<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
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(Amendment No. )
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/ / Soliciting Material Pursuant to section 240.14a-11(c) or section 240.14a-12
INTEL CORPORATION
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<PAGE> 2
[INTEL LOGO]
INTEL CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 28, 1995
The Annual Meeting of Stockholders of Intel Corporation ("Intel" or the
"Company") will be held at the Equitable Center Auditorium, 787 Seventh Avenue,
New York, New York, at 9:00 a.m., New York time, for the following purposes:
1. To elect a board of directors to hold office until the next annual meeting
of stockholders and until their respective successors have been elected or
appointed;
2. To ratify the appointment of the accounting firm of Ernst & Young LLP as
independent auditors for the Company for the current year;
3. To approve the amendment and restatement of the Company's Executive
Officer Bonus Plan;
4. If properly presented, to vote on a stockholder proposal regarding
executive compensation review, which proposal is opposed by the Board
of Directors;
5. If properly presented, to vote on a stockholder proposal regarding certain
environmental matters, which proposal is opposed by the Board of Directors;
and
6. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
These items are fully discussed in the following pages, which are made part of
this Notice. Only stockholders of record on the books of the Company at the
close of business on February 27, 1995 will be entitled to vote at the meeting.
A list of stockholders entitled to vote will be available for inspection at
Harris Trust Company of New York, 77 Water Street, New York, New York 10005, for
ten days prior to the Annual Meeting.
Stockholders are requested to complete, date, sign and return the enclosed proxy
card as promptly as possible. The giving of such proxy will not affect your
right to vote in person should you decide to attend the Annual Meeting.
By Order of the Board of Directors
F. THOMAS DUNLAP, JR., Secretary
Santa Clara, California
March 14, 1995
DOORS WILL OPEN AT 8:30 A.M.
<PAGE> 3
Mailed to Stockholders
on or about March 14, 1995.
[INTEL LOGO]
INTEL CORPORATION
2200 Mission College Boulevard
Santa Clara, California 95052-8119
----------------------------------------
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Intel
Corporation ("Intel" or the "Company") for use in voting at the Annual Meeting
of Stockholders to be held at the Equitable Center Auditorium, 787 Seventh
Avenue, New York, New York, on Friday, April 28, 1995 at 9:00 a.m., and at any
postponement or adjournment thereof, for the purposes set forth in the attached
notice. When proxies are properly dated, executed and returned, the shares they
represent will be voted at the Annual Meeting in accordance with the
instructions of the stockholder. If no specific instructions are given, the
shares will be voted FOR the election of the nominees for directors set forth
herein, FOR ratification of the appointment of auditors, FOR approval of the
amendment and restatement of the Company's Executive Officer Bonus Plan, AGAINST
the stockholder proposal regarding executive compensation review and AGAINST the
stockholder proposal regarding certain environmental matters. A stockholder
giving a proxy has the power to revoke it at any time prior to its exercise by
voting in person at the Annual Meeting, by giving written notice to the
Secretary prior to the Annual Meeting or by giving a later dated proxy.
The eleven candidates for election as directors at the Annual Meeting
who receive the highest number of affirmative votes will be elected. The
ratification of the independent auditors for the Company for the current year,
the approval of the amendment and restatement of the Executive Officer Bonus
Plan, the approval of the two stockholder proposals and such other matters
submitted for stockholder approval at the Annual Meeting will require the
affirmative vote of a majority of the shares of the Company's Common Stock
present or represented and entitled to vote at the Annual Meeting. Because
abstentions with respect to any matter are treated as shares present or
represented and entitled to vote for the purposes of determining whether that
matter has been approved by the stockholders, abstentions have the same effect
as negative votes. Broker non-votes and shares as to which proxy authority has
been withheld with respect to any matter are not deemed to be present or
represented for purposes of determining whether stockholder approval of that
matter has been obtained.
Only stockholders of record on the books of the Company at the close of
business on February 27, 1995 will be entitled to vote at the Annual Meeting.
Each share will be entitled to one vote on all matters. Presence in person or by
proxy of a majority of the shares of Common Stock outstanding on the record date
is required for a quorum. As of the close of business on January 31, 1995 there
were outstanding 413,847,571 shares of Common Stock.
ELECTION OF DIRECTORS
Unless marked otherwise, proxies received will be voted FOR the election
of each of the nominees named below. If any such person is unable or unwilling
to serve as a nominee for the office of director at the date of the Annual
Meeting or any postponement or adjournment thereof, the proxies may be voted for
a substitute nominee, designated by the proxy holders or by the present Board of
Directors to fill such vacancy, or for the balance of those nominees named
without nomination of a substitute, or the Board may be reduced accordingly. The
Board of Directors has no reason to believe that any of such nominees will be
unwilling or unable to serve if elected as a director. Such persons have been
nominated to serve until the next annual meeting of stockholders and until their
successors, if any, are elected or appointed.
The following information is furnished with respect to the nominees.
Stock ownership information is shown under the heading "Security Ownership of
Certain Beneficial Owners and Management" and is based upon information
furnished by the respective individuals.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS.
1.
<PAGE> 4
NAME AND PRINCIPAL OCCUPATION AT PRESENT AND FOR THE PAST FIVE YEARS;
DIRECTORSHIPS
Craig R. Barrett Age: 55
Dr. Barrett became Chief Operating Officer in 1993. He has been a director of
Intel Corporation since 1992 and has been Executive Vice President since 1990.
Dr. Barrett joined the Company in 1975. In 1984 he was elected Vice President
and in 1985 became Vice President and General Manager, Components Technology and
Manufacturing Group. Dr. Barrett became a Senior Vice President in 1987 and
General Manager of the Microcomputer Components Group in 1989. Dr. Barrett is
also a director of Komag, Inc. and a member of the National Academy of
Engineering.
Winston H. Chen (1) Age: 53
Dr. Chen has been a director of Intel Corporation since 1993. He is Chairman of
Paramitas Foundation, a charity foundation. Since 1978 he has held several
positions, including President, Chief Executive Officer and Chairman of the
Board of Directors at Solectron Corporation, an electronic contract manufacturer
in Milpitas, California. In March 1994, Dr. Chen resigned as Chairman of the
Board of Solectron but continues to act as a director. He is also a director of
Megatest Corporation and a member of the Board of Trustees of Santa Clara
University, the Board of Trustees of Stanford University and the Engineering
Advisory Committee of the National Science Foundation.
Andrew S. Grove (3) Age: 58
Dr. Grove has been a director of Intel Corporation since 1974, President since
1979 and Chief Executive Officer since 1987. Dr. Grove participated in the
founding of the Company in 1968 and served as Vice President and Director of
Operations through 1974. He became Executive Vice President in 1975 and was
Chief Operating Officer from 1976 to 1989. Dr. Grove is a member of the National
Academy of Engineering and a Fellow of the IEEE.
D. James Guzy (2)(5) Age: 59
Mr. Guzy has been a director of Intel Corporation since 1969. Since 1969 he has
been President of the Arbor Company, a Nevada limited partnership engaged in the
electronics and computer industry. Mr. Guzy is also a director of Cirrus Logic,
Inc., Frame Technology Corp., Micro Component Technology, Inc., Novellus
Systems, Inc., Selected/Venture Advisors Group of Mutual Funds and Alliance
Capital Management Technology Fund.
Gordon E. Moore (3)(5) Age: 66
Dr. Moore has been a director of Intel Corporation since 1968 and Chairman of
the Board since 1979. Dr. Moore co-founded the Company in 1968 and has served on
the Board since that time. Prior to 1975, Dr. Moore served as Executive Vice
President. Between 1975 and 1979, Dr. Moore served as President and between 1975
and 1987 he served as Chief Executive Officer of the Company. Currently, Dr.
Moore is also a director of Transamerica Corporation and Varian Associates, Inc.
He is also Chairman of the Board of Trustees of the California Institute of
Technology, a member of the National Academy of Engineering, a Fellow of the
IEEE and a member of the Board of Directors of Conservation International.
Max Palevsky (2)(4) Age: 70
Mr. Palevsky is a self-employed investor and has been a director of Intel
Corporation since 1968. He serves as a director of Komag, Inc., and is a member
of the Board of Trustees of The Institute for Advanced Study. Mr. Palevsky
founded Scientific Data Systems, Inc. in 1961, which was acquired by Xerox
Corporation in 1969, at which time he became a director and Chairman of the
Executive Committee of Xerox Corporation. He retired from Xerox in 1972.
Arthur Rock (1)(2)(3)(4)(5) Age: 68
Mr. Rock has been a director of Intel Corporation since its founding in 1968. He
is Chairman of the Executive Committee of the Board of Directors of Intel
Corporation. Mr. Rock is a principal of Arthur Rock & Company,
a venture capital firm. He is also a director of Argonaut Group, Inc., AirTouch
Communications, Inc. and a trustee of the California Institute of Technology.
2.
<PAGE> 5
Jane E. Shaw (1) Age: 56
Dr. Shaw has been a director of Intel Corporation since 1993. She was President
and Chief Operating Officer of ALZA Corporation, a drug delivery company, from
1987 to 1994. Dr. Shaw joined ALZA in 1970 and held several positions within the
company, including Principal Scientist, Executive Vice President of ALZA
Corporation, and Chairman of the Board, ALZA Limited, U.K. From 1970 to 1972,
Dr. Shaw held an appointment as Assistant Professor, Department of Physiology,
at Stanford University. She is currently a director of ALZA Corporation,
McKesson Corporation and Boise Cascade Corporation.
Leslie L. Vadasz Age: 58
Mr. Vadasz has been a director of Intel Corporation since 1988 and became Senior
Vice President, Director of Corporate Business Development in 1991. Mr. Vadasz
joined the Company in 1968 when it was founded and became Director of
Engineering in 1972. In 1975 he was elected Vice President and in 1976 became
Assistant General Manager of the Microcomputer Division. From 1977 to 1979, he
was Vice President, General Manager of the Microcomputer Components Division.
Mr. Vadasz became a Senior Vice President in 1979 and served as Director of
Corporate Strategic Staff from 1979 to 1986. From 1986 to 1990, he was Senior
Vice President, General Manager of the Systems Group. He is also a director of
Symantec Corp. He is a Fellow of the IEEE.
David B. Yoffie (2)(4) Age: 40
Dr. Yoffie has been a director of Intel Corporation since 1989. He has been
Professor of Business Administration at Harvard University since 1990 and in
June 1993 was appointed to the position of Max & Doris Starr Professor of
International Business Administration. He was Associate Professor of Business
Administration from 1985 to 1990 and has been on the faculty since 1981. He is
also a member of the Board of Directors of Physiologica, Inc., a biotechnology
company.
Charles E. Young (1) Age: 63
Dr. Young has been a director of Intel Corporation since 1974. He has been
Chancellor of the University of California, Los Angeles since 1968. He is also
Chairman of the Board of Governors Foundation for the International Exchange of
Scientific and Cultural Information by Telecommunications, a member of the
National Committee on United States-China Relations, Inc. and a director of the
Nicholas-Applegate Equity Fund and Mutual Fund.
Sanford Kaplan and Richard Hodgson retired as active directors of Intel
Corporation in 1993, following 19 years each of service as directors. They were
elected by the Board to act as Directors Emeriti. Messrs. Hodgson and Kaplan are
eligible to attend Board and Committee meetings, but do not have voting rights.
--------------------------
(1) Member of the Audit & Finance Committee.
(2) Member of the Compensation Committee.
(3) Member of the Executive Committee.
(4) Member of the Nominating Committee.
(5) Member of the Stock Option Committee.
3.
<PAGE> 6
REPORT OF THE COMPENSATION AND STOCK OPTION COMMITTEES
The Company's executive compensation program is administered by the
Compensation and Stock Option Committees of the Board of Directors. The role of
the Compensation Committee is to review and approve salaries and other
compensation of the executive officers of the Company and to administer the
Executive Officer Bonus Plan (the "Bonus Plan"). The role of the Stock Option
Committee is to administer the stock option plans and to review and approve
stock option grants to all employees, including the executive officers of the
Company.
GENERAL COMPENSATION PHILOSOPHY
The Company's compensation philosophy is that total cash compensation
should vary with the performance of the Company and any long term incentive
should be closely aligned with the interest of the stockholders.
Total cash compensation for the executive officers consists of the
following components:
- Base salary
- An executive officer bonus that is related to growth in reported
or operating earnings per share of the Company ("EPS")
- An employee cash bonus that is proportional to profitability and
includes all employees
Long term incentive is realized through the granting of stock options to
key employees, including eligible named executives. The Company has no other
long term incentive plans.
The Company maintains a qualified employee stock purchase plan to
encourage employees to own Company stock, which is generally available to all
employees. This plan allows participants to buy Company stock at a discount to
the market price with up to 10% of their salaries and bonuses. However, the
number of shares which may be purchased by each participant is limited by
applicable tax laws.
In setting compensation levels for executive officers, the Compensation
Committee reviews comparative information relating to compensation at other
United States based companies through specific information reported in the proxy
statements of particular companies that are considered generally comparable to
the Company (a majority of which companies are included in the Dow Jones
Technology Index). Recommendations by management are examined in light of this
information, but there is no special attempt to set compensation levels in any
particular relationship to the market data. The compensation levels of the named
executives and the other executive officers are reviewed for internal
consistency relative to the 100 most highly paid employees of the Company.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), places a limit of $1,000,000 on the amount of compensation that may be
deducted by the Company in any year with respect to each of the Company's five
most highly paid executive officers. Certain performance based compensation that
has been approved by stockholders is not subject to the deduction limit. At the
1994 Annual Meeting the Company obtained stockholder approval of the Bonus Plan
and certain amendments to the Company's stock option plans to qualify awards
under such plans as performance based compensation and to maximize the tax
deductibility of such awards. The Company is submitting for a vote of the
stockholders at the Annual Meeting an amended and restated Bonus Plan. See
"Proposal to Approve the Amendment and Restatement of the Company's Executive
Officer Bonus Plan." However, the Company may from time to time pay compensation
to its executive officers that may not be deductible.
BASE SALARY AND EXECUTIVE OFFICER BONUS TARGET
The base salaries of executive officers are determined with reference to
a total base salary plus individual bonus target hereafter referred to as
"BSBT". Base salary is determined by the Compensation Committee as a percentage
of BSBT based on the level and amount of responsibility of the individual. For
example, in 1994 the
4.
<PAGE> 7
base salary for Dr. Grove, the executive officer with the highest level and
amount of responsibility, was 50% of his total BSBT. Dr. Grove has the lowest
proportion of salary to BSBT of all the executive officers. The other
executives' salaries were determined in the same manner, but the base salary
segment as a percentage of their total BSBT for 1994 was greater than 50% and
varied depending on their job responsibilities. Once fixed for the year, base
salary does not depend on the Company's performance.
As a result of this process, and in accordance with the Company's
compensation policy that total cash compensation should vary with Company
performance, the Compensation Committee establishes base salaries of the
Company's executives at levels which the Committee believes are generally below
the base salaries of executives of companies generally considered by the
Compensation Committee to be comparable to the Company. Thus, as set forth
below, a large part of each executive's total cash compensation is tied to
performance of the Company by way of performance based plans.
The Bonus Plan is a cash-based incentive bonus program. For the
executive officers, the Bonus Plan replaced the Executive Bonus Plan (the "EB
Plan"). The purpose of the Bonus Plan is to (i) motivate and reward executives
for good performance and (ii) allow the Company's compensation expense to vary
with the Company's profitability. The Bonus Plan provides for payment of a cash
bonus to each executive that is directly related to the growth in reported (or
"actual") EPS or operating EPS for the year for which it is paid.
Under the Bonus Plan, as in effect for 1994, a maximum bonus is
determined annually for each executive officer pursuant to a predetermined
objective formula, subject to a maximum limit of $5,000,000. The maximum bonus
payment for any performance year is the product of (i) the executive officer's
individual bonus target and (ii) EPS for the performance year (as set by the
Committee in accordance with the terms of the Bonus Plan) multiplied by the
ratio of the actual EPS (as adjusted by factors adopted by the Committee) to an
EPS target for the year (the ratio being the "multiplier") that is set by the
Committee in advance as required by the Code.
