Summary of ADVANCED MICRO DEVICES INC

Item 1.01 Entry into a Material Definitive Agreement; Item 3.02 Unregistered Sales of Equity Securities.

Master Transaction Agreement

On October 6, 2008, Advanced Micro Devices, Inc. (the "Company") entered into a Master Transaction Agreement (the "Master Transaction Agreement") with Advanced Technology Investment Company LLC, a limited liability company established under the laws of the Emirate of Abu Dhabi and wholly owned by the Government of the Emirate of Abu Dhabi ("Oyster"), and West Coast Hitech L.P., an exempted limited partnership organized under the laws of the Cayman Islands ("Pearl"), acting through its general partner, West Coast Hitech G.P., Ltd., a corporation organized under the laws of the Cayman Islands, pursuant to which Oyster and the Company will form a manufacturing joint venture, Foundry Company, an exempted company to be incorporated under the laws of the Cayman Islands ("The Foundry Company"). The Foundry Company will manufacture semiconductor products and will provide certain foundry services to the Company and in the future to other third-party customers.

Pursuant to the Master Transaction Agreement, the Company will contribute certain assets and liabilities to The Foundry Company, including, among other things, shares of the groups of German subsidiaries owning Fab 30/38 and Fab 36, certain manufacturing assets, owned real property, tangible personal property, employees, inventories, books and records, a portion of the Company's patent portfolio and intellectual property and technology, rights under certain material contracts and authorizations necessary for The Foundry Company to carry on its business, in exchange for Foundry Company securities, consisting of one Class A Ordinary Share, 1,680,355 Class A Preferred Shares and 700,000 Class B Preferred Shares, and the assumption of certain liabilities by The Foundry Company. Oyster will contribute approximately $1.4 billion of cash to The Foundry Company in exchange for Foundry Company securities, consisting of one Class A Ordinary Share, 336,071 Class A Preferred Shares, 644,284 Class B Preferred Shares, $83,929,000 aggregate principal amount of Class A Subordinated Convertible Notes and $335,716,000 aggregate principal amount of Class B Subordinated Convertible Notes, and will transfer $0.7 billion of cash to the Company in exchange for the transfer by the Company of 700,000 Class B Preferred Shares of The Foundry Company to Oyster. In addition, the Company will issue to Pearl, for an aggregate purchase price of approximately $314 million, 58 million shares of the Company's common stock (the "Shares") and warrants to purchase 30 million shares of the Company's common stock (the "Warrants") at an exercise price of $0.01 per share. The Warrants will be exercisable after the earlier of
(i) public ground-breaking of Fab 4X in New York and (ii) 24 months from the date of issuance, and the Warrants will have a ten-year term. The transactions contemplated by the Master Transaction Agreement are collectively referred to herein as the "Transactions." Immediately following the closing of the Transactions (the "Closing"), The Foundry Company will have only the Company and Oyster as stockholders, each of which at the Closing will have equal voting rights, and The Foundry Company will be owned 44.4 percent by the Company and 55.6 percent by Oyster on a fully converted to common basis. Oyster's economic ownership will increase over time based on the differences in securities held by the Company and Oyster, and depending on whether the Company elects to invest proportionately with Oyster in future Foundry Company capital infusions. As part of the Transactions, The Foundry Company will assume approximately $1.2 billion of the Company's debt.

The Master Transaction Agreement includes representations, warranties and covenants, as well as covenants restricting the Company from taking certain corporate actions in between signing of the Master Transaction Agreement and the Closing and prohibiting the Company from soliciting any other proposal or entering into any other agreement with a third party relating to an alternative transaction or a change of control of the Company. Subject to certain exceptions and limitations, the Company has agreed to indemnify Oyster and Pearl for breaches of representations, warranties and covenants and other specified matters. The Company's liability for breaches of representations or warranties is capped at $700 million (and there is no indemnification if aggregate indemnifiable damages are less than $21 million).

