Intel 2002 Annual Report Download - page 66

for issuance under equity compensation plans approved by stockholders and not approved by stockholders. For descriptions of our equity
compensation plans, including the 1997 Stock Option Plan, which has not been approved by stockholders, see "Employee Stock Options" within
Item 7 and "Note 11: Employee Stock Benefit Plans" under "Notes to Consolidated Financial Statements" within Item 8 of this Form 10-K.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information appearing in our 2003 Proxy Statement under the heading "Certain Relationships and Related Transactions" is incorporated
by reference.
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ITEM 14. CONTROLS AND PROCEDURES
Quarterly Evaluation of the Company's Disclosure Controls and Internal Controls
Within the 90 days prior to the date of this Annual Report on Form 10-K, the company evaluated the effectiveness of the design and
operation of its "disclosure controls and procedures" (Disclosure Controls), and its "internal controls and procedures for financial
reporting" (Internal Controls). This evaluation (the Controls Evaluation) was performed under the supervision and with the participation of
management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO).
CEO and CFO Certifications
Immediately following the Signatures section of this Annual Report, there are two separate forms of "Certifications" of the CEO and the
CFO. The first form of Certification (the Rule 13a-14 Certification) is required in accord with Rule 13a-14 of the Securities Exchange Act of
1934 (the Exchange Act). This Controls and Procedures section of the Annual Report includes the information concerning the Controls
Evaluation referred to in the Rule 13a-14 Certifications and it should be read in conjunction with the Rule 13a-14 Certifications for a more
complete understanding of the topics presented.
Disclosure Controls and Internal Controls
Disclosure Controls are procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act,
such as this Annual Report, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and
Exchange Commission's (the SEC) rules and forms. Disclosure Controls are also designed to ensure that such information is accumulated and
communicated to our management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure. Internal
Controls are procedures designed to provide reasonable assurance that (1) our transactions are properly authorized; (2) our assets are safeguarded
against unauthorized or improper use; and (3) our transactions are properly recorded and reported, all to permit the preparation of our financial
statements in conformity with generally accepted accounting principles.
Limitations on the Effectiveness of Controls
The company's management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will
prevent all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance
that the control system's objectives will be met. Further, the design of a control system must reflect the fact that there are resource constraints,
and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of
controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. These
inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error
or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management
override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may
become inadequate because of changes in conditions or deterioration in the degree of compliance with its policies or procedures. Because of the
inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.
Scope of the Controls Evaluation
The evaluation of our Disclosure Controls and our Internal Controls included a review of the controls' objectives and design, the company's
implementation of the controls and the effect of the controls on the information generated for use in this Annual Report. In the course of the
Controls Evaluation, we sought to identify data errors, controls problems or acts of fraud and confirm that appropriate corrective actions,
including process improvements, were being undertaken. This type of evaluation is performed on a quarterly basis so that the conclusions of
management, including the CEO and CFO, concerning controls effectiveness can be reported in our Quarterly Reports on Form 10-Q and
Annual Report on Form 10
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K. Our Internal Controls are also evaluated on an ongoing basis by our Internal Audit Department and by other