For 1994, the Committee established the individual bonus targets which
ranged from $75,000 to $380,000, established the multiplier as .77059, and
established EPS for the performance year as the greater of net income or
operating income per weighted average common and common equivalent shares
outstanding for the year (which for 1994 was operating EPS of 7.75). The
multiplier of .77059 was derived by dividing the 1993 multiplier under the
Company's EB Plan by 1.1. For 1995, the Committee has established the multiplier
as .70054 (which is equal to the 1994 multiplier divided by 1.1), and has
established EPS in the same manner as set forth herein for 1994. The reduction
in the multiplier obtained by dividing the prior year's multiplier by 1.1 has
the effect of requiring a 10% increase in EPS over the prior year's EPS to
maintain the same maximum bonus level, assuming no change in individual bonus
targets.
Under the Bonus Plan, the Committee may reduce an individual's bonus in
its sole discretion and pay an amount less than the maximum bonus. For 1994, the
Committee chose to exercise such discretion by reducing the executive officer
bonuses to levels payable under the EB Plan formula applicable to all other
Company executives. However, the Committee is not required to reduce the maximum
bonuses payable, and if the Committee chooses to do so, there are no particular
factors the Committee is required to consider in the exercise of its discretion.
For 1994, actual bonus payments to the executive officers were lower
than the maximum bonuses payable under the Bonus Plan in part because the EB
Plan formula was based on reported EPS (adjusted due to unusual income statement
items) whereas the Bonus Plan formula was based on operating EPS, and in part
because the EB Plan formula took into account business group achievement of
business objectives. The Committee considered either the corporate average
achievement of business objectives or a combination of the corporate average and
individual business group achievement, depending on the level and nature of the
officer's responsibilities, and whether the officer had specific responsibility
for a particular business group, or overall responsibility for the Company (such
as Dr. Grove). Business objectives included, for example, production volumes,
sales, customer satisfaction, product development, gross margins, affirmative
action hiring and environmental matters.
The payment of a bonus for a given performance period generally requires
the executive officer to be employed by the Company as of the last day of the
performance period for which the bonus is paid.
5.
<PAGE> 8
EMPLOYEE CASH BONUS PLAN
The Employee Cash Bonus Plan (the "ECBP") is a profit-sharing program that
offers cash rewards to all employees, including executive officers, based
on corporate profitability. Twice a year, employees receive .55 day's pay for
every two percentage points of corporate pretax profit as a percentage of
revenues, or a total payment based on 4% of net income, whichever is greater.
The Employee Cash Bonus is paid in the first and third quarters of each year
based on corporate performance for the preceding two quarters.
During 1994, corporate pretax profit as a percentage of revenues was
31%. This resulted in an annual cash bonus payout under the ECBP of 17.3 days'
pay per employee or 6.7% of eligible employee earnings. Employees were awarded
an additional 1.0 day's pay for the second half of 1994 as a result of meeting
corporate goals under a vendor of choice (customer satisfaction) program.
CAPITAL ACCUMULATION/RETIREMENT PLANS
The Company has both a qualified and a non-qualified capital
accumulation/retirement plan. The non-qualified plan is a supplemental plan
which provides to participant employees those contributions that could not be
contributed to their accounts under the qualified plan because of limitations
under the Code. These plans are defined contribution plans that are designed to
accumulate retirement funds for employees, including the executive officers, and
to allow the Company to make contributions or allocations to those funds. The
Company contribution is totally discretionary and is not based on any formula.
The contributions approved by the Board may vary with the financial performance
of the Company, in particular revenues and EPS. However, there are no corporate
performance factors or other specific factors that are required to be considered
by the Board in determining the contribution. Contributions made by the Company
under both plans vest based on years of service. Vesting begins after three
years of service in 20% annual increments until the employee is 100% vested
after seven years.
For 1994, the discretionary Company contributions (including allocation
of forfeitures) to these plans for all eligible employees, including executive
officers, equaled 12.5% of eligible salary. Contributions to the qualified plan
are limited under the Code. Where Code limits applied, the excess, up to 12.5%
of eligible salary, was allocated to the non-qualified plan to eligible
employees, including executive officers.
STOCK OPTIONS
Stock options are granted to aid in the retention of key employees and
to align the interests of key employees with those of the stockholders. The
level of stock options granted (i.e., the number of shares subject to each stock
option grant) is based on the employee's ability to impact future corporate
results. An employee's ability to impact future corporate results depends on the
level and amount of job responsibility of the individual. Therefore, the level
of stock options granted is directly proportional to job responsibility. For
example, Dr. Grove as the Chief Executive Officer has the highest level of
responsibility and was awarded the highest level of stock options. However, the
plan limits the total number of shares subject to options that may be granted to
a participant in any year to 1% of the total number of shares outstanding on
January 1, 1994, i.e., 4,181,760 shares.
Grants are made annually and are generally first exercisable five years
after the date of grant (i.e., options granted in 1994 become exercisable in
1999), thus providing an incentive to remain in the Company's employ. In
addition, the stock option program directly links a portion of compensation to
the interests of stockholders by providing an incentive to maximize stockholder
value. Stock options have value for the employee only if the price of the
Company's stock increases above the fair market value on the grant date and the
employee remains in the Company's employ for the period required for the stock
option to be exercisable.
Stock options are granted at a price not less than the fair market value
on the date of grant. They are granted to key employees, including the executive
officers. In 1994, stock options for the executive officers were granted upon
recommendation of management and approval of the Stock Option Committee at
levels believed to be appropriate for the amount and level of responsibility of
each executive officer.
6.
<PAGE> 9
COMPANY PERFORMANCE AND CEO COMPENSATION
The Company's compensation program is leveraged towards the achievement
of corporate and business objectives. This pay-for-performance program is most
clearly exemplified in the compensation of the Company's Chief Executive
Officer, Dr. Grove.
Dr. Grove's base salary and individual bonus target are determined in
the same manner as described above for all executive officers. In setting
compensation levels for the Chief Executive Officer, the Compensation Committee
reviews comparative information reflecting recent compensation data. In line
with the Compensation Committee's general practice, however, there was no
special attempt to set Dr. Grove's 1994 salary or individual bonus target in any
particular relationship to the compensation data. Dr. Grove's base salary and
bonus target were set at levels which, by comparison to selected companies
reflected in the market data (a majority of which companies are included in the
Dow Jones Technology Index), were 46% of the average for base salary, 56% of the
average for target incentive based compensation and 51% of the average for total
target compensation.
Under the Bonus Plan, Dr. Grove's actual bonus for 1994 (paid in 1995)
was $1,664,400. This bonus, like the bonuses paid to each of the other executive
officers under the Bonus Plan, was less than the maximum bonus provided under
the Bonus Plan formula due to the Committee's exercise of its discretion to
reduce the maximum bonus by utilizing the EB Plan formula as described above. In
considering business group achievement of business objectives for Dr. Grove, the
Committee considered the corporate average of the degree to which all of the
Company's business groups achieved their specific business objectives described
above, weighted to reflect the relative importance of each group within the
Company. Due to the high variability in the Company's total compensation program
and to the Company's excellent 1994 financial performance, Dr. Grove's actual
cash compensation (i.e., base salary and bonuses) for 1994 was at the 69th
percentile of the selected peer group.
In 1994, the Stock Option Committee awarded Dr. Grove stock options to
purchase 36,000 shares of stock first exercisable in 1999. The Company also
contributed $18,800 to Dr. Grove's account under the qualified retirement plan
and allocated $256,400 to Dr. Grove's account under the non-qualified retirement
plan. These amounts are generally only available to Dr. Grove upon termination,
retirement, death or disability.
With respect to matters related to stock option grants and to all other
elements of compensation, the Stock Option Committee and the Compensation
Committee, respectively, submit this report.
Compensation Committee: Stock Option Committee:
David Yoffie, Chairman Gordon Moore, Chairman
D. James Guzy D. James Guzy
Max Palevsky Arthur Rock
Arthur Rock
7.
<PAGE> 10
EXECUTIVE COMPENSATION
The following tables set forth the annual compensation for the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company. No executive officer serves pursuant to an employment contract.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Securi-
Other ties Un-
Annual Restricted derlying All Other
Compen- Stock Options/ LTIP Compen-
Name and Salary Bonus (1) sation Award (2) SARs Payouts (3) sation (4)
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Andrew S. Grove 1994 $380,000 $1,722,400 - 0 36,000 0 $275,200
President and CEO 1993 360,000 1,823,700 - 0 48,000 0 172,500
1992 350,000 1,001,300 - 0 51,000 0 139,500
Craig R. Barrett 1994 285,000 1,269,500 - 0 24,000 0 197,200
Executive Vice President, 1993 280,000 1,294,100 - 0 32,000 0 125,600
Chief Operating Officer 1992 270,000 710,600 - 0 34,000 0 100,300
David L. House 1994 240,000 887,400 - 0 12,000 0 153,700
Senior Vice President 1993 240,000 992,000 - 0 16,000 0 102,900
1992 230,000 583,000 - 0 12,000 0 84,700
Frank C. Gill 1994 245,000 795,700 173,000(5) 0 12,000 0 135,100
Senior Vice President 1993 240,000 821,400 - 0 16,000 0 87,900
1992 225,000 453,000 - 0 17,000 0 70,400
Leslie L. Vadasz 1994 240,000 753,700 - 0 12,000 0 135,100
Senior Vice President 1993 240,000 842,800 - 0 16,000 0 91,900
1992 230,000 495,900 - 0 17,000 0 76,900
</TABLE>
---------------------
(1) This amount includes the bonuses paid under the Executive Officer Bonus
Plan for 1994, the Executive Bonus Plan for 1993 and 1992 and the
Employee Cash Bonus Plan.
(2) The Company does not offer any such restricted stock award plan.
(3) The Company does not offer any such long term incentive plan.
(4) All amounts listed in column (i) are amounts contributed to the
Company's broad-based defined contribution retirement plan (for each of
the named executives such amounts were $18,800 for 1994, $21,000 for
1993 and $21,300 for 1992) and amounts deferred under the Company's
non-qualified, defined contribution plan. These amounts are to be paid
out to the named executives (or any other plan participant) only upon
retirement, termination, disability or death.
(5) Reimbursement for certain relocation expenses and taxes consistent with
the Company's practice for similarly situated employees.
8.
<PAGE> 11
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM
----------------------------------------------------------------------------- ---------------------------------
(a) (b) (c) (d) (e) (f) (g)
% of Total
Securities Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price (2) Expiration
Name (1)(#) Year ($/Share) Date 5% (3) 10% (3)
----------------------------------------------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. Grove 36,000 0.60% $67.13 4/12/04 $1,519,700 $3,851,300
C. Barrett 24,000 0.40% 67.13 4/12/04 1,013,100 2,567,500
D. House 12,000 0.20% 67.13 4/12/04 506,600 1,283,800
F. Gill 12,000 0.20% 67.13 4/12/04 506,600 1,283,800
L. Vadasz 12,000 0.20% 67.13 4/12/04 506,600 1,283,800
</TABLE>
---------------------
(1) These options are first exercisable in 1999.
(2) Under all stock option plans, the option purchase price is not less
than fair market value at the date of the grant. All of these options
were granted on April 12, 1994.
(3) In accordance with SEC rules, columns (f) and (g) show gains that might
exist for the respective options, assuming the market price of Intel's
common stock appreciates from the date of grant over a period of ten
years at the annualized rates of five and ten percent, respectively. If
the stock price does not increase above the exercise price, compensation
to the named executives will be zero.
9.
<PAGE> 12
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Securities Underlying Value of Unexercised
Unexercised Options at In-the-Money Options at
FY-End (#) FY-End ($)
Shares Acquired Value Realized Exercisable Unexercisable Exercisable Unexercisable
Name on Exercise (#) ($) (1) (2)
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
A. Grove 0 0 459,998 366,000 $22,677,200 $13,467,800
C. Barrett 0 0 303,996 284,000 14,781,700 10,946,000
D. House 113,554 4,529,650 26,446 197,000 1,296,700 8,161,000
F. Gill 0 0 120,000 202,000 5,918,700 8,424,200
L. Vadasz 135,996 6,461,436 280,000 202,000 13,788,700 8,424,200
</TABLE>
---------------------
(1) This represents the total number of shares subject to stock options
held by the named executives. These options were granted on various
dates during the years 1987 through 1994.
(2) These amounts represent the difference between the exercise price of the
stock options and the closing price of Company stock on December 30,
1994 (last day of trading for the fiscal year ended December 31, 1994),
for all in-the-money options held by each named executive. The
in-the-money stock option exercise prices range from $13.58 to $44.94.
All stock options are granted at the fair market value of the stock on
the grant date.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
Years of Service at Retirement (2)(3)
-------------------------------------------------------------------------
Eligible Compensation (1) 15 20 25 30 35
--------------------------- -------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$150,000 and above $29,130 $38,839 $48,549 $58,259 $67,969
</TABLE>
---------------------
(1) The plan provides for minimum pension benefits that are determined by a
participant's years of service credited under the plan, final average
compensation, taking into account the participant's social security wage
base, and the value of the participant's Company contributions, plus
earnings, in the profit sharing retirement plan. If the annuity value of
the profit sharing account balance exceeds the pension guarantee, the
participant will receive benefits from the profit sharing plan only.
Compensation includes regular earnings and most bonuses. However,
maximum eligible compensation for 1994 is $150,000, in accordance with
Internal Revenue Code Section 401(a)(17). This amount is subject to cost
of living adjustments in accordance with Internal Revenue Code Section
415(d).
(2) For each of the employees named in the Summary Compensation Table set
forth on page 8, the years of credited service as of year-end 1994 under
the Company's pension plan are currently as follows: Dr. Grove (26);
Dr. Barrett (20); Mr. House (20); Mr. Gill (19) and Mr. Vadasz (26).
(3) The table illustrates the estimated annual benefits payable in the form
of a straight-life annuity upon retirement at age 65 under the pension
plan to persons in the specified compensation and years of service
classifications for Social Security benefits. The Employee Retirement
Income Security Act of 1974 contains certain limitations on the amount
of benefits that may be paid under pension plans qualified under the
Internal Revenue Code. The amounts shown are subject to reduction to the
extent they exceed such limitations but are not subject to reduction for
Social Security benefits.
10.
<PAGE> 13
DIRECTORS' COMPENSATION
Directors who are Company employees receive no additional or special
remuneration for serving as directors. Non-employee directors are paid $20,000
per year. In addition, non-employee directors were paid $1,000 plus out-of-
pocket expenses per Board of Directors meeting attended through May 5, 1994, and
are currently paid $2,000 plus out-of-pocket expenses per Board of Directors
meeting. Mr. Rock receives an additional $6,000 as Chairman of the Executive
Committee.
In 1990, the Company adopted a retirement program for non-employee
directors. The Director's Retirement Program provides a retirement benefit to
any director who is not an employee of the Company and who has either been a
non-employee director for at least ten years or has been a non-employee director
for at least five years and retires after age 65. The retirement program will
pay an annual benefit equal to the retainer fee in effect at the time of
payment, to be paid beginning at commencement of retirement for the lesser of
the number of years served as a non-employee director or the life of the
director. Pursuant to the Director's Retirement Program, Messrs. Hodgson and
Kaplan are each eligible to receive an annual benefit equal to $20,000, payable
quarterly. They each received payment of $20,000 in 1994.
Each year, each non-employee director is automatically granted an option
to purchase 5,000 shares of Company stock at an exercise price not less than the
fair market value on the date of grant. During 1994, each non-employee director
was granted an option to purchase a total of 5,000 shares at an exercise price
of $58.94 per share. Upon joining the Board, each new non-employee director
receives an option to purchase 5,000 shares. Non-employee director options are
exercisable in full one year from the date of grant.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Company's Board of
Directors are Messrs. Guzy, Palevsky, Rock and Yoffie. The Stock Option
Committee of the Board of Directors consists of Mr. Guzy, Dr. Moore and Mr.
