain or regain market share. To compete with Intel in this market
in the future, we intend to continue to form closer relationships with third-
party designers and manufacturers of chipsets, motherboards, BIOS software and
other components. Similarly, we intend to expand our chipset and system design
capabilities, and to offer OEMs licensed system designs incorporating our
processors and companion products. We cannot be certain, however, that our
efforts will be successful.
Embedded Processors. Embedded processors are general purpose devices, which
consist of an instruction control unit and an arithmetic and logic unit, and
are used to carry out a single application with limited user interface and
programmability. We also offer a line of C186, C188 and AMD-K6E processors for
use as embedded processors in hard disk drives. We offer an expanding range of
embedded processors based upon x86 microprocessor technology for both
communications as well as handheld computing applications. These embedded
processors are derivative of the microprocessors we sell in PCs.
Memory Group
Memory Group products ($773 million, or 27 percent, of our 1999 net sales)
include Flash memory devices and EPROMs.
Flash Memory Devices. Our Flash memory devices are used in cellular
telephones, networking equipment and other applications that require memory to
be non-volatile and rewritten. These Flash memory devices may be electrically
rewritten. This feature provides greater flexibility and ease of use than
EPROMs and other similar integrated circuits that cannot be electrically
rewritten. Flash memory devices have a size and cost advantage over EEPROM
devices. Communications companies use Flash memory devices in cellular
telephones and related equipment to enable users to add and modify frequently
called numbers and to allow manufacturers to preprogram firmware and other
information. In networking applications, Flash memory devices are used in
hubs, switches and routers to enable systems to store firmware and
reprogrammed Internet addresses and other routing information. Use of Flash
memory devices is proliferating into a variety of other applications, such as
set-top boxes and automotive control systems.
Competition in the market for Flash memory devices is increasing as existing
manufacturers introduce competitive products and industry-wide production
capacity increases, and as Intel continues to aggressively price its Flash
memory products. In 1999, almost all of our Flash memory devices were produced
in Aizu-Wakamatsu, Japan through Fujitsu AMD Semiconductor Limited (FASL), our
joint venture with Fujitsu Limited.
6
EPROMs. EPROMs represent an older generation of erasable, programmable read-
only memory technology which is used primarily in the electronic equipment
industry. These devices are used in cellular telephones, wireless base
stations, telecommunication switching equipment, automotive applications, PC
hard disk drives, printer controllers, industrial machine controls and
numerous other types of electronic equipment to store firmware which controls
the equipment's operation. EPROMs are generally preferred over more expensive
Flash memory devices in applications where end users do not need to reprogram
the information stored on the IC. We believe the market for EPROMS, which is
significantly smaller than the market for Flash memory devices, will continue
to decline as EPROMs are replaced in various applications by Flash memory
devices.
Communications Group
Communications Group products ($298 million, or 10 percent, of our 1999 net
sales) include telecommunication and networking products. In October 1999, we
announced our intention to sell certain assets of the Communications Group.
Telecommunication Products. Our telecommunication products are used
primarily in public communications infrastructure systems, customer premise
equipment and cordless telephony applications. Specifically, the products are
used in infrastructure equipment such as central office switches, digital loop
carriers and digital subscriber loop access multiplexers (DSLAMS), and in
customer premise equipment such as wireless local loop systems, cable
telephony systems, private branch exchange (PBX) equipment and voice over
digital subscriber line (DSL) systems. Among our more significant products for
the communications market are our line card products. In modern telephone
communications systems, voice communications are generally transmitted between
the speaker and the central office switch in analog format, but are switched
and transmitted over longer distances in digital format. Our subscriber line
interface circuits (SLIC) for line cards connect the user's telephone wire to
the telephone company's digital switching equipment. Our SLAC(TM) line cards
are coder/decoders which convert analog voice signals to a digital format and
back. Our DSL products include a coder/decoder device and a modem device for
use in DSLAM applications. Our cordless telephony products include a baseband
controller for the 900 MHz narrow band digital cordless market.
Networking Products. Our networking products are used in the data
communication and networking industry to establish and manage connectivity.
The product portfolio encompasses the following local area network (LAN)
products:
. home networking controllers and physical layer products;
. Ethernet controllers supporting the enterprise and small business
networking areas;
. Ethernet physical layer and repeater products which are used in
enterprise and small business systems solutions; and
. Ethernet physical layer and switch products which are used in
enterprise, small business and telecommunication systems.
Vantis Corporation
On June 15, 1999, we completed the sale of our programmable logic
subsidiary, Vantis Corporation, to Lattice Semiconductor Corporation for
approximately $500 million in cash. We now function as a foundry and provide
administrative services to Vantis.
Through June 15, 1999, Vantis products ($87 million, or 3 percent, of our
1999 net sales) included both complex and simple high performance
complementary metal oxide semiconductor (CMOS) PLDs. We received service fees
of $43 million from Lattice in 1999.
Research and Development; Manufacturing Technology
Our expenses for research and development were $636 million in 1999, $567
million in 1998 and $468 million in 1997. These expenses represented 22
percent of net sales in 1999, 22 percent of net sales in 1998 and
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20 percent of net sales in 1997. Our research and development expenses are
charged to operations as they are incurred. Most of our research and
development personnel are integrated into the engineering staff.
Manufacturing technology is the key determinant in the improvement in most
semiconductor products. Each new generation of process technology has resulted
in products with higher speeds and greater performance produced at lower cost.
We continue to make significant infrastructure investments to enable us to
continue to achieve high volume, high reliability and low cost production
using leading edge process technology.
Our efforts concerning process technologies are focused in two major areas:
logic technology used by our microprocessors and embedded processors, and non-
volatile memory technology used by Flash memory products. Our goals are to
improve product performance, increase manufacturing volumes and reduce unit
costs.
In order to remain competitive, we must continue to make substantial
investments in improving our process technologies. In particular, we have made
and continue to make significant research and development investments in the
technologies and equipment used in the fabrication of our microprocessor
products and in the fabrication of Flash memory devices. If we are not
successful in our microprocessor and Flash memory businesses, we will be
unable to recover such investments, which would have a material adverse effect
on our business. In addition, if we are unable to remain competitive with
respect to process technology we will be materially and adversely affected.
Competition
The IC industry is intensely competitive and, historically, has experienced
rapid technological advances in product and system technologies. After a
product is introduced, prices normally decrease over time as production
efficiency and competition increase, and as successive generations of products
are developed and introduced for sale. Technological advances in the industry
result in frequent product introductions, regular price reductions, short
product life cycles and increased product capabilities that may result in
significant performance improvements. Competition in the sale of ICs is based
on:
. performance;
. product quality and reliability;
. price;
. adherence to industry standards;
. software and hardware compatibility;
. marketing and distribution capability;
. brand recognition;
. financial strength; and
. ability to deliver in large volumes on a timely basis.
In each market in which we participate, we face competition from different
groups of companies. With respect to microprocessors, Intel holds a dominant
market position. With respect to the Memory Group, our principal competitors
are Intel, Sharp, Atmel and ST Microelectronics. We also compete to a lesser
degree with Fujitsu, our joint venture partner in FASL. With respect to the
Communications Group product lines, our principal competitors are Broadcom
Corp., ST Microelectronics, Texas Instruments Incorporated, Infineon
Corporation, NEC Corporation, LM Ericsson, Alcatel, National Semiconductor
Corporation, 3Com Corporation, Intel Corporation, Lucent Technologies Inc.,
Conexant Systems, Inc. and Motorola, Inc.
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Manufacturing Facilities
Our current IC manufacturing facilities are described in the chart set forth
below:
Production
Technology Approximate
Wafer Size (in Clean Room
Facility Location (Diameter in Inches) Microns) (Square Footage)
----------------- -------------------- ----------- ----------------
Austin, Texas
Fab 25................... 8 0.18 120,000
Fab 14/15(1)............. 6 0.5 42,000
Aizu-Wakamatsu, Japan
FASL(2).................. 8 0.35 70,000
FASL II(2)............... 8 0.25 & 0.35 91,000
Sunnyvale, California
SDC...................... 8 0.18 & 0.25 42,500
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(1) We consolidated our Fab 14 and Fab 15 operations in 1999.
(2) We own 49.992 percent of FASL. Fujitsu owns 50.008 percent of FASL.
AMD Saxony Manufacturing GmbH, an indirect wholly owned German subsidiary of
AMD, has constructed and is installing equipment in Dresden Fab 30, a 900,000-
square-foot submicron integrated circuit manufacturing and design facility
located in Dresden, in the State of Saxony, Germany. The building construction
of FASL II, a second Flash manufacturing facility, was completed, equipment
was installed and production was initiated in 1999. We also have foundry
arrangements for the production of our products by third parties.
Our current assembly and test facilities are described in the chart set
forth below:
Approximate
Assembly & Test
Facility Location Square Footage Activity
----------------- --------------- ---------------
Penang, Malaysia............................. 377,000 Assembly & Test
Bangkok, Thailand............................ 78,000 Assembly & Test
Singapore.................................... 162,000 Test
Suzhou, China................................ 30,250 Assembly & Test
We began operations in our new assembly and test facility in Suzhou during
the first quarter of 1999. Foreign manufacturing and construction of foreign
facilities entails political and economic risks, including political
instability, expropriation, currency controls and fluctuations, changes in
freight and interest rates, and loss or modification of exemptions for taxes
and tariffs. For example, if we were unable to assemble and test our products
abroad, or if air transportation between the United States and our overseas
facilities were disrupted, there could be a material adverse effect on our
business.
