Dear Murthy:
Congratulations! On behalf of Intel Corporation (“Intel or the “Company”), I am pleased to offer you the position of President of Intel’s Client and IoT Business and System Architecture Group, reporting to Brian Krzanich, Intel’s CEO. The role will be based in Santa Clara, California and you will be responsible for leading the following organizations: Client Computing Group, Platform Engineering Group, Software and Services Group, Design Tools Technology Group and Internet of Things Group. In this role, you will have direct contact and interaction with Intel’s Board of Directors and will have a leadership role amongst Intel’s most senior executives on our Management Committee (MCM).
Base Salary. Your starting annual base salary will be $900,000, less applicable taxes, deductions and withholdings. This base salary will be reviewed annually as part of our performance review process and will increase commensurate with your performance, as assessed by the CEO.
Annual Performance Bonus. You are eligible for an Annual Performance Bonus (APB) with a target of $2,100,000 (assumes a 3X multiplier on your APB base of $700,000). The APB is paid out in January for the prior year based on Intel’s financial performance, as well as achievement of specified operational goals, subject to the terms of the APB plan. The bonus will be prorated for any portion of 2015 that you are employed with Intel. However, to help with your employment transition, for the first three full years you are employed with Intel, if the actual APB bonus is less than 3X your APB base , we will provide you with a special bonus so that the combined bonuses for that year will equal $2,100,000.
Quarterly Profit Bonus. You are eligible for quarterly bonuses under the Quarterly Profit Bonus (QPB) plan. These bonuses are determined based on Intel’s quarterly profitability, subject to the terms of the QPB plan. Based on historical payouts, we anticipate this will pay you approximately $28,000 per quarter ($112,000 annually).
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Hiring Bonus. In recognition of the equity and cash based compensation you will be forfeiting by joining Intel, we will offer you a sign on bonus of $8,100,000, less applicable taxes, deductions and withholding to be paid: $2,700,000 within 30 days of your employment start date, $2,700,000 paid on the one-year anniversary of your employment start date, and $2,700,000 to be paid on the two-year anniversary of your employment start date, provided you remain employed by Intel on those subsequent dates. Should your resignation from your current employer result in you losing your annual bonus/maturing equity awards for 2015 we will pay you a sum equal to the lesser of (i) that which you would have received for your 2015 annual bonus/equity and (ii) $1,750,000.
New Hire Equity Grant. In recognition of the equity and cash based compensation you will be forfeiting by joining Intel and to allow you to share in the success of Intel Corporation through the company's stock benefit program, we are pleased to grant you an award of Restricted Stock Units (RSUs) with a target valuation of $8,100,000. The RSUs will be granted on the first regularly scheduled grant date after your employment start date (“New Hire Grant Date”). The RSUs will vest over a three year period: 1/12 of the RSUs vesting per quarter beginning on the three-month anniversary of the grant date and continuing for three years such that the grant is fully vested on the three-year anniversary of grant date. The RSUs will be subject to the terms and conditions of the Intel Corporation 2006 Equity Incentive Plan, the Notice of Grant for each award, and grant agreement linked to your Notice of Grant.
Focal Equity Grants. Each January, you will be eligible for equity awards based on your job performance and contributions to Intel as part of Intel’s annual performance evaluation process (“Focal”). For the first three years of your employment, the target valuation for your annual equity award granted in January will be guaranteed to be at least $6,000,000. Equity awards will be recommended to be in the form of RSUs and Outperformance Stock Units (OSUs) and will be subject to the terms and conditions of the Intel Corporation 2006 Equity Incentive Plan, the Notice of Grant for each award and the grant agreement linked to your Notice of Grant. We anticipate the split will be 40 percent RSUs and 60 percent OSUs, but the exact split is subject to approval by Intel’s Board of Directors.