Rock. Messrs. Guzy, Palevsky, Rock and Yoffie are non-employee directors. Dr.
Moore, who is an officer of the Company and the Company's Chairman of the Board,
is not eligible to receive stock options. Mr. Rock was formerly a non-employee
officer of the Company as Chairman of the Board from 1970 to 1975.
11.
<PAGE> 14
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN AMONG INTEL,
THE S&P 500 INDEX AND THE DOW JONES TECHNOLOGY INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD INTEL S&P 500 DOW JONES
(FISCAL YEAR CORP. INDEX TECHNOLOGY
COVERED) INDEX
<S> <C> <C> <C>
1989 $100 $100 $100
1990 110 97 99
1991 138 126 123
1992 261 136 138
1993 362 150 157
1994 374 152 179
</TABLE>
Intel and the Dow Jones Technology Index are based on Intel's fiscal year. The
S&P 500 Index is based on a calendar year.
Assumes identical $100 investments in Intel Common Stock and each of the two
indices on December 29, 1989, including reinvested dividends.
12.
<PAGE> 15
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
To the Company's knowledge, the following sets forth information
regarding ownership of the Company's outstanding Common Stock on January 31,
1995 by (i) beneficial owners of more than 5% of the outstanding shares of
Common Stock, (ii) each director, director emeritus and named executive officer,
and (iii) all directors, directors emeriti and executive officers as a group.
Except as otherwise indicated below and subject to applicable community property
laws, each owner has sole voting and sole investment powers with respect to the
stock listed.
<TABLE>
<CAPTION>
Number of Shares
of Common Stock
Beneficially Owned
Stockholder at January 31, 1995 Percent of Class
----------- ------------------- ----------------
<S> <C> <C>
Gordon E. Moore, Chairman 23,071,863 5.6%
2200 Mission College Blvd.
Santa Clara, California 95052-8119
Arthur Rock, Director 1,662,740 (1) *
Andrew S. Grove, Director, President and Chief
Executive Officer 916,551 (2) *
D. James Guzy, Director 790,772 (3) *
Leslie L. Vadasz, Director and Senior Vice President 553,819 (4) *
Craig R. Barrett, Director, Executive Vice President and 335,087 (5) *
Chief Operating Officer
Max Palevsky, Director 282,734 (6) *
Frank Gill, Senior Vice President 142,560 (7) *
David L. House, Senior Vice President 57,563 (8) *
Richard Hodgson, Director Emeritus 38,650 *
Sanford Kaplan, Director Emeritus 35,300 *
Winston H. Chen, Director 25,000 (9) *
David B. Yoffie, Director 20,400 (6) *
Jane E. Shaw, Director 6,000 (10) *
Charles E. Young, Director 2,600 (11) *
All directors, directors emeriti and executive
officers as a group (26 individuals) 28,739,537 (12) 6.9%
</TABLE>
---------------------
* Less than 1%.
(1) Includes 480 shares held by Mr. Rock's spouse as to which shares Mr.
Rock disclaims any beneficial interest and as to which he has no voting
or investment powers. Also includes outstanding options to purchase
20,000 shares which were exercisable as of January 31, 1995, or within
60 days from such date.
(2) Includes outstanding options to purchase 459,998 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(3) Includes 770,580 shares held by the Arbor Company of which Mr. Guzy is a
general partner. Also includes outstanding options to purchase 20,000
shares, which were exercisable as of January 31, 1995, or within 60 days
from such date.
(4) Includes outstanding options to purchase 280,000 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(5) Includes outstanding options to purchase 303,996 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(6) Includes outstanding options to purchase 20,000 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(7) Includes outstanding options to purchase 120,000 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
13.
<PAGE> 16
(8) Includes outstanding options to purchase 26,446 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(9) Includes outstanding options to purchase 5,000 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
(10) Held in a family trust. Includes outstanding options to purchase 4,000
shares, which were exercisable as of January 31, 1995, or within 60
days from such date.
(11) Includes outstanding options to purchase 2,500 shares, which were
exercisable as of January 31, 1995, or within 60 days of such date.
(12) Includes outstanding options to purchase 1,816,692 shares, which were
exercisable as of January 31, 1995, or within 60 days from such date.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
From April 1994 through January 1995, Frank Gill, Senior Vice President
and General Manager of Intel Products Group, rented a house owned by the Company
at a rate of $2,500 per month. The rental amount was determined based on the
rental amounts for comparable houses located in the area. In January 1995, Mr.
Gill paid the Company $914,000 to acquire the house. The selling price of the
house was determined pursuant to six independent appraisals and approved by
management. The Company believes that the terms of the rental and sale were at
fair market value and approximated arm's length transactions.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has standing Executive, Audit & Finance, Nominating,
Compensation and Stock Option Committees of the Board of Directors. The members
of the committees are identified on pages 2-3.
The Audit & Finance Committee, which recommends for approval by the
Board of Directors a firm of certified public accountants whose duty it is to
audit the financial statements of the Company for the fiscal year in which they
are appointed, monitors the effectiveness of the audit effort and the Company's
internal financial and accounting organization and financial reporting. The
Audit & Finance Committee held four meetings during 1994.
The Nominating Committee makes recommendations to the Board regarding
the size and composition of the Board. The Committee establishes procedures for
the nomination process, recommends candidates for election to the Board of
Directors and nominates officers for election by the Board. The Nominating
Committee held one meeting during 1994. The Nominating Committee will consider
nominees proposed by the stockholders. Any stockholder who wishes to recommend a
prospective nominee for the Board of Directors for the Nominating Committee's
consideration may do so by giving the candidate's name and qualifications in
writing to the Secretary of the Company, M/S SC4-203, 2200 Mission College
Blvd., Santa Clara, CA 95052-8119.
The Compensation Committee reviews and approves salaries and other
matters relating to compensation of the executive officers of the Company. The
Compensation Committee held three meetings during 1994.
The Stock Option Committee administers the Company's stock option plans,
including the review and grant of stock options to all eligible employees under
the Company's existing stock option plans. The Stock Option Committee acted by
written consent 24 times during 1994.
The Board of Directors held eight meetings during 1994. No director
attended less than 75% of all the meetings of the Board and those committees on
which he or she served in 1994, except Mr. Palevsky, who attended 61% of the
meetings of the Board and those Committees on which he served during 1994.
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS
Ernst & Young LLP have been the Company's independent auditors since its
incorporation in 1968 and have been selected by the Board of Directors as the
Company's independent auditors for 1995. In the event ratification of this
selection of auditors is not approved by a majority of the shares of Common
Stock voting thereon, management will review its future selection of auditors.
14.
<PAGE> 17
A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will have an opportunity to make a statement if he or she so
desires. The representative will also be available to respond to appropriate
questions from the stockholders.
Audit services of Ernst & Young LLP for 1994 included the examination of
the consolidated financial statements of the Company and services related to
filings made with the Securities and Exchange Commission, as well as certain
services relating to the consolidated quarterly reports and annual and other
periodic reports at international locations.
The Audit & Finance Committee of the Company meets twice a year with
Ernst & Young LLP and, on an annual basis, reviews both audit and non-audit
services performed by Ernst & Young LLP for the preceding year as well as the
fees charged by Ernst & Young LLP for such services. Non-audit services are
approved by the Audit & Finance Committee, which considers, among other things,
the possible effect of the performance of such services on the auditors'
independence.
Unless marked to the contrary, proxies received will be voted FOR
ratification of the appointment of Ernst & Young LLP as the independent auditors
for the current year.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR RATIFICATION
OF THE APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS FOR THE COMPANY
FOR THE CURRENT YEAR.
15.
<PAGE> 18
PROPOSAL TO APPROVE THE AMENDMENT AND RESTATEMENT
OF THE COMPANY'S EXECUTIVE OFFICER BONUS PLAN
In 1994, the Company's Board of Directors adopted, and the stockholders
approved, the Company's Executive Officer Bonus Plan (the "Bonus Plan") in order
to maximize the amount of the bonuses paid to executive officers that is
deductible under Section 162(m) of the Code. Section 162(m), which was added to
the Code in 1993, places a limit of $1,000,000 on the amount of compensation
that may be deducted by the Company in any tax year with respect to each of the
Company's five most highly paid executives. However, certain performance based
compensation that has been approved by stockholders is not subject to the
deduction limit. The Bonus Plan is designed to provide for this type of
performance based compensation.
In March 1995, the Board of Directors amended and restated the Bonus
Plan effective January 1, 1995, subject to approval by the stockholders, to
clarify the formula by which the performance based bonus payment is calculated.
The clarifications effected by the amendment relate to the description of
earnings per share and the multiplier applied to earnings per share in the
maximum bonus calculation and do not result in a change in the manner in which
bonuses are calculated or the way in which the Bonus Plan is administered. The
Board of Directors also made certain technical changes to extend the time period
during which individual bonus targets may be established to the latest time
permitted by the Code. Bonuses under the Bonus Plan will continue to be based
upon objective earnings per share criteria (subject to an individual maximum of
$5,000,000 per performance period), and the Bonus Plan will continue to make
executive pay highly variable with the earnings of the Company.
The text of the Bonus Plan, as amended and restated, is set forth in
Exhibit A to this Proxy Statement. The following is intended to be a summary of
the Bonus Plan's principal terms and does not purport to be a complete statement
of the Plan's terms. It is subject to and qualified in its entirety by reference
to Exhibit A.
PURPOSE
The purpose of the Bonus Plan is to (i) motivate and reward executives
for good performance and (ii) allow the Company's compensation expense to vary
with the Company's profitability. The Company's compensation policy is that cash
compensation should vary with Company performance. In accordance with that
policy, the Compensation Committee establishes base salaries of the Company's
executives at levels which are generally below the base salaries of executives
of companies generally considered by the Compensation Committee to be comparable
to the Company. Thus, a large part of each executive's total cash compensation
is tied to performance of the Company by way of performance based plans like the
Bonus Plan. See "Report of the Compensation and Stock Option Committees."
PARTICIPANTS
Individuals eligible for the Bonus Plan include the Company's executive
officers.
MAXIMUM BONUS AND PAYOUT CRITERIA
Bonus payments are made in cash. The payment to each executive is
directly related to the reported or operating earnings per share of the Company
for the applicable performance period. The bonus payment is the product of (i)
an individual bonus target in dollars for the performance period set by the
Compensation Committee in writing and (ii) the numerical value of EPS for the
performance period multiplied by a factor (the "multiplier") that is set in
writing by the Committee in its sole discretion. For this calculation "EPS"
shall mean the greater of operating income or net income for the performance
period, in each case per weighted average common and common equivalent shares
outstanding for the period. The individual bonus target and the multiplier shall
be adopted by the Compensation Committee in its sole discretion with respect to
each performance period no later than the latest time permitted by the Code in
order for bonus payments pursuant to the Bonus Plan to be deductible under
Section 162(m). The multiplier for 1995 has been set at .70054. See "Report of
the Compensation and Stock Option Committees."
16.
<PAGE> 19
The actual amount of future bonus payments under the Bonus Plan is not
presently determinable. However, the Bonus Plan provides that no bonus in excess
of $5,000,000 will be paid to any executive officer for any performance period.
Further, the Compensation Committee, in its sole discretion, may reduce the
amount of an executive's bonus under the Bonus Plan to an amount below the
maximum bonus calculated pursuant to the Bonus Plan formula. In 1994, the
Compensation Committee exercised such discretion and reduced the amounts of the
bonuses paid to all executive officers. See "Report of the Compensation and
Stock Option Committees" and "Executive Compensation - Summary Compensation
Table." The payment of a bonus for a given performance period generally requires
the executive officer to be employed by the Company as of the last day of the
performance period for which the bonus is paid.
REQUIRED APPROVAL
The affirmative vote of the holders of a majority of the shares of
Common Stock represented and voting at the Annual Meeting is required to approve
the amended and restated Bonus Plan. Unless marked to the contrary, proxies
received will be voted FOR approval of the amended and restated Bonus Plan.
THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS A VOTE FOR THE APPROVAL
OF THE COMPANY'S AMENDED AND RESTATED EXECUTIVE OFFICER BONUS PLAN.
---------------------
STOCKHOLDER PROPOSALS
From time to time, the individual stockholders of the Company submit
proposals which they believe should be voted upon by the stockholders. This
year, the following two proposals have been submitted. Each was accompanied by a
supporting statement and notice of intention to present the proposal for action
at the Annual Meeting. Information regarding the names, addresses and number of
shares of Company stock held by each stockholder proponent will be furnished by
the Company to any person, orally or in writing, as requested, promptly upon the
receipt of any oral or written request therefore. Any such request should be
directed to the Secretary of the Company.
Each stockholder proponent must appear personally or by proxy at the
Annual Meeting to present its proposal for action. Each proposal will be
approved if it is introduced and voted on at the Annual Meeting and it is
supported by a majority of the shares that are voted for or against the
proposal.
17.
<PAGE> 20
STOCKHOLDER PROPOSAL REGARDING EXECUTIVE COMPENSATION REVIEW
The following proposal was submitted by the Women's Division of the
General Board of Global Ministries of the United Methodist Church and is OPPOSED
by the Company's Board of Directors:
ENVIRONMENTAL, SOCIAL, AND FINANCIAL ACCOUNTABILITY
IN EXECUTIVE COMPENSATION FOR INTEL
WHEREAS:
We believe financial, social and environmental criteria should all be taken into
account in fixing compensation packages for top corporate officers. Public
scrutiny on compensation is reaching a new intensity, concerns expressed include
the following:
- Too often top executives receive considerable increases in compensation
packages, even when corporate financial performance is mediocre or poor and
stockholders watch dividends slip and stock prices drop.
- Executive compensation, even when it decreases in a bad year, is usually not
proportional to a year's poor returns and the financial burden borne by
stockholders. Professor Graef Crystal, a national authority on executive
compensation, argues that CEOs, get paid "hugely in good years," and "if not
hugely, then merely wonderfully in bad years."
- The relationship between compensation and the social and environmental impact
of a company's decisions is an important question. For instance, should the
responsible top officers' pay for a given year be reduced if the company is
found guilty of systematic sexual harassment or race discrimination or poor
environmental performance, especially if it results in costly fines? Should
responsible officers compensation be on a business-as-usual scale in a year
of a major environmental accident? Should compensation reflect a company's
consistent EPA ranking as a U.S. company with high toxic releases?
- We believe this is an important principle for Intel management and board to
review in assessing the compensation packages for our Company's leaders. For
example Intel's business requires scrupulous adherence to the best
environmental practices. We believe Intel's environmental performance and
employment record deserves improvement. For example the fact that the Board
has no women or minorities represented signals a lack of forward thinking.
Intel's charitable giving and community programs are below average as well.
These questions deserve careful scrutiny by our Board and Compensation
Committee. This request is reasonable. Companies including Bristol-Myers,
Westinghouse and Procter and Gamble have done such reports.
RESOLVED: Shareholders request that the Board institute an Executive
Compensation Review, and prepare a report available to shareholders by October
1995 with the results of the review and recommended changes in practice. The
review shall cover pay, benefits, perks, stock options and special arrangements
in the compensation packages for all the Company's top officers.
Supporting Statement
We recommend that the Board study and report on the following in its review:
1. Ways to link executive compensation more closely to financial performance
with proposed criteria.
2. Ways to link compensation more closely to environmental and social corporate
performance (e.g. are incentives given for meeting or surpassing certain
environmental standards?).
3. Ways to link financial viability of the Company to long-term environmental
and social sustainability.
4. A description of social and environmental criteria to take into account (e.g.
environmental law suits, settlements, penalties, violations, results of
internal or independent environment audits).
5. Comparison of compensation packages for officers and the lowest and average
wages for (a) the company's U.S. employees, and (b) company operations
outside the U.S.
18.
<PAGE> 21
RECOMMENDATION OF THE BOARD AGAINST STOCKHOLDER PROPOSAL
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE "EXECUTIVE COMPENSATION
REVIEW" PROPOSAL.
- The premises of the Proposal do not apply to the Company. For example, the
proponent's statement that the Board has no women or minorities is untrue.
