Exhibit 10.5

 

INTEL CORPORATION

2004 EQUITY INCENTIVE PLAN

 

STANDARD TERMS AND CONDITIONS RELATING TO NONQUALIFIED STOCK OPTIONS GRANTED ON
AND AFTER MAY 19, 2004 UNDER THE INTEL CORPORATION 2004 EQUITY INCENTIVE PLAN
(other than grants made under the SOP Plus or ELTSOP programs)

 

1. TERMS OF OPTION

 

The following standard terms and conditions (“Standard Terms”) apply to
Nonqualified Stock Options granted to U.S. employees under the Intel Corporation
2004 Equity Incentive Plan (the “2004 Plan”) (other than grants made under the
SOP Plus or ELTSOP programs).

 

2. NONQUALIFIED STOCK OPTION

 

The option is not intended to be an incentive stock option under Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”) and will be
interpreted accordingly.

 

3. OPTION PRICE

 

The exercise price of the option (the “option price”) is 100% of the market
value of the common stock of Intel Corporation (“Intel” or the “Corporation”),
$.001 par value (the “Common Stock”), on the date of grant, as specified in the
Notice of Grant. “Market value” means the average of the highest and lowest
sales prices of the Common Stock as reported by NASDAQ.

 

4. TERM OF OPTION AND EXERCISE OF OPTION

 

To the extent the option has become exercisable (vested) during the periods
indicated in the Notice of Grant and has not been previously exercised, and
subject to termination or acceleration as provided in these Standard Terms and
the requirements of these Standard Terms, the Notice of Grant and the 2004 Plan,
you may exercise the option to purchase up to the number of shares of the Common
Stock set forth in the Notice of Grant. Notwithstanding anything to the contrary
in Section 5 or Sections 7 through 10 hereof, no part of the option may be
exercised after seven (7) years from the date of grant.

 

The process for exercising the option (or any part thereof) is governed by these
Standard Terms, the Notice of Grant, the 2004 Plan and your agreements with
Intel’s stock plan administrator. Exercises of stock options will be processed
as soon as practicable. The option price may be paid (a) in cash, (b) by

 

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arrangement with Intel’s stock plan administrator which is acceptable to Intel
where payment of the option price is made pursuant to an irrevocable direction
to the broker to deliver all or part of the proceeds from the sale of the shares
of the Common Stock issuable under the option to Intel, (c) by delivery of any
other lawful consideration approved in advance by the Committee of the Board of
Directors of Intel established pursuant to the 2004 Plan (the “Committee”) or
its delegate, or (d) in any combination of the foregoing. Fractional shares may
not be exercised. Shares of the Common Stock will be issued as soon as
practicable. You will have the rights of a stockholder only after the shares of
the Common Stock have been issued. For administrative or other reasons, Intel
may from time to time suspend the ability of employees to exercise options for
limited periods of time.

 

Notwithstanding the above, Intel shall not be obligated to deliver any shares of
the Common Stock during any period when Intel determines that the exercisability
of the option or the delivery of shares hereunder would violate any federal,
state or other applicable laws.

 

Notwithstanding anything to the contrary in these Standard Terms or the
applicable Notice of Grant, Intel may reduce your unvested options if you change
classification from a full-time employee to a part-time employee.

 

IF AN EXPIRATION DATE DESCRIBED HEREIN FALLS ON A WEEKDAY, YOU MUST EXERCISE
YOUR OPTIONS BEFORE 3:45 P.M. NEW YORK TIME ON THE EXPIRATION DATE.

 

IF AN EXPIRATION DATE DESCRIBED HEREIN FALLS ON A WEEKEND OR ANY OTHER DAY ON
WHICH THE NEW YORK STOCK EXCHANGE (“NYSE”) IS NOT OPEN, YOU MUST EXERCISE YOUR
OPTIONS BEFORE 3:45 P.M. NEW YORK TIME ON THE LAST NYSE BUSINESS DAY PRIOR TO
THE EXPIRATION DATE.

 

5. LEAVES OF ABSENCE

 

  (a) Except as expressly provided otherwise in this Agreement, if you take a
personal leave of absence (“PLOA”), the option will be exercisable only to the
extent and during the times specified in this Section 5:

 

  (1) If the duration of the PLOA is 365 days or less, you may exercise any part
of the option that vested prior to the commencement of the PLOA at any time
during the PLOA. If the duration of the PLOA is greater than 365 days, any part
of the option that had vested prior to the commencement of the PLOA and that has
not been exercised will terminate on the 365th day of the PLOA.

 

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  (2) If the duration of the PLOA is less than thirty (30) days:

 

  a. The exercisability of any part of the option that would have vested during
the PLOA shall be deferred until the first day that you return to work (i.e.,
the date that the PLOA is terminated); and

 

  b. Any part of the option that had not vested at the commencement of the PLOA
and would not have vested during the PLOA shall vest in accordance with the
normal schedule indicated in the Notice of Grant and shall not be affected by
the PLOA.

