Intel 2010 Annual Report Download - page 119

Table of Contents
INTEL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Minimum rental commitments under all non-cancelable leases with an initial term in excess of one year were as follows as of
December 25, 2010 (in millions):
Commitments for construction or purchase of property, plant and equipment totaled $4.6 billion as of December 25, 2010
($1.8 billion as of December 26, 2009), most of which will be due within the next year. Other purchase obligations and
commitments totaled approximately $600 million as of December 25, 2010 (approximately $900 million as of December 26,
2009). Other purchase obligations and commitments include payments due under various types of licenses, agreements to
purchase raw materials or other goods, and payments due under non-contingent funding obligations. Funding obligations
include, for example, agreements to fund various projects with other companies. In addition, we have various contractual
commitments with Micron and IMFT/IMFS. For further information on these contractual commitments, see “Note 11: Equity
Method and Cost Method Investments.”
Note 24: Employee Equity Incentive Plans
Our equity incentive plans are broad-based, long-term programs intended to attract and retain talented employees and align
stockholder and employee interests.
In May 2009, stockholders approved an extension of the 2006 Equity Incentive Plan (the 2006 Plan). Stockholders approved
134 million additional shares for issuance, increasing the total shares of common stock available for issuance as equity awards
to employees and non-employee directors to 428 million shares. The approval also extended the expiration date of the 2006
Plan to June 2012. The maximum number of shares to be awarded as non-vested shares (restricted stock) or non-vested share
units (restricted stock units) increased to 253 million shares. As of December 25, 2010, 190 million shares remained available
for future grant under the 2006 Plan. We may assume the equity incentive plans and the outstanding equity awards of certain
acquired companies. Once they are assumed, we do not grant additional shares under those plans.
Also in May 2009, stockholders approved an employee stock option exchange program (Option Exchange) to give employees
(not listed officers) the opportunity to exchange eligible stock options for a lesser number of new stock options that have
approximately the same fair value as the options surrendered, as of the date of the exchange. The Option Exchange
commenced on September 28, 2009 and expired on October 30, 2009. Eligible options included stock options granted under
any Intel stock option or equity incentive plan between October 1, 2000 and September 28, 2008 that had an exercise price
above $20.83, which was the 52-week closing-price high as of October 30, 2009. A total of 217 million eligible stock options
were tendered and cancelled in exchange for 83 million new stock options granted. The new stock options have an exercise
price of $19.04, which is equal to the market price of Intel common stock (defined as the average of the high and low trading
prices) on October 30, 2009. The new stock options were issued under the 2006 Plan and are subject to its terms and
conditions. The new stock options vest in equal annual increments over a four-year period from the date of grant and will
expire seven years from the grant date. Using the Black-Scholes option pricing model, we determined that the fair value of the
surrendered stock options on a grant-by-grant basis was approximately equal, as of the date of the exchange, to the fair value
of the eligible stock options exchanged, resulting in insignificant incremental share-based compensation.
In 2009, we began issuing restricted stock units with both a market condition and a service condition (market-based restricted
stock units), referred to in our 2010 Proxy Statement as outperformance stock units, to a small group of senior officers and
non-employee directors. The number of shares of Intel common stock to be received at vesting will range from 33% to 200%
of the target amount, based on total stockholder return (TSR) on Intel common stock measured against the benchmark TSR of
a peer group over a three-year period. TSR is a measure of stock price appreciation plus any dividends paid in this
performance period. As of December 25, 2010, there were 3 million market-based restricted stock units outstanding. These
market-based restricted stock units accrue dividend equivalents and vest three years and one month from the grant date.
In connection with our 2009 acquisition of Wind River Systems, we assumed the company’s equity incentive plans and issued
replacement awards in 2009. The stock options and restricted stock units issued generally retain the terms and conditions of
the respective plans under which they were originally granted. We will not grant additional shares under these plans.
Year Payable
2011
$
102
2012
86
2013
56
2014
32
2015
20
2016 and thereafter
31
Total
$
327