{"id":38497,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/amended-and-restated-employment-agreement-advanced-micro.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"amended-and-restated-employment-agreement-advanced-micro","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/amended-and-restated-employment-agreement-advanced-micro.html","title":{"rendered":"Amended and Restated Employment Agreement &#8211; Advanced Micro Devices Inc. and W. J. Sanders III"},"content":{"rendered":"<pre>\n                              AMENDED AND RESTATED\n                              EMPLOYMENT AGREEMENT\n\n                             AS OF NOVEMBER 3, 2000\n\n                                    BETWEEN\n\n                          ADVANCED MICRO DEVICES, INC.\n\n                                      AND\n\n                               W. J. SANDERS III\n\n \n                               TABLE OF CONTENTS\n                                                                            Page\n                                 \n1.   Term.................................................................... 2\n\n2.   Position and Duties..................................................... 2\n\n3.   Salary.................................................................. 3\n\n4.   Bonus................................................................... 4\n\n5.   Stock Options and Related Incentive Plans............................... 5\n\n6.   Reimbursement of Expenses............................................... 7\n\n7.   Other Benefits During Service........................................... 7\n\n8.   Special Retirement Benefit; Change of Control........................... 8\n\n9.   Disability Benefits.................................................... 10\n\n10.  Death During Service; Split Dollar Policy.............................. 10\n\n11.  Confidential Information............................................... 11\n\n12.  Inventions, Patents, Copyrights and Proprietary Information............ 12\n\n13.  Termination by Company................................................. 12\n\n14.  Termination by Executive............................................... 15\n\n15.  Consequences of a Section 14 Termination by Executive, a Termination by \n     Company for Certain Reasons or a Breach by Company..................... 15\n\n16.  Other Benefits Following Termination of Service........................ 17\n\n17.  Indemnification........................................................ 19\n\n18.  Remedies............................................................... 19\n\n19.  Binding Agreement...................................................... 19\n\n20.  No Attachment.......................................................... 20\n\n21.  Assignment............................................................. 20\n\n22.  Waiver................................................................. 20\n\n23.  Notice................................................................. 20\n\n24.  Governing Law.......................................................... 21\n\n25.  Costs.................................................................. 21\n\n26.  Severability........................................................... 21\n\n27.  Arbitration............................................................ 21\n\n28.  Entire Agreement....................................................... 22\n\n29.  Survival............................................................... 22\n\n                                       i\n\n \n                              AMENDED AND RESTATED\n                              EMPLOYMENT AGREEMENT\n                          DATED AS OF NOVEMBER 3, 2000\n                          ADVANCED MICRO DEVICES, INC.\n                                      AND\n                               W. J. SANDERS III\n\n\n\nThis Amended and Restated Employment Agreement (the \"Agreement\") is made and\n                                                     ---------              \nentered into as of the 3rd day of November, 2000 (the \"Effective Date\") by and\n                                                       --------------         \nbetween W. J. Sanders III (\"Executive\") and Advanced Micro Devices, Inc., a\n                            ---------                                      \nDelaware corporation (\"Company\") and amends and restates in its entirety the\n                       -------                                              \nagreement between them as of September 29, 1996.\n\n\n                                R E C I T A L S\n\n          A.  Executive and Company entered into an employment agreement as of\nJuly 1, 1991 (the \"Original Employment Agreement\"), which was amended and\n                   -----------------------------                         \ncompletely restated as of September 29, 1996 (the \"Prior Employment Agreement\").\n                                                   --------------------------   \n\n          B.  Executive is the founder of Company and remains instrumental to\ndeveloping and expanding its business and operations,  possesses unique and\ninvaluable knowledge, skills and judgment with respect to such business, and\nmaintains strong ties with the business community essential to the continued\nsuccess and growth of Company.\n\n          C.  The non-management directors believe that Executive is uniquely\nqualified to protect and enhance the best interests of Company and its\nstockholders and that entering into this amended employment contract to provide\nfor Executive's continued stewardship will be of great value to Company and the\nlong-term interests of its stockholders.\n\n          D.  Company recognizes that, as is the case with many publicly held\ncorporations, the possibility of a change of control may exist and that the\nuncertainty and questions which such possibility may raise among management may\nresult in the departure or distraction of management personnel to the detriment\nof Company and its stockholders.\n\n          E.  The non-management members of Company's Board of Directors have\ndetermined that in the event of that contingency it is imperative to be able to\nrely upon management's continuance and in particular Executive's leadership, and\nthat appropriate steps should be taken to reinforce and encourage that\nleadership and to reward Executive's essential service.\n\n          F.  Executive and Company now desire to recognize Executive's\nextraordinary service; provide him continuing incentives to promote and enhance\nCompany's short and long term strategies and opportunities by extending bonus\nopportunities and providing \n\n                                       1\n\n \nadditional stock-based, long term incentives; better align his compensation and\ntermination benefits relative to other executives, within and outside the\nCompany, recognizing his unique and special contributions and responsibilities;\nprepare for and facilitate a smooth transition of executive roles and leadership\nupon his anticipated retirement as chief executive officer in early 2002;\nprovide for his continuing service as Chairman through 2003; respond to changing\npractices in executive compensation since his employment contract was last\nrevised; and modify certain other terms and conditions contained in the Prior\nEmployment Agreement.\n\n          G.  Executive and Company desire to address more particularly the\nresults of his retirement as chief executive officer, and provide reasonable\naccommodations to him thereafter consistent with those being made in the\nmarketplace for long-serving leaders of his stature.\n\n1.   Term\n\n          The term of services under this Agreement commenced as of September 1,\n1996 and shall terminate on December 27, 2003.\n\n2.   Position and Duties\n\n          (a) Executive shall be employed by Company as its Chairman and Chief\nExecutive Officer through the earlier of the annual stockholders meeting in 2002\nor June 30, 2002 (the \"Initial Term\").  Executive shall report directly and\n                       ------------                                        \nsolely to Company's Board of Directors (\"Board\").  The Board agrees to nominate\n                                         -----                                 \nExecutive for election to the Board as a member of its slate at each annual\nmeeting of stockholders during the Initial Term and the Extended Term.\nExecutive agrees to serve on the Board if elected.  The duties and\nresponsibilities of Chairman and Chief Executive Officer shall be as defined in\nthe By-Laws of Company in effect as of the date hereof, and shall be without\nconsideration of other positions Executive may hold with Company.  Executive's\nservices are mutually agreed to be unique.\n\n          (b) Executive shall be employed by Company as its Chairman from the\ncompletion of the Initial Term through December 27, 2003 (the \"Extended Term\").\n                                                               -------------    \nDuring such period, Executive shall continue for all purposes of this Agreement\nand the Prior Employment Agreement to be an executive officer and key employee\nof Company and shall report directly and solely to the Board.\n\n          (c) During Executive's period of service hereunder, Executive agrees\nto perform such services not inconsistent with his position as shall from time\nto time be assigned to him by Company's Board.  During the Initial Term, except\nfor disability, illness and reasonable vacation periods, Executive shall devote\nsubstantially his full productive time, attention, and energies to the position\nof Chairman and Chief Executive Officer.\n\n          (d) Without the prior express authorization of Company, Executive\nshall not, directly or indirectly, during the term of service:\n\n          (1) Render services of a business, professional or commercial nature\nto any other person or firm, whether for compensation or otherwise; or\n\n                                       2\n\n \n          (2) Engage in any activity competitive with or adverse to Company's\nbusiness or welfare, whether alone, as a partner, or as an officer, director,\nemployee or holder (directly or indirectly, such as by means of a trust or\noption arrangement) of more than 1% of the capital stock of any class of any\nother corporation.