8-K 2004 10-11-04 ELTSOP 1.doc
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report: October 6, 2004
(Date of earliest event reported)
INTEL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 0-06217 94-1672743
(State of (Commission File (IRS Employer
Incorporation) Number) Identification No.)
2200 Mission College Blvd., Santa Clara, CA 95052-8119
(Address of Principal Executive Offices and Zip Code)
(408) 765-8080
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is
intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-4c))
Item Entry into a Material Definitive Agreement
1.01
On October 6, 2004, the Compensation Committee of
the Board of Directors of Intel Corporation (the
"Corporation") approved the form of non-qualified
stock option agreement to be used in connection with
grants of stock options to executive officers
pursuant to the Corporation's Executive Long Term
Stock Option Program (ELTSOP). ELTSOP grants are
long-term executive performance incentive and
retention awards made pursuant to the Corporation's
2004 Equity Incentive Plan, which was approved by
the Corporation's stockholders in May 2004. ELTSOP
stock options typically vest 25% annually beginning
five or six years after the date of grant. The
delayed vesting of these awards is designed to focus
the efforts of the executive on the Corporation's
long-term performance and stock price appreciation.
ELTSOP stock options expire ten years from the date
of grant. There is no material relationship between
the Corporation and recipients of ELTSOP awards,
other than in respect of their employment with the
Corporation.
The form of ELTSOP stock option agreement sets forth
the terms and conditions of stock options granted
pursuant to the Corporation's ELTSOP program. The
following description is qualified by reference to
the terms of the form of ELTSOP stock option
agreement, a copy of which is filed with this Form 8-
K, and to the terms of the Corporation's 2004 Equity
Incentive Plan and the form of Notice of Grant,
copies of which were filed as exhibits 10.3 and
10.7, respectively, to the Corporation's Form 10-Q
for the quarter ending June 26, 2004. ELTSOP stock
options are subject to administration and
interpretation by the committee of the Board of
Directors designated pursuant to the plan, or by its
delegate. Unvested ELTSOP stock options are
cancelled as of the date of employment termination
and vested options expire after termination of
employment as set forth in the form of ELTSOP stock
option agreement. If employment is terminated due
to misconduct, the options will be cancelled and the
holder will have no further right to exercise them.
ELTSOP stock options are transferable at death by
will or the laws of descent and distribution or by
gift to the permitted transferees identified in the
stock option agreement.
Item Financial Statements and Exhibits
9.01
(c) Exhibits.
The following exhibits are filed as part of this
Report:
Exhibit Description
Number
10.1 Form of ELTSOP Non-Qualified Stock Option Agreement
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
Date: October 12, 2004 INTEL CORPORATION
(Registrant)
By: /s/ Patrice C. Scatena
------------------------
Patrice C. Scatena
Assistant Secretary
Exhibit 10.1
INTEL CORPORATION
2004 EQUITY INCENTIVE PLAN
TERMS AND CONDITIONS RELATING TO NONQUALIFIED STOCK OPTIONS
GRANTED ON AND AFTER SEPTEMBER 1, 2004 UNDER THE INTEL CORPORATION
2004 EQUITY INCENTIVE PLAN FOR GRANTS FORMERLY KNOWN AS ELTSOP
GRANTS
1. TERMS OF OPTION
The following terms and conditions (these "Terms") apply to
Nonqualified Stock Options granted to U.S. employees under
the Intel Corporation 2004 Equity Incentive Plan (the "2004
Plan") for grants formerly known as ELTSOP grants.
2. NONQUALIFIED STOCK OPTION
The option is not intended to be an incentive stock option
under Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and will be interpreted accordingly.
3. OPTION PRICE
The exercise price of the option (the "option price") is
100% of the market value of the common stock of Intel
Corporation ("Intel" or the "Corporation"), $.001 par value
(the "Common Stock"), on the date of grant, as specified in
the Notice of Grant. "Market value" means the average of
the highest and lowest sales prices of the Common Stock as
reported by NASDAQ.