- Further, the proponent seeks to link executive compensation more closely to
financial performance, yet the Company's executive compensation is already
directly and strongly linked to financial performance.
- The proponent seeks to institute an Executive Compensation Review and the
preparation of a separate report to stockholders. This is unnecessary because
the Company already has an executive compensation review and discloses such
compensation annually in the Company's proxy statement.
- The Company believes that the basis under which Intel's executives are paid
motivates the executive officers to maximize stockholder value and does not
recommend present changes in its executive compensation practices.
- Overall, Intel is not an appropriate target for the proponent's general
concerns which, apparently, are not based on any specific review of Intel's
executive compensation policies.
The 1995 Proxy Statement provides stockholders with a comprehensive review of
the Company's executive compensation. As indicated in the Report of the
Compensation and Stock Option Committees of the Board, executive compensation
varies with the financial performance of the Company, and the executives'
long-term incentives, stock options, are aligned with the long-term interests of
stockholders.
Last year the Company obtained stockholder approval for the Executive Officer
Bonus Plan, which directly ties the top executive officers' maximum bonuses to
continued improvements in the Company's earnings per share. Under this plan the
Board has discretion to reduce, but not to increase, executive bonuses.
Historically, more than 50% of the top executives' cash compensation has been
paid in the form of a bonus that was at risk and tied to earnings per share
(measures short term performance) and other strategic business objectives
(measure long term performance). Executive officer base salaries, which are not
at risk, are established by the Compensation Committee at levels which are
generally below the base salaries of executives of companies generally
considered by the Committee to be comparable to the Company.
The proponent also requests linking executive compensation more closely to
environmental and social corporate performance, and taking into account
environmental lawsuit settlements, penalties, etc. The Company shares
environmental and social concerns, and believes it is addressing these concerns
appropriately. The Company has policies regarding the environment, harassment,
discrimination, conflicts of interest and other important social matters, which
are disseminated to all employees. These policies are designed to promote
environmentally and socially responsible behavior at all levels of the
organization. Adherence to Company policies is regularly monitored, is taken
into account in performance reviews and, ultimately, failure to adhere may
result in termination of employment. The Company's business goals also include
goals addressing environmental and social issues such as affirmative action.
Moreover, given that Intel's executive compensation is highly linked with
financial performance, if, for example, an environmental matter had any material
effect on Intel's financials, executive compensation could be impacted.
SUMMARY: The proposal is unnecessary, and is not in the best interests of the
stockholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE PROPOSAL TO
INSTITUTE AN EXECUTIVE COMPENSATION REVIEW.
19.
<PAGE> 22
STOCKHOLDER PROPOSAL REGARDING CERTAIN ENVIRONMENTAL MATTERS
The following proposal was submitted by a group of stockholders and is
OPPOSED by the Company's Board of Directors:
INTEL:
COMMUNITY ENVIRONMENTAL HAZARDS
WHEREAS:
Electronics producers, including Intel, use large quantities of toxic chemicals.
Industry-sponsored studies (Digital 1986; IBM 1992; SemiConductor Industry
Association 1992) show heightened rates of miscarriages for women working with
glycol ethers. News accounts report New Mexican workers suffering from illness
due to exposure to toxic substances at facilities operated by GTE, Honeywell,
Motorola and Sandia. Documentation on Intel's FAB 11 site at Rio Rancho, New
Mexico shows construction workplace accidents, chemical spills and contractors
improperly testing wastewater and hydrogen lines. According to a former
electrical contract worker, "Intel is operating every day under unsafe and
potentially catastrophic conditions."
WHEREAS, we are concerned about Intel's commitment to worker health and safety
and to the environment;
WE BELIEVE:
Intel requires enormous amounts of water for production, yet places major
production facilities in desert areas-- New Mexico and Arizona. Intel will
use at least 2 billion gallons of water per year in New Mexico by mid-1995,
making it the state's largest private water user. Local communities and
hydrologists have expressed to the New Mexico State Engineer that this
exceeds local capacity. The Company is also rapidly building plants which use
large quantities of chemical solvents, acids and gases in production, even
while it is already responsible (partially or wholly) for three federal
Superfund (toxicly contaminated) sites in California's Silicon Valley;
Community organizations around Intel facilities in New Mexico, Arizona and
California have raised questions about Intel's chemical storage, transport,
use, disposal, and workplace exposure. The Company's plans and practices have
not allayed these concerns.
RESOLVED: Shareholders request the Company to adopt a policy to make publicly
available, at each facility, non-confidential (non-proprietary)
information that will allow concerned persons or organizations (i)
to assess that facility's [a] actual environmental and safety
hazards to local communities, [b] pertinent Company policies and
procedures, and [c] arrangements for emergency preparedness; and
(ii) to inspect such facilities with regard to these hazards, in
such a way as not to be disruptive.
SUPPORTING STATEMENT
To be effective, this information should include an evaluation of risks and
consequences of accidents, worst-case accident scenarios, specific plans (with
concrete timeframes) to reduce usage of toxins and depletion of local water
resources and to promote workplace safety, air and water quality.
Intel needs to deal satisfactorily with public concerns about environmental
health and safety if it is to live up to the image it puts forth. To be
accountable to shareholders, it should reveal full costs, consequences, and
liability arising from its environmental impact. We believe that the Company
jeopardizes stockholder investments by picking environmentally risky sites for
its operations and by pursuing practices that render operations into "accidents
waiting to happen", according to an Intel worker. We invite shareholders
concerned with environmental degradation and damage, or negative publicity, to
vote FOR this resolution.
20.
<PAGE> 23
RECOMMENDATION OF THE BOARD AGAINST STOCKHOLDER PROPOSAL
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE "COMMUNITY ENVIRONMENTAL
HAZARDS" PROPOSAL.
The proponents would have you believe that the Company needs closer scrutiny of
its facilities than is already undertaken. We absolutely understand and share
their concern for worker health and safety and the environment. Our belief is
that the Company's commitment to environmental, health and safety programs is
integral to its success as a corporation. We are committed to dealing honestly
and openly with public concerns. Our worldwide Environmental, Health and Safety
(EHS) Policy addresses these concerns and our commitments.
We have established a comprehensive management system and an extensive staff of
200 EHS experts to ensure that the EHS policy is implemented and followed.
Further, a large variety of health, safety and environmental regulators ALREADY
HAVE access to Intel facilities and they do conduct regular inspections. These
regulators include Federal OSHA, regional EPA, state environmental and safety
agencies, local fire departments and other local agencies.
The Company routinely works with local communities to assure communication and
make available information concerning our plans and actual performance. For
example, in New Mexico the Company established a Community Advisory Panel,
composed of a cross-section of local leaders and members of the community, which
addresses environmental and safety issues relating to the Company's New Mexico
operations. The Company also has community advisory panels in Arizona, Ireland
and Oregon.
The Company takes its obligations as an environmentally responsible citizen very
seriously, and has done so for many years. In 1991 the Company adopted its
environmental, health and safety policy which is summarized below:
The Company's Policy:
- Compliance with regulations, and adoption of higher standards where
appropriate;
- Provide appropriate safeguards for the community;
- Conservation of natural resources and reduction of emissions and waste
generation;
- Continuous improvement in our operations on environmental, health
and safety issues.
The Company is proud of its record in environmental issues. The Company has
extensive examples of its positive results. Here are a few of the recent ones:
- Reduced hazardous wastes shipped off site by more than 50% since 1985.
- 90% of our hazardous wastes are reused as fuel or recycled.
- Eliminated in 1994 use of Class I Ozone Depleting Chemicals in our
manufacturing processes.
- Reduced occupational illness cases by 40% between 1990 and 1994.
- The Company has been a significant participant in the EPA's Energy Star
Program, producing energy efficient processors which are substantially
reducing the use of electricity in PCs throughout the world.
The Company plans to do a lot more. For example, the Company is committed to
substantial reductions in water usage, through increased use of recycled water
from our own plants.
================================================================================
The Company has recently published a summary report addressing Environmental,
Health and Safety performance and actual data trends. Also included in this
report is a full statement of the Company's Environmental, Health and Safety
Policy, and additional examples of recent environmental accomplishments. YOU
CAN OBTAIN A COPY BY CALLING 1-800-753-9754, EXT. 282, AND REFERENCING
DOCUMENT NUMBER 242496-001.
================================================================================
SUMMARY: The proposal is unnecessary, and is not in the best interests of the
stockholders. THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE PROPOSAL TO
MAKE PUBLICLY AVAILABLE CERTAIN ENVIRONMENTAL INFORMATION RELATING TO THE
COMPANY.
21.
<PAGE> 24
OTHER MATTERS
Compliance With Section 16(a) of the Exchange Act. Section 16(a) of the
Securities Exchange Act of 1934 requires the Company's directors and executive
officers, and persons who own more than ten percent of a registered class of the
Company's equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and The Nasdaq
Stock Market. Directors, executive officers and greater than ten-percent
beneficial owners are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms received by the Company
and on written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, during the period of
December 26, 1993 to December 31, 1994, all filing requirements applicable to
its directors, executive officers and greater than ten-percent beneficial owners
were met.
1996 Stockholder Proposals. To be eligible for inclusion in the Company's
1996 Proxy Statement, stockholder proposals must be submitted to the Secretary
of the Company no later than November 14, 1995.
Financial Statements. The Company's financial statements for the year ended
December 31, 1994, are being sent concurrently to the Company's stockholders. If
you have not received or had access to the 1994 Annual Report to Stockholders,
please notify the Secretary of the Company, M/S SC4-203, 2200 Mission College
Blvd., Santa Clara, CA 95052-8119 and a copy will be sent to you.
Other Matters. At the date hereof, there are no other matters which the Board
of Directors intends to present or has reason to believe others will present at
the meeting. If other matters come before the meeting, the persons named in the
accompanying form of proxy will vote in accordance with their best judgment with
respect to such matters.
Proxy Solicitation. The expense of solicitation of proxies will be borne by
the Company. In addition to solicitation of proxies by mail, certain officers,
directors and Company employees who will receive no additional compensation for
their services may solicit proxies by telephone, telegraph or personal
interview. The Company has retained Morrow & Company to solicit proxies for a
fee of $7,000 plus a reasonable amount to cover expenses. The Company is
required to request brokers and nominees who hold stock in their name to furnish
the Company's proxy material to beneficial owners of the stock and will
reimburse such brokers and nominees for their reasonable out-of-pocket expenses
in so doing.
By Order of the Board of Directors
F. THOMAS DUNLAP, JR., Secretary
Dated: March 14, 1995
Santa Clara, California
22.
<PAGE> 25
EXHIBIT A
INTEL CORPORATION
EXECUTIVE OFFICER BONUS PLAN
(AMENDED AND RESTATED EFFECTIVE JANUARY 1, 1995)
1. PURPOSE
The purpose of this amended and restated Bonus Plan is to motivate and
reward eligible employees for good performance by making a portion of
their cash compensation dependent on growth in earnings per share
("EPS") of Intel Corporation (the "Company"). The Bonus Plan is designed
to ensure that the annual bonus paid hereunder to executive officers of
the Company is deductible without limit under Section 162(m) of the
Internal Revenue Code of 1986, as amended, and the regulations and
interpretations promulgated thereunder (the "Code"). This amended and
restated Bonus Plan clarifies the description of EPS and the multiplier
that appeared in the original Bonus Plan and extends the time period
during which bonus targets can be established to the latest time
permitted by the Code. This amended and restated Bonus Plan is subject
to stockholder approval.
2. COVERED INDIVIDUALS
The individuals entitled to bonus payments hereunder shall be the
executive officers of the Company, as determined by the Compensation
Committee (the "Committee").
3. THE COMMITTEE
The Committee shall consist of at least two outside directors of the
Company who satisfy the requirements of Code Section 162(m). The
Committee shall have the sole discretion and authority to administer and
interpret the Bonus Plan in accordance with Code Section 162(m).
4. AMOUNT OF BONUS
Bonus payments are made in cash. The maximum bonus payment is the
product of (i) an individual bonus target in dollars for the performance
period set by the Committee in writing and (ii) the numerical value of
EPS for the performance period multiplied by a factor (the "multiplier")
that is set by the Committee in writing. The term "performance period"
shall mean the service period for which the bonus is payable. The term
"EPS" shall mean the greater of operating income or net income for the
performance period, in each case per weighted average common and common
equivalent shares outstanding for the period. The individual bonus
target and the multiplier shall be adopted by the Committee in its sole
discretion with respect to each performance period no later than the
latest time permitted by the Code. However, no bonus in excess of
$5,000,000 will be paid to any executive officer for any performance
period. The Committee may also reduce an individual's bonus calculated
under the preceding formula in its sole discretion. The bonus payable
hereunder shall be paid in lieu of any bonus payable under the Company's
Executive Bonus Plan.
5. PAYMENT OF BONUS
The payment of a bonus for a given performance period requires that the
executive officer be on the Company's payroll as of the last day of the
performance period. The Committee may make exceptions to this
requirement in the case of retirement, death or disability, as
determined by the Committee in its sole discretion. No bonus shall be
paid unless and until the Committee makes a certification in writing as
required by Code Section 162(m).
6. AMENDMENT AND TERMINATION
The Company reserves the right to amend or terminate this Bonus Plan at
any time with respect to future services of covered individuals. Bonus
Plan amendments will require stockholder approval only to the extent
required by applicable law.
<PAGE> 26
PROXY INTEL CORPORATION PROXY
2200 MISSION COLLEGE BLVD., SANTA CLARA, CALIFORNIA 95052-8119
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING -- APRIL 28,1995
GORDON E. MOORE, ANDREW S. GROVE and F. THOMAS DUNLAP, JR., or any of them, each
with the power of substitution, are hereby authorized to represent and vote the
shares of the undersigned, with all the powers which the undersigned would
possess if personally present, at the Annual Meeting of Stockholders of Intel
Corporation to be held on Friday, April 28, 1995 or at any postponement or
adjournment thereof.
Election of all 11 Directors (or if any nominee is not available for election,
such substitute as the Board of Directors may designate).
NOMINEES: C. Barrett, W. Chen, A. Grove, J. Guzy, G. Moore, M. Palevsky,
A. Rock, J. Shaw, L. Vadasz, D. Yoffie, C. Young.
SEE REVERSE SIDE. If you wish to vote in accordance with the Board of Directors'
recommendations, just sign on the reverse side. You need not mark any boxes.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY, USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
SEE REVERSE
/ / MARK HERE FOR ADDRESS CHANGE AND NOTE ABOVE.
<PAGE> 27
INTEL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. /X/
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3 BELOW:
1. ELECTION OF DIRECTORS -- (SEE REVERSE) FOR WITHHOLD ALL EXCEPT
/ / / / / /
--------------------------------------
(EXCEPT NOMINEE(S) WRITTEN ABOVE)
2. To ratify the appointment of the accounting FOR AGAINST ABSTAIN
firm of Ernst & Young LLP as independent / / / / / /
auditors for the Company for the current
year.
3. To approve the Company's amended and FOR AGAINST ABSTAIN
restated Executive Officer Bonus Plan. / / / / / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEMS 4 AND 5 BELOW:
4. An advisory stockholder proposal relating FOR AGAINST ABSTAIN
to certain executive compensation matters. / / / / / /
5. An advisory stockholder proposal relating FOR AGAINST ABSTAIN
to certain environmental matters. / / / / / /
SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER.
IF NO SUCH DIRECTIONS ARE INDICATED, THE PROXIES WILL HAVE AUTHORITY TO VOTE FOR
THE ELECTION OF DIRECTORS, FOR ITEMS 2 AND 3 AND AGAINST ITEMS 4 AND 5. IN THEIR
DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING.
DATED: , 1995
----------------------
SIGNATURE(S)
--------------------------------------------------------------------
--------------------------------------------------------------------------------
PLEASE SIGN EXACTLY AS NAME APPEARS HEREIN. JOINT OWNERS MUST EACH SIGN. WHEN
SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE GIVE
FULL TITLE AS SUCH.
<PAGE> 28
Environmental, Health and Safety At Intel
1994
Intel's commitment
to environmental, health
and safety is an integral
part of our success as
a corporation.