\n\nNotwithstanding the foregoing requirement of substantially full-time services to\nbe rendered by Executive on behalf of Company, his expenditure of reasonable\namounts of time in connection with outside activities, not competitive with\nCompany's business, such as additional outside directorships (but only with\nBoard approval), or charitable or professional activities, or, after the Initial\nTerm, other business ventures shall not be considered to be in violation of this\nAgreement, subject, however, to the requirement that in no event shall any such\nactivities materially interfere with the performance of Executive required under\nthis Agreement.  Further, it is understood and agreed by the parties hereto that\nExecutive is entitled to engage in passive and personal investment activities\nnot materially interfering with his performance hereunder.  Service as an\nexecutive of an affiliate of Company, whether separately compensated or not,\nshall not be considered to be in contravention of this paragraph (d).\n\n3.   Salary\n\n          (a) Through the Initial Term Executive shall continue to receive an\nannual base salary of $1,000,000 in cash, plus increases for indexed adjustments\nunder the Prior Employment Agreement and as provided below.  The Board of\nDirectors (or such Committee as may be designated by the Board) shall review\nExecutive's salary at least annually at or before the first regularly scheduled\nBoard meeting following the annual stockholders meeting of each fiscal year\nduring the Initial Term.  The Board (or designated Committee), in its\ndiscretion, may increase the base salary based upon relevant circumstances.  The\nbase salary shall not be reduced during the Initial Term.  The Compensation\nCommittee of the Board shall fulfill the Board's obligations under this Section\n3(a) until such designation is revoked by the Board.  In addition to any and all\ndeferred balances and prior accrued salary obligations of Company, if during any\none year period of January 1 to December 31 commencing in the year 2000, the\nConsumer Price Index for Urban Wage Earners, San Francisco, published by the\nBureau of Labor Statistics of the U.S. Department of Labor (\"CPI-W\") increases,\n                                                             -----             \nthe salary for the following one year period from January 1 to December 31 shall\nbe automatically increased by the same percentage.  All past and ongoing indexed\nsalary increases shall be accrued on a continuous basis and shall bear interest\nfrom the date of accrual at an annual rate of 120% of the federal long-term\nrate, with compounding from the effective date of the Prior Employment\nAgreement.  The accrued balance of all indexed salary increases under this and\nprior agreements, together with accrued interest thereon, shall be paid at the\nearliest time at which a deduction for federal income tax purposes will be\nallowed for payment of such amounts under Section 162(m) of the Internal Revenue\nCode of 1986, as amended (the \"Code\"), but in any event no later than March 31,\n                               ----                                            \n2004, which earliest time shall be referred to as the \"Section 162(m) Deferred\n                                                       -----------------------\nPayment Date\".\n------------  \n\n          (b) During the Extended Term Executive shall receive an annual base\nsalary of no less than $750,000 (plus adjustments calculated as provided above\nfor CPI-W increases, from base year 1996 through the Extended Term on an amount\nof $500,000) for the period January 1, 2002 through December 29, 2002 and of no\nless than $600,000 (plus the same adjustments) for the period January 1, 2003\nthrough December 28, 2003.  The Board (or\n\n                                       3\n\n \ndesignated committee), in its discretion, may increase the annual base salary\nbased upon relevant circumstances. The base salary shall not be reduced during\nthe Extended Term.\n\n          (c) Except as provided above, base salary shall be paid in\ninstallments consistent with Company's usual payroll practices for executive\nofficers.\n\n4.   Bonus\n\n          (a) Executive shall, as provided in, and subject to, this Section 4(a)\nand Sections 4(b) and (c) below, receive an incentive bonus for each of\nCompany's fiscal years ending December 31, 1997, December 31, 1998, December 31,\n1999, December 31, 2000, December 30, 2001 and December 29, 2002 under Company's\n1996 Executive Incentive Plan in an amount equal to six-tenths of one percent\n(0.6%) of Adjusted Operating Profits of Company in excess of twenty percent\n(20%) of the Adjusted Operating Profits of Company for Company's immediately\npreceding fiscal year.  For the fiscal year ending December 28, 2003, such\nannual bonus shall be in an amount equal to two-tenths of one percent (0.2%) of\nAdjusted Operating Profits of Company in excess of twenty percent (20%) of the\nAdjusted Operating Profits for Company's immediately preceding fiscal year.  The\nannual bonus shall be paid immediately upon release by Company of its\noperational results for the last quarter of each fiscal year referred to above.\nThe amount payable under this Section 4(a) or Section 4(b) shall not be subject\nto the further discretion of Company's Compensation Committee and shall not be\nreduced or deferred except as specifically provided in this Section 4 or as\notherwise agreed to by Executive.\n\n          For purposes of all calculations, \"Adjusted Operating Profits\" of\nCompany shall be deemed to constitute operating income, as reported on Company's\nfinancial statements, increased for any pre-tax operating income and decreased\nfor any pre-tax operating loss from the Fujitsu joint venture (and any other\njoint ventures approved by Executive and the Board for these purposes) and\nincreased by any expenses accrued for profit sharing plan contributions, bonuses\nunder Company's Executive Bonus Plan, bonuses to the Chief Operating Officer of\nCompany and, in fiscal years 2002 and 2003, any other Chief Executive Officer,\nand bonuses (including bonuses under this Agreement and the Prior Employment\nAgreement) provided for in Sections 4(a), (b) and (d) hereof.  The provisions of\nthis Agreement with respect to bonus-related benefits following a termination of\nservice shall supersede any \"in service\" provisions (including last day of year\nservice requirements) of the 1996 Executive Incentive Plan.\n\n          (b) The maximum bonus initially payable to Executive under Section\n4(a) above in each fiscal year shall not be greater than $5,000,000.  The amount\nof the bonus which exceeds the maximum bonus payable in any one fiscal year, if\nany (the \"Excess Bonus\") shall be carried over (on a \"first-in, first-out\"\n          ------------                                                    \nbasis) and added to the bonus (if any) determined for any of the next three\nfiscal years, whether or not any one or more of such fiscal years ends before or\nafter the end of the Extended Term; provided the Excess Bonus, or portion\nthereof, does not cause the bonus payable in any fiscal year to exceed\n$5,000,000 or any higher maximum bonus payable in that year.\n\n          (c) If there shall be a combination of Company with another company or\na reorganization or capital restructuring of Company, or any other occurrence\nsimilar to any of the foregoing, and as a result thereof the amount or value of\nthe bonuses payable pursuant to the \n\n                                       4\n\n \nbonus formula set forth in Section 4(a) above would be, or could reasonably be\nexpected to be, significantly affected thereby, appropriate adjustment will, at\nthe request of either party, be negotiated to establish a substitute formula to\nyield an equitable and comparable result. If the parties cannot agree upon such\nsubstitute formula, or if the parties cannot agree as to whether or not an\noccurrence which would give rise to the right of either party to request\nadjustment pursuant to the foregoing has occurred, the parties shall submit such\nmatter to arbitration under the provisions of Section 27.\n\n          (d) In addition to the bonus payable in each fiscal year under Section\n4(a), Executive shall be entitled to receive as an additional bonus such\nadditional amounts as the Board (or such Committees as may be designated by the\nBoard) shall determine in its discretion.  In determining the amount of such\nadditional amounts, the Board (or Committee) shall consider among other things\nExecutive's contribution to the accomplishment of Company's long-range business\ngoals, the success of various corporate strategies in which Executive\nparticipated in reaching those goals, and Executive's unique services in\nconnection with the maintenance or increase in stockholder value of Company. The\nCompensation Committee of the Board shall fulfill the Board's obligations under\nthis Section 4(d), until such designation is revoked by the Board.\n\n5.   Stock Options and Related Incentive Plans\n\n          (a) Executive shall be eligible to participate in the Stock Option\nPlans of Company and any additional or successor incentive plan or plans.  Any\noption grants made to Executive pursuant to such plans shall provide for an\nexpiration date of ten (10) years following the date of grant subject to earlier\ntermination following termination of service only pursuant to Section 5(c), 13\nor 15 hereof.\n\n          (b) As of the Effective Date, Executive was granted time-based options\nto purchase an aggregate 1,200,000 shares of Company's Common Stock (the \"New\n                                                                          ---\nOption\" or \"New Options\"), pursuant to Company stock incentive plans (as\n------                                                                  \namended) under which the options are duly authorized (the \"Option Plan\" or\n                                                           -----------    \n\"Options Plans\").  The New Options shall have an exercise price equal to one\n--------------                                                              \nhundred percent (100%) of the fair market value of Company Common Stock as of\nthe Effective Date.  