2011 Executive Incentive Plan – Advanced Micro Devices

1.

.

2.

.

A.

“Award” means, with respect to each Participant, any cash incentive payment
made under the Plan for a Performance Period, including Awards that qualify as
performance-based compensation under Section 162(m) of the Code.

B.

“Code” means the Internal Revenue Code of 1986, as amended.

C.

“Committee” means the Compensation Committee of AMD’s Board of Directors, or
such other committee designated by that Board of Directors, which is authorized
to administer the Plan under Section 3 hereof. With respect to payments
hereunder intended to qualify as performance-based compensation under Section
162(m) of the Code, the Committee shall be comprised solely of two or more
directors who are “outside directors” under Section 162(m) of the Code.

D.

“Company” means AMD and any corporation or other business entity of which AMD
(i) directly or indirectly has an ownership interest of 50% or more, or (ii) has
a right to elect or appoint 50% or more of the board of directors or other
governing body.

E.

“Key Employee” means any employee of the Company whose performance the
Committee determines can have a significant effect on the success of the
Company.

F.

“Participant” means any Key Employee to whom an Award is granted under the
Plan.

G.

“Performance Period” means any fiscal year of the Company or such other
period as determined by the Committee.

H.

“Plan” means this Plan, which shall be known as the AMD Executive Incentive
Plan.

3.

.

A.

The Plan shall be administered by the Committee. Subject to the requirements
for qualifying payments hereunder as performance-based compensation under
Section 162(m) of the Code, the Committee shall have the authority to:

(i)

interpret and determine all questions of policy and expediency pertaining to
the Plan;

(ii)

adopt such rules, regulations, agreements and instruments as it deems
necessary for its proper administration;

(iii)

select Key Employees to receive Awards;

(iv)

determine the terms of Awards;

(v)

determine amounts subject to Awards (within the limits prescribed in the
Plan);

(vi)

determine whether Awards will be granted in replacement of or as alternatives
to any other incentive or compensation plan of the Company or an acquired
business unit;

(vii)

grant waivers of Plan or Award conditions (other than Awards intended to
qualify as performance-based compensation under Section 162(m) of the Code);

(viii)

accelerate the payment of Awards (but with respect to Awards intended to
qualify as performance-based compensation under Section 162(m) of the Code, only
as permitted under that Section);

(ix)

correct any defect, supply any omission, or reconcile any inconsistency in
the Plan, any Award or any Award notice;

(x)

take any and all other actions it deems necessary or advisable for the proper
administration of the Plan;

(xi)

adopt such Plan procedures, regulations, subplans and the like as it deems
are necessary to enable Key Employees to receive Awards; and

(xii)

amend the Plan at any time and from time to time, provided however that no
amendment to the Plan shall be effective unless approved by the Company’s
stockholders, to the extent such stockholder approval is required under Section
162(m) of the Code.

B.

The Committee may delegate its authority to grant and administer Awards to a
separate committee; however, only the Committee may grant and administer Awards
which are intended to qualify as performance-based compensation under Section
162(m) of the Code.

4.

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5.

.

A.

The Committee shall set forth in writing objectively determinable performance
goals (“Performance Goals“) applicable to a Participant for a Performance
Period prior to the commencement of such Performance Period, provided, however,
that such goals may be established after the start of the Performance Period
but, with respect to an Award that is intended to qualify as performance-based
compensation under Section 162(m) of the Code, in no event later than the latest
time permitted by Section 162(m) of the Code with respect to any payments
intended to qualify as performance-based compensation under Section 162(m) of
the Code (generally, no later than the earlier of (i) 90 days after the
commencement of the Performance Period or (ii) the lapse of 25% of the
Performance Period, and in any event while the outcome is substantially
uncertain) (the “ 162(m) Determination Date “).

B.

Each Performance Goal shall relate to one or more of the following business
criteria of the individual, the Company as a whole, any business unit of the
Company, or any combination thereof, that are to be monitored during the fiscal
year (or Performance Period):

Net income

Operating income

Earnings before interest and taxes

Earnings per share

Return on investment

Return on capital

Return on invested capital

Return on capital compared to cost of capital

Return on capital employed

Return on equity

Return on assets

Return on net assets

Stockholder return

Cash return on capitalization

Revenue

Revenue ratios (per employee or per customer)

Stock price

Market share

Stockholder value

Net cash flow

Cash flow

Cash flow from operations

Cost reductions and cost ratios (per employee or per customer)

New product releases

Strategic positioning programs, including the achievement of
specified milestones or the completion of specified projects.

