<PAGE> PRELIMINARY PROXY
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant []
Check the appropriate box:
[X] Preliminary Proxy [ ] Confidential, for use of the
Statement commission only (as
permitted by Rule 14a-
6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or rule 14a-
12
INTEL CORPORATION
-------------------------------
(Name of Registrant as Specified in Its Charter)
-------------------------------
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(I)(1) and 0-11
(1) Title of each class of securities to which transaction
applies:
-------------------------------
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applies:
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transaction computed pursuant to Exchange Act Rule 0-
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calculated and state how it was determined):
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-------------------------------
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previously. Identify the previous filing by
registration statement number, or the form or schedule
and the date of its filing.
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<PAGE> PRELIMINARY PROXY
INTEL CORPORATION
2200 Mission College Blvd.
P. O. Box 58119
Santa Clara, CA 95052-8119
(408) 765-8080
[INTEL LOGO]
Dear Stockholder:
Intel's 1997 Annual Meeting of Stockholders will be held on May
21, 1997 at the Hotel Sofitel in Redwood City, California, and we
look forward to your attending either in person or by proxy. The
Notice of Meeting, the Proxy Statement and the Proxy Card from
the Board of Directors is enclosed and provides further
information concerning the Meeting.
At this year's Meeting the agenda includes the annual election of
directors, a proposal to approve an increase in the number of
authorized shares of Intel Common Stock, and a proposal to ratify
the appointment of our independent auditing firm. The Board of
Directors recommends that you vote FOR the election of the slate
of nominees for directors, FOR the appointment of the independent
auditors, and FOR the proposal to approve the increase in
authorized shares of Common Stock.
Max Palevsky, one of our founding directors (since 1968) will not
be standing for re-election. Max has provided Intel with
invaluable assistance for 29 years and we will still look to his
wise counsel in his new position as Director Emeritus. At the
same time, we have recently welcomed John Browne to the Board as
our newest director. John is Group Chief Executive of The
British Petroleum Company p.l.c. and we look forward to his
bringing to Intel his years of international experience managing
a large and widely dispersed industrial organization. John is
appearing on our slate of director nominees for the first time.
Please refer to the enclosed Proxy Statement for the detailed
information on each of these proposals. If you have any further
questions concerning the Annual Meeting or any of the proposals,
please feel free to contact Intel at 1-800-298-0146 (US) or 800-
628-8510 (outside US, call collect), or speak with D.F. King &
Co., our proxy solicitors, at (312) 461-5545.
Sincerely yours,
/s/Gordon E. Moore
Gordon E. Moore
Chairman of the Board
<PAGE> PRELIMINARY PROXY
Notice of
1997
Annual Meeting
of Stockholders
and
Proxy Statement
[INTEL LOGO]
<PAGE> PRELIMINARY PROXY
TABLE OF CONTENTS Page
Notice of Annual Meeting of Stockholders
Proxy Statement
Election of Directors (Proposal 1) 2
Board Committees and Meetings 6
Directors' Compensation 6
Report of the Compensation Committee on Executive 7
Compensation
Compensation Committee Interlocks and Insider 11
Participation
Employment Contracts and Change of Control 11
Arrangements
Stock Price Performance Graph 12
Executive Compensation 13
Security Ownership of Certain Beneficial Owners and 16
Management
Ratification of Selection of Independent Auditors 18
(Proposal 2)
Amendment of Company's Restated Certificate of 18
Incorporation to Increase the Number of Authorized
Shares of Common Stock(Proposal 3)
Stockholder Proposals and Nominations 21
Other Matters 21
Communicating with the Company 23
Directions to Hotel Sofitel Back Cover
Map to Hotel Sofitel Back Cover
RETURN OF PROXY
Please complete, sign, date, and return the accompanying
proxy promptly in the enclosed addressed envelope even if you
plan to attend the Annual Meeting. Postage need not be affixed
to the enclosed envelope if mailed in the United States. If you
attend the Annual Meeting and vote in person, your proxy will not
be used. The immediate return of your proxy will be of great
assistance in preparing for the Annual Meeting and is therefore
urgently requested.
IF YOU PLAN TO ATTEND THE MEETING
The Annual Meeting will be held at 9:00 a.m. (PDT) on May
21, 1997 at the Hotel Sofitel, 223 Twin Dolphin Drive, Redwood
City, California, which is located at Redwood Shores. A map to
the hotel is printed on the back cover of this Proxy Statement.
Signs will direct you to the conference room where the Annual
Meeting will be held. Please note that the doors to the meeting
room at the Hotel Sofitel will not open for admission until 8:30
a.m.
If you do not own shares in your own name and you plan to
attend the meeting and vote your shares in person, you should
contact your broker or agent in whose name your shares are
registered to obtain a broker's proxy and bring it to the Annual
Meeting in order to vote.
<PAGE> PRELIMINARY PROXY
[INTEL LOGO]
INTEL CORPORATION
Notice of Annual Meeting of Stockholders
May 21, 1997
9:00 a.m., Pacific Standard Time
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of
Stockholders of Intel Corporation ("Intel" or the "Company")
which will be held on May 21, 1997 at the Hotel Sofitel, 223 Twin
Dolphin Drive, Redwood City, California, at 9:00 a.m., Pacific
Standard time. A map to the location appears on the back cover
of the Proxy Statement. The Meeting is being held for the
following purposes:
1. To elect a Board of Directors to hold office until the next
annual meeting of stockholders or 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 of the Company's Restated
Certificate of Incorporation to increase the number of
authorized shares of Common Stock; and
4. 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 March 24, 1997
will be entitled to vote at the meeting. A list of stockholders
entitled to vote will be available for inspection at the offices
of Intel, 2200 Mission College Blvd., Santa Clara, CA 95052, 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.
THE BOARD OF DIRECTORS
/s/F. THOMAS DUNLAP, JR.
By: F. THOMAS DUNLAP, JR., Secretary
Santa Clara, California
April 7, 1997
DOORS WILL OPEN AT 8:30 a.m.
<PAGE> 1 PRELIMINARY PROXY
First mailed to stockholders on or about April 7, 1997
[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 Hotel
Sofitel, 223 Twin Dolphin Drive, Redwood City, California, on
Wednesday, May 21, 1997, at 9:00 a.m., and at any postponement or
adjournment thereof, for the purposes set forth in the attached
notice (the "Annual Meeting" or the "Meeting").
Voting and Revocability of Proxies
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, and FOR the
amendment to the Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock. In
addition, 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. 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.
Each share of Common Stock outstanding on the record date
will be entitled to one vote on all matters. 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 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. The
amendment of the Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock will
require the affirmative vote of a majority of the shares of the
Company's outstanding Common Stock. 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.
Record Date and Share Ownership
Only stockholders of record on the books of the Company at
the close of business on March 24, 1997 will be entitled to vote
at the Annual Meeting. 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
February 28, 1997 there were outstanding ______________________
shares of Common Stock.