Of the New Option shares, 350,000 shares shall become\nvested and fully exercisable on and after November 15, 2000; 350,000 shares\nshall become vested and fully exercisable on and after November 15, 2001;\n250,000 shares shall become vested and fully exercisable on and after November\n15, 2002; and 250,000 shares shall become vested on and after November 15, 2003\nand shall become fully exercisable on the date Executive ceases to be an\nexecutive officer or any earlier date on which an exercise would not render the\noption \"spread\" nondeductible to Company by reason of Section 162(m) of the\nCode, but in no event later than June 30, 2004; provided in each case that\n                                                --------                  \n(except as provided elsewhere in this Agreement or as accelerated under other\nprovisions of this Agreement) Executive is providing services to Company as an\nofficer, director or employee on the applicable vesting date.  Each New Option\nshall be transferable upon election by Executive, to the extent consistent with\napplicable restrictions under Company's registration of the underlying shares\nwith the SEC.\n\n                                       5\n\n \n          (c) Each New Option described in this Section 5 shall be subject to,\nand governed by, the terms and provisions in the applicable Option Plan, except\nto the extent of modifications that are expressly provided for in this\nAgreement.  Notwithstanding anything in the applicable Option Plan to the\ncontrary, the New Options shall be exercisable, to the extent vested as provided\nin Section 5(b) (or vested and made exercisable by acceleration as provided for\nelsewhere in this Agreement or the Option Plan), for the following periods after\nthe last date of termination of all of Executive's services to Company in any\nand all capacities as a director, officer or employee of Company:\n\n     (i)  in the case of a termination because of death or disability (including\n     Disability), five years;\n\n     (ii) in the case of a termination by reason of Executive's voluntary\n     resignation or retirement, other than pursuant to Section 14,\n\n               (A)  before age 65, without the consent of the Board, one year;\n\n               (B)  before age 65, with the consent of the Board, three years;\n     and\n\n               (C)  after age 65, five years;\n     \n\n     (iii) in the case of a termination by Company pursuant to Section 13(a)\n     (ii) of this Agreement, 30 days; and\n\n     (iv)  in the case of a termination by Executive pursuant to Section 14, or\n     by Company pursuant to Section 13(a)(iii), or by Company for reasons not\n     otherwise referred to above, five years, in each case except as expressly\n     otherwise provided in Section 15(a)(iv).\n\n          (d) Executive agrees to enter into stock option agreements with\nCompany containing the terms and provisions of the New Options together with\nsuch other terms and conditions as counsel for Company may reasonably require to\nassure compliance with applicable federal and state securities law and stock\nexchange requirements in connection with the issuance of shares of Company\nCommon Stock upon exercise of the New Options granted as provided herein.\nCompany will undertake, as soon as practicable, to register the shares\nunderlying the New Options on Form S-8 under the Securities Act of 1933 (to the\nextent not previously registered) and shall keep such Form S-8 in effect for the\nentire period the New Options remain outstanding.\n\n          (e) All outstanding options, stock appreciation rights, restricted\nstock and other stock-based awards held by Executive prior to November 3, 2000\n(\"Prior Options\") shall remain outstanding in accordance with their original\n  -------------                                                             \nterms and (i) as to options granted prior to September 29, 1996, the terms of\nthe Original Employment Agreement and the Management Continuity Agreement dated\nJuly 1, 1991 between Company and the Executive (the \"MCA\") and (ii) as to\n                                                     ---                 \noptions contemplated by and granted pursuant to the Prior Employment Agreement,\nthe terms thereof.  In the event of any inconsistency or ambiguity with respect\nto any options, rights, restricted stock or stock-based awards, the provisions\nthat are most favorable to the Executive shall prevail.\n\n                                       6\n\n \n          (f) Notwithstanding any provision of this Agreement to the contrary,\nin no event shall any New Option be exercisable beyond the maximum 10-year\nperiod allowed therefor under the applicable Plan.\n\n6.   Reimbursement of Expenses\n\n          Executive shall be authorized to incur and shall be reimbursed by\nCompany for reasonable expenses for the advancement of Company's business\npursuant to standing Company policy and those specific categories of such\nexpenses as the Board has defined, which shall not during the period of any\nservice hereunder be reduced as to Executive.\n\n7.   Other Benefits During Service\n\n          (a) During the period of any service hereunder, Executive shall also\nbe entitled to receive all other benefits of service which are, and which may be\nin the future, generally available to members of Company's management, and\nspecifically, an allowance for use of automobiles as provided from time to time\nby action of the Board of Directors, as well as, without limitation, group\nhealth, disability, and life insurance benefits and participation in any Company\nprofit-sharing, retirement or pension plan, and vacation consistent with the\nvacation policies of Company.\n\n          (b) No later than March 31st of each year during the term, Company\nshall pay Executive an amount necessary to reimburse Executive for federal and\nstate income taxes payable with respect to income recognized by the Executive\nfor income tax purposes as a result of (i) Company providing the Executive with\nthe services of any individuals hired as a driver\/security guard, and (ii) the\namount paid under this Section 7(b), so that Executive will be in the same\nafter-tax position as if no such taxes had been imposed.  Company (consistent\nwith past practice) shall reimburse or pay the costs of any driver\/guard and\nsecurity, provided that reimbursement of any residential security costs\n(exclusive of any driver\/guard or any payments under clauses (i) and (ii) above)\nincurred other than while traveling on Company business shall not exceed\n$100,000.\n\n          (c) In addition, Company shall provide up to $25,000 each year for\nexpenses incurred by Executive for estate, tax and financial planning, insurance\n(including annuity) products and benefits, and related attorneys' fees.  If such\nexpenses are less than $25,000 in any one year after 1995, the unused amount(s)\nshall cumulate and be available to Executive in any year thereafter.  Company\nacknowledges that $117,247 in unused amount from periods prior to the effective\ndate of the Prior Employment Agreement and all unused additional amounts since\nthe date of the Prior Employment Agreement shall also be available to Executive\nin future periods for these purposes.\n\n          (d) If Executive enters into loan agreements for the purpose of\nexercising any options or warrants (whether such options or warrants arose by\nvirtue of this Agreement or any other past, present, or future agreement between\nExecutive and Company), or paying taxes thereon or on the vesting of restricted\nstock, Company shall guarantee such loans for a period ending two (2) years\nafter the date of the event causing tax liability to be incurred by reason of\nsuch exercise or vesting.  Company's obligation to guarantee such loans shall\ncontinue \n\n                                       7\n\n \nnotwithstanding Executive's termination of service and shall apply to loans\nentered into prior to termination of service which may run for a period beyond\nthe Date of Termination (as such term is defined in Section 13(b) hereof), as\nwell as loans obtained subsequent to the Date of Termination, provided that the\nloan was obtained in connection with the exercise of any option or warrant\nwhenever granted or the vesting of restricted stock. The amount of said\nguaranteed loans shall not exceed the lesser of: (a) the amount of the exercise\nprice, plus the actual tax paid during the two year period by reason of such\nexercise and\/or vesting, or (b) three and one-half million dollars ($3,500,000).\nIn addition, if Executive enters into any one or more loan agreements for any\nreason whatsoever, Company shall guarantee such loans for a period ending 180\ndays after retirement, death, or Disability, or other termination of service\nhereunder (or after any extended period of consulting, as may be approved by the\nBoard) or, in the case termination by Company other than for good cause as set\nforth in Section 13(a)(ii) hereof or upon the termination by Executive pursuant\nto Section 14. The amount of said guaranteed loans shall not exceed three and\none-half million dollars ($3,500,000).\n\n8.   Special Retirement Benefit; Change of Control\n\n          (a) Company will maintain a non-discretionary supplemental retirement\narrangement (the \"Special Retirement Benefit\") to provide additional cash\n                  --------------------------                             \npayments to Executive that will be paid to Executive upon, or at Executive's\nelection after, the Section 162(m) Deferred Payment Date.  The Special\nRetirement Benefit will accrue from September 29, 1996, at the rate of $400,000\nper year on each of December 31, 1997, December 31, 1998, December 31, 1999,\nDecember 31, 2000 and December 31, 2001.\n\n          (b) The Special Retirement Benefit will be due and payable to\nExecutive on (or at Executive's election after) the Section 162(m) Deferred\nPayment Date and shall be increased by interest at the rate of 9% per year,\ncompounded annually from September 29, 1996 or the applicable date of accrual\nunder Section 8(a) until paid (the \"Interest\").  