Certain Material Agreements. Set forth below are descriptions of certain
material contractual relationships we have relating to FASL, Dresden Fab 30
and Motorola.
FASL. In 1993, we formed FASL, a joint venture with Fujitsu, for the
development and manufacture of Flash memory devices. FASL operates two
advanced IC manufacturing facilities in Aizu-Wakamatsu, Japan, for the
production of Flash memory devices. FASL began volume production in the first
quarter of 1995, and utilizes eight-inch wafer processing technologies capable
of producing products with geometrics of .35 micron or smaller. FASL II began
volume production in 1999, and utilizes eight-inch wafer processing
technologies.
We expect FASL II, including equipment, to cost approximately $1 billion
(denominated in yen) when fully equipped. Capital expenditures for FASL II
construction to date have been funded by cash generated from FASL operations
and local borrowings by FASL. To the extent that FASL is unable to secure the
necessary funds for FASL II, we may be required to contribute cash or
guarantee third-party loans in proportion to our 49.992 percent interest in
FASL. As of December 26, 1999, we had loan guarantees of $2 million
(denominated in yen)
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outstanding with respect to these loans. The planned FASL II costs are
denominated in yen and are, therefore, subject to change due to foreign
exchange rate fluctuations. As of December 26, 1999, the exchange rate was
approximately 103.51 yen to one U.S. dollar (which we used to calculate the
amounts denominated in yen).
In connection with FASL, AMD and Fujitsu have entered into various joint
development, cross-license and investment arrangements. Accordingly, the
companies are providing their product designs and process and manufacturing
technologies to FASL. In addition, both companies are collaborating in
developing manufacturing processes and designing Flash memory devices for
FASL. The right of each company to use the licensed intellectual property of
the other with respect to certain products is limited both in scope and
geographic areas. For instance, AMD and Fujitsu have cross-licensed their
respective intellectual property to produce stand-alone Flash memory devices
with geometrics of 0.5 micron or smaller within the joint venture.
Furthermore, our ability to sell Flash memory products incorporating Fujitsu
intellectual property, whether or not produced by FASL, is also limited in
certain territories, including Japan and Asia (excluding Taiwan). Fujitsu is
likewise limited in its ability to sell Flash memory devices incorporating our
intellectual property, whether or not produced by FASL, in certain territories
including the United States and Taiwan.
Dresden Fab 30. AMD Saxony has constructed and is installing equipment in
Dresden Fab 30, a 900,000-square-foot submicron integrated circuit
manufacturing and design facility located in Dresden, in the State of Saxony,
Germany. AMD, the Federal Republic of Germany, the State of Saxony and a
consortium of banks are supporting the project. We currently estimate
construction and facilitization costs of Dresden Fab 30 to be approximately
$1.9 billion (denominated in deutsche marks) when the facility is fully
equipped. In March 1997, AMD Saxony entered into a loan agreement and other
related agreements (the Dresden Loan Agreements) with a consortium of banks
led by Dresdner Bank AG. The Dresden Loan Agreements provide for the funding
of the construction and facilitization of Dresden Fab 30. The funding consists
of:
. equity, subordinated loans and loan guarantees from AMD;
. loans from a consortium of banks; and
. grants, subsidies and loan guarantees from the Federal Republic of
Germany and the State of Saxony.
The Dresden Loan Agreements, which were amended in February 1998 to reflect
planned upgrades in wafer production technology as well as the decline in the
deutsche mark relative to the U.S. dollar, require that we partially fund
Dresden Fab 30 project costs in the form of subordinated loans to, or equity
investments in, AMD Saxony. In accordance with the terms of the Dresden Loan
Agreements, we have invested $421 million as of December 26, 1999 in the form
of subordinated loans and equity in AMD Saxony (denominated in both deutsche
marks and U.S. dollars).
The Dresden Loan Agreements were amended again in June 1999 to remove a
requirement that we sell at least $200 million of our stock by June 30, 1999
in order to fund a $70 million loan to AMD Saxony. In lieu of the stock
offering, we funded the $70 million loan to AMD Saxony with proceeds from the
sale of Vantis.
In addition to support from AMD, the consortium of banks led by Dresdner
Bank AG has made available $850 million in loans (denominated in deutsche
marks) to AMD Saxony to help fund Dresden Fab 30 project costs. AMD Saxony had
$270 million of such loans outstanding as of December 26, 1999.
Finally, the Federal Republic of Germany and the State of Saxony are
supporting the Dresden Fab 30 project, in accordance with the Dresden Loan
Agreements, in the form of:
. guarantees of 65 percent of AMD Saxony bank debt up to a maximum amount
of $850 million;
. capital investment grants and allowances totaling $287 million; and
. interest subsidies totaling $156 million.
Of these amounts (which are all denominated in deutsche marks), AMD Saxony
has received approximately $275 million in capital investment grants and $23
million in interest subsidies as of December 26, 1999. The
10
grants and subsidies are subject to conditions, including meeting specified
levels of employment in December 2001 and maintaining those levels until June
2007. Noncompliance with the conditions of the grants and subsidies could
result in the forfeiture of all or a portion of the future amounts to be
received as well as the repayment of all or a portion of amounts received to
date. As of December 26, 1999, we were in compliance with all of the
conditions of the grants and subsidies.
The Dresden Loan Agreements also require that we:
. provide interim funding to AMD Saxony if either the remaining capital
investment allowances or the remaining interest subsidies are delayed,
in which event the funding would be repaid to AMD as AMD Saxony receives
the grants or subsidies from the state of Saxony;
. fund shortfalls in government subsidies resulting from any default under
the subsidy agreements caused by AMD Saxony or its affiliates;
. guarantee a portion of AMD Saxony's obligations under the Dresden Loan
Agreements up to a maximum of $112 million (denominated in deutsche
marks) until Dresden Fab 30 has been completed;
. fund certain contingent obligations, including obligations to fund
project cost overruns, if any; and
. make funds available to AMD Saxony, after completion of Dresden Fab 30,
up to approximately $75 million (denominated in deutsche marks) if AMD
Saxony does not meet its fixed charge coverage ratio covenant.
Because the amounts under the Dresden Loan Agreements are denominated in
deutsche marks, the dollar amounts set forth herein are subject to change
based on applicable conversion rates. At the end of 1999 the exchange rate was
approximately 1.94 deutsche marks to one U.S. dollar (which we used to
calculate the amounts denominated in deutsche marks). We entered into foreign
currency hedging transactions for Dresden Fab 30 in 1997, 1998 and 1999 and
anticipate entering into additional such foreign currency hedging transactions
in 2000 and in future years.
Motorola. In 1998, we entered into an alliance with Motorola for the
development of Flash memory and logic technology. The alliance includes a
seven-year technology development and license agreement, which was amended on
January 21, 2000 to include certain additional technology, and a patent cross-
license agreement. The agreements provide that we will co-develop with
Motorola future generation logic process and embedded Flash technologies. In
addition, we will receive certain licenses to Motorola's semiconductor logic
process technology, including copper interconnect technology, which may be
subject to variable royalty rates. In exchange, we will develop and license to
Motorola a Flash module design to be used in Motorola's future embedded Flash
products. Motorola will have additional rights, subject to certain conditions,
to make stand-alone Flash devices, and to make and sell certain data
networking devices. The rights to data networking devices may be subject to
variable royalty payment provisions.
Marketing and Sales
Our products are marketed and sold under the AMD trademark. We employ a
direct sales force through our principal facilities in Sunnyvale, California,
and field sales offices throughout the United States and abroad (primarily
Europe and Asia Pacific). We also sell our products through third-party
distributors and independent representatives in both domestic and
international markets pursuant to nonexclusive agreements. The distributors
also sell products manufactured by our competitors, including those products
for which we are an alternate source. One of our OEMs, Compaq Computer
Corporation, accounted for approximately 13 percent of our 1999 net sales. No
other single distributor or OEM customer accounted for 10 percent or more of
our net sales in 1999.
Distributors typically maintain an inventory of our products. In most
instances, our agreements with distributors protect their inventory of our
products against price reductions, as well as products that are slow moving or
have been discontinued. These agreements, which may be canceled by either
party on a specified
11
notice, generally allow for the return of our products if the agreement with
the distributor is terminated. The market for our products is generally
characterized by, among other things, severe price competition. The price
protection and return rights we offer to our distributors could materially and
adversely affect us if there is an unexpected significant decline in the price
of our products.
Our international sales operations entail political and economic risks,
including expropriation, currency controls, exchange rate fluctuations,
changes in freight rates and changes in rates and exemptions for taxes and
tariffs.
Raw Materials
Certain raw materials we use in the manufacture of our products are
available from a limited number of suppliers. For example, a few foreign
companies principally supply several types of the IC packages purchased by us,
as well as by the majority of other companies in the semiconductor industry.
Interruption of supply, increased demand in the industry or currency
fluctuations could cause shortages in various essential materials. We would
have to reduce our manufacturing operations if we were unable to procure
certain of these materials. This reduction in our manufacturing operations
could have a material adverse effect on our business. To date, we have not
experienced significant difficulty in obtaining the raw materials required for
our manufacturing operations.
