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Exhibit
10.13(b)
ADVANCED MICRO DEVICES,
INC.
Form of Amended and
Restated
Management Continuity
Agreement
Dear
:
Advanced Micro Devices, Inc.
(the “Company”) considers the establishment and
maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its
stockholders. The Company recognizes that, as is the case with many
publicly held corporations, the possibility of a change of control
may exist and that the uncertainty and questions which such
possibility may raise among management may result in the departure
or distraction of management personnel to the detriment of the
Company and its stockholders. Accordingly, the non-management
members of the Company’s Board of Directors have determined
that it is imperative to be able to rely upon management’s
continuance and that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of members of
the Company’s management, including you, to their assigned
duties without distraction in the face of the potentially
disturbing circumstances arising from the possibility of a change
of control of the Company.
In order to induce you to
remain in the employ of the Company under such circumstances, this
letter agreement sets forth the benefits which the Company agrees
will be provided to you in the event there is a “Change of
Control” of the Company under the circumstances described
below. (“Change of Control” is defined in
Section 1.) In addition, the Company is also willing to agree
to provide you the benefits described herein in consideration of
your agreement to the arbitration provisions set forth in
Section 14 hereof. This Agreement amends and restates in its
entirety the Management Continuity Agreement between you and the
Company entered into as of
(the “Prior Agreement”). Upon the execution of this
Agreement by you and the Company it shall supersede the Prior
Agreement and the Prior Agreement shall be of no further force or
effect.
1. Change of Control.
For purposes of this Agreement, a “Change of Control”
shall mean a change of control of the Company of a nature which
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (“Exchange Act”) or in
response to any other form or report to the Securities and Exchange
Commission or any stock exchange on which the Company’s
shares are listed which requires the reporting of a change of
control. In addition, a Change of Control shall be deemed to have
occurred if (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
beneficial owner, directly or indirectly, of securities of the
Company representing more than 20% of the combined voting power of
the Company’s then outstanding securities; or (ii) in
any two year period, individuals who were members of the Board of
Directors (the “Board”) at the beginning of such period
plus each new director whose election or nomination for election
was approved by at least two-thirds of the directors in office
immediately prior to such election or nomination, cease for any
reason to constitute at least a majority of the Board, or
(iii) a majority of the members of the Board in office prior
to the happening of any event and who are still in office after
such event, determines in its sole discretion within one year after
such event, that as a result of such event there has been a Change
of Control.
Notwithstanding the foregoing
definition, “Change of Control” for purposes of this
Agreement, shall exclude the acquisition of securities representing
more than 20% of the combined voting power of the Company by the
Company, any of its wholly owned subsidiaries, or any trustee or
other fiduciary holding securities of the Company under an employee
benefit plan now or hereafter established by the Company. As used
herein, the term “beneficial owner” shall have the same
meaning as under Section 13(d) of the Exchange Act, and
related case law.
2. Term. This
Agreement shall become effective immediately on the delivery of
fully executed copies to both parties, and shall continue until
canceled pursuant to the notice of either party. Either party
hereto may provide written notice to the other of cancellation of
this Agreement, to take effect on the date specified in such
notice, but in no event shall such cancellation take effect less
than two years from the date on which notice is given. Such notice
shall be furnished in accordance with Section 11 of this
Agreement.
3. Tax
Indemnity.
(a) If all or any portion of
the amounts payable to you on your behalf under this Agreement or
otherwise are subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the “Code”) (or similar state tax and/or assessment),
the Company shall pay to you an amount necessary to place you in
the same after-tax position as you would have been in had no such
excise tax been imposed. The amount payable pursuant to the
preceding sentence shall be increased to the extent necessary to
pay income and excise taxes due on such amount. The determination
of the amount of any such tax indemnity shall initially be made by
the independent accounting firm employed by the Company immediately
prior to the Change of Control, or if such firm is unwilling to
complete such calculations, such independent accounting or
consulting firm as the Company may select in its
discretion.
