AMD » Topics » Tax Treatment for You

These excerpts taken from the AMD 10-K filed Feb 26, 2008.

Tax Treatment for You

You will be taxed on the value of the benefit you receive under this Plan. The amount or amounts will be taxable in the year any payment is made.

In order to keep you from having substantial out-of-pocket costs due to taxes, AMD will increase your lump benefit payment(s) by the amount of your estimated Federal and State Income Taxes. The amount of the increased payment(s) for taxes will be based on your marginal tax rate (not to exceed 40%) plus 1.45% (Medicare) for Federal taxes and the highest bracket rate in your state of residence at retirement for state taxes. Refer to Exhibit B. Any such increase will be paid to you no later than the last day of the tax year following the tax year in which you remit the related taxes to the appropriate tax authorities.

 

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If marginal Federal tax rates increase beyond 40%, the Compensation Committee will either (i) reduce your benefit to the extent required to prevent your having to pay additional tax or (ii) increase the “tax payments” to cover the higher taxes.

AMD will not reimburse you for any income taxes other than Federal and State income taxes (or the equivalent taxes in countries other than the United States.

Tax Treatment for You

You will be taxed on the value of the benefit you receive under this Plan. The amount or amounts will be taxable in the year any payment is made.

In order to keep you from having substantial out-of-pocket costs due to taxes, AMD will increase your lump benefit payment(s) by the amount of your
estimated Federal and State Income Taxes. The amount of the increased payment(s) for taxes will be based on your marginal tax rate (not to exceed 40%) plus 1.45% (Medicare) for Federal taxes and the highest bracket rate in your state of residence at
retirement for state taxes. Refer to Exhibit B. Any such increase will be paid to you no later than the last day of the tax year following the tax year in which you remit the related taxes to the appropriate tax authorities.

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If marginal Federal tax rates increase beyond 40%, the Compensation Committee will either (i) reduce your benefit to
the extent required to prevent your having to pay additional tax or (ii) increase the “tax payments” to cover the higher taxes.

AMD will
not reimburse you for any income taxes other than Federal and State income taxes (or the equivalent taxes in countries other than the United States.

SIZE="2">Internal Revenue Code Section 409A

Notwithstanding any provision to the contrary in this Plan, if you are deemed by AMD at the time of
your separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the benefits to which you are entitled under this Plan is required in
order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of your benefits shall not be provided to your before the earlier of (a) the expiration of the six-month period measured from the date of the
your Separation from Service or (b) the date of your death. Upon the expiration of the applicable Code Section 409A(a)(2)(B)(i) period, all payments deferred pursuant to this paragraph shall be paid in a lump sum to you, and any remaining
payments due under the Plan shall be paid as otherwise provided herein.

 


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EXCERPTS ON THIS PAGE:

10-K (2 sections)
Feb 26, 2008

"Tax Treatment for You" elsewhere:

Electronic Arts (ERTS)
Activision Blizzard (ATVI)
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