4. TERM OF OPTION AND EXERCISE OF OPTION
To the extent the option has become exercisable (vested)
during the periods indicated in the Notice of Grant and has
not been previously exercised, and subject to termination or
acceleration as provided in these Terms and the requirements
of these Terms, the Notice of Grant and the 2004 Plan, you
may exercise the option to purchase up to the number of
shares of the Common Stock set forth in the Notice of Grant.
Notwithstanding anything to the contrary in Section 5 or
Sections 7 through 9 hereof, no part of the option may be
exercised after ten (10) years from the date of grant.
The process for exercising the option (or any part thereof)
is governed by these Terms, the Notice of Grant, the 2004
Plan and your agreements with Intel's stock plan
administrator. Exercises of stock options will be processed
as soon as practicable. The option price may be paid (a) in
cash, (b) by arrangement with Intel's stock plan
administrator which is acceptable to Intel where payment of
the option price is made pursuant to an irrevocable
direction to the broker to deliver all or part of the
proceeds from the sale of the shares of the Common Stock
issuable under the option to Intel, (c) by delivery of any
other lawful consideration
approved in advance by the Committee of the Board of
Directors of Intel established pursuant to the 2004 Plan
(the "Committee") or its delegate, or (d) in any combination
of the foregoing. Fractional shares may not be exercised.
Shares of the Common Stock will be issued as soon as
practicable. You will have the rights of a stockholder only
after the shares of the Common Stock have been issued. For
administrative or other reasons, Intel may from time to time
suspend the ability of employees to exercise options for
limited periods of time.
Notwithstanding the above, Intel shall not be obligated to
deliver any shares of the Common Stock during any period
when Intel determines that the exercisability of the option
or the delivery of shares hereunder would violate any
federal, state or other applicable laws.
Notwithstanding anything to the contrary in these Terms or
the applicable Notice of Grant, Intel may reduce your
unvested options if you change classification from a full-
time to a part-time employee.
IF AN EXPIRATION DATE DESCRIBED HEREIN FALLS ON A WEEKDAY,
YOU MUST EXERCISE YOUR OPTIONS BEFORE 3:45 P.M. NEW YORK
TIME ON THE EXPIRATION DATE.
IF AN EXPIRATION DATE DESCRIBED HEREIN FALLS ON A WEEKEND OR
ANY OTHER DAY ON WHICH THE NEW YORK STOCK EXCHANGE ("NYSE")
IS NOT OPEN, YOU MUST EXERCISE YOUR OPTIONS BEFORE 3:45 P.M.
NEW YORK TIME ON THE LAST NYSE BUSINESS DAY PRIOR TO THE
EXPIRATION DATE.
5. LEAVES OF ABSENCE
(a) Except as expressly provided otherwise in this
Agreement, if you take a personal leave of absence ("PLOA"),
the option will be exercisable only to the extent and during
the times specified in this Section 5:
(1) If the duration of the PLOA is 365 days
or less, you may exercise any part of the option
that vested prior to the commencement of the PLOA
at any time during the PLOA. If the duration of
the PLOA is greater than 365 days, any part of the
option that had vested prior to the commencement
of the PLOA and that has not been exercised will
terminate on the 365th day of the PLOA.
(2) If the duration of the PLOA is less than
thirty (30) days:
a. The exercisability of any part
of the option that would have vested during
the PLOA shall be deferred until the first
day that you return to work (i.e., the date
that the PLOA is terminated); and
b. Any part of the option that
had not vested at the commencement of the
PLOA and would not have vested during the
PLOA shall vest in accordance with the normal
schedule indicated in the Notice of
Grant and shall not be affected by the PLOA.
(3) If the duration of the PLOA equals or
exceeds thirty (30) days, the exercisability of
each part of the option scheduled to vest after
commencement of the PLOA shall be deferred for a
period of time equal to the duration of the PLOA,
however, in no event shall the term of the option
be extended beyond ten (10) years from the date of
grant. If you terminate employment after
returning from the PLOA but prior to the end of
such deferral period, you shall have no right to
exercise any unvested portion of the option,
except to the extent provided otherwise in
Sections 8 and 9 hereof, and such option shall
terminate as of the date that your employment
terminates.