(b) If at a later date it is
determined (pursuant to final regulations or published rulings of
the IRS, final judgment of a court of competent jurisdiction or
otherwise) that the amount of excise taxes payable by you is
greater than the amount initially so determined, then the Company
(or its successor) shall pay you an amount equal to the sum of
(1) such additional excise taxes (2) any interest, fines
and penalties resulting from such underpayment, plus (3) any
additional amount necessary to reimburse you for any income, excise
or other taxes payable by you with respect to the amounts specified
in (1) and (2) above, and the reimbursement provided by
this clause (3). If at a later date it is determined (pursuant to
final regulations or published rulings of the IRS, final judgment
of a court of competent jurisdiction or otherwise) that the amount
of excise taxes payable by you is lesser than the amount initially
so determined, then you shall pay to the Company (or its successor)
an amount equal to such overpayment to the extent such is refunded
to you.
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(c) By signing this
agreement, you and the Company both agree to cooperate with the
person(s) calculating the amount of the tax indemnity, and will
provide copies of whatever tax returns and other documents may be
necessary to perform the calculation.
(d) Notwithstanding anything
herein to the contrary, any payment required to be made under this
Section shall be made no later than the end of the calendar year
following the calendar year within which the taxes giving rise to
such payment obligation are remitted to the appropriate tax
authorities.
4. Termination of
Employment Following Change of Control. If any of the events
described in Section 1 hereof constituting a Change of Control
shall have occurred, you shall be entitled to the benefits provided
in Section 5 hereof upon the actual termination by the Company
without Cause or “Constructive Termination” of your
employment that is a “separation from service” (within
the meaning of Code Section 409A(a)(2)(A)(i)) within two years
after such Change of Control (a “Change of Control
Termination”), unless such termination is by the Company for
Cause.
(a) Constructive
Termination . For purposes of this Agreement,
“Constructive Termination” shall mean a resignation by
you due to any diminution or adverse change in the circumstances of
your employment as determined in good faith by you, including,
without limitation, your reporting relationships, job description,
duties, responsibilities, compensation, perquisites, office or
location of employment.
(b) Cause . For
the purposes of this Agreement, the Company shall have a
“Cause” to terminate your employment if you are
determined by a court of law or pursuant to arbitration under
Section 14 to have committed a willful act of embezzlement,
fraud or dishonesty which resulted in material loss, material
damage or material injury to the Company. In such an event, you
shall have no rights under this Agreement.
(c) Notice of
Termination . Any termination of your employment by the
Company or by you for any reason whatsoever during the term of this
Agreement shall be communicated by written notice of termination to
the other party hereto (“Notice of
Termination”).
(d) Date of
Termination . “Date of Termination” shall mean
the date specified in the Notice of Termination of your Change of
Control Termination.
5. Benefits Upon
Termination Following a Change Of Control.
(a) Amount of
Benefits . The Company shall provide to you as soon as
practicable, but not more than ten business days (subject to
Section 6, below) following a Change of Control Termination
each of the following benefits:
(1) Severance Benefit.
The Company shall pay you a lump sum severance benefit which shall
equal three times the sum of (A) your Base Compensation (as
defined below), plus (B) the average of the two highest annual
bonuses paid to you during the last five full calendar years
immediately prior to the Change of Control. For purposes of
this
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Section 5(a)(1),
“Base Compensation” means your rate of annual salary,
as in effect for the twelve-month period ending on the date six
months prior to the Change of Control or on the Date of
Termination, whichever is higher. Base Compensation does not
include elements such as bonuses, reimbursement of interest paid on
guaranteed loans, auto allowances, nor any income from equity based
compensation, such as may result from the exercise of stock options
or stock appreciation rights, or the receipt of restricted stock
unit awards or the lapse of restrictions on such awards. If you
were employed by the Company and/or any of its subsidiaries for
less than one full calendar year immediately preceding the Change
of Control, your “highest annual bo
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