<PAGE> 2 PRELIMINARY PROXY
ELECTION OF DIRECTORS (Proposal 1)
Unless marked otherwise, proxies received will be voted FOR
the election of each of the nominees named below. Each of the
current directors has been nominated for election to the Board of
Directors except Max Palevsky, a director for 29 years, who is
not standing for re-election. If any such nominee is unable or
unwilling to serve as a nominee for the office of director at the
time of the Annual Meeting, the proxies may be voted for either
(i) a substitute nominee who shall be designated by the proxy
holders or by the present Board of Directors to fill such vacancy
or (ii) for the balance of the nominees, leaving a vacancy.
Alternatively, the size of 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 or until their successors, if
any, are elected or appointed. The Board of Directors recommends
a vote FOR the election of each of the nominees listed below.
Craig R. Barrett Craig R. Barrett has been Executive
57 Years Old Vice President of the Company since
Director Since 1992 1990, a director of Intel since
Executive Vice 1992 and Chief Operating Officer
President and Chief since 1993. The Board of Directors
Operating Officer of has elected Dr. Barrett President
the Company and Chief Operating Officer
effective May 21, 1997. Dr.
Barrett joined the Company in 1975.
[PHOTO APPEARS HERE] 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, Incorporated,
and a member of the National
Academy of Engineering.
John Browne John Browne is a Managing Director
49 Years Old and the Group Chief Executive of
Director Since The British Petroleum Company
January, 1997 p.l.c. Mr. Browne is also a
Group Chief Executive director of SmithKline Beecham and
of The British a Trustee of the British Museum.
Petroleum Company Mr. Browne was elected to the Board
of Directors of Intel Corporation
in January, 1997. Mr. Browne is
[PHOTO APPEARS HERE] also a Fellow of the Royal Academy
of Engineering in the United
Kingdom.
Winston H. Chen (1) Winston H. Chen has been a director
55 Years Old of Intel since 1993. He is
Director Since 1993 Chairman of Paramitas Foundation, a
Chairman of Paramitas charitable foundation. During 1978-
Foundation 1994, he held several positions at
Solectron Corporation, an
electronics contract manufacturer
[PHOTO APPEARS HERE] in Milpitas, California, including
President, Chief Executive Officer
and Chairman of the Board of
Directors. Dr. Chen continues as a
director of Solectron. He is also
a director of Edison International
(Inc.), and a member of the Board
of Trustees of Santa Clara
University and the Board of
Trustees of Stanford University.
<PAGE> 3 PRELIMINARY PROXY
Andrew S. Grove (3) Andrew S. Grove has been a director
60 Years Old of Intel since 1974, President of
Director Since 1974 the Company since 1979 and Chief
President and Chief Executive Officer of Intel since
Executive Officer of 1987. Dr. Grove participated in
the Company the founding of the Company in 1968
and served as Vice President and
Director of Operations through
[PHOTO APPEARS HERE] 1974. He became Executive Vice
President in 1975 and was Chief
Operating Officer from 1976 to
1989. The Board of Directors has
elected Dr. Grove Chairman of the
Board of Directors and Chief
Executive Officer effective May 21,
1997. Dr. Grove is a member of the
National Academy of Engineering and
a Fellow of the Institute of
Electrical and Electronic Engineers
("IEEE").
D. James Guzy (4) D. James Guzy has been a director
61 Years Old of Intel since 1969. Since 1969,
Director Since 1969 he has been President of the Arbor
President of the Arbor Company, a limited partnership
Company engaged in the electronics and
computer industry. Mr. Guzy is also
a director of Cirrus Logic, Inc.,
[PHOTO APPEARS HERE] Micro Component Technology, Inc.,
Novellus Systems, Inc., Davis
Selected Group of Mutual Funds and
Alliance Capital Management
Technology Fund.
Gordon E. Moore (3) Gordon E. Moore has been a director
68 Years Old of Intel since 1968 and Chairman of
Director Since 1968 the Board since 1979. Effective
Chairman of the Board May 21, 1997, Dr. Moore will become
of the Company Chairman Emeritus and will continue
to serve as a member of the
Company's Executive Office. Dr.
[PHOTO APPEARS HERE] 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 Gilead Sciences,
Inc., 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.
Arthur Rock (1-4) Arthur Rock has been a director of
70 Years Old Intel since its founding in 1968.
Director Since 1968 He is Chairman of the Executive
Venture Capitalist Committee and of the Audit &
Finance Committee of the Board of
Directors. Mr. Rock is a principal
[PHOTO APPEARS HERE] of Arthur Rock & Company, a venture
capital firm. He is also a
director of Argonaut Group, Inc.,
AirTouch Communications, Inc. and
Echelon Corporation, and a trustee
of the California Institute of
Technology.
PRELIMINARY PROXY
<PAGE> 4
Jane E. Shaw (1, 2) Jane E. Shaw has been a director of
58 Years Old Intel since 1993. She founded The
Director Since 1993 Stable Network, a biopharmaceutical
Founder of The Stable consulting company, in 1995. She
Network was President and Chief Operating
Officer of ALZA Corporation, a drug
delivery company, from 1987 to
[PHOTO APPEARS HERE] 1994. Dr. Shaw joined ALZA in 1970
and held several positions within
the company, including Principal
Scientist, Executive Vice President
of ALZA Corporation, Director of
ALZA Corporation and Chairman of
the Board of 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 Aviron,
McKesson Corporation and Boise
Cascade Corporation, and Chairman
of the Board of IntraBiotics
Pharmaceuticals, a privately-held
developer of antimicrobial drugs.
Leslie L. Vadasz Leslie L. Vadasz has been a
60 Years Old director of Intel since 1988 and
Director Since 1988 became Senior Vice President,
Senior Vice President, Director of Corporate Business
Director of Corporate Development in 1991. Mr. Vadasz
Business Development of joined the Company in 1968 when it
the Company was founded and became Director of
Engineering in 1972. In 1975 he
was elected Vice President and in
[PHOTO APPEARS HERE] 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,
then President of the Systems
Group. He is a Fellow of the IEEE.
David B. Yoffie (2, 4) David B. Yoffie has been a director
42 Years Old of Intel since 1989. He is
Director Since 1989 Chairman of the Compensation
Professor of Business Committee of the Board of
Administration, Harvard Directors. He has been Professor
University of Business Administration at
Harvard University since 1990 and
in June 1993 was appointed to the
[PHOTO APPEARS HERE] 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 Harvard faculty
since 1981. He is also a member of
the Boards of Directors of Evolve
Software, Inc., Physiologica, Inc.,
Bion, Inc. and the National Bureau
of Economic Research.
Charles E. Young (1) Charles E. Young has been a
65 Years Old director of Intel since 1974. He
Director Since 1974 has been Chancellor of the
Chancellor of the University of California at Los
University of Angeles since 1968. He is also
California, Los Angeles Chairman of the Board of Governors
Foundation for the International
Exchange of Scientific and Cultural
[PHOTO APPEARS HERE] Information by Telecommunications,
a member of the National Committee
on United States-China Relations,
Inc. and a director of Nicholas-
Applegate Fund, Inc. and a trustee
of Nicholas-Applegate Mutual Funds.