Consummation of the Transactions is subject to the satisfaction or waiver of certain closing conditions, including, among other matters: (i) the absence of breaches of representations, warranties or covenants that would result in a material adverse effect on the Company or The Foundry Company; (ii) receipt of material consents; (iii) receipt of certain government approvals, including HSR antitrust approval from the United States and merger control clearances from certain foreign regulatory authorities; (iv) the absence of proceedings or litigation that would result in a material adverse effect on the Company;
(v) the absence of a change of control event of the Company; (vi) approval from the Company's stockholders under the rules and regulations of the New York Stock Exchange of the issuance of the Shares, the Warrants and the shares issuable upon exercise of the Warrants; (vii) the economic incentives and subsidies currently made available to the Company and its subsidiaries by governmental authorities in the State of New York remaining available to The Foundry Company and its subsidiaries without financial penalty or change that would be materially adverse to The Foundry Company and its subsidiaries and no governmental authority having notified any party that such governmental authority intends to seek to terminate the availability of such economic incentives and subsidies related to the Company's proposed fab project located in Saratoga County, New York; (viii) receipt of notice from the Committee on Foreign Investment in the United States ("CFIUS") to the effect that a review or investigation of the Transactions has been concluded and that a determination has been made that there are no unresolved U.S. national security concerns, or the lack of action by the President of the United States to block or prevent the consummation of the Transactions under Exon-Florio, with the applicable time period for the President to take such action having expired; and (ix) the appointment of a Pearl nominee to the Company's board of directors.

The Master Transaction Agreement may be terminated at any time prior to Closing:
(i) by either Oyster or Pearl in the event that (A) a material adverse effect on the Company or The Foundry Company occurs, (B) a breach of a representation or warranty of the Company is likely to cause a material adverse effect, (C) the . . .

Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

In connection with the Transactions, on October 6, 2008, the Company signed, on behalf of The Foundry Company, an employment agreement between the Company and Dr. Hector de J. Ruiz (the "Employment Agreement"), pursuant to which Dr. Ruiz will serve as non-voting Chairman of the Foundry Company Board, to be effective upon the Closing. The term of the Employment Agreement is for two years, commencing on the Closing (the "Term"). In the event that the Closing does not occur pursuant to the terms of the Master Transaction Agreement, the Employment Agreement will be automatically null and void.

Under the Employment Agreement, Dr. Ruiz' base salary at The Foundry Company will be $1,150,000 per year and during the Term, Dr. Ruiz will be eligible for a target annual bonus opportunity of 200% of his base salary, with a maximum annual bonus opportunity at 400% of his base salary, subject to achievement of applicable performance goals established by the Foundry Company Board in consultation with Dr. Ruiz. In the event that Dr. Ruiz' employment is terminated by The Foundry Company without Cause (as defined in the Employment Agreement) or Dr. Ruiz resigns for Good Reason (as defined in the Employment Agreement), The Foundry

Company will pay to Dr. Ruiz, subject to his compliance with non-competition and non-solicitation provisions and execution of a release of claims, an amount equal to his base salary and the target annual bonuses remaining payable to Dr. Ruiz for the remainder of the Term, payable in a lump sum. If Dr. Ruiz' employment is terminated due to disability or death, Dr. Ruiz or his beneficiaries, as applicable, are eligible to receive the amounts described above; provided that no release of claims is required to be executed in the event that Dr. Ruiz' employment is terminated due to death.

The Board also approved a transaction bonus payable by the Company to Dr. Ruiz in cash equal to $3,000,000 (subject to applicable withholdings), to be paid on the Closing, subject to (i) Dr. Ruiz' continued employment with the Company through the Closing, (ii) Dr. Ruiz' separation from service with the Company at the Closing and (iii) Dr. Ruiz assuming the position of Chairman of the Foundry Company Board on the Closing.

The foregoing description of the Employment Agreement is qualified in its entirety by reference to the Employment Agreement attached hereto as Exhibit 10.2, which is incorporated herein by reference.