Environmental Regulations
We could possibly be subject to fines, suspension of production, alteration
of our manufacturing processes or cessation of our operations if we fail to
comply with present or future governmental regulations related to the use,
storage, handling, discharge or disposal of toxic, volatile or otherwise
hazardous chemicals used in our manufacturing processes. Such regulations
could require us to acquire expensive remediation equipment or to incur other
expenses to comply with environmental regulations. Our failure to control the
use, disposal or storage of, or adequately restrict the discharge of,
hazardous substances could subject us to future liabilities and could have a
material adverse effect on our business.
Intellectual Property and Licensing
We have been granted over 2,500 United States patents, and have several
thousand patent applications pending in the United States. In certain cases,
we have filed corresponding applications in foreign jurisdictions. We expect
to file future patent applications in both the United States and abroad on
significant inventions as we deem appropriate.
In January 1995, we reached an agreement with Intel to settle all previously
outstanding legal disputes between the two companies. As part of the
settlement, in December 1995, we signed a five-year, comprehensive cross-
license agreement with Intel which expires on December 31, 2000. The agreement
provides that after December 20, 1999, the parties will negotiate in good
faith a patent cross-license agreement to be effective on January 1, 2001. The
existing cross-license agreement gives AMD and Intel the right to use each
others' patents and certain copyrights, including copyrights to the x86
instruction sets but excluding other microprocessor microcode copyrights. The
cross-license is royalty-bearing for our products that use certain Intel
technologies. We are required to pay Intel minimum non-refundable royalties
during the years 1997 through 2000.
In addition, we have entered into numerous cross-licensing and technology
exchange agreements with other companies under which we both transfer and
receive technology and intellectual property rights. Although we attempt to
protect our intellectual property rights through patents, copyrights, trade
secrets and other measures, we cannot give any assurance that we will be able
to protect our technology or other intellectual property adequately or that
competitors will not be able to develop similar technology independently. We
cannot give any assurance that any patent applications that we may file will
be issued or that foreign intellectual property laws will protect our
intellectual property rights. We cannot give any assurance that any patent
licensed by or issued
12
to us will not be challenged, invalidated or circumvented, or that the rights
granted thereunder will provide competitive advantages to us. Furthermore, we
cannot give any assurance that others will not independently develop similar
products, duplicate our products or design around our patents and other
rights.
From time to time, we have been notified that we may be infringing
intellectual property rights of others. If any claims are asserted against us,
we may seek to obtain a license under the third party's intellectual property
rights. We could decide, in the alternative, to resort to litigation to
challenge these claims. These challenges could be extremely expensive and
time-consuming and could materially and adversely affect our business. We
cannot give any assurance that all necessary licenses can be obtained on
satisfactory terms, or that litigation may always be avoided or favorably
concluded.
Backlog
We manufacture and market standard lines of products. Consequently, a
significant portion of our sales are made from inventory on a current basis.
Sales are made primarily pursuant to purchase orders for current delivery, or
agreements covering purchases over a period of time, which are frequently
subject to revision and cancellation without penalty. Generally, in light of
current industry practice and experience, we do not believe that such
agreements provide meaningful backlog figures or are necessarily indicative of
actual sales for any succeeding period.
Employees
On January 30, 2000, we employed approximately 13,387 employees, none of
whom are represented by collective bargaining arrangements. We believe that
our relationship with our employees is generally good.
Executive Officers of the Registrant
W. J. Sanders III--Mr. Sanders, 63, is Chairman of the Board and Chief
Executive Officer of Advanced Micro Devices, Inc. Mr. Sanders co-founded AMD
in 1969.
Benjamin M. Anixter--Mr. Anixter, 62, is Vice President, External Affairs of
Advanced Micro Devices, Inc., and has been since 1987. Mr. Anixter became a
corporate officer in April of 1999. He has been with AMD since 1971.
Francis P. Barton--Mr. Barton, 53, is Senior Vice President and Chief
Financial Officer of Advanced Micro Devices, Inc. Mr. Barton joined AMD in
September 1998. Before joining AMD, he was Chief Financial Officer for Amdahl
Corporation, where he worked for two years. Before that, Mr. Barton spent 22
years in various financial management positions at Digital Equipment
Corporation, including Vice President, Finance of the Personal Computer
division.
Eugene D. Conner--Mr. Conner, 56, is Executive Vice President, Strategic
Relations of Advanced Micro Devices, Inc. From 1997 to 1999, Mr. Conner served
as Executive Vice President, Operations and as a Member of the Office of the
CEO. Mr. Conner was elected an executive officer in 1981. Mr. Conner joined
AMD in 1969.
Robert R. Herb--Mr. Herb, 38, is Senior Vice President, Chief Sales and
Marketing Officer of Advanced Micro Devices, Inc. In 1998, Mr. Herb became an
officer of AMD and was promoted to Senior Vice President and Co-Chief
Marketing Officer. Before his promotion, Mr. Herb served as the Vice President
of Group Strategic Marketing for the Computation Products Group. Before that,
he was a director of Marketing for the Personal Computer Products Division.
Thomas M. McCoy--Mr. McCoy, 49, is Senior Vice President, General Counsel,
Secretary and Year 2000 Compliance Officer of Advanced Micro Devices, Inc. He
held the office of Vice President, General Counsel and Secretary from 1995 to
1998. Before his appointment as Vice President, General Counsel and Secretary,
Mr. McCoy was with the law firm of O'Melveny and Myers where he practiced law,
first as an associate and then as a partner, from 1977 to 1995.
13
Richard Previte--Mr. Previte, 65, is Vice Chairman of Advanced Micro
Devices, Inc. Mr. Previte was President, Co-Chief Operating Officer from
October 1998 to April 1999; President from 1990 to October 1998; Executive
Vice President and Chief Operating Officer from 1989 to 1999; Chief Financial
Officer and Treasurer from 1969 to 1989; and Chief Administrative Officer and
Secretary from 1986 to 1989.
Hector de J. Ruiz--Dr. Ruiz, 54, is President and Chief Operating Officer of
Advanced Micro Devices, Inc. Dr. Ruiz joined AMD in January 2000. Before
joining AMD, Dr. Ruiz was President of Motorola Inc.'s Semiconductor Products
Sector. Dr. Ruiz held various executive positions with Motorola since 1977.
William T. Siegle--Dr. Siegle, 61, is Senior Vice President, Technology and
Manufacturing Operations, Chief Scientist of Advanced Micro Devices, Inc. Dr.
Siegle was Group Vice President, Technology Development Group and Chief
Scientist from 1997 until 1998. Before his appointment as Group Vice
President, Dr. Siegle served as Vice President, Integrated Technology
Department and Chief Scientist since 1990.
Stanley Winvick--Mr. Winvick, 60, is Senior Vice President, Human Resources
of Advanced Micro Devices, Inc. Before his appointment as Senior Vice
President in 1991, Mr. Winvick served as Vice President, Human Resources since
1980.
Stephen J. Zelencik--Mr. Zelencik, 65, is Senior Vice President, Market
Development of Advanced Micro Devices, Inc. Before his appointment as Senior
Vice President, Market Development in 1999, Mr. Zelencik served as Senior Vice
President and Co-Chief Marketing Officer. From 1979 until 1998, Mr. Zelencik
was Senior Vice President and Chief Marketing Executive.
ITEM 2. PROPERTIES
Our principal engineering, manufacturing, warehouse and administrative
facilities comprise approximately 4.0 million square feet and are located in
Sunnyvale, California; Austin, Texas; and Dresden, Germany. Over 3.1 million
square feet of this space is in buildings we own.
We lease property containing two buildings with an aggregate of
approximately 360,000 square feet, located on 45.6 acres of land in Sunnyvale,
California (One AMD Place). The lease term ends in December 2018. In 1993, we
entered into a lease agreement for approximately 175,000 square feet located
adjacent to One AMD Place (known as AMD Square) to be used by the product
groups as engineering offices and laboratory facilities.
We also own or lease facilities containing approximately 1.2 million square
feet for our operations in Malaysia, Thailand, Singapore and China. We lease
approximately 15 acres of land in Suzhou, China for our assembly and test
facility. In 1996, we acquired approximately 103 acres of land in Dresden,
Germany for Dresden Fab 30. Dresden Fab 30 is encumbered by a lien securing
borrowings of AMD Saxony. Fab 25, our fabrication facility in Austin, Texas,
is encumbered by a lien securing our $400 million of 11% Senior Secured Notes
due 2003.
We lease 22 sales offices in North America, 11 sales offices in Asia
Pacific, ten sales offices in Europe and one sales office in South America for
our direct sales force. These offices are located in cities in major
electronics markets where concentrations of our customers are located.
Leases covering our facilities expire over terms of generally one to 20
years. We currently do not anticipate significant difficulty in either
retaining occupancy of any of our facilities through lease renewals prior to
expiration or through month-to-month occupancy, or replacing them with
equivalent facilities.
