Intel 1994 Annual Report Download - page 28

The exercise prices of options outstanding at December 31, 1994 ranged from $14.63 to $54.63. These options expire if not exercised at
specific dates ranging from April 1999 to July 2003. The price range for options exercised during the three-year period ended December 31,
1994 was $14.63 to $14.69.
STOCK PARTICIPATION PLAN. Under this plan, qualified employees may purchase shares of Intel's Common Stock at 85% of fair market
value at specific, predetermined dates. Of the 59.0 million shares authorized to be issued under the plan, 15.4 million shares are available for
issuance at December 31, 1994. Employees purchased 2.0 million shares in 1994 (2.2 million and 2.6 million in 1993 and 1992, respectively)
for $94 million ($71 million and $57 million in 1993 and 1992, respectively).
RETIREMENT PLANS. The Company provides profit-sharing retirement plans (the "Profit-Sharing Plans") for the benefit of qualified
employees in the U.S. and Puerto Rico. The plans are designed to provide employees with an accumulation of funds at retirement and provide
for annual discretionary contributions to trust funds.
The Company also provides a non-qualified profit-sharing retirement plan (the "Non-Qualified Plan") for the benefit of qualified employees in
the U.S. This plan is designed to permit certain discretionary employer contributions in excess of the tax limits applicable to the profit-sharing
retirement plans discussed above and to permit certain employee deferrals in excess of certain tax limits. This plan is intended to be an
unfunded plan.
The Company accrued $152 million for the Profit-Sharing Plans and the Non- Qualified Plan in 1994 ($103 million in 1993 and $93 million in
1992). Of the $152 million accrued in 1994, the Company expects to fund approximately $126 million for the 1994 contribution to the Profit-
Sharing Plans and to allocate approximately $5 million for the Non-Qualified Plan. The remainder, plus approximately $120 million carried
forward from prior years, is expected to be contributed to these plans when allowable under IRS regulations and plan rules.
Contributions made by the Company vest based on the employee's years of service. Vesting begins after three years of service in 20% annual
increments until the employee is 100% vested after seven years.
The Company provides qualified defined benefit pension plans for the benefit of qualified employees in the U.S. and Puerto Rico. Each plan
provides for minimum pension benefits, which are determined by a participant's years of service, final average compensation (taking into
account the participant's social security wage base), and the value of the Company's contributions, plus earnings, in the Profit-Sharing Plan. If
the balance in the participant's Profit-Sharing Plan exceeds the pension guarantee, the participant will receive benefits from the Profit-Sharing
Plan only. Intel's funding policy is consistent with the funding requirements of federal laws and regulations.
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Pension expense for 1994, 1993 and 1992 for the U.S. and Puerto Rico plans was less than $1 million per year, and no component of expense
exceeded $1 million. The funded status of these plans as of December 31, 1994 and December 25, 1993 is as follows:
At fiscal year-ends, the weighted average discount rates and long-term rates for compensation increases used for estimating the benefit
obligations and the expected return on plan assets are as follows:
Plan assets of the U.S. and Puerto Rico plans consist primarily of listed stocks and bonds, repurchase agreements, money market securities,
U.S. government securities and stock index derivatives.
December 31, 1994 1.3 $ 19
(In millions) 1994 1993
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Vested benefit obligation $ (3) $ (2)
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Accumulated benefit obligation $ (3) $ (2)
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Projected benefit obligation $ (5) $ (8)
Fair market value of plan assets 6 6
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Projected benefit obligation less than
(in excess of) plan assets 1 (2)
Unrecognized net (gain) (12) (10)
Unrecognized prior service cost 4 5
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Accrued pension costs $ (7) $ (7)
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1994 1993 1992
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Discount rate 8.5% 7.0% 8.5%
Rate of increase in compensation levels 5.5% 5.0% 5.5%
Expected long-term return on assets 8.5% 8.5% 8.5%