We currently estimate that the Option Exchange could cover approximately 488 million outstanding stock options. The new stock options would be granted with an exercise price equal to the market value of an Intel share on the grant date, and would be subject to a four-year vesting schedule and seven-year contractual life. We considered other alternatives, such as applying the remaining term of the surrendered stock options to the new stock options granted or using a weighted average remaining term, but these approaches would structure the new stock option grants as short-term equity incentive vehicles with shorter associated vesting. This goes against the intent of equity as a long-term incentive vehicle. Our objective for the Option Exchange is to preserve the integrity of the new stock option grants for long-term retention and motivation, with a term and vesting schedule following that of the majority of our stock options. The seven-year term will be reflected in the exchange ratios that we calculate on a value-for-value basis. We believe that this is appropriate because using a seven-year term and a four-year linear vesting schedule better aligns our employees with our other stockholders for long-term stock price growth and provides better retention.

All stock options surrendered as part of the Option Exchange will be cancelled upon completion of the exchange offer, and the shares underlying those options will not be available for new grants, except to the extent that the surrendered options were granted under the 2006 Equity Incentive Plan. Accordingly, because the 2006 Equity Incentive Plan is not expected to have sufficient shares available for the Option Exchange if all eligible options are exchanged, as part of this proposal we are requesting an amendment to the 2006 Equity Incentive Plan to authorize the issuance of enough additional shares to satisfy all of the new stock options that will be granted in the Option Exchange, which will not exceed 235 million shares. Those shares will be used only for stock options granted in the Option Exchange, and if any of those shares are not issued under new options granted in the Option Exchange for any reason (including upon forfeiture or expiration of those new options), they will cease to be available for issuance under the plan. This request for stock options is in addition to the stock options and RSUs, and the underlying shares, that we are requesting in Proposal 3 for our 2006 Equity Incentive Plan, to cover our customary equity granting practices and an extension of the plan expiration date to June 30, 2012. For more information on the 2006 Equity Incentive Plan, see Proposal 3.