Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Election of New Director.
On November 17, 2022, the Board elected Barbara G. Novick to the Board, effective December 1, 2022 (the “Effective Date”). The Board determined that Ms. Novick qualifies as “independent” in accordance with the published listing requirements of Nasdaq, and she has been appointed to the Audit & Finance Committee and Compensation Committee as of the Effective Date.
Ms. Novick, 62, co-founded BlackRock, Inc. in 1988 and continued as its Vice Chairman until February 2021 when she transitioned to Senior Advisor. From 1988 to 2009, Ms. Novick headed the Global Account Management Group at Blackrock and oversaw global business development, marketing and client service across equity, fixed income, liquidity, alternative investment and real estate products for institutional and individual investors and their intermediaries worldwide. In 2009, she established BlackRock’s Global Government Relations and Public Policy Group to provide a voice for investors, which she headed until 2021; and from 2018 to 2020, she additionally oversaw BlackRock’s Global Investment Stewardship team.
Ms. Novick has served since 2021 on the private company board of directors of New York Life Insurance Company, a mutual insurance company, and American Financial Exchange (AFX), an electronic exchange for direct lending and borrowing by American banks and financial institutions. She also serves on the boards of the Peterson Institute for International Economics, 100 Women in Finance, Committee on Capital Markets Regulation, and the Millstein Center for Global Markets and Corporate Ownership, and on the advisory boards of Growth Curve Capital and Center for Financial Stability. She previously served on the boards of Cornell University from 2012 to 2020 and the Investment Company Institute from 2015 to 2021. Ms. Novick earned a B.A., cum laude, in Economics from Cornell University. She has authored numerous articles on asset management and public policy issues and over her career received numerous awards and accolades, including Barron’s 100 Most Influential Women in U.S. Finance in 2020.
Ms. Novick will receive the standard compensation payable to non-employee directors of the Board (“Intel Board Compensation”). Pursuant to these arrangements, commencing on the Effective Date, she will be paid an annual cash retainer of $90,000 (in addition to any committee fees), which will be pro-rated for her first year of service. In addition, in the first quarter of 2023, Ms. Novick will be granted an award of non-employee director time-based restricted stock units with a value on the grant date of approximately $91,667, which is pro-rated from the value of the annual award granted to Intel’s non-employee directors in May 2022. The award will vest on the earlier of May 12, 2023 and the date of Intel’s 2023 Annual Stockholders’ Meeting, the same schedule as the annual award granted to Intel’s other non-employee directors in May 2022, subject to Ms. Novick’s continued service on the Board.
Ms. Novick will also enter into Intel’s standard form of directors’ indemnification agreement with Intel, pursuant to which Intel agrees to indemnify its directors to the fullest extent permitted by applicable law and subject to certain conditions to advance expenses in connection with proceedings as described in the indemnification agreement.
Ms. Novick does not have any family relationship with any director or executive officer of Intel, or person nominated or chosen by Intel to become a director or executive officer, and she has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K.
Compensatory Arrangements of Certain Officers.
Amendments to Chief Executive Officer’s 2021 New Hire Performance-Based Equity Awards
The Compensation Committee (“Committee”) of the Board and Patrick Gelsinger, Chief Executive Officer of Intel, agreed to amend three equity grant agreements (“Amendments”) relating to Mr. Gelsinger’s new hire performance-based equity awards. The Amendments were entered into between the Company and Mr. Gelsinger on
November 18, 2022. The Committee and Mr. Gelsinger desired to further strengthen the alignment of Mr. Gelsinger’s new hire performance-based equity awards with his commitment to long-term stockholder value creation. Accordingly, the Amendments to Mr. Gelsinger’s awards increase the stock price performance hurdles for certain awards and, for all three awards described below, provide even greater alignment with stockholders by lengthening the period during which stock price performance hurdles must be maintained. For reference, Intel’s closing stock price on the date of the Amendments was $29.87.
The following is a summary of the Amendments:
Performance Options. On February 15, 2021 (the “Grant Date”), Mr. Gelsinger was granted performance-based stock options (“Performance Options”) that may be exercised only if Intel’s stock price appreciates by 30% or more from a baseline stock price over the five-year period following the Grant Date. The terms of the Performance Options were amended to increase the performance stock price hurdle from 30% appreciation ($64.54) to 50% ($74.47). In addition, the terms of the Performance Options were amended to increase the period during which Intel’s stock price must be maintained at or above the amended performance stock price hurdle to achieve payout from 30 consecutive trading days to 90 calendar days.
Strategic Growth PSUs. On the Grant Date, Mr. Gelsinger was granted performance stock units (“Strategic Growth PSUs”) that may be earned based on the appreciation in Intel’s stock price from a baseline stock price over the five-year period following the Grant Date and on the achievement of the threshold, target, or maximum stock price appreciation goals. The terms of the Strategic Growth PSUs were amended to remove the ability to vest and be paid out a portion of the award on the third anniversary of the Grant Date, and the Strategic Growth PSUs instead – and only to the extent the applicable performance stock price hurdle has been achieved - will vest on the fifth anniversary of the Grant Date. In addition, the terms of the Strategic Growth PSUs were amended to increase the period during which Intel’s stock must be maintained at or above the applicable performance stock price hurdle to achieve payout from 30 consecutive trading days to 90 calendar days. Similarly, the provision of the Strategic Growth PSUs that caps payout at target if at least the threshold stock price hurdle is not maintained for a period of time at the end of the five-year performance period was amended to increase such period from 30 consecutive trading days to 90 calendar days.
Outperformance PSUs. On the Grant Date, Mr. Gelsinger was granted performance stock units (“Outperformance PSUs”) that may be earned based on the appreciation in Intel’s stock price of 200% ($148.95) or more from a baseline stock price over the five-year period following the Grant Date. The terms of the Outperformance PSUs were amended to remove the ability to vest and be paid out a portion of the award on the third anniversary of the Grant Date, and the Outperformance PSUs instead – and only to the extent the performance stock price hurdle has been achieved - will vest on the fifth anniversary of the Grant Date. In addition, the terms of the Outperformance PSUs were amended to increase the period during which Intel’s stock price must be maintained at or above the performance stock price hurdle of at least 200% from a baseline stock price to achieve payout from 30 consecutive trading days to 90 calendar days.
The foregoing description of the Amendments to Mr. Gelsinger’s equity awards does not purport to be complete and is qualified in its entirety by reference to the Amendments, which are attached as Exhibit 10.1, 10.2, and 10.3 to this report.