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August 26, 2002

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Attn: Jonathan J. Katz, Secretary

Re: File No. S7-22-02 - Release No. 33-8106; 34-46084
Additional Form 8-K Disclosure Requirements and Acceleration of Filing Date

Dear Mr. Katz:

Intel Corporation is pleased to submit this comment letter setting forth comments on Securities and Exchange Commission ("SEC" or "Commission") Release No. 33-8106 and 34-4608. The Release concerns proposals to shorten the filing deadline for current reports on Form 8-K to two business days, and to add 13 new items to Form 8-K as well as amending several of the existing items.

Executive Summary

Intel supports the Commission's goal of improving the quality and timeliness of disclosure to investors. We support many of the Commission's proposed additions and changes to Form 8-K because they will provide information that is truly significant to investors. We are concerned, however, that several items are overbroad, forcing disclosure of a large volume of data which is irrelevant to investors, insufficiently relevant to justify the burdens of current reporting or, in some cases, speculative and potentially misleading. Some of the items also require disclosure of sensitive proprietary or commercial information, and we believe the potential harm to companies' businesses outweighs this information's possible significance to investors.

The proposed two business day deadline is of great concern to us because we believe it will require compliance procedures to detect reportable events within no more than an hour of their occurrence, and still leaves insufficient time, in many cases, to analyze the event, prepare accurate disclosure and take all of the other necessary steps in advance of a filing. Certain of the proposals reach functions that would be decentralized in a company of any size or complexity. For example, contract signature authority and the authority to negotiate non-binding letters of intent and communicate with customers are typically dispersed within large companies. The procedures necessary to detect these decentralized events quickly enough to meet a two business day deadline will be very burdensome and expensive.

We believe the Commission should exclude Section 1 and Items 2.03 and 2.04 from Form 8-K because they are not sufficiently material to investors to justify the heavy burdens of disclosure, and the speculative nature of some of the events makes their disclosure inherently misleading to investors. The compliance burden associated with tracking these events and making disclosures will be significant, regardless of the filing deadline imposed. Considerably broadening disclosure requirements for agreements raises competitive concerns. Premature disclosure of events or transactions that have not yet fully occurred could have a serious adverse effect on the company's ability to complete potential transactions or avoid potential terminations of contracts or customer relationships. Premature disclosure of potential events of default and acceleration could cause a ripple effect, with possibly serious resulting harm to the company's financial position.

We also believe the Commission should exclude Item 5.04 because the disclosure is irrelevant to non-plan participants and existing law already requires adequate disclosure to plan participants. We are suggesting that the Commission omit or significantly narrow Item 3.03 because of its relative immateriality to investors. Intel is proposing changes to the triggering event for Item 2.05 to correspond with recent accounting pronouncements, and changes to Item 2.06 so that it applies only to unusual impairment decisions made during a quarter and does not require filings in a quiet period during which the company is preparing for a coordinated announcement of actual or expected financial results.

We have no comments on the proposed changes to Item 2.01, except that if the Commission determines to include Item 1.01 in Form 8-K, we believe the Commission should reconcile the disclosure thresholds under Items 1.01 and 2.01 with Item 601(b)(ii)(C) of Regulation S-K. We have no comments on the proposed addition of Item 5.03, except to note that the Commission should perhaps exclude purely ministerial amendments, such as correction of typographical errors or restatement in one document of the existing articles as previously amended, from the 8-K filing and leave these ministerial amendments to be filed as an exhibit to the next Form 10-K or 10-Q. For the remaining items, Intel has only minor requests for changes to reduce the compliance burden, decrease the chances for missing a filing and focus on information most material to investors.

To the extent that new 8-K items would require issuers to disclose forward-looking information regarding the effects of triggering events, Intel believes the safe harbor for forward-looking statements contained in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), should apply to the disclosure.

