8-KMaterial AgreementsExhibits & Filings

ADVANCED MICRO DEVICES INC 8-K Report, Material Agreement (Oct 4, 2006)

Filed October 4, 2006For Securities:AMD

Summary

This 8-K filing from Advanced Micro Devices, Inc. (AMD) on October 4, 2006, primarily details the employment offer for David Orton, who will serve as an Executive Vice President. This appointment is contingent upon the successful closing of AMD's acquisition of ATI Technologies Inc., a significant strategic move for AMD that was initially contemplated in July 2006. The offer letter outlines a comprehensive compensation package designed to incentivize Mr. Orton and facilitate a smooth integration of ATI's operations into AMD. Key components include a substantial base salary, performance-based bonuses, and equity awards. The agreement also specifies severance provisions in case of termination, reflecting the company's commitment to retaining key talent during this transitional period.

Key Highlights

  • 1David Orton appointed Executive Vice President, effective upon the closing of the ATI acquisition.
  • 2Orton's compensation package includes a base salary of $550,000 annually.
  • 3Eligibility for a Corporate Bonus Plan with a target of 100% of base compensation.
  • 4Inclusion in the Vice President Long Term Incentive Plan, with a target payout of 30% of base salary based on revenue growth and operating income.
  • 5Two separate cash bonuses of $412,500 each are provided as incentives for ATI integration.
  • 6Grant of 50,000 restricted stock units, vesting over time.
  • 7Detailed severance package for termination without cause or by mutual agreement within the first 24 months of employment.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose the material terms of the offer letter agreement with David Orton, who is set to become an Executive Vice President at AMD. This appointment is directly tied to AMD's ongoing acquisition of ATI Technologies Inc.

Mr. Orton's compensation is structured to reward his leadership during the ATI acquisition and integration. It includes a significant base salary, performance-based bonuses, and restricted stock units. Notably, he will receive two 'Contribution Bonuses' totaling $825,000, specifically for his anticipated role in ensuring the effective integration of ATI's operations into AMD.

The offer letter includes provisions for severance if Mr. Orton's employment is terminated by mutual agreement or without cause. Within the first 12 months, he is entitled to 24 months of severance, including base salary, target bonus, and pro-rated integration bonuses. This period is adjusted for terminations between the 13th and 24th month of employment.

Mr. Orton will be eligible for AMD's standard benefits plans, including a 401(k) plan with matching contributions. He will also participate in the Corporate Bonus Plan and the Vice President Long Term Incentive Plan. The agreement also outlines continued eligibility for executive plans and medical/dental insurance continuance during any severance period.