Exhibit 10.35(b)

Advanced Micro Devices, Inc.

Plan to Replace Motorola Retirement Benefit

For Robert J. Rivet (“Plan”) Pursuant to Employment Agreement

In Recognition of Your Forfeiture of Benefits Under Motorola’s

Supplemental Retirement Plan for Officers

Participation & Services

Your participation in this Plan began on your date of employment with Advanced
Micro Devices, Inc. (“AMD”); however, your years of service with Motorola will
be taken into account with respect to calculating your benefit under this Plan.
Except under circumstances noted herein, you will not be entitled to any benefit
under this Plan until attainment of age 55.

Vesting

You will become 100% vested in your accrued benefit under the Plan upon the
earliest of the following conditions to occur:

 

  a. Upon your attainment of age 55

 

  b. Upon termination of your employment following a Change of Control, as that
term is defined in your Management Continuity Agreement with AMD

 

  c. Upon becoming disabled as defined under AMD’s Executive Long Term
Disability plan (“Disability”)

 

  d. Upon termination by AMD of your employment other than for Cause as defined
in your Management Continuity Agreement with AMD, following your attainment of
age 54.

Retirement Benefit

The benefit formula is as indicated below, subject to the constraint that the
benefit cannot exceed 70% of your annualized salary at the point of benefit
determination.

 

A. Normal Benefit

The Normal Benefit is a lifetime annual income (actually payable monthly) equal
to forty two and a half percent (42.5%) of the sum of (i) your annualized salary
in effect at the point of benefit determination (age 55; or, in the case of
Disability, the initial date of Disability; or, in the event of termination
following a Change in Control, the date of the employment termination; or in the
case of termination after attainment of age 54, the date of the employment
termination) and (ii) your Average Bonus Earned, as described below.

The Normal Benefit will be converted to an Actuarially Equivalent lump sum
amount. For purposes of this Plan, the term “Actuarial Equivalent” shall mean
the average of two lump sum amounts, calculated separately by two independent
actuaries, that equals the life annuity, using

 

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the then 30-day average of the 10-year Treasury Bill rate as the discount
factor. Each actuary will independently choose a mortality assumption. That
average lump sum amount will be reduced by (i) the Actuarial Equivalent lump sum
value of any accrued benefit you are entitled to receive from any AMD qualified
or nonqualified pension plan (not including income from your AMD Retirement
Savings and Deferred Profit Sharing Plan account or Executive Investment Account
Plan), in the U.S. or elsewhere, and (ii) the benefit you received from the
Motorola Pension Plan, adjusted for the time value of money. For purposes of
this calculation, your Motorola Pension Plan benefit is equal to $169,887 at
December 31, 2001. That amount will be presumed to accumulate interest at the
rate of 3% per annum through the point of benefit determination.

The remaining amount is your Net Benefit under this Plan. (See example in
Exhibit A to this Plan.)

Average Bonus Earned is calculated as follows:

 

1. For each of the eight full fiscal years immediately prior to the point of
benefit determination, calculate the Cash Bonus Award paid or earned and payable
under any and all applicable bonus plan(s) as a percentage of that year’s actual
earnings from salary.

 

2. Determine which five of the eight years produce the highest percentages.

 

3. Calculate the average percentage for those five years.

 

4. Apply that average percentage to your annualized salary at the point of
benefit determination.

The amount so determined is the Average Bonus Earned.

 

B. Disability Income

If you become totally and permanently disabled prior to age 55, in accordance
with AMD’s Executive Long Term Disability Plan, you will receive a disability
income payable through age 65, or until you are no longer disabled. The amount
of the benefit under this Plan will then be the Normal Benefit determined as set
forth above, less the Actuarial Equivalent of any remaining disability payments
you are entitled to receive under AMD’s Executive Long-Term Disability Plan.

Under this Plan, the Compensation Committee has the authority, using reasonable
discretion, to determine whether you are totally and permanently disabled,
notwithstanding the determination of the administrator for the Executive Long
Term Disability Plan.