-Gordon Moore
Chairman of the Board
[Intel Logo]
<PAGE> 29
OUR ENVIRONMENTAL, HEALTH AND SAFETY POLICY
Intel Corporation and its subsidiaries are committed to achieving high
standards of environmental quality and product safety, and to providing a safe
and healthful workplace for our employees and surrounding communities.
We will comply with all applicable regulatory requirements as a minimum and
implement programs and processes to achieve higher standards, where
appropriate. We will work with others to develop responsible laws and
regulations that may be required to provide appropriate safeguards for the
community, the workplace and the environment.
We seek a healthful and safe workplace, free of occupational injury and
illness. We emphasize individual responsibility for safety by all employees
and at all levels of management. We encourage employees to report safety
hazards and issues. We will not conduct any operations or market a product
without adequate safeguards.
We understand that our manufacturing technology and the regulatory requirements
are changing rapidly. We will provide appropriate flexibility in our control
equipment and processes to provide protection for the employee, the community
and the environment.
We are committed to conserving natural resources and reducing waste generation
and emissions to the air, water and land. We will ensure that the wastes we
generate are disposed of in a safe and environmentally sound manner.
We will continue to expand our knowledge and understanding of the effect of our
operations on safety, health and the environment. We are committed both to
continuous improvement in our operations and to sharing the knowledge that we
gain with our employees, customers, the scientific community and government. We
will be a responsible member of the communities in which we live and work.
We will establish and maintain appropriate controls, including periodic review,
to ensure that this policy is being followed.
/s/ Gordon E. Moore
Gordon E. Moore, Chairman of the Board
September 1991
<PAGE> 30
OUR ENVIRONMENTAL, HEALTH AND SAFETY COMMITMENT
[PHOTOGRAPH OF GORDON MOORE]
Intel's commitment to environmental, health and safety programs is an integral
part of our success as a corporation. It is no longer enough to just produce a
profit. Instead, we need to continually improve our manufacturing process,
thereby reducing our burden on the environment and becoming an asset to the
communities in which we live and work. We have developed our first
corporate-wide report on environmental, health and safety (EHS) to communicate
our key programs and performance to our stockholders, our employees, the
residents of communities where we operate, government officials and our
customers. Our objective is to provide these stakeholders with a better
understanding of our performance, the challenges we face and our ability to meet
those challenges.
We are currently working to make every step of our manufacturing
process -- from raw material extraction to product distribution and disposal --
environmentally safe. Since 1989, for instance, we have reduced our worldwide
use of ozone-depleting chemicals in manufacturing from 600,000 pounds per year
to none. We have eliminated ethylene-based glycol ethers in all our new
manufacturing processes. We expect to reduce the volatile organic compound
emissions in our next generation of wafer manufacturing process by 50
percent. Because of our efforts to reduce emissions, our newest wafer
fabrication facility in Oregon was recently given a permit as a "minor"
source of air emissions. Most factories of this size are "major" sources.
Our goal is to be an industry leader in environmental, health and
safety. Our first priority is to ensure continuous compliance with all local,
state and national regulations. We also realize, however, that our commitment
should go beyond strict regulatory compliance. To that end, we work closely with
many local, regional and national groups to make our operations as safe as
possible and to lead other companies and industries to similar levels of safety
and environmental performance.
We acknowledge the need for continuous improvement. We realize that we
have experienced setbacks and periods of non-compliance with a few of our
programs and operations. For example, in New Mexico last year our estimated
water use for a major expansion was of concern to the community. We responded
with aggressive conservation plans. This resulted in an overall reduction of our
requested allotment. We experienced operating difficulties with several new
pieces of air pollution abatement equipment. We have plans in place to remedy
these and other issues that we have experienced this past year.
Intel is the largest semiconductor manufacturer in the world. Many of
our products have beneficial effects on both the environment and people's health
and safety. Our Intel microprocessors, for example, which are the brains of most
personal computers, have automatic power management capabilities to save energy.
Our video conferencing systems and modems provide electronic connections that
reduce travel mileage, which helps lessen air pollution. And our
microcontrollers drive automobile solid-state electronic ignition systems, which
help to save energy through efficient fuel usage.
My commitment is to ensure that Intel continuously improves our
environmental, health and safety performance. I believe environmental, health
and safety laws and regulations represent a minimum expectation for the way
Intel operates. Hence, we will continue to develop and implement new initiatives
to go beyond compliance and to reduce our consumption of natural resources in
our manufacturing processes.
This report is an effort to further the dialogue with our key
stakeholders. We hope that this report provides you with a better understanding
of our progress, the challenges we face and the mechanisms that we implement to
manage them. We welcome your questions and comments regarding the information in
this report. Please complete the comment card and return it to us.
/s/ Gordon E. Moore
Gordon E. Moore, Chairman of the Board
January 1995
<PAGE> 31
CONTENTS
<TABLE>
<S> <C>
OUR ENVIRONMENTAL, HEALTH AND SAFETY POLICY
Our Environmental, Health and Safety Commitment 1
Intel Corporation in Brief 3
We Are Dedicated to EHS at All Levels 4
We Comply with EHS Laws and Regulations 6
We Manage Risk Carefully 7
We Conserve Natural Resources 9
We Provide a Safe and Healthy Workplace 11
We Are Committed to an Ethic of Product Stewardship 13
We Strive to Reduce Our Environmental Releases 15
We Are a Responsible Corporate Citizen 18
Our EHS Goals for 1995 and Beyond 21
Awards and Accomplishments 21
</TABLE>
For questions or comments, contact:
Terry McManus, Manager, Corporate Environmental Affairs,
Intel Corporation (CH10-22), 5000 W. Chandler Boulevard,
Chandler, AZ 85226. (602) 554-4812
<PAGE> 32
INTEL CORPORATION IN BRIEF
HISTORY AND MISSION
[PHOTOGRAPH OF PENTIUM(R) PROCESSOR]
Intel began operations in 1968 to design and manufacture very complex
silicon chips. The company's first products were semiconductor memory chips. In
1971, Intel introduced the world's first microprocessor, a development that
changed not only the future of the company but much of the industrial world.
Increasingly, Intel's business direction evolves in parallel with the directions
that the microprocessor revolution takes.
After 27 years in business, Intel continues to be a leading supplier of
microcomputer components and modules. Today's desktop and mobile systems deliver
formidable computing performance. These powerful yet inexpensive computers are
being connected to networks that allow many types of data to be shared. Intel's
mission is to supply the electronic building blocks for the new computer and
communications industry -- an industry in which many key products are built
around technologies that Intel has helped pioneer, including the personal
computer (PC) architecture.
MAJOR CUSTOMERS
- Computer and computer peripheral manufacturers worldwide.
- Original equipment manufacturers (OEMs), including makers of automobiles
and a wide range of industrial and telecommunications equipment.
- PC users who buy Intel's PC enhancements, business communications
products and networking products at retail stores around the world.
- Scientists and engineers working on the world's greatest computational
problems.
MAJOR FACILITIES
United States
- Chandler, Arizona
- Santa Clara and Folsom, California
- Rio Rancho, New Mexico
- Aloha and Hillsboro, Oregon
- Las Piedras, Puerto Rico
International
- Swindon, England
- Munich, Germany
- Hong Kong
- Leixlip, Ireland
- Haifa and Jerusalem, Israel
- Tsukuba, Japan
- Penang, Malaysia
- Manila, Philippines
PRINCIPAL PRODUCTS
- Microprocessors, the brains of desktop and mobile computers.
- Microcontrollers, or single-chip computers, dedicated to specific
application functions, such as automobile engine control and control of a VCR.
- Memory chips, principally flash memories, which retain data even when
computer system power is turned off.
- Computer modules and boards based on Intel components and sold to OEMs,
who integrate them into their products.
- Network and communications products, which enhance the capabilities of
PC systems and networks.
- Personal conferencing products, which provide PCs with document and
video conferencing capabilities, making the PC a true communications tool.
- Parallel supercomputers, very high-performance computer systems that use
many microprocessors working together to solve complex computational problems.
[MAP OF THE WORLD INDICATING THE GEOGRAPHIC LOCATIONS OF MAJOR FACILITIES.]
3
<PAGE> 33
WE ARE DEDICATED TO EHS AT ALL LEVELS
Compliance, performance and innovation in environmental, health and safety (EHS)
programs require strong commitment and leadership. Throughout the last decade,
we have written and implemented EHS programs that establish the basic framework
for all of our operations. We also require each facility's management to
implement our EHS policies and programs, and to communicate them to our
employees.
We set direction and monitor performance through quarterly EHS
Operations Reviews, which the Chairman of the Board and Chief Operating Officer
oversee. Those reviews cover several areas, including:
- Compliance with internal and external standards and regulations
- Management of air quality, health, waste management, pollution
prevention, safety and natural resource consumption
- Progress in identifying and restoring any contaminated sites
- Participation in initiatives to go beyond compliance
In 1993, we established the Strategic Chemical Council, a senior management
review board that drives many of our improvements in environmental, health and
safety. In 1994, the council developed major initiatives to reduce energy
consumption, to reduce air emissions from our factories, and to evaluate new and
proven technologies to recycle and reuse water. This organization also has final
approval for any major process chemical changes.
The Director of Environmental, Health and Safety operates a matrix
organization that consists of both the corporate staff and the environmental,
health and safety managers from each of our major operations. In addition, we
have cross-organizational groups that meet routinely to address environmental,
ergonomic, health and safety issues. Worldwide, we have a staff of 200 EHS
professionals.
Our corporate EHS staff helps set strategic direction and provide
support to individual facilities. Their principal responsibilities include:
- Setting strategy on pollution prevention
- Auditing our facilities for compliance with laws, regulations and Intel
standards
- Procuring permits for new manufacturing sites worldwide
- Reviewing new manufacturing equipment in accordance with EHS performance
guidelines
- Managing corporate-wide contracts for chemical recycling and waste
management
- Providing technical assistance
- Identifying and managing emerging EHS issues
In addition, each Intel site worldwide has professional EHS staff who are
responsible for operations in each community. Their principal responsibilities
include:
- Self-auditing our facilities for compliance with laws, regulations and
Intel standards
- Providing technical assistance to on-site management and employees
- Procuring permits for facility expansions and changes
- Supporting local initiatives on environmental, health and safety
- Ensuring that pollution prevention initiatives are implemented
We carefully train Intel employees in the environmental, health and safety
issues relevant to their positions. For example, we train our manufacturing
employees in workplace and chemical safety; office employees learn about office
ergonomics; and our emergency response personnel receive CPR and spill response
training.
PULL QUOTE:
Throughout the world, our facilities operate in accordance with government
standards as a minimum. In many cases, our internal standards are more
stringent.
SIDEBARS:
OUR ENVIRONMENTAL, HEALTH AND SAFETY POLICY
- Provide a safe and healthy workplace
- Conserve natural resources
- Reduce waste generation and emissions
- Comply with all laws and regulations as a minimum
- Implement programs and processes to achieve higher standards
- Extend our EHS philosophy to our suppliers
4
<PAGE> 34
INTEL'S ENVIRONMENTAL, HEALTH AND SAFETY HIGHLIGHTS
Over the last five years, we have achieved -- and even exceeded -- many of our
EHS goals. In many instances this has made us a leader within the semiconductor
industry. Here are just a few highlights from our EHS performance:
- Since 1989, we have reduced our worldwide use of ozone-depleting
chemicals in manufacturing from 600,000 pounds per year to none.
- We have eliminated ethylene-based glycol ethers in all our new
manufacturing processes.
- We were the first major semiconductor company to eliminate arsine, a
toxic gas, from its manufacturing processes.
- We helped the Semiconductor Equipment and Materials International trade
association develop a common set of EHS guidelines for manufacturing equipment
performance. These guidelines were first published in 1991 and were updated in
1993.
- Our latest generation of wafer manufacturing has significantly lower
rates of air emissions and waste generation per unit of production than our
older technologies.
- We have been engaged in a company-wide ergonomics program since 1991.
- We were the first microprocessor manufacturer to join the Energy Star
initiative, a program sponsored by the U.S. Environmental Protection Agency
(EPA) to encourage manufacturers to design more energy-efficient computers.
- Intel packaging no longer contains chlorine-bleached white fibers,
ozone-depleting substances or inks with more than 100 parts per million of heavy
metals.
- While Intel's production of semiconductors has increased 98 percent over
the past four years, our emissions of volatile organic chemicals have increased
only 18 percent in the same period.
- Our circuit board manufacturing operation has begun changing our
manufacturing equipment from aqueous cleaning to "no clean," which eliminates
wastewater.
- In 1994, we generated only one-half the amount of hazardous waste as we
generated in 1985, although revenues increased sevenfold.
- We have developed a system that will decrease our Rio Rancho, New Mexico
facility's water use by 500,000 gallons a day.
- We have exceeded the emissions reduction goals for the 18 chemicals
listed in the U.S. EPA's 33/50 Industrial Toxics Reduction program. The goal was
33 percent reduction by year end 1992.
- We have established Community Advisory Panels (CAPs) to provide feedback
to several of our sites in Arizona, Ireland, New Mexico and Oregon. These CAPs
allow us to tap into the expertise of local communities and allow them to learn
about and contribute to our EHS policies and procedures.
- Our aggressive programs to reduce the volume of solid waste sent to
landfills have resulted in an overall recycling rate in 1994 of 35 percent.
- We have received dozens of awards and certificates for our EHS
achievements, some of which are highlighted on the inside back cover of this
report.
[PHOTOGRAPH OF SCRUBBERS AT INTEL'S RIO RANCHO, NEW MEXICO SITE.]
PHOTO CAPTION:
At Intel's Rio Rancho, New Mexico site, corrosive chemical vapors are removed by
water "scrubbers" before the air is exhausted to the outside. Pictured (left to
right): Harry Hunsaker, Frank Garcia and Rhonda Buttler monitor samples of
exhaust air before it reaches the scrubber.
5
<PAGE> 35
WE COMPLY WITH EHS LAWS AND REGULATIONS
EHS leadership depends on, at a minimum, compliance to complex and ever-changing
laws and regulations. Intel uses both a corporate internal inspection program
and external inspections by national, state and local agencies to help us
achieve the highest levels of compliance possible.
Intel's internal corporate EHS inspection program to review worldwide
operations has been in place since 1984. In 1990, we revised our corporate
inspection protocol to provide an integrated EHS compliance inspection and
program review. Each facility undergoes at least one inspection per year.
In 1992, Intel also developed a new safety self-assessment protocol.
Under that protocol, each site reviews its own safety programs and then
undergoes an on-site inspection by an Intel vice president, who evaluates both
the self-assessment and improvement plans. In 1993 and 1994, these safety
reviews covered all 17 major manufacturing operations of Intel and 19 ancillary
operations.
In 1994, we made major improvements to our corporate environmental
inspection program and developed four inspection protocols: Compliance,
Management Systems, Business Risk and Environmental Excellence. Full
implementation of baseline inspections on all major manufacturing operations
began in the fall of 1994.
Intel welcomes external inspections by a wide variety of agencies. Over
the past five years, representatives from national, state or local
environmental, health and safety agencies have periodically inspected Intel
facilities. (Of the 176 inspections conducted during that period, 78 percent
were conducted by state and local agencies.) The following table summarizes
inspections of Intel operations worldwide.
Table Regarding Environmental Inspections Worldwide 1990-1994
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Safety 10 7 10 8 14
inspections
Environmental 16 16 26 36 33
inspections
Citations 1 2 5 7 12
</TABLE>
FIGURE CAPTION:
This table shows an increase in the number of citations Intel incurred between
1993 and 1994. Ten of the 12 citations came during the course of one single OSHA
inspection. Eight of those 10 citations were corrected before the inspector left
the premises that day.
PULL QUOTE:
It is Intel's practice to self-report episodes of non-compliance with EHS laws
and regulations.
NON-COMPLIANCE PENALTIES
One way to measure the success of a compliance program is to look at the
non-compliance penalties that have been levied against it. Some penalties are
determined through inspections or reviews by regulatory agencies; others may be
the result of shortcomings that we identified and reported to the proper
authorities. It is Intel's practice to self-report instances of non-compliance
that it finds at its facilities.