(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.
<PAGE> 5 PRELIMINARY PROXY
Except as noted above, each of the nominees has been engaged
in the principal occupation set forth above during the past five
years. There are no family relationships among any directors or
executive officers of the Company. 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.
Retiring Director
Max Palevsky Max Palevsky has been a director of
72 Years Old Intel since 1968 and currently is
Director Since 1968 Chairman of the Nominating
Member of the Committee of the Board of
Compensation and Directors. In accord with the
Nominating Committees Board's retirement policy for its
Self-Employed Investor members, Mr. Palevsky is not
standing for re-election at the
Annual Meeting. He is a self-
[PHOTO APPEARS HERE] employed investor and serves as a
director of Komag, Incorporated.
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 as a
director of Xerox in 1972.
Directors Emeriti
Richard Hodgson and Sanford Kaplan 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. Upon the
retirement of Max Palevsky from the Board of Directors (see
above), the Board similarly intends to elect Mr. Palevsky a
Director Emeritus.
<PAGE> 6 PRELIMINARY PROXY
BOARD COMMITTEES AND MEETINGS
The Company has standing Executive, Audit & Finance,
Nominating, and Compensation Committees of the Board of
Directors. In March 1996, the Stock Option Committee was
combined with, and new committee members were appointed to, a
reconstituted Compensation Committee. The members of the
committees are identified with the list of Board nominees on the
preceding pages.
The Audit & Finance Committee 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, and monitors the
effectiveness of the audit effort, the Company's internal
financial and accounting organization and controls and financial
reporting. The Audit & Finance Committee also considers various
capital and investment matters. The Audit & Finance Committee
held 3 meetings during 1996.
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 four meetings during 1996. 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 administers the Company's stock
option plans, including the review and grant of stock options to
officers and other employees under the Company's stock option
plans. The Compensation Committee also reviews and approves
various other Company compensation policies and matters, and
reviews and approves salaries and other matters relating to
compensation of the executive officers of the Company. The
Compensation Committee acted by written consent 14 times and met
4 times during 1996, and the predecessor Stock Option Committee
acted by written consent 6 times during 1996. The Stock Option
Committee was combined with the Compensation Committee in March
1996.
The Board of Directors held 8 meetings and acted by written
consent 2 times during 1996. No director attended less than 75%
of all the meetings of the Board and those committees on which he
or she served in 1996.
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 are paid $2,000 plus out-of-pocket expenses per Board
of Directors regular meeting attended. Mr. Rock receives an
additional $6,000 as Chairman of the Executive Committee.
In accord with the 1984 Stock Option Plan, each year each
non-employee director has been 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
1996, each non-employee director was granted an option to
purchase a total of 5,000 shares at an exercise price of $69.63
per share. Mr. Browne joined the Board in 1997, and in March
1997, received an option to purchase 2,500 shares at an exercise
price of $________. Non-employee director options are
exercisable in full one year from the date of grant. Commencing
with 1997, the 1984 Stock Option Plan has been amended to provide
that option grants to non-employee directors will be set by the
Board of Directors each year in amounts not to exceed 5,000
shares per director per year. In light of the Company's stock
price appreciation since the 5,000 share option grants were first
provided for, the directors intend to set the annual director
option grants in 1997 at 2,500 shares.
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 and continuing for the lesser of the
<PAGE> 7 PRELIMINARY PROXY
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 in quarterly installments.
They each received $20,000 under this plan in 1996. Mr.
Palevsky, upon his retirement as a director in May, will also be
eligible for this plan.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive compensation program is administered
by the Compensation Committee of the Board of Directors. In this
regard, the role of the Compensation Committee, which is
comprised entirely of outside, non-employee directors, 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 Committee also reviews and approves
various other Company compensation policies and matters and
administers the Company's stock option plans, including the
review and approval of stock option grants to 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 in
attaining financial and non-financial objectives and that any
long-term incentive compensation should be closely aligned with
the interests of the stockholders.
TOTAL CASH COMPENSATION for the executive officers consists
of the following components:
- Base salary;
- An executive officer cash bonus that is related to
growth in earnings per share of the Company and is
based on an individual bonus target for the performance
period (See "Executive Officer Bonus Plan"); and
- A cash bonus that is proportional to corporate
profitability and which is paid to all employees of the
Company (See Employee Cash Bonus Plan).
In addition, most employees, including the executive
officers, received a special flat-amount bonus for 1996 (the
"1996 year-end bonus") which was granted on account of the
Company's excellent 1996 financial results.
LONG-TERM INCENTIVE COMPENSATION is realized through the
granting of stock options to most employees, including eligible
executive officers. The Company has no other long-term incentive
plans.
In addition to encouraging stock ownership by granting stock
options, the Company further encourages its employees to own
Company stock through a tax-qualified employee stock purchase
plan 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 salary and bonuses (subject
to certain limits), therefore allowing employees to profit when
the value of the Company's stock increases over time.
In setting the base salary and individual bonus target
amount (hereafter together referred to as "BSBT") for executive
officers, the Compensation Committee reviews information relating
to executive compensation of US-based companies that are
considered generally comparable to the Company (a majority of
which companies are included in the Dow Jones Technology Index).
While there is no specific formula that is used to set pay in
relation to this market data, executive officer BSBT is generally
set to be slightly below the median salaries for comparable jobs
in the market place. However, when the Company's business groups
meet or exceed certain predetermined financial and non-financial
goals, amounts paid under the Company's performance based
compensation programs may lead to total cash compensation levels
which are higher than the median salaries for comparable jobs.
The Compensation Committee also reviews the compensation levels
of the executive officers for internal consistency relative to
the 100 most highly paid employees of the Company.
<PAGE> 8 PRELIMINARY PROXY
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.
The Company's 1984 and 1988 stock option plans and Executive
Officer Bonus Plan are qualified so that awards under such plans
constitute performance based compensation not subject to Section
162(m) of the Code. However, in order to maintain flexibility in
compensating executive officers in a manner designed to promote
varying corporate goals, the Compensation Committee has not
adopted a policy that all compensation must be deductible.
Base Salary
The Compensation Committee reviews the history of and
proposals for the compensation package of each of the Company's
executive officers, including BSBT and its base salary and
performance based compensation components. The base salary is
then set as a percentage of BSBT, taking into account the level
and amount of responsibility of the individual. In general,
executive officers having the highest level and amount of
responsibility have the lowest percentage of their BSBT as base
salary and the highest percentage of their BSBT as their
individual bonus target amount. For example, in 1996, the base
salary for Dr. Grove, the executive officer with the highest
level and amount of responsibility, was 50% of his total BSBT.
The other executives' base salaries were determined in the same
manner, but the base salary segment as a percentage of their BSBT
for 1996 ranged from 50% to 64% depending on their job
responsibilities. Once fixed, base salary does not depend on the
Company's performance.