Discussion and Analysis

I. Proposed Shortened Filing Deadline for Reports on Form 8-K

The proposed amendments to Form 8-K would require domestic issuers to file required current reports within two business days of a triggering event. In Release No. 34-46079, the Commission proposes to require every reporting company to maintain sufficient procedures to provide reasonable assurance that the company is able to collect, process and disclose the information required to be disclosed in its periodic and current reports within the deadlines for such filings. This is a daunting task in connection with a two-day filing requirement on Form 8-K, but if the Commission imposes the two-day deadline, Intel will put procedures in place to meet it.

However, Intel believes that to meet a two business day deadline, these procedures would have to be able to detect the reportable events within one hour or less of the occurrence of the event. It is important to consider all of the required steps for making the filing once a reportable event has occurred and assuming procedures are in place to quickly detect it. Prior to making a Form 8-K filing, Intel must (a) investigate and collect relevant facts, (b) prepare an accurate filing and have it reviewed by the relevant stakeholders (including the CEO, CFO and other senior officers who are likely to be immersed in other critical business) and, if necessary, by outside counsel, (c) have the filing signed by the appropriate officer, and (d) properly format and code the filing and get it made in the EDGAR filing system. It is also critical that we coordinate internal communications and external reactive communication plans prior to making the filing. We need to ensure the company's directors, officers and/or employees do not first hear about the matter from a public filing, and the company's spokespersons are prepared to react accurately to inquiries.

For a company like Intel that has worldwide operations, we believe time zone differences and non-U.S. holidays alone could make it impossible to meet a two-day filing requirement for an event outside the U.S. or having worldwide impact. In addition, a two-day deadline means West Coast filers must file within one and a half business days, by 2:30 p.m. on the second business day. If the Commission imposes a two-day (or even five-day) deadline, the Commission should consider revising the EDGAR rules to permit a same day effective date for filings transmitted through the end of EDGAR activity on the filing day.

It is in the best interest of the investing public and the company for the company to be given an adequate opportunity to carefully consider the information required to be included in 8-K filings and make the filing only when the information has been confirmed as accurate. We are recommending against inclusion of certain of the events being proposed by the Commission, but assuming that all of the proposed new items were to be included, we would suggest a five business day filing requirement for the events described in Items 2.01, 2.02, 2.05, 2.06, Section 3, Section 4 and Items 5.01, 5.02 and 5.03, and a ten calendar day filing requirement for the events described in Section 1 and Items 2.03, 2.04 and 5.04. This proposal reflects our view that some of the items are both highly significant and easier to detect and analyze, justifying a shorter filing deadline. The other proposed items are related to decentralized functions, where procedures to detect and report such events would be more burdensome, and potentially require disclosure of information that has less significance to investors, justifying the longer filing deadline.

If the Commission issues final rules requiring disclosure and filing of material contracts entered into outside of the ordinary course of business and agreements giving rise to material direct or contingent financial obligations, even ten business days may be inadequate for the filing of documents which contain sensitive commercial information. Submitting a confidential treatment request requires the company to prepare a proposed version of the contract that redacts sensitive confidential information line-by-line and word-by-word and to provide supporting arguments for each redaction. It can take several days to prepare, review internally and with the other party and file a confidential treatment request and then an additional period of time for the Commission to issue a ruling. If Items 1.01, 1.02 and 2.03 are adopted, we suggest a procedure by which the company could note in the 8-K report that the contract contains sensitive information as to which a confidential treatment request is being submitted and that the company will file a redacted copy in an amendment to the 8-K report within five business days after the Commission issues a final order on the confidential treatment request. Alternatively, the Commission could revise these items to permit companies to file the contracts as exhibits to their next Form 10-Q or 10-K.

II. Safe Harbor and Rule 12b-25/Form 12b-25 Amendments for Late Filings

Intel supports the proposals to add a safe harbor to Rules 13a-11 and 15d-11, and amend Rule 12b-25 and Form 12b-25. However, if the Commission adopts a two business day deadline, or includes Items 1.01, 1.02 and 2.03 in the final rule, Intel believes companies should be required to file the Form 12b-25 within two business days of the original due date and the Form 8-K within five business days of the original due date, if the company certifies in the Form 12b-25 that the conditions for the safe harbors under Rules 13a-11 and 15d-11 were met with respect to the late filing.