(4) If you terminate employment with the
Corporation during a PLOA:
a. Any portions of the option
that had vested prior to the commencement of
the PLOA shall be exercisable in accordance
with Sections 7 through 9 hereof, as
applicable; and
b. Any portions of the option
that had not vested prior to the commencement
of the PLOA shall terminate, except to the
extent provided otherwise in Sections 8 and 9
hereof.
(b) If you take an approved (i) medical (including a
medical leave to care for your family, as described
below), (ii) industrial, or (iii) military leave of
absence ("LOA"), the option shall be unaffected by such
LOA and will vest in accordance with the schedule set
forth in the Notice of Grant. For purposes of this
subsection, family care related medical leaves of
absence are approved periods of time off from work for
an employee to care for: (i) a spouse, parent, and, in
Oregon only, parent-in-law; (ii) a child, or legal
dependent who has a serious health condition and, in
Oregon only, to care for a child who has a non-serious
medical condition that requires home care; or (iii) a
newborn, newly-adopted child or newly-placed foster
child.
6. SUSPENSION OR TERMINATION OF OPTION FOR MISCONDUCT
If you have allegedly committed an act of misconduct as
defined in the 2004 Plan, including, but not limited to,
embezzlement, fraud, dishonesty, unauthorized disclosure of
trade secrets or confidential information, breach of
fiduciary duty or nonpayment of an obligation owed to the
Corporation, an Authorized Officer, as defined in the 2004
Plan, may suspend your right to exercise the option, pending
a decision by the Committee (or Board of Directors, as the
case may be) or an Authorized Officer to terminate the
option. The option cannot be exercised during such
suspension or after such termination.
7. TERMINATION OF EMPLOYMENT
Except as expressly provided otherwise in this Agreement, if
your employment by the Corporation terminates for any
reason, whether voluntarily or involuntarily, other than
death, Disablement (defined below), or discharge for
misconduct, you may exercise any portion of the option that
had vested on or prior to the date of termination at any
time prior to ninety (90) days after the date of such
termination. The option shall terminate on the 90th day to
the extent that it is unexercised. All unvested stock
options shall be cancelled on the date of employment
termination, regardless of whether such employment
termination is voluntary or involuntary.
For purposes of this Section 7, your employment is not
deemed terminated if, prior to sixty (60) days after the
date of termination from Intel or a Subsidiary, you are
rehired by Intel or a Subsidiary on a basis that would make
you eligible for future Intel stock option grants, nor would
your transfer from Intel to any Subsidiary or from any one
Subsidiary to another, or from a Subsidiary to Intel be
deemed a termination of employment. Further, your
employment with any partnership, joint venture or
corporation not meeting the requirements of a Subsidiary in
which Intel or a Subsidiary is a party shall be considered
employment for purposes of this provision if either (a) the
entity is designated by the Committee as a Subsidiary for
purposes of this provision or (b) you are designated as an
employee of a Subsidiary for purposes of this provision.
8. DEATH
Except as expressly provided otherwise in this Agreement, if
you die while employed by the Corporation, the executor of
your will, administrator of your estate or any successor
trustee of a grantor trust may exercise the option, to the
extent not previously exercised and whether or not vested on
the date of death, at any time prior to 365 days from the
date of death.
Except as expressly provided otherwise in this Agreement, if
you die prior to ninety (90) days after terminating your
employment with the Corporation, the executor of your will
or administrator of your estate may exercise the option, to
the extent not previously exercised and to the extent the
option had vested on or prior to the date of your employment
termination, at any time prior to 365 days from the date of
your employment termination.
The option shall terminate on the applicable expiration date
described in this Section 8, to the extent that it is
unexercised.