Given our tremendous growth and the complexity of our operations, we are proud
of our compliance record. However, we have had problems that continue to
challenge our attention to detail. The following table summarizes the penalties
and our actions for improvement over the past five years.
Table Regarding Non-Compliance Penalties 1990-1994
<TABLE>
<CAPTION>
Year Fine in $ Intel Type Violation Intel's Corrective Action
---- --------- Location ---- --------- -------------------------
--------
<S> <C> <C> <C> <C> <C>
1994 900 Oregon OSHA* Miscellaneous 8 of 10 items were corrected before
Violations the inspector left during OSHA
inspection. Remaining 2 have also
been corrected.
1994 100 Oregon Self- Wastewater System immediately corrected.
reported cyanide
concentration too
high
1994 35,000 New Self- Boilers installed Revised permit to reflect boilers
Mexico reported not consistent installed
with permit
1993 200 Arizona RCRA** Error in RCRA Errors corrected and documents
manifest refiled
1993 2,000 Puerto RCRA Waste analysis Retesting of waste and submittal of
Rico incorrect data to agency
1993 400 Oregon Self- Wastewater pH Improvements to the neutralization
reported out of system implemented
specification
1993 40,000 New Self- VOC emissions Revised methodology for
Mexico reported data determining VOC emissions and
inconsistencies reached agreement with state on
new protocol
1991 500 Santa Air Agency Cover installed on sink
Clara District inspection
identified cover
missing from
solvent sink
1990 600 Santa Air Missing air Systems improved to ensure that
Clara District emissions log no future logs are missing
1990 10,000 Santa Local Release of Systems repaired so no future
Clara hydrogen gas releases occur
systems
</TABLE>
FIGURE CAPTIONS:
*OSHA is the federal Occupational Safety and Health Act
**RCRA is the Resource Conservation and Recovery Act
Intel as been subject to ten non-compliance penalties over the last five years.
6
<PAGE> 36
WE MANAGE RISK CAREFULLY
The manufacture of semiconductors requires the use of a wide variety of
chemicals, many of which have hazardous properties. Intel dedicates itself to
the safe handling of these materials and has made considerable efforts to
establish itself as one of the semiconductor industry leaders in this field.
Cooperative arrangements with our chemical suppliers help us keep
on-site storage of hazardous materials at Intel factories to a minimum. The
chemicals that must be kept on site are stored in rooms designed to capture or
treat any leak or release before it can reach the environment. Those rooms also
have state-of-the-art leak detection and monitoring systems, which allow trained
employees to respond quickly to potential problems before they have a chance to
escalate.
All manufacturing plants maintain up-to-date emergency response plans,
which are reviewed regularly with local fire departments and environmental
agencies. All major sites also undergo emergency drills, in which local and
sometimes state agencies participate to check our response and communications
systems. Sites in California and Oregon, for instance, have conducted earthquake
drills that include joint training exercises with local fire departments and
state emergency services, and, in one instance, representatives of local media
groups. The goal is to simulate conditions during an earthquake as closely as
possible and thereby practice and test our response.
Since we believe community involvement is critical to a safe chemical
management program, our factories have provided tours to interested local
citizens and government officials to explain how the various chemical storage
and emergency response systems work.
Local officials and agencies have recognized Intel's leadership in this
area and frequently ask our help in establishing local plans for chemical
management, waste reduction and emergency response. We have donated equipment
and made special training classes available to local emergency response
organizations. Intel played a large role in developing a hazardous materials
management ordinance for Santa Clara County, California. Ultimately, portions of
the ordinance became a part of state and federal law. Many citizens and
environmental groups now regard that ordinance as a model for proper management
of hazardous materials.
Although employee safety and environmental protection have always been
top priorities, our programs are continuously evolving and improving. For
instance, during the 1970s and early 1980s, Intel, like many other companies,
stored flammable hazardous materials, including diesel fuel and waste solvent,
in underground tanks. Over time, however, some of these tank systems developed
leaks that could not be immediately detected. As a result, Intel has had to
clean up several sites. Three were designated "Superfund" sites by the EPA in
1984.
[PHOTOGRAPH OF GAS PAD TECHNICIAN.]
PHOTO CAPTION:
Gas pad technician Robert Duran changes a sensor tape on one of Intel's
automated gas leak detection systems at the New Mexico facility. These
electronic systems are monitored 24 hours a day, 7 days a week.
We continue to take voluntary responsibility for these sites. We are
working with state and federal agencies to ensure that clean-up can be completed
with no impact on public health and the environment. We believe that further
cleanup at our Santa Clara 3 site is not required. Intel is working with the EPA
and the California Regional Water Control Board to remove this site from the
Superfund List. We are also designated as a potentially responsible party, along
with more than 30 other entities, at the Hassayampa Superfund site in Arizona,
where we sent hazardous materials for disposal following the requirements set by
the state.
PULL QUOTE:
Intel is dedicated to the safe handling of hazardous materials and has made
considerable efforts to establish itself as an industry leader in this field.
RISK PREVENTION
By 1985, Intel had voluntarily removed all of its underground storage tanks
worldwide and installed above-ground facilities in double containment. The
exception is California, where local requirements specify that certain materials
(especially flammable liquids) be stored underground. There, all underground
tanks have double containment, with leak detectors that immediately set off an
alarm in the event of a release into the secondary containment.
While proper management of chemicals on site is critical, we prefer to
re-engineer our manufacturing processes to use less hazardous materials
altogether. Our components research organiza-
7
<PAGE> 37
tion operates the "Leapfrog" program, which evaluates replacement
chemistries to reduce our impact on the environment and improve worker safety.
For instance, Intel was the first major semiconductor company to eliminate
arsine, a toxic gas, from its manufacturing processes. In recent years, we have
eliminated or minimized the use of a number of other hazardous materials,
including 1,1,1 trichloroethane and cellosolve acetate.
We continue to be committed to improvement in this area. Intel's newest
factories will make extensive use of chemical recycling and reprocessing systems
to minimize both the amounts of incoming chemicals and outgoing waste. As a
result, many of our newest factories actually have lower rates of air emissions
and waste generation than our older factories -- in spite of the fact that the
newer factories are many times larger.
[PHOTOGRAPH OF AUTOMATED WET STATION.]
PHOTO CAPTION:
The automated wet station at our Santa Clara, Calif. site allows us to increase
manufacturing rates while minimizing worker exposure to chemicals.
MANUFACTURING EQUIPMENT SUPPLIER PARTNERSHIPS
Intel also has a long-term commitment to improve the environmental, health and
safety performance of the equipment we buy from manufacturers. Historically,
semiconductor manufacturers addressed equipment safety during installation or in
the course of manufacturing. The semiconductor industry had neither common
guidelines for safety requirements in manufacturing equipment nor a set of
directions for equipment suppliers and manufacturers. This meant that equipment
manufacturers' interpretations of equipment "safety" varied depending on
existing codes, standards and company policies.
In 1988, Intel took a leadership role within the Semiconductor
Equipment and Materials International (SEMI) trade association to develop a
common set of environmental, health and safety guidelines for manufacturing
equipment performance. The intent has been to create guidelines that both
integrate EHS features into the initial design of equipment and establish
long-term goals and objectives. Guidelines that closely resembled Intel's own
internal requirements were published as a formal SEMI document, the SEMI S2-91
Product Safety Guideline, in 1991. In 1993, with broad input from the
semiconductor industry, the guidelines were revised and released as SEMI S2-93
Safety Guidelines for Semiconductor Manufacturing Equipment.
Today, many United States-based semiconductor companies use the SEMI
guidelines as the minimum EHS requirement for equipment they purchase. Many
equipment suppliers in the U.S. and internationally have adopted these
guidelines for inclusion into their product safety programs. Japanese
semiconductor companies are currently reviewing the need for EHS consistency and
the use of the SEMI guidelines.
Since 1989, Intel has completed more than 150 EHS assessments for our
fabrication, assembly and test manufacturing equipment. We also use the program
to assess equipment used in quality and reliability testing, metrology,
facilities, factory automation, and research and development. Equipment
manufactured according to the guidelines show fewer EHS problems, even though
the amount of equipment in use has grown tremendously. Equipment installation
time has also decreased, as suppliers now have to meet our standards before
delivering equipment.
In the future, we would like to see worldwide acceptance and use of
SEMI guidelines for semiconductor equipment. We would also like to see joint
efforts between the semiconductor industry and the European Union to develop EHS
requirements and continuous improvement of existing industry standards.
SIDEBAR:
THE SEMI GUIDELINES
Intel has taken a leadership role in creating and modeling EHS guidelines for
equipment. Under the guidelines, all device manufacturers and equipment
suppliers
1 Focus on EHS issues in the design phase
2 Get EHS assessments by independent third parties
3 Complete necessary modifications before shipment
8
<PAGE> 38
WE CONSERVE NATURAL RESOURCES
We understand that natural resources and landfill space are limited. In 1994, as
part of our commitment to conserving natural resources -- and as part of our
corporate-wide commitment to continuous improvement -- we undertook aggressive
programs to address water use reduction, energy use reduction and landfill
diversion.
WATER USE REDUCTION
Our major demand for water comes from our silicon wafer cleaning process.
Because of the sensitivity of the manufacturing process, we use ultra pure water
(UPW) to prevent the introduction of contaminants that could cause product
failure. In 1994, Intel launched an aggressive program to reduce water
consumption in three ways: by producing more UPW per gallon of city water, by
using water more efficiently during the manufacturing process, and by maximizing
the reuse and recycling of our wastewaters.
Typically, the manufacture of UPW can have efficiencies as low as 50
percent. This means that two gallons of incoming water are required to make one
gallon of UPW. At Intel's Rio Rancho facility in New Mexico, a pilot project has
focused on improving this efficiency. Initial results from the testing indicate
that the treatment efficiency can be improved by up to 30 percent. We plan
additional research for 1995. If these improvements prove to be effective and
reliable, they will be incorporated into the UPW treatment system at Rio Rancho.
Intel is also working with equipment manufacturers to reduce UPW usage
in the manufacturing process. The "wet benches" that we use to clean silicon
wafers between manufacturing steps comprise more than 50 percent of our total
UPW usage. We have worked with wet bench manufacturers to develop new designs
that are up to 50 percent more efficient in UPW usage. Intel and its suppliers
are currently testing these new wet benches.
At the same time, Intel is working with Sandia National Laboratories,
the University of Arizona and Stanford University to better understand the basic
science of the wafer cleaning process on a molecular level. The information
being developed in these studies will lead to even more efficient wet benches
and lower UPW usage.
We have also explored opportunities to reduce the incoming city water
demand by using wastewater for processes that are less sensitive to water
quality. We conducted a pilot project at our New Mexico facility to determine if
we could use waste-water from manufacturing in the cooling tower system to
replace water lost to evaporation. The pilot project was an unqualified success,
and we plan a full-scale implementation in 1995. This project will decrease the
facility's fresh water demand by 500,000 gallons per day. At our Arizona site,
through recycling rinsewater, we are saving 65,000 gallons of fresh water per
day.
Similar projects at each of our other wafer fabrication facilities
worldwide are currently being designed, tested or implemented. For instance, one
of our newest factories, Fab 12, which is being constructed in Chandler,
Arizona, will use wastewater reclaimed from a local municipal treatment plant in
the cooling towers and for landscape irrigation. The segregation of higher
quality process rinsewater streams will return water to the city's advanced
treatment system for reinjection into the underground aquifer. These water
conservation measures will decrease the facility's net fresh water demand from
5.5 million gallons per day to approximately 1 million gallons per day.
PULL QUOTE:
Our pilot water conservation project in New Mexico will decrease the facility's
fresh water demand by 500,000 gallons per day.
ENERGY USE REDUCTION
More than one-half of the energy consumed at an Intel factory is used to clean
and condition the air for the manufacturing "clean rooms," where particles in
the air must be controlled to levels thousands of times cleaner than a hospital
operating room. During 1994, Intel investigated ten specific areas in which we
could decrease exhaust requirements, thereby reducing the factory's energy
demand. Tracer gas testing verified the air exhaust rates required to maintain a
safe work environment. As a result, Intel reduced its air exhaust requirements
from 20 to 90 percent in specific areas. This translates to an estimated
12 percent overall reduction
9
<PAGE> 39
in air exhaust for a new factory.
We also achieved energy savings in our office areas. In 1994, we
continued our program to replace lighting fixtures with higher efficiency units.
The new lighting fixtures are up to 60 percent more efficient than the older
models. These high-efficiency lighting fixtures are also being included in the
design of all new facilities.
LANDFILL DIVERSION
In 1994, Intel continued an aggressive program to minimize the volume of solid
waste sent to landfills for disposal. We established a corporate-wide task force
to measure and improve our performance. We have documented improvement every
quarter, and in the fourth quarter we exceeded our 1994 recycling rate goal of
35 percent.
Intel recycling efforts cover both our office operations and our
manufacturing facilities. In our manufacturing facilities, we recycle a wide
variety of materials, including bottles, metals, wood and plastic. In 1994
alone, from both our offices and manufacturing facilities, we recycled 1,166
tons of paper, 1,899 tons of cardboard, and 1,368 tons of wood, which translates
into saving more than 75,000 trees. We also recycled 1,925 tons of metal and 68
tons of plastic. In the last quarter of 1994, we achieved a recycling rate of 47
percent.
At the Chandler manufacturing facility alone, 826,000 plastic trays
used for shipping integrated circuits have been reused since 1993. That has
saved 17,500 cubic feet in landfill volume. This facility also recycles chemical
bottles, rubber gloves and metals. Obsolete office equipment is either donated
to schools or other non-profit organizations or is sold, rather than taking it
to a landfill.
Graph Regarding Solid Waste Recycling in 1994
<TABLE>
<S> <C>
Q1 26%
Q2 28%
Q3 30%
Q4 47%
</TABLE>
FIGURE CAPTION:
In the fourth quarter, Intel exceeded its recycling goal for the first time.
At the Chandler manufacturing facility alone, more than 800,000 plastic trays
used for shipping integrated circuits have been reused since 1993. That has
saved 17,500 cubic feet in landfill volume.
[PHOTOGRAPH OF THANG LE IN FRONT OF RECYCLING EQUIPMENT.]
PHOTO CAPTION:
Thang Le, a senior environmental engineer, is pictured with sulfuric acid
recycling equipment at the manufacturing facility in Santa Clara, Calif. This
equipment reduces the overall load on our acid waste neutralization system and
reduces the amount of new acid that Intel buys each year. The Santa Clara
facility recycled 2,800,000 pounds of sulfuric acid in 1993.
[PHOTOGRAPH OF RECYCLED MATERIAL.]
PHOTO CAPTION:
At our Arizona operations we separate and prepare paper, plastic bottles, wood
and metal for recycling.
10
<PAGE> 40
WE PROVIDE A SAFE AND HEALTHY WORKPLACE
Intel has a long-standing commitment to providing a safe and healthy workplace
for all of its employees. In 1993 and 1994, we had several new facility
start-ups and significant growth in the number of employees. Yet the rate of
accidents involving lost work days or restricted days (called "lost day case
rate") declined significantly. Indeed, our incidence rate of employee illness
and injury is better than average for the semiconductor industry. Our efforts
will continue, and Intel is firmly committed to continuous improvement in safety
and health performance.
SAFETY SELF-ASSESSMENT
In 1991, we initiated a comprehensive review of our safety program by comparing
our systems, performance, policies and procedures with six companies (from
non-semiconductor industries) that are known safety leaders. Based on this
review, we identified five critical characteristics for a premier safety
program: management commitment, line management and organization responsibility,
safety training, motivation and safety support. In 1992, we developed an Intel
safety system around these characteristics. We have put this safety system in
place in all manufacturing facilities and in a majority of support organizations
worldwide.
Our safety self-assessment process provides criteria for each
organization to annually evaluate the strengths and weaknesses of the existing
system and develop an ongoing improvement plan.