Through its Intel Capital strategic investment program, Intel acquires securities that constitute "restricted stock" within the meaning of Rule 144 under the Securities Act of 1933, as amended, and Intel, like traditional venture capitalists, routinely relies on the Rule 144 safe harbor for the resale of these securities. We are concerned that there may be a likelihood of other companies failing to meet the new 8-K requirements, particularly if the triggering events for some of the requirements are not clarified and the deadline is set at two business days. Of particular concern are the new reporting requirements in Sections 1 and 2. If companies are then viewed as not being current in their public filings for purposes of Rule 144, Intel will be unable to sell its restricted securities unless and until the two-year holding period under Rule 144(k) has elapsed or a registration statement is filed by the issuer covering the securities. Intel may not have the right to request registration and the potential inability of the issuer to use short form registration statements will make it even more difficult to obtain registration. Intel requests that if the Commission adopts the new 8-K reporting requirements in Sections 1 and 2, or adopts the two business day deadline for any items, the Commission consider amending Rule 144(c) so that failure to file an 8-K report will not make Rule 144 unavailable if the safe harbor conditions were met or will only make Rule 144 unavailable until the filing of the company's next report on Form 10-K or 10-Q.

III. Possible Addition of a Mandatory General Disclosure Obligation

The Commission seeks comment as to whether, under each new section of Form 8-K, there should be a general item soliciting mandatory disclosure of other important events similar to those requested in the section. The Commission also seeks comment as to whether, instead, the Commission should adopt a broad principle requiring disclosure of highly important corporate events, leaving the company to determine the trigger for and scope of the necessary disclosure.

There are serious adverse consequences to failing to file a Form 8-K in a timely manner, including potential legal liability and subsequent unavailability of Rule 144 for resale of the company's securities by affiliates and restricted stockholders for 12 months after the late filing. Consequently, we believe that the 8-K requirements should be specific and with clearly defined triggering events. The materiality or significance of information and events is determined based on analysis of the facts and circumstances, and reasonable minds can differ as to the conclusion made. A generally stated requirement to disclose on Form 8-K all "material" or "highly significant" information or events would leave too much opportunity for the company's decisions to be second guessed.

Intel also believes that maintaining the current Item 5 permitting but not requiring issuers to file other relevant material information on Form 8-K is sufficient, and that a mandatory general filing requirement (under each new section or in a separate section) should not be imposed as it would result in a fundamental shift in the disclosure requirements under the securities laws. Absent a specific disclosure obligation under the rules or the issuer's assumption of a duty to update, there is currently no general legal duty for issuers to disclose material non-public information outside of the periodic reports on Form 10-Q and 10-K. A general Form 8-K disclosure requirement could force companies to disclose information on the suspicion that it might be material, before all developments related to the event have unfolded and the full impact of the event is understood. In addition, it is possible that efforts to minimize the impact of an event could be adversely affected by premature disclosure.

IV. Proposed Additional and Revised Form 8-K Items

The remainder of this letter sets forth our comments on some of the specific items proposed for inclusion in Form 8-K.

A. Entry into a Material Agreement (Item 1.01)

We have discussed above our concern that the proposed two-day deadline is too short to give companies adequate time to determine whether a definitive agreement is material and not entered into in the ordinary course of business (a "material, extraordinary agreement") and prepare an accurate filing. If agreements are required to be filed as exhibits, the filing deadline also must allow adequate time to determine whether any agreement containing sensitive information is a material, extraordinary agreement for either party, and then prepare, or monitor that the other party is appropriately preparing, a confidential treatment request.

We believe it is more advantageous to have disclosure and filing of definitive material, extraordinary agreements in the context of a full 10-Q or 10-K filing covering results of operations, rather than piecemeal on a current basis. This approach allows evaluation of the agreement in the context of current operating results. For this reason, we urge the Commission to consider whether the burdens imposed by an 8-K filing requirement for material, extraordinary agreements outweigh the perceived benefits of this disclosure.