Except for payment as otherwise\n                                    --------                                    \nprovided in Section 8(c) and (e), payment of the Special Retirement Benefit plus\nthe Interest (collectively, the \"Retirement Payment\") shall be made to Executive\n                                 ------------------                             \nonly if Executive is Chief Executive Officer of Company on his 65th birthday,\nprovided, however, that a pro rata portion of the Special Retirement Benefit\n--------  -------                                                           \n(determined by multiplying the maximum Special Retirement Benefit by a fraction,\nthe numerator of which is the number of months from January 1, 1997 until\nExecutive's death or Disability and the denominator of which is 60), plus\nInterest, will be paid to Executive or his designated beneficiary or in the\nabsence of a designated beneficiary, his estate (the applicable beneficiary or\nestate being herein referred to as \"Estate\") upon his death or to him or to his\n                                    ------                                     \nduly authorized representative in event of his Disability as defined in Section\n9 hereof.\n\n          (c) If Executive's Service hereunder is terminated by Executive\npursuant to Section 14 hereof prior to 2002 or by Company pursuant to Section\n13(a)(iii) hereof prior to 2002, or if Company shall terminate Executive's\nservice under this Agreement other than for good cause or because of his death\nor Disability prior to 2002, the unaccrued installments of the Special\nRetirement Benefit that would have been payable had he remained as Chief\nExecutive Officer through December 31, 2001, plus Interest, shall be accelerated\nand accrued immediately and the entire amount of the Retirement Payment shall be\npayable to Executive no later than the Section 162(m) Deferred Payment Date.\n\n                                       8\n\n \n          (d) All cash payments pursuant to the Special Retirement Benefit will\nbe paid from the general funds of Company and no special or separate fund will\nbe established and no segregation of assets will be made to assure the payment\nof funds pursuant to the Special Retirement Benefit.  Executive shall have no\nright, title or interest whatever in or to any investment which Company may make\nto aid it in meeting its obligations under the Special Retirement Benefit.\nNothing contained in this Agreement, and no action taken pursuant to its\nprovisions, shall create or be construed to create a trust of any kind, or a\nfiduciary relationship between Company and Executive or any other person.  To\nthe extent that Executive acquires a right to receive payments pursuant to the\nSpecial Retirement Benefit, such right shall be no greater than the right of an\nunsecured creditor of Company.\n\n          (e) In the event or anticipation of a Change of Control, as defined in\nthis Section 8, the unaccrued installments of the Special Retirement Benefit\nshall be accelerated and accrued and the entire amount of the Special Retirement\nBenefit, plus Interest (in an amount not less than that which would have been\npayable had he remained as Chief Executive Officer through 2001), shall be\npayable to Executive immediately prior to such Change of Control or as soon\nthereafter as practicable.\n\n          (f) For purposes of this Agreement, the term \"Change of Control\" shall\nmean a change of control of a nature that would be required to be reported in\nresponse to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the\nSecurities Exchange Act of 1934, as amended (the \"Exchange Act\"), or in response\n                                                  ------------                  \nto any other form or report to the Securities and Exchange Commission or any\nstock exchange on which Company's shares are listed which requires the reporting\nof a change of control.  In addition, a Change of Control shall be deemed to\nhave occurred if (i) any \"person\" (as such term is used in Sections 13(d) and\n14(d) of the Exchange Act, but excluding a person described in (and who\ncontinues to satisfy the requirements and conditions of) the proviso at Rule\n13d-1(b)(1)(i), (ii) and (iii) and who has not become subject to Rule 13d-\n1(e)(1) or (g) is or becomes the beneficial owner, directly or indirectly, of\nsecurities of Company representing more than 35% of the combined voting power of\nCompany's then outstanding securities; or (ii) in any two-year period,\nindividuals who were members of the Board at the beginning of such period, plus\neach new director (other than a participant or designate of a participant in a\ntransaction described in clause (i), (ii), (iii) or (iv) of this sentence) whose\nelection or nomination for election was approved by at least two-thirds of the\ndirectors in office immediately prior to such election or nomination, cease for\nany reason to constitute at least a majority of the Board; (iii) there is\nconsummated a merger or consolidation of Company with or into any other entity,\nother than a merger or consolidation which would result in the holders of the\nvoting securities of Company outstanding immediately prior thereto holding\nsecurities which represent immediately after such merger or consolidation more\nthan 50% of the combined voting power of the voting securities of either Company\nor the other entity which survives such merger or consolidation or the parent of\nthe entity which survives such merger or consolidation; (iv) the stockholders of\nCompany approve a plan of complete liquidation of Company or there is\nconsummated the sale or disposition by Company of all or substantially all of\nCompany's assets, other than a sale or disposition by Company of all or\nsubstantially all of Company's assets to an entity at least 65% of the combined\nvoting power of the voting securities of which are owned by persons in\nsubstantially the same proportions as their ownership of Company immediately\nprior to such sale; or (v) a majority of the members of the Board in office\nprior to the happening of any event and who are still in office after such\nevent, \n\n                                       9\n\n \ndetermines in its sole discretion within one year after such event, that as a\nresult of such event that there has been a Change of Control.\n\n           Notwithstanding the foregoing definition, the term \"Change of\nControl\" for purposes of this Agreement (a) shall exclude the acquisition of\nsecurities representing more than 35% of the combined voting power of Company\n(i) by Executive or any group with which Executive is affiliated (as the terms\n\"group\" and \"affiliate\" are defined under the Exchange Act), (ii) by Company,\n(iii) by any of its wholly-owned subsidiaries (unless after giving effect to the\nacquisition, less than 65% of the voting power of the subsidiary is held by\nCompany and persons who were stockholders of Company immediately prior to the\nacquisition), or (iv) by any trustee (or other fiduciary) holding securities of\nCompany under an employee benefit plan now or hereafter established by Company;\nand (b) shall not apply to the Prior Options, which shall be governed by the\nprovisions of Section 5(e) and the applicable agreements referred to therein. As\nused herein, the term \"beneficial owner\" shall have the same meaning as under\nSection 13(d) of the Exchange Act, and related case law.\n\n9.   Disability Benefits\n\n          \"Disability\" shall mean Executive's incapacity due to physical or\nmental illness or cause, which results in the Executive being absent from the\nperformance of his duties with Company on a full-time basis for a period of six\n(6) consecutive months.  The existence or cessation of a physical or mental\nillness which renders Executive absent from the performance of his duties on a\nfull-time basis shall, if disputed by Company or Executive, be conclusively\ndetermined by written opinions rendered by two qualified physicians, one\nselected by Executive, and one selected by Company.  During the period of\nabsence, Executive shall be deemed to be on disability leave of absence, with\nhis compensation paid in full. During the period of such disability leave of\nabsence, the Board of Directors may designate an interim Chief Executive Officer\non such terms as it deems proper.\n\n           Upon the expiration of twelve (12) consecutive months of such\ndisability leave of absence, Executive's service may be terminated by Company\npursuant to the provisions of Section 13(a)(i); provided, however, that prior to\nthe Date of Termination (as defined in Section 13), Executive shall have the\nright to return to full-time service.  At Company's request, Executive shall be\nrequired to provide the written opinions of two qualified physicians, one\nselected by Executive and one selected by Company, to verify Executive's\ncondition of health.  If Company refuses to permit Executive to resume full-time\nservice as Chairman and Chief Executive Officer, Company shall be deemed to have\nterminated this Agreement under Section 13(a)(iii) hereof.\n\n10.  Death During Service; Split Dollar Policy\n\n           If Executive dies during the term of service contemplated by this\nAgreement, Company shall pay the regular compensation that would otherwise be\npayable to Executive up to the end of the month in which his death occurs, plus,\nas a death benefit, compensation for a period of twelve (12) months thereafter\nat the same monthly rate of base compensation which prevailed during the month\nof his death.  In addition, Executive shall be entitled to receive the payments\nand benefits enumerated in Sections 8(b) and 13(c).  Any amounts payable to\n\n                                       10\n\n \nExecutive under this Agreement which are unpaid at the date of Executive's death\nor payable hereunder or otherwise by reason of his death, unless otherwise\nexpressly provided herein, shall be paid in accordance with the terms of this\nAgreement to Executive's Estate.\n\n           Company shall provide Executive with a split dollar life insurance\npolicy in the amount of one million dollars ($1,000,000).  Under the terms of\nsuch split dollar arrangement, on Executive's death, Company shall recover its\ncumulative premiums paid.  