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Khaldoun Khalifah Al Mubarak, CEO of Mubadala
Provides cash infusion to trim debt

Shareholders of Advanced Micro Devices have approved the financial transactions necessary for the formation of "The Foundry Company" at a second special vote in Austin, Texas. This allows AMD to spin off its fabs into a joint venture with the Advanced Technology Investment Company (ATIC), wholly owned by the Emirate of Abu Dhabi.
At the first special meeting on February 10, only 42% of AMD's shares were presented. This shook investor confidence in AMD's ability to close the deal, leading to a sharp drop in AMD's stock price. AMD has been criticized for not allowing enough time for shareholders to prepare and submit their votes.

There were a total of 608,725,020 outstanding shares of AMD stock on January 15, the date of record to denote those shareholders who were eligible to vote. Of that total, only 305,951,749 shares were actually registered to vote by proxy or present at this second special meeting. This means that only 50.26% of outstanding stock was actually presented, barely passing the required majority to form a quorum.

The final results were 289,045,519 shares in favor, 7,269,962 shares against, and 9,636,268 shares abstaining. 94.47% of shares presented voted in favor, but the low turnout means that only 47.48% of all outstanding shares were actually voted in favor of the deal, which is expected to close by March 2, 2009.

The approved transactions include the issue and sale of 58 million shares of AMD's common stock to West Coast Hitech (WCH), a Cayman Island based holding company. It is a wholly owned subsidiary of Mubadala Development, a sovereign wealth fund owned by the government of Abu Dhabi. WCH currently owns 8.05% of AMD due to an earlier investment. Due to rules set out by the Securities and Exchange Commission, this meant that the acquisition of the additional shares required a special vote by shareholders, which have now allowed WCH to own 16.05% of AMD when the deal closes.

A separate but related agreement sells WCH warrants to purchase an additional 35 million shares. If exercised, WCH will own 142 million shares, accounting for 19.9% of AMD on a fully diluted basis, including outstanding stock options and restricted stock units.

A point of contention was raised by an angry shareholder at the meeting, who pointed out that AMD's board of directors approved a $3,000,000 transaction bonus to Hector Ruiz, AMD's Executive Chairman.

Ruiz, who has been heavily criticized for his poor management of AMD after the departure of the legendary Jerry Sanders, will become the Chairman of The Foundry Company. His base salary will be $1,150,000 per year, but he will also be eligible for a targeted annual bonus opportunity of 200% of his base salary, with a maximum annual bonus opportunity at 400% of his base salary.

The Foundry Company will assume ownership of all AMD's fabs, in an effort to lower AMD's debt burden. The new firm will seek to compete against other foundries such as UMC (United Microelectronics Corporation), Chartered Semiconductor, and TSMC (Taiwan Semiconductor Manufacturing Company), which currently produces AMD's graphics chips.

AMD will contribute its fabs, manufacturing employees, intellectual property rights, and other related assets to the new joint venture, which will then assume $1.2 billion in debt from AMD. ATIC will invest $2.1 billion to purchase its ownership stake in The Foundry Company, of which $700 million will go directly to AMD. The other $1.4 billion will provide capital funding.

AMD and ATIC will each own 50% of the voting shares, entitling each to elect four directors of The Foundry Company. AMD will own 34.2%, with the remaining 65.8% owned by ATIC, which may see its ownership increase over time based on future capital infusions of up to $6 billion.

The details of the entire deal can be found in AMD's 433 page proxy statement here.

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Too bad
By Murst on 2/18/2009 5:47:09 PM , Rating: -1
I was a fan of AMD chips... my first one was a Duron in like 97-98 and have since that time pretty much stuck with AMD when building my own systems. However, I think I'll start buying only Intel chips now. We already send enough money to countries where people do not consider us their friends. Too bad.

I realize that AMD was in trouble, but this solution just doesn't seem like the best one. I'd much rather they have sold to IBM, or if they went to a foreign company, go to Samsung or something similar. Don't go to countries that wish for us to die.

RE: Too bad
By yacoub on 2/18/2009 6:12:16 PM , Rating: 2
Pretty sure the Duron was around 00-01, because they arrived around the time of the Athlon (K7) (note similar naming scheme - Athlon, Duron), compared to their previous CPUs, generally known simply as K6.

RE: Too bad
By Murst on 2/18/2009 6:18:25 PM , Rating: 2
Pretty sure the Duron was around 00-01

You're right, just checked wiki and Duron was released in 2000. I guess it was my 2nd AMD chip then ( I know I build an AMD system prior to going to college ).

RE: Too bad
By Beno on 2/18/09, Rating: -1
RE: Too bad
By amanojaku on 2/18/2009 7:52:42 PM , Rating: 4
I love how you censored d1ck, but wrote sh1t. :)

RE: Too bad
By Beno on 2/18/09, Rating: -1
RE: Too bad
By chizow on 2/18/2009 8:21:05 PM , Rating: 2
What'd you expect? They love their Counter Strike and pr0n as much as the next guy.

Not kidding about that either, remember some internet study that showed the Middle East was one of the biggest black holes on the planet for internet pr0n. Online gaming and internet cafes are also huge over there, anyone who's into MMOs knows what I'm talking about.

RE: Too bad
By chizow on 2/18/2009 8:22:28 PM , Rating: 2
oops this was in reply to the "Fuzzy" comment.

RE: Too bad
By JS on 2/18/2009 10:45:21 PM , Rating: 2
We already send enough money to countries where people do not consider us their friends.

Since when is Abu Dhabi hostile towards the US? Or is it just that they guy on the picture fits your stereotype of a terrorist? Get a clue, please.

RE: Too bad
By Murst on 2/19/2009 11:50:00 AM , Rating: 2
You ( along w/ a lot of other people responding to my comment ) seem to want to make this about religion or race for some reason. I would have the same issue if AMD was selling to Venezuela.

RE: Too bad
By Amiga500 on 2/19/09, Rating: 0
RE: Too bad
By Murloc on 2/19/2009 7:37:19 AM , Rating: 2
stop using your car, the gas you use comes from these countries.

RE: Too bad
By Hexxx on 2/19/2009 8:35:57 AM , Rating: 2
The UAE is actually the largest place of service for US military ships outside of the US (being in the Gulf). They are a key ally and most definitely considered a friend to the US. You should really try get out more or read or something.

If you're still confused, Dubai is a city in the UAE.

RE: Too bad
By Murst on 2/19/2009 11:33:09 AM , Rating: 2
They are a key ally and most definitely considered a friend to the US

The only reason we consider them a "friend" is because we need someone who is not hostile to us in that region. The only reason they are not hostile to us is because of the money and military equipment they receive from our government.

If you think that this friendship is anything other than money and weapons, you're seriously wrong. Our countries share very few values. Their treatment of foreign workers ( who make up the majority of their work force ) is basically slavery. UAE is continuesly cited for women's rights issues.

I have family who's lived in the UAE. They worked for the US government ( in the US embassy ) and were under constant lockdowns due to security. Even when there was no lockdown, they needed to be extremely careful because of fear for their own or their children's lives. And you think this country is a friend of ours? I suggest you read up some more or "try to get out". If you can't, then try to find someone who's actually lived there.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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