9. DISABILITY
Except as expressly provided otherwise in this Agreement and
at the discretion of the Committee or its delegate,
following your termination of employment due to Disablement,
you may exercise the option, to the extent not previously
exercised and whether or not the option had vested on or
prior to the date of employment termination, at any time
prior to 365 days from the date of determination of your
Disablement as described in this Section 9; provided,
however, that while the claim of Disablement is pending,
options that were unvested at termination of employment may
not be exercised and options that
were vested at termination of employment may be exercised
only during the period set forth in Section 7 hereof. The
option shall terminate on the 365th day from the date of
determination of Disablement, to the extent that it is
unexercised. For purposes of this Agreement, "Disablement"
means a physical condition arising from an illness or
injury, which renders an individual incapable of performing
work in any occupation. The determination as to an
individual's Disablement shall be made in accordance with
the standards and procedures of the then-current Long Term
Disability Plan maintained by the Corporation or the
Subsidiary that employs you (or if such Subsidiary has no
such plan, in accordance with the Intel Long Term Disability
Plan) and shall be conclusive on all of the parties.
10. INCOME TAXES WITHHOLDING
Nonqualified stock options are taxable upon exercise. To
the extent required by applicable federal, state or other
law, you shall make arrangements satisfactory to Intel for
the satisfaction of any withholding tax obligations that
arise by reason of an option exercise and, if applicable,
any sale of shares of the Common Stock. Intel shall not be
required to issue shares of the Common Stock or to recognize
any purported transfer of shares of the Common Stock until
such obligations are satisfied. The Committee may permit
these obligations to be satisfied by having Intel withhold a
portion of the shares of the Common Stock that otherwise
would be issued to you upon exercise of the option, or to
the extent permitted by the Committee, by tendering shares
of the Common Stock previously acquired.
11. TRANSFERABILITY OF OPTION
Unless otherwise provided by the Committee, each option
shall be transferable only
(a) pursuant to your will or upon your death to your
beneficiaries, or
(b) by gift to your Immediate Family (defined below),
partnerships whose only partners are you or members of
your Immediate Family, limited liability companies
whose only shareholders are you or members of your
Immediate Family, trusts established solely for the
benefit of you or members of your Immediate Family, or
private, charitable foundations in which you or members
of your Immediate Family control the management of the
foundation's assets.
For purposes of these Terms, "Immediate Family" is defined
as your spouse or domestic partner, children, grandchildren,
parents or siblings.
With respect to transfers by gift, options are transferable
to private, charitable foundations only to the extent the
options are vested at the time of transfer. Options may be
transferred by gift to partnerships, limited liability
companies, or trusts in accordance with subsection (b)
above, whether or not vested at the time of transfer. Any
purported assignment, transfer or encumbrance that does not
qualify under subsections (a) and (b) above shall be void
and unenforceable against the Corporation.
Any option transferred by you pursuant to this section shall
not be transferable by the recipient except by will or the
laws of descent and distribution.
The transferability of options is subject to any applicable
laws of your country of residence or employment.
12. DISPUTES
The Committee or its delegate shall finally and conclusively
determine any disagreement concerning your option.
13. AMENDMENTS
The 2004 Plan and the option may be amended or altered by
the Committee or the Board of Directors of Intel to the
extent provided in the 2004 Plan.
14. THE 2004 PLAN AND OTHER AGREEMENTS; OTHER MATTERS
(a) The provisions of these Terms and the 2004 Plan
are incorporated into the Notice of Grant by reference.
Certain capitalized terms used in these Terms are
defined in the 2004 Plan.
These Terms, the Notice of Grant and the 2004 Plan
constitute the entire understanding between you and the
Corporation regarding the option. Any prior
agreements, commitments or negotiations concerning the
option are superseded.
The grant of an option to an employee in any one year,
or at any time, does not obligate Intel or any
Subsidiary to make a grant in any future year or in any
given amount and should not create an expectation that
Intel or any Subsidiary might make a grant in any
future year or in any given amount.
(b) To the extent that the option refers to the Common
Stock of Intel Corporation, and as required by the laws
of your residence or employment, only authorized but
unissued shares thereof shall be utilized for delivery
upon exercise by the holder in accord with the terms
hereof.
(c) Because this Agreement relates to terms and
conditions under which you may purchase Common Stock of
Intel, a Delaware corporation, an essential term of
this Agreement is that it shall be governed by the laws
of the State of Delaware, without regard to choice of
law principles of Delaware or other jurisdictions. Any
action, suit, or proceeding relating to this Agreement
or the option granted hereunder shall be brought in the
state or federal courts of competent jurisdiction in
the State of California.