 

C. Maximum Benefit

The Normal Benefit cannot exceed an amount equal to 70% of your annualized
salary at the point of benefit determination.

 

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When Benefits Are Paid

You will receive a lump sum benefit within six weeks of your attainment of age
55 (March 23, 2009), even though you may choose to retire after that date.

If you become permanently disabled prior to age 55, as defined under AMD’s
Executive Long-Term Disability Plan, you will be eligible to receive the benefit
under this Plan in a lump sum at age 55.

If you have a “separation from service” from AMD within the meaning of
Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the
“Code”) (a “Separation from Service”) at any time prior to age 55 following a
Change of Control, as that term is defined in your Management Continuity
Agreement with AMD, you will be paid a lump sum benefit within ten days
following such Separation from Service in an amount that is the Actuarial
Equivalent of the amount you would have received had you remained an employee of
AMD until age 55.

If you cease to be an officer of AMD, or to be employed by AMD for any reason
other than disability or following a Change of Control before you attain age 55,
you will not be eligible to receive any benefit under the Plan, unless you have
attained age 54 and you have a Separation from Service for reasons other than
for Cause (as defined in your Management Continuity Agreement with AMD); and in
that event, payment of a benefit will be contingent upon your entering into an
agreement with AMD within 10 days after such Separation from Service not to
compete with AMD for a reasonable period of time to be determined by AMD.

Death Benefit

If you should die prior to attainment of age 55, your spouse will receive a lump
sum benefit. If you have no spouse at the time of your death, there is no death
benefit.

The amount of the death benefit will be the lump sum value of your benefit (as
calculated under the “Retirement Benefit” paragraph above, on the basis that you
had retired on the date of death, with a fully vested retirement benefit) less
the amount of the death benefit you are entitled to at that time as an executive
of AMD (three times annual salary, to a maximum of $2,000,000, unless otherwise
modified by AMD for all executives).

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.

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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EXHIBIT A

Salary & Bonus Input Table

 

Year

   Actual
Salary
Paid*    Cash
Bonus
Award*    Award as
a % of
Salary Paid 2009    649,000      

2008

   618,000    494,400    80%

2007

   589,000    471,200    80%

2006

   561,000    448,800    80%

2005

   534,000    427,200    80%

2004

   509,000    407,200    80%

2003

   485,000    125,000    26%

2002

   475,000    125,000    26%

2001

   450,000    88,000    20%

 

* All numbers from 2003 on are estimated only.

 

     Average Bonus as a % of Pay** 80%

 

** Highest five of the last 8 years

Sample Calculation

 

Annualized Salary at Age 55

          $ 649,000  

Average Bonus Earned

 

80% x

   $     649,000  

=

   $ 519,200                  

Total    

          $ 1,168,200  

Normal Benefit = The Lesser of:

         

a) 42.5% of

   $ 1,168,200      $ 496,485  

or      b)    70% of

   $     649,000      $ 454,300                             $ 454,300         
        

Estimated Actuarial Equivalent (Lump Sum Value)

          $ 4,543,000 *

Less Motorola Benefit

 

169,887* 1.037

        $ 208,940  

Less Benefit from other AMD Retirement Plans

          $ 0                  

Net Benefit

          $ 4,334,060                  

 

* For purposes of this illustration only we have used an arbitrary conversion
factor of 20.0

 

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EXHIBIT B

Calculation of Tax Gross Up on Net Benefit

 

Net Benefit

               $ 4,334,060

Federal Tax Rate

       33.00 %        

State Tax Rate (CA)

       9.30 %        

Medicare

       1.45 %                           

Combined Tax Rate

       43.75 %                           

Tax Gross Up

    [      0.4375     ]    x     $ 4,334,060 =        $ 3,370,936             
                 0.5625           $ 7,704,996                    Gross Benefit  
LOGO [g21104image001.jpg]         1- 0.43751                 

All tax rates specified above are current estimates of rates that might apply at
the maximum marginal rate.