MANAGEMENT SUPPORT
Senior management provides leadership and strong support of our commitment to
continuous improvement in safety performance. We report all lost day cases to
the chief operating officer within 48 hours. We also immediately communicate
close calls and then launch investigations, whether injuries result or not. The
details of these close calls are communicated to relevant sites worldwide, along
with prevention guidance.
We provide management with a comprehensive report and comparison of
injury and illness performance data each month. Safety and health results and
action plans are reviewed and discussed with senior management on a quarterly
basis. In addition, individual members of senior management are involved in
initiatives for continuous improvement.
ERGONOMICS
The science of designing equipment to advance the safety and performance of
humans is called "ergonomics." At Intel, ergonomic-related cumulative trauma
disorders and strains or sprains are by far the largest categories of injuries.
As a component of our overall safety improvement effort, we target significant
resources and attention to ergonomics, including:
- Since 1991, Intel has implemented a company-wide ergonomics program,
including ergonomics design criteria for future equipment.
- We train our major equipment suppliers and Intel engineers in advanced
ergonomics design.
- We have an ongoing effort to improve office and manufacturing
ergonomics.
Lost Day Case Rate Per 100 Employees
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Durable Goods
Manufacturing 6.0 5.7 5.5 5.4
Semiconductor
Industry 2.0 2.0 1.7 1.8
Intel 1.9 1.5 1.6 1.4 1.0
</TABLE>
FIGURE CAPTION:
Intel's "lost day case rate" has decreased faster than that of the broader
semiconductor industry and is far lower than that of the durable goods
manufacturing industry. We compare ourselves to durable goods manufacturers
because that is the industry group which contains semiconductor manufacturing.
Data for the semiconductor and durable goods industries for 1994 were not
available at press time.
Total Recordable Rate Per 100 Employees
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C>
Durable Goods
Manufacturing 14.2 13.6 13.4 13.2
Semiconductor
Industry 4.5 4.7 3.7 4.0
Intel 3.4 2.7 3.2 3.7 2.9
</TABLE>
FIGURE CAPTION:
Intel's rate of total recordable injuries and illnesses is lower than that of
the semiconductor industry and the durable goods manufacturing industry. OSHA
defines recordable cases to include all work-related deaths and illnesses, and
work-related injuries that result in: loss of consciousness, restriction of work
or motion, transfer to another job and medical treatment beyond first-aid. The
recordable cases include all lost day cases. Data for the semiconductor and
durable goods industries for 1994 were not available at press time.
11
<PAGE> 41
- Through 1994, 17,000 computer users and general Intel office employees
received ergonomic training.
- Our office systems -- including chairs, keyboards and desks -- are now
designed to be adjustable to better fit the individual.
Our ergonomics work, however, goes far beyond our own company. We have led the
semiconductor industry in establishing consistent ergonomics requirements for
manufacturing equipment and facility design. Our manufacturing organization has
devoted considerable resources to create and implement a number of hardware
solutions to material handling needs. With the National Science Foundation,
we are co-sponsoring research on ergonomic problems in our industry.
GLYCOL ETHER ELIMINATION
Intel is committed to replacing hazardous chemicals with less hazardous ones
wherever technically possible. In 1992, Intel eliminated the use of
ethylene-based glycol ethers in all of our new manufacturing processes. Since
then, Intel also has been working toward eliminating their use in older (but
still active) processes. This complex manufacturing change requires extensive
engineering, testing and requalification to ensure product integrity. In the
interim, stringent engineering and procedural systems remain in place to control
the hazards of these chemicals. In 1994, we made significant progress in this
area in all our factories. We expect the remaining process steps that use these
chemicals to be completely converted or eliminated in 1995. We have reduced our
1995 usage to only 3 percent of our 1994 quantities.
MEDICAL MONITORING
Intel employees who work with chemicals participate in a Medical Monitoring
program. During the first few weeks of employment and every two to four years
thereafter, we provide these employees with medical examinations that include
health and symptom histories, lung function testing and laboratory blood
chemistries. We have completed more than 10,000 medical exams since the program
began. Periodically, we combine and analyze the results of the exams to
determine if trends in the health of any groups of employees may exist. A
comprehensive analysis of the data is performed every few years. In our 1994
analysis, we found no undesirable health trends in any of the areas studied,
including symptom frequency, lung function, kidney function and liver function.
We provide employees with the results of both their individual exams and the
combined analyses.
EMPLOYEE HEALTH PROMOTION
Our employee health promotion program creates ever higher levels of good health.
In 1994, EHS Health Services and Intel Corporate Benefits combined efforts to
offer cross-site wellness activities and education to Intel employees. The Intel
health promotion program aims at addressing the health issues that are of the
greatest concern to Intel and our employees.
PULL QUOTE:
Our 1994 analysis of employee medical monitoring data showed no undesirable
health trends in a number of areas, including symptom frequency, lung function,
kidney function and liver function.
SIDEBAR:
Wellness Activities at Intel
We offer four types of seminars and health fairs to keep our employees mentally
and physically healthy.
- Musculo-skeletal Injury Prevention includes classes in back care,
exercise, body mechanics and ergonomics.
- Psycho-social Stress Reduction covers topics including coping with
change, self-motivation and reducing stress during holidays.
- Pregnancy, Prenatal Care and Childrearing classes teach about subjects
such as communicating with children and reducing conflicts with
teenagers.
- Self-care includes sessions on avoiding flus and colds, sports medicine
and dealing with allergies.
12
<PAGE> 42
WE ARE COMMITTED TO AN ETHIC OF PRODUCT STEWARDSHIP
Computers are environmentally beneficial, as they help save paper and reduce
travel miles, as well as the pollution associated with both. Beyond this, Intel
is also concerned with the environmental effects of both our products and
associated packaging. For that reason, the company is committed to the goal of
"product stewardship," or the idea that we can minimize the environmental
impacts of a product during each phase of its life cycle: from raw material
production through product design, manufacturing, marketing, distribution,
sales, customer use and ultimate disposal.
SIDEBAR:
INTEL'S ENVIRONMENTAL DESIGN GUIDELINES
The primary motto of Product Stewardship is "Reduce, Reuse, Recycle." To this
end, Intel has developed a series of design guidelines to reduce the
environmental burden of our products. Those guidelines help the company:
- Reduce product energy consumption
- Reduce the volume and weight of materials in products, packages and
manuals
- Reduce the amount of virgin materials used
- Reduce the use of hazardous materials in each product and package
- Reuse products by maximizing opportunities to refurbish or upgrade them
wherever possible
- Recycle used component parts wherever possible
THE "GREEN" PC
One way that we can reduce the environmental effects of computers is to reduce
the amount of energy they use. Today, personal computers account for about 5
percent of the United States' commercial energy consumption. The U.S.
Environmental Protection Agency (EPA) estimates that the figure could rise to 10
percent over the next few years. In June 1992, the EPA implemented the Energy
Star Computers Program to encourage manufacturers to design more
energy-efficient computers. The agency believes that an energy-efficient PC can
save its users 1,200 kilowatt- hours -- and between $60 and $120 in electricity
bills -- each year.
Personal Computer Energy Demand
<TABLE>
<CAPTION>
Product Watts in Sleep Mode
------- -------------------
<S> <C>
Conventional PC 175
Energy Star product 30
Pentium(R) processor-based PC 28
Intel486(TM)
processor-based PC 19
</TABLE>
FIGURE CAPTION:
Conventional personal computers draw about 175 watts of electricity during idle
periods. In order to display the U.S. EPA's Energy Star logo, a PC must draw
less than 30 watts of electricity in this inactive or "sleep mode" (not
including 30 watts allotted for the monitor). Computers with Intel
microprocessors typically use even less than the 30-watt standard.
Intel was the first microprocessor manufacturer to join the Energy Star
initiative. We have put forth great effort to create computer systems that meet
the Energy Star standards and microprocessors that are energy efficient. Both
the Intel486(TM) and Pentium(R) processors include a "sleep" mode feature that
allows the computer to reduce the amount of energy used while idle. Intel's fax
modems and video cards have similar sleep functions.
PRODUCT PACKAGING
Disposal practices for product packaging materials can often damage the
environment. To reduce such environmental impacts, Intel has developed specific
environmental packaging guidelines. For instance, Intel packaging designers are
systematically eliminating packaging that contains chlorine-bleached white
fibers, ozone-depleting substances and inks with more than 100 parts per million
of heavy metals. We have converted most plastic outer packaging to paper. We
have eliminated some branded product boxes that use high-color folding outer
boxes and have replaced them by simply printing on the corrugated inner box. We
also use recyclable tape and glue, and plastic strapping rather than steel
banding and staples.
Nearly all packaging materials that Intel uses, including corrugated
cardboard and bubble wrap, contain at least 30 percent recycled materials. We
have drastically reduced the use of plastic foam and thermofoams; we use no
polystyrene peanuts, degradable plastics or popcorn. In 1994, 18 percent of the
plastic component trays used for shipping our semiconductors were recycled; the
goal
13
<PAGE> 43
for 1995 is a 50 percent recycle rate. We have also begun to use bulk
containers, rather than individual packages, for shipping to certain customers.
Intel asks its suppliers to use similar guidelines.
OTHER PRODUCT DESIGN IMPROVEMENTS
Intel has taken a number of other steps to improve its product designs. For
instance, we have reduced the amount of hazardous materials used in
manufacturing wherever possible. We have eliminated ozone-depleting chemicals
and PCBs from systems, and we no longer use zinc and chromates in manufacturing
chassis. For PC systems, researchers are currently seeking alternatives to
bromine-based fire retardants for circuit boards and lead-based solders.
Branded Products Packaging
<TABLE>
<CAPTION>
Year Plastic Foam
---- ------- ----
<S> <C> <C>
1994 4,800 cubic feet 5,800 pounds
1993 18,900 cubic feet 11,200 pounds
1992 36,750 cubic feet 17,500 pounds
</TABLE>
FIGURE CAPTION:
Since 1992, Intel has reduced the amount of plastic and foam packaging materials
in its branded products by 67 percent and 87 percent, respectively.
Intel has an ongoing commitment to finding ever more opportunities to
reuse and recycle its products. Most plastic parts, for instance, carry standard
marks to facilitate future recycling. The company frequently donates used
equipment to schools and other institutions. Instructions are now being
developed to help customers disassemble their products and recycle
or dispose of them properly.
Intel is also reducing the amount of paper used for product
documentation. We estimate that we can deliver 70 percent of all product manuals
and documents to customers via electronic media, thereby saving paper, trees and
landfill space. The company is currently moving toward a goal of distributing as
much documentation electronically as possible.
PULL QUOTE:
We estimate that we can deliver 70 percent of all product manuals and documents
via electronic media, thereby saving paper, trees and landfill space.
SIDEBAR:
INTEL'S ENVIRONMENTAL PACKAGING POLICY
In 1992, Intel developed guidelines for producing packaging that imposes a
minimal burden on the environment, especially landfills. Those guidelines
include the following principles:
- Avoid, minimize, reduce
- Reuse
- Recycle
- Dispose safely and responsibly
- Use materials that were manufactured responsibly
[PHOTOGRAPH OF OVERDRIVE(R) PROCESSOR IN PLASTIC TRAY.]
PHOTO CAPTION:
Intel used to package its OverDrive(R) processor in a plastic tray that filled
the entire box. To save packaging materials, we created a plastic shell that
closely fits the product and then nestled that into a corrugated cardboard tray.
14
<PAGE> 44
WE STRIVE TO REDUCE OUR ENVIRONMENTAL RELEASES
We view the release of chemicals through air emissions, wastewater discharge,
and wastes shipped to treatment and disposal facilities as an inefficient use of
natural resources. We firmly believe that preventing pollution -- through
recycling, reuse and well-designed processes -- is better than cleaning it up
afterward. To that end, we try to follow the pollution prevention hierarchy
established by the U.S. Environmental Protection Agency (EPA), which encourages
companies to move from controlling releases through pollution abatement
equipment, to recycling chemicals in an environmentally sound manner, to reusing
chemicals and, optimally, to reducing chemical use at the source.
AIR EMISSIONS
Intel's worldwide semiconductor production has increased 98 percent over the
past four years. Yet our volatile organic chemical (VOC) emissions worldwide
have increased only 18 percent in the same period. We achieved that lower rate
of increase in VOC emissions through improved chemical utilization, solvent
substitution, abatement and improvements to manufacturing equipment. In the
course of our attempts to reduce VOC emissions, we caused an inadvertent odor
problem at four of our fabrication facilities when we substituted the chemical
ethyl 3-ethoxypropionate for a more volatile solvent to help reduce VOC
emissions. In 1994, we spent $16 million on thermal oxidizing units at four of
our facilities to destroy these odors and VOC air emissions.
In 1990, Intel set an aggressive goal to eliminate ozone-depleting
chemicals (ODC) from our manufacturing processes by the end of 1992. Intel had
achieved a 98 percent reduction by that date and has since eliminated the
remaining 2 percent of usage, thereby making Intel products ODC-free. While we
do still use ODC in our refrigerators, air conditioners and fire extinguishers,
we also have a program to identify and install substitutes for them as they
become feasible.
WASTEWATER
The manufacturing of semiconductors results in the generation of large
quantities of corrosive rinsewater. All Intel facilities worldwide have
neutralization units to safely treat these wastewaters by adjusting the pH
(acidity or alkalinity) to neutral. In addition, facilities that use lead in
soldering or plating have treatment systems for lead removal. To remove fluoride
in our wastewater, special treatment systems are in place.
In 1994, Intel concentrated on eliminating the discharge of ethylene
glycol to our wastewater. We used to discharge the majority of this material
along with our pretreated wastewater to the local sewer, which flows to city
treatment facilities. Working with an outside vendor, we developed a method to
recycle this material. Systems to collect this material for recycling are
currently under construction.
HAZARDOUS WASTE
In 1994, Intel entered into a contract with a single supplier for hazardous
waste transportation and management for all U.S. facilities. This supplier is
known throughout the country for its use of state-of-the-art equipment for
chemical recycling and fuel blending. Using that company allows us to move up
the EPA's pollution prevention hierarchy. Similar contracts are in place for our
facilities outside the U.S. We also started several capital projects to more
effectively segregate our waste solvents and increase the amount recycled in the
future.
SARA TITLE III DATA
Each July, we give the U.S. EPA a record of chemical releases, transfers,
recycling, energy recovery and on-site treatment at our U.S. facilities, as
required by Title III of the Superfund Amendments and Reauthorization Act (SARA
Title III). The act requires companies to account for some 300 toxic chemicals;
Intel used only 11 of those chemicals in quantities sufficient to require
reporting in 1993, the latest year for which we have completed our reporting.
Intel reports acetone, ammonia, ethylene glycol, glycol ethers, hydrochloric
acid, hydrofluoric acid, lead, nitric acid, phosphoric acid, sulfuric acid and
xylene.
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<PAGE> 45
FIGURE CAPTION:
Intel revenues increased 195 percent since 1990.
Intel Revenues 1990-1994
<TABLE>
<CAPTION>
Year Amount in Billions
---- ------------------
<S> <C>
1990 3.9
1991 4.8
1992 5.8
1993 8.8
1994 11.5
</TABLE>
FIGURE CAPTION:
VOC emissions increased only 18 percent between 1991 and 1994, while
semiconductor production increased 98 percent.
VOC Emissions 1991-1994
<TABLE>
<CAPTION>
Year Tons
---- ----
<S> <C>
1991 434
1992 391
1993 388
1994 510
</TABLE>
FIGURE CAPTION:
ODC usage in manufacturing was reduced to zero in 1994, making all Intel
products free of ozone-depleting substances. In 1989, 37 percent of our ODC
usage came from our products group manufacturing, 53 percent from assembly and
testing operations, and 10 percent from wafer fabrication facilities.