If Executive's employment with Company terminates for\nany reason or Executive desires for any reason to dissolve the split dollar\narrangement, Executive may take ownership of the policy by paying to Company an\namount equal to Company's cumulative premiums paid, in which event Company shall\nassign to Executive all of its interest under such policy.\n\n11.  Confidential Information\n\n           This and the next following Section 12 supersede all previous\nagreements, if any, between Executive and Company relating to confidential\naffairs of Company and to inventions conceived or made by Executive. Executive's\nobligations hereunder are made partly in consideration of the salary to be paid\nduring service by Company. Confidential information shall mean all information\ngenerated by Executive or obtained by Executive from or disclosed to Executive\nby Company which relates to Company's past, present, and future research,\ndevelopment and business activities, trade secrets, including in particular, all\nmatters of a technical nature, such as \"know-how,\" formulae, secret processes or\nmachines, inventions, and research projects, and matters of a business nature,\nsuch as information about costs, profits, markets, sales, lists of customers,\nand any other information of a similar nature, also including plans for further\ndevelopment. Except as authorized by Company in writing, Executive shall hold\nall such confidential information in trust and confidence for Company, and\nagrees not to disclose them to anyone outside of Company, either during or after\nservice with Company. This commitment shall impose no obligation upon Executive\nwith respect to any portion of the confidential information which (i) is now or\nhereafter, through no act or failure to act on his part, becomes generally known\nor publicly available, (ii) is hereafter furnished to Executive by a third party\nas matter of right and without restriction on disclosure, or (iii) is furnished\nto others by Company without restriction on disclosure. Executive further agrees\nto deliver promptly to Company on termination of employment with Company, or at\nany time it may so request all memoranda, notes, records, reports, manuals,\ndrawings, blueprints, and any other documents containing any confidential\ninformation as defined above, including all copies of such materials which\nExecutive may then possess or have under his control. The rights and obligations\nset forth in this Section 11 shall survive according to the terms hereof and\ncontinue after any expiration or termination of this Agreement or the service\nspecified herein. In the event of a breach or threatened breach by Executive of\nthe provisions of this Section 11, Company shall be entitled to an injunction\nrestraining Executive from disclosing, in whole or in part, any of such\nconfidential information, or from rendering any services to any person, firm,\ncorporation, association, or other entity to whom such confidential information,\nin whole or in part, has been disclosed or is threatened to be disclosed.\n\n                                       11\n\n \n12.  Inventions, Patents, Copyrights and Proprietary Information\n\n           Executive agrees that all inventions, works of authorship, trade\nsecrets, and proprietary information (including new contributions, improvements,\nideas, or discoveries), patentable or unpatentable, copyrightable or\nuncopyrightable, conceived, made or first actually reduced to practice by him\nsolely or jointly with others during the period of his service with Company and\nwhich are either related in any manner to the business (commercial or\nexperimental) of Company or of any of its subsidiaries, including product,\nservice, research and development fields in which Company or any of its\nsubsidiaries has been or is engaged or plans to engage, or to Executive's\nemployment activities, or are conceived, made or first reduced to practice in\nwhole or in part on Company time or with the use of Company facilities or\nmaterials (except any invention which qualifies fully for exemption under\nSection 2870 of the California Labor Code) shall belong to Company; provided\n                                                                    --------\nthat works of authorship concerning Executive or the electronics industry, and\nany copyrights thereon, shall belong to Executive and Executive shall seek\nauthorization in writing pursuant to Section 11 for disclosure of any\nconfidential information contained therein.  Executive further agrees that he\nwill:\n\n           (a) Promptly disclose such inventions, works of authorship, trade\nsecrets and proprietary information to Company;\n\n           (b) Notify Company of any invention which he claims qualifies for\nexemption under Section 2870 of the California Labor Code and offer to disclose\nsuch inventions to Company in confidence;\n\n           (c) Assign to Company, at its request and without additional\ncompensation, the entire rights to the inventions for the United States and all\nforeign countries;\n\n           (d) Sign all papers within the truth, necessary to carry out the\nabove; and\n\n           (e) Give testimony (but without expense to Executive) in support of\nhis inventorship, idea or trade secret, or as otherwise reasonably deemed\nnecessary by counsel to Company.\n\n           Executive agrees to accept the compensation provided by this\nAgreement as his sole compensation for the use, lease, sale or other transfer by\nCompany of any such inventions, works of authorship, trade secrets and\nproprietary information or of any such patents obtained by it in such\ninventions, works of authorship, trade secrets or proprietary information.\n\n           To the best of Executive's knowledge, there is no other contract to\nassign inventions, works of authorship, patents, trade secrets, or other\nproprietary information that is now in existence between him and any other\nperson, corporation or partnership, unless Executive has so indicated below, and\nunless a copy of any such other contract is attached hereto.\n\n13.  Termination by Company\n\n           (a) Company shall have the right to terminate Executive's service\nhereunder under the following circumstances:\n\n                                       12\n\n \n     (i)  Upon ten (10) days' written notice from Company to Executive in the\n     event of disability which has incapacitated him from performing his duties\n     for twelve (12) consecutive months as determined under Section 9, subject\n     to Executive's right to reinstatement as provided in Section 9, provided\n     that any such determination after Executive reaches age 65 shall not\n     prejudice any rights or benefits to which he would have been entitled had\n     he voluntarily retired as of such date under this Agreement.\n\n     (ii)  For good cause upon ten (10) days' written notice from Company.\n     Termination by Company of Executive's service for \"good cause\" as used in\n     this Agreement shall mean (A) that the Board of Directors has found that\n     Executive has committed a material act of theft, misappropriation, or\n     conversion of corporate funds, or (B) a termination of Executive's\n     employment during the Initial Term (other than in contemplation of, in\n     connection with or following a Change in Control (as defined in Section 8\n     hereof)) as a result of Executive's demonstrably willful, deliberate and\n     continued failure to follow reasonable directives of the Board of Directors\n     (other than for any such failure resulting from Executive's incapacity due\n     to physical or mental illness or any such actual or anticipated failure in\n     connection with a resignation by Executive pursuant to Section 14 hereof)\n     within Executive's ability to perform, which failure has had a material\n     adverse effect on Company.  For purposes of the previous sentence, no act\n     or failure to act by Executive shall be deemed \"willful\" unless done, or\n     omitted to be done, by Executive in bad faith and without reasonable belief\n     that his action or omission was in the best interest of Company.\n     Notwithstanding the foregoing, Executive shall not be deemed to have been\n     terminated for good cause under clause (B) above unless and until:  (1)\n     there shall have been delivered to Executive a copy of a resolution duly\n     adopted by the Board of Directors in good faith at a meeting of the Board\n     of Directors called and held for such purpose (after reasonable notice to\n     Executive and an opportunity for Executive, together with his counsel, to\n     be heard before the Board of Directors), finding that Executive was guilty\n     of conduct set forth above in clause (B) and specifying the particulars\n     thereof in reasonable detail, and (2) Executive shall have been provided\n     the opportunity to correct the performance at issue within 20 business days\n     after his receipt of the resolution; and (3) if Executive contests such\n     finding (or a conclusion that he has failed to timely cure the performance\n     in response thereto), the arbitrators by final determination in an\n     arbitration proceeding pursuant to Section 27 hereof have concluded that\n     Executive's conduct met the standard for termination for \"good cause\" above\n     and that the Board of Directors' conduct met the standards of good faith\n     and satisfied the procedural and substantive conditions of this Section 13.\n\n     (iii)  Upon ninety-five (95) days' written notice to Executive where the\n     Board by majority vote, elects to terminate Executive for any reason, other\n     than the reasons referred to in subparagraphs (i) or (ii) above.