You may only exchange outstanding options with an exercise price greater than $6.34 per share, a grant date on or before June 28, 2008 and an expiration date after July 27, 2010 and provided that you are an employee of AMD or any of our majority-owned subsidiaries on June 29, 2009 and remain an employee through the grant date of the replacement options. Replacement options will be granted to purchase common stock under the 2004 Equity Incentive Plan, subject to the terms and conditions set out in the Offer to Exchange (as defined below).

The number of replacement options that you receive will be based on the following exchange ratios that are further explained in the offer terms.

Exercise Price Range

Shares Subject to Option
Surrendered

Shares Subject to

Replacement Option To

Be Granted

$6.35 to $9.99

$10.00 to $15.99

$16.00 and above

If you are eligible to participate, you must exchange all or none of the outstanding options that were granted to you on a single grant date with the same grant number and at the same exercise price. Replacement option grants calculated according to the exchange ratios will be rounded down to the nearest whole share on a grant-by-grant basis. Subject to and as a result of our acceptance of the exchange, all existing options surrendered under this Stock Option Exchange Program will be cancelled as well as all SARs that may be related to the surrendered options.

The replacement options will have an exercise price equal to the closing sales price of our common stock as quoted on the New York Stock Exchange on the replacement option grant date.

Your replacement options will vest and become exercisable beginning one year from the replacement grant date, depending upon your continued employment with AMD or any of our majority-owned subsidiaries, unless otherwise prohibited under local law. This means that all replacement options will be completely unvested on the replacement grant date, regardless of whether the surrendered options were partially or wholly vested. Replacement options granted in exchange for vested shares of the surrendered options at the time they were surrendered for cancellation will fully vest on the one-year anniversary of the replacement grant date; provided, you remain an employee of AMD or any of our majority-owned subsidiaries through the applicable vest date. Replacement options granted in exchange for unvested shares of the surrendered options at the time they were surrendered for cancellation will vest as to 50% on the one-year anniversary of the replacement grant date and as to the remaining 50% on the two-year anniversary of the replacement grant date; provided, you remain an employee of AMD or any of our majority-owned subsidiaries through the applicable vest dates.

The replacement options will retain the same expiration date as the surrendered options, subject to earlier expiration of the option following termination of employment of the option holder, unless otherwise prohibited under local law.

The replacement options will be treated as a nonstatutory stock option for U.S. federal income tax purposes.

You understand and acknowledge that AMD reserves the right, in its reasonable judgment, to terminate or to amend the Offer to Exchange in any respect, and as the case may be, to accept any options elected for exchange or to postpone its acceptance and cancellation of any options elected for exchange under the terms and conditions as set out in the Offer to Exchange, in particular in situations such as but not limited to actual, proposed or threatened change of control situations, any challenging of the Stock Option Exchange Program by judicial or related means, changes to regulatory requirements or business conditions and any other material event as further defined under the applicable provisions of the Offer to Exchange.