As a result of this process, and in accordance with the
Company's compensation philosophy that total cash compensation
should vary with Company performance, the Compensation Committee
establishes base salaries of the Company's executive officers at
levels which the Compensation Committee believes are below the
median base salaries of executives of companies considered by
the Compensation Committee to be comparable to the Company.
Thus, as set forth below, a large part of each executive
officer's potential total cash compensation is dependent on the
performance of the Company as measured through its performance
based compensation programs.
Performance Based Compensation
The Company has several performance based compensation
programs in which the majority of Intel's employees are eligible
to participate. Most Company employees not compensated on a
commission basis participate in the Employee Bonus Program
("EBP"). For the executive officers, participation in the
Executive Officer Bonus Plan (the "EOBP") is in lieu of
participation in the EBP.
Executive Officer Bonus Plan
The EOBP is a cash-based incentive bonus program. The
purpose of the EOBP 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
the Company.
The EOBP provides for the determination of a maximum bonus
amount which is established annually for each executive officer
pursuant to a predetermined objective formula, subject to a
maximum annual limit of $5,000,000. Under this predetermined
formula, the maximum bonus payment for any performance period is
the product of (i) the executive officer's individual bonus
target for the performance period and (ii) the numerical value of
the Company's EPS for the performance period multiplied by a pre-
established factor (the "multiplier") which is set by the
Compensation Committee. For purposes of this formula, "EPS"
means the greater of (x) the Company's operating income or (y)
the Company's net income, in each case per weighted average
common and common equivalent shares outstanding during such
performance period. The EPS data to be utilized in the
calculations (and which is also used in the Company's published
financial statements) is reviewed and approved by the
Compensation Committee.
In January 1996, the Compensation Committee established
individual bonus targets which ranged from $90,000 to $425,000
for each of the then executive officers (representing a range of
36% to 50% of BSBT), and set
<PAGE> 9 PRELIMINARY PROXY
the multiplier as 0.90 for the 1996 performance period. During
this period, operating income per share of $8.51 exceeded net
income per share of $5.81 and led to an EPS value, as defined, of
$8.51 to be used in the formula for determining the maximum bonus
amount.
Under the EOBP, the Compensation Committee has discretion to
reduce (but not to increase) an individual's actual bonus payment
from the amount which would otherwise be payable under the above
formula. In the past, the Compensation Committee has exercised
its discretion to pay bonuses at amounts which were below the
maximum amounts permitted under the EOBP. The EOBP does not
specify the factors which the Compensation Committee evaluates in
the exercise of its discretion to reduce bonus payments under the
EOBP and does not require the Compensation Committee to make
such a reduction. The EOBP requires that an executive officer be
on the Company's payroll as of the last day of the performance
period for which the bonus is payable in order to be eligible to
receive payment of the bonus for such performance period.
For the 1996 performance period, the Compensation Committee
chose to exercise its discretion to reduce the bonus amounts
paid under the EOBP to the amounts which would have been paid to
the executive officers under the EBP. Bonus payments under the
EBP are generally lower than the maximum bonuses payable under
the EOBP in part because the EBP formula utilizes reported EPS
(adjusted to reflect any unusual income statement items) whereas
the EPS utilized in the EOBP formula is based on the greater of
operating income or net income as described above. The EBP
formula also takes into account whether certain business group
objectives have been met over the performance period. For
example, for 1996, business group objectives considered in
determining the payouts under the EBP included financial and non-
financial goals such as sales, customer satisfaction,
productivity measures, cost reduction and employee training. The
particular goals are set each year and vary from year to year.
In determining bonuses payable to the executive officers with
responsibility for overall performance of the Company, such as
the Chairman of the Board, the Chief Executive Officer and the
Chief Operating Officer, the Compensation Committee took into
account the corporate average score on achievement of business
objectives. For those executive officers with specific
responsibility for a particular business group, achievement
scores were based on either the individual business group's
score, or a combination of the group's score and the corporate
average score.
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 1996, payments based on 4% of net income resulted in
an annual cash bonus payout under the ECBP of 25.9 days' pay per
employee or 10.0% of eligible employee earnings. Employees were
awarded an additional 1.0 day's pay for the second half of 1996
as a result of meeting corporate goals under a vendor of choice
(customer satisfaction) program.
In addition, most employees, including the executive
officers, received a special flat-amount bonus for 1996 which was
granted on account of the Company's excellent 1996 financial
results.
Profit Sharing Retirement Plans
The Company has both tax-qualified and non-qualified capital
accumulation/retirement plans (the "Profit Sharing Retirement
Plans"). The tax-qualified plans are available to eligible
employees in the U.S. and Puerto Rico, and there are similar
Plans for certain of the Company's non-U.S. subsidiaries. The
non-qualified plan is a supplemental plan which provides to
eligible employees in the U.S. those contributions that could not
be contributed to their accounts under the qualified plan because
of limitations under the Internal Revenue Code. The Profit
Sharing Retirement 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
<PAGE> 10 PRELIMINARY PROXY
approved by the Board may vary with the financial performance of
the Company, in particular, the revenues and EPS of the Company.
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 the 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 1996, the discretionary Company contributions (including
allocation of forfeitures) to the Profit Sharing Retirement 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 for eligible employees, including executive
officers.
Stock Options
Stock options are granted by the Company to aid in the
retention of employees and to align the interests of employees
with those of the stockholders. Stock options have value for an
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, thus providing an incentive to remain
in the Company's employ. In addition, stock options directly
link a portion of an employee's compensation to the interests of
stockholders by providing an incentive to maximize stockholder
value.
Commencing in 1997, the Company has a 1997 Stock Option Plan
for use with employees other than officers and directors; and
1984 and 1988 Stock Option Plans, as amended, which will
generally be employed in making grants to officers and directors.
Grants under the Company's 1997 Stock Option Plan, (the "SOP")
may be made at the time an employee commences working for the
Company and thereafter may be made on an annual basis as a part
of the Company's employee performance review process. In
general, initial grants are exercisable in increasing increments
over a five-year period and subsequent grants are first
exercisable five years after the date of grant (e.g., options
granted in 1997 become exercisable in 2002). Stock options under
all three plans are granted at a price equal to the fair market
value on the date of grant.
The level of stock options granted (i.e., the number of
shares subject to each stock option grant) is based on the
Committee's evaluation of an 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 in 1996 was awarded the
highest level of stock options. However, the 1984 plan limits
the total number of shares subject to options that may be granted
to any one participant in any year to 1% of the total number of
shares outstanding on January 1, 1994 (i.e., 8,363,520 shares).
In 1996, stock options for the executive officers were
granted upon recommendation of management and approval of the
Compensation Committee based on their subjective evaluation of
the appropriate amount for the level and amount of responsibility
of each executive officer.
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 does not have an employment contract. Dr. Grove's
BSBT is determined in the same manner as described above for all
executive officers. In setting compensation levels for the Chief
Executive Officer, the Compensation Committee considers data
reflecting comparative compensation information from other
companies. In line with the Compensation Committee's general
practice and discretionary authority, however, Dr. Grove's 1996
salary and individual bonus target were not tied directly to the
comparative 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
______% of the average for base salary, _____% of the average for
target incentive based compensation and _____% of the average for
BSBT.