 

  (3) If the duration of the PLOA equals or exceeds thirty (30) days, the
exercisability of each part of the option scheduled to vest after commencement
of the PLOA shall be deferred for a period of time equal to the duration of the
PLOA. If you terminate employment after returning from the PLOA but prior to the
end of such deferral period, you shall have no right to exercise any unvested
portion of the option, except to the extent provided otherwise in Sections 8
through 10 hereof, and such option shall terminate as of the date that your
employment terminates.

 

  (4) If you terminate employment with the Corporation during a PLOA:

 

  a. Any portions of the option that had vested prior to the commencement of the
PLOA shall be exercisable in accordance with Sections 7 through 10 hereof, as
applicable; and

 

  b. Any portions of the option that had not vested prior to the commencement of
the PLOA shall terminate, except to the extent provided otherwise in Sections 8
through 10 hereof.

 

  (b) If you take an approved (i) medical (including a medical leave to care for
your family, as described below), (ii) industrial, or (iii) military leave of
absence (“LOA”), the option shall be unaffected by such LOA and will vest in
accordance with the schedule set forth in the Notice of Grant. For purposes of
this subsection, family care related medical leaves of absence are approved
periods of time off from work for an employee to care for: (i) a spouse, parent,
and, in Oregon only, parent-in-law; (ii) a child or legal dependent who has a
serious health condition and, in Oregon only, to care for a child who has a
non-serious medical condition that requires home care; or (iii) a newborn,
newly-adopted child or newly-placed foster child.

 

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6. SUSPENSION OR TERMINATION OF OPTION FOR MISCONDUCT

 

If you have allegedly committed an act of misconduct as defined in the 2004
Plan, including, but not limited to, embezzlement, fraud, dishonesty,
unauthorized disclosure of trade secrets or confidential information, breach of
fiduciary duty or nonpayment of an obligation owed to the Corporation, an
Authorized Officer, as defined in the 2004 Plan, may suspend your right to
exercise the option, pending a decision by the Committee (or Board of Directors,
as the case may be) or an Authorized Officer to terminate the option. The option
cannot be exercised during such suspension or after such termination.

 

7. TERMINATION OF EMPLOYMENT

 

Except as expressly provided otherwise in this Agreement, if your employment by
the Corporation terminates for any reason, whether voluntarily or involuntarily,
other than death, Disablement (defined below), Retirement (defined below) or
discharge for misconduct, you may exercise any portion of the option that had
vested on or prior to the date of termination at any time prior to ninety (90)
days after the date of such termination. The option shall terminate on the 90th
day to the extent that it is unexercised. All unvested stock options shall be
cancelled on the date of employment termination, regardless of whether such
employment termination is voluntary or involuntary.

 

For purposes of this Section 7, your employment is not deemed terminated if,
prior to sixty (60) days after the date of termination from Intel or a
Subsidiary, you are rehired by Intel or a Subsidiary on a basis that would make
you eligible for future Intel stock option grants, nor would your transfer from
Intel to any Subsidiary or from any one Subsidiary to another, or from a
Subsidiary to Intel be deemed a termination of employment. Further, your
employment with any partnership, joint venture or corporation not meeting the
requirements of a Subsidiary in which Intel or a Subsidiary is a party shall be
considered employment for purposes of this provision if either (a) the entity is
designated by the Committee as a Subsidiary for purposes of this provision or
(b) you are designated as an employee of a Subsidiary for purposes of this
provision.

 

8. DEATH

 

Except as expressly provided otherwise in this Agreement, if you die while
employed by the Corporation, the executor of your will, administrator of your
estate or any successor trustee of a grantor trust may exercise the option, to
the extent not previously exercised and whether or not vested on the date of
death, at any time prior to 365 days from the date of death.

 

Except as expressly provided otherwise in this Agreement, if you die prior to
ninety (90) days after terminating your employment with the Corporation, the
executor of your will or administrator of your estate may exercise the option,
to the extent not previously exercised and to the extent the option had vested
on or

 

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prior to the date of your employment termination, at any time prior to 365 days
from the date of your employment termination.

 

The option shall terminate on the applicable expiration date described in this
Section 8, to the extent that it is unexercised.

 

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9. DISABILITY

 

Except as expressly provided otherwise in this Agreement and at the discretion
of the Committee or its delegate, following your termination of employment due
to Disablement, you may exercise the option, to the extent not previously
exercised and whether or not the option had vested on or prior to the date of
employment termination, at any time prior to 365 days from the date of
determination of your Disablement as described in this Section 9; provided,
however, that while the claim of Disablement is pending, options that were
unvested at termination of employment may not be exercised and options that were
vested at termination of employment may be exercised only during the period set
forth in Section 7 hereof. The option shall terminate on the 365th day from the
date of determination of Disablement, to the extent that it is unexercised. For
purposes of this Agreement, “Disablement” means a physical condition arising
from an illness or injury, which renders an individual incapable of performing
work in any occupation. The determination as to an individual’s Disablement
shall be made in accordance with the standards and procedures of the
then-current Long Term Disability Plan maintained by the Corporation or the
Subsidiary that employs you (or if such Subsidiary has no such plan, in
accordance with the Intel Long Term Disability Plan) and shall be conclusive on
all of the parties.