14
ITEM 3. LEGAL PROCEEDINGS
1. Environmental Matters. Since 1981, we have discovered, investigated and
begun remediation of three sites where releases from underground chemical
tanks at our facilities in Santa Clara County, California, adversely affected
the groundwater. The chemicals released into the groundwater were commonly in
use in the semiconductor industry in the wafer fabrication process prior to
1979. At least one of the released chemicals (which we no longer use) has been
identified as a probable carcinogen.
In 1991, we received four Final Site Clean-up Requirements Orders from the
California Regional Water Quality Control Board, San Francisco Bay Region
relating to the three sites. One of the orders named us as well as TRW
Microwave, Inc. and Philips Semiconductors Corporation. In January 1999, we
entered into a settlement agreement with Philips whereby Philips will assume
costs allocated to us under this order, although we would be responsible for
these costs in the event that Philips does not fulfill its obligations under
the settlement agreement. Another of the orders named us as well as National
Semiconductor Corporation.
The three sites in Santa Clara County are on the National Priorities List
(Superfund). If we fail to satisfy federal compliance requirements or
inadequately perform the compliance measures, the government (1) can bring an
action to enforce compliance or (2) can undertake the desired response actions
itself and later bring an action to recover its costs, and penalties, which is
up to three times the costs of clean-up activities, if appropriate. The
statute of limitations has been tolled on the claims of landowners adjacent to
the Santa Clara County Superfund sites for causes of action such as
negligence, nuisance and trespass.
We have computed and recorded the estimated environmental liability in
accordance with applicable accounting rules and have not recorded any
potential insurance recoveries in determining the estimated costs of the
cleanup. The amount of environmental charges to earnings has not been material
during any of the last three fiscal years. We believe that the potential
liability, if any, in excess of amounts already accrued with respect to the
foregoing environmental matters will not have a material adverse effect on our
business.
We received a notice dated October 14, 1998 from the Environmental
Protection Agency (EPA) indicating that the EPA has determined AMD to be a
potentially responsible party that arranged for disposal of hazardous
substances at a site located in Santa Barbara County, California. We are
currently in settlement discussions with the EPA and believe that any
settlement will not have a material adverse effect on our financial condition
or results of operations.
2. Securities Class Action Litigation. Between March 10, 1999 and April 22,
1999, AMD and certain individual officers of AMD were named as defendants in a
number of lawsuits that have been consolidated under Ellis Investment Co.,
Ltd., et al v. Advanced Micro Devices, Inc. et al. (Case No. C-99-01102-BZ,
N.D. Cal.). The class action complaints allege various violations of Section
10(b) of the Securities Exchange Act and Rule 10b-5 promulgated thereunder.
Most of the complaints purportedly were filed on behalf of all persons, other
than the defendants, who purchased or otherwise acquired common stock of AMD
during the period from October 6, 1998 to March 8, 1999. Two of the complaints
allege a class period from July 13, 1998 to March 9, 1999. All of the
complaints allege that materially misleading statements and/or material
omissions were made by AMD and certain individual officers of AMD concerning
design and production problems relating to high-speed versions of AMD-K6-2 and
AMD-K6-III microprocessors. Based upon information presently known to
management, we do not believe that the ultimate resolution of these lawsuits
will have a material adverse effect on our business.
3. Other Matters. We are a defendant or plaintiff in various other actions
which arose in the normal course of business. In the opinion of management,
the ultimate disposition of these matters will not have a material adverse
effect on our business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
15
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock (symbol AMD) is listed on the New York Stock Exchange. The
information regarding market price range, dividend information and number of
holders of our common stock appearing under the captions "Supplementary
Financial Data" and "Financial Summary" on pages 45 and 46 of our 1999 Annual
Report to Stockholders is incorporated herein by reference.
During 1999, we did not make any sales of our equity securities which were
not registered under the Securities Act of 1933, as amended.
ITEM 6. SELECTED FINANCIAL DATA
The information regarding selected financial data for the fiscal years 1995
through 1999, under the caption "Financial Summary" on page 46 of our 1999
Annual Report to Stockholders is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information appearing under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages 6 through
22 of our 1999 Annual Report to Stockholders is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
The information appearing under the caption "Quantitative and Qualitative
Disclosure about Market Risk" on pages 12 through 14 of our 1999 Annual Report
to Stockholders is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Our consolidated financial statements at December 26, 1999 and December 27,
1998 and for each of the three years in the period ended December 26, 1999,
and the report of independent auditors thereon, and our unaudited quarterly
financial data for the two-year period ended December 26, 1999, appearing on
pages 23 through 46 of our 1999 Annual Report to Stockholders are incorporated
herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information under the captions "Item 1--Election of Directors" and
"Section 16(a) Beneficial Ownership Reporting Compliance" in our Proxy
Statement for our Annual Meeting of Stockholders to be held on April 27, 2000
(2000 Proxy Statement) is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information under the captions "Directors' Compensation and Benefits,"
"Committees and Meetings of the Board of Directors," "Executive Compensation,"
"Employment Agreements" and "Change in Control Arrangements" in our 2000 Proxy
Statement is incorporated herein by reference.
16
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the captions "Principal Stockholders" and "Security
Ownership of Directors and Executive Officers" in our 2000 Proxy Statement is
incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the caption "Certain Relationships and Related
Transactions" in our 2000 Proxy Statement is incorporated herein by reference.
With the exception of the information specifically incorporated by reference
in Part III of this Annual Report on Form 10-K from our 2000 Proxy Statement,
our 2000 Proxy Statement shall not be deemed to be filed as part of this
report. Without limiting the foregoing, the information under the captions
"Board Compensation Committee Report on Executive Compensation" and
"Performance Graphs" in our 2000 Proxy Statement is not incorporated by
reference in this Annual Report on Form 10-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a)
1. Financial Statements
The financial statements listed in the accompanying Index to Consolidated
Financial Statements and Financial Statement Schedule covered by the Report of
Independent Auditors are filed or incorporated by reference as part of this
Annual Report on Form 10-K. The following is a list of such financial
statements:
Page References
-----------------
1999 Annual
Form Report to
10-K Stockholders
---- ------------
Report of Ernst & Young LLP, Independent Auditors......... -- 44
Consolidated Statements of Operations for the three years
in the period ended December 26, 1999.................... -- 23
Consolidated Balance Sheets at December 26, 1999 and
December 27, 1998........................................ -- 24
Consolidated Statements of Stockholders' Equity for the
three years in the period ended December 26, 1999........ -- 25
Consolidated Statements of Cash Flows for the three years
in the period ended December 26, 1999.................... -- 26
Notes to Consolidated Financial Statements................ -- 27-43
2. Financial Statement Schedule
The financial statement schedule listed below is filed as part of this
Annual Report on Form 10-K.
Page References
-----------------
1999 Annual
Form Report to
10-K Stockholders
---- ------------
Schedule for the three years in the period ended
December 26, 1999:
Schedule II Valuation and Qualifying Accounts......... F-3 --
All other schedules have been omitted because the required information is
not present or is not present in amounts sufficient to require submission of
the schedules, or because the information required is included in the
Consolidated Financial Statements or Notes thereto. With the exception of the
information specifically incorporated by reference into Parts II and IV of
this Annual Report on Form 10-K, the 1999 Annual Report to Stockholders is not
to be deemed filed as part of this report.
17
3. Exhibits
The exhibits listed in the accompanying Index to Exhibits are filed as part
of, or incorporated by reference into, this Annual Report on Form 10-K. The
following is a list of such Exhibits:
Exhibit
Number Description of Exhibits
------- -----------------------
2.1 Agreement and Plan of Merger dated October 20, 1995, between AMD
and NexGen, Inc., filed as Exhibit 2 to AMD's Quarterly Report for
the period ended October 1, 1995, and as amended as Exhibit 2.1 to
AMD's Current Report on Form 8-K dated January 17, 1996, is hereby
incorporated by reference.
2.2 Amendment No. 2 to the Agreement and Plan of Merger, dated January
11, 1996, between AMD and NexGen, Inc., filed as Exhibit 2.2 to
AMD's Current Report on Form 8-K dated January 17, 1996, is hereby
incorporated by reference.
2.3 Stock Purchase Agreement dated as of April 21, 1999, by and
between Lattice Semiconductor and AMD, filed as Exhibit 2.3 to
AMD's Current Report on Form 8-K dated April 26, 1999, is hereby
incorporated by reference.
2.3(a) First Amendment to Stock Purchase Agreement, dated as of June 7,
1999, between AMD and Lattice Semiconductor Corporation, filed as
Exhibit 2.3 (a) to AMD's Quarterly Report on Form 10-Q for the
period ended June 27, 1999, is hereby incorporated by reference.
2.3(b) Second Amendment to Stock Purchase Agreement, dated as of June 15,
1999, between AMD and Lattice Semiconductor Corporation, filed as
Exhibit 2.3 (b) to AMD's Quarterly Report on From 10-Q for the
period ended June 27, 1999, is hereby incorporated by reference.
3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to
AMD's Quarterly Report on Form 10-Q for the period ended July 2,
1995, is hereby incorporated by reference.
3.2 By-Laws, as amended.
4.1 Form of AMD 11% Senior Secured Notes due August 1, 2003, filed as
Exhibit 4.1 to AMD's Current Report on Form 8-K dated August 13,
1996, is hereby incorporated by reference.