<PAGE> 11 PRELIMINARY PROXY
Under the EOBP, Dr. Grove's actual bonus for 1996 (paid in
1997) was $_____. This bonus, like the bonuses paid to each of
the other executive officers under the EOBP, was less than the
maximum bonus provided under the EOBP formula due to the
Compensation Committee's exercise of its discretion to reduce the
maximum bonus to the bonus derived by utilizing the EBP formula
as described above. Although Dr. Grove's BSBT was _____% of the
average total target compensation of the selected peer group, due
to the high variability in the Company's total compensation
program and to the Company's excellent 1996 financial
performance, his actual cash compensation (i.e., base salary and
bonuses) for 1996 was _____% of the average total actual cash
compensation of the selected peer group.
In 1996, the Compensation Committee awarded Dr. Grove stock
options to purchase _____ shares of stock. The options first
become exercisable in 2001. In 1997, the Company also
contributed $_____ to Dr. Grove's account under the tax-qualified
retirement plan and allocated $_____ to Dr. Grove's account under
the non-qualified retirement plan, based on the Company's 1996
results. In general, Dr. Grove's retirement plan accounts are
available to Dr. Grove only upon termination, retirement, death
or disability.
The Compensation Committee is pleased to submit this report
to the stockholders with regards to the above matters.
Compensation Committee:
David Yoffie, Chairman
Max Palevsky
Arthur Rock
Jane Shaw
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, Messrs. Guzy, Palevsky, Rock and Yoffie served
on the Compensation Committee and Messrs. Guzy, Moore and Rock
served on the Stock Option Committee. The Stock Option Committee
was combined with the Compensation Committee in March 1996.
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.
EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
None of the Company's executive officers has employment or
severance arrangements with the Company.
<PAGE> 12 PRELIMINARY PROXY
STOCK PRICE PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE RETURN AMONG INTEL,
THE S&P 500 INDEX AND THE DOW JONES TECHNOLOGY INDEX
Set forth below is a line graph comparing the cumulative total
stockholder return on the Company's Common Stock against the
cumulative total return of the Standard & Poor's 500 Stock Index
and the Dow Jones Technology Index for the period of five years
commencing December 28, 1991 and ending December 28, 1996. The
graph and table assume that $100 was invested on December 28,
1991 in each of the Company's Common Stock, the Standard & Poor's
500 Stock Index and the Dow Jones Technology Index and that all
dividends were reinvested. This data was furnished by Standard &
Poor's Compustat Services, Inc. and Dow Jones and Company, Inc.
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.
[PERFORMANCE GRAPH APPEARS HERE]
1991 1992 1993 1994 1995 1996
----- ----- ----- ----- ----- -----
Intel Corporation $100 $190 $263 $271 $483 $1,156
S&P 500 Index $100 $108 $118 $120 $165 $203
Dow Jones Technology $100 $112 $128 $146 $207 $279
Index
<PAGE> 13 PRELIMINARY PROXY
EXECUTIVE COMPENSATION
The following tables set forth the annual compensation for
the Chief Executive Officer and the four other most highly
compensated executive officers of the Company. All references to
shares of Common Stock are without adjustment for the proposed
Stock Split described in Proposal No. 3 in this Proxy Statement.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-
Term
Compen-
Other sation All
Annual Awards(2) Other
Name and Principal Annual Compensation Compen- Options Compensa-
Position Year Salary($) Bonus($)(1) sation($) (#)(3) tion($)(4)
- ------------------ ---- ---------- ---------- --------- ------- ----------
<S> <C> <C> <C> <C> <C> <C>
Andrew S. Grove 1996 ---
President and Chief 1995 400,000 2,356,700 --- 96,000 266,100
Executive Officer 1994 380,000 1,722,400 --- 72,000 275,200
Craig R. Barrett 1996 ---
Executive Vice 1995 300,000 1,767,500 --- 64,000 196,800
President, Chief 1994 285,000 1,269,500 --- 48,000 197,200
Operating Officer
Frank C. Gill 1996 ---
Executive Vice 1995 255,000 1,000,000 --- 32,000 131,800
President 1994 245,000 795,700 173,000(5) 24,000 135,100
General Manager,
Internet and
Communications
Group
Gerhard H. Parker 1996 ---
Executive Vice 1995 235,000 1,029,500 --- 32,000 120,100
President 1994 ---
General Manager,
Technology and
Manufacturing
Group
Leslie L. Vadasz 1996 ---
Senior Vice 1995 ---
President 1994 240,000 753,700 --- 24,000 135,100
Director, Corporate
Business
Development
</TABLE>
- --------------
(1) This amount includes the bonuses paid under the Executive
Officer Bonus Plan for 1994, 1995 and 1996, the Employee
Cash Bonus Plan for each of the covered years and the 1996
year-end bonus for 1996.
(2) The Company does not offer any Restricted Stock Awards, SAR
or other LTIP programs.
(3) Indicates number of shares of Common Stock underlying
options.
(4) All amounts listed in this column are amounts contributed
to the Company's broad-based defined contribution
retirement plan (for each of the named executives such
amounts were $_____ for 1996, $18,800 for 1995 and $18,800
for 1994) and discretionary Company contributions made
under the Company's non-qualified, defined contribution
plan. These amounts are to be paid out to the named
executives (or any other plan participant) only upon
retirement, termination, disability or death.
(5) Reimbursement for certain relocation expenses and taxes
consistent with the Company's practice for similarly
situated employees.
<PAGE> 14 PRELIMINARY PROXY
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------
% of Total POTENTIAL REALIZABLE
Securities Options Exercise VALUE AT ASSUMED
Underlying Granted to or ANNUAL RATES OF STOCK
Options Employees Base Price PRICE APPRECIATION FOR
Granted in Fiscal ($/Share) Expiration OPTION TERM ($)(3)
Name (#) (1) Year (2) Date 5% 10%
- ----- ------- ------ ------- ------ ------- -------
<S> <C> <C> <C> <C> <C> <C>
A. Grove
C. Barrett
F. Gill
G. Parker
L. Vadasz
</TABLE>
- --------------
(1) These options are first exercisable in 2001.
(2) Under all stock option plans, the option purchase price is
equal to fair market value at the date of the grant. All
of these options were granted on April 9, 1996.
(3) In accordance with SEC rules, these columns show gains that
might exist for the respective options, assuming the market
price of Intel's Common Stock appreciates from the date of
grant over a period of ten years at the annualized rates of
five and ten percent, respectively. If the stock price
does not increase above the exercise price at the time of
exercise, realized value to the named executives from these
options will be zero.