 

10. RETIREMENT

 

For purposes of this Agreement, “Retirement” shall mean either Standard
Retirement (as defined below) or the Rule of 75 (as defined below). Following
your Retirement, the vesting of the option, to the extent that it had not vested
on or prior to the date of your Retirement, shall be accelerated as follows:

 

  (a) If you retire at or after age 60 (“Standard Retirement”), you will receive
one year of additional vesting from your date of Retirement for every five (5)
years that you have been employed by the Corporation (measured in complete,
whole years). No vesting acceleration shall occur for any periods of employment
of less than five (5) years; or

 

  (b) If, when you terminate employment with Intel, your age plus years of
service (in each case measured in complete, whole years) equals or exceeds 75
(“Rule of 75”), you will receive accelerated vesting of any portion of the
option that would have vested prior to 365 days from the date of your
Retirement.

 

You will receive vesting acceleration pursuant to either Standard Retirement or
the Rule of 75, but not both. Except as expressly provided otherwise in this
Agreement, following your Retirement from the Corporation, you may exercise the
option at any time prior to 365 days from the date of your Retirement, to the
extent that it had vested as of the date of your Retirement or to the extent
that

 

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vesting of the option is accelerated pursuant to this Section 10. The option
shall terminate on the 365th day from your date of Retirement, to the extent
that it is unexercised.

 

11. INCOME TAXES WITHHOLDING

 

Nonqualified stock options are taxable upon exercise. To the extent required by
applicable federal, state or other law, you shall make arrangements satisfactory
to Intel for the satisfaction of any withholding tax obligations that arise by
reason of an option exercise and, if applicable, any sale of shares of the
Common Stock. Intel shall not be required to issue shares of the Common Stock or
to recognize any purported transfer of shares of the Common Stock until such
obligations are satisfied. The Committee may permit these obligations to be
satisfied by having Intel withhold a portion of the shares of the Common Stock
that otherwise would be issued to you upon exercise of the option, or to the
extent permitted by the Committee, by tendering shares of the Common Stock
previously acquired.

 

12. TRANSFERABILITY OF OPTION

 

Unless otherwise provided by the Committee, each option shall be transferable
only

 

  (a) pursuant to your will or upon your death to your beneficiaries, or

 

  (b) by gift to your Immediate Family (defined below), partnerships whose only
partners are you or members of your Immediate Family, limited liability
companies whose only shareholders are you or members of your Immediate Family,
or trusts established solely for the benefit of you or members of your Immediate
Family.

 

For purposes of this Agreement, “Immediate Family” is defined as your spouse or
domestic partner, children, grandchildren, parents, or siblings.

 

With respect to transfers by gift, options are transferable only to the extent
the options are vested at the time of transfer. Any purported assignment,
transfer or encumbrance that does not qualify under subsections (a) and (b)
above shall be void and unenforceable against the Corporation.

 

Any option transferred by you pursuant to this section shall not be transferable
by the recipient except by will or the laws of descent and distribution.

 

The transferability of options is subject to any applicable laws of your country
of residence or employment.

 

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13. DISPUTES

 

The Committee or its delegate shall finally and conclusively determine any
disagreement concerning your option.

 

14. AMENDMENTS

 

The 2004 Plan and the option may be amended or altered by the Committee or the
Board of Directors of Intel to the extent provided in the 2004 Plan.

 

15. THE 2004 PLAN AND OTHER AGREEMENTS; OTHER MATTERS

 

  (a) The provisions of these Standard Terms and the 2004 Plan are incorporated
into the Notice of Grant by reference. Certain capitalized terms used in these
Standard Terms are defined in the 2004 Plan.

 

These Standard Terms, the Notice of Grant and the 2004 Plan constitute the
entire understanding between you and the Corporation regarding the option. Any
prior agreements, commitments or negotiations concerning the option are
superseded.

 

The grant of an option to an employee in any one year, or at any time, does not
obligate Intel or any Subsidiary to make a grant in any future year or in any
given amount and should not create an expectation that Intel or any Subsidiary
might make a grant in any future year or in any given amount.

 

  (b) To the extent that the option refers to the Common Stock of Intel
Corporation, and as required by the laws of your country of residence or
employment, only authorized but unissued shares thereof shall be utilized for
delivery upon exercise by the holder in accord with the terms hereof.

 

  (c) Because this Agreement relates to terms and conditions under which you may
purchase Common Stock of Intel, a Delaware corporation, an essential term of
this Agreement is that it shall be governed by the laws of the State of
Delaware, without regard to choice of law principles of Delaware or other
jurisdictions. Any action, suit, or proceeding relating to this Agreement or the
option granted hereunder shall be brought in the state or federal courts of
competent jurisdiction in the State of California.

 

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