4.2(a) Indenture, dated as of August 1, 1996, between AMD and United
States Trust Company of New York, as trustee, filed as Exhibit 4.2
to AMD's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
4.2(b) First Supplemental Indenture, dated as of January 13, 1999,
between AMD and United States Trust Company of New York, as
trustee, filed as Exhibit 4.2(b) to AMD's Annual Report on
Form 10-K for the fiscal year ended December 27, 1998, is hereby
incorporated by reference.
4.2(c) Second Supplemental Indenture, dated as of April 8, 1999, between
AMD and United States Trust Company of New York, as trustee.
4.3 Intercreditor and Collateral Agent Agreement, dated as of August
1, 1996, among United States Trust Company of New York, as
trustee, Bank of America NT&SA, as agent for the banks under the
Credit Agreement of July 19, 1996, and IBJ Schroder Bank & Trust
Company, filed as Exhibit 4.3 to AMD's Current Report on Form 8-K
dated August 13, 1996, is hereby incorporated by reference.
4.4 Payment, Reimbursement and Indemnity Agreement, dated as of August
1, 1996, between AMD and IBJ Schroder Bank & Trust Company, filed
as Exhibit 4.4 to AMD's Current Report on Form 8-K dated August
13, 1996, is hereby incorporated by reference.
18
Exhibit
Number Description of Exhibits
------- -----------------------
4.5 Deed of Trust, Assignment, Security Agreement and Financing
Statement, dated as of August 1, 1996, among AMD, as grantor, IBJ
Schroder Bank & Trust Company, as grantee, and Shelley W. Austin,
as trustee, filed as Exhibit 4.5 to AMD's Current Report on Form
8-K dated August 13, 1996, is hereby incorporated by reference.
4.6 Security Agreement, dated as of August 1, 1996, among AMD and IBJ
Schroder Bank & Trust Company, as agent for United States Trust
Company of New York, as trustee, and Bank of America NT&SA, as
agent for banks, filed as Exhibit 4.6 to AMD's Current Report on
Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.7 Lease, Option to Purchase and Put Option Agreement, dated as of
August 1, 1996, between AMD, as lessor, and AMD Texas Properties,
LLC, as lessee, filed as Exhibit 4.7 to AMD's Current Report on
Form 8-K dated August 13, 1996, is hereby incorporated by
reference.
4.8 Reciprocal Easement Agreement, dated as of August 1, 1996, between
AMD and AMD Texas Properties, LLC, filed as Exhibit 4.8 to AMD's
Current Report on Form 8-K dated August 13, 1996, is hereby
incorporated by reference.
4.9 Sublease Agreement, dated as of August 1, 1996, between AMD, as
sublessee, and AMD Texas Properties, LLC, as sublessor, filed as
Exhibit 4.9 to AMD's Current Report on Form 8-K dated August 13,
1996, is hereby incorporated by reference.
4.10 Indenture, dated as of May 8, 1998, by and between AMD and The
Bank of New York, as trustee, filed as Exhibit 4.1 to AMD's
Current Report on Form 8-K dated May 8, 1998, is hereby
incorporated by reference.
4.11 Officers' Certificate, dated as of May 8, 1998, filed as Exhibit
4.2 to AMD's Current Report on Form 8-K dated May 8, 1998, is
hereby incorporated by reference.
4.12 Form of 6% Convertible Subordinated Note due 2005, filed as
Exhibit 4.3 to AMD's Current Report on Form 8-K dated May 8, 1998,
is hereby incorporated by reference.
4.13 AMD hereby agrees to file on request of the Commission a copy of
all instruments not otherwise filed with respect to AMD's long-
term debt or any of its subsidiaries for which the total amount of
securities authorized under such instruments does not exceed 10
percent of the total assets of AMD and its subsidiaries on a
consolidated basis.
*10.1 AMD 1982 Stock Option Plan, as amended, filed as Exhibit 10.1 to
AMD's Annual Report on Form 10-K for the fiscal year ended
December 26, 1993, is hereby incorporated by reference.
*10.2 AMD 1986 Stock Option Plan, as amended, filed as Exhibit 10.2 to
AMD's Annual Report on Form 10-K for the fiscal year ended
December 26, 1993, is hereby incorporated by reference.
*10.3 AMD 1992 Stock Incentive Plan, as amended, filed as Exhibit 10.3
to AMD's Annual Report on Form 10-K for the fiscal year ended
December 26, 1993, is hereby incorporated by reference.
*10.4 AMD 1980 Stock Appreciation Rights Plan, as amended, filed as
Exhibit 10.4 to AMD's Annual Report on Form 10-K for the fiscal
year ended December 26, 1993, is hereby incorporated by reference.
*10.5 AMD 1986 Stock Appreciation Rights Plan, as amended, filed as
Exhibit 10.5 to the Company's Annual Report on Form 10-K for the
fiscal year ended December 26, 1993, is hereby incorporated by
reference.
*10.6 Forms of Stock Option Agreements, filed as Exhibit 10.8 to AMD's
Annual Report on Form 10-K for the fiscal year ended December 29,
1991, are hereby incorporated by reference.
19
Exhibit
Number Description of Exhibits
------- -----------------------
*10.7 Form of Limited Stock Appreciation Rights Agreement, filed as
Exhibit 4.11 to AMD's Registration Statement on Form S-8 (No. 33-
26266), is hereby incorporated by reference.
*10.8 AMD 1987 Restricted Stock Award Plan, as amended, filed as Exhibit
10.10 to AMD's Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
*10.9 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to
AMD's Annual Report on Form 10-K for the fiscal year ended
December 29, 1991, are hereby incorporated by reference.
*10.10 Resolution of Board of Directors on September 9, 1981, regarding
acceleration of vesting of all outstanding stock options and
associated limited stock appreciation rights held by officers
under certain circumstances, filed as Exhibit 10.10 to AMD's
Annual Report on Form 10-K for the fiscal year ended March 31,
1985, is hereby incorporated by reference.
*10.11 AMD 1996 Stock Incentive Plan, as amended, filed as Exhibit 10.11
to AMD's Annual Report on Form 10-K for the fiscal year ended
December 29, 1996, is hereby incorporated by reference.
*10.12 Employment Agreement dated September 29, 1996, between AMD and W.
J. Sanders III, filed as Exhibit 10.11(a) to AMD's Quarterly
Report on Form 10-Q for the period ended September 29, 1996, is
hereby incorporated by reference.
*10.13 Management Continuity Agreement between AMD and W. J. Sanders III,
filed as Exhibit 10.14 to AMD's Annual Report on Form 10-K for the
fiscal year ended December 29, 1991, is hereby incorporated by
reference.
*10.14 Bonus Agreement between AMD and Richard Previte, filed as Exhibit
10.14 to AMD's Quarterly Report on Form 10-Q for the period ended
June 28, 1998, is hereby incorporated by reference.
*10.15 Executive Bonus Plan, as amended, filed as Exhibit 10.16 to AMD's
Annual Report on Form 10-K for the fiscal year ended December 25,
1994, is hereby incorporated by reference.
*10.16 AMD Executive Incentive Plan, filed as Exhibit 10.14(b) to AMD's
Quarterly Report on Form 10-Q for the period ended June 30, 1996,
is hereby incorporated by reference.
*10.17 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to AMD's
Annual Report on Form 10-K for the fiscal year ended March 30,
1986, is hereby incorporated by reference.
*10.18 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to
AMD's Annual Report on Form 10-K for the fiscal year ended
December 31, 1989, is hereby incorporated by reference.
*10.19 Director Deferral Agreement of R. Gene Brown, filed as Exhibit
10.18 to AMD's Annual Report on Form 10-K for the fiscal year
ended December 31, 1989, is hereby incorporated by reference.
10.20 Intellectual Property Agreements with Intel Corporation, filed as
Exhibit 10.21 to AMD's Annual Report on Form 10-K for the fiscal
year ended December 29, 1991, are hereby incorporated by
reference.
*10.21 Form of Indemnification Agreements with former officers of
Monolithic Memories, Inc., filed as Exhibit 10.22 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 27, 1987,
is hereby incorporated by reference.
*10.22 Form of Management Continuity Agreement, filed as Exhibit 10.25 to
AMD's Annual Report on Form 10-K for the fiscal year ended
December 29, 1991, is hereby incorporated by reference.
**10.23(a) Joint Venture Agreement between AMD and Fujitsu Limited, filed as
Exhibit 10.27(a) to AMD's Amendment No. 1 to its Annual Report on
Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
20
Exhibit
Number Description of Exhibits
------- -----------------------
**10.23(b) Technology Cross-License Agreement between AMD and Fujitsu
Limited, filed as Exhibit 10.27(b) to AMD's Amendment No. 1 to its
Annual Report on Form 10-K for the fiscal year ended December 26,
1993, is hereby incorporated by reference.
**10.23(c) AMD Investment Agreement between AMD and Fujitsu Limited, filed as
Exhibit 10.27(c) to AMD's Amendment No. 1 to its Annual Report on
Form 10-K for the fiscal year ended December 26, 1993, is hereby
incorporated by reference.
**10.23(d) Fujitsu Investment Agreement between AMD and Fujitsu Limited,
filed as Exhibit 10.27(d) to AMD's Amendment No. 1 to its Annual
Report on Form 10-K for the fiscal year ended December 26, 1993,
is hereby incorporated by reference.