ODC Usage in Manufacturing 1990-1994
<TABLE>
<CAPTION>
Year Tons
---- ----
<S> <C>
1990 307
1991 135
1992 46
1993 9
1994 0
</TABLE>
1994 Hazardous Waste Management
Recycling - 7%
Incineration or Landfill - 5%
Energy Recovery - 88%
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<PAGE> 46
FIGURE CAPTION:
Intel's U.S. operations now generate one-half the amount of hazardous waste as
in 1985, when we started our waste minimization program, although net revenue
has increased sevenfold. Increases in hazardous waste generation between 1990
and 1991, and between 1992 and 1993, were due to increases in both production
output and manufacturing complexity. Waste figures (red bars) are in thousands
of tons. Net revenue (blue line) is in billions of dollars.
Intel Hazardous Waste Generation vs. Net Revenue (U.S. sites only)
<TABLE>
<CAPTION>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net 1.4 1.3 1.9 2.9 3.1 3.9 4.8 5.8 8.8 11.5
Revenue
Hazardous 4.894 3.513 3.033 0.883 0.533 0.76 1.4 1.185 2.1 2.404
Waste
</TABLE>
FIGURE CAPTION:
During the five-year period ending in 1993, revenue increased over 180 percent
while SARA Title III chemical releases increased by only about 40 percent. The
large increase between 1992 and 1993 is due to increases in both production
output and manufacturing complexity. We plan to recycle ethylene glycol, which
is a major source of the 1993 increase.
SARA Title III Releases 1989-1993 (Tons per Year, U.S. Sites Only)
<TABLE>
<CAPTION>
Year Tons
---- ----
<S> <C>
1989 342
1990 295
1991 302
1992 278
1993 460
</TABLE>
FIGURE CAPTION:
Since 1990, Intel has decreased the amount of waste that is incinerated or
landfilled, while increasing the amount that is recycled or used for fuel.
Hazardous Waste Managed Through Incineration or Landfill 1990-1994
(Tons per Year, U.S. Sites Only)
<TABLE>
<CAPTION>
Year Tons
---- ----
<S> <C>
1990 200
1991 414
1992 129
1993 131
1994 126
</TABLE>
17
<PAGE> 47
[PHOTOGRAPH OF JIM CARROLL.]
PHOTO CAPTION:
Intel helped restore conditions at the River Rye in Ireland. "It's just perfect
now," says water bailiff/ pollution officer Jim Carroll, who is also a keen
angler. "The difference between the river before and after this project is
almost unbelievable."
WE ARE A RESPONSIBLE CORPORATE CITIZEN
Intel conducts business in a manner that protects the environment and safeguards
the health and safety of our employees and the public. We share the
environmental, health and safety knowledge that we gain and are a responsible
member of the communities in which we live and work. We believe that it is our
responsibility to participate in environmental, health and safety initiatives
and to establish partnerships with the public, industry and academic
organizations.
SUPPORTING PUBLIC INITIATIVES
Intel has a strong history of participation in major public initiatives for
improvement in the environment, health and safety. For example:
- Intel is committed to achieving the national goals of the U.S.
EPA's 33/50 Industrial Toxics Reduction Program. To be in this voluntary
program, a company must commit to reduce its emissions of 18 specific chemicals
33 percent by 1992 and 50 percent by 1995 (1988 is the baseline). Through 1992,
Intel had gone beyond program requirements, by reducing our absolute emissions
by 35 percent, while our revenues grew by more than 200 percent.
- Intel, the Oregon Department of Environmental Quality and the
U.S. EPA together developed the first Title V air permit in the nation under the
new Clean Air Act for our Aloha, Oregon facility. We call this Pollution
Prevention in Permitting Pilot project P4 for short. We will produce a detailed
plan for pollution prevention and annual reports on our progress. This permit
could become a new model for industry.
- Under the Common Sense Initiative (CSI), U.S. EPA Administrator
Carol Browner has invited six industry sectors to embark on a new pilot project
to develop a "cleaner-cheaper-smarter" regulatory system. Our manager of
corporate environmental affairs was invited to the Electronics Sector
subcommittee and the CSI Council. We hope to incorporate the work from our P4
project into the EPA's CSI program.
BUILDING COMMUNITY PARTNERSHIPS
Intel believes that it is extremely important to become an asset to the
communities in which we operate. We have undertaken several projects to develop
a strong bond with our local communities and to continuously improve the EHS
performance of our operations.
In 1993 and 1994, Intel developed a number of "Community Advisory
Panels" (CAPs). The panels have two purposes. They provide a way for Intel to
tap the expertise and common sense of the community at large. And they provide a
way for the public to better understand the planning stages of facility
construction, the scope of our expansions and community infrastructure
development needs.
Each panel has 14 to 18 community members who represent a diverse
cross-section of business, academic, social and environmental interests in the
host area. Most panels tour their local Intel site to learn about its operations
and environmental, health and safety practices.
In 1994, the Intel CAPs focused primarily on communication and
awareness, employment and socioeconomic issues, and the environment.
Rio Rancho, New Mexico
In 1993, Intel New Mexico formed a Community Advisory Panel to provide a link
between Intel and the greater Albuquerque community. In 1994, the panel focused
on the environmental issues Intel was facing, including water and natural
resource use, and air quality related to air emissions from the facility.
Intel also asked the panel to review and provide comments on the Intel
New Mexico Environmental Report, which was published in March 1994. This report
provides a broad range of information about the materials used at Intel's New
Mexico manufacturing facility, as well as the facility's environmental
performance to date and its environmental goals. The panel helped focus the
report on the environmental issues of most concern to the public and helped
Intel present technical information to the public in an understandable way.
In addition, the panel heard about Intel's water use practices, as well
as its water conservation and reuse program initiatives. Outside speakers
discussed the broader issue of water consumption in the Albuquerque metropolitan
area.
Since the summer of 1994, the panel has organized into three
subcommittees that focus on economic development and infrastructure, corporate
responsibility and education.
Chandler, Arizona
A Community Advisory Panel was formed in Chandler, Arizona in 1993. The panel
was especially interested in the fact that Intel was going to build a new
facility, Fab 12, in its community. The expansion offered the benefits of more
jobs and tax revenue. But citizens were also concerned
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<PAGE> 48
about the new facility's impacts on the environment and community
infrastructure, particularly water use, air emissions, groundwater quality,
electricity use and increased traffic. The new facility is quite close to
housing, schools and senior citizen residences. For that reason, the panel has
been especially interested in emergency preparedness planning and response
capabilities. Intel presented information about its internal emergency response
capability and how we integrate our capabilities with the City of Chandler's
emergency response units. We are also participants on the Chandler Hazardous
Materials Advisory Committee, which comprises government and industry emergency
response personnel, and coordinates emergency planning for the industrial
operations in the city.
Leixlip, Ireland
In March 1994, a Community Advisory Panel was formed in Leixlip, Ireland. The
panel has provided a forum for Intel to become more aware of citizen concerns
and more effective in its responses. Environmental concerns initially identified
by the panel included possible impact of chemicals and wastewater effluent on
the sewage system and the nearby River Liffey.
Oregon
Throughout 1994, Intel Oregon held three community meetings to seek input and
respond to questions from residents near the four major campuses: Aloha,
Hawthorn Farm, Jones Farm and the new Ronler Acres campus, which is just
starting construction. During those meetings, Aloha campus neighbors discussed
improvements and a cleanup effort of a wetlands area in an adjacent
neighborhood. Jones Farm campus neighbors discussed improvements for another
wetlands and animal habitat area. Ronler Acres campus neighbors discussed
construction of the new campus and listened to a presentation about Intel's
environmental policies and the air pollution permitting process. A Report to the
Community was mailed to 2,500 residents in advance of the meeting to provide a
preview of plans and environmental issues associated with the $2.2 billion
construction project.
TREE PLANTINGS
Intel believes in planting trees -- to mitigate possible global warming, filter
noise and air pollution, improve the landscape, and get to know our communities
better. In 1994, we initiated three major tree-planting projects. When Intel's
Chandler, Arizona facility underwent new construction expansion in 1994,
approximately 100 trees required relocation. Arizona site employees found homes
for the trees within local neighborhoods, schools, parks, and the local girls
and boys clubs.
As part of the 1994 Earth Day celebration, 50 employees from our Santa
Clara site worked with the City of Santa Clara to plant crepe myrtle trees on an
expressway. The site received an award for those activities, as well as for its
contribution to Earth Day activities in San Jose that same year. During the
1994-95 school year, the Santa Clara site gave a grant to Our City Forest, a
nonprofit organization dedicated to planting new trees and educating the
community about their value.
In Israel, we implemented reforestation in 1994 on open land that was
adjacent to the facility.
OTHER COMMUNITY PROJECTS
We are deeply committed to science and technology education projects that will
help both children and adults understand and participate in the rapid
technological changes currently taking place. For example:
- During 1993-94, the Santa Clara site built a $30,000 outdoor
classroom -- complete with trees, a native plant garden and stone sitting areas
-- for the Cabrillo Middle School and a $5,000 garden for environmental science
projects for the Ponderosa Elementary School. The latter involved 100 hours of
employee volunteer time.
- The Intel New Mexico site donated $100,000 in 1993 to the
Albuquerque Children's Museum for a discovery lab where children will use
computers to explore science topics.
- In 1992, the New Mexico site provided a $25,000 grant to
Students Watching Our Planet Earth to conduct hands-on environmental projects.
- The Arizona site is also providing $100,000 for The Weather Link
display for the new Arizona Science Center. Intel will provide a future exhibit
called "How a Computer Works."
PULL QUOTE:
We believe that it is our responsibility to participate in environmental, health
and safety initiatives and to establish partnerships with the public, industry
and academic organizations.
RESEARCH, ACADEMIC AND INDUSTRY PARTNERSHIPS
Intel believes that industry should not compete on issues of environmental,
health and safety, but should instead cooperate to share knowledge and spur ever
greater improvements. To that end, we have developed partnerships with a number
of entities interested in EHS issues. For instance:
- Intel is a founding member and a major sup-
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<PAGE> 49
porter of the Pacific Northwest Pollution Prevention Research Center. The
center's mission is to protect public health, safety and the environment.
It does this by mobilizing public and private resources for projects that
prevent pollution and toxics use in the Pacific Northwest.
- Intel has participated in more than a dozen EHS projects with
Sematech, a consortium of semiconductor companies that are studying and
improving the manufacturing process. Intel currently has a safety engineer on a
two-year assignment with the organization. We are developing a software tool
that can assess the relative risks of hazardous materials. (This will provide
engineers with a method to evaluate the risk of chemical alternatives at the
process design stage.) And we are investigating ways to mitigate the
environmental impacts of global warming gas emissions, by redesigning processes
and process equipment and by developing new reclaim and control systems.
[PHOTOGRAPH OF STUDENTS AT FAIR MIDDLE SCHOOL.]
PHOTO CAPTION:
In 1994, Intel donated $18,000 to the Fair Middle School in San Jose, Calif. for
an on-line environmental education project. Using databases and other resources
on the Internet, students will investigate why trees die in their area every
eight years. Here, students use a Pentium(R) processor-based PC while Intel
volunteers and a teacher look on.
We are particularly proud of our role in creating the SEMI S2 -93
Safety Guidelines for Semiconductor Manufacturing Equipment (see page 8), which
has driven industry-wide environmental, health and safety equipment
improvements.
- Intel participates in and has been among the leading companies
working with The Center for Office Technology. Through this national group, we
have provided input on both state and federal ergonomic proposals. The group has
been actively involved in developing national standards for video display
terminals and other office safety and efficiency issues. We also have a
representative on the center's Board of Directors.
- Intel is a participating member on the National Safety Council,
a non-governmental, non-profit, international public service organization
dedicated to protecting life and promoting health. An Intel representative also
sits on the council's Board of Directors.
- In 1995, Intel has committed $35,000 in research funding to the
Oregon Graduate Institute to develop an industrial ecosystem analysis tool that
will help researchers and manufacturers understand and prioritize the
environmental impact of industrial facilities.
SIDEBAR:
INTEL AND THE NATIONAL LABS
In 1994, Intel signed two Cooperative Research and Development Agreements
(CRADAs) with the Sandia and Los Alamos National Laboratories. The CRADAs are
intended to assist in the development and transfer of technology from the
national laboratories to private industry.
Three of the initial CRADA projects focus on environmental issues at Intel's
manufacturing plants in New Mexico. The Sandia VOC project is a joint effort to
develop instruments to analyze the individual organic emissions present in the
exhaust from our manufacturing equipment. The Sandia Photocatalytic Oxidation of
Organics in Wastewater Project seeks to find a way to clean ultra pure water
after it has been used in washing silicon wafers. By removing trace contaminants
from the water, we will be able to recycle it back into our manufacturing
processes. The Los Alamos Chemical Dispense Nozzle Design Project aims to
redesign the small chemical nozzle used in wafer coating so that chemical use,
chemical emissions and waste generation are reduced.
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<PAGE> 50
OUR EHS GOALS FOR 1995 AND BEYOND
Intel is committed to continual improvement in our EHS performance. To that end,
we have developed a number of goals for 1995 and the years following. Some of
those goals are:
- To reduce our VOC emissions by 50 percent per unit production in our
next generation wafer manufacturing process.
- To continually reduce work-related injuries and illnesses with at least
a 20 percent reduction in the lost day case rate in 1995.
- To reduce the ergonomically related lost day case rate by 20 percent in
1995.
- To recycle 50 percent of our solid waste by the year 2000.
- To recycle 50 percent of the plastic component trays used for shipping
our semiconductors by 1996; to reuse moisture barrier bags and desiccant, and to
implement reusable shipping containers.
- To further expand the conversion of our aqueous board-cleaning operation
to "no clean."
- To reduce natural gas usage and boiler emissions by 20 percent in our
newest factories.
- To use wastewater from a Chandler treatment plant for cooling tower
make-up in Fab 12, and to collect the plant's rinsewaters and reverse-osmosis
reject, treat them and reinject the water into the groundwater supply.
AWARDS AND ACCOMPLISHMENTS
Intel has received many awards and recognition from outside agencies and
organizations. The following is a sampling:
1994
SEMI AWARD
Semiconductor Equipment and Materials International (SEMI) awarded Intel the
Corporate Device Member Award for outstanding contributions in the development
of SEMI guidelines that establish environmental, health and safety performance
criteria on new semiconductor manufacturing equipment and for fostering support
within the industry.
1993
ENVIRONMENTAL ACHIEVEMENT AWARD
Air Products recognized Intel for our work in developing a replacement of
1,1,1-trichloroethane (TCA), an ozone-depleting chemical used in semiconductor
manufacturing. We made this technology available to all semiconductor
manufacturers.
POLLUTION PREVENTION BENCHMARKING
Intel's Oregon facility was selected as one of six manufacturing sites
nationwide for best-in-class benchmarking in pollution prevention.
EPA ENERGY STAR COMPUTERS PROGRAM
Intel was recognized by the U.S. Environmental Protection Agency as a key
participant in the Energy Star Computers Program, with our commitment to
providing a sleep mode in all products using Intel microprocessors. Sleep mode
powers the unit down when it is on but not in use. For a personal computer, it
reduces energy consumption from 150-200 watts to 30 watts or less.
1992
YOSSEF TAL TROPHY
Intel's Fab 8 in Israel won this health and safety award first in 1992 and
continues to hold the trophy.
ISRAEL MINISTRY OF ENVIRONMENT
Intel's Israel operations won the 1992 National Environmental Award from the
Ministry of Environment. The prize was the first and highest environmental
excellence award given in Israel to an industrial plant.
OREGON GOVERNOR'S AWARD
Intel's Oregon site received the 1992 Governor's Award for Toxic Use Reduction
for completing projects in 1991 that reduced chemical consumption by 264,000
pounds per year and reduced waste generation by 1,200,000 pounds per year.
1991
NORTHERN CALIFORNIA WATER POLLUTION CONTROL ASSOCIATION
Intel's Santa Clara operations won an award for the treatment method and
compliance record of our industrial wastewater treatment plant.
UNIFIED SEWER AGENCY COMMENDATION FOR EXCELLENCE
Intel's Oregon facility received a commendation for extraordinary effort "in
enhancing the water quality of the Tualatin River" by voluntarily installing a
phosphoric acid collection system. Another company uses the phosphoric acid
that we collect to produce fertilizer.
