8-KRegulation FDExhibits & Filings

INTEL CORP 8-K Report, Regulation FD Disclosure (Jan 26, 2011)

Filed January 26, 2011For Securities:INTC

Summary

Intel Corporation (INTC) filed an 8-K on January 25, 2011, reporting changes to its executive compensation structure, specifically concerning performance-based Restricted Stock Units (OSUs) and standard Restricted Stock Units (RSUs) for grants made in 2011. The primary focus is on adjustments to the performance metrics and vesting schedules for these awards, aimed at aligning executive incentives more closely with shareholder value creation and the company's performance relative to its peers. Key changes include modifications to how OSUs convert into Intel stock based on Total Shareholder Return (TSR) relative to a peer group, with a wider range of potential payouts. Additionally, RSUs will now vest quarterly over three years for both U.S. and non-U.S. management, including executive officers, a shift from the previous annual vesting over four years. These adjustments reflect a strategic move to enhance performance-driven compensation and improve the timeliness of equity awards realization.

Key Highlights

  • 1Intel revised its performance-based Restricted Stock Unit (OSU) program for 2011 grants to U.S. and non-U.S. management.
  • 2The OSU conversion rate to Intel stock now depends on Intel's Total Shareholder Return (TSR) relative to a 'Tech 15' peer group, with a potential range of 0.5 to 2 shares per OSU.
  • 3The target conversion rate for OSUs is 1:1, with adjustments based on relative TSR performance.
  • 4If Intel underperforms the peer group, the OSU conversion rate decreases by a 1:2.5 margin; if it outperforms, it increases by a 1:5 margin, capped at 2 shares per OSU.
  • 5Standard Restricted Stock Units (RSUs) granted in 2011 will now vest quarterly over three years, a change from the previous annual vesting over four years.
  • 6These changes apply to grants made in 2011 to management, including executive officers.
  • 7New standard agreements for RSUs and OSUs granted after January 20, 2011, have been filed as exhibits.

Frequently Asked Questions

OSUs (Performance-based Restricted Stock Units) are designed to reward superior stock price performance. For 2011 grants, the number of Intel shares an OSU converts into will be determined by Intel's Total Shareholder Return (TSR) compared to a 'Tech 15' peer group. The conversion rate can range from 0.5 to 2 shares per OSU, with a target of 1 share, depending on whether Intel underperforms or outperforms its peers.

For RSUs (standard Restricted Stock Units) granted in 2011, the vesting schedule has been accelerated. Instead of vesting annually over four years, these RSUs will now vest quarterly over a three-year period. This change applies to U.S. and non-U.S. employees, including executive officers.

The 'Tech 15' refers to the fifteen technology companies included in Intel's peer group for determining executive compensation as of the start of the performance period. This group is used to benchmark Intel's performance in TSR for the OSU program. Comparing Intel's TSR to this group helps determine the number of shares executives receive for their OSUs.

No, the described changes specifically apply to performance-based RSUs (OSUs) and standard RSUs granted in 2011 and thereafter. The filing notes that OSUs granted in 2009 and 2010 had different minimum conversion rates and a broader peer group (Tech 15 and S&P 100). Standard RSUs also operated under a different vesting schedule for past grants.