**10.23(e) First Amendment to Fujitsu Investment Agreement dated April 28,
1995, filed as Exhibit 10.23(e) to AMD's Annual Report on Form 10-
K for the fiscal year ended December 29, 1996, is hereby
incorporated by reference.
10.23(f) Second Amendment to Fujitsu Investment Agreement, dated February
27, 1996, filed as Exhibit 10.23 (f) to AMD's Annual Report on
Form 10-K for the fiscal year ended December 29, 1996, is hereby
incorporated by reference.
**10.23(g) Joint Venture License Agreement between AMD and Fujitsu Limited,
filed as Exhibit 10.27(e) to AMD's Amendment No. 1 to its Annual
Report on Form 10-K for the fiscal year ended December 26, 1993,
is hereby incorporated by reference.
**10.23(h) Joint Development Agreement between AMD and Fujitsu Limited, filed
as Exhibit 10.27(f) to AMD's Amendment No. 1 to its Annual Report
on Form 10-K for the fiscal year ended December 26, 1993, is
hereby incorporated by reference.
**10.23(i) Fujitsu Joint Development Agreement Amendment, filed as Exhibit
10.23(g) to AMD's Quarterly Report on Form 10-Q for the period
ended March 31, 1996, is hereby incorporated by reference.
10.24(a) Credit Agreement, dated as of July 19, 1996, among AMD, Bank of
America NT&SA, as administrative agent and lender, ABN AMRO Bank
N.V., as syndication agent and lender, and Canadian Imperial Bank
of Commerce, as documentation agent and lender, filed as Exhibit
99.1 to AMD's Current Report on Form 8-K dated August 13, 1996, is
hereby incorporated by reference.
10.24(b) First Amendment to Credit Agreement, dated as of August 7, 1996,
among AMD, Bank of America NT&SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndication agent and lender, and
Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 99.2 to AMD's Current Report on Form 8-K
dated August 13, 1996, is hereby incorporated by reference.
10.24(c) Second Amendment to Credit Agreement, dated as of September 9,
1996, among AMD, Bank of America NT&SA, as administrative agent
and lender, ABN AMRO Bank N.V., as syndication agent and lender,
and Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24(b) to AMD's Quarterly Report on
Form 10-Q for the period ended September 29, 1996, is hereby
incorporated by reference.
10.24(d) Third Amendment to Credit Agreement, dated as of October 1, 1997,
among AMD, Bank of America NT & SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndicated agent and lender, and
Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24(d) to AMD's Quarterly Report on
Form 10-Q for the period ended September 28, 1997, is hereby
incorporated by reference.
21
Exhibit
Number Description of Exhibits
------- -----------------------
10.24(e) Fourth Amendment to Credit Agreement, dated as of January 26,
1998, among AMD, Bank of America NT & SA, as administrative agent
and lender, ABN AMRO Bank N.V., as syndicated agent and lender,
and Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24(e) to AMD's Annual Report on Form
10-K for the fiscal year ended December 28, 1997, is hereby
incorporated by reference.
10.24(f) Fifth Amendment to Credit Agreement, dated as of February 26,
1998, among AMD, Bank of America NT & SA, as administrative agent
and lender, ABN AMRO Bank, N.V., as syndicated agent and lender,
and Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24(f) to AMD's Annual Report on Form
10-K for the fiscal year ended December 28, 1997, is hereby
incorporated by reference.
10.24(g) Sixth Amendment to Credit Agreement, dated as of June 30, 1998,
among AMD, Bank of America NT & SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndicated agent and lender, and
Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24(g) to AMD's Current Report on Form
8-K dated July 8, 1998, is hereby incorporated by reference.
10.24(h) Seventh Amendment to the Credit Agreement and waiver, dated as of
April 8, 1999, among AMD, Bank of America NT & SA, as
administrative agent and lender, ABN AMRO Bank of N.V., as
syndicated agent and lender, and Canadian Imperial Bank of
Commerce, as documentation agent and lender.
10.24(i) Eighth Amendment to Credit Agreement, dated as of June 25, 1999,
among AMD, Bank of America NT&SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndicated agent and lender, and
Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24 (i) to AMD's Quarterly Report on
Form 10-Q for the period ended June 27, 1999, is hereby
incorporated by reference.
10.24(j) Ninth Amendment to Credit Agreement, dated as of July 30, 1999,
among AMD, Bank of America NT&SA, as administrative agent and
lender, ABN AMRO Bank N.V., as syndicated agent and lender, and
Canadian Imperial Bank of Commerce, as documentation agent and
lender, filed as Exhibit 10.24 (j) to AMD's Quarterly Report on
Form 10-Q for the period ended June 27, 1999, is hereby
incorporated by reference.
**10.25 Technology Development and License Agreement, dated as of October
1, 1998, among AMD and its subsidiaries and Motorola, Inc. and its
subsidiaries, filed as Exhibit 10.25 to AMD's Annual Report on
Form 10-K for the fiscal year ended December 27, 1998, is hereby
incorporated by reference.
***10.25(a) Amendment to the Technology Development and License Agreement,
entered into as of October 1, 1998, by AMD and its subsidiaries
and Motorola, Inc. and its subsidiaries.
**10.26 Patent License Agreement, dated as of December 3, 1998, between
AMD and Motorola, Inc., filed as Exhibit 10.26 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 27, 1998,
is hereby incorporated by reference.
10.27 Lease Agreement, dated as of December 22, 1998, between AMD and
Delaware Chip LLC, filed as Exhibit 10.27 to AMD's Annual Report
on Form 10-K for the fiscal year ended December 27, 1998 is hereby
incorporated by reference.
*10.28(a) AMD Executive Savings Plan (Amendment and Restatement, effective
as of August 1, 1993), filed as Exhibit 10.30 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 25, 1994,
is hereby incorporated by reference.
22
Exhibit
Number Description of Exhibits
------- -----------------------
*10.28(b) First Amendment to the AMD Executive Savings Plan (as amended and
restated, effective as of August 1, 1993), filed as Exhibit
10.28(b) to AMD's Annual Report on Form 10-K for the fiscal year
ended December 28, 1997, is hereby incorporated by reference.
*10.28(c) Second Amendment to the AMD Executive Savings Plan (as amended and
restated, effective as of August 1, 1993), filed as Exhibit
10.28(b) to AMD's Annual Report on Form 10-K for the fiscal year
ended December 28, 1997, is hereby incorporated by reference.
*10.29 Form of Split Dollar Agreement, as amended, filed as Exhibit 10.31
to AMD's Annual Report on Form 10-K for the fiscal year ended
December 25, 1994, is hereby incorporated by reference.
*10.30 Form of Collateral Security Assignment Agreement, filed as Exhibit
10.32 to AMD's Annual Report on Form 10-K for the fiscal year
ended December 26, 1993, is hereby incorporated by reference.
*10.31 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan,
filed as Exhibit 4.3 to AMD's Registration Statement on Form S-8
(No. 33-46577), are hereby incorporated by reference.
*10.32 1992 United Kingdom Share Option Scheme, filed as Exhibit 4.2 to
AMD's Registration Statement on Form S-8 (No. 33-46577), is hereby
incorporated by reference.
**10.33 AMD 1998 Stock Incentive Plan, filed as Exhibit 10.33 to AMD's
Annual Report on Form 10-K for the fiscal year ended December 27,
1998, is hereby incorporated by reference.
*10.34 Form of indemnification agreements with officers and directors of
AMD, filed as Exhibit 10.38 to AMD's Annual Report on Form 10-K
for the fiscal year ended December 25, 1994, is hereby
incorporated by reference.
*10.35 Agreement to Preserve Goodwill dated January 15, 1996, between AMD
and S. Atiq Raza, filed as Exhibit 10.36 to AMD's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, is hereby
incorporated by reference.
*10.36 1995 Stock Plan of NexGen, Inc., as amended, filed as Exhibit
10.36 to AMD's Annual Report on Form 10-K for the fiscal year
ended December 29, 1996, is hereby incorporated by reference.
**10.37 Patent Cross-License Agreement dated December 20, 1995, between
AMD and Intel Corporation, filed as Exhibit 10.38 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995,
is hereby incorporated by reference.
10.38 Contract for Transfer of the Right to the Use of Land between AMD
(Suzhou) Limited and China-Singapore Suzhou Industrial Park
Development Co., Ltd., filed as Exhibit 10.39 to AMD's Annual
Report on Form 10-K for the fiscal year ended December 31, 1995,
is hereby incorporated by reference.
*10.39 NexGen, Inc. 1987 Employee Stock Plan, filed as Exhibit 99.3 to
Post-Effective Amendment No. 1 on Form S-8 to AMD's Registration
Statement on Form S-4 (No. 33-64911), is hereby incorporated by
reference.
*10.40 1995 Stock Plan of NexGen, Inc. (assumed by AMD), as amended,
filed as Exhibit 10.37 to AMD's Quarterly Report on Form 10-Q for
the period ended June 30, 1996, is hereby incorporated by
reference.
*10.41 Form of indemnity agreement between NexGen, Inc. and its directors
and officers, filed as Exhibit 10.5 to the Registration Statement
of NexGen, Inc. on Form S-1 (No. 33-90750), is hereby incorporated
by reference.