\n\n              (b) Except as provided in the following sentences of this clause\n(b) and clauses (c) and (d), as used in this Agreement \"Date of Termination\"\n                                                        -------------------     \nshall mean the date specified in the written notice of termination given by\nCompany pursuant to Section 13(a)(i), (ii) or (iii) hereof, or the effective\ndate of a termination of services for any other reason. If Executive dies, the\ndate of Executive's death shall be the Date of Termination. Further, if within\nsixty (60) days after any notice of termination is given, the party receiving\nsuch notice of termination\n\n                                       13\n\n \nnotifies the other party that a dispute exists concerning the termination, the\nDate of Termination shall be the date as finally determined by mutual written\nagreement of the parties or by a final and binding arbitration award. Any party\ngiving notice of a dispute shall pursue the resolution of such dispute. During\nthe period until the dispute is finally resolved in accordance with this Section\n13(b), Company will continue to pay Executive his full compensation in effect\nwhen the notice giving rise to the dispute was given (including, but not limited\nto, base salary) and continue Executive as a participant in all compensation,\nemployee benefit, health and welfare and insurance plans, programs, arrangements\nand perquisites in which Executive was participating or to which he was entitled\nwhen the notice giving rise to the dispute was given, until the dispute is\nfinally resolved in accordance with this Section 13(b). Amounts paid under this\nSection 13(b) shall be repaid to Company or be offset against or reduce any\nother amounts due Executive under this Agreement, if appropriate, only upon the\nfinal resolution of the dispute.\n\n              (c) If Executive's service hereunder is terminated by reason of\nExecutive's death or Disability pursuant to Section 13(a)(i) hereof, Executive\nor his Estate shall be entitled to receive 100% of his base salary (including\nadjustments) for the remainder of the Initial Term, the amounts provided under\nSection 10, his compensation under Sections 4(a), (b) and 4(d) hereof for the\nfiscal year in which the Date of Termination occurs and for the following fiscal\nyear, and any Excess Bonus remaining unpaid as of the date the foregoing bonuses\nare paid.  Company may purchase insurance to cover all or any part of its\nobligations set forth in the preceding sentence, and Executive agrees to take a\nphysical examination to facilitate the obtaining of such insurance.  In addition\nto the foregoing, the New Options and all Prior Options (collectively, the\n\"Options\") which otherwise would have vested within two years following the Date\n--------                                                                        \nof Termination shall accelerate, vest and become exercisable on the Date of\nTermination.  The New Options shall remain exercisable as provided in Section\n5(c).  In addition, Executive or his estate (or spouse or dependents, as\napplicable) shall be entitled to the benefits contemplated by Section 16(a)(i)\nand (iii).\n\n              (d) If Executive's service hereunder is terminated pursuant to\nSection 13(a)(ii) hereof, or by reason of Executive's voluntary termination\nother than pursuant to Section 14 hereof, Company shall be obligated to pay\nExecutive only such severance compensation as the Board by majority vote deems\nappropriate, or none at all, and such other benefits and compensation as is\nexpressly provided for under other provisions of this Agreement (including but\nnot limited to Sections 4(b), 5(c), 5(e), 8, 16 and 17) and Company's ongoing\nobligations under Sections 3 and 4 shall cease (except as to any and all\nobligations that are either accrued or deferred or both). Any and all of\nCompany's obligations under other sections of this Agreement shall continue. The\nNew Option shall remain exercisable as provided in Section 5(c).\n\n              (e) If Executive's service hereunder is terminated pursuant to\nSection 13(a)(iii), the provisions of Sections 15 and 16 hereof shall apply.\n\n              (f) All Prior Options shall be and remain subject to the\nprovisions of Section 5(e) hereof.\n\n                                       14\n\n \n14.  Termination by Executive\n\n          Executive shall have the right to terminate his service under this\nAgreement upon 30 days' notice to Company given within 180 days following the\ndate on which the Executive becomes aware of any of the following events:\n\n          (a) Executive is not elected or retained as Chairman and  Chief\nExecutive Officer and a director of Company at any time during the Initial Term\nor as Chairman and a director of Company at any time during the Extended Term;\n\n          (b) any assignment to Executive of any duties other than those\nreasonably contemplated by, or any limitation of the powers or prerogatives of\nExecutive in any respect not reasonably contemplated by, Section 2 hereof;\n\n          (c) any removal of Executive from responsibilities substantially\nsimilar to those described or contemplated in Section 2 hereof (except pursuant\nto Section 13 (a)(ii) hereof);\n\n          (d) any reduction in, or limitation upon, the compensation,\nreimbursable expenses or other benefits provided in Sections 3 through 10, other\nthan by valid public law or regulation;\n\n          (e) any assignment to Executive of duties that would require him to\nrelocate or transfer his current principal place of residence in Southern\nCalifornia, or would make the continuance of such current principal place of\nresidence unreasonably difficult or inconvenient for him; or\n\n          (f) a Change of Control of Company (as defined in Section 8 hereof);\nprovided that in such event no advance notice shall be required.\n\n15.  Consequences of a Section 14 Termination by Executive, a Termination by\n     Company for Certain Reasons or a Breach by Company\n\n          (a) If Executive's service hereunder is terminated by Executive\npursuant to Section 14 hereof during the Initial Term or the Extended Term, or\nby Company pursuant to Section 13(a)(iii) hereof during the Initial Term or the\nExtended Term, or if Company shall otherwise terminate Executive's services\nunder this Agreement (other than for good cause or because of death or\ndisability) during the Initial Term or the Extended Term, the following shall\napply:\n\n     (i)  Executive shall continue to receive Executive's base salary (in effect\n     in the fiscal year in which the Date of Termination occurs and as adjusted\n     under Section 3) until the end of the Extended Term; provided, however,\n                                                          --------          \n     that in the event of a Change of Control (as defined in Section 8 hereof),\n     such base salary shall be payable for no less than three years following\n     the Date of Termination.  Company shall as soon as practicable but no later\n     than 10 business days after the Date of Termination pay to Executive in a\n     lump sum the full amount to which he is entitled under this Section\n     15(a)(i).\n\n                                       15\n\n \n     (ii)  Executive shall be entitled to receive the bonuses that would have\n     been paid to Executive under Sections 4(a), (b) and 4(d) hereof for (x) the\n     fiscal year in which such Date of Termination occurred, (y) the fiscal year\n     following the fiscal year in which the Date of Termination occurred, and\n     (z) any subsequent fiscal year to the extent that the carry-over provisions\n     of Section 4(b) hereof are applicable, provided that no bonus shall be\n     first accrued for any period following the last fiscal year in which the\n     last day of the Extended Term occurs.  Notwithstanding the foregoing, in\n     the event of a Change of Control (as defined in Section 8 hereof), Company\n     shall pay Executive immediately an amount equal to the average of the two\n     highest bonuses paid (or payable) to Executive for the last five full\n     fiscal years immediately prior to such Change of Control, plus any and all\n     amounts that may be carried-over pursuant to Section 4(b) hereof, and shall\n     pay Executive as soon as determinable the difference between any greater\n     amount determined pursuant to the preceding sentence and such average\n     amount previously paid.  Except as provided with respect to a Change of\n     Control, any bonuses otherwise payable pursuant to this Section 15(a)(ii)\n     shall be paid to Executive (or his Estate) at the same time as such bonuses\n     would have been paid to Executive if Executive's service hereunder had not\n     been terminated.  The bonus payable for the fiscal year following the\n     fiscal year in which the Date of Termination occurs shall be calculated and\n     paid as if Executive's service hereunder had not been terminated,\n     notwithstanding any \"in service\", eligibility status or other requirements\n     under the 1996 Executive Incentive Plan.\n\n     (iii)  The vesting and exercisability of all New Options and all other\n     options, stock appreciation rights, restricted stock or other stock-based\n     awards granted by Company to Executive shall accelerate and all of them\n     shall become fully vested and exercisable on the Date of Termination.\n\n     (iv)  Any New Options that are exercisable without regard to this Section\n     15 shall remain exercisable as provided in Section 5(c), except that any\n     New Options that become exercisable solely by reason of the provisions of\n     Section 15(a)(iii) before September 12, 2001 shall remain exercisable for a\n     period of only three years.\n\n     (v)   In addition to all other amounts payable to Executive under this\n     Section 15, the Executive shall be entitled to receive, not later than the\n     15th day following the Date of Termination, all benefits payable to him\n     under any of Company's tax-qualified employee benefit plans and any other\n     plan, program or arrangement relating to deferred compensation, retirement\n     or other benefits including, without limitation, the Special Retirement\n     Benefit and any profit sharing, 401(k), employee stock ownership plan, or\n     any plan established as a supplement to any of the aforementioned plans or\n     expressly provided by other provisions of this Agreement, whether now\n     existing or hereafter established, with additional service and benefit\n     credits (based on not less than the amount of salary and bonus Executive\n     would have received under this Agreement had his services not terminated)\n     for periods through the Extended Term.