<PAGE> 15 PRELIMINARY PROXY
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
Securities Underlying Value of Unexercised
Unexercised Options In-the-Money Options
at December 28, 1996 at December 28, 1996
(#)(1) ($)(2)
---------- ----------
Shares
Acquired on Value Exer- Unexer- Exer- Unexer-
Name Exercise(#) Realized($) cisable cisable cisable cisable
- -------- ----------- ----------- ---------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
A. Grove
C. Barrett
F. Gill
G. Parker
L. Vadasz
</TABLE>
- --------------
(1) This represents the total number of shares subject to stock
options held by the named executives at December 28, 1996.
These options were granted on various dates during the
years 1989 through 1996.
(2) These amounts represent the difference between the exercise
price of the stock options and the closing price of Company
stock on December 27, 1996 (last day of trading for the
fiscal year ended December 28, 1996), for all in-the-money
options held by each named executive. The in-the-money
stock option exercise prices range from $_____ to $_____.
These stock options were granted at the fair market value
of the stock on the grant date.
PENSION PLAN TABLE
Years of Service at Retirement (2)(3)
---------------------------------------
Eligible 15 20 25 30 35
Compensation (1)
- ------------------- ------ ------ ------ ------ ------
$150,000 and above $28,811 $38,415 $48,018 $57,622 $67,226
- -------------
(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 1996 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 above, the years of credited service as of
year-end 1996 under the Company's pension plan are
currently as follows: Dr. Grove (28); Dr. Barrett (22);
Mr. Gill (21); Dr. Parker (27); and Mr. Vadasz (28).
(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.
<PAGE> 16 PRELIMINARY PROXY
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 February 28, 1997 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. All
references to shares of Common Stock are without adjustment for
the proposed Stock Split described in Proposal No. 3 in this
Proxy Statement.
<TABLE>
<CAPTION>
Shares of
Common Stock
Beneficially
Owned at Percent
February 28, of
Stockholder 1997 Class
- ---------------- -------- -------
<S> <C> <C> <C>
Gordon E. Moore, Chairman (1) ______%
2200 Mission College Blvd.
Santa Clara, California 95052-8119
Craig R. Barrett, Director, (2) *
Executive Vice President and
Chief Operating Officer
John Browne, Director *
Winston H. Chen, Director (3) *
Andrew S. Grove, Director, President and (4) *
Chief Executive Officer
D. James Guzy, Director (5) *
Max Palevsky, Director (6) *
Arthur Rock, Director (7) *
Jane E. Shaw, Director (8) *
Leslie L. Vadasz, Director and Senior (9) *
Vice President
David B. Yoffie, Director (10) *
Charles E. Young, Director (11) *
Richard Hodgson, Director Emeritus *
Sanford Kaplan, Director Emeritus (12) *
Frank Gill, Executive Vice President (13) *
Gerhard H. Parker, Executive Vice (14) *
President
All directors, directors emeritus and (15) ____%
executive officers as a group
(26 individuals)
</TABLE>
____________________
* Less than 1%.
(1) Includes 490,000 shares held in trusts established for
benefit of Mr. Moore's children, as to which Mr. Moore and
his spouse retain beneficial interests.
(2) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
<PAGE> 17 PRELIMINARY PROXY
(3) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(4) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(5) Includes 1,541,160 shares held by the Arbor Company of
which Mr. Guzy is a general partner. Also includes
outstanding options to purchase _________ shares, which
were exercisable as of February 28, 1997, or within 60
days from such date.
(6) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date. Also includes 16,692 shares held
by Mr. Palevsky's spouse.
(7) Includes 960 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 disposition authority. Also
includes outstanding options to purchase _________ shares
which were exercisable as of February 28, 1997, or within
60 days from such date.
(8) Held in a family trust. Includes outstanding options to
purchase _________ shares, which were exercisable as of
February 28, 1997, or within 60 days from such date.
(9) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(10) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(11) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days of such date.
(12) Includes 16,000 shares held by a family limited
partnership of which Mr. Kaplan is a partner.
(13) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(14) Includes outstanding options to purchase _________ shares,
which were exercisable as of February 28, 1997, or within
60 days from such date.
(15) Includes outstanding options to purchase __________
shares, which were exercisable as of February 28, 1997, or
within 60 days from such date.
<PAGE> 18 PRELIMINARY PROXY
RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS (Proposal 2)
Ernst & Young LLP have been the Company's independent
auditors since its incorporation in 1968 and at the
recommendation of the Audit & Finance Committee of the Board have
been selected by the Board of Directors as the Company's
independent auditors for the fiscal year ending December 27,
1997. 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.
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 1996 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.
The Board of Directors recommends a vote FOR ratification of
the appointment of Ernst & Young LLP as independent auditors for
the Company for the current year. Unless a contrary choice is
specified, proxies solicited by the Board of Directors will be
voted FOR ratification of the appointment.
TO AMEND THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO
INCREASE THE NUMBER OF AUTHORIZED SHARES OF COMMON STOCK(Proposal
3)
Introduction
The Company's Restated Certificate of Incorporation
currently authorizes the issuance of one billion four hundred
million (1,400,000,000) shares of Common Stock, with a par value
of one tenth of one cent ($.001) per share, and fifty million
(50,000,000) shares of Preferred Stock, with a par value of one
tenth of one cent ($.001) per share. The Board of Directors in
January, 1997, adopted a resolution proposing that the Restated
Certificate of Incorporation be amended to increase the
authorized number of shares of Common Stock to four billion five
hundred million (4,500,000,000), subject to stockholder approval
of the amendment.
Proposed Stock Split. At the same time that it adopted the
resolution, the Board of Directors declared a two-for-one stock
split of the Company's Common Stock which would be effected as a
special distribution of one additional share of Common Stock for
each share of Common Stock outstanding (the "Stock Split").
Stockholders are not being asked to vote on the Stock Split, but
the Stock Split will not take place unless the authorized number
of shares of Common Stock is increased as described in this
Proposal No. 3. Without this increase in authorized shares, the
Company would not have enough authorized but unissued shares of
Common Stock to double the number of its outstanding shares with
the Stock Split. Readers should note that none of the share-
related data in this Proxy Statement is adjusted to take into
account the proposed Stock Split.
Current Use of Shares. As of February 28, 1997, the Company has
approximately _____________ shares of Common Stock outstanding
and approximately _______________ shares reserved for future
issuance under the Company's employee stock plans, of which,
currently, approximately ____________ are covered by outstanding
options and approximately ____________ are available for grant or
purchase. In addition, the Company has approximately 40 million
shares of Common Stock reserved for issuance upon the exercise of
its publicly-traded 1998 Step-Up Warrants. The Warrants expire
in March, 1998, and are exercisable as of March 15, 1997 at
$41.75
<PAGE> 19 PRELIMINARY PROXY
per share. The Company also has a "shelf" registration statement
on file with the Securities and Exchange Commission so that the
Company may from time to time issue additional securities,
including Common Stock or securities convertible into or
exercisable for Common Stock, having a public offering price of
approximately $1,400,000,000. Based upon the foregoing number of
outstanding and reserved shares of Common Stock, the Company
currently has approximately ___________ shares remaining
available for other purposes.