C.

With respect to an Award that is intended to qualify as performance-based
compensation under Section 162(m) of the Code, on or prior to the 162(m)
Determination Date, the Committee shall establish in writing a bonus formula
specifying the target level and/or other level(s) of performance that must be
achieved with respect to each criterion that is identified in a Performance Goal
in order for an Award to be payable and shall, for each Participant, establish
in writing a target (and/or other level(s)) Award payable under the Plan for the
Performance Period upon attainment of the Performance Goals.

D.

In the event Performance Goals are based on more than one business criterion,
the Committee may determine to make Awards upon attainment of the Performance
Goal relating to any one or more of such criteria, provided the Performance
Goals, when established, are stated as alternatives to one another at the time
the Performance Goal is established.

6.

.

A.

During any fiscal year of the Company, no Participant shall receive an Award
of more than $10,000,000.

B.

No Award that is intended to qualify as performance-based compensation under
Section 162(m) of the Code shall be paid to a Participant unless and until the
Committee makes a certification in writing with respect to the attainment of the
Performance Goals to the extent required by Section 162(m) of the Code. Although
the Committee may in its sole discretion eliminate or reduce an Award payable to
a Participant pursuant to the applicable bonus formula, the Committee shall have
no discretion to increase the amount of a Participant’s Award as determined
under the applicable bonus formula.

C.

Unless otherwise directed by the Committee, each Award shall be paid on the
March 15 immediately following the end of the Performance Period to which such
Award relates.

D.

The payment of an Award requires that the Participant be on the Company’s
payroll as of the date of payment of the Award. Subject to the requirements for
qualifying payments hereunder as performance-based compensation under Section
162(m) of the Code, the Committee may make exceptions to this requirement in the
case of change in control, retirement, death or disability, as determined by the
Committee in its sole discretion, provided, however, in the case of retirement
under an Award that is intended to qualify as performance-based compensation
under Section 162(m) of the Code, an exception may be made by the Committee only
if the performance goals for such qualifying payments have been satisfied based
on actual performance through the end of the Performance Period (or if
applicable, based on actual performance through the termination date), the
amount is pro-rated based on the time employed during the Performance Period,
and the payment is made at the same time similarly situated participants receive
bonuses for such Performance Period.

E.

The Company shall withhold all applicable federal, state, local and foreign
taxes required by law to be paid or withheld relating to the receipt or payment
of any Award.

F.

At the discretion of the Committee, payment of an Award or any portion
thereof may be deferred under a nonqualified deferred compensation plan
maintained by the Committee until a time established by the Committee and in
accordance with the terms of such plan.

7.

.

A.

No Awards that are intended to qualify as performance-based compensation
under Section 162(m) of the Code shall be paid under the Plan unless and until
the Company’s stockholders shall have approved the Plan and the business
criteria set forth above as required by Section 162(m) of the Code. So long as
the Plan shall not have been previously terminated by the Company, it shall be
resubmitted for approval by the Company’s stockholders in the fifth year after
it shall have first been approved by the Company’s stockholders, and no later
than every fifth year thereafter. In addition, the Plan shall be resubmitted to
the Company’s stockholders for approval as required by Section 162(m) of the
Code if it is amended in any way that changes the material terms of the Plan,
including by materially modifying the business criteria set forth above,
increasing the maximum Award payable under the Plan or changing the Plan’s
eligibility requirements.

B.

Any rights of a Participant under the Plan shall not be assignable by such
Participant, by operation of law or otherwise, except by will or the laws of
descent and distribution. No Participant may create a lien on any funds or
rights to which he or she may have an interest under the Plan, or which is held
by the Company for the account of the Participant under the Plan.

C.

Participation in the Plan shall not give any Key Employee any right to remain
in the employ of the Company. Further, the adoption of this Plan shall not be
deemed to give any Key Employee or other individual the right to be selected as
a Participant or to be granted an Award.

D.

The Plan shall constitute an unfunded, unsecured obligation of the Company to
make bonus payments from its general assets in accordance with the provisions of
the Plan. To the extent any person acquires a right to receive payments from the
Company under this Plan, such rights shall be no greater than the rights of an
unsecured creditor of the Company.

E.

The Plan shall be governed by and construed in accordance with the laws of
the State of California.

F.

The Board may amend or terminate the Plan at any time and for any reason,
subject to stockholder approval as described above.