23
Exhibit
Number Description of Exhibits
------- -----------------------
10.42 Series E Preferred Stock Purchase Warrant of NexGen, Inc. issued
to PaineWebber Incorporated, filed as Exhibit 10.14 to the
Registration Statement of NexGen, Inc. on Form S-1 (No. 33-
90750), is hereby incorporated by reference.
10.43 Series F Preferred Stock Purchase Warrant of NexGen, Inc., filed
as Exhibit 10.15 to the Registration Statement of NexGen, Inc.
on Form S-1 (No. 33-90750), is hereby incorporated by reference.
10.44 Series G Preferred Stock Purchase Warrant of NexGen, Inc., filed
as Exhibit 10.16 to the Registration Statement of NexGen, Inc.
on Form S-1 (No. 33-90750), is hereby incorporated by reference.
**10.45 Agreement for Purchase of IBM Products between IBM and NexGen,
Inc. dated June 2, 1994, filed as Exhibit 10.17 to the
Registration Statement of NexGen, Inc. on Form S-1
(No. 33-90750), is hereby incorporated by reference.
*10.46 Letter Agreement dated as of September, 1988, between NexGen,
Inc. and S. Atiq Raza, First Promissory Note dated October 17,
1988, and Second Promissory Note dated October 17, 1988, as
amended, filed as Exhibit 10.20 to the Registration Statement of
NexGen, Inc. on Form S-1 (No. 33-90750), are hereby incorporated
by reference.
10.47 Series B Preferred Stock Purchase Warrant of NexGen, Inc. issued
to Kleiner, Perkins, Caufield and Byers IV, as amended, filed as
Exhibit 10.23 to the Registration Statement of NexGen, Inc. on
Form S-1 (No. 33-90750), is hereby incorporated by reference.
**10.48(a) C-4 Technology Transfer and Licensing Agreement dated June 11,
1996, between AMD and IBM Corporation, filed as Exhibit 10.48 to
AMD's Amendment No. 1 to its Quarterly Report on Form 10-Q/A for
the period ended September 29, 1996, is hereby incorporated by
reference.
**10.48(b) Amendment No. 1 to the C-4 Technology Transfer and Licensing
Agreement, dated as of February 23, 1997, between AMD and
International Business Machine Corporation, filed as Exhibit
10.48(a) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.49(a) Design and Build Agreement dated November 15, 1996, between AMD
Saxony Manufacturing GmbH and Meissner and Wurst GmbH, filed as
Exhibit 10.49(a) to AMD's Annual Report on Form 10-K for the
fiscal year ended December 29, 1996, is hereby incorporated by
reference.
10.49(b) Amendment to Design and Build Agreement dated January 16, 1997,
between AMD Saxony Manufacturing GmbH and Meissner and Wurst
GmbH filed as Exhibit 10.49(b) to AMD's Annual Report on Form
10-K for the fiscal year ended December 29, 1996, is hereby
incorporated by reference.
**10.50(a-1) Syndicated Loan Agreement with Schedules 1, 2 and 17, dated as
of March 11, 1997, among AMD Saxony Manufacturing GmbH, Dresdner
Bank AG and Dresdner Bank Luxembourg S.A., filed as Exhibit
10.50(a) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.50(a-2) Supplemental Agreement to the Syndicated Loan Agreement dated
February 6, 1998, among AMD Saxony Manufacturing GmbH, Dresdner
Bank AG and Dresdner Bank Luxembourg S.A., filed as Exhibit
10.50(a-2) to AMD's Annual Report on Form 10-K/A (No.1) for the
fiscal year ended December 28, 1997, is hereby incorporated by
reference.
24
Exhibit
Number Description of Exhibits
------- -----------------------
10.50(a-3) Supplemental Agreement No. 2 to the Syndicated Loan Agreement as
of March 11, 1997, dated as of June 29, 1999, among AMD Saxony
Manufacturing GmbH, Dresdner Bank AG and Dresdner Bank
Luxembourg S.A., filed as Exhibit 10.50 (a-3) to AMD's Quarterly
Report on Form 10-Q for the period ended June 27, 1999, is
hereby incorporated by reference.
**10.50(b) Determination Regarding the Request for a Guarantee by AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50(b) to AMD's
Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
**10.50(c) AMD Subsidy Agreement, between AMD Saxony Manufacturing GmbH and
Dresdner Bank AG, filed as Exhibit 10.50(c) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
**10.50(d) Subsidy Agreement, dated February 12, 1997, between Sachsische
Aufbaubank and Dresdner Bank AG, with Appendices 1, 2a, 2b, 3
and 4, filed as Exhibit 10.50(d) to AMD's Quarterly Report on
Form 10-Q for the period ended March 30, 1997, is hereby
incorporated by reference.
10.50(e) AMD, Inc. Guaranty, dated as of March 11, 1997, among AMD,
Saxony Manufacturing GmbH and Dresdner Bank AG, filed as Exhibit
10.50(e) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
10.50(f-1) Sponsors' Support Agreement, dated as of March 11, 1997, among
AMD, AMD Saxony Holding GmbH and Dresdner Bank AG, filed as
Exhibit 10.50(f) to AMD's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
10.50(f-2) First Amendment to Sponsors' Support Agreement, dated as of
February 6, 1998, among AMD, AMD Saxony Holding GmbH and
Dresdner Bank AG, filed as Exhibit 10.50(f-2) to AMD's Annual
Report on Form 10-K for the fiscal year ended December 28, 1997,
is hereby incorporated by reference.
10.50(f-3) Second Amendment to Sponsors' Support Agreement, dated as of
June 29, 1999, among AMD, AMD Saxony Holding GmbH, Dresdner Bank
AG and Dresdner Bank Luxembourg S.A., filed as Exhibit 10.50 (f-
3) to AMD's Quarterly Report on Form 10-Q for the period ended
June 27, 1999, is hereby incorporated by reference.
10.50(g-1) Sponsors' Loan Agreement, dated as of March 11, 1997, among AMD,
AMD Saxony Holding GmbH and Saxony Manufacturing GmbH, filed as
Exhibit 10.50(g) to AMD's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
10.50(g-2) First Amendment to Sponsors' Loan Agreement, dated as of
February 6, 1998, among AMD, AMD Saxony Holding GmbH and AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50(g-2) to AMD's
Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, is hereby incorporated by reference.
10.50(g-3) Second Amendment to Sponsors' Loan Agreement, dated as of June
25, 1999, among AMD and AMD Saxony Holding GmbH and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(g-3) to the Company's
Quarterly Report on Form 10-Q for the period ended June 27,
1999, is hereby incorporated by reference.
10.50(h) Sponsors' Subordination Agreement, dated as of March 11, 1997,
among AMD, AMD Saxony Holding GmbH, AMD Saxony Manufacturing
GmbH and Dresdner Bank AG, filed as Exhibit 10.50(h) to AMD's
Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
25
Exhibit
Number Description of Exhibits
------- -----------------------
10.50(i) Sponsors' Guaranty, dated as of March 11, 1997, among AMD, AMD
Saxony Holding GmbH and Dresdner Bank AG, filed as Exhibit
10.50(i) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.50(j) AMD Holding Wafer Purchase Agreement, dated as of March 11,
1997, among AMD and AMD Saxony Holding GmbH, filed as Exhibit
10.50(j) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
**10.50(k) AMD Holding Research, Design and Development Agreement, dated as
of March 11, 1997, between AMD Saxony Holding GmbH and AMD,
filed as Exhibit 10.50(k) to AMD's Quarterly Report on Form 10-Q
for the period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(l-1) AMD Saxonia Wafer Purchase Agreement, dated as of March 11,
1997, between AMD Saxony Holding GmbH and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(l) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
10.50(l-2) First Amendment to AMD Saxonia Wafer Purchase Agreement, dated
as of February 6, 1998, between AMD Saxony Holding GmbH and AMD
Saxony Manufacturing GmbH, filed as Exhibit 10.50 (l-2) to AMD's
Annual Report on Form 10-K for the fiscal year ended December
28, 1997, is hereby incorporated by reference.
**10.50(m) AMD Saxonia Research, Design and Development Agreement, dated as
of March 11, 1997, between AMD Saxony Manufacturing GmbH and AMD
Saxony Holding GmbH, filed as Exhibit 10.50(m) to AMD's
Quarterly Report on Form 10-Q for the period ended March 30,
1997, is hereby incorporated by reference.
10.50(n) License Agreement, dated March 11, 1997, among AMD, AMD Saxony
Holding GmbH and AMD Saxony Manufacturing GmbH, filed as Exhibit
10.50(n) to AMD's Quarterly Report on Form 10-Q for the period
ended March 30, 1997, is hereby incorporated by reference.
10.50(o) AMD, Inc. Subordination Agreement, dated March 11, 1997, among
AMD, AMD Saxony Holding GmbH and Dresdner Bank AG, filed as
Exhibit 10.50(o) to AMD's Quarterly Report on Form 10-Q for the
period ended March 30, 1997, is hereby incorporated by
reference.
**10.50(p-1) ISDA Agreement, dated March 11, 1997, between AMD and AMD Saxony
Manufacturing GmbH, filed as Exhibit 10.50(p) to AMD's Quarterly
Report on Form 10-Q for the period ended March 30, 1997, is
hereby incorporated by reference.