\n\n     (vi)  Company shall also pay to Executive, not later than the 15th day\n     following the Date of Termination, an amount equal to all unvested Company\n     contributions credited to the Executive's account under any tax-qualified\n     employee benefit plan maintained by Company as of the Date of Termination.\n\n                                       16\n\n \n     (vii) Company shall also pay to Executive all legal fees and expenses\n     incurred by the Executive (1) in contesting or disputing any such\n     termination or in seeking to obtain or enforce any right or benefit\n     provided by this Agreement (Executive shall have no obligation to repay any\n     such legal fees or expenses regardless of the outcome of any contest or\n     dispute), or (2) in connection with any tax audit or proceeding to the\n     extent attributable to the application of Section 4999 of the Code to any\n     payment or benefit provided hereunder.\n\n     (viii)  Company shall also pay to Executive, not later than the second day\n     following the Date of Termination, a pro rata amount of his base salary\n     under Section 3 hereof, in effect on the Date of Termination, for each day\n     of vacation or sick leave which has accrued as of the Date of Termination,\n     but which is unpaid as of such date, to which Executive is entitled under\n     Company's vacation and sick leave policies.\n\n          (b) Upon a Change of Control, Company's obligation to pay the benefits\ndescribed herein shall be absolute and unconditional, shall be paid as soon as\npracticable but not more than ten (10) business days thereafter or (if expressly\nprovided herein) as earlier or later herein provided, and shall not be affected\nby any circumstances or any set-off, counter-claim, recoupment, defense or other\nright which Company or any of its subsidiaries may have or claim against\nExecutive or anyone else.\n\n16.  Other Benefits Following Termination of Service\n\n          (a) If Executive's service is terminated by Company other than\npursuant to Section 13(a)(ii), or terminated by Executive pursuant to Section 14\non or before the last day of the Extended Term, or if Executive completes the\nterm of service contemplated by Section 2, or if Executive dies, retires from\nservice as Chief Executive Officer or Chairman (or both) with the consent of the\nBoard before age 65, or retires as Chief Executive Officer or Chairman (or both)\nafter age 65, in addition to the benefits provided under Section 15 in the\napplicable circumstances, Executive shall also be entitled to the following\nbenefits:\n\n     (i)  Company shall provide at its expense for his lifetime, his spouse's\n     lifetime and until his youngest child or other eligible dependent reaches\n     age 21, health and welfare benefits, at least comparable to those benefits\n     in effect on the date hereof or, if greater, immediately prior to the Date\n     of Termination, including but not limited to medical, dental, disability,\n     spouse and dependent care, and life insurance coverage.  At Company's\n     election, health benefits may be provided by reimbursing Executive or his\n     spouse or child's guardian, as the case may be, for the cost of converting\n     group policy to individual coverage, or for the cost of extended COBRA\n     coverage.  Company shall also pay to Executive or his spouse or child's\n     guardian, as the case may be, an amount calculated to pay any income taxes\n     due as a result of the payment by Company on Executive's behalf for such\n     health benefits.  Such tax payment shall be calculated to place Executive\n     (and his spouse and dependents) in the same after-tax position as if no\n     such income taxes had been imposed.  Notwithstanding anything to the\n     contrary in this Agreement, if Executive's service terminates after\n     completion of thirty (30) years of service or\n\n                                       17\n\n \nExecutive dies or is disabled, benefits pursuant to this Section 16(a)(i) shall\ncontinue as above provided in the case of a retirement, expiration or\ntermination.\n\n     (ii)  Company shall allow Executive the continued use of a Company\n     automobile and security\/driver on the same terms which existed on the date\n     hereof or, if greater, immediately prior to the Date of Termination, until\n     five (5) years after the expiration of the Extended Term.\n\n     (iii)  Company shall provide Executive (or his surviving spouse) up to\n     $25,000 each year for expenses incurred by Executive (or surviving spouse)\n     for estate, tax and financial planning, insurance (including annuity)\n     products and benefits and related legal fees, until five years after the\n     expiration of the Extended Term.  Such amount shall cumulate as provided in\n     Section 7(c) hereof and be paid at the conclusion of such period to the\n     extent not used.\n\n     (iv)  Company shall provide Executive with an office and secretarial\n     services equivalent to those provided to Executive in his Southern\n     California office on the date hereof or, if greater, immediately prior to\n     the Date of Termination, until five years after the expiration of the\n     Extended Term.\n\n     (v)  Company shall provide continued access to and use of Company\n     facilities and services comparable to those provided to him prior to his\n     retirement as Chief Executive Officer, including access to Company\n     aircraft, apartments, memberships, and clubs, on substantially the same\n     basis as such facilities and services are now provided or are provided to\n     him prior to his retirement as Chief Executive Officer, for business and\n     for personal use, as the case may be, until five years after the expiration\n     of the Extended Term; provided that in the case of Company aircraft, such\n     access shall be subject to the approval of Company's chief executive\n     officer.\n\n          (b) Unless Executive's service is terminated by Company for good\ncause, for at least ten (10) years following the Date of Termination, Executive\nshall continue to be indemnified under Company's Certificate of Incorporation\nand Bylaws at least to the same extent as prior to the Date of Termination or\nany earlier Change of Control, whichever is greater, and Executive shall\ncontinue to be covered by the directors' and officers' liability insurance, the\nfiduciary liability insurance and the professional liability insurance policies\nthat are the same as, or shall be provided coverage at least equivalent to,\nthose Company carried prior to the Date of Termination or any earlier Change of\nControl, whichever is greater.\n\n          (c) If all or any portion of the amounts payable to Executive or his\nEstate under this Agreement or otherwise are subject to the excise tax imposed\nby Section 4999 of the Code (or similar state tax and\/or assessment), Company\nshall pay to Executive an amount necessary to place Executive in the same \nafter-tax position as Executive would have been in had no such excise tax been\nimposed. The amount payable pursuant to the preceding sentence shall be\nincreased to the extent necessary to pay income and excise taxes due on such\namount. The determination of the amount of any such additional amount shall\ninitially be made by the independent accounting firm then employed by Company.\nIf at a later date it is determined (pursuant to final regulations or published\nrulings of the IRS, final judgment of a court of\n\n                                       18\n\n \ncompetent jurisdiction or otherwise) that the amount of excise taxes payable by\nExecutive is greater than the amount initially so determined, then Company (or\nits successor) shall pay Executive an amount equal to the sum of (1) such\nadditional excise taxes, (2) any interest, fines and penalties resulting from\nsuch underpayment, plus (3) an amount necessary to reimburse Executive for any\nincome, excise or other taxes payable by Executive with respect to the amounts\nspecified in (1) and (2) above, including any income, excise or other taxes\npayable with respect to such amounts, and the reimbursement provided by this\nclause.\n\n          (d) Notwithstanding anything in this Section 16 to the contrary,\nExecutive may elect in his sole discretion not to have any portion of any\npayment be paid or not to have the vesting of any Options accelerated in order\nto avoid any \"excess parachute payment\" under Section 280G(b)(1) of the Code.\n\n17.  Indemnification\n\n          In addition to the provisions of Section 16(b), in the event Executive\nis made, or threatened to be made, a party to any legal action or proceeding,\nwhether civil or criminal or administrative, by reason of the fact that\nExecutive is or was a director or officer of Company or serves or served any\nother corporation fifty percent (50%) or more owned or controlled by Company in\nany capacity at Company's request, Executive shall be indemnified by Company,\nand Company shall pay Executive's related expenses when and as incurred, all to\nthe full extent permitted by law.\n\n18.  Remedies\n\n          Company recognizes that because of Executive's special talents,\nstature and opportunities in the semiconductor  industry, in the event of\ntermination by Company hereunder (except under Section 13(a)(ii)), or in the\nevent of termination by Executive under Section 14, before the end of the\nExtended Term, Company acknowledges and agrees that the provisions of this\nAgreement regarding further payment of base salary, bonuses, and the\nexercisability of Options and other benefits constitute fair and reasonable\nprovisions for the consequences of such termination, do not constitute a\npenalty, and such payments and benefits shall not be limited or reduced by\namounts Executive might earn or be able to earn from any other employment or\nventures during the remainder of the Extended Term.  Notwithstanding the\nforegoing, amounts paid or benefits provided under Section 16(a)(ii) through (v)\nshall be so limited or reduced.  Executive shall not be required to mitigate the\namount of any payment provided for in this Agreement by seeking other employment\nor otherwise.\n\n19.  Binding Agreement\n\n          This Agreement shall be binding upon and inure to the benefit of\nExecutive, his heirs, distributees and assigns, and Company, its successors and\nassigns.  