Proposed Amendment to Restated Certificate of Incorporation
The Board of Directors has adopted resolutions setting forth
(i) the proposed amendment to the first sentence of paragraph 4
of the Company's Restated Certificate of Incorporation (the
"Amendment"); (ii) the advisability of the Amendment; and (iii) a
call for submission of the Amendment for approval by the
Company's stockholders at the Meeting.
The following is the text of the first sentence of paragraph
4 of the Restated Certificate of Incorporation of the Company, as
proposed to be amended:
The total number of shares of all classes of stock that the
Corporation is authorized to issue is four billion five
hundred fifty million (4,550,000,000), consisting of four
billion five hundred million (4,500,000,000) shares of
Common Stock with a par value of one tenth of one cent
($.001) per share and fifty million (50,000,000) shares of
Preferred Stock with a par value of one tenth of one cent
($.001) per share.
Purpose and Effect of the Proposed Amendment
The Board of Directors believes that it is in the Company's
best interest to increase the number of shares of Common Stock
that Intel is authorized to issue in order to give the Company
additional flexibility to maintain a reasonable stock price with
future stock splits and stock dividends. On ten occasions since
Intel's initial public offering in 1971, there has either been a
stock split or a stock dividend functionally serving as a stock
split. The last such action was a 1:1 stock dividend in June,
1995. As noted above, the Board of Directors has approved a
Stock Split subject to the approval of the Amendment.
The Board of Directors also believes that the availability
of additional authorized but unissued shares will provide the
Company with the flexibility to issue Common Stock for other
proper corporate purposes which may be identified in the future,
such as to raise equity capital, to adopt additional employee
benefit plans or reserve additional shares for issuance under
such plans, and to make acquisitions through the use of stock.
Other than with respect to the foregoing Stock Split and as
permitted or required under the Company's employee benefit plans
and under outstanding options, warrants, and other securities
convertible into Common Stock, the Board of Directors has no
immediate plans, understandings, agreements, or commitments to
issue additional Common Stock for any purposes.
The Board of Directors believes that the proposed increase
in the authorized Common Stock will make available sufficient
shares for use, taking into account the Stock Split, should the
Company decide to use its shares for one or more of such
previously mentioned purposes or otherwise. No additional action
or authorization by the Company's stockholders would be necessary
prior to the issuance of such additional shares, unless required
by applicable law or the rules of any stock exchange or national
securities association trading system on which the Common Stock
is then listed or quoted. The Company reserves the right to seek
a further increase in authorized shares from time to time in the
future as considered appropriate by the Board of Directors.
Under the Company's Restated Certificate of Incorporation,
the Company's stockholders do not have preemptive rights with
respect to Common Stock. Thus, should the Board of Directors
elect to issue additional shares of Common Stock, existing
stockholders would not have any preferential rights to purchase
such shares. In addition, if the Board of Directors elects to
issue additional shares of Common Stock, such issuance could have
a dilutive effect on the earnings per share, voting power, and
shareholdings of current stockholders.
The proposed amendment to increase the authorized number of
shares of Common Stock could, under certain circumstances, have
an anti-takeover effect, although this is not the intention of
this proposal. For example,
<PAGE> 20 PRELIMINARY PROXY
in the event of a hostile attempt to take over control of the
Company, it may be possible for the Company to endeavor to impede
the attempt by issuing shares of the Common Stock, thereby
diluting the voting power of the other outstanding shares and
increasing the potential cost to acquire control of the Company.
The Amendment therefore may have the effect of discouraging
unsolicited takeover attempts. By potentially discouraging
initiation of any such unsolicited takeover attempt, the proposed
Amendment may limit the opportunity for the Company's
stockholders to dispose of their shares at the higher price
generally available in takeover attempts or that may be available
under a merger proposal. The proposed amendment may have the
effect of permitting the Company's current management, including
the current Board of Directors, to retain its position, and place
it in a better position to resist changes that stockholders may
wish to make if they are dissatisfied with the conduct of the
Company's business. However, the Board of Directors is not aware
of any attempt to take control of the Company and the Board of
Directors has not presented this proposal with the intent that it
be utilized as a type of anti-takeover device.
Effect of the Stock Split
No change in total stockholders' equity will result from the
Stock Split. The aggregate amount of capital represented by the
outstanding shares of Common Stock will be increased by $.001 for
each share issued to effect the Stock Split and the Company's
capital in excess of par value account will be reduced by the
same amount. After the Stock Split, purchases and sales of
Common Stock by an individual stockholder may be subject to
higher brokerage charges and applicable stock transfer taxes than
on a pre-split transaction of equivalent market value, due to the
greater number of shares of Common Stock involved after the Stock
Split. In addition, the Company will incur certain expenses in
connection with the Stock Split, such as the cost of preparing
and delivering to stockholders new certificates representing
additional shares.
In accordance with the terms of the Company's stock option
and employee benefit plans and the Warrants, appropriate
adjustments will be made upon the effectiveness of the Stock
Split to the number of shares reserved for issuance under such
plans and the exercise prices and number of shares covered by
outstanding options and Warrants.
The Company has been advised that, based on current tax law,
the Stock Split should not result in any gain or loss for Federal
income tax purpose. The tax basis of every share held before the
Stock Split will be allocated between the two shares held as a
result of the distribution, and the holding period of the new
shares will include the holding period of the shares with respect
to which they were issued. The laws of jurisdictions other than
the United States may impose income taxes on the issuance of the
additional shares and stockholders subject to such laws are urged
to consult their tax advisers.
As noted above, the Stock Split is contingent on stockholder
approval of the Amendment, but stockholders are not being asked
to vote on the Stock Split.
Vote Necessary to Approve the Amendment
The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the
Meeting, assuming a quorum is present, is necessary for approval
of the Amendment. Therefore, abstentions and broker non-votes
(which may occur if a beneficial owner of stock where shares are
held in a brokerage or bank account fails to provide the broker
or the bank voting instructions as to such shares) effectively
count as votes against the Amendment.
Recommendation of the Board
The Board of Directors recommends a vote "FOR" the proposal to
amend the Company's Restated Certificate of Incorporation to
increase the number of authorized shares of Common Stock from one
billion four hundred million (1,400,000,000) to four billion five
hundred million (4,500,000,000). Unless a contrary choice is
specified, proxies solicited by the Board of Directors will be
voted FOR approval of the Amendment.
<PAGE> 21 PRELIMINARY PROXY
STOCKHOLDER PROPOSALS AND NOMINATIONS
From time to time, stockholders of the Company submit
proposals which they believe should be voted upon at the Annual
Meeting or nominate persons for election to the Board of
Directors. In accordance with the Company's Bylaws, any such
proposal or nomination must be submitted in writing to the
Secretary of the Company not less than 60 days nor more than 120
days prior to the first anniversary of the preceding year's
Annual Meeting of Stockholders. This submission must include
certain specified information concerning the proposal or nominee,
as the case may be, and information as to the proponent's
ownership of Common Stock of the Company. Proposals or
nominations not meeting these requirements will not be
entertained at the Annual Meeting. The Secretary should be
contacted in writing at the address on the first page of this
Proxy Statement to make any submission or to obtain additional
information as to the proper form and content of submissions.