**10.50(p-2) Confirmation to ISDA Agreement, dated February 6, 1998, between
AMD and AMD Saxony Manufacturing GmbH, filed as Exhibit 10.50(p-
2) to AMD's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997, is hereby incorporated by reference.
10.51 Loan and Security Agreement, dated as of July 13,1999, among
AMD, AMD International Sales and Service, Ltd. and Bank of
America NT&SA as agent, filed as Exhibit 10.51 to AMD's
Quarterly Report on Form 10-Q for the period ended June 27,
1999, is hereby incorporated by reference.
10.51(a) First Amendment to Loan and Security Agreement, dated as of July
30, 1999, among AMD, AMD International Sales and Service, Ltd.
and Bank of America NT&SA, as agent, filed as Exhibit 10.51(a)
to AMD's Quarterly Report on Form 10-Q for the period ended June
27, 1999, is hereby incorporated by reference.
*10.52 Agreement, dated as of June 16, 1999, between AMD and Richard
Previte, filed as Exhibit 10.52 to AMD's Quarterly Report on
Form 10-Q for the period ended June 27, 1999, is hereby
incorporated by reference.
26
Exhibit
Number Description of Exhibits
------- -----------------------
*10.53 Agreement, dated as of June 23, 1999, between AMD and Gene Conner,
filed as Exhibit 10.53 to AMD's Quarterly Report on Form 10-Q for
the period ended June 27, 1999, is hereby incorporated by
reference.
*10.54 Management Continuity Agreement, between AMD and Robert R. Herb.
*10.55 Employment Agreement, dated as of January 13, 2000, between AMD
and Hector de J. Ruiz.
*10.56 Form of indemnification agreements with officers and directors of
AMD.
13 Pages 6 through 46 of AMD's 1999 Annual Report to Stockholders,
which have been incorporated by reference into Parts II and IV of
this annual report.
21 List of AMD subsidiaries.
23 Consent of Ernst & Young LLP, Independent Auditors, refer to page
F-2 herein.
24 Power of Attorney.
27 Financial Data Schedule.
- --------
* Management contracts and compensatory plans or arrangements required to
be filed as an Exhibit to comply with Item 14(a)(3).
** Confidential treatment has been granted as to certain portions of these
Exhibits.
*** Confidential treatment has been requested with respect to certain
portions of this Exhibit.
AMD will furnish a copy of any exhibit on request and payment of AMD's
reasonable expenses of furnishing such exhibit.
(b) Reports on Form 8-K.
A Current Report on Form 8-K dated October 6, 1999 reporting under Item 5--
Other Events was filed announcing AMD's third quarter earnings.
A Current Report on Form 8-K dated October 6, 1999 reporting under Item 5--
Other Events was filed announcing the intention of AMD to sell the
Communications Group.
A Current Report on Form 8-K dated November 11, 1999 reporting under Item
5--Other Events was filed announcing expected revenues in the fourth quarter.
27
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Advanced Micro Devices, Inc.
March 16, 2000
/s/ Francis P. Barton
By: _________________________________
Francis P. Barton
Senior Vice President,
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons, on behalf of the
registrant and in the capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
* Chairman of the Board March 16, 2000
______________________________________ and Chief Executive
W. J. Sanders III Officer (Principal
Executive Officer)
/s/ Francis P. Barton* Senior Vice President, March 16, 2000
______________________________________ Chief Financial Officer
Francis P. Barton (Principal Financial
Officer)
* Director March 16, 2000
______________________________________
Friedrich Baur
* Director March 16, 2000
______________________________________
Charles M. Blalack
* Director March 16, 2000
______________________________________
R. Gene Brown
* Director March 16, 2000
______________________________________
Robert B. Palmer
* Director, Vice Chairman March 16, 2000
______________________________________
Richard Previte
* Director March 16, 2000
______________________________________
Joe L. Roby
* Director, President and March 16, 2000
______________________________________ Chief Operating Officer
Hector de J. Ruiz
* Director March 16, 2000
______________________________________
Leonard Silverman
/s/ Francis P. Barton
*By: ____________________________
(Francis P. Barton, Attorney-in-
Fact)
28
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
COVERED BY THE REPORT OF INDEPENDENT AUDITORS
ITEM 14(a) (1) and (2)
The information under the following captions, which is included in AMD's
1999 Annual Report to Stockholders, a copy of which is attached hereto as
Exhibit 13, is incorporated herein by reference:
Page References
-----------------
1999 Annual
Form Report to
10-K Stockholders
---- ------------
Report of Ernst & Young LLP, Independent Auditors............ -- 44
Consolidated Statements of Operations for the three years in
the period ended December 26, 1999.......................... -- 23
Consolidated Balance Sheets at December 26, 1999 and December
27, 1998.................................................... -- 24
Consolidated Statements of Stockholders' Equity for the three
years in the period ended December 26, 1999................. -- 25
Consolidated Statements of Cash Flows for the three years in
the period ended December 26, 1999.......................... -- 26
Notes to Consolidated Financial Statements................... -- 27-43
Schedule for the three years in the period ended December 26,
1999:
Schedule II Valuation and Qualifying Accounts.............. F-3 --
All other schedules have been omitted because the required information is
not present or is not present in amounts sufficient to require submission of
the schedules, or because the information required is included in the
Consolidated Financial Statements or Notes thereto. With the exception of the
information specifically incorporated by reference into Parts II and IV of
this Annual Report on Form 10-K, our 1999 Annual Report to Stockholders is not
to be deemed filed as part of this report.
F-1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-
K) of Advanced Micro Devices, Inc. of our report dated January 14, 2000
included in the 1999 Annual Report to Stockholders of Advanced Micro Devices,
Inc.
Our audits also included the financial statement schedule of Advanced Micro
Devices, Inc. listed in Item 14(a). This schedule is the responsibility of the
management of Advanced Micro Devices, Inc. Our responsibility is to express an
opinion based on our audits. In our opinion, the financial statement schedule
referred to above, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
We also consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 33-16095) pertaining to the Advanced Micro Devices,
Inc. 1987 Restricted Stock Award Plan; in the Registration Statement on Form
S-8 (Nos. 33-39747, 333-33855 and 333-77495) pertaining to the Advanced Micro
Devices, Inc. 1991 Employee Stock Purchase Plan; in the Registration
Statements on Form S-8 (Nos. 33-10319, 33-26266, 33-36596 and 33-46578)
pertaining to the Advanced Micro Devices, Inc. 1982 and 1986 Stock Option
Plans and the 1980 and 1986 Stock Appreciation Rights Plans; in the
Registration Statements on Form S-8 (Nos. 33-46577 and 33-55107) pertaining to
the Advanced Micro Devices, Inc. 1992 Stock Incentive Plan; in the
Registration Statements on Form S-8 (No. 333-00969) pertaining to the Advanced
Micro Devices, Inc. 1991 Employee Stock Purchase Plan and to the 1995 Stock
Plan of NexGen, Inc.; in the Registration Statements on Form S-8 (Nos. 333-
04797 and 333-57525) pertaining to the Advanced Micro Devices, Inc. 1996 Stock
Incentive Plan; in the Registration Statement on Form S-8 (No. 333-68005)
pertaining to the Advanced Micro Devices, Inc. 1998 Stock Incentive Plan; in
the Registration Statement on Form S-3 (No. 333-47243), as amended, pertaining
to debt securities, preferred stock, common stock, equity warrants and debt
warrants issued or issuable by Advanced Micro Devices, Inc.; in Post-Effective
Amendment No. 1 to the Registration Statement on Form S-8 (No. 33-95888-99)
pertaining to the 1995 Stock Plan of NexGen, Inc. and the NexGen, Inc. 1987
Employee Stock Plan; in Post-Effective Amendment No. 1 to the Registration
Statement on Form S-8 (No. 33-92688-99) pertaining to the 1995 Employee Stock
Purchase Plan of NexGen, Inc.; in Post-Effective Amendment No. 1 on Form S-8
to the Registration Statement on Form S-4 (No. 33-64911) pertaining to the
1995 Employee Stock Purchase Plan of NexGen, Inc., the 1995 Stock Plan of
NexGen, Inc. and the NexGen, Inc. 1987 Employee Stock Plan; and in Post-
Effective Amendment No. 2 on Form S-3 to the Registration Statement on Form S-
4 (No. 33-64911) pertaining to common stock issuable to certain warrantholders
of our report dated January 14, 2000 with respect to the consolidated
financial statements incorporated herein by reference, and our report included
in the preceding paragraph with respect to the financial statement schedule
included in this Annual Report (Form 10-K) of Advanced Micro Devices, Inc.
/s/ Ernst & Young LLP
San Jose, California
March 17, 2000
F-2
SCHEDULE II
ADVANCED MICRO DEVICES, INC.
VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 28, 1997,
December 27, 1998 and December 26, 1999
Additions
Charged
(Reductions
Balance Credited) Balance
Beginning To End of
of Period Operations Deductions(1) Period
--------- ----------- ------------- -------
Allowance for doubtful accounts:
Years ended:
December 28, 1997.............. $ 9,809 $1,500 $ (88) $11,221
December 27, 1998.............. 11,221 1,498 (56) 12,663
December 26, 1999.............. 12,663 3,543 (828) 15,378
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(1) Accounts (written off) recovered, net.
F-3
AMD-22934-A