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-------------------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - -------------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Washington, D.C. 20549 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM 10-K \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (MARK ONE) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES EXCHANGE ACT OF 1934. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR THE FISCAL YEAR ENDED DECEMBER 26, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACT OF 1934 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FOR THE TRANSITION PERIOD FROM \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION FILE NUMBER 1-7882 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Exact name of registrant as specified in its charter) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DELAWARE 94-1692300 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (State or other jurisdiction of (IRS Employer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporation or organization) Identification Number) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ONE AMD PLACE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUNNYVALE, CALIFORNIA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Address of principal executive offices) (Zip Code) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrant's telephone number, including area code: (408) 732-2400 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities registered pursuant to Section 12(b) of the Act: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (NAME OF EACH EXCHANGE ON \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TITLE OF EACH CLASS) WHICH REGISTERED) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $.01 PAR VALUE COMMON STOCK NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREFERRED STOCK PURCHASE RIGHTS NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEPOSITARY CONVERTIBLE EXCHANGEABLE NEW YORK STOCK EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PREFERRED SHARES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities registered pursuant to Section 12(g) of the Act: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NONE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate by check mark whether the registrant (1) has filed all reports \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to be filed by Section 13 or 15(d) of the Securities Exchange Act of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1934 during the preceding 12 months (or for such shorter period that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registrant was required to file such reports), and (2) has been subject to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filing requirements for the past 90 days. Yes No \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate by check mark if disclosure of delinquent filers pursuant to Item \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 405 of Regulation S-K is not contained herein, and will not be contained, to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql best of registrant's knowledge, in definitive proxy or information statements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference in Part III of this Form 10-K or any amendment to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K. /X/ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Aggregate market value of the voting stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by nonaffiliates as of February 28, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,980,075,847 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Indicate the number of shares outstanding of each of the registrant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql classes of common stock, as of the latest practicable date. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 92,627,503 SHARES AS OF FEBRUARY 28, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DOCUMENTS INCORPORATED BY REFERENCE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Portions of the Annual Report to Shareholders for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993, are incorporated into Parts I, II and IV hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Portions of the Proxy Statement dated on or before March 27, 1994, for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Meeting of Stockholders to be held on April 27, 1994 are incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into Part III hereof. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - -------------------------------------------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - -------------------------------------------------------------------------------- \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_1}{\*\bkmkend part_1_2_1}\pard\plain\cf1\f50\fs16\ql PART I \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_1}{\*\bkmkend item_1_3_1}\pard\plain\cf1\f50\fs16\ql ITEM 1. BUSINESS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql GENERAL \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. was incorporated under the laws of the state \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Delaware on May 1, 1969. The mailing address of its executive offices is One \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Place, P.O. Box 3453, Sunnyvale, California 94088-3453, and its telephone \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number is (408) 732-2400. Unless otherwise indicated, the terms "Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices," the "Corporation" and "AMD" in this report refer to Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. and its subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation designs, develops, manufactures and markets complex \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monolithic integrated circuits for use by manufacturers of a broad range of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronic equipment and systems. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PRODUCTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's products are primarily standard or catalog items or are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made from designs based on such items, as opposed to custom circuits designed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for a single customer. While a substantial portion of AMD's products are still \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard or catalog items, many of the recently developed devices are designed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for specific applications such as telecommunications, personal computers, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engineering workstations, optical disk memory or local area networks. As a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service to major customers, the Corporation modifies portions of these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql application-specific devices to meet specific customer needs. The resulting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "semi-standard" devices are produced in significant volumes for particular \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation began as an alternate-source manufacturer of integrated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits originally developed by other suppliers and has gradually shifted its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql emphasis to proprietary products (i.e. products resulting from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's design or technology innovations). Over the past five years, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation has made a significant research and development investment which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has contributed toward its leadership in manufacturing and process technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the integrated circuit industry. The Corporation has focused its future \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product development activities on the three areas of its business: X86 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other microprocessors and related peripheral chips for personal computers, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications solutions products, and programmable logic and non-volatile memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices. Personal computer (PC) products include microprocessors and related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql peripheral chips used in computers. Applications solutions products are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products which are either proprietary to AMD or have a limited supplier base, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are targeted at specialized markets, and typically require substantial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications interface between AMD and its customers. AMD's applications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql solutions products are focused on networks, voice/data communications (WORLD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NETWORK(Registered Trademark)), and on computer peripherals, computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interfaces and mass storage. Those programmable logic devices (PLDs) and memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices that are high-volume commodity products are typically produced by more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than one manufacturer, subject to intense competition, and broadly applicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql across a wide customer base. Since a substantial portion of the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products are utilized in personal computers and related peripherals, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's future growth is closely tied to the performance of the PC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Integrated circuits have generally been manufactured with either bipolar or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metal-oxide semiconductor (MOS) process technologies. Historically, bipolar was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the technology of choice where the highest speed or analog precision was needed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and MOS offered higher levels of integration and lower power consumption than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bipolar. Advances in complementary metal-oxide semiconductor (CMOS) technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are yielding bipolar performance with the density and power advantages of MOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology. Consequently, the Corporation is focusing process development on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advanced CMOS technology to support its designated product areas. By the end of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993, over two-thirds of the Corporation's total sales were derived from CMOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microprocessors \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X86 Microprocessors. A microprocessor is the central processing unit (CPU) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a computer. A CPU microprocessor processes system data and controls \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql input/output, peripheral and memory devices. A CPU microprocessor may also be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used in connection with other microprocessors such as microcontrollers which are \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embedded microprocessors contained in peripherals or other coprocessors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which perform certain functions such as arithmetic calculations. The iAPX \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql architecture, originally developed by Intel Corporation, has been the leading \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql architecture for personal computer microprocessors. AMD's strategy has been to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql serve as an alternative source for iAPX microprocessors, introducing products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at comparable prices to competitive products, but with additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customer-driven features. The Corporation in 1993 entered into a license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement with Microsoft(Registered Trademark), the personal computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry's leading supplier of operation systems software, pursuant to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Microsoft(Registered Trademark) Windows(Trademark) compatible logo now \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appears on AMD's microprocessor packaging and advertising indicating that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's product is compatible with such software. This approach is also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of the computer industry's shift from an emphasis on hardware \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compatibility to software compatibility. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The PC market is currently divided into laptop, personal information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices, desktop and portable varieties, and AMD plays a significant role in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such arenas. The Corporation has developed the Am386(Registered Trademark) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor, which is designed to meet the specifications of the Intel 80386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor. The Am386 family of microprocessors accounted for approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seventeen percent (17%) of the Corporation's 1993 revenues. The Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believes that its success with the Am386 family has been largely due to its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competitive features and pricing coupled with customers' demand for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably priced second source. As is often the case in the semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry, the average selling price of the Am386 has experienced significant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql downward pressure as it approaches the end of its product life cycle. Most \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer manufacturers have made a transition from the 386 to the 486 family of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation now offers a Am486(Trademark) family of products. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation began shipping Am486DX products in the second quarter of 1993, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql began volume shipment of its Am486SX products in 1994. The Corporation's 486DX \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 486SX products are the subject of microcode litigations with Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. (For more information see Item 3, Legal Proceedings, Numbers 2-8). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation is currently in the process of developing additional Am486 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. It is anticipated that development of such 486 products will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed by the end of 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation is currently developing its next generation of CPU \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor products known as the K series, based on superscalar RISC type \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql architecture. The K series products will be compatible with software such as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microsoft(Registered Trademark) Windows(Trademark) currently compatible with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the X86 CPU microprocessors. The Corporation anticipates that the development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the first K series products will be completed sometime in late 1994. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation currently offers a family of RISC microprocessors for embedded \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control applications discussed below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The future outlook for the Corporation's microprocessor products is highly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dependent on the timing of new product introductions, the outcome of its various \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql litigation matters with Intel, and other microprocessor market conditions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Applications Solutions Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Computer Systems, Interfaces and Mass Storage. The Corporation offers a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql range of products which are utilized in a variety of computer systems. Computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql systems include a peripheral chip which is a special-purpose component that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql works with central processing units, managing selected input/output or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql system functions. Other systems components control disk drives, keyboards and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql printers. Through the use of communication peripherals, computers can operate in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql networks and communicate locally and over long distances. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Many of these systems require a high-performance microprocessor for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embedded control. The Corporation's proprietary Am29000(Trademark) family of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RISC microprocessors is used extensively by a wide range of customers for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embedded control applications. Examples of these applications include \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql high-performance laser printer controllers, high-resolution graphics \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql controllers, communications controllers, and accelerator cards. Many \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturers, such as Motorola, Intel, IDT, National Semiconductor and Texas \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Instruments offer RISC-based microprocessors which compete with the Am29000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql family in certain applications. The Corporation expects that the RISC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor market will continue to grow. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation also supplies a range of products specially designed to add \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional functions, improve performance and reduce costs in computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql peripheral, interface or mass storage applications. These are generally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql special-purpose products which are optimized for a specific application and are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql frequently proprietary products of the Corporation or in the case of selected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql large customers, products which have been tailored for that customer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Networks and Voice/Data Communications. The Corporation provides a wide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql variety of products for a broad spectrum of connectivity solutions. These \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include applications in central office switches, PBX equipment, voice/data \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminals, and different performance classes of Local Area Networks (LANs) used \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to connect workstations and personal computers. In addition to providing the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuits for these applications, the Corporation also provides \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql various forms of hardware evaluation tools, development software and interface \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql software. AMD continues to be a major supplier of Ethernet LAN devices for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql workstation applications. During 1993, the Corporation introduced several \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ethernet products designed for use on Personal Computer motherboards and add-in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cards. AMD also is a principal supplier for chip sets to support the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 100-megabit-per-second Fiber Distributed Data Interface (FDDI) local area \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql network standard which is primarily used to connect high performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql workstations and servers. The Corporation has also developed, in cooperation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with systems manufacturers, a family of devices for the 10Base-T standard, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allows transmission of data using Ethernet protocols on twisted-pair wiring, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rather than on the more expensive coaxial cable. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Subscriber Line Interface Circuit (SLIC) and the Subscriber Line \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Audio-Processing Circuit (SLAC(Trademark)), co-invented and manufactured by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, are an integral part of one of the leading designs for digital \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql telephone switching equipment. The SLIC connects the user's telephone wire to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the telephone company's digital switching equipment. The SLAC is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql coder/decoder which converts analog voice signals to a digital format and back. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation enjoys its continued success with these products in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql European market, and more recently has seen increased demand from nations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committed to upgrading their telecommunications infrastructure. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql High-Volume Commodity Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Programmable Logic Devices (PLDs). The Corporation is a leading \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql supplier of high-speed, field-programmable integrated circuits. PLDs generally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql afford a user increased design flexibility relative to standard logic devices. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The initial design time and design cost in customizing a programmable device is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significantly less than designing a custom integrated circuit or customizing a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gate array logic device. The Corporation's Programmable Array Logic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (PAL(Registered Trademark)) architecture was invented by Monolithic Memories, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc. (MMI), which was acquired by the Corporation in 1987, and AMD's PAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices continue to comprise a large share of the worldwide market for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql field-programmable logic devices. These devices combine off-the-shelf \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql availability, ease of use and the low cost of standard products with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capability for semi-custom design, making them attractive to a broad range of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql users. The Corporation's PLDs are generally manufactured with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transistor-to-transistor logic (TTL) designs in bipolar technology for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql low-density, high-speed devices, and CMOS for complex architecture, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql high-density and low-power devices. In the past several years, the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has utilized CMOS technology for lower power and more complex architectures. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Programmable devices have generally been manufactured using bipolar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology to provide users with high-speed products. The Corporation offers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql several products using CMOS technology and has continued to expand its product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portfolio in this area. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Volatile/Volatile Memories. Memory components are used to store \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer programs and data entered during system operation. There are two types \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of memory storage capability, volatile and non-volatile. Volatile memories \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include Dynamic and Static Random Access Memories (DRAMs and SRAMs). Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql volatile memories retain data when system power is shut off, while volatile \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memories do not. Non-volatile memories include Erasable Programmable Read-Only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memories (EPROMs) and the new generation Flash Memory. The Corporation's memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products are primarily non-volatile memories used in a wide range of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications such as PCs, workstations, peripherals, instrumentation, PBX \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equipment, avionics and a variety of other equipment where programmed data \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql storage is needed. The Corporation now has a complete family of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CMOS EPROM devices from 64K (64,000 bits) to 4 megabits (4,000,000 bits) in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql density. AMD generally offers the highest performance at each density of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standard EPROM supplier. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has developed a family of Flash EPROMs to address the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql emerging market for PC memory cards, solid-state disks, cellular communications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and networking applications. Flash Memory is a potential alternative to bulky \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and relatively slow hard-disk drives for PCs because it is smaller, faster and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql can store data almost indefinitely, yet can be erased, read and programmed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql efficiently. The Corporation is developing a family of Flash EPROMs to address \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the demand for PC memory cards, solid-state disks, cellular communications and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql networking applications. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's joint venture with Fujitsu Limited (Fujitsu) will allow \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it to take advantage of expected growth in Flash Memory sales. Under the joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql venture, AMD and Fujitsu will jointly manufacture EPROMs and Flash Memory. (See \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discussion of Joint Venture with Fujitsu Limited below). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture with Fujitsu Limited. In 1993, AMD and Fujitsu entered into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql various agreements for a comprehensive collaboration covering joint development, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing and sales of integrated circuits and formed a Joint Venture, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu AMD Semiconductor Limited (the "Joint Venture"). Through the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture, AMD expects to further develop its strong position in EPROMs and Flash \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory. Under the Joint Venture, the two companies are cooperating in building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operating an $800 million wafer fabrication facility in Aizu-Wakamatsu, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japan to produce non-volatile memory devices such as EPROMs and Flash Memories. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The percentage of the equity of the Joint Venture owned by the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu are 49.95% and 50.05%, respectively (the "Ownership Percentage"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Currently, the primary mission of the Joint Venture is the production of Flash \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory devices. Each company will contribute toward funding and supporting the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture in proportion to its Ownership Percentage. In 1993, AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributed approximately $2 million to the Joint Venture and it anticipates it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will make additional contributions in 1994 of approximately $135 million. AMD is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expected to contribute approximately one-half of its share of funding in cash as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equity investment, and guarantee third party loans made to the Joint Venture for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the remaining one-half. Accordingly, each company is obligated to invest up to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately $200 million as equity in the Joint Venture. As the forecasted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture costs and funding commitments are denominated in Yen, the dollar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amounts involved are subject to change due to fluctuations in exchange rates. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The agreements provide that the Joint Venture will borrow funds required for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital investment and working capital purposes which are in excess of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants' equity contributions. Each participant is obligated to guarantee a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portion of such borrowings proportionate to its Ownership Percentage. To the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that such borrowings cannot be made on the strength of a participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guarantee, the participant is obligated to make direct cash loans to the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The ability of the Corporation to sell products produced by the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture into certain territories, including the United Kingdom and Japan, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited under the terms of the Joint Venture agreement. AMD and Fujitsu will not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independently produce EPROM and Flash Memory products with geometries of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one-half (0.5) micron and smaller outside of the Joint Venture and thus will not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compete with the Joint Venture in such products. Also under the agreement, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu acquired a minority equity position in AMD and will continue to increase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its position over five (5) years. AMD has acquired a minority equity position in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu. The respective equity investments will be less than five percent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql common stock of each company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The new facility is expected to begin volume production in 1995, and will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilize eight-inch wafers and process technologies capable of producing products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with geometries of one-half (0.5) micron and smaller. In connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture, the Corporation and Fujitsu have entered into various joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development, cross-license and investment arrangements. Accordingly, AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu will provide their product designs and process and manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technologies to the Joint Venture. In addition, both companies will collaborate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in developing manufacturing processes and designing integrated circuits for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture. The right of each company to use the licensed intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property of the other with respect to certain products is limited to certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql geographic areas. Consequently, AMD's ability to sell certain products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporating Fujitsu intellectual property, whether or not produced by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture, is also limited in certain territories, including the United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kingdom and Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MARKETING AND SALES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices markets and sells its products primarily to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql original equipment manufacturers of computation and communication equipment. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's products are sold under the AMD(Registered Trademark) trademark. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation recently entered into an agreement with Compaq Computer Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Compaq) under which the Corporation will supply Compaq with microprocessor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products; however, the agreement does not require Compaq to purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessor products from the Corporation. The Corporation sells to a broad \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql base of customers; no single customer accounted for more than ten percent (10%) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of sales during the fiscal year ended December 26, 1993. Through its principal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities in Santa Clara County, California, and field offices throughout the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States and abroad (primarily Europe and the Asia-Pacific Basin) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation employs a direct sales force. The Corporation also sells its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products through third-party distributors and independent representatives in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both domestic and international markets pursuant to nonexclusive agreements. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The distributors also sell products manufactured by AMD's competitors, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including those products for which the Corporation is an alternate source. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Distributors typically maintain an inventory of AMD's products. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, pursuant to its agreements with the distributors, employs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures which provide protection to the distributors for their inventory of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices' products against price reductions as well as products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are slow moving or have been discontinued by the Corporation. These \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements, which may be cancelled by either party on a specified notice, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally contain a provision for the return of AMD's products to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation in the event the agreement with the distributor is terminated. (See \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Note 1 of Notes to Consolidated Financial Statements contained in the 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report to Stockholders.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices has established sales subsidiaries that have offices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Belgium, Canada, China, France, Germany, Hong Kong, Italy, Japan, Korea, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Singapore, Sweden, Switzerland, Taiwan, and the United Kingdom. (See Note 9 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to Consolidated Financial Statements contained in the 1993 Annual Report \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Stockholders.) The international sales force also works with independent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sales representatives and distributors in approximately 30 countries, including, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those where Advanced Micro Devices has sales subsidiaries. The Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql international sales operations entail political and economic risks including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expropriation, currency controls, exchange fluctuations, changes in freight \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rates, and changes in rates and exemptions for taxes and tariffs. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation has not experienced any material adverse effects associated with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such risks. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BACKLOG \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Since Advanced Micro Devices manufactures and markets a standard line of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products, a significant portion of its sales are made from inventory on a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current basis. Sales are made primarily pursuant to (1) purchase orders for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current delivery of standard items, or (2) agreements covering purchases over a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of time, which are frequently subject to revision and cancellation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Generally, in light of current industry practice and experience, the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not believe that such agreements provide reliable backlog figures. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMPETITION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Numerous firms are engaged in the manufacture and sale of integrated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits competitive with those of the Corporation. Some of these firms have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resources greater than those of the Corporation and do not depend upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuits as their principal source of revenue. There is also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significant captive production by certain large users of circuits such as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturers of computers, telecommunications equipment and consumer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electronics products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The industry typically experiences rapid technological advances together \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with substantial price reductions in maturing products. After a product is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql introduced, prices normally decrease over time as production efficiency and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competition increase, and a successive generation of products is developed and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql introduced for sale. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql According to Dataquest, an industry research firm, during 1993, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation was the fifth-largest independent U.S. manufacturer of integrated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits, and the thirteenth largest worldwide (excluding IBM), ranked according \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to sales to unaffiliated customers. Advanced Micro Devices competes for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuit market share with Texas Instruments, Motorola, National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor, Intel, North American Philips, and with several prominent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese firms. These firms include Nippon Electric Co., Hitachi, Toshiba, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu, Matsushita and Mitsubishi, who are making active efforts to increase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their respective and collective worldwide market shares. (For more information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning Fujitsu, see section Joint Venture with Fujitsu Limited above.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All of the above-mentioned competitors are either substantially larger in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql both gross sales and in total assets than Advanced Micro Devices or are part of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql larger corporate enterprises to whose resources, financial and other, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competitors have access. In addition to the above, many other companies \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dedicated to only one or two process technologies and product types compete with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation in those technologies and product types. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESEARCH AND DEVELOPMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In keeping with its objective of increasing emphasis on the development of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary products while maintaining its role as a high-volume producer of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql popular designs, Advanced Micro Devices endeavors to manufacture products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql utilizing advanced technology which is consistently reproducible in an industry \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where the technology is complex and subject to rapid change. The Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directs its research and development efforts towards the advancement of wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processing technology and the design of new circuits utilizing consistently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reproducible advanced technologies. (For information concerning these advances \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql see section Process Technology and Manufacturing below.) The Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql emphasizes research and development efficiency improvements through the use of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computer-aided design workstations and complementary circuit design software. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The semiconductor industry is subject to rapid changes in technology and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires a high level of capital spending and extensive research and development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programs to maintain the state of the art. The Corporation's expenses for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql research and development in 1991, 1992 and 1993, were $213,765,000, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $227,860,000, and $262,802,000, respectively. Such expenses were 17.4%, 15.0% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 16.0% of sales in 1991, 1992 and 1993, respectively. Advanced Micro Devices' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql research and development expenses are charged to operations as incurred. Most of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the research and development personnel are integrated into the engineering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql staff. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROCESS TECHNOLOGY AND MANUFACTURING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Monolithic integrated circuits are manufactured from a circuit layout \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql separated into layers that are produced on photomasks (working plates). The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actual production of the integrated circuit includes wafer fabrication, wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sort, assembly and final test. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The semiconductor industry is increasingly process-based, meaning that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance of semiconductor technology requires the ability to develop new design \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and manufacturing processes. The process technologies generally utilized in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture of integrated circuits are bipolar and metal-oxide semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (MOS). CMOS products require less power than circuits built with other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processes, such as bipolar or N-MOS (N-channel MOS). In addition, CMOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology allows for a much broader circuit design capability than NMOS or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bipolar and thus CMOS designs are displacing both NMOS and bipolar product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designs. The advances and advantages of CMOS technology have created an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased demand for products manufactured with CMOS processes. During 1993, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over two-thirds of the Corporation's total sales were derived from CMOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With advances in CMOS processing technology and the continued erosion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand for products manufactured with bipolar technology, the Corporation has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql significantly streamlined its wafer fabrication capacity by restructuring its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing capabilities from an emphasis on bipolar process technology to an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql emphasis on CMOS process technology. The Corporation is primarily a CMOS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturer and has achieved cost-effective production in its Submicron \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Development Center (SDC) which was completed in 1991 and continues to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improved to incorporate more advanced technology. Am386 microprocessors have \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been produced using 0.8-micron CMOS technology, and the vast majority of AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing capacity is now sub-micron CMOS. In 1993, the Corporation began to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepare the SDC for the anticipated demand for its Am486 microprocessor family \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and its 5-volt Flash Memory through the investment of additional funds in 1993, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bringing the total investment in the SDC to more than $360 million in 1993, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it is estimated to reach approximately $460 million in 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD has developed different base processes that are optimized for logic, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memory and programmable logic designs. Having process expertise which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reproducible across different product designs allows AMD to bring new and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improved designs quickly into production. The Corporation's capital commitment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to improvements in process technology has led to reductions in feature size and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defect densities, which in turn result in the higher transistor count, speed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql functionality and power efficiency of AMD's integrated circuits. In 1993, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation continued building development versions of 0.7-micron triple-layer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metal logic products and memory devices with 0.5-micron feature sizes, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql researched patterning methods that will eventually produce 0.25-micron feature \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sizes. In 1993, the Corporation also began shipment of 0.7-micron triple-layer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metal logic products (Am486). In addition, 0.5 micron feature size logic and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memory devices are in the final stages of development. Research is also being \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carried out on process and patterning methods to produce 0.35-micron and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0.25-micron feature size devices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product design and development and wafer fabrication activities are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently conducted at Advanced Micro Devices' facilities in California and in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas. A subsidiary of Sony Corporation manufactures bipolar products for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation in San Antonio, Texas, using equipment owned by the Corporation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nearly all product assembly and final testing is performed at the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing facilities in Penang, Malaysia; Singapore; and Bangkok, Thailand, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by subcontractors in Asia. A limited amount of testing of products destined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for delivery in Europe and Asia is performed at the Corporation's facilities in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Basingstoke, England. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Foreign manufacture entails political and economic risks, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql political instability, expropriation, currency controls and fluctuations, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changes in freight rates and in interest rates, and exemptions for taxes and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tariffs. For example, if the Corporation were not able to assemble and test its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products abroad, or if air transportation between the United States and these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities were disrupted, there could be a material adverse effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's operations. The Corporation has not experienced any material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse effects associated with such risks. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In July 1993, the Corporation commenced construction of its 700,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql square foot submicron semiconductor manufacturing facility in Austin, Texas \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (FAB 25). The Corporation estimates that the cost of this facility will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately $1 billion when fully equipped. The Corporation anticipates the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facility will commence volume production in 1995. The Corporation has also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recently entered in to an agreement with Digital Equipment Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (DEC(Registered Trademark)) under which DEC will provide a foundry in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Queensferry, Scotland, for production of the Corporation's Am486 products; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, under the terms of such arrangement both parties have certain rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to terminate this relationship earlier, in the event of adverse developments in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's litigations with Intel. DEC will produce wafers for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation in the Queensferry foundry utilizing an adaptation of DEC's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0.68-micron process technology. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A major portion of the Corporation's current effort in both process \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology and circuit design is directed toward the development of large scale \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integration products for microprocessor, programmable logic and memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications. The Corporation has entered into a strategic alliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hewlett-Packard Corporation to collaborate on the development of advanced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql process technology that will enable the Corporation to produce microprocessors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and logic devices with 0.35 micron CMOS logic technology. The Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anticipates the technology will be developed by the end of 1995 and that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production of such products will commence sometime in 1996. The Corporation is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also placing emphasis on the development of CMOS non-volatile memories, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programmable logic and VLSI (Very Large Scale Integration) logic products and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specialized circuits for the telecommunications market. (For information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning product development refer to the section entitled Products above.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quality Assurance. The Corporation's long-established quality program has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allowed it to achieve one of the highest quality and reliability levels in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry. This program is led by top management through an \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Executive Quality Board comprised of senior executives. The Corporation's Total \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Quality Management (TQM) Program is actuated by Market Driven Quality (MDQ) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principles and implemented at all levels within the Corporation. TQM and MDQ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principles are applied through team empowerment, and business process technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and manufacturing qualification. The Corporation's proprietary product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql management methodology starts with detailed analysis of the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developing and supporting a new product, as well as extensive product simulation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before production to assure that the finished product meets specifications free \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of defects. The program uses statistical process control techniques and involves \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all aspects of the manufacture of AMD products. The Corporation has also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql implemented leading international quality system standards, has been certified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to ISO-9000 standards in its manufacturing operations in Asia, and will soon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have a wafer fabrication facility ISO certified. All of the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql facilities follow uniform quality policies set by the Corporation's corporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quality organizations in Sunnyvale, California and in Austin, Texas. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Materials and Energy. The principal raw materials used by the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the manufacture of its products are silicon wafers, processing chemicals and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gases, ceramic and plastic packages, and some precious metals. Certain of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql raw materials used in the manufacture of circuits are available from a limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of suppliers in the United States and elsewhere. For example, for several \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql types of the integrated circuit packages that are purchased by Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, as well as by the majority of other companies in the semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industry, the principal suppliers are Japanese companies. The Corporation does \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not generally depend on long-term fixed supply contracts with its suppliers. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql However, shortages could occur in various essential materials due to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interruption of supply or increased demand in the industry. If Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices were unable to procure certain of such materials from any source, it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql would be required to reduce its manufacturing operations. To date, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation has experienced no significant difficulty in obtaining the necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql raw materials. The Corporation's operations also depend upon a continuing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adequate supply of electricity, natural gas and water. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Environmental Regulations. To the Corporation's knowledge, compliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal, state and local regulatory provisions enacted or adopted for protection \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the environment has had no material effect upon the capital expenditures, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings or competitive position of Advanced Micro Devices. (See also Item 3, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Proceedings, Number 1.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTELLECTUAL PROPERTY AND LICENSING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation and its subsidiaries have been granted 746 United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patents, and approximately 305 patent applications are pending in the United \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql States. Where appropriate, the Corporation has filed corresponding applications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in foreign jurisdictions. The Corporation expects to file future patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications in both the United States and abroad on significant inventions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may be made by its employees or consultants. Advanced Micro Devices plans \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to protect its innovations by various means, including litigation where \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate, and patents and mask work registrations, even though patent and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mask work registration protection may not be essential to maintain the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's market position. (See Microprocessors discussed above concerning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Microsoft license.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As is common in the semiconductor industry, from time to time Advanced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Micro Devices has been notified that it may be infringing patents issued to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others. Such claims are referred to counsel for evaluation and resolution. While \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patent owners in such instances generally express a willingness to grant a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license, the Corporation cannot presently estimate the dollar amount, if any, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that might be involved in such disputes. No assurance can be given that all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary licenses can be obtained on satisfactory terms, nor that litigation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may always be avoided. (See also Item 3, Legal Proceedings, Numbers 2-8.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Under a technology exchange agreement and patent cross-license agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Intel Corporation, the Corporation manufactures various iAPX products, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the 8051 single-chip microcontroller and the 8086, 8088, 80186, 80286, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 80386 and 80486 microprocessors and the 80287, a math co-processor. Certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and obligations under the agreements with Intel are currently the subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of litigation between AMD and Intel. (See Item 3, Legal Proceedings, Numbers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2-8). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has entered into numerous cross-licensing and technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange agreements under which it both transfers and receives technology and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intellectual property rights. Such arrangements include \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses between the Corporation and Hewlett-Packard Company and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited. (See information under sections Joint Venture with Fujitsu Limited and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Process Technology and Manufacturing above.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EMPLOYEES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attracting and retaining competent employees and motivating them to meet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate objectives are essential elements of maintaining profitability in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intensely competitive semiconductor industry where such personnel are in high \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demand. Since its inception in 1969, Advanced Micro Devices has implemented \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql policies designed to create a favorable working environment for its employees. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For example, the Corporation makes available stock option and stock purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plans, pays special bonuses and maintains a profit-sharing program for some or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all employees, depending upon the plan or program. (See Note 10 of Notes to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Financial Statements contained in the 1994 Annual Report to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stockholders.) Like other semiconductor manufacturers, at times the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql experiences difficulty in hiring and retaining experienced personnel. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation intends to utilize whatever forms of compensation, benefits and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other activities are necessary and cost effective in order to continue to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attract and retain the quality of personnel required for its business. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 26, 1993, Advanced Micro Devices and its subsidiaries employed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 12,060 employees. Management considers its employee relations to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be very good. Direct communication among all employees and management is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql encouraged. No employees of Advanced Micro Devices are represented by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collective bargaining agent. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I{\*\bkmkstart item_1_3_2}{\*\bkmkend item_1_3_2}\plain\cf1\f50\fs16\ql TEM 2. PROPERTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation's principal engineering, manufacturing, warehouse and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative facilities comprise approximately 2 million square feet and are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql located in Santa Clara County, California and in Austin, Texas. (See Item 1, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Process Technology and Manufacturing and Item 7, Management's Discussion). Over \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 million square feet of this space is in buildings owned by the Corporation. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Of these properties, approximately 264,300 square feet is subject to a mortgage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a remaining term of up to fourteen years. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In 1992, the Corporation entered into certain operating leases and an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement for the purchase of certain property containing a building with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 318,000 square feet, located on 45.6 acres of land in Sunnyvale, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California (One AMD Place). The Corporation intends to utilize One AMD Place for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its corporate sales, marketing and administrative offices upon completion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alterations to the building in 1994. This arrangement provides the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the option to purchase One AMD Place during the lease term, and at the end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the lease term the Corporation is obligated to either purchase One AMD Place \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or arrange for the sale of One AMD Place to a third party with a guarantee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql residual value to the seller of One AMD Place. In 1993, the Corporation entered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into a lease agreement for approximately 175,000 square feet located adjacent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql One AMD Place to be used in connection with One AMD Place. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation also owns or leases facilities containing approximately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 718,300 square feet for its operations in Malaysia, Singapore and Thailand. (See \par\pard\plain\fs16{\*\bkmkstart item_1_3_3}{\*\bkmkend item_1_3_3}\pard\plain\cf1\f50\fs16\ql Item 1, Process Technology and Manufacturing and Item 7, Management's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Discussion). Of the entire worldwide facilities owned or leased by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation nearly 947,300 square feet are currently vacant, of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 487,000 are currently under improvement or construction. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation holds 74 undeveloped acres of land in the Republic of Ireland, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approximately 8 acres were sold in 1993. The Corporation also has an equity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in 61 acres of land in Albuquerque, New Mexico. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation maintains 35 sales offices in North America and 18 sales \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offices in Asia and Europe for its direct sales force. These offices are located \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in cities in major electronics markets where concentrations of Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices' customers are located. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leases covering the Corporation's facilities expire over terms of generally \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 to 20 years. The Corporation anticipates no difficulty in either retaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occupancy of any of its facilities through lease renewals prior to expiration or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through month-to-month occupancy, or replacing them with equivalent facilities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (See Note 12 of Notes to Consolidated Financial Statements contained in the 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report to Stockholders.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_4}{\*\bkmkend item_1_3_4}\pard\plain\cf1\f50\fs16\ql ITEM 3. LEGAL PROCEEDINGS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Environmental Matters. Since 1981, the Corporation has discovered, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investigated and begun remediation of three sites where releases from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql underground chemical tanks at its facilities in Santa Clara County, California \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adversely affected the groundwater. There is no indication, however, that any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public drinking water supplies have been affected. The chemicals released into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the groundwater were commonly in use in the semiconductor industry in the wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fabrication process prior to 1979. At least one of the released chemicals (which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is no longer used by the Corporation) has been identified as a probable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carcinogen. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In 1991, the Corporation received four Final Site Clean-up Requirements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Orders from the California Regional Water Quality Control Board, San Francisco \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Bay Region (RWQCB) relating to the three sites. One of the sites (Final Site \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clean-up Requirements Order No. 91-102) includes clean-up of groundwater \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination from TRW Microwave, Inc. (TRW), Philips Semiconductor (formerly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Signetics Corporation) and the Corporation which the RWQCB claims merged. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation is proceeding jointly with Philips and TRW to clean-up the merged \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contamination and the parties are contributing to the clean-up equally. Another \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the sites (Final Site Clean-up Requirements Order Nos. 91-139 and 91-140) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql includes clean-up of groundwater contamination from National Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, the Corporation and others, which the RWQCB claims merged. National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Corporation and the Corporation have been named in the orders as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primarily responsible and have commenced clean-up efforts in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their respective orders. However, there has been no allocation of responsibility \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the groundwater contamination. The third site (Final Site Clean-up \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Requirements Order No. 91-101) is primarily the responsibility of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In each instance mentioned above, the Corporation conducted appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programs of remedial action that involved soil removal, installation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monitoring and extraction wells and water treatment systems, disposal of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inoperative tank systems, and repair and alterations to existing facilities. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final clean-up plan includes continued groundwater monitoring, extraction and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql treatment and, in one instance, soil vapor extraction. Federal and State \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental agencies have approved the final clean-up plans being implemented. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has not yet determined to what extent the costs of such remedial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions will be covered by insurance. The three sites are on the National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Priorities List (Superfund). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the Corporation fails to satisfy federal compliance requirements or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inadequately performs the compliance measures, the government (a) can bring an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action to enforce compliance, or (b) can undertake the desired response actions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql itself and later bring an action to recover its costs and penalties, up to three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql times the costs of clean-up activities, if appropriate. It is expected that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these matters will not have a material adverse effect on the financial condition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or results of operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In addition, homeowners residing in the vicinity of two of the Superfund \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sites filed a class action lawsuit against the Corporation, TRW and Signetics in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Superior Court of Santa Clara County, California (Case No. 716064). The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql class action suit alleged that groundwater contamination caused by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defendants lowered property values and that the plaintiff class suffered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql emotional distress and fear. In May 1993, the action was settled and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complaint was dismissed with prejudice in July 1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. AMD/Intel Technology Agreement Arbitration. A 1982 technology exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement (the "1982 Agreement") between AMD and Intel Corporation has been the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject of a dispute which was submitted to Arbitration through the Superior \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court of Santa Clara County, California and the matter is now at the California \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supreme Court on appeal. The dispute centers around issues relating to whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel breached its agreement with AMD and whether that breach injured AMD, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql well as the remedies available for such a breach to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In February 1992, the Arbitrator awarded AMD several remedies including the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following: a permanent, royalty-free, nonexclusive, nontransferable worldwide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to all Intel copyrights, patents, trade secrets and mask work rights, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, contained in the then-current version of AMD's Am80386 family of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors; and a two-year extension, until December 31, 1997, of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyright and patent rights granted to AMD. Intel appealed this decision as it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relates to the technology award. On May 22, 1992, the Superior Court in Santa \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clara County confirmed the Arbitrator's award and entered judgment in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's favor on June 1, 1992. Intel appealed the decision confirming the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arbitrator's award in state court. On June 4, 1993, the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California Court of Appeal affirmed in all respects the Arbitrator's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determinations that Intel breached the 1982 Agreement, however, the Court of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appeal held that the arbitrator exceeded his powers in awarding to AMD a license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Intel intellectual property, if any, in AMD's Am386 microprocessor and in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extending the 1976 patent and copyright agreement between AMD and Intel (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "1976 Agreement") by two years. As a result, the Court of Appeal ordered the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lower court to correct the award to remove these rights and then confirm the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award as so corrected. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On September 2, 1993, the California Supreme Court granted the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's petition for review of the California Court of Appeal decision \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Arbitrator exceeded his authority. The Corporation has requested that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the California Supreme Court affirm the judgment confirming the Arbitrator's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award to the Corporation, which includes the right to the Intel 386 microcode. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If the California Supreme Court affirms the judgment confirming the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arbitrator's award, the Corporation would assert an additional defense against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel's intellectual property claims in the 386 and 486 Microcode Litigations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (discussed below) which could preclude Intel from continuing to pursue any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damage or intellectual property claims regarding the Am386. If the Supreme Court \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not affirm the judgment it could: (i) decide to remand the matter for a new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arbitration proceeding either on the merits or solely on the issue of relief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the damages due to the Corporation, or (ii) order no further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings which would foreclose the possibility of AMD collecting additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monetary damages through the Arbitration and/or potentially impact AMD's ability \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to use the Arbitration Award as a defense in the 386 or 486 Microcode \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Litigations discussed below. The California Supreme Court is expected to decide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case by the end of 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation believes it has the right to use Intel technology to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture and sell AMD's microprocessor products based on a variety of factors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including: (i) the 1982 Agreement, (ii) the Arbitrator's award in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arbitration which is pending review by the California Supreme Court and (iii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 1976 Agreement. An unfavorable decision by the California Supreme Court \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could materially affect other AMD/Intel Microcode Litigations discussed herein. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The AMD/Intel Litigations involve multiple interrelated and complex issues of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fact and law. Therefore, the ultimate outcome of the AMD/Intel Litigations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cannot presently be determined. Accordingly, no provision for any liability that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may result upon the adjudication of the AMD/Intel Litigations has been made in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's financial statements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. 287 Microcode Litigation. (Case No. C-90-20237, N. D. Cal.) On April \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23, 1990, Intel Corporation filed an action against the Corporation in the U.S. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql District Court, Northern District of California, seeking an injunction and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages with respect to the Corporation's 80C287, a math coprocessor designed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql function with the 80286. Intel's suit alleges several causes of action, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including infringement of Intel copyright on the Intel microcode used in its 287 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql math coprocessor. In June 1992, a jury determined that the Corporation did not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the right to use Intel microcode in the 80C287. On December 2, 1992, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql court denied the Corporation's request for declaratory relief to the effect it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has the right, under the 1976 Agreement with Intel to distribute products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql containing Intel microcode. The Corporation filed a motion on February 1, 1993, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for a new trial based upon the discovery by AMD of evidence improperly withheld \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Intel at the time of trial. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In April, 1993, the court granted AMD a new trial on the issue of whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 1976 Agreement with Intel Corporation granted AMD a license to use Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microcode in its products. The ruling vacated both an earlier jury verdict \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holding that the 1976 Agreement did not cover the rights to microcode contained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Intel 80287 math coprocessor and the December 2, 1992 ruling (discussed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above). A new trial commenced in January, 1994 and a decision is expected in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either the first or second quarter of 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The impact of the ultimate outcome of the 287 Microcode Litigation is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql highly uncertain and dependent upon the scope and breadth of the final decision \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the case. A decision of broad scope could not only result in a damages award \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but also impact the Corporation's ability to continue to ship and produce its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am486DX product or other microprocessor products adjudicated to contain any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyrighted Intel microcode. The Corporation's inability to ship product could \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have a material adverse impact on the Corporation's trends in results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial condition. The outcome of the 287 litigation could also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially impact the outcomes in the other AMD/Intel Microcode Litigations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discussed herein. The AMD/Intel Litigations involve multiple interrelated and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complex issues of fact and law. Therefore, the ultimate outcome of the AMD/Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Litigations cannot presently be determined. Accordingly, no provision for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability that may \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result upon the adjudication of the AMD/Intel Litigations has been made in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's financial statements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. 386 Microcode Litigation. (Case No. A-91-CA-800, W.D. Texas and Case \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. C-92-20039, N.D. Cal.) On October 9, 1991, Intel Corporation filed an action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the Corporation in the U.S. District Court for the Western District of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Texas (Case No. A-91-CA-800, W.D. Texas), alleging the separate existence and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyrightability of the logic programming in a microprocessor and characterizing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that logic as a "control program," and further alleging that the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql violated copyrights on this material and on the Intel microcode contained in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am386 microprocessor. This action has been transferred to the U.S. District \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court, Northern District of California (Case No. C-92-20039, N.D. Cal.). The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complaint in this action asserts claims for copyright infringement of what Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql describes as: (1) its 386 microprocessor microcode program and revised programs, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) its control program stored in a 386 microprocessor programmable logic array \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (3) Intel In-Circuit Emulation (ICE) microcode. The complaint seeks damages \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and injunctive relief arising out of the Corporation's development, manufacture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and sale of its Am386 microprocessors and seeks a declaratory judgment as to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel-AMD license agreements (1976 and 1982 Agreements). The monetary relief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sought by Intel is unspecified. The Corporation has answered and counterclaimed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seeking declaratory relief. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation believes that Intel's microcode copyright claims are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantively the same as claims made in the 287 Microcode Litigation (Case No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C-90-20237, N.D. Cal.) (discussed above). Intel has also asserted that federal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law prevents the Corporation from asserting as a defense the intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property rights that were awarded in the Intel Arbitration (discussed above). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel has made this claim both in its appeal of the Arbitration decision and in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the '386 Microcode Litigation. On October 29, 1992, the court in the '386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microcode Litigation granted the Corporation's motion to stay further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings pending resolution of the state court Arbitration appeal. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 28, 1993, the U.S. Court of Appeals for the Ninth Circuit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reversed the stay order and the case was remanded for further proceedings. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation will file a petition for writ of certiorari in the Supreme Court of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the United States. If the Ninth Circuit decision is not reversed or modified, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this action will proceed. In any event, the Corporation expects Intel will argue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the Arbitration is not a defense in this action. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As discussed above, in the 287 Microcode Litigation, the ultimate outcome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the 287 Microcode Litigation could materially impact the outcome in the 386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microcode Litigation and thus affect the Corporation's ability to produce Am386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An unfavorable final decision in the 386 Microcode Litigation could result \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a material monetary damages award to Intel and/or preclude the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from continuing to produce the Am386 and any other microprocessors which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjudicated to contain any copyrighted Intel microcode, either or both of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could have a material adverse impact on the Corporation's trends in results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial condition. The AMD/Intel Litigations involve multiple \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interrelated and complex issues of fact and law. Therefore, the ultimate outcome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the AMD/Intel Litigations cannot presently be determined. Accordingly, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision for any liability that may result upon the adjudication of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD/Intel Litigations has been made in the Corporation's financial statements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. 486 Microcode Litigation. (Case No. C-93-20301 PVT, N.D. Cal). On April \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28, 1993 Intel Corporation filed an action against AMD in the U.S. District \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Court, Northern District of California, seeking an injunction and damages with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the Corporation's Am486 microprocessor. The suit alleges several \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql causes of action, including infringement of various Intel copyrighted computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql programs. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel's Fourth Amended Complaint was filed on November 2, 1993. The Fourth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amended Complaint seeks damages and injunctive relief based on: (1) AMD's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleged copying and distribution of 486 "Processor Microcode Programs" and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Control Programs" and (2) AMD's alleged copying of 486 "Processor Microcode" as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an intermediate step in creating proprietary microcode for the AMD version of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 486. The Fourth Amended Complaint also seeks a declaratory judgment that (1) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD has induced third party copyright infringement through encouraging third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties to import Am486-based products ("Third Party \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inducement Claim"); (2) AMD's license rights to Intel microcode expire as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 31, 1995 ("License Expiration Claim"); (3) that AMD's license rights to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel microcode do not extend to In-Circuit Emulation (ICE) microcode ("ICE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Claim"); and (4) that AMD is not licensed to authorize third parties to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacture products containing copies of Intel microcode ("Have Made Claim"). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel's Fourth Amended Complaint further seeks damages and injunctive relief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql based on AMD's alleged copying and distribution of Intel's "386 Processor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microcode Program" in AMD's 486SX microprocessor. The Corporation answered the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complaint in January, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On December 1, 1993, Intel moved for partial summary judgment on its claim \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for copyright infringement of Intel's 486 ICE microcode. This motion was heard \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on March 1, 1994. The Court requested further briefing from the parties, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicated its intention to rule on the motion after the briefing is completed on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 9, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By order dated December 21, 1993, the Court granted the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql motion to stay Intel's claim that AMD's 486SX infringes Intel copyrights on its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 386 microcode. In light of the Ninth Circuit decision discussed above in the 386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microcode Litigation reversing the Court's order staying the case, the stay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order in this action may be vacated and/or appealed and the litigation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning this claim may proceed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD believes that the microcode copyright infringement claims made by Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the 486 Microcode Litigation are substantively the same as claims: (i) made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the 287 Microcode Litigation with regard to the Intel microcode, discussed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above and (ii) made in the 386 Microcode Litigation with regard to AMD's rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to utilize the so-called Intel microcode, "control programs" and ICE microcode. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel has also made the following two new allegations not contained in either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 386 or 287 Microcode Litigations: (i) despite any rights AMD may have to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copy the Intel microcode, those rights do not extend to foundry rights and thus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD cannot use foundries to manufacture the Am486 product with Intel microcode \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (ii) AMD's rights to Intel copyrights terminate on December 31, 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As discussed above, in the 287 Microcode Litigation, the ultimate outcome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the 287 Microcode Litigation could materially impact the outcome in the 486 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Microcode Litigation. The outcomes in the 287 or the 486 Microcode Litigations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could affect the Corporation's ability to continue to ship and produce its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am486DX products and thus have an immediate, material adverse impact on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's trends in results of operations and financial condition. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD/Intel Litigations involve multiple interrelated and complex issues of fact \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and law. Therefore, the ultimate outcome of the AMD/Intel Litigations cannot \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presently be determined. Accordingly, no provision for any liability that may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result upon the adjudication of the AMD/Intel Litigations has been made in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's financial statements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Intel Antitrust Case. On August 28, 1991, the Corporation filed an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql antitrust complaint against Intel Corporation in the U.S. District Court for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Northern District of California (Case No. C-91-20541-JW-EAI), alleging that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Intel engaged in a series of unlawful acts designed to secure and maintain a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql monopoly in iAPX microprocessor chips. The complaint alleges that Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql illegally coerced customers to purchase Intel chips through selective allocation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Intel products and tying availability of the 80386 to purchases of other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql products from Intel, and that Intel filed baseless lawsuits against AMD in order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to eliminate AMD as a competitor and intimidate AMD customers. The complaint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requests significant monetary damages (which may be trebled), and an injunction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requiring Intel to license the 80386 and 80486 to AMD, or other appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relief. On December 17, 1991, the Court dismissed certain of AMD's claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to Intel's past practices on statute of limitations grounds. Intel has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed a motion for partial summary judgment on one of AMD's remaining claims for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relief, and the hearing on this motion is scheduled for March 4, 1994. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql current trial date is October 3,1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Intel Business Interference Case. On November 12, 1992, the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed a proceeding against Intel Corporation in the Superior Court of Santa \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clara County, California (Case No. 726343), for tortious interference with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prospective economic advantage, violation of California's Unfair Competition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, breach of contract and declaratory relief arising out of Intel's efforts to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require licensees of an Intel patent to pay royalties if they purchased 386 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 486 microprocessors from suppliers of those parts other than Intel. The patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql involved, referred to as the Crawford '338 patent, covers various aspects of how \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Intel 386 microprocessor, the 486 microprocessor and future X86 processors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manage memory and how these \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microprocessors generate memory pages and page tables when combined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with external memory and multi-tasking software such as Microsoft(Registered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trademark) Windows(Trademark), OS/2(Registered Trademark) or UNIX(Registered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Trademark). The action was subsequently removed to the Federal District Court \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where AMD amended its complaint to include causes of action for violation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Lanham Act and a declaration of patent invalidity and unenforceability. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complaint alleges that Intel is demanding royalties for the use of the Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patents from the Corporation's customers, without informing the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers that the Corporation's license arrangement with Intel protects the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's customers from an Intel patent infringement lawsuit. No royalties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the license are charged to customers who purchase these microprocessors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from Intel. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. International Trade Commission Proceeding. The United States \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql International Trade Commission Proceeding (the "ITC Proceeding") (Investigation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No. 337-TA-352) was filed by Intel Corporation on May 7, 1993, against two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respondents, Twinhead International and its U.S. subsidiary, Twinhead \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. Twinhead is a Taiwan-based manufacturer which is a customer of both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD and Intel. Twinhead purchases microprocessors from AMD and Intel, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporates these microprocessors into computers sold by Twinhead. Intel claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the respondents induce computer end-users to infringe on what is known as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Crawford '338 patent when the computers containing AMD microprocessors are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used with multi-tasking software such as Windows, Unix or OS/2. Intel seeks a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permanent exclusion order from entry into the United States of certain Twinhead \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql personal computers and an order directing Twinhead to cease and desist from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql demonstrating, testing or otherwise using such computers in the United States. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD's dispute with Intel in the Intel Business Interference Case (Case No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C-92-20789, N.D. Cal) (discussed above) requests a declaration that the Crawford \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql '338 patent is invalid; accordingly, AMD intervened in the ITC Proceeding as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql real party in interest by filing a motion with the ITC to intervene on the side \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the respondents. On July 2, 1993, the ITC granted AMD's motion to intervene \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the ITC Proceeding on the side of respondents and to participate fully in all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings as a party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation has vigorously contested the relief Intel seeks. A hearing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date before an administrative law judge has been set for May 2, 1994. Any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decision by an administrative judge would then be confirmed or not be confirmed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the International Trade Commission (ITC). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On February 4, 1994, the Corporation filed a motion to suspend immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and thereafter to terminate the ITC proceeding on the ground that Intel is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql collaterally estopped from pursuing the relief it seeks by reason of a judgment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql soon to be entered in favor of Cyrix Corporation, also an intervenor in the ITC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Proceeding, and against Intel in a lawsuit involving the Crawford 338 patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trial in Texas federal court. Intel opposed the motion, and filed a motion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its own requesting that the ITC proceeding be suspended, not terminated, pending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appellate review of the Cyrix Judgment. On February 22, 1994, ITC Administrative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Law Judge Sidney Harris granted AMD's motion to suspend, and indicated his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intent to terminate the ITC Proceeding upon entry of the judgment in the Texas \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal court as AMD has requested. Judge Harris denied Intel's motion to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suspend the ITC Proceeding until its appeal of the judgment in favor of Cyrix \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been resolved. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An unfavorable outcome before the ITC could have an adverse effect on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's ability to sell microprocessors to Twinhead and other computer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturers in Taiwan and potentially, other countries. An unfavorable outcome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql could have a material adverse impact on the Corporation's trends in results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations and financial condition. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. In Re Advanced Micro Devices Securities Litigation. Between September 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and September 10, 1993, five class actions were filed, purportedly on behalf of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasers of the Corporation's stock, alleging that the Corporation and various \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its officers and directors violated Sections 10(b) and 20(a) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and Exchange Act of 1934, 15 U.S.C. sec.sec. 78j(b) and 78t(a), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, and Rule 10b-5 promulgated thereunder, 17 C.F.R. sec. 240.10b-5, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by issuing allegedly false and misleading statements about the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development of its 486SX personal computer microprocessor products, and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent to which that development process included access to Intel's 386 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql microcode. Some or all of the complaints alleged that the Corporation's conduct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also constituted fraud, negligent misrepresentation and violations of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California Corporations Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By order dated October 13, 1993, these five cases, as well as any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequently filed cases, were consolidated under the caption "In Re Advanced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Micro Devices Securities Litigation", with the lead case for the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions being Samuel Sinay v. Advanced Micro Devices, Inc., et al., (No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C-93-20662-JW, N.D. Cal). A consolidated amended class action complaint was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed on December 3, 1993, containing all the claims described above and an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional allegation that the Corporation made false and misleading statements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql about its revenues and earnings during the third quarter of its 1993 fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year. The amended complaint seeks damages in an unspecified amount. On January \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14, 1994, the Company filed a motion to dismiss various claims in the amended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and consolidated class action complaint. The motion to dismiss is currently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scheduled for hearing on March 25, 1994. The Company has responded to initial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document requests and interrogatories, but has not yet produced documents. No \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql depositions have been taken. This case is in the early stage of discovery. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation believes that the ultimate outcome of this litigation will not have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a material adverse effect upon the financial condition or trends in results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. George A. Bilunka, et al. v. Sanders, et al. (93-20727JW, N.D. Cal.). \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On September 30, 1993, an AMD shareholder, George A. Bilunka, purported to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commence an action derivatively on the Corporation's behalf against all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's directors and certain of the Corporation's officers. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation is named as a nominal defendant. This purported derivative action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql essentially alleges that the individual defendants breached their fiduciary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duties to the Corporation by causing, or permitting, the Corporation to make \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql allegedly false and misleading statements about the Corporation's development of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its 486SX personal computer microprocessor products, and the extent to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that development process included access to Intel's 386 microcode. The action \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alleges that a pre-suit demand on the Corporation's Board of Directors would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been futile because of alleged director involvement. Damages are sought \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the individual defendants in an unspecified amount. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql On November 10, 1993, the Corporation, as nominal defendant, filed a motion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to dismiss the action for failure to make a demand upon the Corporation's Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors. The plaintiff then filed an amended derivative complaint on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 17, 1993. The Corporation has again moved to dismiss the complaint. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql motion was heard on February 4, 1994, and on March 1, 1994 the Court denied the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql motion. The Corporation believes that the ultimate outcome of this litigation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not have a material adverse effect upon the financial condition or trends \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in results of operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. SEC Investigation. The Securities and Exchange Commission (SEC) has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notified the Corporation that it is conducting an informal investigation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation into the Corporation's disclosures about the development of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Am486SX products. The Corporation is cooperating fully with the SEC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. Other Matters. The Corporation is a defendant or plaintiff in various \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other actions which arose in the normal course of business. In the opinion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql management, the ultimate disposition of these matters will not have a material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse effect on the financial condition or overall trends in the results of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_5}{\*\bkmkend item_1_3_5}\pard\plain\cf1\f50\fs16\ql ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql No matters were submitted to a vote of security holders during the fourth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter of the fiscal year covered by this report. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXECUTIVE OFFICERS OF THE REGISTRANT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NAME AGE POSITION HELD SINCE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - -------------------- ---- --------------------------------------------------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql W. J. Sanders III 57 Chairman of the Board and Chief Executive Officer 1969 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Anthony B. Holbrook 54 Vice Chairman of the Board and Chief Technical 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer. Mr. Holbrook was President from 1986 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1990, Executive Vice President from 1982 to 1986, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and concurrently was Chief Operating Officer from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1982 until 1989. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Richard Previte 59 Director, President and Chief Operating Officer. 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mr. Previte became Chief Operating Officer in 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and President in 1990. Mr. Previte was Chief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Officer and Treasurer from 1969 to 1989. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett 51 Senior Vice President, Chief Administrative Officer 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Secretary; Chief Financial Officer and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasurer. Mr. Burkett was Controller from 1972 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until 1989. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Larry R. Carter 50 Vice President and Corporate Controller. Mr. Carter 1992 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was, from August 1989 until June 1992, Chief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Officer of VLSI Technology, Inc. and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to that he was Vice President and Controller, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MOS Group, at Motorola, Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Gene Conner 50 Senior Vice President, Operations. Mr. Conner 1987 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql joined the Corporation in 1969, and was elected an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive officer in 1981. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stanley Winvick 54 Senior Vice President, Human Resources. 1980 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stephen Zelencik 59 Senior Vice President and Chief Marketing 1979 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Executive. Mr. Zelencik joined the Corporation in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1970. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql There is no family relationship between any executive officers of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_2}{\*\bkmkend part_1_2_2}\pard\plain\cf1\f50\fs16\ql PART II \par\pard\plain\fs16{\*\bkmkstart item_1_3_6}{\*\bkmkend item_1_3_6}\pard\plain\cf1\f50\fs16\ql ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MATTERS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information regarding market price range, dividend information and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of holders of Common Stock of Advanced Micro Devices appearing under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql caption "Supplemental Financial Data" on pages 30 and 31 of the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 Annual Report to Stockholders is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_7}{\*\bkmkend item_1_3_7}\pard\plain\cf1\f50\fs16\ql ITEM 6. SELECTED FINANCIAL DATA \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information regarding selected financial data for the fiscal years 1989 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql through 1993 under the caption "Financial Summary" on pages 30 and 31 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's 1993 Annual Report to Stockholders is incorporated herein by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_8}{\*\bkmkend item_1_3_8}\pard\plain\cf1\f50\fs16\ql ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL CONDITION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the caption "Management's Discussion and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Analysis of Results of Operations and Financial Condition" on pages 14 through \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 of the Corporation's 1993 Annual Report to Stockholders is incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_9}{\*\bkmkend item_1_3_9}\pard\plain\cf1\f50\fs16\ql ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices' consolidated financial statements at December 29, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1991, December 27, 1992, and at December 26, 1993, and for each of the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years in the period ended December 26, 1993, and the report of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independent auditors thereon, and the unaudited quarterly financial data of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices for the two-year period ended December 26, 1993, on pages \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 through 29 of the Corporation's 1993 Annual Report to Stockholders are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_10}{\*\bkmkend item_1_3_10}\pard\plain\cf1\f50\fs16\ql ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FINANCIAL DISCLOSURE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Not applicable. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_3}{\*\bkmkend part_1_2_3}\pard\plain\cf1\f50\fs16\ql PART III \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_11}{\*\bkmkend item_1_3_11}\pard\plain\cf1\f50\fs16\ql ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing at the end of Part I under the caption "Executive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officers of the Registrant" and under the captions "Proposal No. 1-Election of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors" and "Compliance with Section 16(a) of the Securities Exchange Act of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1934" in the Corporation's Proxy Statement to be mailed to Stockholders on or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before March 27, 1994 is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_12}{\*\bkmkend item_1_3_12}\pard\plain\cf1\f50\fs16\ql ITEM 11. EXECUTIVE COMPENSATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information under the paragraphs entitled "Directors Fees and Expenses" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the caption "Committees and Meetings of the Board of Directors", and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information under the captions "Executive Compensation" (not including the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance graph on page 12), "Material Compensation Agreements", "Change in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control Arrangements" and "Compensation Committee Interlocks and Insider \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participation" in the Corporation's Proxy Statement to be mailed to Stockholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on or before March 27, 1994, is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_13}{\*\bkmkend item_1_3_13}\pard\plain\cf1\f50\fs16\ql ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the captions "Principal Stockholders" and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Stock Ownership Table" in the Corporation's Proxy Statement to be mailed to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stockholders on or before March 27, 1994 is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_14}{\*\bkmkend item_1_3_14}\pard\plain\cf1\f50\fs16\ql ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information appearing under the caption "Transactions with Management" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Corporation's Proxy Statement to be mailed to Stockholders on or before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 27, 1994 is incorporated herein by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_4}{\*\bkmkend part_1_2_4}\pard\plain\cf1\f50\fs16\ql PART IV \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart item_1_3_15}{\*\bkmkend item_1_3_15}\pard\plain\cf1\f50\fs16\ql ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) 1. Financial Statements \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial statements listed in the accompanying Index to Consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Financial Statements and Financial Statement Schedules Covered by Report of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Auditors are filed or incorporated by reference as part of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql annual report. The following is a list of such Financial Statements: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 ANNUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM REPORT TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report of Independent Auditors............................................. -- 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Operations for each of the three fiscal years in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period ended December 26, 1993........................................... -- 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Balance Sheets at December 27, 1992 and December 26, 1993..... -- 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Cash Flows for each of the three fiscal years in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period ended December 26, 1993........................................... -- 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to consolidated financial statements................................. -- 20-28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supplementary financial data: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fiscal years 1992 and 1993 by quarter (unaudited)........................ -- 30-31 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Financial Statement Schedules \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The financial statement schedules listed in the accompanying Index to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Financial Statements and Financial Statement Schedules Covered by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report of Independent Auditors are filed or incorporated by reference as part of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this annual report. The following is a list of such Financial Statement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 ANNUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM REPORT TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---- ------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I Marketable Securities............................................... F-3 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II Amounts receivable from officers and employees...................... F-4 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql V Property, plant and equipment....................................... F-5 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accumulated depreciation and amortization of property, plant and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VI equipment........................................................... F-6 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VIII Valuation and qualifying accounts................................... F-7 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X Supplementary operations statement information...................... F-8 -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. EXHIBITS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The exhibits listed in the accompanying Index to Exhibits are filed or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference as part of this annual report. The following is a list \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such Exhibits: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------- ---------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Certificate of Designations for Convertible Exchangeable Preferred Shares, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 3.2 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year ended March 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.3 Certificate of Designations for Series A Junior Participating Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock, filed as Exhibit 3.3 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended December 31, 1989, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.4 By-Laws, as amended, filed as Exhibit 3.4 to the Corporations Annual Report \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares, filed as Exhibit 4.3 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended March 29, 1987, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Indenture with respect to the 6% Convertible Subordinated Debentures due in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2012, filed as Exhibit 4.4 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended March 29, 1987, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 The Corporation hereby agrees to file on request of the Commission a copy of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all instruments not otherwise filed with respect to long-term debt of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or any of its subsidiaries for which the total amount of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities authorized under such instruments does not exceed 10% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql total assets of the Corporation and its subsidiaries on a consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql basis. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.4 Rights Agreement between the Corporation and Bank of America N.T. & S.A., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as Exhibit 4.1 to the Corporation's Current Report on Form 8-K dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql February 7, 1990, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.1 AMD 1982 Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.2 AMD 1986 Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.3 AMD 1992 Stock Incentive Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.4 AMD 1980 Stock Appreciation Rights Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.5 AMD 1986 Stock Appreciation Rights Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.7 MMI 1981 Incentive Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report on Form 10-K for the fiscal year ended December 29, 1991, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.9 Form of Limited Stock Appreciation Rights Agreement, filed as Exhibit 4.11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Corporation's Registration Statement on Form S-8 (No. 33-26266) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------- ---------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.10 AMD 1987 Restricted Stock Award Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.12 Resolution of Board of Directors on September 9, 1981, regarding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration of vesting of all outstanding stock options and associated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited stock appreciation rights held by officers under certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances, filed as Exhibit 10.10 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for fiscal year ended March 31, 1985, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(a) Employment Agreement dated July 1, 1991, between the Corporation and W. J. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sanders III, filed as Exhibit 10.1 to the Corporation's Form 8-K dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql September 3, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.13(b) Amendment dated August 27, 1991, to Employment Agreement between the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and W. J. Sanders III, filed as Exhibit 10.2 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Form 8-K dated September 3, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.14 Management Continuity Agreement between the Corporation and W. J. Sanders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql III, filed as Exhibit 10.14 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the fiscal year ended December 29, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.15 Bonus Agreement between the Corporation and Richard Previte, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.15 to the Corporation's Annual Report on Form 10-K for the fiscal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.16 Executive Bonus Plan, filed as Exhibit 10.16 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report on Form 10-K for the fiscal year ended December 29, 1991, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.17 Bonus Agreement between the Corporation and Anthony B. Holbrook, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.17 for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended March 30, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, 1989, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit 10.18 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31, 1989, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.21 License Agreement with Western Electric Company, Incorporated, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.5 to the Corporation's Annual Report on Form 10-K for fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended 1979, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.22 Intellectual Property Agreements with Intel Corporation, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.21 to the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.23 Award of Arbitrator in Case No. 626879 between the Corporation and Intel \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, filed as Exhibit 28.2 on Form 8-K dated February 24, 1992, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.24 Form of Indemnification Agreements with former officers of Monolithic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memories, Inc., filed as Exhibit 10.22 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Form 10-K for the fiscal year ended December 27, 1987, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------- ---------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.25 Agreement and Plan of Reorganization between Monolithic Memories Inc., the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and Advanced Micro Devices Merger Corporation, filed as Annex A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Corporation's Amendment No. 1 to Registration Statement on Form S-4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (No. 33-15015), dated June 25, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(a) Joint Venture Agreement between the Corporation and Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(b) Technology Cross-License Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(c) AMD Investment Agreement between the Corporation and Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(e) Joint Venture License Agreement between the Corporation and Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql **10.27(f) Joint Development Agreement between the Corporation and Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28 Credit Agreement dated as of January 4, 1993, among Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc., Bank of America National Trust and Savings Association as Agent, The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First National Bank of Boston as Co-Agent, filed as Exhibit 10.27 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(a) Amended and Restated Guaranty dated as of January 4, 1993, by Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. in favor of CIBC Inc., filed as Exhibit 10.28(a) to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(b) Building Lease by and between CIBC Inc. and AMD International Sales & \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Service, Ltd. dated as of September 22, 1992, filed as Exhibit 10.28(b) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(c) First Amendment to Building Lease dated December 22, 1992, by and between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CIBC Inc. and AMD International Sales & Service, Ltd., filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.28(c) to the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ended December 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(d) Land Lease by and between CIBC Inc. and AMD International Sales & Service, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ltd. dated as of September 22, 1992, filed as Exhibit 10.28(d) to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Annual Report on Form 10-K for the fiscal year ended December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10.29(e) First Amendment to Land Lease dated December 22, 1992, by and between CIBC \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc. and AMD International Sales & Service, Ltd., filed as Exhibit 10.28(e) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.30 Executive Savings Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.31 Form of Split Dollar Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.32 Form of Collateral Security Assignment Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 4.3 to the Corporation's Registration Statement on Form S-8 (No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33-46577) is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql *10.34 1992 United Kingdom Share Option Scheme, Filed as Exhibit 4.2 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's Registration on Form S-8 (No. 33-46577) is hereby incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by reference. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NUMBER DESCRIPTION OF EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------- ---------------------------------------------------------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11.1 Statement re computation of per share earnings. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. 1993 Annual Report to Stockholders which has been incorporated by reference \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql into Parts I, II and IV of this annual report. To the extent filed, refer to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the front page hereinabove. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22. List of AMD subsidiaries. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24. Consent of Independent Auditors, refer to page F-2 hereinabove. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25. Power of Attorney. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation will furnish a copy of any exhibit on request and payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation's reasonable expenses of furnishing such exhibit. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Management contracts and compensatory plans or arrangements required to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be filed as an Exhibit to comply with Item 14(a)(3). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ** Confidential treatment has been requested as to certain portions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these Exhibits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Reports on Form 8-K. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. A current Report on Form 8-K dated January 27, 1994, was filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announcing an agreement with Compaq Computer Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. A current Report on Form 8-K dated February 10, 1994, was filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announcing an agreement with Digital Equipment Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_5}{\*\bkmkend part_1_2_5}\pard\plain\cf1\f50\fs16\ql SIGNATURES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of Section 13 or 15(d) of the Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act of 1934, the registrant has duly caused this report to be signed on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its behalf by the undersigned, thereunto duly authorized. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registrant \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 1, 1994 By: /s/ MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------------------ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, Chief \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Administrative Officer and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary; Chief Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer and Treasurer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Pursuant to the requirements of the Securities Exchange Act of 1934, this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql report has been signed below by the following persons, on behalf of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registrant and in the capacities and on the dates indicated. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SIGNATURE TITLE DATE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------------------------------------- ------------------------------- --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ W. J. SANDERS III* Chairman of the Board and Chief March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (W. J.Sanders III) Executive Officer (Principal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Executive Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ ANTHONY B. HOLBROOK* Vice Chairman of the Board and March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Anthony B. Holbrook) Chief Technical Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ RICHARD PREVITE* Director, President and Chief March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Richard Previte) Operating Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ CHARLES M. BLALACK* Director March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Charles M. Blalack) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ R. GENE BROWN* Director March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (R. Gene Brown) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ JOE L. ROBY* Director March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Joe L. Roby) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ MARVIN D. BURKETT Senior Vice President, Chief March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Marvin D. Burkett) Administrative Officer and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary; Chief Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer and Treasurer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Principal Financial Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ LARRY R. CARTER Vice President and Corporate March 1, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Larry R. Carter) Controller (Principal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounting Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * By: MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Marvin D. Burkett, Attorney-in-Fact) \par\pard\plain\fs16 \page\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INDEX TO CONSOLIDATED FINANCIAL STATEMENTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FINANCIAL STATEMENT SCHEDULES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVERED BY REPORT OF INDEPENDENT AUDITORS \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_6}{\*\bkmkend part_1_2_6}\pard\plain\cf1\f50\fs16\ql ITEM 14(A)(1) AND (2) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The information under the following captions, which is included in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's 1993 Annual Report to Stockholders, a copy of which is attached \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto as Exhibit 13, is incorporated herein by reference: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PAGE REFERENCES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993 ANNUAL REPORT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORM 10-K TO STOCKHOLDERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Report of Independent Auditors................................... -- 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Operations for each of the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years in the period ended December 26, 1993............. -- 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Balance Sheets at December 27, 1992 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993.............................................. -- 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Consolidated Statements of Cash Flows for each of the three \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal years in the period ended December 26, 1993............. -- 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notes to consolidated financial statements....................... -- 20-28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Supplementary financial data: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fiscal years 1992 and 1993 by quarter (unaudited).............. -- 30-31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedules for each of the three fiscal years in the period ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I Marketable Securities....................................... F-3 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql II Amounts Receivable From Officers and Employees.............. F-4 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql V Property, plant and equipment............................... F-5 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VI Accumulated depreciation and amortization of property, plant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and equipment............................................ F-6 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VIII Valuation and qualifying accounts........................... F-7 -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql X Supplementary operations statement information.............. F-8 -- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All other schedules have been omitted since the required information is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql present or is not present in amounts sufficient to require submission of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedules, or because the information required is included in the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statements or notes thereto. With the exception of the information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated by reference into Parts I, II and IV of this Form 10-K, the 1993, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Annual Report to Stockholders is not to be deemed filed as part of this report. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 27 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONSENT OF ERNST & YOUNG, INDEPENDENT AUDITORS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We consent to the incorporation by reference in this Annual Report (Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K) of Advanced Micro Devices, Inc. of our report dated January 6, 1994, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included in the 1993 Annual Report to Stockholders of Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Our audits also included the financial statement schedules of Advanced \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Micro Devices, Inc. listed in Item 14(a). These schedules are the responsibility \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation's management. Our responsibility is to express an opinion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql based on our audits. In our opinion, the financial statement schedules referred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to above, when considered in relation to the basic financial statements taken as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a whole, present fairly in all material respects the information set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql We also consent to the incorporation by reference in the Registration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement on Form S-3 (No. 33-12011) pertaining to Depositary Convertible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchangeable Preferred Shares, in the Registration Statement on Form S-4 (No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33-15015) pertaining to shares issued in connection with the acquisition of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Monolithic Memories, Inc. (MMI), in the Registration Statement on Form S-8 (No. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33-16060) pertaining to options granted under the MMI stock option plans, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Registration Statement on Form S-8 (No. 33-16095) pertaining to the 1987 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restricted Stock Award Plan of Advanced Micro Devices Inc., in the Registration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statement on Form S-8 (No. 33-39747) pertaining to the 1991 Stock Purchase Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Advanced Micro Devices, Inc., in the Registration Statements on Form S-8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Nos. 2-70376, 2-80148, 2-93392, 33-10319, 33-26266, 33-36596 and 33-46578) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertaining to the Stock Option and Stock Appreciation Rights Plans of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, and in the Registration Statement on Form S-8 (No. 33-46577) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pertaining to the 1992 Stock Incentive Plan of Advanced Micro Devices, Inc., and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the related prospectuses, of our report dated January 6, 1994, with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the consolidated financial statements incorporated herein by reference, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql our report included in the preceding paragraph with respect to the consolidated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial statement schedules included in this Annual Report (Form 10-K) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ERNST & YOUNG \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 3, 1994 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql San Jose, California \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 28 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE I \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MARKETABLE SECURITIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THOUSANDS) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql SHORT-TERM MARKETABLE SECURITIES: (A) \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Certificates of Deposit...................................................... $368,016 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Commercial Paper............................................................. 34,645 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Treasury Notes............................................................... 25,114 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Total Short-Term Marketable Securities............................................ $427,775 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql -------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (A) Stated at cost which approximates market. No individual security or group of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of an issuer exceeds 2 percent of total assets. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 29 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE II \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMOUNTS RECEIVABLE FROM OFFICERS AND EMPLOYEES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BALANCE RECEIVABLE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BALANCE AT CLOSE OF PERIOD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECEIVABLE AT ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BEGINNING CURRENT NONCURRENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF PERIOD ADDITIONS COLLECTIONS ASSETS ASSETS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 29, 1991: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amounts Receivable from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employees: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Robert R. Krueger............ (1) $ 310,500 $ -- $ -- $ -- $310,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barry Pomeroy................ (2) -- 110,000 -- -- 110,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total................ $ 310,500 $ 110,000 $ -- $ -- $420,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 27, 1992: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amounts Receivable from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officers: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Larry R. Carter.............. (3) $ -- $ 120,000 $ -- $40,000 $ 80,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amounts Receivable from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employees: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Robert R. Krueger............ (1) $ 310,500 $ -- $ (55,000) $ -- $255,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barry Pomeroy................ (2) 110,000 -- -- -- 110,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $ 420,500 $ -- $ (55,000) $ -- $365,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total................ $ 420,500 $ 120,000 $ (55,000) $40,000 $445,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 26, 1993: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amounts Receivable from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officers: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Larry R. Carter.............. (3) $ 120,000 $ -- $ (40,000) $40,000 $ 40,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Amounts Receivable from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employees: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Robert R. Krueger............ (1) $ 255,500 $ -- $ (70,000) $ -- $185,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Barry Pomeroy................ (2) 110,000 110,000 (110,000) --(4) 110,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $ 365,500 $ 110,000 $ (180,000) $ -- $295,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total................ $ 485,500 $ 110,000 $ (220,000) $40,000 $335,500 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- --------- ----------- ------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Promissory note secured by real property bearing interest at the rate of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.74 percent per year due in July/1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Non-interest bearing promissory note secured by real property paid off in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter 4/1993. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) Non-interest bearing, non-secured loan to be paid in three equal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments of $40,000 due in July/1993, 1994 and 1995. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) Non-secured, interest bearing loan at the rate of 4.0 percent due in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql February/1996. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 30 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE V \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY, PLANT AND EQUIPMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THOUSANDS) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BALANCE BALANCE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BEGINNING ADDITIONS SALES/ END OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF PERIOD AT COST RETIREMENTS TRANSFERS PERIOD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 29, 1991: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land.......................... $ 22,168 $ 24 $ -- $ -- $ 22,192 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements............... 380,323 11,679 (388) 11,349 402,963 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment..................... 1,009,052 66,238 (54,594) 42,582 1,063,278 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress...... 37,783 59,261 (908) (53,931) 42,205 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,449,326 $ 137,202 $ (55,890) $ -- $1,530,638 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 27, 1992: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land.......................... $ 22,192 $ -- $ -- $ -- $ 22,192 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements............... 402,963 19,415 (7,911) 7,622 422,089 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment..................... 1,063,278 134,412 (60,330) 25,198 1,162,558 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress...... 42,205 68,237 (96) (32,820) 77,526 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,530,638 $ 222,064 $ (68,337) $ -- $1,684,365 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 26, 1993: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Land.......................... $ 22,192 $ 1,637 $ -- $ 2,443 $ 26,272 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements............... 422,089 5,880 (84) 16,414 444,299 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment..................... 1,162,558 71,681 (74,099) 175,111 1,335,251 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress...... 77,526 308,983 -- (193,968) 192,541 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $1,684,365 $ 388,181 $ (74,183) $ -- $1,998,363 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- --------- ----------- --------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The annual provisions for depreciation and amortization have been computed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principally in accordance with the following estimated useful lives: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings....................... 26 years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment....................... 3 to 5 years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leasehold improvements.......... Lesser of 5 years or life of lease \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 31 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE VI \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCUMULATED DEPRECIATION AND AMORTIZATION OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY, PLANT AND EQUIPMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THOUSANDS) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BALANCE ADDITIONS BALANCE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BEGINNING CHARGED TO SALES/ END OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF PERIOD OPERATIONS OTHER(1) RETIREMENTS PERIOD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 29, 1991: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements.................. $ 129,869 $ 43,891 $ (4) $ (384) $ 173,372 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment........................ 672,440 112,044 672 (54,230) 730,926 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress......... -- -- -- -- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $ 802,309 $155,935 $668 $ (54,614) $ 904,298 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 27, 1992: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements.................. $ 173,372 $ 42,498 $ -- $ (6,937) $ 208,933 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment........................ 730,926 109,815 222 (58,814) 782,149 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress......... -- -- -- -- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $ 904,298 $152,313 $222 $ (65,751) $ 991,082 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEAR ENDED DECEMBER 26, 1993: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Buildings and leasehold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql improvements.................. $ 208,933 $ 38,661 $ -- $ (18) $ 247,576 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Equipment........................ 782,149 136,406 366 (72,460) 846,461 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Construction in progress......... -- -- -- -- -- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $ 991,082 $175,067 $366 $ (72,478) $1,094,037 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ---------- -------- ----------- ---------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Provision for write-down to net realizable value. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 32 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE VIII \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql VALUATION AND QUALIFYING ACCOUNTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THOUSANDS) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BALANCE ADDITIONS BALANCE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BEGINNING CHARGED END OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF PERIOD TO OPERATIONS DEDUCTIONS(1) PERIOD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------- ------------- ------------- ------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Allowance for doubtful accounts: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 29, 1991........................ $ 4,905 $ 1,582 $ -- $ 6,487 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 27, 1992........................ 6,487 986 (794) 6,679 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql December 26, 1993........................ 6,679 1,540 (727) 7,492 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Accounts (written off) recovered, net. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 33 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SCHEDULE X \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUPPLEMENTARY OPERATIONS STATEMENT INFORMATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql YEARS ENDED DECEMBER 29, 1991, DECEMBER 27, 1992 AND DECEMBER 26, 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THOUSANDS) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CHARGED TO COSTS AND EXPENSES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1991 1992 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql -------- -------- -------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Maintenance and repairs....................................... $ 58,097 $ 69,004 $ 76,124 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All other information is either not material or included in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated financial statements, notes thereto, or other schedules. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F-8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 34 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16{\*\bkmkstart part_1_2_7}{\*\bkmkend part_1_2_7}\pard\plain\cf1\f50\fs16\ql INDEX TO EXHIBITS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ITEM 14(A)(3)) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql NUMBER DESCRIPTION \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql - ---------- ------------------------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 3.1 Certificate of Incorporation, as amended, filed as Exhibit 3.1 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Annual Report on Form 10-K for the fiscal period \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ended December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 3.2 Certificate of Designations for Convertible Exchangeable Preferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Shares, filed as Exhibit 3.2 to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Form 10-K for the fiscal year ended March 27, 1987, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 3.3 Certificate of Designations for Series A Junior Participating \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Preferred Stock, filed as Exhibit 3.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Report on Form 10-K for the fiscal year ended December 31, 1989, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 3.4 By-Laws, as amended, filed as Exhibit 3.4 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Annual Report on Form 10-K for the fiscal year ended December 27, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 4.1 Deposit Agreement with respect to the $30 Convertible Exchangeable \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Preferred Shares, filed as Exhibit 4.3 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Report on Form 10-K for the fiscal year ended March 29, 1987, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 4.2 Indenture with respect to the 6% Convertible Subordinated \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Debentures due in 2012, filed as Exhibit 4.4 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Annual Report on Form 10-K for the fiscal year ended March 29, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 4.3 The Corporation hereby agrees to file on request of the Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql a copy of all instruments not otherwise filed with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql long-term debt of the Corporation or any of its subsidiaries for \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql which the total amount of securities authorized under such \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql instruments does not exceed 10% of the total assets of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation and its subsidiaries on a consolidated basis. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 4.4 Rights Agreement between the Corporation and Bank of America N.T. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql & S.A., filed as Exhibit 4.1 to the Corporation's Current Report \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql on Form 8-K dated February 7, 1990, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.1 AMD 1982 Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.2 AMD 1986 Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.3 AMD 1992 Stock Incentive Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.4 AMD 1980 Stock Appreciation Rights Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.5 AMD 1986 Stock Appreciation Rights Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.6 MMI 1975 Stock Option Plan, as amended, filed as Exhibit 10.6 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.7 MMI 1981 Incentive Stock Option Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.8 Forms of Stock Option Agreements, filed as Exhibit 10.8 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.9 Form of Limited Stock Appreciation Rights Agreement, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Exhibit 4.11 to the Corporation's Registration Statement on Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql S-8 (No. 33-26266) is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.10 AMD 1987 Restricted Stock Award Plan, as amended. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.11 Forms of Restricted Stock Agreements, filed as Exhibit 10.11 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16 \page\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql 35 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql NUMBER DESCRIPTION \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql - ---------- ------------------------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.12 Resolution of Board of Directors on September 9, 1981, regarding \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql acceleration of vesting of all outstanding stock options and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql associated limited stock appreciation rights held by officers \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql under certain circumstances, filed as Exhibit 10.10 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation's Annual Report on Form 10-K for fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql March 31, 1985, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.13(a) Employment Agreement dated July 1, 1991, between the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql and W. J. Sanders III, filed as Exhibit 10.1 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Form 8-K dated September 3, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.13(b) Amendment dated August 27, 1991, to Employment Agreement between \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation and W. J. Sanders III, filed as Exhibit 10.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Form 8-K dated September 3, 1991, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.14 Management Continuity Agreement between the Corporation and W. J. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Sanders III, filed as Exhibit 10.14 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Report on Form 10-K for the fiscal year ended December 29, 1991, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.15 Bonus Agreement between the Corporation and Richard Previte, filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql as Exhibit 10.15 to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql for the fiscal year ended December 29, 1991, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.16 Executive Bonus Plan, filed as Exhibit 10.16 to the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Annual Report on Form 10-K for the fiscal year ended December 29, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.17 Bonus Agreement between the Corporation and Anthony B. Holbrook, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql filed as Exhibit 10.17 for the fiscal year ended December 27, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.18 Form of Bonus Deferral Agreement, filed as Exhibit 10.12 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql March 30, 1986, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.19 Form of Executive Deferral Agreement, filed as Exhibit 10.17 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ended December 31, 1989, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.20 Director Deferral Agreement of R. Gene Brown, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.18 to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql fiscal year ended December 31, 1989, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.21 License Agreement with Western Electric Company, Incorporated, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql filed as Exhibit 10.5 to the Corporation's Annual Report on Form \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10-K for fiscal year ended 1979, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.22 Intellectual Property Agreements with Intel Corporation, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Exhibit 10.21 to the Corporation's Annual Report on Form 10-K for \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the fiscal year ended December 29, 1991, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.23 Award of Arbitrator in Case No. 626879 between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Intel Corporation, filed as Exhibit 28.2 on Form 8-K dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql February 24, 1992, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.24 Form of Indemnification Agreements with former officers of \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Monolithic Memories, Inc., filed as Exhibit 10.22 to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation's Annual Report on Form 10-K for the fiscal year ended \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql December 27, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.25 Agreement and Plan of Reorganization between Monolithic Memories \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Inc., the Corporation and Advanced Micro Devices Merger \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Corporation, filed as Annex A to the Corporation's Amendment No. 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql to Registration Statement on Form S-4 (No. 33-15015), dated June \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 25, 1987, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.26 Form of Management Continuity Agreement, filed as Exhibit 10.25 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Annual Report on Form 10-K for the fiscal year \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql ended December 29, 1991, is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(a) Joint Venture Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(b) Technology Cross-License Agreement between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Fujitsu Limited. \par\pard\plain\fs16 \page\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql 36 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql EXHIBIT \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql NUMBER DESCRIPTION \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql - ---------- ------------------------------------------------------------------ \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(c) AMD Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(d) Fujitsu Investment Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(e) Joint Venture License Agreement between the Corporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Fujitsu Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql **10.27(f) Joint Development Agreement between the Corporation and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Limited. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.28 Credit Agreement dated as of January 4, 1993, among Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Devices, Inc., Bank of America National Trust and Savings \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Association as Agent, The First National Bank of Boston as \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Co-Agent, filed as Exhibit 10.27 to the Corporation's Annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Report on Form 10-K for the fiscal year ended December 27, 1992, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.29(a) Amended and Restated Guaranty dated as of January 4, 1993, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Advanced Micro Devices, Inc. in favor of CIBC Inc., filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Exhibit 10.28(a) to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.29(b) Building Lease by and between CIBC Inc. and AMD International \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Sales & Service, Ltd. dated as of September 22, 1992, filed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Exhibit 10.28(b) to the Corporation's Annual Report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.29(c) First Amendment to Building Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql filed as Exhibit 10.28(c) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.29(d) Land Lease by and between CIBC Inc. and AMD International Sales & \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Service, Ltd. dated as of September 22, 1992, filed as Exhibit \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.28(d) to the Corporation's Annual Report on Form 10-K for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql fiscal year ended December 27, 1992, is hereby incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 10.29(e) First Amendment to Land Lease dated December 22, 1992, by and \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql between CIBC Inc. and AMD International Sales & Service, Ltd., \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql filed as Exhibit 10.28(e) to the Corporation's Annual Report on \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql Form 10-K for the fiscal year ended December 27, 1992, is hereby \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.30 Executive Savings Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.31 Form of Split Dollar Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.32 Form of Collateral Security Assignment Agreement. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.33 Forms of Stock Option Agreements to the 1992 Stock Incentive Plan, \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql filed as Exhibit 4.3 to the Corporation's Registration Statement \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql on Form S-8 (No. 33-46577) is hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql *10.34 1992 United Kingdom Share Option Scheme, Filed as Exhibit 4.2 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql the Corporation's Registration on Form S-8 (No. 33-46577) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql hereby incorporated by reference. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 11.1 Statement re computation of per share earnings. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 13. 1993 Annual Report to Stockholders which have been incorporated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql reference into Parts I, II, and IV of this annual report. To the \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql extent filed, refer to the front page hereinabove. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 22. List of AMD subsidiaries. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 24. Consent of Independent Auditors, refer to page F-2 hereinabove. \par\pard\plain\fs16\pard\plain\cf1\f50\fs18\ql 25. Power of Attorney. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Corporation will furnish a copy of any exhibit on request and payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation's reasonable expenses of furnishing such exhibit. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * Management contracts and compensatory plans or arrangements required to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed as an Exhibit to comply with Item 14(a)(3). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ** Confidential treatment has been requested as to certain portions of these \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibits. \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 37 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD -- 90185 \par\pard\plain\fs16 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_2}{\*\bkmkend doc_1_2} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1982 STOCK OPTION PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. PURPOSE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The purpose of the Plan is to provide a means whereby selected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible employees of Advanced Micro Devices, Inc., and its subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (hereinafter called the "Company") may be given an opportunity to purchase the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $0.01 par value Common Stock of the Company (the "Common Stock"). The word \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "subsidiary" or "parent" as used in this Plan, means a subsidiary or parent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation as defined in Section 425(f) of the Internal Revenue Code of 1954, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as amended. The Internal Revenue Code of 1954, as amended to date and as it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be amended from time to time, is referred to herein as the "Code". \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company, by means of the Plan, seeks to retain the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services of its current key employees, and to secure and retain the services of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql new key employees necessary for the continued improvement of operation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. STOCK OPTIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock options granted pursuant to the Plan may, at the discretion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board, be granted either as Incentive Stock Options ("ISO") or as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonstatutory Stock Options ("NSO"). An ISO shall mean an option described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 422A(b) of the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Code. A NSO shall mean an option not described in Sections 422(b), 422A(b), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 423(b) or 424(b) of the Code. No option may be granted alternatively as an ISO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and as a NSO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. ADMINISTRATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose authority shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plenary, shall administer the Plan and may delegate part or all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers with respect to part or all of the Plan pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(d); provided, however, that the Board of Directors shall delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan to the extent required by Section 3(e). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Board or its delegate shall have the power, subject to and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the limits of the express provisions of the Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To grant Options and Rights pursuant to the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time which of the eligible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons shall be granted Options or Rights under the Plan, the number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Shares for which each Option or Right shall be granted, the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each granted Option or Right and the time or times during the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Option or Right within which all or portions of each Option or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right may be exercised, \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (which at the discretion of the Board or its delegate may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To grant Options and/or Rights in exchange for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of Options and/or Rights granted earlier at different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise prices, provided, however, nothing contained herein shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql empower the Board or its delegate to grant an ISO under conditions or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to terms that are inconsistent with the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 422 of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and provisions of each Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Right granted (which need not be identical) and the form of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instrument that shall constitute the Option and/or Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to amend any Option and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right hereunder, including to cause any Option granted hereunder to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease to be an ISO, provided that no such action may be taken by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate without the written consent of the affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board or its delegate shall also have the power, subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to and within the limits of the express provisions of this Plan: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To construe and interpret the Plan and Options and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights granted under the Plan, and to establish, amend and revoke \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules and regulations for administration of the Plan. The Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate, in the exercise of this power, shall generally determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all questions of policy and expediency that may arise and may correct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any defect, omission or inconsistency in the Plan or in any Option or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right agreement in a manner and to the extent it shall deem necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or expedient to make the Plan fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Generally, to exercise such powers and to perform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such acts as are deemed necessary or expedient to promote the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board of Directors may, by resolution, delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan (including, without limitation, the Board's powers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Sections 3(b) and (c) above), under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or granting of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options or Rights to an employee who is not subject to Section 16 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Act, to a committee of one or more members of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, whether or not such members of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are Disinterested Directors; \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to matters other than the selection for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participation in the Plan, substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or other material term of an Option or Right, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a committee of one or more members of the Board of Directors, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not such members of the Board of Directors are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disinterested Directors, or to one or more officers of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Unless each member of the Board is a Disinterested Director, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board shall, by resolution, delegate administration of the Plan with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of an Option or Right, to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of two or more Disinterested Directors. Any committee to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan is so delegated pursuant to this Section 3(e) may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(d)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Except as required by Section 3(e) above, the Board shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complete discretion to determine the composition, structure, form, term and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provides, the committee shall have, with respect to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan, all of the powers and discretion theretofore \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql possessed by the Board and delegable to such committee, subject to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constraints which may be adopted by the Board from time to time and which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not inconsistent with the provisions of the Plan. The Board, at any time, may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revest in the Board any of its administrative powers under the Plan, except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under circumstances where a committee is required to administer the Plan under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(e) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) The term "Disinterested Director" shall mean a member of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors of the Company who has not, during the one year prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service as an administrator of the Plan, or during such service, been granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or awarded equity securities of the Company pursuant to this Plan or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan of the Company or any of its Affiliates (except for automatic grants of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options to Outside Directors pursuant to Section 8 of the 1992 Stock Incentive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan). \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. SHARES SUBJECT TO PLAN AND TO OPTIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Subject to the provisions of Section 10 (relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustments upon changes in stock), the stock which may be \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sold pursuant to options granted under the Plan shall not exceed in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate 8,500,000 shares of the Company's authorized Common Stock and may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unissued shares or reacquired shares or shares bought on the market for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of issuance under the Plan. If any options granted under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall for any reason terminate or expire without having been exercised in full, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stock not purchased under such options shall be available again for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The aggregate fair market value of the stock (determined at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the time of the grant of the option) for which any employee may be granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO's in any calendar year under all plans of the Company and its parent and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary shall not exceed $100,000 plus any unused limit carryover (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in the Code) to such year or any other maximum aggregate fair market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value to be established in the future under the Code. Should it be determined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any ISO granted under the Plan inadvertently exceeds such maximum, such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO grant shall be deemed to be a grant of a NSO to the extent, but only to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent, of such excess. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. ELIGIBILITY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options may be granted only to full or part time employees of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and/or of any parent or subsidiary. Directors of the Company who are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not also employees of the Company shall not be eligible for the benefits of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. No ISO may be granted to a person who, at the time of grant, \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owns stock possessing more than 10% of the total combined voting power of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or of its parent or any subsidiary unless the option price is at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 110% of the fair market value of the stock subject to the option and the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the option does not exceed five (5) years from the date such ISO is granted. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any employee may hold more than one option at any time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. TERMS OF OPTION AGREEMENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each option agreement shall be in such form and shall contain such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions as the Board or its delegate from time to time shall deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate, subject to the following limitations: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The term of any ISO shall not be greater than ten (10) years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date it was granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The purchase price of each option shall be no less than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair market value of the stock subject to the option on the date the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option is granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) An option by its terms shall not be transferable otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than by will or by the laws of descent and distribution and may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable during the lifetime of the option holder only by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option holder. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) An option (the "New Option") which is designated by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its delegate, as the case may be, as an ISO by its terms shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be exercisable, notwithstanding that such may be vested in whole or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql part, with respect to all or any part of the Shares subject thereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql while there is outstanding any other ISO, granted to the optionee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the grant of the New Option, to purchase Common Stock in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or in a corporation that is, at the time of granting of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Option, to purchase Common Stock in the Company or in a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation that is, at the time of granting of the New Option, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parent or Subsidiary of the Company, or in a predecessor corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any such corporations. For purposes of the preceding sentence, an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO shall be treated as "outstanding" until such option is exercised \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in full or expires by reason of the lapse of time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon the termination of a Participant's employment, his rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise an option then held by him shall be only as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEATH OR DISABILITY: If a Participant's employment is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminated by death or disability, he or his estate as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case may be, shall have the right for a period of twelve (12) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months following the date of death or disability, or for \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such longer period as the Board or its delegate may fix, to exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option to the extent the Participant was entitled to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option on the date of his death or disability, or to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise specified by the Board or its delegate, which may so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specify, at a time that is subsequent to the date of his death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disability, provided the actual date of exercise is in no event after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the expiration date of the term of the option. A Participant's estate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean his legal representative or any person who acquires the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to exercise an option by reason of the Participant's death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCONDUCT: If a Participant is determined by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate (as defined in Section 3 hereinabove) to have committed an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act of theft, embezzlement, fraud, dishonesty, a breach of fiduciary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duty to the Company (or affiliate), or deliberate disregard of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules of the Company (or affiliate) which resulted in loss, damage or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injury to the Company (or affiliate) or if a Participant makes any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unauthorized disclosure of any of the trade secrets or confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information of the Company (or affiliate), engages in any conduct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which constitutes unfair competition with the Company (or affiliate), \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql induces any customer of the Company (or affiliate) to break any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract with the Company (or affiliate) or induces any principal for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whom the Company (or affiliate) acts as agent to terminate such agency \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relationship, neither the Participant nor his estate shall be entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise any option with respect to any shares whatsoever after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of employment, whether or not after termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment, the Participant may receive payment from the Company (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliate) for vacation pay, for services rendered prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination, for services for the day on which termination occurs, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql salary in lieu of notice, or for other benefits. In making such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination, the Board or its delegate shall give the Participant an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opportunity to present to the Board or its delegate (as defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3 hereinabove) evidence on his behalf. For the purpose of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this paragraph, of this subsection 6(e), termination of employment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to occur when the Company (or affiliate) dispatches \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice or advice to Participant that his employment is terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER REASONS: If a Participant's employment is terminated for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reason other than those \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mentioned above under "Death or Disability" or "Misconduct", he or his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estate may, within three (3) months following such termination, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within such longer period as the Board may fix, exercise the option to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent such option was exercisable by the Participant on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of termination of his employment, or to the extent otherwise specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Board, which may so specify at a time that is subsequent to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of the termination of his employment, provided the date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise is in no event after the expiration of the term of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIVORCE: If an Option or any portion thereof is transferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a qualified domestic relations order to a former \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql spouse who is neither a director nor an employee of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any of its Affiliates, the former spouse shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right for the period of twelve months following the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of transfer, or such other period as the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may fix, to exercise the Option to the extent the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was entitled to exercise such option on the date of transfer. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise specified in the option agreement or by court \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order, the date of transfer shall be the date the qualified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql domestic relations order is executed. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Options may also contain such other provisions, which shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be inconsistent with any of the foregoing terms, as the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate shall deem appropriate. No option, however, nor anything \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in the Plan, shall confer upon any employee any right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue in the employ of the Company (or affiliate) nor limit in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql way the right of the Company (or affiliate) to terminate his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment at any time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) If any Participant's employment is terminated by the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for any reason other than for Misconduct or, if applicable, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Constructive Termination, within one year after a Change of Control \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has occurred, then all Options held by such Participant shall become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully vested for exercise upon the date of termination, irrespective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the vesting provisions of the Participant's option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Change of Control" shall mean a change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control of a nature that would be required to be reported in response \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and Exchange Act of 1934, as amended (the "Exchange Act"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in response to any other form or report to the Securities and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Commission or any stock \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange on which the Company's shares are listed which requires the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reporting of a change of control. In addition, a Change of Control \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to have occurred if (i) any "person" (as such term is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the beneficial owner, directly or indirectly, of securities of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company representing more than 20% of the combined voting power of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's then outstanding securities; or (ii) in any two-year period, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individuals who were members of the Board of Directors (the "Board") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the beginning of such period plus each new director whose election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or nomination for election was approved by at least two-thirds of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors in office immediately prior to such election or nomination, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease for any reason to constitute at least a majority of the Board; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (iii) a majority of the members of the Board in office prior to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql happening of any event and who are still in office after such event, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determines in its sole discretion within one year after such event, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that as a result of such event there has been a Change of Control. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing definition, "Change of Control" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall exclude the acquisition of securities representing more than 20% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the combined voting power of the Company by the Company, any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiaries, or any trustee or other fiduciary holding \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of the Company under an employee benefit plan now or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereafter established by the Company. As used herein, the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "beneficial owner" shall have the same meaning as under Section 13(d) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Exchange Act and related case law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Constructive Termination" shall mean a resignation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by a Participant who has been elected by the Company's Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors as a corporate officer of the Company, due to diminution or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adverse change in the circumstances of such Participant's employment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Company, as determined in good faith by the Participant, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, without limitation, reporting relationships, job \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql description, duties, responsibilities, compensation, perquisites, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office or location of employment. Constructive Termination shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communicated by written notice to the Company, and such termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to occur on the date such notice is delivered to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. STOCK APPRECIATION RIGHTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Stock Appreciation Right ("SAR") also may be granted with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all or some of the stock covered by any option (the "Related Option"). Either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a General SAR, or a Limited SAR or both a General SAR and a Limited SAR may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted with respect to the same Related Option. Upon the exercise of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a SAR, the Related Option will cease to be exercisable to the extent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock with respect to which the SAR is exercised. Upon the Exercise or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of the Related Option the SAR that relates thereto will cease to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable. All terms and conditions pertaining to any SAR shall be governed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the provisions of the 1980 Stock Appreciation Rights Plan of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, provided, however, that SARs which are granted with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option that is an ISO shall contain such terms and conditions as may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from time to time be necessary pursuant to applicable provisions of the Code \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Treasury Department regulations to permit such Related Option to qualify as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an ISO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. PAYMENTS AND LOANS UPON EXERCISE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The purchase price of stock sold pursuant to an option shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be paid either in full in cash or by certified check at the time the option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised or pursuant to any deferred payment arrangement that the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors in its discretion may approve. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company may make loans or guarantee loans made by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate financial institution to individual optionees, including officers, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on such terms as may be approved by the Board of Directors for the purpose of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing the exercise of options granted under the Plan and the payment of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes that may be due by reason of such exercise. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) In addition, if and to the extent authorized by the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, optionees may make all or any portion of any payment due to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company upon exercise of an option by delivery of any property (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of the Company) other than cash, so long as such property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes valid consideration for the stock under applicable law. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Where, in the opinion of counsel to the Company, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has or will have an obligation to withhold taxes relating to the exercise of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any stock option, the Board or its delegate may in its discretion require that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such tax obligation be satisfied in a manner satisfactory to the Company before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares deliverable pursuant to the exercise of such option are transferred to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option holder. An option holder may make a Withholding Election, to pay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required minimum withholding taxes by the withholding of shares from the total \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of shares deliverable pursuant to the exercise of the option or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivering a sufficient number of previously acquired shares to the Company and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may elect to have additional taxes paid by the delivery of previously acquired \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares, in each case in accordance with procedures established by the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate. Previously owned shares delivered in payment of such taxes must \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been held at least six months prior to the exercise date, or may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to such other conditions as the Board or its delegate may require. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value of shares withheld or delivered shall be the fair market value of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares on the date the exercise becomes taxable. Such Withholding Election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the approval of the Board or its delegate, and must be made pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to rules established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. USE OF PROCEED FROM STOCK \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Proceeds from the sale of stock pursuant to options granted under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan shall be used for general corporate purposes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. ADJUSTMENT OF AND CHANGES IN THE STOCK \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that the shares of Common Stock of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presently constituted, shall be changed into or exchanged for a different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number or kind of shares of stock or other securities of the Company or of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another corporation (whether by reason of merger, consolidation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recapitalization, reclassification, split-up, combination of shares, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise), or if the number of shares of Common Stock of the Company shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased through the payment of a stock dividend, then there shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted for or added to each share of Common Stock of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore appropriated or thereafter subject or which may become subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an option under the Plan, the number and kind of shares of stock or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities into which each outstanding share of Common Stock of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be so changed, or for which each such share shall be exchanged, or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which each such share shall be entitled, as the case may be. Outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options shall also be amended as to price and other terms if necessary \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to reflect the foregoing events. In the event there shall be any other change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the number or kind of the outstanding shares of Common Stock of the Company, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or of any stock or other securities into which such Common Stock shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed, or for which it shall have been exchanged, then if the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors shall, in its sole discretion, determine that such change equitably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires an adjustment in any option theretofore granted or which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan, such adjustment shall be made in accordance with such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination. No right to purchase fractional shares shall result from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment in options pursuant to this Section 10. In case of any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment, the shares subject to the option shall be rounded down to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nearest whole share. Notice of any adjustment shall be given by the Company to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each holder of any option which shall have been so adjusted and such adjustment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (whether or not such notice is given) shall be effective and binding for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. AMENDMENT OF THE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors, at any time, and from time to time, may amend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan, subject to the limitation, however, that, except as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10 (relating to adjustments upon changes in stock), no amendment shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be effective unless approved, within twelve (12) months before or after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such amendment's adoption, by the vote or \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written consent of a majority of the outstanding shares of the Company entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to vote, where such amendment will: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a) increase the number of shares reserved for options \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b) materially increase the benefits accruing to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participants under the Plan; or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c) materially modify the requirements of Section 5 as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligibility for participation in the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It is expressly contemplated that the Board may amend the Plan in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect necessary to provide the Company's employees with the maximum benefits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided or to be provided under Section 422A of the Code and the regulations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promulgated thereunder relating to employee incentive stock options and/or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bring the Plan or options granted under it into compliance therewith. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any option granted before any amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan shall not be altered or impaired by amendment of the Plan, except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the consent, which may be obtained in any manner that the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate deems appropriate, of the person to whom the option was granted. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. TERMINATION OR SUSPENSION OF THE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors at any time may suspend or terminate the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Plan, unless sooner terminated, shall terminate at the end of ten (10) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql years from the date the Plan \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is adopted by the Board of Directors or approved by the stockholders of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, whichever is earlier. An option may not be granted under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql while the Plan is suspended or after it is terminated. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any option granted while the Plan is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect shall not be altered or impaired by suspension or termination of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, except with the consent of the person to whom the option was granted, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may be obtained in any manner that the Board or its delegate deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. LISTING, QUALIFICATION OR APPROVAL OF STOCK; APPROVAL OF OPTIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All options granted under the Plan are subject to the requirement that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if at any time the Board of Directors shall determine in its discretion that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the listing or qualification of the shares of stock subject thereto on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities exchange or under any applicable law, or the consent or approval of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any governmental regulatory body or the Shareholders of the Company, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or desirable as a condition of or in connection with the issuance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares under the option, the option may not be exercised in whole or in part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless such listing, qualification, consent or approval shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected or obtained free of any condition not acceptable to the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. BINDING EFFECT OF CONDITIONS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The conditions and stipulations hereinabove contained or in any option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted pursuant to the Plan shall be and constitute a covenant running with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all the shares of the Company owned by the Participant at any time, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly whether the same have been issued or not, and those shares of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company owned by the Participant shall not be sold, assigned or transferred by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any person save and except in accordance with the terms and conditions herein \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, and the Participant shall agree to use his best efforts to cause the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers of the Company to refuse to record on the books of the Company any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignments or transfer made or attempted to be made except as provided in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and to cause said officers to refuse to cancel old certificates or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue to deliver new certificates therefore where the purchaser or assignee has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired certificates for the stock represented thereby, except strictly in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. EFFECTIVE DATE OF THE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Plan shall become effective as determined by the Board but no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options granted under it shall be exercisable until the Plan has been approved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the vote or written consent of the holders of a majority of the outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of the Company entitled to vote. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. MISCELLANEOUS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The use of any masculine pronoun or similar term is intended to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without legal significance as to gender. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Board or its delegate" as used herein refers to the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors of the Company or its delegate as set forth in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(c) hereinabove. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Plan or in any option agreement shall confer on an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee any right to continue in the employ of the Company or any subsidiary, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or shall interfere with or restrict the rights of the Company or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary, which are hereby expressly reserved, to discharge an employee at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time, with or without cause, or to adjust the compensation of any employee. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_3}{\*\bkmkend doc_1_3} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986 STOCK OPTION PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. PURPOSE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The purpose of the Plan is to provide a means whereby selected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible employees of Advanced Micro Devices, Inc., and its subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (hereinafter called the "Company") may be given an opportunity to purchase the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $0.01 par value Common Stock of the Company (the "Common Stock"). The word \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "subsidiary" or "parent," as used in this Plan, means a subsidiary or parent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation as defined in Section 425(f) of the Internal Revenue Code of 1954, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as amended. The Internal Revenue Code of 1954, as amended to date and as it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be amended from time to time, is referred to herein as the "Code". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company, by means of the Plan, seeks to retain the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services of current key employees, and to secure and retain the services of new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql key employees necessary for the continued improvement of operations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. STOCK OPTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock Options granted pursuant to the Plan may, at the discretion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board, be granted either as Incentive Stock Options ("ISO") or as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonstatutory Stock Options ("NSO"). An ISO shall mean an option described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 422A(b) of the Code. A NSO shall mean an option not described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 422(b), 422A(b), 423(b) or 424(b) of the Code. No option may be granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql alternatively as an ISO and as a NSO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. ADMINISTRATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose authority shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plenary, shall administer the Plan and may delegate part or all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers with respect to part or all of the Plan pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(d); provided, however, that the Board of Directors shall delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan to the extent required by Section 3(e). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Board or its delegate shall have the power, subject to and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within the limits of the express provisions of the Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To grant Options and Rights pursuant to the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time which of the eligible \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons shall be granted Options or Rights under the Plan, the number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Shares for which each Option or Right shall be granted, the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each granted Option or Right and the time or times during the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Option or Right within which all or portions of each Option or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right may be exercised (which \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the discretion of the Board or its delegate may be accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To grant Options and/or Rights in exchange for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of Options and/or Rights granted earlier at different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise prices, provided, however, nothing contained herein shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql empower the Board or its delegate to grant an ISO under conditions or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to terms that are inconsistent with the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 422 of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and provisions of each Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or Right granted (which need not be identical) and the form of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instrument that shall constitute the Option and/or Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to amend any Option and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right hereunder, including to cause any Option granted hereunder to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease to be an ISO, provided that no such action may be taken by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate without the written consent of the affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board or its delegate shall also have the power, subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to and within the limits of the express provisions of this Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To construe and interpret the Plan and Options \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Rights granted under the Plan, and to establish, amend and revoke \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules and regulations for administration of the Plan. The Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate, in the exercise of this power, shall generally determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all questions of policy and expediency that may arise and may correct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any defect, omission or inconsistency in the Plan or in any Option or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right agreement in a manner and to the extent it shall deem necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or expedient to make the Plan fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Generally, to exercise such powers and to perform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such acts as are deemed necessary or expedient to promote the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board of Directors may, by resolution, delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan (including, without limitation, the Board's powers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Sections 3(b) and (c) above), under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or granting of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options or Rights to an employee who is not subject to Section 16 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Act, to a committee of one or more members of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, whether or not such members of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are Disinterested Directors; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to matters other than the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selection for participation in the Plan, substantive decisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning the timing, pricing, amount or other material term of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or Right, to a committee of one or more members of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, whether or not such members of the Board of Directors are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disinterested Directors, or to one or more officers of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Unless each member of the Board is a Disinterested Director, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board shall, by resolution, delegate administration of the Plan with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of an Option or Right, to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of two or more Disinterested Directors. Any committee to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan is so delegated pursuant to this Section 3(e) may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(d)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Except as required by Section 3(e) above, the Board shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql complete discretion to determine the composition, structure, form, term and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan, all of the powers and discretion theretofore possessed by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and delegable to such committee, subject to any constraints which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adopted by the Board from time to time and which are not inconsistent with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Plan. The Board, at any time, may revest in the Board any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its administrative powers under the Plan, except under circumstances where a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee is required to administer the Plan under Section 3(e) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) The term "Disinterested Director" shall mean a member of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors of the Company who has not, during the one year prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service as an administrator of the Plan, or during such service, been granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or awarded equity securities of the Company pursuant to this Plan (except for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatic grants of options to Outside Directors pursuant to Section 8 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 Stock Incentive Plan) or any other plan of the Company or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. SHARES SUBJECT TO PLAN AND TO OPTIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The total sum of the stock which may be sold pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options granted under the Plan plus the Rights which may be exercised under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986 Stock Appreciation Rights \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan shall not exceed in the aggregate one million (1,000,000) shares of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's authorized Common Stock. Such stock may be unissued shares or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reaquired shares or shares bought on the market for the purposes of issuance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan. This number of authorized shares shall take into account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustments pursuant to Section 10, and shall include stock dividends with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to shares previously issued pursuant to this Plan. If any options \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan shall for any reason terminate or expire without having \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been exercised in full, the stock not purchased under such options shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available again for the purposes of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The aggregate fair market value of the stock (determined at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the time of the grant of the option) for which any employee may be granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO's in any calendar year under all plans of the Company and its parent or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries shall not exceed $100,000 plus any unused limit carryover (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in the Code) to such year or any other maximum aggregate fair market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value to be established in the future under the Code. Should it be determined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that any ISO granted under the Plan inadvertently exceeds such maximum, such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO grant shall be deemed to be a grant of a NSO to the extent, but only to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent, of such excess. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. ELIGIBILITY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options may be granted only to full or part time employees of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and/or of any parent or subsidiary. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Members of the Board of Directors of the Company who are not also employees of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall not be eligible for the benefits of the Plan. No ISO may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to a person who, at the time of grant, owns stock possessing more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10% of the total combined voting power of the Company or its parent or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary unless the option price is at least 110% of the fair market value of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stock subject to the option and the term of the option does not exceed five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) years from the date such ISO is granted. Any employee may hold more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one option at any time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. TERMS OF OPTION AGREEMENT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each option agreement shall be in such form and shall contain such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms and conditions as the Board or its delegate from time to time shall deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate, subject to the following limitations: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The term of any ISO shall not be greater than ten (10) years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date it was granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The purchase price of each ISO shall be not less than the fair \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market value of the stock subject to the ISO on the date the ISO is granted. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The purchase price of each option other than an ISO shall be established by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate, but shall be in no event less than fifty percent (50%) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the fair market value of the stock subject to such option on the date such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option is granted. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) An option, by its terms shall not be transferable otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than by will or by the laws of descent and distribution and may be exercisable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the lifetime of the option holder only by the option holder, or by his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guardian or legal representative. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) An option (the "New Option") which is designated by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its delegate, as the case may be, as an ISO by its terms shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable, notwithstanding that such may be vested in whole or in part, with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to all or any part of the Shares subject thereto while there is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding any other ISO, granted to the optionee prior to the grant of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql New Option, to purchase Common Stock in the Company or in a corporation that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is, at the time of granting of the New Option, a Parent or Subsidiary of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, or in a predecessor corporation of any such corporations. For \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of the preceding sentence, an ISO shall be treated as "outstanding" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until such option is exercised in full or expires by reason of the lapse of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon the termination of a Participant's employment, his rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise an option then held by him shall be only as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEATH OR DISABILITY: If a Participant's employment is terminated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql death or disability, he or his estate, as the case may be, shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right for a period of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twelve (12) months following the date of death or disability, or for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such longer period as the Board or its delegate may fix, to exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option to the extent the Participant was entitled to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option on the date of his death or disability, or to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise specified by the Board or its delegate, which may so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specify, at a time that is subsequent to the date of his death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disability, provided the actual date of exercise is in no event after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the expiration of the term of the option. A Participant's estate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean his legal representative or any person who acquires the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to exercise an option by reason of the Participant's death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCONDUCT: If a Participant is determined by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate to have committed an act of theft, embezzlement, fraud, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dishonesty, a breach of fiduciary duty to the Company (or affiliate), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or deliberate disregard of the rules of the Company (or affiliate), or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if a Participant makes any unauthorized disclosure of any of the trade \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secrets or confidential information of the Company (or affiliate), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql engages in any conduct which constitutes unfair competition with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (or affiliate), induces any customer of the Company (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliate) to break any contract with the Company (or affiliate) or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql induces any principal for whom the Company (or affiliate) acts as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agent to terminate such agency \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relationship, neither the Participant nor his estate shall be entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise any option with respect to any shares whatsoever, after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of employment, whether or not after termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment, the Participant may receive payment from the Company (or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliate) for vacation pay, for services rendered prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination, for services for the day on which termination occurs, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql salary in lieu of notice, or for any other benefits. In making such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination, the Board or its delegate shall give the Participant an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opportunity to present evidence on his behalf. For the purposes of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this paragraph of this subsection 6(e), termination of employment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to occur when the Company (or affiliate) dispatches \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice or advice to Participant that his employment is terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHER REASONS: If a Participant's employment is terminated for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reason other than those mentioned above under "Death or Disability" or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Misconduct", he or his estate may, within three (3) months following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such termination, or within such longer period as the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate may fix, exercise the option to the extent such option was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable by the Participant on the date of termination of his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment, or to the extent otherwise specified by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate, which may so specify at a time that is subsequent to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of the termination of his employment, provided the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of exercise is in no event after the expiration of the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIVORCE: If an Option or any portion thereof is transferred pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a qualified domestic relations order to a former spouse who is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither a director nor an employee of the Company or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates, the former spouse shall have the right for the period of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twelve months following the date of transfer, or such other period as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board or its delegate may fix, to exercise the Option to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent the Participant was entitled to exercise such option on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of transfer. Unless otherwise specified in the option agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or by court order, the date of transfer shall be the date the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualified domestic relations order is executed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The vesting of options may be on such terms as the Board may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prescribe, and such vesting may be made automatically accelerated in the event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a change of control of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any Participant's employment is terminated by the Company for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reason other than for Misconduct or, if applicable, by Constructive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination, within one year after a Change of Control has occurred, then all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options held by such Participant shall become fully vested for exercise upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of termination, irrespective of the vesting provisions of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Participant's option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise specified in an individual's option agreement, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term "Change of Control" shall mean a change of control of a nature that would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be required to be reported in response to Item 6(e) of Schedule 14A of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulation 14A promulgated under the Securities and Exchange Act of 1934, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended (the "Exchange Act"), or in response to any other form or report to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities and Exchange Commission or any stock exchange on which the Company's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares are listed which requires the reporting of a change of control. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, a Change of Control shall be deemed to have occurred if (i) any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is or becomes the beneficial owner, directly or indirectly, of securities of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company representing more than 20% of the combined voting power of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company's then outstanding securities; or (ii) in any two-year period, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql individuals who were members of the Board of Directors (the "Board") at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning of such period plus each new director whose election or nomination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for election was approved by at least two-thirds of the directors in office \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately prior to such election or nomination, cease for any reason to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute at least a majority of the Board; or (iii) a majority of the members \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Board in office prior to the happening of any event and who are still in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office after such event, determines in its sole discretion within one year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after such event, that as a result of such event there has been a \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Change of Control. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing definition, "Change of Control" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclude the acquisition of securities representing more than 20% of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combined voting power of the Company by the Company, any of its wholly-owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries, or any trustee or other fiduciary holding securities of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company under an employee benefit plan now or hereafter established by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. As used herein, the term "beneficial owner" shall have the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning as under Section 13(d) of the Exchange Act and related case law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Constructive Termination" shall mean a resignation by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant who has been elected by the Company's Board of Directors as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporate officer of the Company, due to diminution or adverse change in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances of such Participant's employment with the Company, as determined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in good faith by the Participant, including, without limitation, reporting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relationships, job description, duties, responsibilities, compensation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perquisites, office or location of employment. Constructive Termination shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be communicated by written notice to the Company, and such termination shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to occur on the date such notice is delivered to the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Options may also contain such other provisions, which shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be inconsistent with any of the foregoing \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms, as the Board or its delegate shall deem appropriate. No option, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, nor anything contained in the Plan, shall confer upon any employee any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to continue in the employ of the Company (or affiliate) nor limit in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql way the right of the Company (or affiliate) to terminate his employment at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. STOCK APPRECIATION RIGHTS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A Stock Appreciation Right ("SAR") also may be granted with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all or some of the stock covered by any option granted pursuant to the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Related Option"). Either a General SAR, or a Limited SAR or both a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General SAR and a Limited SAR may be granted with respect to the same Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option. All terms and conditions pertaining to any SAR shall be governed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of the 1986 Stock Appreciation Rights Plan of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended. SARs which are granted with respect to a Related Option that is an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ISO shall contain such terms and conditions as may from time to time be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary pursuant to applicable provisions of the Code and Treasury Department \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations to permit such Related Option to qualify as an ISO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. PAYMENTS AND LOANS UPON EXERCISE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The purchase price of stock sold pursuant to an option shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be paid either in full in cash or by certified check at the time the option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised or pursuant to any deferred payment arrangement that the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors in its \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion may approve. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company may make loans or guarantee loans made by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate financial institution to individual optionees, including officers, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on such terms as may be approved by the Board of Directors for the purpose of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing the exercise of options granted under the Plan and the payment of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes that may be due by reason of such exercise. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) In addition, if and to the extent authorized by the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, optionees may make all or any portion of any payment due to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company upon exercise of an option by delivery of any property (including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of the Company) other than cash, so long as such property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes valid consideration for the stock under applicable law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Where, in the opinion of counsel to the Company, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has or will have a legal obligation to withhold taxes relating to the exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any stock option, the Board or its delegate may in its discretion require \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that such tax obligation be satisfied in a manner satisfactory to the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before shares deliverable pursuant to the exercise of such option are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred to the option holder. An option holder may make a Withholding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Election to pay required minimum withholding taxes by the withholding of shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the total number of shares deliverable pursuant to the exercise of the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option or by delivering a sufficient number of previously acquired shares to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and may elect to have additional taxes paid by the delivery of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously acquired shares, in each case in accordance with rules and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures established by the Board or its delegate. Previously owned shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered in payment for such taxes must have been owned for at least six \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months prior to the exercise date, or may be subject to such other conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the Board or its delegate may require. The value of shares withheld or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered shall be the fair market value of such shares on the date the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise becomes taxable. Such Withholding Election shall be subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the Board or its delegate, and must be in compliance with rules and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. USE OF PROCEED FROM STOCK \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Proceeds from the sale of stock pursuant to options granted under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan shall be used for general corporate purposes. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. ADJUSTMENT OF AND CHANGES IN THE STOCK \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that the shares of Common Stock of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql presently constituted, shall be changed into or exchanged for a different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number or kind of shares of stock or other securities of the Company or of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another corporation (whether by reason of merger, consolidation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recapitalization, reclassification, split- up, combination of shares, or \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise), or if the number of shares of Common Stock of the Company shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increased through the payment of a stock dividend, then there shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted for or added to each share of the Common Stock of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore appropriated or thereafter subject or which may become subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an option under the Plan, the number and kind of shares of stock or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities into which each outstanding share of Common Stock of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be so changed, or for which each such share shall be exchanged, or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which each such share shall be entitled, as the case may be. Outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options shall also be amended as to price and other terms if necessary to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflect the foregoing events. In the event there shall be any other change in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the number or kind of the outstanding shares of Common Stock of the Company, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any stock or other securities into which such Common Stock shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changed, or for which it shall have been exchanged, then if the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors shall, in its sole discretion, determine that such change equitably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires an adjustment in any option theretofore granted or which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan, such adjustment shall be made in accordance with such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination. No right to purchase fractional shares shall result from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment in options pursuant to this Section 10. In case of any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment, the shares subject to the option shall be rounded down to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nearest whole share. Notice of any adjustment shall be given by the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to each holder of any option which shall have been so adjusted and such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment (whether or not such notice is given) shall be \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective and binding for all purposes of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. AMENDMENT OF THE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors, at any time, and from time to time, may amend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan, subject to the limitation, however, that, except as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10 (relating to adjustments upon changes in stock), no amendment shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be effective unless approved, within twelve (12) months before or after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such amendment's adoption, by the vote or written consent of a majority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the outstanding shares of the Company entitled to vote, where such amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a) increase the number of shares reserved for options under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b) materially increase the benefits accruing to Participants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c) materially modify the requirements of Section 5 as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligibility for participation in the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors may amend the Plan in any respect necessary to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provide the Company's employees with the maximum benefits provided or to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided under Section 422A of the Code and the regulations promulgated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder relating to employee incentive stock options and/or to bring the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan or options granted under it into compliance therewith. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any option granted before any amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan shall not be altered or impaired by amendment of the Plan, except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the consent of the person to whom the option was granted, which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtained in any manner deemed by the Board or its delegate to be appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. TERMINATION OR SUSPENSION OF THE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors at any time may suspend or terminate the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Plan, unless sooner terminated, shall terminate at the end of ten (10) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql years from the date the Plan is adopted by the Board of Directors or approved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the stockholders of the Company, whichever is earlier. An option may not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan while the Plan is suspended or after it is terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any option granted while the Plan is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect shall not be altered or impaired by suspension or termination of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, except with the consent of the person to whom the option was granted, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may be obtained in any manner that the Board or its delegate deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. LISTING, QUALIFICATION OR APPROVAL OF STOCK; APPROVAL OF OPTIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All options granted under the Plan are subject to the requirement that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if at any time the Board of Directors shall determine in its discretion that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the listing or qualification \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the shares of stock subject thereto on any securities exchange or under any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable law, or the consent or approval of any governmental regulatory body \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the Shareholders of the Company, is necessary or desirable as a condition of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or in connection with the issuance of shares under the option, the option may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be exercised in whole or in part unless such listing, qualification, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or approval shall have been effected or obtained free of any condition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not acceptable to the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. BINDING EFFECT OF CONDITIONS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The conditions and stipulations hereinabove contained or in any option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted pursuant to the Plan shall be and constitute a covenant running with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all the shares of the Company owned by the Participant at any time, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly whether the same have been issued or not, and those shares of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company owned by the Participant shall not be sold, assigned or transferred by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any person save and except in accordance with the terms and conditions herein \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, and the Participant shall agree to use his best efforts to cause the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers of the Company to refuse to record on the books of the Company any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assignments or transfer made or attempted to be made except as provided in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and to cause said officers to refuse to cancel old certificates or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue to deliver new certificates therefore where the purchaser or assignee has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired certificates for the stock represented thereby, except strictly in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the provisions of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. EFFECTIVE DATE OF THE PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Plan shall become effective as determined by the Board but no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options granted under it shall be exercisable until the Plan has been approved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the vote or written consent of the holders of a majority of the outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of the Company entitled to vote. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. MISCELLANEOUS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The use of any masculine pronoun or similar term is intended to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without legal significance as to gender. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Board or its delegate" as used herein refers to the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors of the Company or its delegate as set forth in Section 3(c) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinabove. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Plan or in any option agreement shall confer on an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee any right to continue in the employ of the Company or any subsidiary, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are hereby expressly reserved, to discharge an employee at any time, with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or without cause, or to adjust the compensation of any employee. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_4}{\*\bkmkend doc_1_4} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 STOCK INCENTIVE PLAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AS AMENDED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. PURPOSE \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The purpose of this Plan is to encourage key personnel, whose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long-term employment is considered essential to the Company's continued \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql progress, to remain in the employ of the Company or its subsidiaries. By means \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan, the Company also seeks to attract new key employees whose future \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql services are necessary for the continued improvement of operations. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company intends future increases in the value of securities granted under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan to form part of the compensation for services to be rendered by such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees in the future. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. DEFINITIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The terms defined in this Section 2 shall have the respective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meanings set forth herein, unless the context otherwise requires. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Affiliate: The term "Affiliate" shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, partnership, joint venture or other entity in which the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holds an equity, profits or voting interest of thirty percent (30%) or more. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Award Price: The term "Award Price" shall mean a price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated by the Board or its delegate and which is not less than the Fair \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Market Value per Share on the date the Stock Appreciation Right is granted. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the case of a General Right which is exercisable only in lieu of exercising a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option, unless otherwise specified in the Right Agreement, the Award \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price shall be the exercise price of such Related Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Board or its delegate: The term "Board or its delegate" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean the Company's Board of Directors or its delegate as set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 3(d) and 3(e) hereinbelow. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Change of Control: The term "Change of Control" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean a change of control of a nature that would be required to be reported in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Exchange Act of 1934, as amended (the "Exchange Act"), or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql response to any other form or report to the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any stock exchange on which the Company's shares are listed which requires \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the reporting of a change of control. In addition, a Change of Control shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed to have occurred if (i) any "person" (as such term is used in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 13(d) and 14(d) of the Exchange Act) is or becomes the beneficial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owner, directly or indirectly, of securities of the Company representing more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than 20% of the combined voting power of the Company's then outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities; or (ii) in any two-year period, individuals who were members of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors (the "Board") at the beginning of such period plus each new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director whose election or nomination for election was approved by at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two-thirds of the directors in office \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately prior to such election or nomination, cease for any reason to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute at least a majority of the Board; or (iii) a majority of the members \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Board in office prior to the happening of any event and who are still in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office after such event, determines in its sole discretion within one year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after such event, that as a result of such event there has been a Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control. The Board or its delegate may, at its discretion, define a Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control differently for purposes of any individual option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing definition, "Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control" shall exclude the acquisition of securities representing more than 20% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the combined voting power of the Company by the Company, any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiaries, or any trustee or other fiduciary holding securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company under an employee benefit plan now or hereafter established by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. As used herein, the term "beneficial owner" shall have the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning as under Section 13(d) of the Exchange Act and related case law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Code: The term "Code" shall mean the Internal Revenue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Code of 1986, as amended to date and as it may be amended from time to time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Company: The term "Company" shall mean Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc., a Delaware corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Constructive Termination: The term "Constructive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination" shall mean a resignation by a Participant who has been elected by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company's Board of Directors as a corporate officer of the Company, due to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql diminution or adverse change in the circumstances of such Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment with the Company, as determined in good faith by the Participant, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including, without limitation, reporting relationships, job description, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duties, responsibilities, compensation, perquisites, office or location of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment. Constructive Termination shall be communicated by written notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company, and such termination shall be deemed to occur on the date such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice is delivered to the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) Disinterested Director: The term "Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director" shall mean a member of the Board of Directors of the Company who has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not, during the one year prior to service as an administrator of the Plan, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during such service, been granted or awarded equity securities of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Plan (except for automatic grants of options to Outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors pursuant to Section 8 hereof) or any other plan of the Company or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of its Affiliates. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Event Price per Share: The term "Event Price per Share" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as used in Section 12 with respect to the exercise of a Limited Right shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean the highest price per Share paid in connection with the event constituting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Change of Control. Any securities or property which are part or all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration paid for Shares in connection with the event constituting a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Change of Control shall be valued in determining the Event Price per Share at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the highest of (A) the valuation placed on such securities or property by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, person or other entity which paid such price or (B) the valuation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql placed on such securities or property by the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) Fair Market Value per Share: The term "Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value per Share" shall mean as of any day (i) the closing price for Shares on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the New York Stock Exchange as reported on the composite tape on the day as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such determination is being made or, if there was \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no sale of Shares reported on the composite tape on such day, on the most \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recently preceding day on which there was such a sale, or (ii) if the Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are not listed or admitted to trading on the New York Stock Exchange on the day \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of which the determination is made, the amount determined by the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate to be the fair market value of a Share on such day. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) ISO: The term "ISO" shall mean a stock option described \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 422(b) of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) NSO: The term "NSO" shall mean a nonstatutory stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option not described in Sections 422(b) or 423(a) of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) Option: The term "Option" shall mean (except as herein \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise provided) a stock option granted under this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) Outside Director: The term "Outside Director" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean a member of the Board of Directors of the Company who is not also an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee of the Company or an Affiliate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) Participant: The term "Participant" shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person who holds an Option or a Stock Appreciation Right granted under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (p) Plan: The term "Plan" shall mean this Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. 1992 Stock Incentive Plan, as amended from time to time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (q) Shares: The term "Shares" shall mean shares of Common \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock of the Company and any shares of stock or other securities received as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result of the adjustments provided for in Section 14 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (r) Related Option: The term "Related Option" shall mean an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option with respect to which a Right has been granted which is exercisable only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent that such Option has not previously been exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (s) Rights: The term "General Right" shall mean a Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right granted pursuant to the provisions of Section 11 of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. The term "Limited Right" shall mean a Stock Appreciation Right granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the provisions of Section 12 of this Plan. The term "Right" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean any General Right or Limited Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (t) Stock Appreciation Right: The term "Stock Appreciation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right" shall mean a right granted under this Plan to receive, without payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Company, cash and/or Shares equivalent in value to the Spread as defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Sections 11 and 12 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (u) Window Period: The term "Window Period" shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period beginning on the third business day following the date of release for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql publication of the quarterly and annual summary statements of sales and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings of the Company and ending on the twelfth business day following such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. ADMINISTRATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose authority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be plenary, shall administer the Plan and may delegate part or all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers with respect to part or all of the Plan pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(d); provided, however, that the Board of Directors shall delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan to the extent required by Section 3(e). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Except for automatic grants of Options to Outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors pursuant to Section 8 hereof, the Board or its delegate shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the power, subject to and within the limits of the express provisions of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To grant Options and Rights pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time which of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible persons shall be granted Options or Rights under the Plan, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the number of Shares for which each Option or Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted, the term of each granted Option or Right and the time or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql times during the term of each Option or Right within which all or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql portions of each Option or Right may be exercised (which at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion of the Board or its delegate may be accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) With respect to persons who are not also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive officers, to grant Options and/or Rights in exchange for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of Options and/or Rights granted earlier at different \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise prices; provided, however, nothing contained herein shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql empower the Board or its delegate to grant an ISO under conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or pursuant to terms that are inconsistent with the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 422 of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and provisions of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option and/or Right granted (which need not be identical) and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form of written instrument that shall constitute the Option and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to amend any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option and/or Right hereunder, including to amend the vesting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedule of any outstanding Option or Right, or to cause any Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted hereunder to cease to be an ISO, provided that no such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action adverse to a Participant's interest may be taken by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its delegate without the written consent of the affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board or its delegate shall also have the power, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to and within the limits of the express provisions of this Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To construe and interpret the Plan and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options and Rights granted under the Plan, and to establish, amend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and revoke rules and regulations for administration of the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board or its delegate, in the exercise of this power, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql generally determine all questions of policy and expediency that may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arise and may correct any defect, omission or inconsistency in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan or in any Option or Right agreement in a manner and to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent it shall deem necessary or expedient to make the Plan fully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Generally, to exercise such powers and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform such acts as are deemed necessary or expedient to promote \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the best interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board of Directors may, by resolution, delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan (including, without limitation, the Board's powers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Sections 3(b) and (c) above), under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granting of Options or Rights to an employee who is not subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, to a committee of one or more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql members of the Board of Directors, whether or not such members of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors are Disinterested Directors; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to matters other than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selection for participation in the Plan, substantive decisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning the timing, pricing, amount or other material term of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or Right, to a committee of one or more members of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, whether or not such members of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are Disinterested Directors, or to one or more officers of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Unless each member of the Board is a Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director, the Board shall, by resolution, delegate administration of the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of an Option or Right, to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of two or more Disinterested Directors. Any committee to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan is so delegated pursuant to this Section 3(e) may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(d)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Except as required by Section 3(e) above, the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have complete discretion to determine the composition, structure, form, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term and operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, all of the powers and discretion theretofore possessed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegable to such committee, subject to any constraints which may be adopted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board from time to time and which are not inconsistent with the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan. The Board at any time may revest in the Board any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers under the Plan, except under circumstances where a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee is required to administer the Plan under Section 3(e) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. SHARES SUBJECT TO PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to the provisions of Section 14 (relating to adjustments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon changes in stock), the Shares which may be issued pursuant to the exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Options or Rights granted under the Plan shall not exceed in the aggregate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ninemillion three hundred fifty thousand (9,350,000) Shares of the Company's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorized Common Stock and may be unissued Shares or \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reacquired Shares or Shares bought on the market for the purposes of issuance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan. If any Options or Rights granted under the Plan shall for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reason be cancelled, terminate or expire without having been exercised in full, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Shares subject to such Options or Rights shall be available again for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of the Plan, except for Shares subject to a Related Option which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancelled due to the exercise for Shares of a Right related to such Option, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except for Shares subject to a Right which is cancelled due to the exercise for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares of an Option related to such Right. Shares which are delivered or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld from the Shares otherwise due on exercise of an Option or Right may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reused and sold pursuant to Options or Rights granted to a Participant who is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not subject to Section 16 of the Exchange Act. If a Right is exercised for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash, the Shares underlying the Right or cancelled related Option, if any, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall become available again for the grant of Options or Rights to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. ELIGIBILITY \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options and/or Rights may be granted only to full or part-time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees of the Company and/or of any Affiliate. Outside Directors shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be eligible for the benefits of the Plan, except as provided in Section 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof. Any employee or Outside Director may hold more than one Option and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right at any time. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. STOCK OPTIONS -- GENERAL PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Except for automatic grants of Options to Outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors under Section 8 hereof, each Option granted pursuant to the Plan may, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the discretion of the Board or its delegate, be granted either as an ISO or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as an NSO. No option may be granted alternatively as an ISO and as an NSO. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) To the extent that the aggregate exercise price for ISOs \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which are exercisable for the first time by a Participant during any calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year (under this Plan or any other plans of the Company or its Affiliates) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exceeds $100,000, such options shall be treated as NSOs. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) No ISO may be granted to a person who, at the time of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant, owns stock possessing more than 10% of the total combined voting power \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company or any of its Affiliates unless the exercise price is at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 110% of the Fair Market Value per Share of the stock subject to the option and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the term of the option does not exceed five (5) years from the date such ISO is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. TERMS OF OPTION AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise required by the terms of Section 8 hereof, each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option agreement shall be in such form and shall contain such terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions as the Board or its delegate from time to time shall deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate, subject to the following limitations: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The term of any Option (other than an ISO) shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql greater than ten (10) years and one day from the date it was granted. The term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any ISO shall not be greater than ten (10) years from the date it was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The exercise price of each Option shall be not less than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Fair Market Value per Share of the stock subject to the Option on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Option is granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Unless otherwise specified in the option agreement, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option shall be transferable otherwise than by will, pursuant to the laws of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql descent and distribution or pursuant to a qualified domestic relations order as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined by the Code or Title I of the Employee Retirement Income Security Act, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the rules thereunder, or as otherwise permitted by regulations and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretations under Section 16 of the Exchange Act. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Except as otherwise provided in paragraph (e) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7, the rights of a Participant other than an Outside Director to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise an Option shall be limited as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) DEATH OR DISABILITY: If a Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment is terminated by Death or Disability, then the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant or the Participant's estate, or such other person as may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hold the option, as the case may be, shall have the right for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of twelve (12) months following the date of Death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disability, or for such other period as the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may fix, to exercise the Option to the extent the Participant was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to exercise such Option on the date of his Death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disability, or to such extent as may otherwise be specified by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate (which may so specify after the date of his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Death or Disability but before expiration of the Option), provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the actual date of exercise is in no event after the expiration of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the term of the Option. A Participant's estate shall mean his legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative or any person who acquires the right to exercise an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option by reason of the Participant's Death or Disability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) MISCONDUCT: If a Participant is determined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Board or its delegate to have committed an act of theft, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embezzlement, fraud, dishonesty, a breach of fiduciary duty to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (or Affiliate), or deliberate disregard of the rules of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company (or Affiliate), or if a Participant makes any unauthorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure of any of the trade secrets or confidential information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company (or Affiliate), engages in any conduct which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes unfair competition with the Company (or Affiliate), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql induces any customer of the Company (or Affiliate) to break any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contract with the Company (or Affiliate), or induces any principal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for whom the Company (or Affiliate) acts as agent to terminate such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agency relationship, neither the Participant, the Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql estate nor such other person who may then hold the Option shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to exercise any Option with respect to any shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whatsoever, after termination of employment, whether or not after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of employment the Participant may receive payment from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company (or Affiliate) for vacation pay, for services rendered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to termination, for services rendered for the day on which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination occurs, for salary in lieu of notice, or for any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits. In making such determination, the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall give the Participant an opportunity to present to the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate evidence on his behalf. For the purpose of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph, termination of employment shall be deemed to occur on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date when the Company dispatches notice or advice to the Participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that his employment is terminated. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) TERMINATION FOR OTHER REASONS: If a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's employment is terminated for any reason other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql those mentioned above under "DEATH OR DISABILITY" or "MISCONDUCT," \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Participant, the Participant's estate, or such other person who \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may then hold the Option may, within three months following such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination, or within such longer period as the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate may fix, exercise the Option to the extent such Option was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable by the Participant on the date of termination of his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment, or to the extent otherwise specified by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate (which may so specify after the date of the termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his employment but before expiration of the Option) provided the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of exercise is in no event after the expiration of the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) DIVORCE: If an Option or any portion thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is transferred pursuant to a qualified domestic relations order to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql former spouse who is neither an Outside Director nor an employee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company or any of its Affiliates, the former spouse shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the right for the period of twelve months following the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer, or such other period as the Board or its delegate may fix, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise the Option to the extent the Participant was entitled to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise such option on the date of transfer. Unless otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the option agreement or by court order, the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer shall be the date the qualified domestic relations order is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) If any Participant's employment is terminated by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company for any reason other than for Misconduct or, if applicable, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Constructive Termination, within one year after a Change of Control has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred, then all Options held by such Participant shall become fully vested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for exercise upon the date of termination, irrespective of the vesting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Participant's option agreement. For purposes of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection (e), the term "Change of Control" shall have the meaning assigned by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Plan, unless a different meaning is defined in an individual Participant's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Options may also contain such other provisions, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be inconsistent with any of the foregoing terms, as the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate shall deem appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The maximum number of shares which are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options granted to any individual, plus the maximum number of Rights which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not associated with a Related Option and which are granted to any individual, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not exceed in the aggregate two million (2,000,000) shares over the full \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ten-year life of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. AUTOMATIC GRANTS TO OUTSIDE DIRECTORS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) On the date of adoption of this Plan by the Board, each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outside Director shall be granted an option to purchase 12,000 Shares under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan (the "First Option"). Thereafter, on the first business day coincident \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with or following each annual meeting of the Company's stockholders, each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outside Director reported as being elected shall be granted an additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option to purchase 3,000 Shares under the Plan (the "Annual Option"); provided, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that an Outside Director who has not previously \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been elected as a member of the Board of Directors of the Company shall then be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted a First Option; i.e., an option to purchase 12,000 Shares under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. Further, subject to the right of any Outside Director who has not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously been elected as a member of the Board of Directors of the Company to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive a First Option, if there are insufficient Shares available under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan for each Outside Director to receive an Annual Option (as adjusted) in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year, the number of Shares subject to each Annual Option in such year shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal the total number of available Shares then remaining under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql divided by the number of Outside Directors on such date, as rounded down to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql avoid fractional Shares. All Options granted to Outside Directors shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the following terms and conditions of this Section 8. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Nonstatutory Options. All Options granted to Outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors pursuant to the Plan shall be NSOs. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Exercise Price. The exercise price under each Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to an Outside Director shall be one hundred percent of the Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value per Share subject thereto on the date the Option is granted and shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payable in full at the time the Option is exercised (i) in cash or by certified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql check, (ii) by delivery of Shares to the Company which shall have been owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for at least six months and have a Fair Market Value per Share on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surrender equal to the exercise price, or (iii) by delivery to the Company of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properly executed exercise notice together with irrevocable instructions to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql broker to promptly deliver to the Company from sale or loan proceeds the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to pay the exercise price and any applicable tax withholding. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Duration and Vesting of Options. Each Option granted to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Outside Director shall be for a term of ten years plus one day. Each First \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option shall vest and become exercisable on July 15 of subsequent calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql years, according to the following schedule: 4,800 shares in the first calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year following the date of grant; 3,600 shares in the second such calendar \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year; 2,400 shares in the third such calendar year; and 1,200 shares in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fourth such calendar year. Each Annual Option shall vest and become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable on July 15 of subsequent calendar years according to the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql schedule: in equal installments of 1,000 shares each in the second, third and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fourth calendar years following the date of grant. Any Shares acquired by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outside Director upon exercise of an option shall not be freely transferable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until six months after the date stockholder approval referred to in Section 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof is obtained. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Termination of Tenure on the Board. The rights to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise an Option granted to an Outside Director shall be limited as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) DEATH, DISABILITY OR TERMINATION: If an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outside Director's tenure on the Board is terminated for any reason, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then the Outside Director or the Outside Director's estate, as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case may be, shall have the right for a period of twelve months \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the date such tenure is terminated to exercise the Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent the Outside Director was entitled to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option on the date the Outside Director's tenure terminated; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided the actual date of exercise is in no event after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration of the term of the Option. An Outside Director's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "estate" shall mean the Outside Director's legal representative or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any person who acquires the right to exercise an Option by reason of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Outside Director's Death or Disability. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) DIVORCE: If an Option or any portion thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is transferred pursuant to a qualified domestic relations order to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql former spouse who is neither an Outside \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director nor an employee of the Company or any of its Affiliates, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the former spouse shall have the right for the period of twelve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months following the date of transfer, or such other period as the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate may fix, to exercise the Option to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Participant was entitled to exercise such option on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer. Unless otherwise specified in the option agreement or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql court order, the date of transfer shall be the date the qualified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql domestic relations order is executed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The automatic grants to Outside Directors pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 8 shall not be subject to the discretion of any person. The other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Plan shall apply to the Options granted automatically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Section 8, except to the extent such other provisions are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistent with this Section 8. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. PAYMENTS AND LOANS UPON EXERCISE OF OPTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With respect to Options other than Options granted to Outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors pursuant to Section 8, the following provisions shall apply: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The exercise price of Shares sold pursuant to an Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be paid either in full in cash or by certified check at the time the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option is exercised or in accordance with any deferred payment arrangement that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board or its delegate in its discretion may approve. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In addition, if and to the extent authorized by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate, Participants may make all or any portion of any payment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql due to the Company upon exercise of an Option (i) by delivery of any property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (including securities of the Company) other than cash, so long as such property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitutes valid consideration for the stock under applicable law and has a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fair market value on date of delivery equal to the exercise price, or (ii) by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery to the Company of a properly executed exercise notice together with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable instructions to a broker to promptly deliver to the Company from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale or loan proceeds the amount required to pay the exercise price and any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable tax withholding. If securities of the Company are delivered in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of the exercise price pursuant to this paragraph, such securities shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been owned for at least six months (or such other period as the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate may require) and have a fair market value on the date of surrender \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the exercise price. Any securities delivered by a Participant who is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to Section 16 of the Exchange Act must be the same class of stock as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the stock to be received upon exercise of the Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Company may make loans or guarantee loans made by an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate financial institution to individual Participants, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers, on such terms as may be approved by the Board of Directors for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of financing the exercise of Options granted under the Plan and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of any taxes that may be due by reason of such exercise. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In addition, a Participant may elect to have the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withhold from the number of Shares otherwise issuable upon exercise of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option, a sufficient number of Shares with an aggregate Fair Market Value per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Share on the date of exercise equal to the exercise price. Any such election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be subject to the approval of the Board or its delegate and must be made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in compliance with rules and procedures established by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. TAX WITHHOLDING \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Where, in the opinion of counsel to the Company, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has or will have an obligation to withhold taxes relating to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of any Option or Right, the Board or its delegate may in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion require that such tax obligation be satisfied in a manner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to the Company. In satisfying such obligation with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General or Limited Right exercised for cash, the Company may withhold such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes from any cash award. With respect to the exercise of an Option or a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right, in whole or in part, for Shares, the Company may require the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment of such taxes before Shares deliverable pursuant to such exercise are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred to the holder of the Option or General Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) With respect to the exercise of an Option or a General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right, in whole or in part, for Shares, a Participant may elect (a "Withholding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Election") to pay his withholding tax obligation by the withholding of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the total number of Shares deliverable pursuant to the exercise of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or General Right or by delivering to the Company a sufficient number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql previously acquired Shares, and may elect to have additional taxes paid by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivery of previously acquired shares, in each case in accordance with rules \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and procedures established by the Board or its delegate. Previously owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares delivered in payment for such taxes must have been owned for at least \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql six months prior to the exercise date, or may be subject to such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions as the Board or its delegate may require. The value of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld or delivered shall be the Fair Market Value per Share on the date the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise becomes taxable. All Withholding Elections are subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the Board or its delegate and must be made in compliance with rules \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and procedures established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. STOCK APPRECIATION RIGHTS -- GENERAL RIGHTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board or its delegate shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a General Right to any eligible employee. A General Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be granted to a Participant irrespective of whether such Participant holds, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is being granted, or has been previously granted an Option, a Limited Right or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a General Right under the Plan. A General Right may be made exercisable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without regard to the exercisability of any Option or may be made exercisable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only to the extent of, and in lieu of, a Related Option. A General Right may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be granted with respect to some or all of the Shares issuable pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) With respect to the exercise of any General Right for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares by any Participant, and with respect to the exercise of a General Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for Shares or cash by a Participant who is not subject to Section 16 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act, the term "Spread" as used in paragraph (c) of this Section 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean an amount equal to the product computed by multiplying (i) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql excess of (A) the Fair Market Value per Share on the date such General Right is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised over (B) the Award Price by (ii) the number of Shares with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such General Right is being exercised. With respect to the exercise of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any General Right for cash by a Participant who is subject to Section 16 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act pursuant to an election made in accordance with paragraphs (c) and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) of this Section 11, the term "Spread" as used in paragraph (c) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11 shall mean an amount equal to the product computed by multiplying \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the excess of (A) the highest Fair Market Value per Share during a Window \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Period over (B) the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Award Price by (ii) the number of Shares with respect to which such General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right is being exercised. With respect to the exercise of a General Right for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash pursuant to an election made in accordance with paragraph (f) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11 by a Participant who is subject to Section 16 of the Exchange Act, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the term "Spread" as used in paragraph (c) of this Section 11 shall mean an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount equal to the product computed by multiplying (i) the excess of (A) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fair Market Value per Share on the date the election becomes effective over (B) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Award Price by (iii) the number of Shares with respect to which the General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right is being exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) On the exercise of a General Right as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (g) of this Section 11, the holder thereof (subject to compliance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with paragraph (d) or paragraph (f) of this Section 11, if applicable) shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled at his election to receive either: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a number of Shares equal to the quotient computed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividing the Spread by the Fair Market Value per Share on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of exercise of the General Right; provided, however, that in lieu of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fractional Shares the Company shall pay cash equal to the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fraction of the Fair Market Value per Share on the date of exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the General Right; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an amount in cash equal to the Spread; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) a combination of cash in the amount specified in such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder's notice of exercise, and a number of Shares calculated as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in clause (i) of this paragraph (c), after reducing the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Spread by such cash amount, plus cash in lieu of any fractional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Share as provided above. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) This paragraph (d) shall only apply to Participants who \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are subject to Section 16 of the Exchange Act. Unless an election to receive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash upon the exercise of a General Right is made pursuant to paragraph (f) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 11, the Board or its delegate shall have sole discretion to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent to or disapprove, in whole or in part, the election pursuant to either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (ii) or (iii) of paragraph (c) of this Section 11 of a holder of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right to receive cash upon the exercise of a General Right ("Cash \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Election"). Such consent or disapproval may be given at any time after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Election to which it relates. If the Board or its delegate shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disapprove a Cash Election, in lieu of paying the cash (or any portion thereof) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in such Cash Election, the Board or its delegate shall determine the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash, if any, to be paid pursuant to such Cash Election and shall issue a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of Shares calculated as provided in clause (i) of paragraph (c) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11, after reducing the Spread by such cash to be paid plus cash in lieu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any fractional Share. A Cash Election may be made only (x) with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a General Right which has been held at least six months from the date of grant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such General Right, and (y) during a Window Period. A Cash Election made in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql advance of a Window Period shall be deemed to have been made and to take effect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the first day of the first Window Period occurring after such election. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Notwithstanding the provision of paragraph (c) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11, if within one year after a Change of Control has occurred the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment of any Participant is terminated by the Company for any reason other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than for Misconduct (or, if applicable, by Constructive Termination), then such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant's General Right shall become fully vested on the date of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination and may be exercised; provided, however, that with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right held by a Participant who is subject to Section 16 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act, the event constituting a Change of Control shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to stockholder approval by non-insider stockholders of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined under Rule 16(b)(3) of the Exchange Act, and if such General Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has not been outstanding for at least six months on the date of termination, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then such grant shall not be exercisable until such six-month period elapses. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Upon an exercise for cash, a holder of a General Right shall be entitled to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive an amount in cash equal to the Spread which, for purposes of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (e) of this Section 11, shall mean an amount equal to the product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computed by multiplying (i) the excess of (A) the Fair Market Value per Share \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the date such General Right is exercised over (B) the Award Price, by (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the number of Shares with respect to which such General Right is being \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) An election by a Participant who is subject to Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 of the Exchange Act to receive cash upon the exercise of a General Right may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be made without compliance with paragraph (d) of this Section 11, if such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql election is irrevocable and the receipt of cash pursuant to such election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurs no earlier than six months after such election is made. An election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made pursuant to this paragraph (f) may be changed only by a subsequent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrevocable election to take effect no earlier than six months after the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such subsequent election is made. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) To exercise a General Right, the holder shall (i) give \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof to the Company in form satisfactory to the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addressed to the Secretary of the Company specifying (A) the number of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to which such holder is exercising the General Right and (B) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount such holder elects to receive in cash, if any, and the amount he elects \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive in Shares with respect to the exercise of the General Right; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, however, that notice of the exercise of a General Right pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (e) of this Section 11 shall only specify the number of Shares with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to which the General Right is being exercised for cash; and (ii) if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by the Company, deliver the Right Agreement relating to the General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right being exercised and the Option Agreement for any Related Option to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary of the Company, who shall endorse thereon a notation of such exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and return the Right Agreement and Option Agreement to the Participant. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of exercise of a General Right which is validly exercised shall be the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date on which the Company shall have received the notice referred to in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first sentence of this paragraph (g). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. STOCK APPRECIATION RIGHTS -- LIMITED RIGHTS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board or its delegate shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a Limited Right to the holder of a Related Option. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right may be granted with respect to all or some of the Shares covered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such Related Option. A Limited Right may be granted either at the time of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant of the Related Option or at any time thereafter during its term. A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right may be granted to a Participant irrespective of whether such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Participant is being granted or has been granted a General Right with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the same Related Option. Unless specified in the Right Agreement as an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Automatic Right, a Limited Right may be exercised only during a period of sixty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days beginning on the date of a Change of Control; provided, however, that with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a Limited Right held by a Participant who is subject to Section 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Exchange Act the event constituting a Change of Control shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to stockholder approval by non-insider stockholders of the Company, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined under Rule 16(b)(3) of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Act, and if such Limited Right has not been outstanding for at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least six months on the date of the Change of Control, then the sixty-day \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period shall not begin until the expiration of six months from the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant of such Limited Right. Notwithstanding the provisions of the immediately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding sentence, each Limited Right shall be exercisable only if and to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent that the Related Option is exercisable. A Limited Right granted as an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Automatic Right, shall be exercised automatically and only for cash, on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction of conditions specified in the Right Agreement; provided that an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Automatic Right held by a participant who is subject to Section 16 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act shall not be automatically exercised unless such Automatic Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has been outstanding for at least six months from the date of grant of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The term "Spread" as used in this Section 12 with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the exercise of any Limited Right shall mean an amount equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product computed by multiplying (i) the excess of (A) either (x) the highest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fair Market Value per Share during the sixty-day period ending on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Change of Control, or (y) the Event Price per Share, whichever is greater, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over (B) the exercise price per Share at which the Related Option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable, by (ii) the number of Shares with respect to which such Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right is being exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Upon the exercise of a Limited Right as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (e) of this Section 12, the holder thereof shall receive an amount in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash equal to the Spread. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Notwithstanding any other provision of this Plan, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right which has a Related Option may be exercised for cash at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql when any Limited Right which was granted with respect to the same Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option may be exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) To exercise a Limited Right, the holder shall (i) give \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof to the Company in form satisfactory to the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifying the number of Shares with respect to which such holder is exercising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Limited Right, and (ii) if requested by the Company, deliver the Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement relating to the Limited Right being exercised and the Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement for the Related Option to the Secretary of the Company who shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql endorse thereon a notation of such exercise and return the Right Agreement and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Option Agreement to the employee. The date of exercise of a Limited Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is validly exercised shall be deemed to be the date on which the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have received the notice referred to in the first sentence of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paragraph (e). \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. STOCK APPRECIATION RIGHTS -- GENERAL PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Either a General Right or a Limited Right, or both a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right and a Limited Right, may be granted with respect to the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option. Upon the exercise of a Right, any Related Option and any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right granted with respect to the same Related Option shall be considered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancelled to the extent of the Shares with respect to which the Right is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised. Upon the exercise, cancelleation or termination of any Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option, the Right or Rights that relate thereto will cease to be exercisable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent of the number of Shares with respect to which the Related Option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised, cancelled or terminated. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Company intends that Sections 11, 12 and 13 shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the requirements of Rule 16b-3 (the "Rule") under the Exchange Act \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the term of this Plan. Should any provision of these Sections 11, 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 13 fail to comply with or be unnecessary to comply with the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Rule, the Board may amend this Plan to add to or modify the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Plan accordingly without seeking stockholder approval. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Unless otherwise specified in the Right Agreement, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General or Limited Right shall be transferable except by will, by the laws of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql descent and distribution, or pursuant to a qualified domestic relations order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as defined in the Code or Title I of the Employee Retirement Income Security \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, or the rules thereunder, or as otherwise permitted by regulations and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpretations under Section 16 of the Exchange Act; provided, however, that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms of a General or Limited Right granted with respect to an ISO shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the requirements of the Code as necessary to maintain the status of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Related Option as an ISO including, without limitation, transferability and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisability restrictions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) A person exercising a General Right shall not be treated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as having become the registered owner of any Shares issued on such exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until such Shares are issued. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Each General or Limited Right shall be on such terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions not inconsistent with this Plan or the Related Option, if any, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board or its delegate may determine and shall be evidenced by a Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement setting forth such terms and conditions executed by the Company and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holder of the General or Limited Right. A General and/or Limited Rightr \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted with respect to a Related Option shall be exercisable only if and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent the Related Option is exercisable. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. ADJUSTMENTS OF AND CHANGES IN THE STOCK \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If there is any change in the Common Stock of the Company by reason \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any stock dividend, stock split, spin-off, split up, merger, consolidation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recapitalization, reclassification, combination or exchange of shares, or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other similar corporate event, then the Board or its delegate shall make \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate adjustments to the number of Shares of Common Stock of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql theretofore appropriated or thereafter subject or which may become subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Option or Right under the Plan. Outstanding Options and Rights shall also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be automatically converted as to price and other terms if necessary to reflect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the foregoing events. No right to purchase fractional shares shall result from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any adjustment in Options or Rights pursuant to this Section 14. In case of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such adjustment, the Shares subject to the Option or Right shall be rounded \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql down to the nearest whole Share. Notice of any adjustment shall be given by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company to each holder of any Option or Right which shall have been so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjusted and such adjustment (whether or not such notice is given) shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective and binding for all purposes of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. EFFECTIVE DATE OF THE PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Plan shall become effective when adopted by the Board, but no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or Right granted under this Plan shall be exercisable until the Plan is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved in the manner prescribed \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in section 16(a) of this Plan. Any amendment to the Plan shall become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective when adopted by the Board, unless specified otherwise, but no Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Right granted under any increase in the number of shares authorized to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued under this Plan shall be exercisable until the increase is approved in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the manner prescribed in section 16(a) of this Plan. The amendments to Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 which pertain to shares available again for issuance to participants not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to Section 16 of the Exchange Act shall be effective from December 27, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1993. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. AMENDMENT OF THE PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors at any time, and from time to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, may amend the Plan, subject to the limitation, however, that, except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 14 (relating to adjustments upon changes in stock), no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment for which stockholder approval is required shall be effective unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such approval is obtained within the required time period. Whether stockholder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval is required shall be determined by the Board of Directors. Approval \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the stockholders may be obtained, at a meeting of stockholders duly called \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and held, by the affirmative vote of a majority of the holders of the Company's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voting stock who are present or represented by proxy and entitled to vote on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan, or by the written consent of the holders of a majority of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding voting stock of the Company. Shares which are present at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting but not voted on the Plan are not counted in determining whether a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority has been obtained. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) It is expressly contemplated that the Board may, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seeking approval of the Company's stockholders, amend the Plan in any respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to provide the Company's employees with the maximum benefits provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or to be provided under Section 422 of the Code or Section 16 of the Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Exchange Act of 1934 and the regulations promulgated thereunder relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee incentive stock options and/or to bring the Plan or Options granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under it into compliance therewith. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Rights and obligations under any Option or Right granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before any amendment of the Plan shall not be altered or impaired by amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan, except with the consent of the person who holds the Option or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right, which consent may be obtained in any manner that the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate deems appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board of Directors may not amend the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8 hereof more than once every six months, other than to comport with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql changes in the Code, the Employee Retirement Income Security Act, or the rules \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. TERMINATION OR SUSPENSION OF THE PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors at any time may suspend or terminate the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. The Plan, unless sooner terminated, shall terminate at the end of ten \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql years from the date the Plan is adopted by the Board or approved by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stockholders of the Company, whichever is earlier. No Option or Right may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan while the Plan is suspended or after it is terminated. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any Option or Right granted while the Plan is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect, including the maximum duration and vesting provisions, shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql altered or impaired by suspension \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or termination of the Plan, except with the consent of the person who holds the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or Right, which consent may be obtained in any manner that the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate deems appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. REGISTRATION, LISTING, QUALIFICATION, APPROVAL OF STOCK AND OPTIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All Options and Rights granted under the Plan are subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement that if at any time the Board shall determine in its discretion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the registration, listing or qualification of the shares of stock subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto on any securities exchange or under any applicable law, or the consent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or approval by any governmental regulatory body or the stockholders of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, is necessary or desirable as a condition of or in connection with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance of shares upon exercise of the Option or Right, the Option or Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may not be exercised in whole or in part unless such registration, listing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualification, consent or approval shall have been effected or obtained free of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any condition not acceptable to the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19. NO RIGHT TO EMPLOYMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nothing in this Plan or in any Option or Right agreement shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to confer on any employee any right to continue in the employ of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company or any Affiliate or to limit the rights of the Company or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates, which are hereby expressly reserved, to discharge an employee at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any time, with or without cause, or to adjust the compensation of any employee. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20. MISCELLANEOUS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The use of any masculine pronoun or similar term is intended to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without legal significance as to gender. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 STOCK INCENTIVE PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql Page \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql ---- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 1. Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 3. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 4. Shares Subject to Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 5. Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 6. Stock Options -- General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 7. Terms of Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 8. Automatic Grants to Outside Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 9. Payments and Loans Upon Exercise of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 10. Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 11. Stock Appreciation Rights -- General Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 12. Stock Appreciation Rights -- Limited Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 13. Stock Appreciation Rights -- General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 14. Adjustments of and Changes in the Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 15. Effective Date of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 16. Amendment of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 17. Termination or Suspension of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 18. Registration, Listing, Qualification, Approval of Stock and Options . . . . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 19. No Right to Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs14\ql 20. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_5}{\*\bkmkend doc_1_5} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUNNYVALE, CALIFORNIA \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1980 STOCK APPRECIATION RIGHTS PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Purpose. The purpose of this Plan is to advance the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests of the Corporation and its stockholders by providing means by which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation and its subsidiaries may remain competitive in the search for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and in the motivation and retention of outstanding management personnel. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation seeks to attract and retain in its employ and in the employ of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries management personnel of training, experience and ability, and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql furnish additional incentive to executives upon whose judgment, initiative and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql efforts the successful conduct of the business of the Corporation and its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiaries largely depends. It is believed that the granting of stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appreciation rights as provided herein will assist the Company in attracting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and retaining employees of unusual competence and, by increasing their equity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests in the Company, will provide incentive and inducement to them to use \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their best efforts in the Company's behalf. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Definitions. The terms defined in this Section 2 shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the respective meanings set forth herein, unless the context otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requires. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Committee. The term "Committee" shall mean a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee to which administration of the Plan has been delegated, in whole or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in part, by the Board of Directors, pursuant to Sections 3(c) or 3(d) hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Disinterested Director: The term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Disinterested Director" shall mean a member of the Board of Directors of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company who has not, during the one year prior to service as an administrator \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan, or during such service, been granted or awarded equity securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company pursuant to this Plan or any other plan of the Company or any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its affiliates, except for options granted automatically pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formula set forth in the Advanced Micro Devices, Inc. 1992 Stock Incentive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) 1969 Plan: The term "1969 Plan" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's 1969 Stock Option Plan as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) 1977 Plan: The term "1977 Plan" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's 1977 Stock Option Plan as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) 1979 Plan: The term "1979 Plan" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's 1979 Stock Option Plan as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) 1982 Plan: The term "1982 Plan" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation's 1982 Stock Option Plan as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Stock Option Plans: The term "Stock Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plans" shall mean collectively the 1969 Plan, the 1977 Plan, the 1979 Plan and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 1982 Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) Plan: The term "Plan" or this "Plan" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean this 1980 Stock Appreciation Rights Plan, as originally adopted, and, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended or modified as herein provided, as so amended or modified as herein \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, as so amended or modified. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Stock Appreciation Right: The term "Stock \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right" shall mean the right to receive, without payment to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, cash and/or Shares equivalent in value to the Spread as defined in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 4 and 5 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) Rights: The term "General Right" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Stock Appreciation Right granted by the Committee pursuant to the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 4 of this Plan. The term "Limited Right" shall mean a Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right granted by the Committee pursuant to the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4 of this Plan. The term "Limited Right" shall mean a Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right granted by the Committee pursuant to the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5 of this Plan. The term "Right" shall mean any General Right or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) Stock Option: The term "Stock Option" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean (except as herein otherwise provided) a stock option granted under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1969 Plan, the 1977 Plan, 1979 Plan or the 1982 Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) Shares: The term "Shares" shall mean shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Common Stock of the Corporation and any shares of Stock or other securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received as a result of the adjustments provided for in Section 7 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) Optionee: The term "Optionee" shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person to whom a Stock Option has been granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) Fair Market Value per Share: The term "Fair \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Market Value per Share" shall mean as of any day (i) the closing price for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares on the New York Stock Exchange as reported on the Composite Tape on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql day as of which such determination is being made or, if there was no sale of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares reported on the Composite Tape on such day, on the most recently \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding day on which there was such a sale, or (ii) if the Shares are not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql listed or admitted to trading on the New York Stock Exchange on the day as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the determination is being made, the amount determined by the Committee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be the fair market value of a Share on such day. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Administration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority shall be plenary, shall administer the Plan and may delegate part or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of the powers designated in Section 3(b) with respect to part or all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan pursuant to Section 3(c); provided, however, that the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall delegate administration of the Plan to the extent required by Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(d). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Board shall have the power, subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and within the limits of the express provisions of the Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To grant Rights pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which of the eligible persons shall be granted Rights under the Plan, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the number of Shares for which each Right shall be granted, the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each granted Right and the time or times during the term of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right within which all or portions of each Right may be exercised, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (which at the discretion of the Board may be accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To grant Rights in exchange for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of Rights granted earlier at different exercise prices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of each Right granted (which need not be identical) and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the form of written instrument that shall constitute the Right \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amend any Right hereunder; provided, however, that no such action may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be taken by the Board without the written consent of the affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of the Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) To construe and interpret the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and Rights granted under the Plan, and to establish, amend and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql revoke rules and regulations for administration of the Plan. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board, in the exercise of this power, shall generally determine all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql questions of policy and expediency that may arise and may correct any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defect, omission or inconsistency in the Plan or in any Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement in a manner and to the extent it shall deem necessary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expedient to make the Plan fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) Generally, to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql powers and to perform such acts as are deemed necessary or expedient \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to promote the best interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Subject to the limits set forth below, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board may, by resolution, delegate its administrative powers set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(b) above under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of or granting of Rights to an employee who is not subject to Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 of the Exchange Act, to a committee of one or more members of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board, whether or not such members of the Board are Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to ministerial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters, i.e., matters other than the selection for participation in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan and substantive decisions concerning the timing, pricing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount or other material term of a Right, to a committee of one or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more members of the Board, whether or not such members of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are Disinterested Directors, or to one or more officers of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Unless each member of the Board is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disinterested Director, the Board shall, by resolution, delegate administration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan with respect to the participation in the Plan of employees who are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to Section 16 of the Exchange Act, including its powers to select such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees for participation in the Plan, to make substantive decisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning the timing, pricing, amount or any other material term of a Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to such an employee, to a committee of two or more Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors. Any committee to which administration of the Plan is so delegated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3(c)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Except as required by Section 3(d) above, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board shall have complete discretion to determine the composition, structure, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form, term and operations of any committee established to administer the Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, all of the powers and discretion theretofore possessed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegable to such committee, subject to any constraints which may be adopted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board from time to time and which are not inconsistent with the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan. The Board at any time may revest in the Board any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers under the Plan, \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except under circumstances where a committee is required to administer the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 3(d) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The determinations of the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate shall be conclusive and binding on all persons having any interest in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Plan or in any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Stock Appreciation Rights - General Rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Committee shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a General Right to the holder of any Stock Option (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Related Option") with respect to all or some of the Shares covered by such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option. A General Right may be granted either at the time of grant of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Related Option or at any time thereafter during its term. A General Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be granted to an Optionee irrespective of whether such Optionee is being \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted or has been granted a Limited Right. Each General Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable only if and to the extent that the Related Option is exercisable. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the provisions of the preceding sentence, no General Right may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be exercised until the expiration of six months from the date of grant of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right unless prior to the expiration of such six month period the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of the General Right ceases to be an employee of the Company because of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his death or physical or mental incapacity. Upon the exercise of a General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right, the Related Option shall cease to be exercisable to the extent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares with respect to which such General Right is exercised, but the Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option shall be considered to have been exercised to such extent for purposes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of determining the number of Shares available for the grant of further Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options pursuant to the Stock Option Plans. Upon the exercise or termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Related Option, the General Right with respect to such Related Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall terminate to the extent of the Shares with respect to which the Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option is exercised or terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The term "Spread" as used in this Section 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean with respect to the exercise of any General Right an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the product computed by multiplying (i) the excess of (A) the Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value per Share on the date such General Right is exercised over (B) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase price per Share at which the Related Option is exercisable by (ii) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of Shares with respect to which such General Right is being exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Upon the exercise of a General Right as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Paragraph (j) of this Section 4, the holder thereof, except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Paragraph (d) of this Section 4, shall be entitled at his election \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive either: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a number of Shares equal to the quotient \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computed by dividing the Spread by the Fair Market Value per Share on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of exercise of the General Right, provided, however, that in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lieu of fractional Shares the Corporation shall pay cash equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql same fraction of the Fair Market Value per Share on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of the General Right; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an amount in cash equal to the Spread; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) a combination of cash in the amount \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in such holder's notice of exercise, and a number of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculated as provided in Clause (i) of this \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph (c), after reducing the Spread by such cash amount, plus \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash in lieu of any fractional Share as provided above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Notwithstanding the provisions of Paragraph \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) of this Section 4, the Committee shall have sole discretion to consent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or disapprove, in whole or in part, the election pursuant to either Clause (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (iii) of Paragraph (c) of this Section 4 of a holder of a General Right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive cash upon the exercise of a General Right ("Cash election"). Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or disapproval may be given at any time after the Cash Election to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it relates. If the Committee shall disapprove a Cash Election, in lieu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of paying the cash (or any portion thereof) specified in such Cash Election, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Committee shall determine the cash, if any, to be paid pursuant to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Election and shall issue a number of Shares calculated as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Clause (i) of Paragraph (c) of this Section 4, after reducing the Spread by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such cash to be paid plus cash in lieu of any fractional Share. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Notwithstanding the provisions of Paragraph \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) of this Section 4, a Cash Election may be made only during the period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on the third business day following the date of release for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql publication of the quarterly and annual summary statements of sales and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earnings of the Corporation and ending on the 12th business day following such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The Corporation intends that this Section 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall comply with the requirements of Rule 16b-3 (the "Rule") under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Exchange Act of 1934 during the term of this Plan. Should any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Section 4 be unnecessary to comply with the requirements of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Rule or should any additional provisions be necessary for Section 4 to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the requirements of the Rule, the Board of Directors of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation may amend this Plan to add to or modify the provisions of this Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordingly. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) No General Right shall be transferable except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by will or by the laws of descent and distribution. During the life of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of a General Right, the General Right shall be exercisable only by him \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or his guardian or legal representative. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) A person exercising a General Right shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be treated as having become the registered owner of any Shares issued on such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise until such Shares are issued. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each General Right shall be on such terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions not inconsistent with this Plan as the Committee may determine and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be evidenced by a Right Agreement setting forth such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Corporation and the holder of the General Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) To exercise a General Right, the holder shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) give written notice thereof to the Corporation in form satisfactory to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee addressed to the Secretary of the Corporation specifying (A) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of Shares with respect to which he is exercising the General Right and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) the amount he elects to receive in cash, if any, and the amount he elects \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive in Shares with respect to the exercise of the General Right; (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Corporation such written representations, warranties and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants as the Corporation may require under Section 8 of this Plan; and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) if requested by the Corporation, deliver the Right Agreement relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right being exercised and the Option Agreement for the Related Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Secretary of the Corporation who shall endorse thereon a notation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such exercise and return the Right Agreement and the Option Agreement to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Optionee. The date of exercise of a General Right which is validly exercised \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be the date on which the Corporation shall have received the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments referred to in the first sentence of this Paragraph (j). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Stock Appreciation Rights - Limited Rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Committee shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a Limited Right to the Holder of any Stock Option (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Related Option") granted under the Stock Option Plans with respect to all or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql some of the Shares covered by such Related Option. A Limited Right may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted either at the time of grant of the Related Option or at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter during its term. A Limited Right may be granted to an Optionee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrespective of whether such Optionee is being granted or has been granted a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right. A Limited Right may be exercised only during the period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on the first day following the date of expiration of any Offer (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that term is defined in Paragraph (b) of this Section 5) for Shares and ending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the thirtieth day following such date. Each Limited Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable only if and to the extent that the Related Option is exercisable. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the provisions of the two immediately preceding sentences, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right may be exercised until the expiration of six months from the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of grant of such Limited Right. Upon the exercise of a Limited Right, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option shall cease to be exercisable to the extent of the number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares with respect to which such Limited Right is exercised, but such Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option shall be considered to have been exercised to such extent for purposes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of determining the number of shares available for the grant of further Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options pursuant to the Stock Option Plans. Upon the exercise or termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Related Option, the Limited Right with respect to such Related Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall terminate to the extent of the number of Shares with respect to which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Related Option is exercised or terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The term "Offer" as used in this Section 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean any tender offer or exchange offer for Shares, other than one made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Company, provided that the corporation, person or other entity making \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the offer acquires Shares pursuant to such offer and following expiration or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of the offer the offeror owns 25% of the outstanding Shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The term "Offer Price per Share" as used in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 5 with respect to the exercise of any Limited Right shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql highest price per Share paid in any Offer which Offer is in effect at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during the period beginning on the sixtieth day prior to the date on which such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right is exercised and ending on the date on which such Limited Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is exercised. Any securities or property which are part or all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration paid for Shares in the Offer shall be valued in determining the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer Price per Share at the higher of (A) the valuation placed on such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities or property by the corporation, person or other entity making such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer or (B) the valuation placed on such securities or property by the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The term "Spread" as used in this Section 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the exercise of any Limited Right shall mean an amount equal to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the product computed by multiplying (i) the excess of (A) the Offer Price per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Share over (B) the purchase price per Share at which the Related Option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable, by (ii) the number of Shares with respect to which such Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right is being exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon the exercise of a Limited Right as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Paragraph (j) of this Section 5, the holder thereof shall receive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an amount in cash equal to the Spread. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Notwithstanding any other provision of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, no General Right may be exercised at a time when any Limited Right held \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the holder of such General Right may be exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The Corporation intends that this Section 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall comply with the requirements of the Rule during the term of this Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Should any provision of this Section 5 be unnecessary to comply with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of the Rule or should any additional provisions be necessary for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 5 to comply with the requirements of the Rule, the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors of the Corporation may amend this Plan to add or to modify the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Plan accordingly. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) No Limited Right shall be transferable except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by will or by the laws of descent and distribution. During the life of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of a Limited Right, the Limited Right shall be exercisable only by him \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or his guardian or legal representative. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each Limited Right shall be on such terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions not inconsistent with the Plan as the Committee may determine and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be evidenced by a Right Agreement setting forth such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Corporation and the holder of the Limited Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) To exercise a Limited Right, the holder shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) give written notice thereof to the Corporation in form satisfactory to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee addressed to the Secretary of the Corporation specifying the number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Shares with respect to which he is exercising the Limited Right, and (ii) if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by the Corporation, deliver the Right Agreement relating to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right being exercised and the Option Agreement for a Related Option to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Secretary of the Corporation who shall endorse thereon a notation of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise and return the Right Agreement and the Option Agreement to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee. The date of exercise of a Limited Right which is validly exercised \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be the date on which the Corporation shall have received the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instruments referred to in the first sentence of this Paragraph (j). \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Effectiveness and Term of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) This Plan shall become effective on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on which it is approved by the holders of outstanding shares of Common Stock of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation constituting a majority of such shares present in person or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represented by proxy and entitled to vote at a meeting of stockholders of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation duly called and held. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Unless previously terminated in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with Section 9 of this Plan, this Plan shall terminate on the close of business \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on January 25, 1992, after which no Rights shall be \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under this Plan. Such termination shall not affect any Stock Options \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Rights granted prior to such termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Certain Adjustments. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In the event that the Company shall pay a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock dividend in, or split-up, combine, reclassify or substitute other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities for, its outstanding Shares, the Committee shall forthwith take such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action, if any, as is consistent with the provisions of this Plan and as in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql judgment shall be necessary to preserve to the holders of Rights such rights as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are substantially proportionate to the rights held by them immediately prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such event under such Rights. Any adjustment may provide for the elimination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any fractional Shares which might otherwise become subject to a Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In case the Corporation is merged or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consolidated with another corporation and the Corporation is not the surviving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, or all or substantially all of the assets of the Corporation are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred to another corporation, such action shall be taken, if any, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the judgment of the Committee is necessary to substitute for Shares covered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by any outstanding Right the type of securities or property of the corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surviving such merger or consolidation or acquiring such assets which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuable by reason of such merger, consolidation or transfer to the holders of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the shares of Common Stock of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Notwithstanding and in addition to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Plan, the Committee shall have the authority to provide in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Right Agreement, either at the time of grant or by amendment, that, upon \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of a determination by the Committee that within six months next \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql succeeding the date of such determination there is a reasonable possibility a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public market for the Shares may cease to exist, or such Shares may fail to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain qualified for listing on the New York Stock Exchange, any General or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right related thereto shall become fully exercisable as to all Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject thereto; provided, however, that except in the case of the death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql physical or mental incapacity of the Right holder, no Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable prior to the expiration of six months following (i) the date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant of the Related Option, or (ii) the date on which the Right was granted, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whichever is later. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In addition to the authority conferred to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee in (c) hereinabove, the Committee shall also have the authority to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modify or otherwise amend any Right Agreement as it deems necessary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate, provided that the holder of the Right subject to any such Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to be modified or amended shall have consented thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Compliance with Law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each employee, to permit the Corporation to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the Securities Act of 1933, as amended (the "Act"), and any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable blue sky or state securities laws, shall represent in writing to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company at the time of grant of a Right and at the time of the issuance of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares thereunder that he does not contemplate and shall not make any transfer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any Shares to be acquired under Rights except in compliance with \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Act, and he shall enter into such agreements and make such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations as, in the opinion of counsel to the Corporation, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient to enable the Corporation legally to issue the Shares. Certificates \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representing Shares to be acquired under Rights shall bear such legends as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel for the Corporation may indicate are necessary or appropriate to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accomplish the purposes of Paragraphs (a) and (b) of this Section 8. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If at any time the Committee shall determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the listing, registration or qualification of the Shares subject to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right upon any securities exchange or under any state or federal law, or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or approval of any governmental regulatory authority, is necessary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desirable as a condition of, or in connection with, the granting of, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance of Shares under, such Right, such Shares shall not be issued unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such listing, registration, qualification, consent or approval shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected or obtained free of any conditions not acceptable to the Committee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Where in the opinion of counsel to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company, the Company has or will have an obligation to withhold taxes relating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the exercise of a Right, a Participant may elect (a "Withholding Election") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to pay his required minimum withholding tax obligation by the withholding of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares from the total number of Shares deliverable pursuant to the exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a Right in whole or in part for Shares, or by delivering to the Company a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient number of previously acquired Shares, and may elect to have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional taxes paid by the delivery of previously acquired shares, in each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case in accordance with rules and procedures established by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate. Previously owned shares delivered in payment for such taxes must \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been owned for at least six months prior to the exercise date, or may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to such other conditions as the Board or its delegate may require. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The value of Shares withheld or delivered shall be the Fair Market Value per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Share on the date the exercise becomes taxable. All Withholding Elections are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the approval of the Board or its delegate and must be made in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with rules and procedures established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Amendment of the Plan. The Board of Directors of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation (i) may at any time and from time to time modify or amend this Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any respect, except that without shareholder approval no such modification \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or amendment may increase the maximum number of Shares as to which Rights may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be granted, or otherwise materially increase the benefits accruing to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants under this Plan, and (ii) may at any time terminate this Plan. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The termination or any modification or amendment of this Plan shall not, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the consent of any Optionee or holder of Rights involved, affect his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights under a Stock Option or Right previously granted to him. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. No Obligations. Neither this Plan nor the grant of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right shall confer any right on any employee to remain in the employ of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or any subsidiary or restrict the right of the Corporation or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary to terminate his employment. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_6}{\*\bkmkend doc_1_6} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986 STOCK APPRECIATION RIGHTS PLAN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Purpose. The purpose of this Plan is to advance the interests of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. ("the Corporation") and its stockholders by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing means by which the Corporation and its subsidiaries may remain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competitive in the search for and in the motivation and retention of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding management personnel. The Corporation seeks to attract and retain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its employ and in the employ of its subsidiaries management personnel of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql training, experience and ability, and to furnish additional incentive to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executives upon whose judgment, initiative and efforts the successful conduct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the business of the Corporation and its subsidiaries largely depends. It is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believed that the granting of stock appreciation rights as provided herein will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assist the Company in attracting and retaining employees of unusual competence \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, by increasing their equity interests in the Corporation, will provide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incentive and inducement to them to use their best efforts in the Corporation's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Definitions. The terms defined in this Section 2 shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective meanings set forth herein, unless the context otherwise requires. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Award Price: The term "Award Price" shall mean a price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated by the Board or its delegate and which is not less than fifty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent (50%) of the Fair Market Value per Share on the date the Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right is granted. In the case of a General Right which is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable only in lieu of exercising a Related Option, unless otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the Right Agreement the Award Price shall be the purchase price of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Related Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Board or its delegate: The term "Board or its delegate" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean the Corporation's Board of Directors or its delegate as set forth in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3(c) hereinbelow. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Disinterested Director: The term "Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director" shall mean a member of the Board of Directors of the Company who has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not, during the one year prior to service as an administrator of the Plan, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql during such service, been granted or awarded equity securities of the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Plan or any other plan of the Company or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affiliates, except for options granted automatically pursuant to the formula \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in the Advanced Micro Devices, Inc. 1992 Stock Incentive Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Fair Market Value per Share: The term "Fair Market Value \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql per Share" shall mean as of any day (i) the closing price for Shares on the New \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql York Stock Exchange as reported on the Composite Tape on the day as of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such determination is being made or, if there was no sale of Shares reported on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Composite Tape on such day, on the most recently preceding day on which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there was such a sale, or (ii) if the Shares are not listed or admitted to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trading on the New York Stock Exchange on the day as of which the determination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is made, the amount determined by the Board or its \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate to be the fair market value of a Share on such day. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) 1986 Plan: The term "1986 Plan" shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation's 1986 Stock Option Plan as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Optionee: The term "Optionee" shall mean any person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible to receive a Stock Option or a Stock Appreciation Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) Plan: The term "Plan" or this "Plan" shall mean this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1986 Stock Appreciation Rights Plan, as originally adopted, and, if amended or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modified as herein provided, as so amended or modified. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) Shares: The term "Shares" shall mean shares of Common \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock of the Corporation and any shares of stock or other securities received \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a result of the adjustments provided for in Section 9 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Stock Appreciation Right: The term "Stock Appreciation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right" shall mean the right to receive, without payment to the Corporation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash and/or Shares equivalent in value to the Spread as defined in Sections 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 7 of this Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) Stock Option: The term "Stock Option" shall mean (except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as herein otherwise provided) a stock option granted under the 1986 Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) Stock Option Plans: The term "Stock Option Plan" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean the 1986 Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) Related Option: The term "Related Option" shall mean an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, if any, with respect to which a Right has been granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) Rights: The term "General Right" shall mean a Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Appreciation Right granted by the Board or its delegate pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of Section 6 of this Plan. The term "Limited Right" shall mean a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock Appreciation Right granted by the Board or its delegate pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of Section 7 of this Plan. The term "Right" shall mean any General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right or Limited Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Administration \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose authority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be plenary, shall administer the Plan and may delegate part or all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql powers designated in Section 3(b) with respect to part or all of the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 3(c); provided, however, that the Board of Directors shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate administration of the Plan to the extent required by Section 3(d). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Board shall have the power, subject to and within the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limits of the express provisions of the Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To grant Rights pursuant to the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time which of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible persons shall be granted Rights under the Plan, the number of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for which each Right shall be granted, the term of each \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted Right and the time or times during the term of each Right within which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all or portions of each Right may be exercised, (which at the discretion of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board may be accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To grant Rights in exchange for cancellation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Rights granted earlier at different exercise prices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and provisions of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right granted (which need not be identical) and the form of written instrument \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that shall constitute the Right agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to amend any Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder; provided, however, that no such action may be taken by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the written consent of the affected holder of the Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) To construe and interpret the Plan and Rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan, and to establish, amend and revoke rules and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations for administration of the Plan. The Board, in the exercise of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power, shall generally determine all questions of policy and expediency that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may arise and may correct any defect, omission or inconsistency in the Plan or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any Right agreement in a manner and to the extent it shall deem necessary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expedient to make the Plan fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) Generally, to exercise such powers and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform such acts as are deemed necessary or expedient to promote the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Subject to the limits set forth below, the Board may, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolution, delegate its administrative powers set forth in Section 3(b) above \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granting of Rights to an employee who is not subject to Section 16 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act, to a committee of one or more members of the Board, whether or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not such members of the Board are Disinterested Directors; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to ministerial matters, i.e., \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matters other than the selection for participation in the Plan and substantive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decisions concerning the timing, pricing, amount or other material term of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right, to a committee of one or more members of the Board, whether or not such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql members of the Board are Disinterested Directors, or to one or more officers of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Unless each member of the Board is a Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director, the Board shall, by resolution, delegate administration of the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of a Right granted to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an employee, to a committee of two or more Disinterested Directors. Any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee to which administration of the Plan is so delegated may also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administer the Plan with respect to an employee \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Section 3(c)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Except as required by Section 3(d) above, the Board shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have complete discretion to determine the composition, structure, form, term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, all of the powers and discretion theretofore possessed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegable to such committee, subject to any constraints which may be adopted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board from time to time and which are not inconsistent with the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan. The Board at any time may revest in the Board any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers under the Plan, except under circumstances where a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee is required to administer the Plan under Section 3(d) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Shares Subject to Plan and to Options. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The total sum of the Shares with respect to which Rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be exercised under the Plan plus the Shares which may be sold pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options granted under the 1986 Stock Option Plan shall not exceed in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql aggregate one million (1,000,000) shares of the Corporation's authorized Common \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock. This number of authorized Rights and options shall take into account \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustments pursuant to Section 9, and shall include stock dividends with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to shares previously issued pursuant to this Plan. If any Rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan shall for any reason terminate or expire without having \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been exercised in full, the stock not purchased under such options shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available again for the purposes of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) On the exercise of any General Right a Related Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be considered to have been exercised to the extent such General Right is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised for the purpose of determining the number of shares and Rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available for the grant of further stock options or Rights pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. On the exercise of a General Right, a Related Option, if any, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease to be exercisable to the extent of the Shares with respect to which such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right is exercised, but such Related Option shall be considered to have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been exercised to such extent for purposes of determining the number of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available for the grant of further Stock Options pursuant to the Stock Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Eligibility. Rights may be granted only to full or part time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees of the Corporation and/or of any parent or subsidiary. Members of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors of the Corporation who are not also employees of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation shall not be eligible for the benefits of the Plan. Any employee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may hold more than one Right at any time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Stock Appreciation Rights - General Rights. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board or its delegate shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a General Right to any eligible employee. A General Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be granted to an Optionee irrespective of whether such Optionee holds, is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being granted, or has been granted an option under any Stock Option Plan of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation. A General Right may be granted to an Optionee irrespective of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether such Optionee holds, is being granted, or has been granted a Limited or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right. A General Right may be made exercisable without regard to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisability of any option. On the exercise or termination of a Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option, the General Right with respect to such Related Option shall terminate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent of the number of Shares with respect to which the Related Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is exercised or terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) With respect to the exercise of any General Right for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares, the term "Spread" as used in this Section 6 shall mean an amount equal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the product computed by multiplying (i) the excess of (A) the Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value per Share on the date such General Right is exercised over (B) the Award \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Price by (ii) the number of Shares with respect to which such General Right is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql being exercised. With respect to the exercise of any General Right for cash, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the term "Spread" as used in this Section 6 shall mean an amount equal to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product computed by multiplying (i) the excess of (A) the highest Fair Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Value per Share during the period described in paragraph (e) of this Section 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql over (B) the Award Price by (ii) the number of Shares with respect to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such General Right is being exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) On the exercise of a General Right as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph (j) of this Section 6, the holder thereof, except as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph (d) of this Section 6, shall be entitled at his election to receive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a number of Shares equal to the quotient computed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividing the Spread by the Fair Market Value per Share on the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of the General Right, provided, however, that in lieu of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fractional Shares the Corporation shall pay cash equal to the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fraction of the Fair Market Value per Share on the date of exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the General Right; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) an amount in cash equal to the Spread; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) a combination of cash in the amount specified in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such holder's notice of exercise, and a number of Shares calculated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided in Clause (i) of this Paragraph (c), after reducing the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Spread by such cash amount, plus cash in lieu of any fractional Share \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Notwithstanding the provisions of Paragraph (c) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6, the Board or its delegate shall have sole discretion to consent to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or disapprove, in whole or in part, the election pursuant to either Clause (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (iii) of Paragraph (c) of this Section 6 of a holder of a General Right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive cash upon the exercise of a General Right ("Cash election"). Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or disapproval may be given at any time after the Cash Election to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it relates. If the Board or its delegate shall disapprove a \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cash Election, in lieu of paying the cash (or any portion thereof) specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such Cash Election, the Board or its delegate shall determine the cash, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, to be paid pursuant to such Cash Election and shall issue a number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares calculated as provided in Clause (i) of Paragraph (c) of this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6, after reducing the Spread by such cash to be paid plus cash in lieu of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fractional Share. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Notwithstanding the provisions of Paragraph (c) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6, a Cash Election may be made only during the period beginning on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third business day following the date of release for publication of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarterly and annual summary statements of sales and earnings of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and ending on the 12th business day following such date. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The Corporation intends that this Section 6 shall comply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act of 1934 during the term of this Plan. Should any provision of this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 be unnecessary to comply with the requirements of the Rule, the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors of the Corporation may amend this Plan to add to or modify the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Plan accordingly. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) No General Right shall be transferable except by will or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the laws of descent and distribution. During the life of a holder of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right, the General Right shall be exercisable only by him or his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guardian or legal representative. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) A person exercising a General Right shall not be treated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as having become the registered owner of any Shares issued on such exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until such Shares are issued. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each General Right shall be on such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not inconsistent with this Plan as the Board or its delegate may determine and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be evidenced by Right Agreement setting forth such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Corporation and the holder of the General Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) To exercise a General Right, the holder shall (i) give \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof to the Corporation in form satisfactory to the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate addressed to the Secretary of the Corporation specifying (A) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of Shares with respect to which he is exercising the General Right and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) the amount he elects to receive in cash, if any, and the amount he elects \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to receive in Shares with respect to the exercise of the General Right; (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver to the Corporation such written representations, warranties and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covenants as the Corporation may require under Section 10 of this Plan; and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) if requested by the Corporation, deliver the Right Agreement relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the General Right being exercised and the Option Agreement for the Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option to the Secretary of the Corporation who shall endorse thereon a notation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such exercise and return the Right Agreement and the Option Agreement to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Optionee. The date of exercise of a General Right which is validly exercised \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be the date on which the Corporation shall have received the notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql referred to in the first sentence of this Paragraph (j). \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Stock Appreciation Rights - Limited Rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board or its delegate shall have authority in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion to grant a Limited Right to the Holder of any Stock Option (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Related Option") granted under the Stock Option Plans with respect to all or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql some of the Shares covered by such Related Option. A Limited Right may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted either at the time of grant of the Related Option or at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter during its term. A Limited Right may be granted to an Optionee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql irrespective of whether such Optionee is being granted or has been granted a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right. A Limited Right may be exercised only during the period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql beginning on the first day following the date of expiration of any Offer (as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that term is defined in Paragraph (b) of this Section 7) for Shares and ending \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the thirtieth day following such date. Each Limited Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable for not more than the number of Shares that the Related Option is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable. Notwithstanding the provisions of the two immediately preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentences, no Limited Right may be exercised until the expiration of six months \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the date of grant of such Limited Right. On the exercise of a Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right, the Related Option shall cease to be exercisable to the extent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of Shares with respect to which such Limited Right is exercised, but \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Related Option shall be considered to have been exercised to such extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for purposes of determining the number of shares available for the grant of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further Stock Options pursuant to the Stock Option Plans. Upon the exercise or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of a Related Option, the Limited Right with respect to such Related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option shall terminate to the extent of the number of Shares with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Related Option is exercised or terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The term "Offer" as used in this Section 7 shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tender offer or exchange offer for Shares, other than one made by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation, provided that the corporation, person or other entity making the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql offer acquires Shares pursuant to such offer and following expiration or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of the Offer the offeror owns 25% or more of the outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The term "Offer Price per Share" as used in this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 with respect to the exercise of any Limited Right shall mean the highest \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price per Share paid in any Offer which Offer is in effect at any time during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the period beginning on the sixtieth day prior to the date on which such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right is exercised and ending on the date on which such Limited Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is exercised. Any securities or property which are part or all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration paid for Shares in the Offer shall be valued in determining the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer Price per Share at the higher of (A) the valuation placed on such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities or property by the corporation, person or other entity making such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Offer or (B) the valuation placed on such securities or property by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The term "Spread" as used in this Section 7 with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the exercise of any Limited Right shall mean an amount equal to the product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql computed by multiplying (i) the excess of (A) the Offer Price per Share over \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (B) the Award Price per Share at which the Related Option is exercisable, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the number of Shares with respect to which such Limited Right is being \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon the exercise of a Limited Right as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph (j) of this Section 7, the holder thereof shall receive an amount in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cash equal to the Spread. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Notwithstanding any other provision of this Plan, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Right may be exercised at a time when any Limited Right held by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder of such General Right may be exercised. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The Corporation intends that this Section 7 shall comply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the requirements of Rule 16b-3 (the "Rule") under the Securities Exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act of 1934 during the term of this Plan. Should any provision of this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 be unnecessary to comply with the requirements of the Rule or should any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional provisions be necessary for this Section 7 to comply with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirements of the Rule, the Board of Directors of the Corporation may amend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Plan to add or to modify the provisions of this Plan accordingly. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) No Limited Right shall be transferable except by will or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the laws of descent and distribution. During the life of a holder of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right, the Limited Right shall be exercisable only by him or his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guardian or legal representative. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each Limited Right shall be on such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not inconsistent with the Plan as the Board or its delegate may determine and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be evidenced by a Right Agreement setting forth such terms and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the Corporation and the holder of the Limited Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) To exercise a Limited Right, the holder shall (i) give \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice thereof to the Corporation in form satisfactory to the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate specifying the number of Shares with respect to which he is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercising the Limited Right, and (ii) if requested by the Corporation, deliver \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Right Agreement relating to the Limited Right being exercised and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option Agreement for a Related Option to the Secretary of the Corporation who \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall endorse thereon a notation of such exercise and return the Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and the Option Agreement to the employee. The date of exercise of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right which is validly exercised shall be deemed to be the date on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Corporation shall have received the notice referred to in the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sentence of this Paragraph (j). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Effectiveness and Term of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) No Right granted under this Plan shall be exercisable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until the Plan is approved by the holders of outstanding shares of Common Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Corporation constituting a majority of such shares present in person or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql represented by proxy and entitled to vote at a meeting of shareholders of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation duly called and held. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Unless previously terminated in accordance with Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 of this Plan, this Plan shall terminate on the close of business on June 10, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1996, after which no Rights shall be granted under this Plan. Such termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not affect any Stock Options or Rights granted prior to such termination. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Certain Adjustments. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In the event that the Corporation shall pay a stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dividend in, or split-up, combine, reclassify or substitute other securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for, its outstanding Shares, the Board or its delegate shall forthwith take \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such action, if any, as is consistent with the provisions of this Plan and as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in its judgment shall be necessary to preserve to the holders of Rights such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights as are substantially proportionate to the rights held by them \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately prior to such an event. Any adjustment may provide for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elimination of any fractional Shares which might otherwise become subject to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In case the Corporation is merged or consolidated with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another corporation and the Corporation is not the surviving corporation, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all or substantially all of the assets of the Corporation are transferred to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql another corporation, such action shall be taken, if any, which in the judgment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Board of Directors is necessary to substitute for Shares covered by any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding Right the type of securities or property of the corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surviving such merger or consolidation or acquiring such assets which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuable by reason of such merger, consolidation or transfer to the holders of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the shares of Common Stock of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Notwithstanding and in addition to the provisions of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, the Board or its delegate shall have the authority to provide in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right Agreement, either at the time of grant or by amendment, that, upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of a determination by the Board of Directors that within six months next \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql succeeding the date of such determination there is a reasonable possibility a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public market for the Shares may cease to exist, or such Shares may fail to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain qualified for listing on the New York Stock Exchange, any General or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Limited Right related thereto shall become fully exercisable as to all Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject thereto; provided, however, that except in the case of the death or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql physical or mental incapacity of the Right holder, no Right shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercisable prior to the expiration of six months following (i) the date of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant of the Related Option, or (ii) the date on which the Right was granted, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whichever is later. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) In addition to the authority conferred to the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate in (c) hereinabove, the Board or its delegate shall also have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authority to modify or otherwise amend any Right Agreement as it deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or appropriate, provided that the holder of the Right subject to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Right Agreement to be modified or amended shall have consented thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Compliance with Law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each employee, to permit the Corporation to comply with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Securities Act of 1933, as amended (the "Act"), and any applicable blue sky \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or state securities laws, may be required by the Corporation to represent in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing to the Corporation at the time of grant of a Right and at the time of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the issuance of any Shares thereunder that he does not contemplate and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not make \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any transfer of any Shares to be acquired under Rights except in compliance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Act, and he shall enter into such agreements and make such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations as, in the opinion of counsel to the Corporation, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient to enable the Corporation legally to issue the Shares. Certificates \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representing Shares to be acquired under Rights shall bear such legends as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel for the Corporation may indicate are necessary or appropriate to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accomplish the purposes of Paragraphs (a) and (b) of this Section 10. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If at any time the Board of Directors shall determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the listing, registration or qualification of the Shares subject to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right upon any securities exchange or under any state or federal law, or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent or approval of any governmental regulatory authority, is necessary or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desirable as a condition of, or in connection with, the granting of, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issuance of Shares under, such Right, such Shares shall not be issued unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such listing, registration, qualification, consent or approval shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effected or obtained free of any conditions not acceptable to the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Where in the opinion of counsel to the Company, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company has or will have an obligation to withhold taxes relating to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise of a Right, a Participant may elect (a "Withholding Election") to pay \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his required minimum withholding tax obligation by the withholding of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from the total number of Shares deliverable pursuant to the exercise of a Right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in whole or in part for Shares, or by delivering to the Company a sufficient \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of previously acquired Shares, and may elect to have additional taxes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql paid by the delivery of previously acquired shares, in each case in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with rules and procedures established by the Board or its delegate. Previously \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned shares delivered in payment for such taxes must have been owned for at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least six months prior to the exercise date, or may be subject to such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions as the Board or its delegate may require. The value of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld or delivered shall be the Fair Market Value per Share on the date the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise becomes taxable. All Withholding Elections are subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the Board or its delegate and must be made in compliance with rules \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and procedures established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Amendment of the Plan. The Board of Directors at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time and from time to time, may amend the Plan, subject to the limitation that, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as provided in Section 9 (relating to adjustments upon changes in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock), no amendment shall be effective unless approved within twelve (12) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months before or after the date of such amendment's adoption, by the vote or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written consent of a majority of the outstanding shares of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company/Corporation entitled to vote, where such amendment will: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) increase the number of Rights which may be exercised \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) materially increase the benefits accruing to participants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan; or \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) materially modify the requirements of Section 5 as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligibility for participation in the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql It is expressly contemplated that the Board may amend the Plan in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect necessary to provide the Company's employees with the maximum benefits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided or to be provided under Section 422A of the Code and the regulations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql promulgated thereunder relating to employee incentive stock options and/or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bring the Plan or Rights granted under it into compliance therewith. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights and obligations under any Right granted before any amendment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan shall not be altered or impaired by amendment of the Plan, except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the consent, which may be obtained in any manner deemed by the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate to be appropriate, of the person to whom the Right was granted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. No Obligations. Neither this Plan nor the grant of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right shall confer any right on any employee to remain in the employ of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation or any subsidiary or restrict the right of the Corporation or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary to terminate his employment. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_7}{\*\bkmkend doc_1_7} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MONOLITHIC MEMORIES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1981 INCENTIVE STOCK OPTION PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Purposes of the Plan. The purposes of this Stock Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan are to attract and retain the best available personnel for positions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substantial responsibility, to provide additional incentive to the Employees of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company and to promote the success of the Company's business. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options granted hereunder may be either Incentive Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options or Nonstatutory Stock Options, at the discretion of the Board and as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reflected in the terms of the written option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Definitions. As used herein, the following definitions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall apply: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) "Board" shall mean the Committee, if one has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been established, or the Board of Directors of the Company, if no Committee is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appointed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) "Code" shall mean the Internal Revenue Code \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of 1986, as amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) "Committee" shall mean the Board, and if such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is appointed by the Board in accordance with Section 4(a) of the Plan, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Committee to which part or all of the Board's authority is delegated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) "Common Stock" shall mean the Common Stock of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) "Company" shall mean Advanced Micro Devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inc., a Delaware corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) "Continuous Status as an Employee" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the absence of any interruption or termination of service as an Employee. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Continuous Status as an Employee shall not be considered interrupted in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql case of sick leave, military leave, or any other leave of absence approved by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) "Employee" shall mean any person, including \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql officers and directors, employed by the Company or any Parent or Subsidiary of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. The payment of directors' fees by the Company shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient to constitute "employment" by the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) "Incentive Stock Option" shall mean an option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intended to qualify as an incentive stock option within the meaning of Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 422A of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) "Nonstatutory Stock Option" shall mean an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option not \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intended to qualify as an Incentive Stock Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (j) "Option" shall mean a stock option granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (k) "Optioned Stock" shall mean the Common Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to an option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (l) "Optionee" shall mean an Employee who \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receives an Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (m) "Parent" shall mean a "parent corporation", \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether now or hereafter existing, as defined in Section 425 (e) of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (n) "Plan" shall mean this 1981 Incentive Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (o) "Share" shall mean a share of the Common \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock, as adjusted in accordance with Section 11 of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (p) "Subsidiary" shall mean a "subsidiary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation," whether now or hereafter existing, as defined in Section 425(f) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Stock Subject to the Plan. Subject to the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 11 of the Plan, the maximum aggregate number of shares which may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql optioned and sold under the Plan is 4,620,000 shares of Common Stock. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares may be authorized, but unissued, or reacquired Common Stock. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If an Option should expire or become unexercisable for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any reason without having been exercised in full, the unpurchased shares which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql were subject thereto shall, unless the Plan shall have been terminated, become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql available for future grant under the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Administration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board"), whose authority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be plenary, shall administer the Plan and may delegate part or all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers with respect to part or all of the Plan pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4(d); provided, however, that the Board of directors shall delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan to the extent required by Section 4(e). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The Board or its delegate shall have the power, subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to and within the limits of the express provisions of the Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To make any determination under this Plan in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql execution of its responsibilities. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) To determine from time to time the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each granted Option or Right and the time or times during the term of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option or Right within which all or portions of each Option or Right may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised (which at the discretion of the Board or its \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate may be accelerated). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) To grant Options and/or Rights in exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for cancellation of Options and/or Rights granted earlier at different exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prices, provided, however, nothing contained herein shall empower the Board or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its delegate to grant an ISO under conditions or pursuant to terms that are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistent with the requirements of Section 422 of the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) To prescribe the terms and provisions of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option and/or Right granted (which need not be identical) and the form of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written instrument that shall constitute the Option and/or Right agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) To take appropriate action to amend any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option and/or Right hereunder, including to cause any Option granted hereunder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to cease to be an ISO, provided that no such action may be taken by the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its delegate without the written consent of the affected Participant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board or its delegate shall also have the power, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to and within the limits of the express provisions of this Plan: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) To construe and interpret the Plan and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options and Rights granted under the Plan, and to establish, amend and revoke \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules and regulations for administration of the Plan. The Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate, in the exercise of this power, shall generally determine all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql questions of policy and expediency that may arise and may correct any defect, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql omission or inconsistency in the Plan or in any Option or Right agreement in a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner and to the extent it shall deem necessary or expedient to make the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Generally, to exercise such powers and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql perform such acts as are deemed necessary or expedient to promote the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board of Directors may, by resolution, delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan (including, without limitation, the Board's powers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Sections 4(b) and (c) above), under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granting of Options or Rights to an employee who is not subject to Section 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Exchange Act, to a committee of one or more members of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, whether or not such members of the Board of Directors are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disinterested Directors; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to matters other than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selection for participation in the Plan, substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or other material term of an Option or Right, to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of one or more members of the Board of Directors, whether or not such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql members of the Board of Directors are Disinterested Directors, or to one or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more officers of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Unless each member of the Board is a Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director, the Board shall, by resolution, delegate administration of the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of an Option or Right, to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of two or more Disinterested Directors. Any committee to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan is so delegated pursuant to this Section 4(e) may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4(d)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Except as required by Section 3(e) above, the Board shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have complete discretion to determine the composition, structure, form, term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, all of the powers and discretion theretofore possessed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegable to such committee, subject to any constraints which may be adopted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board from time to time and which are not inconsistent with the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan. The Board, at any time, may revest in the Board any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers under the Plan, except under circumstances where a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee is required to administer the Plan under Section 3(e) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (h) The term "Disinterested Director" shall mean a member of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors of the Company who has not, during the one year prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service as an administrator of the Plan, or during such service, been granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or awarded equity securities of the Company pursuant to this Plan (except for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql automatic grants of options to Outside Directors pursuant to Section 8) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 Stock Incentive Plan or any other plan of the Company or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. Eligibility. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Options may be granted only to Employees. An \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee who has been granted an Option may, if he is otherwise eligible, be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted an additional Option or Options. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No Incentive Stock Option may be granted to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an Employee which, when aggregated with all other incentive stock options \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to such Employee by the Company or any Parent or Subsidiary, would \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql result in Shares having an aggregate fair market value (determined for each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Share as of the date of grant of the Option covering such Share) in excess of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql $100,000 becoming first available upon exercise of one or more Incentive Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option during any calendar year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Section 5(b) of the Plan shall apply only to an \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incentive Stock Option evidenced by an "Incentive Stock Option Agreement" which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sets forth the intention of the Company and the Optionee that such Option shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql qualify as an Incentive Stock Option. Section 5(b) of the Plan shall not apply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any Option evidenced by a "Nonstatutory Stock Option Agreement" which sets \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth the intention of the Company and the Optionee that such Option shall be a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonstatutory Stock Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Plan shall not confer upon any Optionee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any right with respect to continuation of employment by the Company, nor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql it interfere in any way with his right or the Company's right to terminate his \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment at any time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. Term of Plan. The Plan shall become effective upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier to occur of its adoption by the Board or its approval by vote of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holders of a majority of the outstanding shares of the Company entitled to vote \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the adoption of the Plan. It shall continue in effect for a term of ten \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (10) years unless sooner terminated under Section 13 of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. Term of Option. The term of each Incentive Stock Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be ten (10) years from the date of grant thereof or such shorter term as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be provided in the Stock Option Agreement. The term of each Option that is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not an Incentive Stock Option shall be ten (10) years and one (1) day from the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of grant thereof or such shorter term as may be provided in the Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option Agreement. However, in the case of an Option granted to an Optionee \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql who, at the time the Option is granted, owns stock representing more than ten \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent (10%) of the voting power of all classes of stock of the Company or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Parent or Subsidiary, (a) if the Option is an Incentive Stock Option, the term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Option shall be five (5) years from the date of grant thereof or such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shorter time as may be provided in the Stock Option Agreement, or (b) if the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option is not an Incentive Stock Option, the term of the Option shall be five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) years and one (1) day from the date of grant thereof or such shorter term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as may be provided in the Stock Option Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. Option Price and Consideration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The per Share purchase price of the Shares to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be issued pursuant to exercise of an Incentive Stock Option shall be such price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as is determined by the Board, but shall in no event be less than the fair \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market value per Share on the date of grant of the Incentive Stock Option. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql per Share purchase price of the Shares to be issued pursuant to exercise of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonstatutory Stock Option shall be such price as is determined by the Board, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but shall be in no event be less than the fair market value per Share on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of grant of the Nonstatutory Stock Option or the date the price is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, whichever is lower. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The fair market value shall be determined by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board in its discretion; provided, however, that where there is a public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql market for the Common Stock, the fair market value per Share shall be the mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the bid and asked prices of the Common Stock for the date of grant, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reported in the Wall Street Journal, or, \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the event the Common Stock is listed on a stock exchange or on the National \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Association of Securities Dealers Automated Quotation (NASDAQ) National Market \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql System, the fair market value per Share shall be the closing price on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exchange on the date of grant of the Option, as reported in the Wall Street \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Journal. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The consideration to be paid for the Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be issued upon exercise of an Option, including the method of payment, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be determined by the Board and may consist entirely of cash, check, promissory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql note, other Shares of Common Stock of the Company having a fair market value on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of surrender equal to the aggregate exercise price of the Shares as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which said option shall be exercised, or any combination of such methods of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment, or such other consideration and method of payment for the issuance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares to the extent permitted by the Delaware General Corporation Law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. Exercise of Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Procedure for Exercise; Rights as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholder. Any Option granted hereunder shall be exercisable at such times \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and under such conditions as determined by the Board, including performance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql criteria with respect to the Company and/or the Optionee, and as shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permissible under the terms of the Plan; provided, however, that an Incentive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock Option granted prior to January 1, 1987 shall not be exercisable while \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql there is outstanding any Incentive Stock Option which was granted, before the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granting of such Incentive Stock Option, to the same Optionee to purchase stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company, or any Parent or Subsidiary, or any predecessor corporation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such corporation. For purposes of this provision, an Incentive Stock Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be treated as outstanding until such option is exercised in full or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expires by reason of lapse of time. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Option may not be exercised for a fraction of a Share. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An Option shall be deemed to be exercised when written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice of such exercise has been given to the Company in accordance with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of the Option by the person entitled to exercise the Option and full \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment for the Shares with respect to which the Option is exercised has been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql received by the Company. Full payment may, as authorized by the Board, consist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of any consideration and method of payment allowable under Section 8(c) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. Until the Company receives written notice of such exercise and full \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment for the Shares, no right to vote or receive dividends or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights as a shareholder shall exist with respect to the Optioned Stock, and no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment will be made for a dividend or other right for which the record date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is prior to the date the Company receives such notice and such payment, except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as provided in Section 11 of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exercise of an Option in any manner shall result in a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decrease in the number of Shares which thereafter may be available, both for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of the Plan and for sale under the Option, by the number of Shares as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which the Option is exercised. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Termination of Status as an Employee. If an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee ceases to serve as an Employee, he may, but only within thirty (30) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days (or such other period of time as determined by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate, and not extending beyond the original maximum term of the option) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after the date he ceases to be an Employee of the Company, exercise his Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the extent that he was entitled to exercise it at the date of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination. To the extent that he was not entitled to exercise the Option at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date of such termination, or if he does not exercise such Option (which he \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql was entitled to exercise) within the time specified herein, the Option shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Death of Optionee. In the event of the death \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of an Optionee: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) during the term of the Option who \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is at the time of his death an Employee of the Company and who shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Continuous Status as an Employee since the date of grant of the Option, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option may be exercised, at any time within six (6) months following the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of death, by the Optionee's estate or by a person who acquired the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise the Option by bequest or inheritance, but only to the extent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to exercise that would have accrued had the Optionee continued living and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remained in Continuous Status as an Employee six months after the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql death; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) within one (1) month after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of Continuous Status as an Employee, the Option may be exercised, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at any time within six (6) months following the date of death, by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Optionee's estate or by a person who acquired the right to exercise the Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by bequest or inheritance, but only to the extent of the right to exercise that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql had accrued at the date of termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Divorce: If an Option or any portion thereof \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is transferred pursuant to a qualified domestic relations order to a former \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql spouse who is neither a director nor an employee of the Company or any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Affiliates, the former spouse shall have the right for the period of twelve \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql months following the date of transfer, or such other period as the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate may fix, to exercise the Option to the extent the Participant was \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entitled to exercise such option on the date of transfer. Unless otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the option agreement or by court order, the date of transfer shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be the date the qualified domestic relations order is executed. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Withholding Taxes. Where in the opinion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel to the Company, the Company has or will have an obligation to withhold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql taxes relating to the exercise of any stock option, the Board or its delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may in its discretion require that such tax obligation be satisfied in a manner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfactory to the Company before shares deliverable pursuant to the exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such option are transferred to the option holder. An option holder may make \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Withholding Election, to pay required minimum withholding taxes by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withholding of shares from the total number of shares deliverable pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the exercise of the option or by delivering \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a sufficient number of previously acquired shares, in each case in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with rules and procedures established by the Board or its delegate. Previously \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned shares delivered in payment for such taxes must have been owned for at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql least six months prior to the exercise date, or may be subject to such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions as the Board or its delegate may require. The value of shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld or delivered shall be the fair market value of such shares on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the exercise becomes taxable. Such Withholding Election shall be subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the approval of the Board or its delegate, and must be in compliance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rules and procedures established by the Board or its delegate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The vesting of options may be on such terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as the Board may prescribe, and such vesting may be made automatically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerated in the event of a change of control of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If any Participant's employment is terminated by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company for any reason other than for Misconduct or, if applicable, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Constructive Termination, within one year after a Change of Control has \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurred, then all Options held by such Participant shall become fully vested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for exercise upon the date of termination, irrespective of the vesting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of the Participant's option agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Unless otherwise specified in an individual's option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement, the term "Change of Control" shall mean a change of control of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nature that would be required to be reported in response to Item 6(e) of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Schedule 14A of Regulation 14A promulgated under the Securities and Exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act of 1934, as amended (the "Exchange Act"), or in response to any other form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or report to the Securities and Exchange Commission or any stock exchange on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which the Company's shares are listed which requires the reporting of a change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of control. In addition, a Change of Control shall be deemed to have occurred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Act) is or becomes the beneficial owner, directly or indirectly, of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql securities of the Company representing more than 20% of the combined voting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power of the Company's then outstanding securities; or (ii) in any two-year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period, individual who were members of the Board of Directors (the "Board") at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the beginning of such period plus each new director whose election or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nomination for election was approved by at least two-thirds of the directors in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office immediately prior to such election or nomination, cease for any reason \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to constitute at least a majority of the Board; or (iii) a majority of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql members of the Board in office prior to the happening of any event and who are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql still in office after such event, determines in its sole discretion within one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year after such event, that as a result of such event there has been a Change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Control. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notwithstanding the foregoing definition, "Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control" shall exclude the acquisition of securities representing more than 20% \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the combined voting power of the Company by the Company, any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly-owned subsidiaries, or any trustee or other fiduciary holding securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company under an employee benefit plan now or hereafter established by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. As used \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, the term "beneficial owner" shall have the same meaning as under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 13(d) of the Exchange Act and related case law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term "Constructive Termination" shall mean a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resignation by a Participant who has been elected by the Company's Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors as a corporate officer of the Company, due to diminution or adverse \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change in the circumstances of such Participant's employment with the company, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as determined in good faith by the Participant, including, without limitation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reporting relationships, job description, duties, responsibilities, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compensation, perquisites, office or location of employment. Constructive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Termination shall be communicated by written notice to the Company, and such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination shall be deemed to occur on the date such notice is delivered to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. Non-Transferability of Options. The Option may not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sold, pledged, assigned, hypothecated, transferred, or disposed of in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner other than by will or by the laws of descent or distribution and may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercised, during the lifetime of the Optionee, only by the Optionee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. Adjustments Upon Changes in Capitalization or Merger. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subject to any required action by the shareholders of the Company, the number \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of shares of Common Stock covered by each outstanding Option, and the number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of Common Stock which have been authorized for issuance under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but as to which no Options have yet been granted or which have been returned to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan upon cancellation or expiration of an Option, as well as the price per \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql share of Common Stock covered by each such outstanding Option, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proportionately adjusted for any increase or decrease in the number of issued \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of Common Stock resulting from a stock split, stock dividend, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combination or reclassification of the Common Stock, or any other increase or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql decrease in the number of issued shares of Common Stock effected without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt of consideration by the Company; provided, however, that conversion of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any convertible securities of the Company shall not be deemed to have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "effected without receipt of consideration." Such adjustment shall be made by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board, whose determination in that respect shall be final, binding and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive. Except as expressly provided herein, no issuance by the Company of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of stock of any class, or securities convertible into shares of stock of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any class, shall affect, and no adjustment by reason thereof shall be made with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to, the number or price of shares of Common Stock subject to an Option. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event of the proposed dissolution or liquidation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Company, or in the event of a proposed sale of substantially all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assets of the Company, or the merger of the Company with or into another \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, the Option will terminate unless otherwise provided by the Board. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board may, in the exercise of its sole discretion in such instances, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declare that any option shall terminate as of a date fixed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql give each Optionee the right to exercise his Option as to all or any part of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Optioned Stock including Shares as to which the Option would not otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be exercisable. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12. Time of Granting Options. The date of grant of an Option \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, for all purposes, be the date on which the Board makes the determination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granting such Option. Notice of the determination shall be given to each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employee to whom an Option is so granted within a reasonable time after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date of such grant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13. Amendment and Termination of the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Amendment and Termination. The Board may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amend or terminate the Plan from time to time in such respects as the Board may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deem advisable; provided that, the following revisions or amendments shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require approval of the shareholders of the Company: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) any increase in the number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares subject to the Plan, other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than in connection with an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adjustment under Section 11 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) any change in the destination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or the class of employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligible to the granted Options; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) any material increase in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefits accruing to participants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Effect of Amendment or Termination. Any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amendment or termination of the Plan shall not affect Options already granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and such Options shall remain in full force and effect as if this Plan had not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been amended or terminated, unless mutually agreed otherwise between the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Optionee and the Board, which agreement must be in writing and signed by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Optionee and the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14. Conditions Upon Issuance of Shares. Shares shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued with respect to the exercise of an Option unless the exercise of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Option and the issuance and delivery of such Shares pursuant thereto shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with all relevant provisions of law, including, without limitation, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended (the "Exchange Act"), the rules and regulations promulgated thereunder, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the requirements of any stock exchange upon which the Shares may then be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql listed, and shall be further subject to the approval of counsel for the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to such compliance. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As a condition to the exercise of an Option, the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may require the person exercising such Option to represent and warrant at the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time of any such exercise that the Shares are being purchased only for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investment and without any present intention to sell or distribute such Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql if, in the opinion of counsel for the Company, such a representation is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by any of the aforementioned relevant provisions of law. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15. Reservation of Shares. The Company, during the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Plan, will at all times reserve and keep available such number of Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as shall be sufficient to satisfy the requirements of the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Inability of the Company to obtain authority from any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulatory body having jurisdiction, which authority is deemed by the Company's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel to be necessary to the lawful issuance and sale of any Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder, shall relieve the Company of any liability in respect of the failure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to issue or sell such Shares as to which such requisite authority shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have been obtained. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16. Option Agreement. Options shall be evidenced by written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option agreements in such form as the Board shall approve. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17. Shareholder Approval. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any amendment of the Plan requiring \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholder approval shall be obtained either at a duly held shareholders' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting or by written consent. If such shareholder approval is obtained at a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly held shareholders' meeting, it must be obtained by the affirmative vote of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the holders of a majority of the outstanding shares of the Company, or if such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholder approval is obtained by written consent, it must be obtained by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unanimous written consent of all shareholders of the Company; provided, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that approval at a meeting or by written consent may be obtained by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lesser degree of shareholder approval if the Board determines, in its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion after consultation with the Company's legal counsel, that such a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lesser degree of shareholder approval will comply with all applicable laws and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not adversely affect the qualification of the Plan under Section 422A of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Code. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Any required approval of the shareholders of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company obtained shall be solicited substantially in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sections 14(a) of the Exchange Act and the rules and regulations promulgated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18. Information to Optionees. The Company shall provide to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Optionee, during the period for which such Optionee has one or more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Options outstanding, copies of all annual reports and other information which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are provided to all shareholders of the Company. The Company shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to provide such information if the issuance of Options under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is limited to key employees whose duties in connection with the Company assure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their access to equivalent information. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_8}{\*\bkmkend doc_1_8} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.10 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1987 RESTRICTED STOCK AWARD PLAN \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. PURPOSES OF THE PLAN. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Advanced Micro Devices, Inc. 1987 Restricted Stock Award Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (the "Plan") is intended to attract and retain employees of Advanced Micro \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Devices, Inc. (the "Corporation) and its subsidiaries who are and will be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributing to the success of the business; to motivate and reward outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees who have made significant contributions to the success of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and encourage them to continue to give their best efforts to its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql future success; to provide competitive incentive compensation opportunities; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and to further opportunities for stock ownership by such employees in order to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increase their proprietary interest in the Corporation. Accordingly, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation may, from time to time, grant to selected employees awards of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of the Corporation's $0.01 par value Common Stock ("Common Stock") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the terms and conditions hereinafter provided. Common Stock awarded \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to such terms and conditions is hereinafter referred to as "Restricted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock". \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. ADMINISTRATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors (the "Board") whose authority \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be plenary, shall administer the Plan and may delegate part or all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers with respect to part or all of the Plan pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsection 2(c) of the Plan, provided, however, that the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall delegate administration of the Plan to the extent required by Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2(d). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Subject to the terms, provisions and conditions of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan as set forth herein, the Board or its delegate shall have sole discretion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and authority: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) to select the employee directors, officers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other employees to be awarded Restricted Stock pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5 (it being understood that more than one award may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted to the same person), and in connection therewith: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) to determine the number of shares to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be awarded each recipient; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) to determine the period of restriction \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable to each award; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) to determine the time or times when \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awards may be granted and any additional terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions which may be placed on receiving such award; \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) to determine the amount and type \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of consideration to be provided by the recipient, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may include the rendering of service as an employee of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD or any of its subsidiaries but shall not include any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payment in the form of cash; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) to take appropriate action to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amend the terms or conditions of any award granted to an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employee under the Plan; provided that no such action may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be taken by the Board or its delegate without the written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent of the affected participant; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) to prescribe the form of agreement, legend or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other instruments evidencing any awards granted under this Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) to amend the Plan as provided in Section 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) to construe and interpret the provisions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan and the terms and conditions of the awards granted under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan and to establish, amend and revoke rules and regulations for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql carrying out the Plan as the Board or its delegate may deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. In the exercise of this power, the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate shall generally determine all questions of policy and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expediency that may arise and may correct any defect, omission or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inconsistency in the Plan or in any agreement evidencing any award \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under this Plan in a manner and to the extent it shall deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary or expedient to make the Plan fully effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board of Directors may, by resolution, delegate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan (including, without limitation, the Board's powers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under subsection 2(b) above), under either or both of the following: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) with respect to the participation of or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awarding shares to an employee who is not subject to Section 16 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Exchange Act, to a committee of one or more members of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, whether or not such members of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are Disinterested Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) with respect to matters other than the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql selection for participation in the Plan, substantive decisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning the timing, pricing, amount or other material term of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award, to a committee of one or more members of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, whether or not such members of the Board of Directors are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Disinterested Directors, or to one or more officers of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Unless each member of the Board is a Disinterested \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director, the Board shall, by resolution, delegate administration of the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to the participation in the Plan of employees who are subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 16 of the Exchange Act, including its powers to select such employees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for participation in the Plan, to make substantive decisions concerning the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql timing, pricing, amount or any other material term of an award, to a \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee of two or more Disinterested Directors. Any committee to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration of the Plan is so delegated pursuant to this Section 2(d) may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql also administer the Plan with respect to an employee described in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2(c)(1) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Except as required by Section 2(d) above, the Board shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have complete discretion to determine the composition, structure, form, term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and operations of any committee established to administer the Plan. If \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administration is delegated to a committee, unless the Board otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides, the committee shall have, with respect to the administration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, all of the powers and discretion theretofore possessed by the Board and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegable to such committee, subject to any constraints which may be adopted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board from time to time and which are not inconsistent with the provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Plan. The Board at any time may revest in the Board any of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative powers under the Plan, except under circumstances where a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql committee is required to administer the Plan under Section 2(d) above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) The determinations of the Board or its delegate shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conclusive and binding on all persons having any interest in this Plan or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any awards granted hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (g) The term "Disinterested Director" shall mean a member of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors of the Company who has not, during the one year prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service as an administrator of the Plan, or during such service, been granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or awarded equity securities of the Company pursuant to this Plan or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql plan of the Company or any of its Affiliates (except for automatic grants of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql options to Outside Directors pursuant to Section 8 of the 1992 Stock Incentive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. STOCK SUBJECT TO THE PLAN. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The aggregate number of shares of Common Stock which may be awarded \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the Plan shall not exceed Two Million (2,000,000) shares. Shares to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awarded under this Plan shall be made available, at the discretion of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors, either from the authorized but unissued shares of Common Stock of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation or from shares of Common Stock reacquired by the Corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including shares purchased in the open market for the purpose of issuance under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Plan. If any shares of common Stock awarded under the Plan are reacquired \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Corporation in accordance with Section 6(c) of the Plan, such shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall again become available for use under the Plan and shall be regarded as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not having been previously awarded. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. ELIGIBILITY. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restricted Stock shall be awarded by the Board or its delegate only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to employees of the Corporation or of a subsidiary of the Corporation. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql term "employees" shall include officers as well as other employees of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation and its subsidiaries and shall include directors who are also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees of the Corporation or of a subsidiary of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. AWARDS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board or its delegate shall have the authority to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award Restricted Stock to employ directors, officers and other employees. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Common Stock awarded to employees pursuant to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5 shall be subject to the restrictions on transfer and other conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Section 6. The Board or its delegate, in its sole discretion, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall determine the terms or conditions under which such restrictions on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer shall lapse. Such terms or conditions may include attainment of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance goals, passage of time, a change of control of the Corporation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other terms or conditions as the Board or its delegate may deem \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. Subject to Section 8, the Board or its delegate may accelerate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the lapse of restrictions or otherwise waive any terms or conditions of an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award when it finds that such an acceleration or waiver would be in the best \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Board or its delegate, in its sole discretion, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determine the terms or conditions under which, during the Restriction Period \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (defined in Section 6), shares still subject to restriction shall be forfeited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by an employee. Such terms or conditions may include, but are not limited to, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of service. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) During the Restriction Period, recipients of awards of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restricted stock under this Section 5 shall be entitled to the rights incident \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such shares described in Section 6. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Where in the opinion of counsel to the Corporation, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation has or will have an obligation to withhold taxes relating to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restricted stock award, the Board or its delegate may in its discretion require \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that such tax obligation be satisfied in a manner satisfactory to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation before shares deliverable pursuant to the award are transferred to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the award holder. An award holder may make an election to pay such tax by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withholding of shares from the total number of shares deliverable pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms of the award or by delivering a sufficient number of previously \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquired shares to the Corporation (the "Withholding Election"), and may elect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to have additional taxes paid by the delivery of previously acquired shares in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with rules and procedures established by the Board or its delegate. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Previously owned shares delivered in payment for such taxes must have been for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at least six months prior to the owned exercise date, or may be subject to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other conditions as the Board or its delegate may require. The value of shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld or delivered shall be the fair market value of such shares on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the award becomes taxable (the "Tax Date"). Such Withholding Election shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the approval of the Board or its delegate, and must be in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql compliance with rules and procedures established by the Board or its delegate. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An award holder who elects under Section 83(b) of the Internal Revenue Code to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be taxed at the time shares are issued subject to restrictions \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may not elect to have a portion of those shares withheld, but may elect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliver previously acquired shares which are not subject to restrictions. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event that the award holder fails to satisfy his withholding obligation in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a timely manner and according to the rules established by the Board or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delegate, the Corporation shall withhold a sufficient number of shares or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sufficient cash, from whatever source available, to satisfy the tax withholding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) No employee or other person shall have any claim or right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be granted shares of Restricted Stock under this Section 5. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. RESTRICTIONS AND RIGHTS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The shares of Common Stock awarded pursuant to the Plan shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the following restrictions and conditions and shall entitle the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holder thereof to the following rights: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) During the Restriction Period, the participant will not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be permitted to sell, pledge, assign or otherwise transfer Restricted Stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql awarded under this Plan. The Restriction Period is the period between the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the shares are awarded and the date on which all restrictions and conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are waived. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Except as provided in Section 6(a), the participant shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have with respect to the Restricted Stock all of the rights of a stockholder of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Corporation, including the right to vote the shares and receive dividends \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other distributions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) All shares of Restricted Stock which are forfeited by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant pursuant to the provisions of this Plan or any agreement required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder will be re-acquired by the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) Notwithstanding the other provisions of this Section 6, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board or its delegate may adopt rules which would permit a gift by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant of Restricted Stock to a spouse, lineal descendant or legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dependent or to a trust whose beneficiary or beneficiaries shall be either such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a person or persons or the participant; provided that any restrictions on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further transfer and any requirement of continued service shall continue to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apply to the Restricted Stock in the hands of the donee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Any attempt to dispose of Restricted Stock in a manner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary to the restrictions shall be void and ineffective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) Nothing in this Section 6 shall preclude a participant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from exchanging any Restricted Stock for any other shares of Common Stock that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are similarly restricted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. AGREEMENTS AND CERTIFICATES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Each recipient of an award under this Plan shall execute \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an agreement or other instrument evidencing the award and shall deliver a fully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed copy thereof to the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each participant shall be issued a certificate in respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of shares of Restricted Stock awarded under the Plan. Such certificate shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be registered in the name of the participant, and shall bear an appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legend referring to the terms, conditions and restrictions applicable to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql award. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) All certificates for shares of Restricted Stock delivered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Plan shall be subject to such stop transfer orders and other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrictions as the Board or its delegate may deem advisable under the rules, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations and other requirements of the Securities and Exchange Commission, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any stock exchange on which the Common Stock is then listed, and any applicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql federal or state securities law. The Board or its delegate may cause a legend \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or legends to be placed on any such certificates to make appropriate reference \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such restrictions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Board or its delegate may adopt rules which provide \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the stock certificates evidencing shares of Restricted Stock may be held \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in custody by a third party fiduciary, or that the Corporation may itself hold \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such shares in custody until the restrictions thereon shall have lapsed and may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql require, as a condition of any award, that the participant shall have delivered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a stock power endorsed in blank relating to the stock covered by such award. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Notwithstanding any other provision of this Plan, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board or its delegate may make awards under the Plan, pursuant to which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate representing shares of Common Stock: (i) will only be issued \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under an agreement that imposes restrictions and conditions on the issuance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such certificate, and (ii) when issued will bear no restrictive legends and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will be freely transferable. In such cases the participant shall, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding the provisions of Section 6(b) of this Plan, not have any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights of a stockholder of the Corporation with respect to any shares of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Restricted Stock for which no certificate has been issued. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. AMENDMENT OF THE PLAN. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board or its delegate may amend the Plan at any time, provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that, unless approved by the stockholders within twelve months before or after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the adoption of the amendment, no amendment shall: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) materially increase the maximum number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of Common Stock which are available for awards under the Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (other than to prevent dilution as provided for in Section 10(a)); \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) materially increase the benefits accruing to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participants under the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) materially modify the requirements as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eligibility for participation in the Plan; \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) extend the period during which awards may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted under the Plan beyond June 9, 1997, or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) impair the rights of any participant under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any then outstanding award, except in accordance with the Plan or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable agreement or applicable law or with the written consent of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the participant. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. TERMINATION OR SUSPENSION OF THE PLAN. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The Board of Directors at any time may suspend or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate the Plan. Unless terminated sooner, the Plan shall automatically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate on June 9, 1997. Common Stock may not be awarded pursuant to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan while the Plan is suspended or after it is terminated. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Rights and obligations under any award granted while the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan is in effect shall not be impaired by suspension or termination of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Plan, except with the consent of the person to whom the award was granted, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which may be obtained in any manner that the Board or its delegate deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. MISCELLANEOUS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) In the event that the number of outstanding shares of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Common Stock of the Corporation shall be changed by reason of split-ups or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql combinations of shares, any merger, consolidation, reorganization or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recapitalization, stock dividends or other capital adjustments, the number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares for which awards of restricted stock may be granted under this Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be appropriately adjusted as determined by the Board of Directors so as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to reflect such change. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Neither the Plan nor any action taken hereunder shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construed as giving any participant, recipient, employee or other person any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to be retained in the employ of the Corporation or any subsidiary or as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restricting the rights of the Corporation or any subsidiary, which are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expressly reserved, to discharge an employee at any time, with or without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cause, or to adjust the compensation of any employee. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Income realized as a result of an award of Restricted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock shall not be included in the participant's earnings for the purpose of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any benefit plan in which the participant may be enrolled or for which the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql participant may become eligible unless otherwise specifically provided for in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The terms "subsidiary" as used herein shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation fifty percent or more of the outstanding voting stock or voting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power of which is owned directly or indirectly by the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The term "Board or its delegate" as used herein refers to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors of the Corporation or any committee or committees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it delegates any of its administrative powers \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Plan pursuant to Section 2(c) or any officers or other persons to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whom it may properly delegate any such powers pursuant to Section 2(c). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11. EFFECTIVE DATE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) This Plan shall be submitted to the stockholders of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Corporation at the Annual Meeting in 1987, and, if approved by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stockholders, shall become effective June 10, 1987. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) No shares of Common Stock awarded pursuant to this Plan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be sold, transferred, pledged or assigned unless or until the Plan has been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved by the stockholders of the Corporation. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_9}{\*\bkmkend doc_1_9} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.27(a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JOINT VENTURE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BETWEEN \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential portions of this document have been deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed separately with the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a request for confidential treatment. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JOINT VENTURE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.1 "AMD INVESTMENT AGREEMENT". . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.2 "APPLICABLE LAW". . . . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.3 "ARTICLES OF INCORPORATION" . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.4 "ASSOCIATED AGREEMENTS" . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.5 "BOARD OF DIRECTORS". . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.6 "BUSINESS PLAN" . . . . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.7 "COMBINED FINANCIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONTRIBUTION". . . . . . . . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.8 "CONFIDENTIAL INFORMATION". . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.9 "EFFECTIVE DATE". . . . . . . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.10 "EPROM". . . . . . . . . . . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.11 "FLASH MEMORY" . . . . . . . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.12 "FUJITSU INVESTMENT AGREEMENT" . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.13 "GOVERNMENTAL APPROVALS" . . . . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.14 "GOVERNMENTAL AUTHORITY" . . . . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.15 "INDEPENDENT ACCOUNTING FIRM". . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.16 "INVESTMENT AGREEMENTS". . . . . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.17 "JOINT DEVELOPMENT AGREEMENT". . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.18 "JOINT VENTURE LICENSE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AGREEMENT". . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.19 "JV PRODUCT" . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.20 "LAND LEASE" . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.21 "NONDISCLOSURE AGREEMENTS" . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.22 "PERCENTAGE INTEREST". . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.23 "REGULATIONS OF THE BOARD OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DIRECTORS".\par\pard\plain\f0\fs16\par\pard\plain\cf1\f50\fs16\ql . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.24 "TECHNOLOGY CROSS-LICENSE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AGREEMENT". . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2. INCORPORATION. . . . . . . . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.1 Formation of JV . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.2 The Name of JV. . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.3 Articles of Incorporation . . . . . . . . . . 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.4 Capital Contributions . . . . . . . . . . . . 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.5 Reimbursement of Incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expenses. . . . . . . . . . . . . . . . . . . 7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3. MANAGEMENT OF JV . . . . . . . . . . . . . . . . . . . . . 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.1 Meetings and Resolutions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholders. . . . . . . . . . . . . . . . . 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2 Election of Directors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statutory Auditors. . . . . . . . . . . . . . 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.3 Representative Directors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors with Titles . . . . . . . . . . . . 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4 Meetings and Resolutions of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors. . . . . . . . . . . . . . 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.5 Statement of Policy.. . . . . . . . . . . . . 12 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.6 Manufacturing Activity. . . . . . . . . . . . 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.7 [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]. . . . . . . . . . . . 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.8 Accounting and Reporting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations . . . . . . . . . . . . . . . . . 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES. . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1 Financing . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.2 Land Lease. . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.3 Transfer of Shares; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right of First Refusal. . . . . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.4 Transfer of Fujitsu Employees . . . . . . . . 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.5 Transfer and Assignment of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Employees . . . . . . . . . . . . . . . . . . 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.6 Confidentiality . . . . . . . . . . . . . . . 19 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5. ASSOCIATED AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 22 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . 23 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.1 Representations and Warranties of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu . . . . . . . . . . . . . . . . . . . 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.2 Representations and Warranties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of AMD. . . . . . . . . . . . . . . . . . . . 24 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 7. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . . . . 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.1 Effective Date. . . . . . . . . . . . . . . . 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.2 Term. . . . . . . . . . . . . . . . . . . . . 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.3 Triggering Events . . . . . . . . . . . . . . 27 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.4. Causes of Dissolution . . . . . . . . . . . . 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5. Election of Non-Triggering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party . . . . . . . . . . . . . . . . . . . . 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.6 Noncompetition; Nonsolicitation . . . . . . . 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.7. Name. . . . . . . . . . . . . . . . . . . . . 30 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.8. Rights Under Associated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements. . . . . . . . . . . . . . . . . . 30 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.1. Force Majeure. . . . . . . . . . . . . . . . 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.2. Assignment . . . . . . . . . . . . . . . . . 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.3. Survival . . . . . . . . . . . . . . . . . . 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.4. Notices. . . . . . . . . . . . . . . . . . . 32 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.5. Export Control . . . . . . . . . . . . . . . 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.6. Arbitration. . . . . . . . . . . . . . . . . 34 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.7. Entire Agreement . . . . . . . . . . . . . . 35 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.8. Modification . . . . . . . . . . . . . . . . 35 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.9. Announcement . . . . . . . . . . . . . . . . 35 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.10. Severability . . . . . . . . . . . . . . . . 35 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.11. No Waiver. . . . . . . . . . . . . . . . . . 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.12. Governing Law. . . . . . . . . . . . . . . . 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.13. Language . . . . . . . . . . . . . . . . . . 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.14. No Agency. . . . . . . . . . . . . . . . . . 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.15. No Third Party Beneficiaries . . . . . . . . 37 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.16. Headings . . . . . . . . . . . . . . . . . . 37 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ii \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.17. Construction and Reference . . . . . . . . . 37 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.18. Governmental Approvals . . . . . . . . . . . 37 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.19. Counterparts . . . . . . . . . . . . . . . . 37 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql iii \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JOINT VENTURE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture Agreement ("Agreement") dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 30, 1993, by and between ADVANCED MICRO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES, INC. ("AMD"), a Delaware corporation having its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql principal place of business at 901 Thompson Place, Sunnyvale, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California 94088-3453, U.S.A., and FUJITSU LIMITED ("Fujitsu"), a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese corporation having its registered place of business at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1015 Kamikodanaka, Nakahara-ku, Kawasaki-shi, Kanagawa-ken 211, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTRODUCTION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. AMD is engaged in the manufacture and sale of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuit devices and has a wide and rich experience in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this field of industry. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Fujitsu is also engaged in the manufacture and sale of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql integrated circuit devices and has a wide and rich experience in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this field of industry. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD and Fujitsu desire to form a company with limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability (kabushiki kaisha) under the laws of Japan ("JV") for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the purpose of manufacturing certain integrated circuit devices, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such as certain densities of erasable programmable read only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memory ("EPROM") and flash memory ("Flash Memory") as more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically defined by this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. AMD and Fujitsu desire to collaborate in developing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain process technologies and designs to be utilized in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with such EPROM and Flash Memory. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. AMD and Fujitsu desire to license to JV and to cross- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql license to each other certain technologies which are necessary \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for JV to manufacture such integrated circuit devices. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCORDINGLY, in consideration of the foregoing premises and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the covenants contained herein, the parties agree as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1. DEFINITIONS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For the purpose of this Agreement, the following terms shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the meanings hereinafter set forth: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.1 "AMD INVESTMENT AGREEMENT" shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning set forth in Section 5.E. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.2 "APPLICABLE LAW" shall mean, with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, any domestic or foreign, federal, state or local statute, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql law, ordinance, rule, administrative interpretation, regulation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order, writ, injunction, directive, judgment, decree or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requirement of any Governmental Authority applicable to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party or its properties, business or assets. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.3 "ARTICLES OF INCORPORATION" shall mean articles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of incorporation of JV written in the Japanese language and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attached hereto as Exhibit A-1, as amended from time to time. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql For the convenience of the parties an English translation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation is attached hereto as Exhibit A-2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.4 "ASSOCIATED AGREEMENTS" shall have the meaning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ascribed to such term in Article 5. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.5 "BOARD OF DIRECTORS" shall mean the board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors of JV as from time to time constituted pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terms of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.6 "BUSINESS PLAN" shall mean a business plan of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV agreed to in writing by both parties hereto, as from time to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time amended by a resolution of the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.7 "COMBINED FINANCIAL CONTRIBUTION" shall mean, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to a party, the sum of (i) capital contributions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made by such party pursuant to Section 2.4, (ii) loans to JV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guaranteed by such party pursuant to Sections 4.1.C. and 4.1.D. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (iii) loans made directly to, or otherwise arranged by, such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party pursuant to Section 4.1.E. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.8 "CONFIDENTIAL INFORMATION" shall mean any trade \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql secrets, know-how, data, formulas, processes, intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property or other information, tangible or intangible, of one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party that becomes known by the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.9 "EFFECTIVE DATE" shall mean the latest to occur \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of (a) the date of this Agreement, (b) the date on which all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requisite Governmental Approvals have been obtained, or (c) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first date on which all of the Associated Agreements, other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Joint Venture License Agreement, are in effect. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.10 "EPROM" or "Electrically Programmable Read \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Only Memory" shall mean a non-volatile semiconductor memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql device incorporating floating gate structure cells, which device \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is electrically programmable and erasable by using ultraviolet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql light. The device mainly consists of such floating gate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql structure cells with auxiliary logic circuits, if any, when such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql logic circuits are used solely for memory operation or interface \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to other products. OTPROM or One Time PROM, which is a certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql non-volatile semiconductor device incorporating the same chip as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EPROM and packaged without transparent windows for ultraviolet \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql light, shall be included in the definition of EPROM. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.11 "FLASH MEMORY" shall mean a non-volatile \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor memory device incorporating floating gate structure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cells, which device is programmable and erasable by electrically \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injecting and electrically discharging electric charges into and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from floating gates. The device mainly consists of such floating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql gate structure cells, with auxiliary logic circuits, if any, when \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such logic circuits are used solely for memory operation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interface to other products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.12 "FUJITSU INVESTMENT AGREEMENT" shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning set forth in Section 5.D. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.13 "GOVERNMENTAL APPROVALS" means all approvals, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consents, authorizations and similar actions from all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Authorities that the parties agree are desirable in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql order to consummate the transactions contemplated hereunder or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any of the Associated Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.14 "GOVERNMENTAL AUTHORITY" shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foreign, domestic, federal, territorial, state or local \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental authority, quasi-governmental authority, court, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql government or self-regulatory organization, commission, tribunal, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organization or any regulatory, administrative or other agency, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any political or other subdivision, department or branch of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of the foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.15 "INDEPENDENT ACCOUNTING FIRM" shall mean a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified public accountant at audit firm qualified under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese Certified Public Accountants Act, Law No. 103, 1948, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.16 "INVESTMENT AGREEMENTS" shall have the meaning \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in Section 5.E. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.17 "JOINT DEVELOPMENT AGREEMENT" shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meaning set forth in Section 5.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.18 "JOINT VENTURE LICENSE AGREEMENT" shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the meaning set forth in Section 5.C. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.19 "JV PRODUCT" shall mean any product listed as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a JV Product in the Joint Development Agreement, or so designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.20 "LAND LEASE" shall have the meaning set forth \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 4.2.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.21 "NONDISCLOSURE AGREEMENTS" shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nondisclosure Agreements between Fujitsu and AMD dated March 12, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1992 and July 20, 1992 and the Confidentiality Agreement between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu and AMD dated October 16, 1992. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.22 "PERCENTAGE INTEREST" shall mean with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a party, the percentage of JV's issued and outstanding shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql held by such party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.23 "REGULATIONS OF THE BOARD OF DIRECTORS" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the meaning set forth in Section 3.4.F. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.24 "TECHNOLOGY CROSS-LICENSE AGREEMENT" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the meaning set forth in Section 5.B. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2. INCORPORATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.1 Formation of JV. Promptly following the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date, the parties shall form JV in Japan for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of the production, marketing and sale of JV Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.2 The Name of JV. The name of JV shall be as set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in the Articles of Incorporation in Japanese and "Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Semiconductor Limited" in English. Fujitsu shall file a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql temporary application for registration to reserve JV's Japanese \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql name in Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.3 Articles of Incorporation. The Articles of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporation are hereby incorporated herein and made a part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof. In the event of any ambiguity or conflict arising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the terms and conditions of this Agreement and those of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Articles of Incorporation, to the extent legally permissible, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the terms and conditions of this Agreement shall prevail. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.4 Capital Contributions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. As soon as practicable following the Effective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date, each party shall purchase shares of common stock of JV as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party Number of Shares Consideration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ----- ---------------- ------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu 1,001 Y50,050,000 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD 999 Y49,950,000 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Pursuant to a separate schedule to be agreed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the parties, the parties shall make additional capital \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributions to JV until the parties' aggregate capital \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributions reach Y40,000,000,000, and JV shall issue \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional shares reflecting such contributions. Additional \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contributions shall be made by the parties in cash, in proportion \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to their respective Percentage Interests. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The authorized capital of JV shall initially be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Y400,000,000, to be represented by 8,000 shares of common stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a par value of Y50,000 each. Thereafter, the authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital of JV shall be increased from time to time in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a schedule to be agreed upon between the parties. As \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in the Business Plan, the maximum authorized capital of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV shall be Y40,000,000,000, to be represented by 800,000 shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such common stock. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Unless otherwise agreed by both parties, Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall hold 50.05%, and AMD 49.95%, of the issued and outstanding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of JV. In the event that new shares of JV are issued, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each of the parties shall have the right to purchase such shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in an amount that is proportionate to its respective Percentage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.5 Reimbursement of Incorporation Expenses. JV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall reimburse Fujitsu for expenses incurred directly by Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with the incorporation of JV to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted under the laws of Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3. MANAGEMENT OF JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.1 Meetings and Resolutions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Each party, in its capacity as a shareholder, shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the right from time to time to call a meeting of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The quorum required for a meeting of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders shall be shareholders representing, in person or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proxy, not less than two thirds (2/3) of the total number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued and outstanding shares of JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Unless otherwise required by the laws of Japan or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise explicitly provided herein, no shareholders' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolutions shall be effective unless adopted by the affirmative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql votes of shareholders holding a majority of the shares present at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a meeting of the shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Resolutions with respect to the following matters \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be adopted by the affirmative vote of shareholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] of the issued and outstanding \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares of JV: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Interpreters may attend meetings of shareholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the request of either party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2 Election of Directors and Statutory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Auditors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. JV shall be administered by a Board of Directors composed of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] directors, [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] directors of whom shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be nominated by AMD, and [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of whom shall be [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] of whom shall be nominated by Fujitsu. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. If a vacancy occurs on the Board of Directors, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql new director shall be nominated by the party that nominated the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director whose office has been vacated, and an election to fill \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such vacancy shall be held at a shareholders' meeting to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql called without delay. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. JV shall have two (2) statutory auditors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (kansayaku), [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. The \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql full-time statutory auditor (jookin kansayaku) shall be the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statutory auditor nominated by Fujitsu. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The parties agree to exercise their respective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voting rights as shareholders of JV so as to ensure that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql persons nominated as directors and statutory auditors by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties are elected. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Each individual nominated by one party as a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director or statutory auditor shall be subject to the reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approval of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.3 Representative Directors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors with Titles. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. JV shall have a chairman and a vice chairman, each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of whom shall be a representative director. The chairman shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be nominated by Fujitsu and the vice chairman by AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Two full-time standing directors (jookin \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql torishimariyaku) shall be elected from among the directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nominated by Fujitsu. The Board of Directors shall determine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether such full-time standing directors shall be representative \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors and/or directors with titles such as president, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executive vice president, executive director or managing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql director. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Each of the parties shall cause the directors it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql has nominated to exercise their voting rights as members of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Board of Directors so as to effect the election of the chairman, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vice chairman, representative directors and directors with titles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in accordance with Sections 3.3.A. and B. above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4 Meetings and Resolutions of the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. A regular meeting of the Board of Directors shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be held once each calendar quarter. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The chairman, the vice chairman, or any two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors acting together shall have the right to call, from time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to time, a special meeting of the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The quorum required for a meeting of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors shall be two thirds (2/3) of all the directors of JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Resolutions of the Board of Directors shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql adopted by the affirmative vote of a majority of the members of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors present at a meeting, except as provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Section 3.4.E. below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Resolutions with respect to the following matters \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be adopted by the affirmative vote of [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of the entire Board of Directors: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (3) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (4) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (5) Approval of: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql b. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql c. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql d. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql e. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql f. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql g. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql h. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (6) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (7) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (8) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (9) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (10) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (11) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Following the formation of JV, the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors shall adopt Regulations of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written in the Japanese language, in the form of Exhibit B-1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto (the "Regulations of the Board of Directors"). For the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convenience of the parties, an English translation of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulations is attached hereto as Exhibit B-2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. When any issue cannot be resolved by the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors at two consecutive meetings, the managements of AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Fujitsu (Electronic Devices Group, or its successor) shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consult with each other in a good faith attempt to resolve such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. Interpreters may attend meetings of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors upon the request of either party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.5 Statement of Policy. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. The business and affairs of JV shall be carried on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and conducted in a sound, prudent and constructive manner for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of building a successful and financially strong JV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The day-to-day operations of JV shall be managed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the full-time standing directors nominated and elected under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.3.B. above. Such operations shall be conducted in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with this Agreement, the Business Plan and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operating and capital budgets approved by the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.6 Manufacturing Activity. JV shall construct a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor wafer fabrication facility capable of mass \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql production with eight-inch wafer line, and shall manufacture JV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products in accordance with the Business Plan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.7 [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.8 Accounting and Reporting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Obligations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. JV's fiscal year shall be the twelve (12) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month period ending on March 31. Japanese accounting principles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be adopted. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. JV shall provide the following reports and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql statements to the parties in English and Japanese within the time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql periods set forth below: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Within twenty (20) days after the closing of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql month, a report on booking and billing monthly results, balance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sheet, profit and loss statement, cash flow, head count and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business operations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Within thirty (30) days after the closing of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter, a report on booking and billing quarterly results, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance sheet, profit and loss statement, cash flow, head count, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial change and business operations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) Within three (3) months after the end of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fiscal year, a report on booking and billing annual results, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql balance sheet, profit and loss statement, cash flow, inventory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of major properties, head count, shareholders' equity, business \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation, and annual proposals governing appropriation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql profits or covering losses. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The parties agree that JV shall designate Fujitsu's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Independent Accounting Firm, as approved by Fujitsu's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders, as the Independent Accounting Firm of JV, unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise determined by the affirmative vote of shareholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql holding not less than two-thirds (2/3) of the issued and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding shares of JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The annual accounting report of JV shall be audited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at the expense of JV by its Independent Accounting Firm in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the laws of Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Each party shall, upon reasonable written notice to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV and to the other party, have access to JV's books, records, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql procedures, employees and similar sources of data and information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql concerning JV's financial operations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Upon reasonable written notice to JV and the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, but not more often than once every twelve (12) months, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each party shall have a right to perform a special audit of JV by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independent outside auditors, at that party's own cost. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addition, upon such reasonable notice each party shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to perform or have performed, at that party's own cost, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such audits as are necessary to meet such party's financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reporting obligations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. The JV shall provide to each party full access to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the books and records of JV, and shall provide to each party the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accounting information such party requires to comply with its own \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial reporting requirements, provided that any cost involved \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in providing such information shall be paid by the requesting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql H. The JV shall have the right, and each party hereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the right to compel JV, to have independent outside \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql auditors, upon reasonable written notice to the other party and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not more than once each twelve (12) months, at JV's cost, examine \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the books and records of the other party for the purpose of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql auditing the calculation of sales proceeds or any amounts due to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 4. RIGHTS AND OBLIGATIONS OF THE PARTIES. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1 Financing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Except as otherwise explicitly agreed, the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall bear equal responsibility for financing JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Both parties recognize that, in addition to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital contributions made pursuant to Section 2.4 above, JV will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql need additional sums for working capital and for long term \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql capital, which shall be borrowed by JV pursuant to arrangements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be made by the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Until JV becomes self-financing, the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql guarantee third-party loans made to JV in proportion to their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Percentage Interests. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Both parties shall use their best efforts to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrange for JV to receive loans from Japanese government-related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financial institutions for JV's long-term capital. Such loans \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be guaranteed by the parties in proportion to their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective Percentage Interests. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. In the event that JV is unable to secure necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing, the parties themselves shall advance the necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funds to JV, each party lending that portion of the required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amount which is proportionate to such party's Percentage \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interest. Each party may arrange third-party financing, with or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without such party's guaranty, in lieu of any such advance. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.2 Land Lease. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. JV shall construct its semiconductor wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fabrication facility on land to be leased from Fujitsu pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a 30-year lease (the "Land Lease"), which lease may be renewed \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for additional terms in accordance with Japan's Land and House \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Leasing Act of 1991, as amended, and the terms and conditions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such lease agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. (i) If all, or substantially all, of the assets of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV are to be offered for sale (whether in connection with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dissolution of JV or otherwise) Fujitsu shall have the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase JV's fabrication facility at a price equal to the book \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value of such facility, as determined by JV's Independent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Accounting Firm as of the close of the preceding quarter, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be given written notice of such intended sale not less than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql one hundred and twenty (120) days prior to any such offering for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale. Fujitsu shall either exercise or decline to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right, by a written statement delivered within one hundred and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twenty (120) days following the receipt of such notice. Failure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to deliver such notice within such period shall be considered a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql declination by Fujitsu. If Fujitsu declines to exercise such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to purchase, it will consent to the assignment of JV's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest under the Land Lease to the purchaser of such assets. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) AMD will take all action necessary to assure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that if it transfers shares of JV to any person or entity other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than Fujitsu or a wholly-owned subsidiary of Fujitsu, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferee shall agree in writing that Fujitsu shall be entitled \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to exercise a right of first refusal to acquire all, but not less \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than all, of the JV shares to be so transferred, at the purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price at which the transferee intends to sell such shares. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees to review with Fujitsu the precise language to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporated in appropriate documentation under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circumstances, in an effort to perfect such statement of rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Fujitsu's reasonable satisfaction. Such documentation will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql include a provision that if Fujitsu declines to acquire such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares: (x) the seller shall be entitled to sell such shares at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the reported price, but not less than the reported price, within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ninety (90) days after the end of the period within which Fujitsu \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may exercise its right to acquire such shares, (y) Fujitsu will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consent to the assignment of JV's interest under the Land Lease, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (z) Fujitsu shall give such consents as may be required to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue to operate the facility; provided, however, that Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not be required to incur any expense or obligation in order \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to carry out the provisions of this sentence. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.3 Transfer of Shares; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right of First Refusal. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Except as otherwise explicitly provided in Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 or 7.5, no share or any interest therein in JV shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql validly sold, transferred or otherwise disposed of for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql consideration or otherwise, and no purported transferee shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql recognized as a shareholder of JV for any purpose whatsoever \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless such transfer is in accordance with this Section 4.3. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Neither party shall pledge or otherwise encumber \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any of its shares or any interest therein in JV at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without the prior written consent of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Neither party shall sell or transfer any shares in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV for a period of five (5) years following the Effective Date. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In the event that either party (the "Selling Party") desires to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sell or transfer its shares in JV following such five (5)-year \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period, it shall first offer to sell the shares to the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party (the "Nonselling Party") and, upon the request of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonselling Party, to any third party designated by such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonselling Party, at a price equal to the lower of (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] or (ii) [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION]. No owner of JV shares may sell or transfer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of its shares in JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. (i) A Nonselling Party to which an offer is made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 4.3.C. above and/or any third party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated by such Nonselling Party, shall have one hundred and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql twenty (120) days from the date of receipt of the offer, during \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which period such Nonselling Party shall have reasonable access \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to JV's books and records, within which to accept such offer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) In the event that the Nonselling Party and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its designee do not accept the offer to purchase all of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Selling Party's shares, the Selling Party may, within ninety (90) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days following the expiration of such one hundred and twenty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (120) day period, seek the Board of Directors' approval, by not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql less than [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] votes, of a sale or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer of its shares to a specified third party; provided, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql however, that in the event that a sale or transfer to such third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party is proposed on terms less favorable to the Selling Party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the terms of the offer made pursuant to Section 4.3.C. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql above, the Nonselling Party and/or a third party designated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Nonselling Party shall have the right to purchase the shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on such less favorable terms, which right may be exercised by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice to the Selling Party within fourteen (14) days following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date on which such sale or transfer is proposed to the Board \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) In the event that the Nonselling Party and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its designee elects to purchase the Selling Party's shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 4.3.D. (i) or (ii), payment shall be made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within sixty (60) days of such election. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. It shall be a condition to any sale or transfer to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any third party other than a third party designated by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonselling Party that such third party upon request of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonselling Party shall become a party to this Agreement, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Development Agreement, the Joint Venture License Agreement \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or any other agreements, and assume such obligations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably deemed by the Nonselling Party to be necessary in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql light of the identity and nature of the new shareholder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. In the event that either party transfers its shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in JV pursuant to this Section 4.3, the Nonselling Party shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the right to terminate this Agreement and/or either or both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Investment Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql G. All offers and acceptances pursuant to this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.3 shall be made by written notice to the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.4 Transfer of Fujitsu Employees. Fujitsu shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the right to designate Fujitsu employees to be transferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to JV and to determine when such transferred employees shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql return to Fujitsu. AMD acknowledges and agrees that JV shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accept and release such employees in accordance with Fujitsu's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instructions. It is understood that any retirement allowance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments made to such employees will be prorated between JV and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu based on total years of service. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.5 Transfer and Assignment of AMD Employees. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may transfer or assign its personnel to JV [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION], subject to the approval of the full-time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql standing directors, such approval not to be unreasonably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld. [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.6 Confidentiality. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Except as expressly authorized by the other party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each party agrees not to disclose, use or permit the disclosure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or use by others of any Confidential Information unless and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent such Confidential Information (i) is not marked or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated in writing as confidential and is provided for a \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose that reasonably contemplates disclosure to or use by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others, (ii) becomes a matter of public knowledge through no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action or inaction of the party receiving the Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information, (iii) was in the receiving party's possession before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt from the party providing such Confidential Information, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) is rightfully received by the receiving party from a third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party without any duty of confidentiality, (v) is disclosed to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third party by the party providing the Confidential Information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without a duty of confidentiality on the third party, (vi) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosed by the receiving party despite the exercise of the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql degree of care used by the receiving party to safeguard its own \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar Confidential Information, but the receiving party shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take all necessary action to prevent any further disclosure, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vii) is disclosed with the prior written approval of the party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing such Confidential Information, or (viii) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independently developed by the receiving party without any use of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party's Confidential Information. Information shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be deemed to be available to the general public for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of the exclusion (ii) above with respect to each party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (x) merely because it is embraced by more general information in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the prior possession of recipient or others, or (y) merely \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql because it is expressed in public literature in general terms not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically in accordance with the Confidential Information. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. In furtherance, and not in limitation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing Section 4.6.A., each party agrees to do the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to any such Confidential Information: (i) exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same degree of care to safeguard the confidentiality of, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevent the unauthorized use of, such information as that party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercises to safeguard the confidentiality of its own \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information; (ii) restrict disclosure of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information to those of its employees and agents who have a "need \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to know", and (iii) instruct and require such employees, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensees, and agents to maintain the confidentiality of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information and not to use such Confidential Information except \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as expressly permitted herein. Each party further agrees not to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remove or destroy any proprietary or confidential legends or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql markings placed upon any documentation or other materials. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The foregoing confidentiality obligation shall also \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql apply to the contents of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. The obligations under this Section 4.6 shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prevent the parties from disclosing the Confidential Information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or terms of this Agreement to any Governmental Authority as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required by law (provided that the party intending to make such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure in such circumstances has given the other party prompt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice prior to making such disclosure so that the other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may seek a protective order or other appropriate remedy prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such disclosure and cooperates fully with such other party in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql seeking such order or remedy). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Notwithstanding anything else contained herein, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either party may disclose the catalog specifications generated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Section 5.3(a) of the Joint Development Agreement to its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql potential customers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. The obligations under this Section 4.6 shall apply \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to any Confidential Information for a period of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] years from the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure of such Confidential Information to the other party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unless with respect to any particular Confidential Information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the providing party in good faith notifies the receiving party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that a longer period shall apply, in which case the obligations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under this Section 4.6 with respect to such Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information shall apply for such longer period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5. ASSOCIATED AGREEMENTS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following associated agreements (the "Associated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements") shall be entered into on or prior to the Effective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date; provided, however, that the Joint Venture License Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only shall be entered into as soon after the Effective Date as is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably practicable: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. A Joint Development Agreement between AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu dated as of March 1993 providing for the joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql development of integrated circuit devices (the "Joint Development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. A Technology Cross-License Agreement between AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Fujitsu dated as of March 1993 providing for the cross- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensing of certain of the parties' respective proprietary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor related intellectual property rights (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Technology Cross-License Agreement"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. A Joint Venture License Agreement among AMD, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu and JV dated as of March 1993 (or promptly thereafter) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing for the license by the parties to JV of certain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary technologies and sublicensable technologies necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for manufacturing JV Products (the "Joint Venture License \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. An Investment Agreement between AMD and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of March 1993 providing for the purchase of stock in AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Fujitsu (the "Fujitsu Investment Agreement"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. An Investment Agreement between Fujitsu and AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dated as of March 1993 providing for the purchase of stock in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu by AMD (the "AMD Investment Agreement," collectively with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Fujitsu Investment Agreement, the "Investment Agreements"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 27 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Those certain letters from AMD to Fujitsu, signed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by both parties and dated as of March 1993, setting forth the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties' agreement as to certain matters including the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Approvals referenced in Section 1.13 of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 6. REPRESENTATIONS AND WARRANTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.1 Representations and Warranties of Fujitsu. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu hereby represents and warrants to AMD, as of the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereof and as of the Effective Date, as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Corporate Organization; Etc. Fujitsu is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation duly organized and validly existing under the laws of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Authorization; Etc. Fujitsu has full corporate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql power and authority to enter into this Agreement and those of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Associated Agreements to which it is a party and to carry out the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions contemplated hereby and thereby. Fujitsu has taken \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all action required by law, its articles of incorporation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise to authorize the execution and delivery of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and those of the Associated Agreements to which it is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. Each of this Agreement and the Associated Agreements to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which it is a party is or will be the valid and binding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation of Fujitsu, subject to receipt of necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Approvals, enforceable in accordance with its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective terms, except that such enforcement may be subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy, insolvency, reorganization, moratorium or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar laws now or hereafter in effect relating to creditors' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and the remedy of specific performance and injunctive and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other forms of equitable relief may be subject to equitable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defenses and to the discretion of the court before which any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding therefor may be brought. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. No Violation. Neither the execution and delivery \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Fujitsu of this Agreement and those of the Associated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements to which it is a party, nor the consummation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions contemplated hereby and thereby, will (i) conflict \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with or result in a breach of any provision of Fujitsu's articles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of incorporation, (ii) conflict with or result in the breach of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any term, condition or provision of, or constitute a default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under, or give rise to any right of termination, cancellation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration with respect to, or result in the creation of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien, charge or encumbrance upon any property or assets of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu pursuant to, or otherwise require the consent of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person under, any agreement or obligation to which Fujitsu is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party or by which any of its properties or assets may be bound, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or (iii) violate or conflict with any Applicable Law applicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to Fujitsu or any of its properties or assets, subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtaining the requisite Governmental Approvals. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Consents and Approvals of Governmental Authorities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except for the Governmental Approvals, no consent, approval or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorization of, or declaration, filing or registration with, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Governmental Authority is required to be obtained by Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with the execution, delivery and performance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and those of the Associated Agreements to which it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is a party, and the consummation of the transactions contemplated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby and thereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Regulatory Applications. The information provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Fujitsu for use in the applications for the Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approvals will not contain any untrue statement of a material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fact or omit to state a material fact required to be stated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql therein or necessary to make the statements therein not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql misleading. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.2 Representations and Warranties of AMD. AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby represents and warrants to Fujitsu, as of the date hereof \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 29 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and as of the Effective Date, as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Corporate Organization; Etc. AMD is a corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duly organized, validly existing and in good standing under the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql laws of the State of Delaware. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Authorization; Etc. AMD has full corporate power \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and authority to enter into this Agreement and those of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Associated Agreements to which it is a party and to carry out the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transactions contemplated hereby and thereby. AMD has taken all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql actions required by law, its certificate of incorporation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bylaws or otherwise to authorize the execution and delivery of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement and those of the Associated Agreements to which it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is a party. Each of the Associated Agreements to which it is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and this Agreement is or will be the valid and binding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation of AMD, subject to receipt of necessary Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approvals, enforceable in accordance with their respective terms, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except that such enforcement may be subject to bankruptcy, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insolvency, reorganization, moratorium or other similar laws now \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or hereafter in effect relating to creditors' rights and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedy of specific performance and injunctive and other forms of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equitable relief may be subject to equitable defenses and to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion of the court before which any proceeding therefor may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be brought. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. No Violation. Neither the execution and delivery \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD of this Agreement and those of the Associated Agreements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to which it is a party, nor the consummation of the transactions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated hereby and thereby, will (i) conflict with or result \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in a breach of any provision of the certificate of incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or bylaws of AMD, (ii) conflict with or result in the breach of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any term, condition or provision of, or constitute a default \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under, or give rise to any right of termination, cancellation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acceleration with respect to, or result in the creation of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql lien, charge or encumbrance upon any property or assets of AMD \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 30 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to, or otherwise require the consent of any person \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under, any agreement or obligation to which AMD is a party or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which any of its properties or assets may be bound, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) violate or conflict with any Applicable Law applicable to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD or any of its properties or assets, subject to obtaining the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requisite Governmental Approvals. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. Consents and Approvals of Governmental Authorities. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except for the Governmental Approvals, no consent, approval or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorization of, or declaration, filing or registration with, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Governmental Authority is required to be obtained by AMD in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection with the execution, delivery and performance of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and those of the Associated Agreements to which it is a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and the consummation of the transactions contemplated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby and thereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. Regulatory Applications. The information provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD for use in the applications for the Governmental Approvals \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not contain any untrue statement of a material fact or omit \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to state a material fact required to be stated therein or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to make the statements therein not misleading. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 7. TERM AND TERMINATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.1 Effective Date. This Agreement shall come into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql force on the Effective Date. If the Effective Date does not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occur within one (1) year of the date hereof, unless otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed by the parties, either party may terminate this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective upon written notice to the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.2 Term. The term of this Agreement shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue for so long as JV remains in existence, unless earlier \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminated by mutual agreement of the parties or as provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 31 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.3 Triggering Events. The occurrence of any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following events shall constitute a triggering event ("Triggering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Event") hereunder on the part of the party with respect to which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such event occurs ("Triggering Party"); and each party shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inform the other party in writing of the occurrence of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Triggering Event when known to such party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. A material breach of this Agreement, the AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investment Agreement, the Fujitsu Investment Agreement, the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Development Agreement or the Joint Venture License Agreement by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Triggering Party, or a material misrepresentation by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Triggering Party with respect to any condition, warranty, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation or agreement contained in this Agreement, the AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Investment Agreement, the Fujitsu Investment Agreement, the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Development Agreement or the Joint Venture License Agreement is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not cured within ninety (90) days after the Triggering Party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receives written notice thereof from the non-Triggering Party; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that failure by either party to comply with the terms of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1.E. shall not be considered a material default until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the earlier of (a) an aggregate of [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] months of delay, or (b) the non-complying party is in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql default of a payment obligation that allows creditors to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accelerate the maturity date of indebtedness in an amount in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql excess of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of such party's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders' equity. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. A Triggering Party becomes the subject of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voluntary or involuntary petition in bankruptcy or any proceeding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to insolvency, or composition for the benefit of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql creditors, which petition or proceeding is not dismissed within \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sixty (60) days after filing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 27 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 32 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. A Triggering Party assigns all or substantially all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the assets of its semiconductor business to any third party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or incurs in one transaction or series of related transactions a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql change in ownership of more than [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] of its capital stock. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. A third party (other than a bank, insurance company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other financial or investment company or institution) acquires \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a greater than [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] ownership \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interest in a Triggering Party and either a seat on the board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directors or a position of management in such party where such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acquisition of ownership and management position or seat on the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql board of directors in such Triggering Party is judged by the non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Triggering Party after careful consideration to be detrimental. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. The Percentage Interest of the Triggering Party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql falls to one third (1/3), or less. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. A change occurs in the management of the Triggering \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party as a result of a proxy solicitation contest, which change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is judged by the non-Triggering Party after careful consideration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be detrimental to the affairs of JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.4. Causes of Dissolution. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV shall be dissolved if: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. A Triggering Event has occurred and the non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Triggering Party elects to dissolve JV as provided in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5.A.(ii) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. The parties mutually agree to dissolve JV. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 28 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 33 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5. Election of Non-Triggering Party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Upon the occurrence of a Triggering Event, the non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Triggering Party shall have the right: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) to acquire the Triggering Party's shares of JV \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at a price equal to the lesser of (a) [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] or (b) [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) to dissolve JV; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) to terminate this Agreement; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) to terminate either or both of the Investment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreements; and/or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) to pursue any other right or remedy available \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to it. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. The non-Triggering Party may exercise its rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 7.5.A. and/or Section 7.5.B. at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within one hundred and eighty (180) days after becoming aware of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Triggering Event. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.6 Noncompetition; Nonsolicitation. If either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party sells its shares in JV within ten (10) years after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date, whether pursuant to Section 4.3 or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5.A., for a period of two (2) years following such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, such party shall be precluded from (a) manufacturing any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EPROM or Flash Memory device that is or may be competitive with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV and is manufactured using wafer processes with geometries of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 0.5 micron or less and that embodies, incorporates or is subject \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 29 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 34 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to any intellectual property right owned by the other party or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developed pursuant to the Joint Development Agreement or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture License Agreement, or (b) employing, soliciting for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employment or recommending for employment any person employed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JV (excluding employees transferred to JV from either Fujitsu or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD who return to the party that transferred him or her). So \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long as a party holds shares in JV, except as otherwise agreed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties, such party shall be prohibited from (x) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing any EPROM or Flash Memory device that is or may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competitive with JV and is manufactured using wafer processes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with geometries of 0.5 micron or less, or (y) employing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql soliciting for employment or recommending for employment any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person employed by JV (excluding employees transferred to JV from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either Fujitsu or AMD who return to the party that transferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql him or her). Notwithstanding the foregoing, if either party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sells its shares in JV, whether pursuant to Section 4.3 or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5.A., such party shall be entitled to continue to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receive JV Products from JV and to sell JV Products to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary in order to fulfill such party's commitments pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to purchase orders issued by such party's customers and accepted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such party prior to the date on which such party ceased to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a shareholder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.7. Name. In the event that either party sells \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its shares in JV, whether pursuant to Section 4.3 or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.5.A., the name of JV shall promptly be amended to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql eliminate any reference to such party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.8. Rights Under Associated Agreements. The rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and obligations of any Triggering Party under any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Associated Agreements, and any other agreements ancillary to JV's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation, shall be specified in those agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 30 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 35 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 8. MISCELLANEOUS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.1. Force Majeure. Neither party shall be liable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for failure to perform, in whole or in material part, its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations under this Agreement or any Associated Agreement if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such failure is caused by any event or condition not existing as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the date of this Agreement and not reasonably within the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql control of the affected party, including without limitation, by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql fire, flood, typhoon, earthquake, explosion, strikes, labor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql troubles or other industrial disturbances, unavoidable accidents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql war (declared or undeclared), acts of terrorism, sabotage, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql embargoes, blockage, acts of Governmental Authorities, riots, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql insurrections, or any other cause beyond the control of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties; provided, that the affected party promptly notifies the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party of the occurrence of the event of force majeure and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql takes all reasonable steps necessary to resume performance of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations so interfered with. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.2. Assignment. Neither this Agreement nor any of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the rights and obligations created hereunder may be assigned, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred, pledged, or otherwise encumbered or disposed of, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole or in part, whether voluntary or by operation of law, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, by either party without the prior written consent of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party; provided, however, that each party may assign \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its rights to acquire and hold shares in JV to a wholly-owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsidiary of such party so long as such assignee remains wholly- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql owned, directly or indirectly, by such party. No such assignment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall relieve the assigning party of any of its obligations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder. This Agreement and the Associated Agreements shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql inure to the benefit of and be binding upon the parties' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted successors and assigns. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.3. Survival. If a party sells all of its shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in JV, or if JV is dissolved, or if this Agreement is terminated, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the obligations hereunder of each party to the other and to JV \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 31 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 36 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will terminate, except that the obligations of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Sections 2.5 ("Reimbursement of Incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Expenses"), 4.2.B. ("Land Lease"), 4.3 ("Transfer of Shares; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Right of First Refusal"), 7.6 ("Noncompetition; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nonsolicitation"), 8.3 ("Survival"), 8.4 ("Notices"), 8.6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Arbitration"), 8.7 ("Entire Agreement"), 8.8 ("Modification"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.11 ("No Waiver"), 8.12 ("Governing Law"), 8.13 ("Language"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8.15 ("No Third Party Beneficiaries"), and Article 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Representations and Warranties") shall survive indefinitely the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of this Agreement. The obligations of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 4.6 ("Confidentiality") shall survive as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 4.6.F. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.4. Notices. All notices and communications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required, made or permitted hereunder shall be in writing and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be delivered by hand or by messenger, or by recognized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql courier service (with written receipt confirming delivery), or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postage prepaid, return receipt requested, registered or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified airmail, addressed: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to AMD: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 De Guigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94086, USA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Mr. Gene Conner \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operations \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Thomas W. Armstrong, Esq. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President, General \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Counsel and Secretary \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 32 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 37 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql If to Fujitsu: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Furukawa Sogo Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 2-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Mr. Hirohiko Kondo \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electronic Devices \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marketing Division \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marunouchi Center Bldg. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 1-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Mr. Gen Iseki \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Division \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each such notice or other communication shall for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes hereunder be treated as effective or as having been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given as follows: (i) if delivered in person, when delivered, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) if sent by airmail, at the earlier of its receipt or at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 p.m. local time of the recipient, on the seventh day after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit in a regularly maintained receptacle for the deposit of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql airmail, and (iii) if sent by a recognized courier service, on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date shown in the written confirmation of delivery issued by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such delivery service. Either party may change the address(es) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or addressee(s) to whom notice may be given by giving notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this section at least seven (7) days prior to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date the change becomes effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.5. Export Control. Without in any way limiting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the provisions of this Agreement, each of the parties agrees that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql no products procured from or technical information disclosed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party or JV under this Agreement are intended to or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be exported or re-exported, directly or indirectly, to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql destination restricted or prohibited by Applicable Law without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary authorization by the Governmental Authorities. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 33 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 38 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.6. Arbitration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Any and all disputes arising under or affecting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement shall be resolved exclusively by confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitration pursuant to the rules of the Japan Commercial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Arbitration Association in Tokyo, Japan, or such other location \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as may be agreed between the parties; provided, however, that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrators shall be empowered to hold hearings at other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql locations within and without Japan. Each of the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designate one arbitrator and the two arbitrators so designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall select the third arbitrator. Arbitration proceedings shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be conducted in English with simultaneous translation into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese. Among the remedies available to them, the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be authorized to order the specific performance of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement and of the Associated Agreements. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The judgment upon award of the arbitrators shall be final and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql binding and may be enforced in any court of competent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction including any court of competent jurisdiction in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States or Japan, and each of the parties hereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unconditionally submits to the jurisdiction of such court for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose of any proceeding seeking such enforcement. Subject only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the provisions of Applicable Law, the procedure described in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Section 8.6 shall be the exclusive means of resolving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disputes arising under or affecting this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. All papers, documents or evidence, whether written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or oral, filed with or presented to the panel of arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed by the parties and by the arbitrators to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information. No party or arbitrator shall disclose \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in whole or in part to any other person any Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information submitted in connection with the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, except to the extent reasonably necessary to assist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel in the arbitration or preparation for arbitration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute. Confidential Information may be disclosed (i) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys, (ii) to parties, and (iii) to outside experts \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 34 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 39 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by either party's counsel to furnish technical or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expert services or to give testimony at the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, subject, in the case of such experts, to execution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a legally binding written statement that such expert is fully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql familiar with the terms of this Section, agrees to comply with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the confidentiality terms of this Section, and will not use any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information disclosed to such expert for personal or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business advantage. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.7. Entire Agreement. This Agreement, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Associated Agreements and the exhibits hereto and thereto, embody \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the entire agreement and understanding between the parties with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to the subject matter hereof, superseding, as of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date, all previous and contemporaneous communications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations, agreements and understandings, whether written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or oral, in existence on the date this Agreement is executed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including without limitation that certain Memorandum of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Understanding between Fujitsu and AMD dated July 13, 1992 and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nondisclosure Agreements. Neither party has relied upon any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation or warranty of the other party except as expressly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth herein or in the Associated Agreements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.8. Modification. This Agreement and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql surviving provisions thereof may not be modified or amended, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whole or part, except by a writing executed by duly authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives of both parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.9. Announcement. The parties may announce the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql existence of the parties' relationship and this Agreement at a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time to be mutually determined. Neither party shall unreasonably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withhold its consent to a time proposed by the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.10. Severability. If any term or provision of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement shall be determined to be invalid or unenforceable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under Applicable Law, such provision shall be deemed severed from \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 35 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 40 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, and a reasonable valid provision to be mutually \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreed upon shall be substituted. In the event that no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable valid provision can be so substituted, the remaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provisions of this Agreement shall remain in full force and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect, and shall be construed and interpreted in a manner that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corresponds as far as possible with the intentions of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as expressed in this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.11. No Waiver. Except to the extent that a party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto may have otherwise agreed in writing, no waiver by that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party of any condition of this Agreement or breach by the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party of any of its obligations or representations hereunder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be deemed to be a waiver of any other condition or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subsequent or prior breach of the same or any other obligation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representation by the other party, nor shall any forbearance by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the first party to seek a remedy for any noncompliance or breach \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the other party be deemed to be a waiver by the first party of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its rights and remedies with respect to such noncompliance or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.12. Governing Law. The validity, construction, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance and enforceability of this Agreement shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governed in all respects by the laws of Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.13. Language. This Agreement, and the exhibits \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and schedules hereto, except for the Articles of Incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the Regulations of the Board of Directors, are in the English \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql language, which language shall be controlling in all respects. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Articles of Incorporation and the Regulations of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors are in the Japanese language, which language shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql controlling in all respects. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.14. No Agency. This Agreement shall not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute an appointment of either party as the legal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative or agent of the other party, nor shall either \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 36 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 41 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party have any right or authority to assume, create or incur in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any manner any obligation or other liability of any kind, express \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or implied, against, in the name or on behalf of, the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. Nothing herein or in the transactions contemplated by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement shall be construed as, or deemed to be, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formation of a partnership by or among the parties hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.15. No Third Party Beneficiaries. No provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement or any of the Associated Agreements are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql intended to, or shall be construed to, confer upon or give to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql person other than the parties hereto and thereto, any rights, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedies or other benefits under or by reason of this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any Associated Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.16. Headings. The section and other headings \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained in this Agreement are for convenience of reference only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall not be deemed to be a part of this Agreement or to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affect the meaning or interpretation of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.17. Construction and Reference. Words used in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, regardless of the number or gender specifically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql used, shall be deemed and construed to include any other number, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql singular or plural, and any other gender, masculine, feminine or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neuter, as the context shall require. Unless otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified, all references in this Agreement to Sections are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed references to be corresponding Sections in this Agreement, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and all references in this Agreement to Exhibits are references \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the corresponding Exhibits attached to this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.18. Governmental Approvals. Each of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall use its reasonable best efforts to obtain all Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Approvals and shall cooperate with the other in good faith. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.19. Counterparts. This Agreement may be executed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in counterparts, each of which shall be deemed an original, and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 37 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 42 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of which shall be deemed to constitute one and the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties hereto have caused this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to be executed by their duly authorized representatives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the date set forth above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ W.J. SANDERS III /s/ TADASHI SEKIZAWA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________________________ ___________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: W.J. Sanders III By: Tadashi Sekizawa \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Chairman and CEO Title: President \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Date: March 18, 1993 Date: March 30, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 38 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 43 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBITS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A-1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Japanese language) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A-2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles of Incorporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (English translation) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B-1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulations of the Board of Directors (Japanese \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql language) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B-2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Regulations of the Board of Directors (English \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql translation) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 44 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit 10.27(a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBSTITUTE EXHIBIT A-1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit A-1 to the Joint Venture Agreement is a Japanese language \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document. The registrant represents that Exhibit A-2 to the Joint Venuture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement constitutes a fair and accurate English translation of Exhibit A-1. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql --------------------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Its: Senior Vice President \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Administrative Officer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Secretary, Chief Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer and Treasurer \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 45 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A-2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K Exhibit 10.27(a) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TRANSLATION) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLES OF INCORPORATION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU AMD SEMICONDUCTOR K.K. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 1 General Provisions \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1 (Name) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name of the Company shall be Fujitsu AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Kabushiki Kaisha in Japanese and Fujitsu AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Limited in English. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2 (Object) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The object of the Company shall be to engage in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following businesses: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) Manufacture and sales of semiconductor integrated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) All business incidental to or associated with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding Item \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3 (Location of Head Office) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall have its head office in Kawasaki-shi, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kanagawa-ken. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 4 (Method of Public Notice) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Public notice of the Company shall be made in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Official Gazette (Kampo). \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 46 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 2 Shares \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5 (Number of Authorized Shares) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The total number of shares authorized to be issued by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Company shall be eight thousand (8,000). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 6 (Par Value) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql All shares to be issued by the Company shall be par \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value common stock. The par value of each share shall be fifty \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thousand yen (#50,000). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 7 (Kinds of Share Certificates) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kinds of share certificates to be issued by the Company \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be determined by the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 8 (Restriction on Transfer of Shares) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Transfer of shares of the Company shall be subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the approval of [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql entire Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 9 (Pre-emptive Right) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The shareholders shall have the pre-emptive right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to subscribe to new shares if new shares are issued. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The pre-emptive right in the preceding Paragraph \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be transferable separately from shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 47 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 10 (Registration of Transfer of Shares, etc.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Procedures of registration of transfer of shares, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registration or cancellation of a pledge, registration or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cancellation of a trust, re-issuance of share certificates or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other matters relating to shares of the Company shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 11 (Registration of Shareholders, etc.) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shareholders, pledgees, trustees or their statutory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representatives shall notify the Company of their names, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addresses and seal impressions (specimen signature in case of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foreigner with the custom of signature), or of any change to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 12 (Record Date and Suspension of Entry to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Register of Shareholders) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The shareholders whose names are registered in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql register of shareholders at the end of each business term shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be deemed to have the voting rights at the ordinary general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of shareholders for such business term. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. If necessity arises, the Company may, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with a resolution of the Board of Directors and after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql giving public notice, set up a record date, whereby the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders or pledgees who are registered at the record date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have such rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. In addition to the preceding Paragraphs and if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessity arises, the Company may, in accordance with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolution of the Board of Directors and after giving public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice, suspend entry to the register of shareholders for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certain period not exceeding three (3) months. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 48 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 3 General Meeting of Shareholders \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 13 (Convocation) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. An ordinary general meeting of shareholders shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be convened within three (3) months after the end of each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business term, and an extraordinary general meeting of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders may be convened from time to time if necessity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arises. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Meetings of Shareholders shall be convened by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman or the Vice Chairman in accordance with resolutions of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 14 (Place) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Meetings of Shareholders shall be held in the area \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql where the head office of the Company is located or at any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql place if agreed in writing by all shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 15 (Presiding Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Director-Chairman shall be the presiding officer of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a general meeting of shareholders. In the event that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director-Chairman is unable to perform his or her duties, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director-Vice Chairman shall act in his or her place. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 16 (Notice) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Notice calling a general meeting of shareholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be dispatched to each shareholder at least one month before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the day set for such meeting. The notice shall contain date, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time, place and agenda for the meeting. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The notice shall be prepared both in Japanese and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql English and shall be dispatched to the registered address of each \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 49 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholder by registered mail. In case of shareholders not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql residing in Japan, the notice shall be dispatched by registered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql airmail. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. The notice period provided for in Paragraph 1 may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be shortened to the period provided in the Commercial Code, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all shareholders agree in writing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 17 (Quorum) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The quorum of general meetings of shareholders shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attendance of shareholders having in total two thirds or more of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total issued and outstanding common shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 18 (Ordinary Resolutions) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as otherwise provided in laws or in Article 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of these Articles of Incorporation, resolutions at a general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of shareholders shall be adopted by a majority of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql voting shares represented by the shareholders present. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 19 (Special Resolutions) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The following resolutions shall be made by the vote of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] the total issued and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql outstanding common shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 50 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 20 (Proxy) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An individual acting as a proxy for a shareholder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall, on a meeting-by-meeting basis, file a proxy with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 4 Directors and Board of Directors \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 21 (Number of Directors) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Company shall have [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. In case of vacancy caused by resignation or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, an extraordinary general meeting shall be promptly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convened in accordance with Articles 13 and 16 of these Articles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Incorporation to fill the vacancy. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 22 (Election) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Directors shall be elected at a general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting of shareholders under Article 19 of these Articles of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Directors shall not be elected by a method of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cumulative voting. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 23 (Term of Office) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The term of office of a Director shall expire at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the close of the ordinary general meeting of shareholders \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covering the last business term within one (1) year after his or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql her assumption of office. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 51 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The term of office of a Director elected to fill a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vacancy shall be the remainder of the term of office of his or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql her predecessor; and provided further that the term of office of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a newly added Director shall be the remainder of the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office of the other Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 24 (Remuneration) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remuneration of the Directors shall be determined by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolution of shareholders at a general meeting of shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 25 (Representative Directors and Directors with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Special Title) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Company shall, by a resolution of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors, elect one (1) Chairman and one (1) Vice Chairman from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql among the Directors. In case of necessity of business, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company may have a President, Vice President(s), Executive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Managing Director(s) or Managing Director(s). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The Chairman and Vice Chairman shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Representative Directors. The Board of Directors may appoint one \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or more Representative Directors from among the Directors with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql special title provided for in the preceding Paragraph. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Representative Directors shall represent the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Company and execute the Company's business in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resolutions of the Board of Directors. Director-Chairman shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have the exclusive authority to operate day-to-day business, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may delegate such authority to a full-time standing (Jokin) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director provided for in the following Paragraph. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. Except for Director-Chairman and Director-Vice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman, all Directors with special title are elected from among \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the full-time standing Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 52 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 26 (Person to Convene) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Director-Chairman, Director-Vice Chairman or two \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) Directors may convene a meeting of the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 27 (Presiding Officer) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Director-Chairman shall be the presiding officer of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a meeting of the Board of Directors. If the Director-Chairman is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unable to perform his or her duties, Director-Vice Chairman shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql act in his or her place. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 28 (Notice) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Notice calling a meeting of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be dispatched to each Director at least two (2) weeks \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql before the date set for such meeting. The notice shall contain \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date, time, place and agenda for the meeting. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The notice shall be prepared both in Japanese and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql English and shall be dispatched by registered mail. In case of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors not residing in Japan, the notice shall be dispatched \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by registered airmail. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. The notice period provided for in Paragraph 1 may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be shortened or dispensed with, if all Directors agree in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql writing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 29 (Place) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Meetings of the Board of Directors shall be held in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql area where the head office of the Company is located or at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other place if agreed in writing by all Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 53 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 30 (Resolutions) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Except as provided for by law or by the Articles \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Incorporation, the matters relating to the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be governed by the Regulations of the Board of Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Resolutions of the Board shall be adopted by a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql majority vote of the Directors present at a meeting at which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql two-thirds or more of all Directors are present. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 5 Statutory Auditors \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 31 (Number of Statutory Auditors) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Company shall have two (2) Statutory Auditors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 32 (Election) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Statutory Auditors shall be elected by a resolution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of shareholders at a general meeting of shareholders in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with Article 19 of these Articles of Incorporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 33 (Term of Office) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The term of office of a Statutory Auditor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expire at the close of the ordinary general meeting of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shareholders covering the last business term within two (2) years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after his or her assumption of office. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. The term of office of a Statutory Auditor elected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to fill a vacancy shall be the remainder of the term of office of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql his or her predecessor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 54 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 34 (Full-time Standing Statutory Auditor) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Statutory Auditors shall elect from among \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql themselves a full-time standing (Jokin) Statutory Auditor. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 35 (Remuneration) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Remuneration of the Statutory Auditors shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determined by a resolution of shareholders at a general meeting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of shareholders. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 6 Accounting \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 36 (Business Term) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The business term of the Company shall commence on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 1 of each year and shall end on March 31 of the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 37 (Dividends) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Dividends shall be paid to the shareholders and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql registered pledgees entered in the register of shareholders as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the closing date of each business term of the Company. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chapter 7 Supplementary Provisions \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 38 (The total number of Shares to be Issued at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Time of Incorporation) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The total number of shares which the Company shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issue at the time of the incorporation shall be two thousand \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2,000), and all such shares shall be common shares with par \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value. The issue price per share of the above-mentioned shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be fifty thousand yen ($50,000 Yen). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 55 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 39 (First Business Term) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The first business term of the Company shall, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notwithstanding Article 36 of these Articles of Incorporation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commence on the date of incorporation of the Company and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql end on March 31, 1994. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 40 (Initial Term of Office of Directors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statutory Auditors) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The term of office of the initial Directors and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Statutory Auditors shall, notwithstanding Articles 23 and 33 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql these Articles of Incorporation, expire at the close of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ordinary general meeting of shareholders covering the last \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business term within one (1) year after their assumption of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql office. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 41 (Name and Address of Promoter) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The name and address of the promoter and the number of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares subscribed for by the promoter are as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Name and Address of Promoter Number of Share \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------------------------- --------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hirohiko Kondo 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2-16-1 Tamanawa, Kamakura-shi \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kanagawa, Japan \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql In order to certify the incorporation of Fujitsu AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor K.K., these Articles of Incorporation have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prepared and the promoter has affixed his seal hereto. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql , 1993 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Promoter: Hirohiko Kondo \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 56 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K Exhibit 10.27(a) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUBSTITUTE EXHIBIT B-1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exhibit B-1 to the Joint Venture Agreement is a Japanese language \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql document. The registrant represents that Exhibit B-2 to the Joint Venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement constitutes a fair and accurate English translation of Exhibit B-1. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ________________________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Its: Senior Vice President, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Administrative Officer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Secretary, Chief Financial \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Officer and Treasurer \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 57 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B-2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10-K Exhibit 10.27(a) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (TRANSLATION) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU AMD SEMICONDUCTOR LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGULATIONS OF THE BOARD OF DIRECTORS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As effective on ,1993 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Purpose) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Except as provided for by laws and ordinances or the Articles of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporation, the matters relating to the Board of Directors shall be governed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by these Regulations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Composition) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql The Board of Directors shall consist of all the Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Representative Directors and Directors with Titles) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. A Chairman and a Vice Chairman, each of whom shall be a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Representative Director, shall be elected from among the Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Two Full-time Standing Directors (Jookin Torishimariyaku) shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be elected from among the Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. One or more additional Representative Directors may be elected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql from among the Full-time Standing Directors. \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 58 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Person to Convene) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 4. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A meeting of the Board of Directors may be convened by the Chairman, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Vice-Chairman, or any two Directors acting together. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Presiding Officer) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. The Chairman will act as the presiding officer (Gicho) of all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meetings of the Board of Directors; provided that, if the office of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman is vacant or the Chairman is unable to attend the meeting, the Vice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chairman will act as the presiding officer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. A meeting of the Board of Directors shall be presided over by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the presiding officer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. In case the presiding officer mentioned in the foregoing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph is unable to act, one of the other Directors will act in his place in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the order previously fixed by a resolution of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Kind of Meetings) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 6. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Meetings of the Board of Directors shall be ordinary meetings and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extraordinary meetings. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Ordinary Meetings) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 7. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql An ordinary meeting of the Board of Directors shall be held once each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql quarter. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 59 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Extraordinary Meetings) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 8. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Extraordinary meetings of the Board of Directors shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convened whenever necessary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. Any Director may ask the Chairman or the Vice Chairman to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convene an extraordinary meeting showing the agenda and reason to convene a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql meeting. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Notices of Convocation of Meetings) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 9. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Notices of convocation of meetings of the Board of Directors shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sent in the manner provided for in the Articles of Incorporation. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Method of Resolutions) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 10. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Resolutions of the Board of Directors shall be adopted by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affirmative vote of a majority of the members of the Board of Directors present \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at a meeting where not less than two-thirds (2/3) of all Directors are present. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Interpreters) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 11. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Interpreters may attend meetings of the Board of Directors upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request of one of the Directors. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 60 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Postponement of Meetings of Board of Directors) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 12. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. If the number in attendance at a meeting of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors properly convened is less than the number required for voting as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Articles 10, the presiding officer of the meeting of the Board of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Directors can postpone the meeting of the Board of Directors, specifying a date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql at least fourteen (14) days after the date of issuance of the postponement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notices specified in Paragraph 2 of this Article. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. In the case of postponement specified in the preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Paragraph, the presiding officer shall, within two (2) business days after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date when it was decided to postpone the meeting, issue a written notice to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each Director, stating the date, time and place of reconvocation of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postponed meeting of the Board of Directors. The provisions of Article 9 shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be applicable with the necessary modifications to the notices in question. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql However, it shall be required that the entire text of the notices in question \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql must be transmitted by telegram simultaneously to each Director. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Minutes of Meetings) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 13. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Outlines of the deliberations of meetings of the Board of Directors \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as well as their results shall be recorded in minutes of meetings in both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese and English. The presiding officer and all the Directors who attended \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each meeting shall affix their signatures or their names and seals to them, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql they shall be retained by the Company. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_10}{\*\bkmkend doc_1_10} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.27(b) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY CROSS-LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential portions of this document have been deleted and filed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql separately with the Securities and Exchange Commission pursuant to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql request for confidential treatment. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY CROSS-LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Technology Cross-License Agreement (this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Agreement"), dated as of March 26, 1993, is between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. ("AMD"), a Delaware corporation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql having its principal officeat 901 Thompson Place, Sunnyvale, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, 94088-3453, U.S.A., and FUJITSU LIMITED ("Fujitsu"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Japanese corporation having its registered office at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1015 Kamikodanaka, Nakahara-ku, Kawasaki 211, Japan. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTRODUCTION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Fujitsu and AMD each own or control various patent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and other intellectual property rights to which the other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wishes to acquire a license. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Fujitsu and AMD are engaged in continuing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql research, development and engineering with regard to Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products (as defined below). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. Fujitsu and AMD desire to establish an amicable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and mutually beneficial relationship and, more specifically, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql desire to grant licenses and exchange semiconductor technology in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the following terms and conditions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCORDINGLY, in consideration of the mutual covenants \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and promises contained herein, the parties hereto agree as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1. DEFINITIONS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used in this Agreement, the following terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the following meanings: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.1. "Affiliate", with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, shall mean the companies affiliated with such party as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in Attachment A hereto, which may be amended from time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to time upon the agreement of the parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.2. "Applicable Law" shall mean, with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a party, any statute, law, ordinance, rule, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative interpretation, regulation, order, writ, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql injunction, directive, judgment, decree or other requirement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Governmental Authority applicable to such party or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql properties, business or assets. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.3. "Auxiliary Part" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql input/output means, supporting means, terminal members, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conductors or equivalent interconnecting members, housing means, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any environmental controlling means included within such housing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql means or unitary with such housing means, and active and/or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql passive elements unitarily or separately combined with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Product and any other parts, primarily usable in or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for manufacturing Semiconductor Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.4. "Confidential Information" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean information or materials disclosed to a party by the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party that are identified as, or provided under circumstances \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indicating the information or materials are, confidential or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.5. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.6. "Effective Date" shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql later to occur of (a) the date of this Agreement or (b) the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which all required Governmental Approvals have been obtained. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.7. "EPROM" or "Electrically \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Programmable Read Only Memory" shall mean a non-volatile \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor memory device incorporating floating gate structure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cells, which device is electrically programmable and erasable by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql using ultraviolet light. The device mainly consists of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql floating gate structure cells, with auxiliary logic circuits, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any, where such logic circuits are used solely for memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation or interface to other products. OTPROM or One Time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROM, which is a certain non-volatile semiconductor device \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporating the same chip as EPROM and packaged without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transparent windows for ultraviolet light, shall be included in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the definition of EPROM. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.8. "Flash Memory" shall mean a non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql volatile semiconductor memory device incorporating floating gate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql structure cells, which device is programmable and erasable by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql electrically injecting and electrically discharging electric \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql charges into and from floating gates. The device mainly consists \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such floating gate structure cells, with auxiliary logic \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits, if any, where such logic circuits are used solely for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql memory operation or interface to other products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.9. "Governmental Approvals" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all approvals, consents, authorizations and similar actions from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all Governmental Authorities that the parties agree are desirable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in order to consummate the transactions hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.10. "Governmental Authority" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any foreign, domestic, national, federal, territorial, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prefectural, state or local governmental authority, quasi- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governmental authority, court, government or self-regulatory, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql administrative or other agency, or any political or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subdivision, department, or branch of any of the foregoing. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.11. "Incorporated Product", with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a party, shall mean a product, other than an NVM or a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory Card, into which such party has incorporated NVM(s) made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by or for such party or JV, or portions of such NVM(s). Without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, Incorporated Product shall include both (a) an \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information handling system, circuit board or multichip module \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that incorporates such NVM(s) or (b) a Semiconductor Product that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporates circuits of such NVM(s) with other circuits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.12. "IPR" or "Intellectual Property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Rights", (a) with respect to a party, shall mean such party's \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Patents, Proprietary Information and Other IPR, and (b) with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a third party, shall mean the equivalents of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing, except that, in any case, IPR shall exclude \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trademarks, service marks, trade names and their equivalents, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any contraction, abbreviation, or simulation thereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.13. "Joint Development Agreement" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean the Joint Development Agreement as defined in the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture Agreement, and any amendments or modifications thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.14. "Joint Venture Agreement" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean that certain joint venture agreement to be entered into by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties concurrently with this Agreement, and any amendments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or modifications thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.15. "Joint Venture License Agreement" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean the Joint Venture License Agreement as defined in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture Agreement, and any amendments or modifications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.16. "JV" shall mean Fujitsu AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Limited, a Japanese corporation being formed by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Fujitsu pursuant to the Joint Venture Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.17. [Intentionally omitted] \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.18. "Licensed Product" shall mean any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the items described in the following clauses (a) through (c) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or parts thereof: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Semiconductive Material; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Auxiliary Part; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Semiconductor Product. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Licensed Products shall include NVMs and Memory Cards, unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise expressly provided herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.19. "Manufacturing Apparatus" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean any instrumentality or aggregate of instrumentalities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql primarily designated for use in the fabrication of Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.20. "Memory Card" shall mean an EPROM \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or Flash Memory card, module or board which consists mainly of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NVM(s) and auxiliary semiconductor logic, if any, where such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql auxiliary semiconductor logic is used solely for memory operation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or interface to other products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.21. "Nondisclosure Agreements" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean the Nondisclosure Agreements between Fujitsu and AMD dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 12, 1992 and July 20, 1992 and the Confidentiality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement between Fujitsu and AMD dated October 16, 1992. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.22. "Non-Semiconductor Group", with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a party, shall mean the party's internal group or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other organization that is not the Semiconductor Group of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. It is understood that AMD currently does not have such a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Semiconductor Group. Should AMD elect to form a Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group in the future, such Group shall at that time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have all of the rights and privileges, subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations, of a Non-Semiconductor Group hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.23. "NVM" or "Non-Volatile Memory", \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with respect to a party, shall mean any EPROM or Flash Memory in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wafer, die or packaged device form manufactured using wafer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processes with geometries of 0.5 micron or less that embodies, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporates or is subject to (or is manufactured through \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processes or methods that embody, incorporate or are subject to) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IPR of the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.24. "Other IPR", with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, shall mean all mask work rights and copyrights relating to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql software or microcode, and the equivalents of the foregoing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (under the laws of any jurisdiction, including without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation, all applications and registrations with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto) that both (a) are covered, embodied, or incorporated in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the materials or information deliberately provided by such party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the other party in accordance with the Joint Development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or the Nondisclosure Agreements, or deliberately \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided by such party to JV or by JV to such party in accordance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Joint Venture License Agreement and (b) are wholly owned \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by such party or as to which, and only to the extent and subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the conditions under which, such party has the right, as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Effective Date or thereafter during the term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, to grant licenses or sublicenses of the scope granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, without such grant resulting in the payment of royalties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other consideration to third parties (unless and until the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party undertakes to reimburse such party for any payments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql so made, in which case such mask work rights and copyrights and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equivalents shall be included within such party's Other IPR), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except for payments to a Subsidiary of such party sublicensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder or payments to third parties for Other IPR developed or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql created by such third parties while employed by such party or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary of such party sublicensed hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.25. "Patents", with respect to a party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall mean all classes or types of patents, utility models, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql design patents and reissues, importations and confirmations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, and other indicia of ownership, and respective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applications therefor of all countries of the world, provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such indicia of ownership or applications therefor meet both the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following conditions: (a) have a filing date, or claim the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql benefit of a filing date, prior to the expiration or termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement, and (b) are wholly owned by such party prior \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the expiration or termination of this Agreement, or as to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which, and only to the extent and subject to the conditions under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which, such party has the right, as of the Effective Date or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter during the term of this Agreement, to grant licenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or sublicenses of the scope granted herein, without such grant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resulting in the payment of royalties or other consideration to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third parties (unless and until the other party undertakes to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reimburse such party for any payments so made, in which case such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql patents shall be included within such party's Patents), except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for payments to a Subsidiary of such party sublicensed hereunder \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or payments to third parties for inventions made by such third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties while employed by such party or any Subsidiary of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party sublicensed hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.26. "Pilot Product", with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, shall mean (i) an NVM wafer manufactured by or for (except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the JV) such party or (ii) an NVM die or packaged device made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by or for (except by the JV) such party from such NVM wafer. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.27. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.28. "Proprietary Information", with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to a party, shall mean any trade secrets, copyrighted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material (except as is otherwise provided in this Section 1.28), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql know-how, data, formula, processes, confidential information, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other information, tangible or otherwise, of such party that both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) comes to the knowledge of the other party (whether or not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deliberately provided by such party) in the course of performing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Joint Development Agreement or the Joint Venture License \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or pursuant to the Nondisclosure Agreements, and (b) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly owned by such party or as to which, and only to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and subject to the conditions under which, such party has the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right, as of the Effective Date or thereafter during the term of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, to grant licenses or sublicenses of the scope \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted herein, without such grant resulting in the payment of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalties or other consideration to third parties (unless and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until the other party undertakes to reimburse such party for any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments so made, in which case such information shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included within such party's Proprietary Information), except for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments to a Subsidiary of such party sublicensed hereunder or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql payments to third parties for Proprietary Information developed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or created by such third parties while employed by such party or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any Subsidiary of such party sublicensed hereunder. Proprietary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information does not include mask work rights or copyrights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to software or microcode or the equivalents of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.29. "Semiconductor Group", with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a party, shall mean the internal group or other organization \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such party currently having as its primary activities the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql research and development, making and selling of Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products to the semiconductor merchant market, and controlling \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor-related IPR arising by virtue of such activities. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.29.1. The Fujitsu Semiconductor Group \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently consists of (and is limited to) the Electronic Devices \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group of Fujitsu, and will consist in the future of any successor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql organization(s) which succeeds to the semiconductor-related \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql research and development, making, selling and/or IPR of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electronic Devices Group. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.29.2. The AMD Semiconductor Group \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently consists of AMD in its entirety, and will consist in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the future of any successor organization(s) which succeeds to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql semiconductor-related research and development, making, selling \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or IPR of any current AMD operations. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.30. "Semiconductor Product" shall mean: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a Semiconductive Element; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) a Semiconductive Element and one or more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql films of conductive, semiconductive or insulating materials \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formed on a surface or surfaces of such Semiconductive Element, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql said film or films comprising one or more conductors, active or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql passive electrical circuit elements, or any combination thereof; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) a unitary assembly consisting of one or more \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the elements described in clauses (a) and/or (b) of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.30 having a fixed permanent physical relationship \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established therebetween; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) a unitary assembly consisting primarily of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) one or more of the elements described in clauses (a), (b) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or (c) of this Section , and (ii) one or more film \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql devices having a fixed permanent physical relationship \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql established therebetween. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Product includes, if provided therewith as a part \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, (i) Auxiliary Parts and (ii) additional electrical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits constituted thereby and integrally included therein, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that such Auxiliary Parts and additional electrical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql circuits are incidental to the functionality of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.31. "Semiconductive Element" shall mean \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql an element consisting primarily of a body of Semiconductive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Material having a plurality of electrodes associated therewith, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not said body consists of a single Semiconductive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Material or of a multiplicity of such materials, whether or not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql said body has, therein and/or thereon, one or more junctions and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether or not said body includes one or more layers or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regions (constituting substantially less than the whole of said \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql body) of a material or materials which are of a type other than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductive Material, and if provided as a part thereof, said \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql element includes passivating means thereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.32. "Semiconductive Material" shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql mean any material whose conductivity is intermediate to that of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql metals and insulators at room temperature and whose conductivity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql increases with increasing temperature over some temperature \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql range. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.33. "Subsidiary", with respect to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, shall mean any corporation, partnership or other entity, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql more than fifty percent (50%) of whose shares or ownership \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests entitled to vote for the election of directors (other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than any shares whose voting rights are subject to restriction) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or, in the case of a noncorporate entity, the equivalent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interests, are owned or controlled by such party, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, now or hereafter, but such corporation, partnership \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other entity shall be deemed to be a Subsidiary only for so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql long as such ownership or control exists. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.34. "Transitional Event" shall mean the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier to occur of (i) termination or expiration of the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture Agreement, (ii) dissolution of the JV, or (iii) Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or AMD ceasing to be a shareholder of the JV. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 2. MUTUAL RELEASE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.1. Fujitsu hereby releases, acquits and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forever discharges AMD hereunder from any and all claims or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability for infringement or alleged infringement of any Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IPR by performance of acts prior to the Effective Date which, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performed on or after the Effective Date, would be acts licensed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensed or immunized hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2.2. AMD hereby releases, acquits and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forever discharges Fujitsu hereunder from any and all claims or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql liability for infringement or alleged infringement of any AMD IPR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by performance of acts prior to the Effective Date which, if \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performed on or after the Effective Date, would be acts licensed, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensed or immunized hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3. GRANTS OF LICENSE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.1. Fujitsu hereby grants to AMD a non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusive and non-transferable license under Fujitsu IPR: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) to make, have made (it being understood that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for purposes of this Agreement the terms "make" and "have made" \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall include the acts of assembling, packaging, and/or testing), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use, sell, lease, or otherwise dispose of Licensed Products and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated Products anywhere in the world, but excluding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION], NVMs and Memory Cards, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except as otherwise specified in Attachment B; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) to make, have made and use Manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Apparatuses anywhere in the world, and to sell, lease, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise dispose of such Manufacturing Apparatuses anywhere in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the world, provided that such sale, lease or other disposition is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incidental to a technology license to make Licensed Products to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Manufacturing Apparatuses relate. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2. AMD hereby grants to Fujitsu a non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusive and non-transferable license under AMD IPR: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) to make, have made, use, sell, lease, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise dispose of Licensed Products and Incorporated Products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql anywhere in the world, but excluding [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION], NVMs and Memory Cards, except as otherwise specified \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in Attachment B; and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) to make, have made and use Manufacturing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Apparatuses anywhere in the world, and to sell, lease, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise dispose of such Manufacturing Apparatuses anywhere in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the world, provided that such sale, lease or other disposition is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incidental to a technology license to make Licensed Products to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which such Manufacturing Apparatuses relate. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.3. Fujitsu and AMD agree that upon the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of a Transitional Event, whether or not it results in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination under Article 9, or upon the assumption by or on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql behalf of a party (including a bankruptcy trustee or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative or debtor in possession) of the rights and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of this Agreement in a bankruptcy or insolvency \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceeding involving such party, the licenses under Sections 3.1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and 3.2, respectively, shall automatically, without further \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action by either party, be changed so that the licenses become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses to make, have made, use, sell, lease or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispose of any volume of Licensed Products, including NVMs and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory Cards, anywhere in the world not subject to the conditions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Attachment B, but excluding, in the case of Section 3.1, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION], and, in the case of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2, [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4.1. Notwithstanding anything to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary in Sections 1.12 and 3.1, Articles 4 and 5, or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Agreement: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The rights, licenses and immunities granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by Fujitsu hereunder to AMD (and the definition of "IPR" included \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such grant) shall exclude IPR of any Fujitsu Non-Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group except that: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Such Fujitsu Non-Semiconductor Group, at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its option, may grant to the AMD Semiconductor Group a license of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Fujitsu Non-Semiconductor Group's Patents that relate to (A) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql processes for manufacturing Licensed Products, (B) the device \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql structure (but not circuits) of Licensed Products, or (C) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materials comprising Licensed Products (collectively, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Semiconductor-Related"). Unless such Fujitsu Non-Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group grants such a license to the AMD Semiconductor Group and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such license is otherwise of a scope that is equivalent to that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 3.1, such Fujitsu Non-Semiconductor Group may not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise the rights, licenses and immunities granted hereunder to \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu with respect to Licensed Products, except Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products that are made by or for Fujitsu Semiconductor Group, a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiary sublicensed hereunder, the JV or another Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group that has acquired the right (pursuant to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4.1(a)(i)) to exercise such rights, licenses and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immunities granted hereunder to Fujitsu. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) If the Fujitsu Semiconductor Group \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provides or makes available to AMD information, material or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql technology in connection with activities related to the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Development Agreement or the Joint Venture License Agreement, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such information, material or technology embodies, incorporates \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or is subject to any Semiconductor-Related IPR of a Fujitsu Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group that is used by the Fujitsu Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group, the Fujitsu Semiconductor Group shall (unless such Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Semiconductor Group has granted a license of such IPR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to clause (i)) arrange for a license or immunity from \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql suit under such IPR to the AMD Semiconductor Group, provided that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD shall pay any related reasonable license fees or royalties. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Such license or immunity shall otherwise be of a scope equivalent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to that of Section 3.1, but shall be no broader than the rights \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Fujitsu Semiconductor Group to such IPR. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) An AMD Non-Semiconductor Group may, at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its option, obtain a license hereunder of the circuit Patents of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Fujitsu Semiconductor Group. Such license shall be of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scope equivalent to that of Section 3.1. If such AMD Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group obtains such a license, it shall grant back \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the Fujitsu Semiconductor Group a license hereunder of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Non-Semiconductor Group's circuit Patents. Such license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall otherwise be of a scope equivalent to that of Section 3.2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4.2. Notwithstanding anything to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contrary in Sections 1.12 and 3.2, Articles 4 and 5, or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Agreement: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The rights, licenses and immunities granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by AMD hereunder to Fujitsu (and the definition of "IPR" included \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in such grant) shall exclude IPR of any AMD Non-Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group except that: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Such AMD Non-Semiconductor Group, at its option, may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant to the Fujitsu Semiconductor Group a license of such AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Semiconductor Group's Semiconductor-Related Patents. Unless such AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Non-Semiconductor Group grants such a license to the Fujitsu Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group and such license is otherwise of a scope that is equivalent to that of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.2, such AMD Non- Semiconductor Group may not exercise the rights, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses and immunities granted hereunder to AMD with respect to Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products, except Licensed Products that are made by or for AMD Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group, a Subsidiary sublicensed hereunder, the JV or another Non-Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group that has acquired the right (pursuant to this Section 3.4.2(a)(i)) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise such rights, licenses and immunities granted hereunder to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) If the AMD Semiconductor Group provides \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or makes available to Fujitsu information, material or technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in connection with activities related to the Joint Development \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or the Joint Venture License Agreement, and such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information, material or technology embodies, incorporates or is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to any Semiconductor-Related IPR of an AMD Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group that is used by the AMD Semiconductor Group, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the AMD Semiconductor Group shall (unless such AMD Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group has granted a license of such IPR pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql clause (i)) arrange for a license or immunity from suit under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such IPR to the Fujitsu Semiconductor Group, provided that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu shall pay any related reasonable license fees or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalties. Such license or immunity shall otherwise be of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scope equivalent to that of Section 3.2, but shall be no broader \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than the rights of the AMD Semiconductor Group to such IPR. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) A Fujitsu Non-Semiconductor Group may, at its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql option, obtain a license hereunder of the circuit Patents of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Semiconductor Group. Such license shall be of a scope \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equivalent to that of Section 3.2. If such Fujitsu Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group obtains such a license, it shall grant back \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the AMD Semiconductor Group a license hereunder of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Non-Semiconductor Group's circuit Patents. Such license \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall otherwise be of a scope equivalent to that of Section 3.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.5. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.6. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 4. IMMUNITY FOR CUSTOMERS AND USERS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1. Fujitsu hereby forever grants to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers and users of Licensed Products or Incorporated Products \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are sold, leased or otherwise disposed of by AMD pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to, and subject to the conditions of, this Agreement a worldwide, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalty-free and non-exclusive immunity from suit, damages and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims by Fujitsu under Fujitsu IPR to use, sell, lease or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise dispose of such Licensed Products or Incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products, provided that such royalty-free immunity for such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers and users shall extend only to the use, sale, lease or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other disposition of such particular Licensed Products or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated Products that such customers and users obtained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directly or indirectly from AMD. [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. The sale, lease, or other disposition to customers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and users of Licensed Products or Incorporated Products by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql does not convey any license, by implication, estoppel, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, to such customers and users under Patent claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covering combinations of such Products with other devices or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elements. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.2. AMD hereby forever grants to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers and users of Licensed Products or Incorporated Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that are sold, leased or otherwise disposed of by Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to, and subject to the conditions of, this Agreement a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql worldwide, royalty-free and non-exclusive immunity from suit, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql damages and claims by AMD under AMD IPR to use, sell, lease or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise dispose of such Licensed Products or Incorporated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Product, provided that such royalty-free immunity for such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql customers and users shall extend only to the use, sale, lease or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other disposition of such particular Licensed Products or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated Products that such customers and users obtained \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql directly or indirectly from Fujitsu. [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. The sale, lease, or other disposition to customers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and users of Licensed Products or Incorporated Products by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu does not convey any license, by implication, estoppel, or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql otherwise, to such customers and users under Patent claims \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql covering combinations of such Products with other devices or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql elements. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5. SUBLICENSE. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.1. Each party shall have the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant sublicenses of the rights, licenses and immunities granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such party under Section 3.1 or 3.2, as well as Articles 2 and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 and this Article 5, to a Subsidiary of such party but subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the condition that such Subsidiary grants a license to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party hereunder of the Patents, if any, of such Subsidiary, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as follows: If such Subsidiary is subject to control by a Non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group, such grant-back license (a) shall be to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group of the other party and (b) shall be of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor-Related (as defined in Section 3.4.1(a)(i)) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Patents. If such Subsidiary is subject to control by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group, such license (a) shall be to the other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as a whole and (b) shall be of all Patents of such Subsidiary. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Any such license shall otherwise be of a scope equivalent to that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Section 3.1 or 3.2 (as applicable). It is hereby stated, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirmation purposes, that (i) it is an option, and not an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation, for a Subsidiary to grant such a license, unless and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until such Subsidiary elects to be granted a sublicense of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, licenses and immunities, and (ii) even without obtaining \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such a sublicense, a Subsidiary of a party may exercise the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights, licenses and immunities granted hereunder to the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql extent as a Non-Semiconductor Group of such party that has not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted a license to the other party's Semiconductor Group under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.4.1(a)(i) or 3.4.2(a)(i). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.2. If requested by a party, the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall cause a Subsidiary actually controlled by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Semiconductor Group of such other party to grant a license to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such party under Section 5.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.3. If the Semiconductor Group of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party provides or makes available to the other party information, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql material or technology in connection with activities related to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Joint Development Agreement or the Joint Venture License \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, and such information, material or technology embodies, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incorporates or is subject to any Semiconductor-Related (as \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in Section 3.4.1(a)(i)) IPR of a Subsidiary of such party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that is used by such Semiconductor Group, such Semiconductor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Group shall (unless such Subsidiary has granted a license to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party pursuant to Section 5.1) arrange for a license or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immunity from suit under such IPR to the Semiconductor Group of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such other party, provided that such other party shall pay any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related reasonable license fees or royalties. Such license or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immunity shall otherwise be of a scope equivalent to that of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 3.1 or 3.2. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 5.4. A party shall not have the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant sublicenses hereunder except as provided herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 6. CONFIDENTIALITY. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.1. Except as expressly authorized by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party (including without limitation the exercise of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights granted to a party under this Agreement, the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Development Agreement and the Joint Venture License Agreement) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each party agrees not to disclose, use or permit the disclosure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or use by others of any Confidential Information unless and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the extent such Confidential Information (i) is not marked or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated in writing as confidential and is provided for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purpose that reasonably contemplates disclosure to or use by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others, (ii) becomes a matter of public knowledge through no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql action or inaction of the party receiving the Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information, (iii) was in the receiving party's possession before \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receipt from the party providing such Confidential Information, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) is rightfully received by the receiving party from a third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party without any duty of confidentiality, (v) is disclosed to a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql third party by the party providing the Confidential Information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql without a duty of confidentiality on the third party, (vi) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosed by the receiving party despite the exercise of the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql degree of care used by the receiving party to safeguard its own \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql similar Confidential Information, but the receiving party shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql take all necessary steps to prevent any further disclosure, (vii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is disclosed with the prior written approval of the party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing such Confidential Information, or (viii) is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql independently developed by the receiving party without any use of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party's Confidential Information. Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information shall not be deemed to be available to the general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql public for the purpose of exclusion (ii) above with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each party (x) merely because it is embraced by more general \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information in the prior possession of the receiving party or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql others, or (y) merely because it is expressed in public \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql literature in general terms not specifically in accordance with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Confidential Information. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.2. In furtherance, and not in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limitation of the foregoing Section 6.1, each party agrees to do \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following with respect to any such Confidential Information: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) exercise the same degree of care to safeguard the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidentiality of, and prevent the unauthorized use of, such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information as that party exercises to safeguard the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidentiality of its own Confidential Information, (ii) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql restrict disclosure of such information to those of its \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employees, agents and sublicensees who have a "need to know", and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) instruct and require such employees, agents and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensees to maintain the confidentiality of such information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and not to use such information except as expressly permitted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein. Each party further agrees not to remove or destroy any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proprietary or confidential legends or markings placed upon any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documentation or other materials. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.3. The foregoing confidentiality \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations shall also apply to the contents of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.4. The obligations under this Article 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not prevent the parties from disclosing the Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information or terms of this Agreement to any government agency \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or body as required by law (provided that the party required to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql make such disclosure in such circumstances has given the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party prompt notice prior to making such disclosure so that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party may seek a protective order or other appropriate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remedy prior to such disclosure and cooperates fully with such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party in seeking such order or remedy). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 6.5. The obligations under this Article 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall apply with respect to any Confidential Information for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql period of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] from the date of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclosure of such Confidential Information to the receiving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, unless with respect to any particular Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information the providing party in good faith notifies the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql receiving party in writing that a longer period shall apply, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which case the obligations under this Article 6 with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Confidential Information shall apply for such longer period. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 7. USE OF PROPRIETARY INFORMATION AND COMMINGLED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.1. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 7.2. [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 8. WARRANTIES, LIMITATION ON LIABILITY, AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COVENANTS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.1. Each party hereto represents and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warrants to the other party that it has the right, and will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql continue during the term of this Agreement to have the right, to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql grant to or for the benefit of the other party the rights and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses granted hereunder in accordance with the terms of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and such grant of rights and licenses does not, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql will not during the term of this Agreement, conflict with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and obligations of such party under any other license, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement, contract or other undertaking. Each party shall \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indemnify, hold harmless and defend the other party against a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach by such party of this Section 8.1. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.2. Nothing contained in this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be construed as: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) a warranty or representation by any of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties hereto or its Subsidiaries sublicensed hereunder as to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the validity or scope of any Fujitsu IPR or AMD IPR, as the case \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may be; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) conferring upon any party hereto or its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsidiaries sublicensed hereunder any license, right or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql privilege under any patents, utility models, design patents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyrights, mask work rights or trade secrets except the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses, rights and privileges expressly granted hereunder; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) a warranty or representation that any acts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensed or sublicensed hereunder will be free from infringement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of patents, utility models, design patents, copyrights, mask work \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights or trade secrets other than those under which licenses, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and privileges have been expressly granted hereunder; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) an arrangement to bring or prosecute actions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or suits against third parties for infringement or conferring any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql right to bring or prosecute actions or suits against third \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties for infringement; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) conferring any right to use in advertising, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql publicly or otherwise, any trademark, service mark, trade name or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their equivalent, or any contraction, abbreviation or simulation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof, of either party hereto or their Subsidiaries sublicensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 8.3. EXCEPT AS EXPRESSLY PROVIDED HEREIN, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql NEITHER PARTY HERETO MAKES ANY WARRANTIES, WHETHER EXPRESS OR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OTHERWISE, CONCERNING ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURSUANT TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURPOSE, WARRANTIES OF FREEDOM FROM ERRORS OR DEFECTS, OR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WARRANTIES OF NON-INFRINGEMENT OF THIRD PARTY INTELLECTUAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PROPERTY RIGHTS, AND NEITHER PARTY SHALL BE RESPONSIBLE FOR ANY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED, ON \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ANY THEORY OF LIABILITY AND WHETHER OR NOT SUCH PARTY HAS BEEN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVISED OF THE POSSIBILITY OF SUCH DAMAGES ARISING IN ANY WAY OUT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF THIS AGREEMENT OR ANY IPR, TECHNOLOGY, PRODUCTS, PROCESSES, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DESIGNS, DOCUMENTS OR INFORMATION LICENSED OR OTHERWISE PROVIDED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURSUANT TO THIS AGREEMENT. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 9. TERM AND TERMINATION. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 9.1. Term. This Agreement shall become \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective on the Effective Date and shall, unless and until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earlier terminated hereunder, remain in effect until the later to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occur of (i) the tenth anniversary date of the Effective Date and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) the date of a Transitional Event, at which time this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall terminate. At the request of either party, both \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties shall negotiate in good faith to extend the term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, with or without amendment to the provisions hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 9.2. Termination. Termination of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement may result from the events listed below. Each party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agrees to give prompt written notice to the other party of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql happening of any such event. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If either party hereto defaults in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance of any material obligation hereunder, the non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defaulting party may give written notice thereof and the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall discuss the problem arising from such default in good faith \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and seek to resolve such problem. If such default is not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corrected or otherwise addressed by the defaulting party to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonable satisfaction of the non-defaulting party within ninety \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (90) days after the written notice of such default, then the non- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defaulting party may, in addition to any other remedies it may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql have, terminate this Agreement by written notice. This Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall terminate on the thirtieth (30th) day after such notice of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) Each party hereto may terminate this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, by giving written notice of termination to the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party at any time, upon or after: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) the filing by such other party of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql petition in bankruptcy or insolvency; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) any adjudication that such other party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is bankrupt or insolvent; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) the filing by such other party of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legal action or document seeking reorganization, readjustment or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arrangement of such other party's business under any law relating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to bankruptcy or insolvency; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) the appointment of a receiver or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy trustee for all or substantially all of the property \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such other party; \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (v) the making by such other party of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql general assignment for the benefit of creditors; or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (vi) the institution of any proceedings for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the liquidation or winding up of such other party's business or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the termination of its corporate charter, provided, in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql event such proceedings are involuntary, the proceedings are not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dismissed within ninety (90) days. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) If at any time during the term of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, (i) a party incurs in one transaction or a series of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql related transactions a change in ownership of more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] of its capital stock, (ii) a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party consolidates with or merges with or into another \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation, partnership or other entity, whether or not such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party is the surviving entity of such transaction, unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediately after such consolidation or merger shareholders of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such party prior to the transaction continue to own more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] of the outstanding shares of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql stock entitled to vote for the election of directors of such new \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or surviving entity, or (iii) a party sells, assigns or otherwise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfers all or substantially all of the business or assets of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such party relating to its semiconductor merchant market business \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to a third party, the other party may terminate this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon thirty (30) days' advance written notice to such party, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, in each case, that the terminating party must exercise \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such right no later than one (1) year after receiving written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice from the other party of such transaction. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 9.3. Effect of Termination. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Except as otherwise provided in this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3, all rights and obligations of the parties hereunder shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cease upon termination or expiration of this Agreement, with the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exception of the rights and obligations of the parties under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Articles 2, 4, 6, 7, 8, 9 and 10 and Sections 3.3 and 3.5, which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall survive termination or expiration of this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) In the event of termination of this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to Section 9.1, the licenses granted by a party under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 3 or any sublicenses granted by a party under Article 5, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including the modification pursuant to Section 3.3, shall survive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such termination of this Agreement with respect to any IPR \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensed as of the date of such termination of this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql until expiration of such IPR. Should any of the events described \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in clauses (i) through (iii) of Section 9.2(c) ("Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control") occur with respect to a party during the period in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which license rights are surviving pursuant to this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9.3(b), the other party shall have the right to exercise the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights of a Terminating Party as described in Sections 9.3(c) and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d), and the rights of the parties shall thereafter be as set \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql forth in Sections 9.3(c) and (d) rather than this Section 9.3(b). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) If a party (the "Terminating Party") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminates this Agreement pursuant to Section 9.2, the licenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted by the Terminating Party to the other party (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Terminated Party") under Article 3, or any sublicenses granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Terminated Party under Article 5, shall survive such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination with respect to IPR licensed as of the date of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination of this Agreement until expiration of such IPR, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql except that with respect to Patents such post-termination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses and sublicenses shall be limited solely to (i) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Incorporated Products and Licensed Products being made or have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql made and sold by the Terminated Party and its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensed hereunder at the time of such termination and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql modifications thereof that do not add functionality ("Existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products") and (ii) process Patents licensed at the time of such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination ("Existing Process Patents"), whether such Existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Process Patents are used in the manufacture of Existing Products \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other Incorporated Products or Licensed Products, but subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any event to the requirements of Section 9.3(d). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) If a Change of Control occurs with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Terminated Party, whether in connection with termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement or thereafter: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) beginning on the date of such Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control, the licenses granted by the Terminating Party to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Terminated Party under Article 3, or any sublicenses granted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Terminated Party under Article 5, with respect to Patents \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be limited solely to manufacture and sale of Existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products and (notwithstanding Section 9.3 (c)(ii)) use of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Existing Process Patents to make or have made only Existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products, in each case only in the operations of the Terminated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Party as such operations existed at the time of such Change of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Control, and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) such licenses or sublicenses shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate on the date of such Change of Control or five years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after termination of this Agreement (whichever is later), unless \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (and only for so long as) the Terminating Party, its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensed hereunder and their customers have a world-wide, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalty-free and non-exclusive immunity from suit, damages and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims under all patents and patent applications of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Terminated Party and the third party that, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, controls the Terminated Party relating to Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products or Incorporated Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Upon termination of this Agreement by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Terminating Party pursuant to Section 9.2, the licenses granted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the Terminated Party to the Terminating Party under Article 3, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or any sublicenses granted by the Terminating Party under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 5, shall survive such termination of this Agreement with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to any IPR licensed as of such termination until \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expiration of such IPR, as if such termination had occurred as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql described in Sections 9.1 and 9.3(b), except that with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Patents such post-termination licenses and sublicenses shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql subject to the requirements of Section 9.3(f). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (f) If a Change of Control occurs with respect to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Terminating Party, whether in connection with termination of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement or thereafter: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) beginning on the date of such Change \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of Control, the licenses granted by the Terminated Party to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Terminating Party under Article 3, or any sublicenses granted by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Terminating Party under Article 5, with respect to Patents \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be limited solely to manufacture and sale of Existing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products and use of Existing Process Patents to make or have made \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only Existing Products, in each case only in the operations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Terminating Party as such operations existed at the time of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such Change of Control, and \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) such licenses or sublicenses shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql terminate on the date of such Change of Control or five years \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after termination of this Agreement (whichever is later), unless \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (and only for so long as) the Terminated Party, its Subsidiaries \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sublicensed hereunder and their customers have a world-wide, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalty-free and non-exclusive immunity from suit, damages and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql claims under all patents and patent applications of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Terminating Party and the third party that, directly or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql indirectly, controls the Terminating Party relating to Licensed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products or Incorporated Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 10. MISCELLANEOUS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.1. Force Majeure. Neither party shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be liable for failure to perform, in whole or in material part, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its obligations under this Agreement if such failure is caused by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any event or condition not existing as of the date of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement and not reasonably within the control of the affected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, including, without limitation, by fire, flood, typhoon, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql earthquake, explosion, strikes, labor troubles or other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql industrial disturbances, unavoidable accidents, war (declared or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql undeclared), acts of terrorism, sabotage, embargoes, blockage, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql acts of Governmental Authorities, riots, insurrections, or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other cause beyond the control of the parties; provided, that the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affected party promptly notifies the other party of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql occurrence of the event of force majeure and takes all reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql steps necessary to resume performance of its obligations so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interfered with. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.2. Assignment. Neither this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nor any of the rights and obligations created hereunder may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigned, transferred, pledged, or otherwise encumbered or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disposed of, in whole or in part, whether voluntary or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql operation of law, or otherwise, by either party without the prior \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written consent of the other party. This Agreement shall inure \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the benefit of and be binding upon the parties' permitted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successors and assigns. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.3. Notices. All notices and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql communications required, permitted or made hereunder or in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql connection herewith shall be in writing and shall be mailed by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql first class, registered or certified air mail, postage prepaid, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or otherwise delivered by hand or by messenger, or by recognized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql courier service (with written receipt confirming delivery), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql addressed: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If to FUJITSU, to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mail or Hand Delivery: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1015 Kamikodanaka, Nakahara-ku \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Kawasaki-shi 211, JAPAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Masaichi Shinoda \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Business Development Division \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electronic Devices \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mail or Hand Delivery: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marunouchi Center Bldg., 6-1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marunouchi 1-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, JAPAN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Gen Iseki \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager, Legal Division \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If to AMD, to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mail: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mikio Ishimaru, Esq. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Director of Technology Law \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc., MS 68 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P. O. Box 3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hand Delivery: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3625 Peterson Way \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Santa Clara, CA 95054 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Mail: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, Operations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P. O. Box 3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S.A. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Gene Conner \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hand Delivery: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 DeGuigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94086 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql U.S.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each such notice or other communication shall for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes hereunder be treated as effective or as having been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given as follows: (i) if delivered in person, when delivered; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) if sent by airmail, at the earlier of its receipt or at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 pm, local time of the recipient, on the seventh day after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit in a regularly maintained receptacle for the deposition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of airmail; and (iii) if sent by recognized courier service, on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date shown in the written confirmation of delivery issued by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such delivery service. Either party may change the address \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or addressee(s) to whom notice must be given by giving \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appropriate written notice at least seven (7) days prior to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql date the change becomes effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.4 Export Control. Without in any way \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limiting the provisions of this Agreement, each of the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereto agrees that no products, items, commodities or technical \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql data or information obtained from a party hereto nor any direct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product of such technical data or information is intended to or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be exported or reexported, directly or indirectly, to any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql destination restricted or prohibited by Applicable Law without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary authorization by the Governmental Authorities, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including (without limitation) the Japanese Ministry of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql International Trade and Industry, the United States Bureau of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Export Administration (the "BEA") or other Governmental \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Authorities of the United States with jurisdiction with respect \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to export matters. Without limiting the generality of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql foregoing, each party hereto agrees that it will not, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql authorization from the Office of Export Licensing of the BEA, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql knowingly export or reexport to a destination outside of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States General License GTDR technical data or information \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of United States origin subject to this Agreement, or the direct \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql product thereof, or the product of a plant or major component of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a plant that is the direct product thereof, without first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql providing any applicable export assurances to the exporting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.5. Arbitration. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any and all disputes arising under or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting this Agreement shall be resolved exclusively by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential arbitration pursuant to the rules of the Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commercial Arbitration Association in Tokyo, Japan, or such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql location as may be agreed between the parties; provided, however, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the arbitrators shall be empowered to hold hearings at other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql locations within and without Japan. Each of the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designate one arbitrator and the two arbitrators so designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall select the third arbitrator. Arbitration proceedings shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be conducted in English with simultaneous translation into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese. The judgment upon award of the arbitrators shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql final and binding and may be enforced in any court of competent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction in the United States or Japan, and each of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties hereto unconditionally submits to the jurisdiction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such court for the purpose of any proceeding seeking such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement. Subject only to the provision of Applicable Law, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the procedure described in this Section 10.5 shall be the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exclusive means of resolving disputes arising under or affecting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) All papers, documents, or evidence, whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written or oral, filed with or presented to the panel of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrators shall be deemed by the parties and by the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be Confidential Information. No party or arbitrator shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose in whole or in part to any other person any Confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Information submitted in connection with the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, except to the extent reasonably necessary to assist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel in the arbitration or preparation for arbitration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute. Confidential Information may be disclosed (i) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys, (ii) to parties, and (iii) to outside experts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by either party's counsel to furnish technical or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expert services or to give testimony at the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, subject, in the case of such experts, to execution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a legally binding written statement that such expert is fully \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql familiar with the terms of this section, agrees to comply with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the confidentiality terms of this section, and will not use any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential Information disclosed to such expert for personal or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business advantage. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.6. Entire Agreement. This Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and the attachments hereto embody the entire agreement and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql understanding between the parties with respect to the subject \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql matter hereof, superseding all previous communications, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreements and understandings, whether written or oral. Neither \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party has relied upon any representation or warranty of the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party except as expressly set forth herein. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.7. Modification. This Agreement may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be modified or amended, in whole or part, except by a writing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by duly authorized representatives of both parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.8. Announcement. The parties may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql announce the existence of the parties' relationship and this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement at a time and in a form to be mutually determined. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Neither party shall unreasonably withhold its consent to a time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proposed by the other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.9. Severability. If any term or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision of this Agreement shall be determined to be invalid or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql unenforceable under Applicable Law, such provision shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed severed from this Agreement, and a reasonable valid \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provision to be mutually agreed upon shall be substituted. In \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event that no reasonable valid provision can be so \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql substituted, the remaining provisions of this Agreement shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql remain in full force and effect, and shall be construed and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql interpreted in a manner that corresponds as far as possible with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the intentions of the parties as expressed in this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.10. No Waiver. Except to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that a party hereto may have otherwise agreed in writing, no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql waiver by that party of any condition of this Agreement or breach \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the other party of any of its obligations or representations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereunder shall be deemed to be a waiver of any other condition \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or subsequent or prior breach of the same or any other obligation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or representation by the other party, nor shall any forbearance \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by the first party to seek a remedy for any noncompliance or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach by the other party be deemed to be a waiver by the first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party of its rights and remedies with respect to such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql noncompliance or breach. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.11. Nature of Rights. Each party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the right to the other party's IPR licensed under this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement when created, developed or invented, regardless of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whether physically delivered to such party. All rights and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licenses granted under or pursuant to this Agreement by a party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("licensor party") to the other party ("licensee party") are, for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes of Section 365(n) of the U.S. Bankruptcy Code (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Bankruptcy Code"), licenses of "intellectual property" within \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the scope of Section 101 of the Bankruptcy Code. The parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree that the licensee party, as a licensee of such rights under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement, shall retain and may fully exercise all of its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights and elections under the Bankruptcy Code. The parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql further agree that, in the event of the commencement of a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql bankruptcy or insolvency proceeding by or against the licensor \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party, the licensee party shall be entitled to a complete \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql duplicate of (and complete access to) any such intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property and all embodiments thereof. If not already in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql licensee party's possession, the licensee party has the right to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql immediate delivery of such intellectual property and embodiments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon written request of the licensee party (i) upon any such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commencement of bankruptcy proceedings, unless the licensor party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or its representative or trustee elects to continue to perform \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all of its obligations under this Agreement, or (ii) if not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delivered under clause (i) above, upon the rejection of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement by or on behalf of the licensor party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.12. Tangible Property. The parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree that the tangible portion of the property delivered and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be delivered by AMD to Fujitsu is valued at [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] and by Fujitsu to AMD is valued at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.13. Governing Law. The validity, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql construction, performance and enforceability of this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be governed in all respects by the laws of the State of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql California, U.S.A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.14. Language. This Agreement and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attachments hereto are in the English language, which language \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be controlling in all respects. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.15. No Agency or Partnership. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement shall not constitute an appointment of either party as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the legal representative or agent of the other party, nor shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql either party have any right or authority to assume, create or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql incur in any manner any obligation or other liability of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql kind, express or implied, against, in the name or on behalf of, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the other party. Nothing herein or in the transactions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contemplated by this Agreement shall be construed as, or deemed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be, the formation of a partnership, association, joint venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or similar entity by or among the parties hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.16. Headings. The section and other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql headings contained in this Agreement are for convenience of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reference only and shall not be deemed to be a part of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or to affect the meaning or interpretation of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 10.17. Counterparts. This Agreement may \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be executed in counterparts, each of which shall be deemed an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql original, and all of which shall be deemed to constitute one and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the same instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties hereto have caused this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to be executed by their duly authorized representatives \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the date set forth above. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql /s/ Gene Conner /s/ Hikotara Masunaga \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ----------------------------- ----------------------------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: Gene Conner By: Hikotaro Masunaga \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Title: Senior Vice President, Title: Managing Director \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Operations \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 23 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTACHMENT A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY CROSS-LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU AFFILIATES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Amdahl Corporation \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. HaL Computer Corporation \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. Such other companies (in which Fujitsu has not less \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than a five percent (5%) stock ownership) as may be requested by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu and approved (which approval shall not be unreasonably \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql withheld) by AMD for addition to this Attachment A. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD AFFILIATES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. Such companies (in which AMD has not less than a five \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql percent (5%) stock ownership) as may be requested by AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved (which approval shall not be unreasonably withheld) by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu for addition to this Attachment A. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 24 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTACHMENT B \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY CROSS-LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each party is licensed under Section 3.1 or 3.2: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. With regard to NVMs: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Fujitsu: to sell, lease, or otherwise dispose of NVMs in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql countries [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] Ireland, the United Kingdom, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) AMD: to sell, lease, or otherwise dispose of NVMs in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] countries in Europe (except \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Ireland and the United Kingdom) [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) Each party: to assemble, package and test, [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] and to use, NVMs anywhere in the world. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. With regard to Pilot Products: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each party: to make [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] Pilot \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products, [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] and to use such Pilot \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Products, anywhere in the world. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. With regard to Memory Cards: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) Each party: to make [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql use Memory Cards anywhere in the world. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) Each party: to sell, lease or otherwise dispose of Memory \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cards as provided for NVMs in 1. above or 4. below. [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. With regard to the European Community ("EC") (and, if the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql European Economic Area ("EEA") Agreement comes into effect, the EEA): \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each party: commencing five years after the first commercial sale \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each new NVM or Memory Card in the EC (and, if the EEA Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comes into effect, the EEA), and notwithstanding anything else in this \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 25 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 27 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attachment B, to sell, lease or otherwise dispose of such NVM or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory Card anywhere in the EC (and, if the EEA Agreement comes into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effect, the EEA). Notwithstanding the foregoing or anything else in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Attachment B, (i) for the first five years from such first \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commercial sale, each party may solicit orders, advertise, set up or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql appoint distributors or sales representatives, establish warehouses, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and otherwise engage in active sales and marketing for such NVM or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Memory Card only in the countries of the EC (and, if the EEA Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comes into effect, the EEA) specified for such party in 1.(i) or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.(ii), as applicable, above, and (ii) at any time, the unsolicited \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sale, lease or other disposition of NVMs or Memory Cards shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted between Member States of the EC (and, if the EEA Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comes into effect, the EEA). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 28 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TECHNOLOGY CROSS-LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Table of Contents \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2. MUTUAL RELEASE . . . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3. GRANTS OF LICENSE. . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4. IMMUNITY FOR CUSTOMERS AND USERS . . . . . . . . . . . . 9 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5. SUBLICENSE . . . . . . . . . . . . . . . . . . . . . . . 10 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . 11 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7. USE OF PROPRIETARY INFORMATION AND COMMINGLED TECHNOLOGY 12 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8. WARRANTIES, LIMITATION ON LIABILITY, AND COVENANTS . . . 12 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9. TERM AND TERMINATION . . . . . . . . . . . . . . . . . . 13 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . 16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTACHMENT A. . . . . . . . . . . . . . . . . . . . . . . . . 22 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ATTACHMENT B. . . . . . . . . . . . . . . . . . . . . . . . . 25 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_11}{\*\bkmkend doc_1_11} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.27(c) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investing in \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 26, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential portions of this document have been deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed separately with the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a request for confidential treatment. \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This AMD INVESTMENT AGREEMENT (the "Agreement") is made this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26th day of March, 1993 between FUJITSU LIMITED, a Japanese stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company or kabushiki kaisha ("FUJITSU") and ADVANCED MICRO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES, INC., a Delaware corporation ("AMD"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD and FUJITSU have entered into a Memorandum of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Understanding dated July 13, 1992 regarding (a) the formation, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql funding and implementation of a joint venture between AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU to manufacture integrated circuits (the "Joint Venture") \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (b) the purchase by each party of common stock of the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party and/or its subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Purchases of Fujitsu Securities. Upon the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions set forth in this Agreement, AMD shall purchase bonds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or shares of the common stock of FUJITSU having a total price \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] (the "Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Securities"). All Fujitsu Securities shall be purchased in the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql open market in Japan, unless otherwise agreed between the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql parties. The selection between the purchase of bonds, or the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of equity securities such as common stock or bonds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql convertible into common stock, shall be initially at FUJITSU'S \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql discretion, provided that AMD shall have the sole discretion to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql vary such selection to the extent necessary for the Joint Venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be or not to be, at AMD's discretion, a "controlled foreign \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation" of AMD (within the meaning of Chapter 1, Subchapter \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql N, Part III, Subpart F of the Internal Revenue Code of 1986, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended), with a reasonable margin to ensure that AMD's objective \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is achieved. To the extent consistent with this objective, at \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU's election the parties will negotiate the terms under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which AMD shall purchase publicly traded bonds issued by FUJITSU \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and convertible into common stock of FUJITSU, instead of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchasing common stock. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Timing of Purchase. FUJITSU shall provide written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice to AMD regarding the extent to which FUJITSU elects to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exercise its option to request AMD purchase convertible bonds \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rather than Fujitsu common stock within ten (10) days after the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date of the Joint Venture Agreement between FUJITSU and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD. AMD shall purchase Fujitsu Securities within thirty (30) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql days after receipt of such notice. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 Timing of Permitted Resales or Transfers. Unless AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enters into a firm commitment to replace the FUJITSU Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchased under Section 1.1 with FUJITSU Securities of equal \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql value within 30 days after disposition, the FUJITSU Securities \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchased under Section 1.1 may not be resold, hypothecated or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred except in the following manner. Up to [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] of the Fujitsu Securities purchased in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance with the Agreement may be resold or transferred at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of the consummation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such purchase. All remaining Fujitsu Securities may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql resold or transferred at any time after [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] of the consummation of such purchase. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 Information on Issuances. FUJITSU shall, to the extent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql legally permissible (i) provide AMD with a statement, on December \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 of each year during the term of the Joint Venture Agreement, of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the number and type of voting shares and convertible debt of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU outstanding as of a date within the preceding 45 days, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and (ii) provide AMD with at least seven days advance notice \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prior to the issuance of additional shares (other than shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql issued pursuant to conversion of debt) which would cause the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of FUJITSU voting shares outstanding at December 31 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such year to be in excess of 110% of the number of shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specified in FUJITSU's December 1 statement to AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 Communications. All notices and communications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required, made or permitted hereunder or in connection herewith \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be in writing and shall be delivered by hand, or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql messenger, or by recognized courier service (with written receipt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confirming delivery), or by postage prepaid registered or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certified airmail (return receipt requested), and addressed: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If to FUJITSU, to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Furukawa Sogo Building \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 2-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Mr. Hirohiko Kondo \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electronic Devices Marketing Division \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marunouchi Center Bldg. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 1-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Mr. Gen Iseki \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Legal Division \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If to AMD, to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Mail) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P.O. Box 3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Hand Delivery) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 De Guigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With a copy to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (same addresses) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Thomas W. Armstrong, Esq. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President, General Counsel and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each such notice or other communication shall for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes hereunder be treated as effective or as having been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given as follows: (i) if delivered in person, when delivered \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) if sent by airmail, at the earlier of its receipt or at 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql p.m. local time of the recipient, on the seventh (7th) day after \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deposit in a regularly maintained receptacle for the deposit of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql airmail, and (iii) if sent by a recognized courier service, on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the date shown in the written confirmation of delivery issued by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such courier service. Either party may change the address(es) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or addressee(s) to whom notice must be given by giving notice \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this section at least seven days prior to the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the change becomes effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.6 Costs and Expenses. FUJITSU and AMD each shall bear \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their own costs and expenses of the transactions contemplated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.7 Successors and Assigns. This Agreement shall inure to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of, and be binding on, the parties hereto and their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective successors and assigns. This Agreement may not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigned by either party without the prior written consent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.8 Entire Agreement; Modification. This Agreement and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exhibits hereto and other documents delivered pursuant hereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute the full and entire understanding and agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the parties with regard to the subject matter hereof, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither party shall be liable or bound to the other party in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner by any warranties, representations or covenants except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically set forth herein. Except as expressly provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, neither this Agreement nor any term hereof may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, waived, discharged or terminated other than by a written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument signed by a corporate officer of the party against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whom enforcement of any such amendment, waiver, discharge or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination is sought. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 Counterparts. This Agreement may be executed in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of counterparts, each of which may be executed by fewer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than all of the parties, each of which shall be enforceable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the parties actually executing such counterparts, and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which together shall constitute one instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 Severability. In the event that any provision of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement becomes or is declared by a court of competent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql jurisdiction to be illegal, unenforceable or void, this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall continue in full force and effect without said provision; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, that no such severability shall be effective if it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially changes the economic impact of this Agreement on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.11 Cooperation; Best Efforts. The parties agree to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperate and to use their best efforts to consummate the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of Fujitsu Shares authorized by this Agreement. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperation shall include, but not be limited to, the diligent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and prompt filing and pursuit of all governmental consents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reviews or clearances required by law to be obtained by either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party with respect to any or all purchases under this Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.12 Governing Law, Language. This Agreement shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governed in all respects by the laws of Japan. This Agreement is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the English language only, which shall be controlling in all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respects. No translations, if any, of this Agreement into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese or any other language shall be of any force or effect in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the interpretation of this Agreement as to either party hereto or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in any determination of the interest of either of such parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.13 Dispute Resolution. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any and all disputes arising under or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting this Agreement or any other agreement to be executed in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance herewith shall be resolved, except as expressly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided otherwise in such other agreement, exclusively by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential arbitration pursuant to the rules of the Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commercial Arbitration Association in Tokyo, Japan, or such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql location as may be agreed between the parties; provided, however, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the arbitrators shall be empowered to hold hearings at other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql locations within and without Japan. Each of the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designate one arbitrator and the two arbitrators so designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall select the third arbitrator. Arbitration proceedings shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be conducted in English with simultaneous translation into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese. Among the remedies available to them, the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be authorized to require specific performance of provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement. The judgment upon award of the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be final and binding and may be enforced in any court of \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competent jurisdiction in the United States or Japan, and each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties hereto unconditionally submits to the jurisdiction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such court for the purpose of any proceeding seeking such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement. Subject only to the provisions of Applicable Law \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, except as aforesaid, the procedure described in this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.13 shall be the exclusive means of resolving disputes arising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under or affecting this Agreement and all other agreements to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed in accordance herewith. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) All papers, documents or evidence, whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written or oral, filed with or presented to the panel of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrators shall be deemed by the parties and by the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be confidential information. No party or arbitrator shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose in whole or in part to any other person any confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information submitted in connection with the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, except to the extent reasonably necessary to assist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel in the arbitration or preparation for arbitration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute. Confidential information may be disclosed (i) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys, (ii) to parties, and (iii) to outside experts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by either party's counsel to furnish technical or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expert services or to give testimony at the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, subject, in the case of such experts, to execution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a legally binding written statement that such expert agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the confidentiality terms of this Section, and that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such expert will not use any confidential information disclosed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such expert for personal or business advantage. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.14 Termination. If either party transfers its shares in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Joint Venture pursuant to the Joint venture Agreement, or is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Triggering Party under the Joint Venture Agreement, the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall have the right to terminate this Agreement. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement may be terminated by either party pursuant to the \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights given it under subsection 7.5.A of the Joint Venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties hereto have caused this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to be duly executed by their duly authorized officers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of the day and year first above written. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ HIKOTARO MASUNAGA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ________________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hikotaro Masunaga \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By: /s/ MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql _________________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql TABLE OF CONTENTS \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Purchases of Fujitsu Securities . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Timing of Purchase. . . . . . . . . . . . . . . . . . . . 2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 Timing of Permitted Resales or Transfers. . . . . . . . . 2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 Information on Issuances. . . . . . . . . . . . . . . . . 2 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 Communications. . . . . . . . . . . . . . . . . . . . . . 3 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.6 Costs and Expenses. . . . . . . . . . . . . . . . . . . . 4 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.7 Successors and Assigns. . . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.8 Entire Agreement; Modification. . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.9 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.10 Severability. . . . . . . . . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.11 Cooperation; Best Efforts . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.12 Governing Law, Language . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.13 Dispute Resolution. . . . . . . . . . . . . . . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.14 Termination . . . . . . . . . . . . . . . . . . . . . . . 7 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_12}{\*\bkmkend doc_1_12} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.27(d) \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investing in \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 26, 1993 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential portions of this document have been deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed separately with the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a request for confidential treatment. \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This INVESTMENT AGREEMENT (the "Agreement") is made this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 26th day of March, 1993 between FUJITSU LIMITED, a Japanese stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company or kabushiki kaisha ("FUJITSU") and ADVANCED MICRO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DEVICES, INC., a Delaware corporation ("AMD"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WHEREAS, AMD and FUJITSU have entered into a Memorandum of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Understanding dated July 13, 1992 (the "MOU") regarding (a) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql formation, funding and implementation of a joint venture between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD and FUJITSU to manufacture integrated circuits and (b) the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase by each party of common stock of the other party and/or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql its subsidiaries. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE I \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURCHASES AND SALES OF AMD SHARES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Purchase of AMD Shares. Upon the terms and subject to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the conditions set forth in this Agreement, FUJITSU agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase from AMD, and AMD agrees to sell to FUJITSU, up to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] shares (the "AMD Shares") of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the $.01 par value common stock of AMD (the "AMD Common Stock"); \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided that FUJITSU will not be required to purchase more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql five percent (5%) of the issued and outstanding shares of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql common stock. The AMD Shares shall be purchased and sold in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql installments as set forth in Section 1.2 below, and the exact \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of AMD Shares to be sold and purchased and the price or \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql prices at which such AMD Shares shall be sold and purchased shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be determined pursuant to Section 1.4 below. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Timing of Purchases. The AMD Shares shall be sold and purchased in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql nine (9) installments, as follows: (i) an initial sale and purchase of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] shares (the "Initial Purchase") which shall be consummated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql within thirty (30) business days following the Effective Date of the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture Agreement, dated March 30, 1993, between the parties ("the Joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Venture Effective Date"), as anticipated in the MOU, and (ii) eight (8) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql additional sales and purchases of up to [CONFIDENTIAL INFORMATION OMITTED AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] shares each \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (collectively, the "Subsequent Purchases"), to be consummated by two (2) annual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchases of such amount, the first such purchase to be consummated prior to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the last business day of the sixth (6th) month following the Joint Venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Effective Date (the "First Subsequent Purchase") and the second annual purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be consummated prior to the last business day of the twelfth (12th) month \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the Joint Venture Effective Date (the "Second Subsequent Purchase"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with the Third through Eighth Subsequent Purchases being made in the same \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner as the First and Second Subsequent Purchases, i.e., prior to the last \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql business day of the eighteenth (18th), twenty-fourth (24th), thirtieth (30th), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thirty-sixth (36th), forty-second (42nd) and forty-eighth (48th) months, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respectively, following the Joint Venture Effective Date. Unless the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agree otherwise in writing, each of the purchases of AMD Shares authorized by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement shall be closed at the AMD main corporate offices, currently 915 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql DeGuigne Drive, Sunnyvale, California, at 9:00 a.m. local time on the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designated herein for each purchase. If at the time or times scheduled for a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchase of AMD Shares FUJITSU's financial \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql condition is so constrained that it would, in the good faith judgement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of FUJITSU, be imprudent for such purchase to be closed on the scheduled date, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU shall notify AMD not less than thirty (30) days prior to the date \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql scheduled for such purchase. If such notice is given, the parties will \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql negotiate in good faith to reschedule the closing in question, but the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql determination of the purchase price for such closing shall not be affected by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any such rescheduling. Participation in such negotiations shall not affect the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligations of FUJITSU to effect the aggregate purchases of AMD Shares pursuant \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to this section. FUJITSU will not be in default under this Agreement, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture Agreement, or other agreements between the parties, as a result \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of failing to meet the closing schedule in question, so long as the aggregate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql delay in meeting the original schedule for such purchases (as set forth in this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 1.2) does not exceed twelve (12) months. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 Manner of Sale. The offer and sale of the AMD Shares to FUJITSU \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall not be registered under Section 4(2) of the Securities Act of 1933, as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended (the "1933 Act"). The AMD Shares shall not involve a public offering, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql but shall be issued pursuant to an exemption under Section 4(2) of the 1933 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act. The AMD Shares when issued in accordance with this Agreement shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql deemed to be "restricted shares" within the meaning of Rule 144 under the 1933 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Act, the resale of which shall comply with applicable provisions of Article II \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the Agreement. The parties agree to cooperate with respect to the closing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each installment purchase and to deliver and execute all such records, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql documents and instruments necessary or desirable to facilitate each such sale \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and purchase as either party shall reasonably request. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 Purchase Price(s) of AMD Shares; Limitation on Total \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchase Price and Total Number of AMD Shares. The purchase \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql price of each installment of the AMD Shares shall be payable in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql United States dollars by wire transfer or otherwise as AMD shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reasonably request, and: (i) for the Initial Purchase, shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql equal to the number of AMD Shares acquired in the installment \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql times the average of the closing sales prices of AMD common stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the New York Stock Exchange for the sixty (60) trading days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ending on the Joint Venture Effective Date, and (ii) for the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql First through Eighth Subsequent Purchases, the average of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql closing sales prices on the New York Exchange for the sixty (60) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql trading days ending on the twentieth day of the month preceding \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the month in which the purchase is scheduled, or if the Exchange \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql is not open for trading on such date, on the trading day \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql preceding such date. AMD shall provide FUJITSU with a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculation of each such purchase price within three days \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following the end of the relevant sixty-day period. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql calculation shall be provided by facsimile, the numbers of which \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be designated by Fujitsu in advance, as well as pursuant to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section 5.3 below. Notwithstanding the foregoing sentence, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU shall not be required, except in its own discretion, to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pay for the AMD Shares acquired in the Initial Purchase and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsequent Purchases a total amount in excess of [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] or an amount in excess of [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] in any twelve-month period. In the event \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the total purchase price of the AMD Shares exceeds [CONFIDENTIAL \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXCHANGE COMMISSION] and FUJITSU elects not to pay more than \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION] for the AMD Shares, the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of AMD Shares which AMD shall be required to deliver to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU shall be reduced proportionately. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 Suspension of Obligation to Purchase. FUJITSU and AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql are contemporaneously executing a separate agreement providing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the purchase of Common Stock or bonds of FUJITSU by AMD. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Further, FUJITSU and AMD are parties to a Joint Venture Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to which each party agrees to advance funds to the joint \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql venture if the joint venture is unable to secure necessary \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql financing. If AMD does not make any such advance when required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to do so, FUJITSU's obligations to purchase shares of AMD stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to this Agreement shall be suspended until AMD makes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such advances, and the purchase dates and corresponding time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql periods used to calculate the purchase prices as specified in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql sections 1.2 and 1.4 shall be extended by the number of months \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that Fujitsu's purchase obligation was suspended. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE II \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESTRICTIONS ON RESALE AND VOTING OF AMD SHARES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 No Rights of Registration, Repurchase, First Refusal or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Redemption. FUJITSU shall have no right at any time to require \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD to register or qualify the sale of any of the AMD Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under the 1933 Act or the securities laws of any state, country \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or other jurisdiction, or to include the AMD Shares under any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other registration by AMD of its securities. AMD shall have no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obligation to repurchase the AMD Shares or, except as provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, in any manner to cooperate or assist in the resale of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Shares by FUJITSU to any other party. The AMD Shares shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be subject to redemption by AMD, and AMD shall have no right \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or obligation, commonly known as a "right of first refusal" or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "right of first offer," to acquire any of the AMD Shares either \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql upon the terms and conditions first agreed upon by and between \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU and any other party or prior to any such agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql relating to such terms and conditions. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.2 Restricted Nature of AMD Shares; Legend; Manner and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Timing of Permitted Resales or Transfers. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) The AMD Shares shall be deemed to be "restricted \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shares" within the meaning of Rule 144 under the 1933 Act, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql may not be resold, hypothecated, pledged, otherwise encumbered or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transferred by FUJITSU except as provided herein. In order to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assure compliance with this Agreement and with the 1933 Act and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql regulations thereunder, AMD before delivering to FUJITSU \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates representing the AMD Shares shall cause such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificates to be legended with the following legend to indicate \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the restrictions placed upon their resale or transfer: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SHARES REPRESENTED BY THIS CERTIFICATE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARE SUBJECT TO CERTAIN RESTRICTIONS AS SET \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FORTH IN AN AGREEMENT DATED MARCH 26, 1993, A \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COPY OF WHICH IS ON FILE WITH THE SECRETARY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF ADVANCED MICRO DEVICES, INC., AND MAY NOT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BE RESOLD PRIOR TO [DATE]*. THE SHARES \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTED BY THIS CERTIFICATE ARE DEEMED TO \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BE RESTRICTED SHARES FOR PURPOSES OF RULE 144 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNDER THE SECURITIES ACT OF 1933, AS AMENDED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (THE "ACT"). NO TRANSFER OF THESE SHARES MAY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql BE MADE EXCEPT PURSUANT TO AN EFFECTIVE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REGISTRATION STATEMENT UNDER THE ACT, UNLESS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES HAS RECEIVED AN \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OPINION OF COUNSEL SATISFACTORY TO IT THAT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SUCH TRANSFER DOES NOT REQUIRE REGISTRATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql UNDER THE ACT. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) The AMD Shares shall not be resold or transferred \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql by FUJITSU except pursuant to a valid and effective registration \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql - ---------- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql * [DATE] refers to the dates specified in 202(c), below \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 7 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereof under the 1933 Act or an exemption from registration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which is available thereunder. AMD and/or its transfer agent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall have the right to require, prior to resale or transfer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under any such exemption, that FUJITSU provide to AMD and for its \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and/or its transfer agent's benefit an opinion of counsel, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql form and substance reasonably satisfactory to AMD, stating and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql opining that registration is not required. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) Except as provided in subsections (d) and (e) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql below, the AMD Shares may not be resold or transferred except in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following manner. Up to [CONFIDENTIAL INFORMATION OMITTED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION] \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the AMD Shares purchased in the Initial Purchase or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsequent Purchase may be resold or transferred at any time \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql THE SECURITIES AND EXCHANGE COMMISSION] of the consummation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such purchase. Up to an additional [CONFIDENTIAL INFORMATION \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql COMMISSION] of such shares may be resold or transferred at any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql time after [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql WITH THE SECURITIES AND EXCHANGE COMMISSION] of the consummation \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of such purchase \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) FUJITSU may tender or sell any of the AMD Shares \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql then owned by it, without restriction under this Agreement, in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the event of, and in accordance with the terms and conditions of, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) a tender or exchange offer for shares of common stock of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql commenced by AMD, or (ii) a tender, exchange or other offer for \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such shares of common stock commenced by a third party and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql approved by the Board of Directors of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) Except for the resales or other transfers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql permitted by subsections (c) or (d) above, FUJITSU may not \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 8 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql transfer any of the AMD Shares to any other person or entity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql including an affiliate of FUJITSU, by gift or otherwise, without \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the prior written consent of AMD. This restriction shall expire \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on the earlier of [CONFIDENTIAL INFORMATION OMITTED AND FILED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION], or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql SECURITIES AND EXCHANGE COMMISSION]. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE III \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND WARRANTIES OF THE PARTIES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Representations and Warranties of AMD. Except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided in Section 4.2(b) hereof, AMD does not make and shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not be required to make to FUJITSU any representations or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties of any kind in connection with its sale of the AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares, including but not limited to representations or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties regarding the AMD Shares or the financial condition or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql results of operations of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Representations and Warranties of FUJITSU. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Except as provided in this Section 3.2 and in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 4.1(a) hereof, FUJITSU does not make and shall not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required to make to AMD any representations or warranties of any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql kind in connection with its purchases of the AMD Shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) FUJITSU represents and warrants to AMD as follows: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (i) FUJITSU is and shall be as of the closing \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of each of the Initial Purchase and the Subsequent Purchases an \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "accredited investor" within the meaning of Rule 501(a)(3) under \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the 1933 Act. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 9 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) FUJITSU is acquiring and will acquire the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD Shares for its own account for the purpose of investment and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql not with a view to or for resale in connection with any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql distribution thereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) FUJITSU has such knowledge and experience \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in financial and business matters as to be capable of evaluating \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on its own the merits and risks of investment in the AMD Shares. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iv) FUJITSU has had opportunity to ask \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql questions of and receive answers from AMD concerning the terms \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and conditions of the offer and sale of the AMD Shares, and to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql obtain all additional information from AMD which FUJITSU deems \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql necessary to verify the accuracy of the information contained in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the following, copies of which (including all exhibits filed with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql or incorporated by reference therein except, at AMD's option, any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql exhibit with respect to which confidential treatment has been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql granted) FUJITSU acknowledges to have received from AMD: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (1) AMD's annual report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed with the Securities and Exchange Commission (the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Commission") for its most recent fiscal year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (2) AMD's filings with the Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql on Forms 10-Q and 8-K since the filing of its report on Form 10-K \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql for the most recent fiscal year. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 10 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE IV \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITIONS TO CLOSINGS OF PURCHASES OF AMD SHARES \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Conditions to AMD's Obligations. The obligations of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql AMD to close the Initial Purchase and the Subsequent Purchases \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be subject to the fulfillment of the following conditions, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any or all of which may be waived in writing by AMD: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) AMD shall have received from FUJITSU an officers' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate dated the date of closing in substantially the form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in Exhibit A hereto, signed by an authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of FUJITSU who is at least department manager \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql management level ("bucho") or above. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) All required consents, clearances and permits of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any governmental entity applicable to the purchase shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been obtained and be in effect and not withdrawn, and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable waiting periods shall have expired, including but not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to any consents or waiting periods required by the Hart- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Scott-Rodino Antitrust Improvements Act and Section 5021 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Omnibus Trade and Competitiveness Act of 1988 (50 U.S.C. App. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2170) and regulations issued by the Department of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Treasury thereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) The Joint Venture Agreement shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the parties and be in full force and effect, and no \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice shall have been given by AMD to FUJITSU of any material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach of this Agreement or the Joint Venture Agreement by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU which shall not have been corrected to the reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The agreement relating to the purchase of equity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of FUJITSU by AMD shall have been executed by the parties \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 11 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, and no notice shall have been given by AMD to FUJITSU of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any material breach thereof, that shall not have been corrected \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to the reasonable satisfaction of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Conditions to FUJITSU's Obligations. The obligations \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of FUJITSU to close the Initial Purchase and the Subsequent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Purchases shall be subject to the fulfillment of the following \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions, any or all of which may be waived in writing by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) AMD shall continue to be listed on the New York \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Stock Exchange, NASDAQ, or the American Stock Exchange, or any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql successor of such exchange recognized by the U.S. Securities and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Exchange Commission. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) FUJITSU shall have received from AMD an officers' \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql certificate dated the date of closing in substantially the form \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql set forth in Exhibit B hereto, signed by an authorized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representative of AMD. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (c) All required consents, clearances and permits of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any governmental entity applicable to the purchase shall have \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql been obtained and be in effect and not withdrawn and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql applicable waiting periods shall have expired, including but not \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql limited to any consents or waiting periods required by the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hart-Scott-Rodino Antitrust Improvements Act and Section 5021 of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Omnibus Trade and Competitiveness Act of 1988 (50 U.S.C. App. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 2170) and regulations issued by the Department of the Treasury \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereunder. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (d) The Joint Venture Agreement shall have been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed by the parties and be in full force and effect, and no \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 12 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice shall have been given by FUJITSU to AMD of any material \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql breach of this Agreement or the Joint Venture Agreement by AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql which shall not have been corrected to the reasonable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql satisfaction of FUJITSU. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (e) The agreement relating to the purchase of equity \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of FUJITSU by AMD shall have been executed by the parties \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereto, and no notice shall have been given by FUJITSU to AMD of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql any material breach thereof that shall not have been corrected to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the reasonable satisfaction of FUJITSU. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ARTICLE V \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS PROVISIONS \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Costs and Expenses. AMD and FUJITSU each shall bear \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql their own costs and expenses incurred with respect to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, including but not limited to the costs and expenses of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql each installment purchase of AMD Shares contemplated hereby. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Successors and Assigns. This Agreement shall inure to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the benefit of, and be binding upon, the parties hereto and their \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respective successors and assigns. This Agreement may not be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql assigned by either party without the prior written consent of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.3 Communications. All notices and communications \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql required, made or permitted hereunder shall be in writing and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be delivered by hand, or by messenger, or by recognized \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql courier service (with written receipt confirming delivery), or by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql postage prepaid registered or certified airmail (return receipt \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested), addressed: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 13 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) If to FUJITSU, to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Furukawa Sogo Bldg. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 2-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Hirohiko Kondo \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Electronic Devices Marketing Division \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql with a copy to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marunouchi Center Bldg. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 6-1, Marunouchi 1-chome \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chiyoda-ku, Tokyo 100, Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Gen Iseki \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql General Manager, Legal Division \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) If to AMD, to: \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Mail) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql P.O. Box 3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA 94088-3453 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Senior Vice President, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (Hand Delivery) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 915 DeGuigne Drive \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, CA \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql With a copy to: \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (same addresses as above) \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Attn: Thomas W. Armstrong, Esq. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Vice President, General Counsel and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Secretary \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 14 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Each such notice or other communication shall for all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purposes hereunder be treated as effective or as having been \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql given as follows: (i) if delivered in person, when delivered; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (ii) if sent by airmail, at the earlier of its receipt or at 5 pm \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql local time of the recipient, on the seventh day after deposit in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a regularly maintained receptacle for the deposit of airmail; and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (iii) if sent by recognized courier service, on the date shown in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the written confirmation of delivery issued by such delivery \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql service. Either party may change the addresses and/or addressees \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to whom notice must be given by giving notice pursuant to this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql section at least seven days prior to the date the change becomes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql effective. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.4 Entire Agreement; Modification. This Agreement and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql all exhibits hereto and other documents delivered pursuant hereto \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql constitute the full and entire understanding and agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql between the parties with regard to the subject matter hereof, and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql neither party shall be liable or bound to the other party in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manner by any warranties, representations or covenants except as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql specifically set forth herein. Except as expressly provided \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql herein, neither this Agreement nor any term hereof may be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql amended, waived, discharged or terminated other than by a written \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql instrument signed by a corporate officer of the party against \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql whom enforcement of any such amendment, waiver, discharge or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql termination is sought. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.5 Captions. Headings of the various sections of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement have been inserted for convenience of reference only \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and shall not be relied upon to limit the construction of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 15 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.6 Counterparts. This Agreement may be executed in any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql number of counterparts, each of which may be executed by fewer \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql than all of the parties, each of which shall be enforceable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql against the parties actually executing such counterparts, and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of which together shall constitute one instrument. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.7 Severability. In the event that any provision of this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement becomes or is declared by a court of competent juris- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql diction to be illegal, unenforceable or void, this Agreement \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall continue in full force and effect without said provision; \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided, that no such severability shall be effective if it \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql materially changes the economic impact of this Agreement on any \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.8 Governing Law, Language. This Agreement shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql governed in all respects by the laws of the United States and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql State of Delaware. This Agreement is in the English language \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql only, which shall be controlling in all respects. No transla- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql tion, if any, of this Agreement into Japanese or any other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql language shall be of any force or effect in the interpretation of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql this Agreement as to either party hereto or in any determination \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the intent of either of such parties. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.9 Notice and Correction of Breach. Either party \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql believing that the other party has materially breached this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement, prior to institution of any proceeding for specific \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql performance pursuant to Section 5.10, shall give notice to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql other party specifying the nature of the breach and requesting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that it be corrected. If within sixty (60) days after such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice is given the accused party has not to the satisfaction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the accusing party responded and materially commenced or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql completed the correction of the breach asserted, the party giving \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql notice may take such other action permitted to it by this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement or in law or equity. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.10 Dispute Resolution. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) Any and all disputes arising under or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql affecting this Agreement or any other agreement to be executed in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql accordance herewith shall be resolved, except as expressly \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided otherwise in such other agreement, exclusively by \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential arbitration pursuant to the rules of the Japan \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Commercial Arbitration Association in Tokyo, Japan, or such other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql location as may be agreed between the parties; provided, however, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql that the arbitrators shall be empowered to hold hearings at other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql locations within and without Japan. Each of the parties shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql designate one arbitrator and the two arbitrators so designated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall select the third arbitrator. Arbitration proceedings shall \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql be conducted in English with simultaneous translation into \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese. Among the remedies available to them, the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be authorized to require specific performance of provisions \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement. The judgment upon award of the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql shall be final and binding and may be enforced in any court of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql competent jurisdiction in the United States or Japan, and each of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the parties hereto unconditionally submits to the jurisdiction of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such court for the purpose of any proceeding seeking such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql enforcement. Subject only to the provisions of Applicable Law \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and, except as aforesaid, the procedure described in this Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.10 shall be the exclusive means of resolving disputes arising \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql under or affecting this Agreement and all other agreements to be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql executed in accordance herewith. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (b) All papers, documents or evidence, whether \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql written or oral, filed with or presented to the panel of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql arbitrators shall be deemed by the parties and by the arbitrators \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to be confidential information. No party or arbitrator shall \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 17 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql disclose in whole or in part to any other person any confidential \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql information submitted in connection with the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, except to the extent reasonably necessary to assist \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql counsel in the arbitration or preparation for arbitration of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql dispute. Confidential information may be disclosed (i) to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql attorneys, (ii) to parties, and (iii) to outside experts \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql requested by either party's counsel to furnish technical or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql expert services or to give testimony at the arbitration \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql proceedings, subject, in the case of such experts, to execution \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of a legally binding written statement that such expert agrees to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql comply with the confidentiality terms of this Section, and that \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql such expert will not use any confidential information disclosed \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to such expert for personal or business advantage. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.11 Termination. If either party transfers its shares in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql the Joint Venture pursuant to the Joint Venture Agreement, or is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Triggering Party under the Joint Venture Agreement, the other \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party shall have the right to terminate this Agreement. This \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql agreement may be terminated by either party pursuant to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql rights given it under subsection 7.5.A of the Joint Venture \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.12 Cooperation; Best Efforts. The parties agree to \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperate and to use their best efforts to consummate all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql purchases of AMD Shares authorized by this Agreement. Such \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql cooperation shall include, but not be limited to, the diligent \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and prompt filing and pursuit of all governmental consents, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reviews or clearances required by law to be obtained by either \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql party with respect to any or all of the Initial Purchase and the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Subsequent Purchases. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 18 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, the parties hereto have caused this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement to be duly executed by their duly authorized officers \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql as of the day and year first above written. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /s/ HIKOTARO MASUNAGA \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Hikotaro Masunaga \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql By /S/ MARVIN D. BURKETT \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql _____________________________ \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Marvin D. Burkett \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Chief Financial Officer \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 19 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT A \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CLOSING CERTIFICATE OF OFFICERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I am the duly elected, qualified and acting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ______________________ (bucho) of Fujitsu Limited, a Japanese stock \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql company ("Fujitsu"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I hereby certify that, to the best of my knowledge, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations and warranties contained in section 6.1 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture Agreement by and between Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Fujitsu, Limited, dated ___________ and the representations and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties contained in section 3.2 of the Investment Agreement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited into Advanced Micro Devices, Inc., dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________, remain true and correct as of the date hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, I have executed this Certificate on this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___ day of ____________, 199__. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 20 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT B \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CLOSING CERTIFICATE OF OFFICERS \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql OF \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I am the duly elected, qualified and acting \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ______________________, of Advanced Micro Devices, Inc., a Delaware \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql corporation ("AMD"). \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql I hereby certify that, to the best of my knowledge, the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql representations and warranties contained in section 6.2 of the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Joint Venture Agreement by and between Advanced Micro Devices, Inc. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql and Fujitsu, Limited, dated __________, and the representation and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql warranties contained in section 3.1 of the Investment Agreement of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Fujitsu Limited into Advanced Micro Devices, Inc., dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ____________, remain true and correct as of the date hereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql IN WITNESS WHEREOF, I have executed this Certificate on this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ___ day of ________, 199___. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 21 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 22 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU INVESTMENT AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql FUJITSU LIMITED \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql investing in \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ADVANCED MICRO DEVICES, INC. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Table of Contents \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql PURCHASES AND SALES OF AMD SHARES. . . . . . . . . . . . . . . 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.1 Purchase of AMD Shares . . . . . . . . . . . . . . . 1 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.2 Timing of Purchases. . . . . . . . . . . . . . . . . 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.3 Manner of Sale . . . . . . . . . . . . . . . . . . . 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.4 Purchase Price(s) of AMD Shares; Limitation on \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Total Purchase Price and Total Number of AMD \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Shares . . . . . . . . . . . . . . . . . . . . . . . 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1.5 Suspension of Obligation to Purchase.. . . . . . . . 5 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql RESTRICTIONS ON RESALE AND VOTING OF AMD SHARES. . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.1 No Rights of Registration, Repurchase, First \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Refusal or Redemption. . . . . . . . . . . . . . . . 5 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2.2 Restricted Nature of AMD Shares; Legend; Manner and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Timing of Permitted Resales or Transfers . . . . . . 6 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql REPRESENTATIONS AND WARRANTIES OF THE PARTIES. . . . . . . . . 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.1 Representations and Warranties of AMD. . . . . . . . 8 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 3.2 Representations and Warranties of FUJITSU. . . . . . 8 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql CONDITIONS TO CLOSINGS OF PURCHASES OF AMD SHARES. . . . . . . 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.1 Conditions to AMD's Obligations. . . . . . . . . . . 10 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 4.2 Conditions to FUJITSU's Obligations. . . . . . . . . 11 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.1 Costs and Expenses. . . . . . . . . . . . . . . . . 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.2 Successors and Assigns. . . . . . . . . . . . . . . 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.3 Communications. . . . . . . . . . . . . . . . . . . 12 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.4 Entire Agreement; Modification. . . . . . . . . . . 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.5 Captions. . . . . . . . . . . . . . . . . . . . . . 14 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.6 Counterparts. . . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.7 Severability. . . . . . . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.8 Governing Law, Language . . . . . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.9 Notice and Correction of Breach . . . . . . . . . . 15 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.10 Dispute Resolution. . . . . . . . . . . . . . . . . 16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.11 Termination . . . . . . . . . . . . . . . . . . . . 17 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 5.12 Cooperation; Best Efforts . . . . . . . . . . . . . 17 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql i \par\pard\plain\fs16 \page{\*\bkmkstart doc_1_13}{\*\bkmkend doc_1_13} \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql EXHIBIT 10.27(e) \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JOINT VENTURE LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Confidential portions of this document have been deleted and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql filed separately with the Securities and Exchange Commission \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql pursuant to a request for confidential treatment. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql JOINT VENTURE LICENSE AGREEMENT \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql This Joint Venture License Agreement (this "Agreement"), dated as of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql April 16, 1993, is among ADVANCED MICRO DEVICES, INC. ("AMD"), a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Delaware corporation having its principal office at 901 Thompson Place, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Sunnyvale, California 94088-3453, U.S.A., FUJITSU LIMITED ("Fujitsu"), a \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Japanese corporation having its registered office at 1015 Kamikodanaka, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nakahara-ku, Kawasaki 211, Japan, and FUJITSU AMD SEMICONDUCTOR LIMITED ("JV"), \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql a Japanese corporation having its registered office at 1263 Kamikodanaka, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Nakahara-ku, Kawasaki 211, Japan. \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql INTRODUCTION \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql A. Fujitsu and AMD have entered into a joint venture agreement dated \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql March 30, 1993 (the "Joint Venture Agreement"), and other related agreements \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to establish JV to manufacture and supply certain integrated circuits. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql B. Fujitsu is, among other things, in the business of designing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql developing, manufacturing and selling semiconductor products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql C. AMD is, among other things, in the business of designing, developing, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing and selling semiconductor products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql D. JV desires Fujitsu and AMD to grant to JV, and Fujitsu and AMD are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql willing to grant to JV, a limited license to use their respective intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property rights for manufacturing and supplying certain JV Products (as defined \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql in the Joint Development Agreement), subject to the terms and conditions as \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql hereinafter set forth. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql E. JV desires to obtain from Fujitsu and AMD, and Fujitsu and AMD are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql willing to supply JV, certain relevant technology, technical training and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql support for such JV Products. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql F. Fujitsu and AMD desire JV to grant to Fujitsu and AMD, and JV is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql willing to grant to Fujitsu and AMD, a license to use JV's intellectual \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql property rights to make, use or sell products, subject to the terms and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions as hereinafter set forth. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ACCORDINGLY, in consideration of the mutual covenants and promises \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql contained herein, Fujitsu, AMD and JV agree as follows: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Article 1. DEFINITIONS. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql As used in this Agreement, the following terms shall have the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql following meanings: \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 1 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 3 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.1 The following words as used herein have the meanings \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql defined in the Technology Cross-License Agreement between AMD and Fujitsu \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ("Technology Cross-License") dated as of March 1993 (except that, for purposes \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of this Agreement, references in Sections 1.9 and 1.25 of the Technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cross-License to "this Agreement" shall mean this Agreement). \par\pard\plain\fs16 \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Technology Cross- \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Definition License Section \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql ---------- ----------------- \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Affiliate" 1.1. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Applicable Law" 1.2. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Confidential Information" 1.4. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "EPROM" or "Electrically Programmable \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Read Only Memory" 1.7. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Flash Memory" 1.8. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Governmental Approvals" 1.9. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Governmental Authority" 1.10. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Incorporated Product" 1.11. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Joint Development Agreement" 1.13. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Memory Card" 1.20. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Nondisclosure Agreements" 1.21. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "NVM" or "Non-Volatile Memory" 1.23. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Other IPR" 1.24. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Patents" 1.25. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Pilot Product" 1.26. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Proprietary Information" 1.28. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Subsidiary" 1.33. \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql "Transitional Event" 1.34. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.2. "AMD/Fujitsu Technology" shall mean the front-end \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql manufacturing process technology for manufacturing JV Products and the product \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql design data for JV Products owned or developed by Fujitsu and/or AMD and \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql provided or transferred to JV by AMD or Fujitsu in accordance with this \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Agreement. The major elements of AMD/Fujitsu Technology to be provided are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql currently anticipated as set forth in Attachment D hereto. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.3. "Effective Date" shall mean the later to occur of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql (a) the date of this Agreement or (b) the date on which all required \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Governmental Approvals have been obtained. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Section 1.4. "IPR" or "Intellectual Property Rights", (a) with \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql respect to Fujitsu or AMD, shall have the meaning set forth in the Technology \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql Cross-License, and (b) with respect to JV, shall mean all Patents of JV and all \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql copyrights, mask works, trade secrets, know-how, data, formula, processes, \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql confidential information, or other information, tangible or otherwise, that are \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql wholly owned by JV or as to which, and only to the extent and subject to the \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql conditions under which, JV has the right, as of the Effective Date or \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql thereafter during the term of this Agreement, to grant licenses or sublicenses \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql of the scope granted herein, without such grant resulting in the payment of \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql royalties or other consideration to third parties (unless and until JV is \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reimbursed for any payments so made, in which case such information shall be \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql included within IPR for any license or sublicense to the party providing the \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql 2 \par\pard\plain\fs16 \par\pard\plain\fs16 \page\par\pard\plain\cf1\f50\fs16\ql 4 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql reimbursement) except for payments to a Subsidiary of JV, if any, or payments \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql to third parties for IPR developed or created by such third parties while \par\pard\plain\fs16\pard\plain\cf1\f50\fs16\ql employed by JV or any Subsidiary thereof. \par\pard\plain\fs16 \par\pard\plain\fs16\pard\plain\cf1\f50\fs16