1998 Stockholder Proposals. Pursuant to applicable rules
under the Securities Exchange Act of 1934, some stockholder
proposals may be eligible for inclusion in the Company's 1998
Proxy Statement. Any such stockholder proposals must be
submitted in writing to the Secretary of the Company no later
than December 8, 1997. Stockholders interested in submitting
such a proposal are advised to contact knowledgeable counsel with
regards to the detailed requirements of such securities rules.
OTHER MATTERS
Section 16(a) Beneficial Ownership Reporting Compliance.
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 of, and
transactions in, the Company's securities with the Securities and
Exchange Commission ("SEC") and The Nasdaq Stock Market
("Nasdaq"). Such directors, executive officers and ten-percent
stockholders are also required 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 it, and on written representations from certain
reporting persons, the Company believes that during fiscal 1996,
all Section 16(a) filing requirements applicable to its
directors, officers and ten percent stockholders were complied
with, with the following exceptions: Stephen Nachtsheim, an
officer of the Company, filed one report of one transaction
involving a stock purchase late. As of the date of this Proxy
Statement, each of the referenced transactions has been reported
with the SEC and Nasdaq.
Financial Statements. The Company's financial statements
for the year ended December 28, 1996, are included in the
Company's 1996 Annual Report to Stockholders. Copies of the
Annual Report are being sent to the Company's stockholders
concurrently with the mailing of this Proxy Statement.
Stockholders directly registered by name on the books of Harris
Trust and Savings Bank have in an earlier mailing been offered
the opportunity to obtain this Proxy Statement and the Annual
Report by accessing it in electronic form instead of receiving
paper copies. If you have not received or had access to the 1996
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. Copies of the
Company's Annual Report and this Proxy Statement are available on
Intel's World Wide Web site at www.intel.com.
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. The Company has retained D. F.
King & Co., Inc. to solicit proxies for a fee of $10,000 plus a
reasonable amount to cover expenses. Proxies may also be
solicited by certain of the Company's directors, officers and
other employees, without additional compensation, personally or
by written communication, telephone or other electronic means.
The Company is required to request brokers and nominees who hold
stock in their name to furnish the Company's
<PAGE> 22 PRELIMINARY PROXY
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
/s/F. Thomas Dunlap, Jr.
F. THOMAS DUNLAP, JR., Secretary
Dated: April 7, 1997
Santa Clara, California
<PAGE> 23 PRELIMINARY PROXY
COMMUNICATING WITH THE COMPANY
We have from time-to-time received calls from stockholders
inquiring about the availability of certain means of
communication with the Company. Because we have added a variety
of such avenues over the past couple of years, we thought that it
might be helpful if we outlined them for you.
- - If you would like to receive information about Intel, you
may use one of these convenient methods:
(1) To have information such as the Company's latest earnings
release, Form 10-K, Form 10-Q or Annual Report mailed to
you, stockholders residing in the U.S., Britain and France
please call the transfer agent, Harris Trust and Savings
Bank at (800) 298-0146. (All other foreign investors,
please call (312) 461-5545.)
(2) To listen to a recording of our most recent earnings
announcement or to reach a Stockholder Services
representative, stockholders residing in the U.S., Britain
and France please call (800) 298-0146. (All other foreign
investors, please call (312) 461-5545.)
(3) To view Intel's home page on the Internet, use Intel's URL:
www.intel.com. Intel's home page gives you access to
product, marketing and financial data, an on-line version
of this Proxy Statement, Intel's Annual Report to
Stockholders and job listings. Internet access to this
information has the advantage of providing you with up-to-
date information about the Company throughout the year.
- - If you would like to write to us, please send your
correspondence to the following address:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attn: Investor Relations, RN5-24
Of course, as a stockholder, you will continue to automatically
receive the Annual Report and Proxy Statement by mail.
<PAGE> 24 PRELIMINARY PROXY
Directions
From South: Take 101 North. Exit Holly Street, follow sign for
Redwood Shores parkway. At second traffic signal, turn left on
Twin Dolphin Drive. Hotel is 1/2 mile on right side.
From North: Take 101 South. Exit Ralston/Belmont, follow sign
for Marine World Parkway. At second traffic signal, turn right
on Twin Dolphin Drive. Hotel is 1/2 mile on left side.
From East Bay via Highway 92: Take Highway 92 West to 101 South.
Exit Ralston/Belmont, follow sign for Marine World Parkway. At
second traffic signal, turn right on Twin Dolphin Drive. Hotel
is 1/2 mile on left side.
[MAP INDICATING THE LOCATION OF THE 1997 SHAREHOLDER MEETING
APPEARS HERE]
[PRINTED ON RECYCLED PAPER LOGO]
<PAGE> PRELIMINARY PROXY
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<CAPTION>
PROXY PROXY
INTEL CORPORATION
2200 Mission College Blvd., Santa Clara, California 95052-8119
Proxy Solicited by Board of Directors for Annual Meeting - May 21, 1997
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 Wednesday, May 21, 1997 or at any postponement or adjournment thereof.
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 Item 1
(the election of directors), FOR Item 2 (ratification of the appointment of
independent auditors) and FOR Item 3 (amendment to Restated Articles of
Incorporation). In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
<S> <C>
[]Mark here if you plan to attend the Annual
Meeting in person. PLEASE MARK, SIGN, DATE AND MAIL
[]Mark here for address change and note below. THIS PROXY CARD PROMPTLY, USING
THE ENCLOSED ENVELOPE
New Address: ______________________________ (Continued and to be signed on
______________________________ reverse side.)
______________________________
SEE REVERSE SIDE
</TABLE>
<PAGE> PRELIMINARY PROXY
<TABLE>
<CAPTION>
please mark vote in oval in the following manner using dark ink only. []
The Board of Directors recommends a VOTE FOR Items 1, 2 and 3 below: If you wish to vote in
accordance with the Board of Directors' recommendations, just sign below, you need not mark
any ovals.
<S> <C> <C> <C> <C>
(1) Election of all nominees listed below to the For Withhold
Board of Directors, except as noted (write the [] []
names, if any, of the nominees for whom you
withhold authority to vote). Nominees: C.
Barrett, J. Browne, W. Chen, A. Grove, J. Guzy,
G. Moore, A. Rock, J. Shaw, L. Vadasz,
D. Yoffie, C. Young. [] For all except:
_____________________________
(2) To ratify the appointment of the accounting firm For Against Abstain
of Ernst & Young LLP as independent auditors for [] [] []
the Company for the current year.
(3) To amend the Restated Certificate of For Against Abstain
Incorporation to increase the number of [] [] []
authorized shares of Common Stock from one
billion four hundred million (1,400,000,000) to
four billion five hundred million
(4,500,000,000).
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.
[INTEL LOGO]
Signature:_________ Date:_________
Signature:_________ Date:_________
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