Except as contemplated by Section 5(b), Executive may not, without the\nexpress written permission of Company, assign or pledge any rights or\nobligations hereunder to any person, firm or corporation.  If the Executive\nshould die while any amount would still be payable to Executive if he had\ncontinued to live, all such amounts, unless otherwise provided herein, shall be\npaid in accordance with this Agreement to the Executive's Estate.\n\n                                       19\n\n \n20.  No Attachment\n\n          Except as required by law or with the consent of Company or by laws of\ndescent and distribution or permitted designation, no right to receive payments\nunder this Agreement shall be subject to anticipation, commutation, alienation,\nsale, assignment, encumbrance, charge, pledge or hypothecation or to execution,\nattachment, levy or similar process or assignment by operation of law, and any\nattempt, voluntary or involuntary, to effect any such action shall be null, void\nand of no effect.\n\n21.  Assignment\n\n          Company will require any successor (whether direct or indirect, by\noperation of law, by purchase, merger, consolidation or otherwise to all or\nsubstantially all of the business and\/or assets of Company) to expressly assume\nand agree to perform this Agreement in the same manner and to the same extent\nthat Company would be required to perform it if no such succession had taken\nplace.  Failure of Company to obtain such assumption and agreement prior to the\neffectiveness of any such succession shall at Executive's election be deemed a\nmaterial breach of this Agreement and shall entitle the Executive to\ncompensation from Company in an amount equal to the greater of (A) the same\namount on the same terms as the Executive would be entitled under Section 15 and\nSection 16 hereof upon a termination without good cause by Company, or (B) the\nbenefits hereunder upon a Change of Control, except that for purposes of\nimplementing the foregoing, the date on which any such succession becomes\neffective shall be the Date of Termination.  As used in this Agreement,\n\"Company\" shall mean Company as defined above and, unless the context otherwise\nrequires, any successor to its business and\/or assets as aforesaid which assumes\nand agrees to perform this Agreement by operation of law, or otherwise.\n\n22.  Waiver\n\n          No term or condition of this Agreement shall be deemed to have been\nwaived, nor shall there be any estoppel against the enforcement of any provision\nof this Agreement, except by written instrument of the party charged with such\nwaiver or estoppel.  No such written waiver shall be deemed a continuing waiver\nunless specifically stated therein, and each such waiver shall operate only as\nto the specific term or condition waived and shall not constitute a waiver of\nsuch term or condition for the future or as to any act other than that\nspecifically waived.\n\n23.  Notice\n\n          For the purposes of this Agreement and the Prior Employment Agreement,\nnotices and all other communications provided for in this Agreement or the Prior\nEmployment Agreement shall be in writing and shall be deemed to have been duly\ngiven when personally delivered and acknowledged or delivered by United States\nregistered mail, return receipt requested, addressed to the Executive at 10659\nBellagio Road, Los Angeles, California 90077, with a copy to Diana L. Walker,\nO'Melveny &amp; Myers LLP, 400 South Hope Street, Los Angeles, California  90071-\n2899 in the case of Executive, and in the case of Company, to the attention of\nthe Chairman of the Compensation Committee of the Board of Directors with copies\nto the Chief Financial Officer and the Secretary of Company at the principal\nexecutive offices of  Company, \n\n                                       20\n\n \nor to such other address as either party may have furnished to the other in\nwriting in accordance herewith, except that notice of change of address shall be\neffective only upon receipt.\n\n24.  Governing Law\n\n          This Agreement shall be governed and construed in accordance with the\nlaws of the State of Delaware.\n\n25.  Costs\n\n          Company shall pay all the expenses of Executive, including attorneys'\nfees, in the negotiation and preparation of this Agreement, in addition to\nCompany's own expenses in connection therewith.\n\n26.  Severability\n\n          If, for any reason, any provision of this Agreement is held invalid,\nsuch invalidity shall not affect any other provision of this Agreement not held\nso invalid, and each such other provision shall to the full extent consistent\nwith law continue in full force and effect.  If any provision of this Agreement\nshall be held invalid in part, such invalidity shall in no way affect the rest\nof such provision not held so invalid, and the rest of such provision, together\nwith all other provisions of this Agreement, shall to the full extent consistent\nwith law continue in full force and effect.\n\n27.  Arbitration\n\n          (a) Any disagreement, dispute, controversy or claim arising out of or\nin any way related to this Agreement or the subject matter hereof or the\ninterpretation hereof or any arrangements relating hereto or contemplated herein\nor the breach, termination or invalidity hereof or the provision or failure to\nprovide any other benefits upon a change of control pursuant to any other bonus\nor compensation plans, stock option plan, stock ownership plan, stock purchase\nplan, life insurance plan or similar plan or agreement with Company and\/or any\nof its subsidiaries as \"change of control\" may be defined in such other\nagreement or plan, which benefits constitute \"parachute payments\" within the\nmeaning of Section 280G of the Code, shall be settled exclusively and finally by\narbitration.  If this Section 27 conflicts with any provision in any such\ncompensation or bonus plan, stock option plan or any other similar plan or\nagreement, this provision requiring arbitration shall control.\n\n          (b) The arbitration shall be conducted in accordance with the\nCommercial Arbitration Rules (the \"Arbitration Rules\") of the American\n                                   -----------------                  \nArbitration Association (the \"AAA\").  The arbitral tribunal shall consist of\n                              ---                                           \nthree arbitrators, one chosen by Company, one chosen by the Executive and one\nchosen by the preceding two persons.\n\n          (c) Company shall pay all of the fees, if any, and expenses of such\narbitration, and shall also pay all Executive's expenses, including attorneys'\nfees, incurred in connection with the arbitration regardless of the final\noutcome of such arbitration.\n\n                                       21\n\n \n          (d) The arbitration shall be conducted in Los Angeles if initiated by\nCompany and in San Francisco if initiated by the Executive or in any other city\nin the United States of America as the parties to the dispute may designate by\nmutual written consent.\n\n          (e) Any decision or award of the arbitral tribunal shall be final and\nbinding upon the parties to the arbitration proceeding.  The parties hereto\nhereby waive to the extent permitted by law any rights to appeal or to review of\nsuch award by any court or tribunal.  The parties hereto agree that the arbitral\naward may be enforced against the parties to the arbitration proceeding or their\nassets wherever the award may be entered in any court having jurisdiction\nthereof.\n\n          (f) The parties stipulate that discovery may be held in any such\narbitration proceeding as provided in Section 1283.05 of the California Code of\nCivil Procedure, as may be amended or revised from time to time.\n\n28.  Entire Agreement\n\n          Except as otherwise specifically provided herein, as of the Effective\nDate, all previous agreements relating to the continuing employment of the\nExecutive to the extent inconsistent herewith, including, but not limited to the\nPrior Employment Agreement and the MCA, are hereby superseded, and this\nAgreement embodies all agreements, contracts, and understandings by and between\nthe parties hereto.  Notwithstanding the foregoing, nothing contained in this\nAgreement shall adversely affect or limit any rights Executive may have or any\nbenefits Executive may be entitled to receive under any other agreements, plans,\nprograms or otherwise, including, without limitation, any pension, retirement,\nhealth, welfare or fringe benefit arrangements, the Restricted Stock Award\nAgreement dated August 5, 1994 between Company and Executive and any and all\nstock option, stock appreciation rights or restricted stock award agreements or\nother stock based benefits held by Executive.  This Agreement may not be changed\norally, but only by an agreement in writing signed by the party against whom\nenforcement of any waiver, change, modification, extension, or discharge is\nsought.\n\n29.  Survival\n\n          The terms of this Agreement shall survive a termination of Executive's\nservices.\n\n\nW. J. SANDERS III                                   ADVANCED MICRO DEVICES, INC.\n\n\n\n\/s\/ W.J. Sanders III                             By: \/s\/ Charles M. Blalack\n--------------------                                ----------------------------\n                                                        CHARLES M. BLALACK\n                                                        Chairman, Compensation\n                                                        Committee\n\n                                       22\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6576],"corporate_contracts_industries":[9512],"corporate_contracts_types":[9539,9544],"class_list":["post-38497","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-advanced-micro-devices-inc","corporate_contracts_industries-technology__semiconductors","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/38497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=38497"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=38497"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=38497"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=38497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}