If the Commission adopts a final rule requiring 8-K disclosure of entry into definitive material, extraordinary agreements, we suggest only requiring current disclosure of amendments if the amendment itself is material. In addition, the Commission should reconcile the materiality standard in Item 2.01 (acquisitions whose value or cost exceeds 10% of the company's total assets) with the standard for determining the agreement is outside of the ordinary course of business in Regulation S-K Item 601(b)(ii)(C) (acquisition or sale of any property, plant or equipment for a consideration exceeding 15% of consolidated fixed assets), and should apply a consistent standard for disclosure of acquisition transactions in Items 1.01 and 2.01. It is not sensible to require the disclosure of entry into an acquisition agreement in one item and then not require disclosure of the completion of the acquisition in the other item. Investor notification of the completion of the acquisition is more important than notification of the initial entry into the acquisition agreement.

The most troubling part of proposed Item 1.01 is the requirement to disclose letters of intent and other "non-binding agreements" and to file these documents as exhibits. This requirement is of concern because (a) it is likely to result in misleading disclosures of speculative transactions which may never come to fruition, or may be completed on significantly different terms, (b) it could require disclosure of multiple non-binding agreements for the same transaction as the negotiations proceed, (c) premature disclosure of some transactions could cause serious competitive harm, and (d) a disclosure requirement could have a chilling effect on transactions or delay the parties' willingness to begin reducing them to writing, potentially prejudicing the ability to complete the transactions.

It is unclear what constitutes a "non-binding" agreement. The Commission indicates this item is not meant to cover agreements still under negotiation. However, a letter of intent or non-binding agreement is inherently still under negotiation. It simply sets forth the framework for continued discussions and all of the terms are subject to change. In addition, there is nothing in the proposed item which clarifies whether, for example, disclosure would be required for an email exchange about the terms of a potential agreement accompanied by a consensus decision that the parties will proceed to negotiate a definitive agreement incorporating those terms. Disclosure of these types of informal communications would be misleading to investors and harmful to the parties, as the communications would likely be incomplete reflections of the parties' intentions and attempts to clarify them in the filing would be speculative.

The obligation to disclose non-binding agreements and letters of intent is a marked change from current disclosure practices. There is currently no obligation to file or disclose the potential of an acquisition until the parties have actually reached agreement on the terms. If the transaction is material to one of the parties, the parties may need to disclose the entry into any related binding agreements such as "no-shops." However, currently this type of agreement only has to be disclosed at a high level, indicating that the parties have entered into discussions and does not necessarily require identifying the particular business area or terms. If the target is a private company, the name of the target does not need to be disclosed.

At this stage of an acquisition, the terms of the deal are still subject to being substantially changed. The purchase price cannot be finally determined until diligence is completed and the other terms of the deal, including representations and warranties and indemnity provisions, have been agreed. Based on the due diligence, the structure of the transaction could completely change. In the meantime, employees and customers of the company would be put into a period of unnecessary uncertainty. The market would know the target company is in play and the price at which one company may be willing to buy it. Both companies would be concerned about stockholder liability if the acquisition is not completed or is completed at a different price, and stockholders have traded on the prospect of an acquisition on the terms disclosed in the letter of intent. In addition, the acquirer would be concerned about disruption of the transaction from competing bidders. If the terms of non-binding agreements have to be disclosed and filed, these concerns will cause the parties to delay as long as possible any attempts to put the material terms of the transaction in writing. We note also that the new requirement to file binding "no-shop" agreements as an exhibit to the 8-K report has many of the same concerns, because such agreements typically incorporate the status of the parties' negotiations on the principal terms. The new requirement to file the agreement as an exhibit could have a chilling effect on transactions.

There are other examples of hypothetical situations where the disclosure of non-binding agreements could cause serious harm to the company's business. A letter of intent for a potential supply agreement could be deemed material and not in the ordinary course of business under Item 601(b)(10)(ii)(B) of Regulation S-K because, for example, the particular component is needed for the continued distribution of the company's flagship product, which comprises 60% of the company's revenues, or alternatively, the company's purchases of the component are expected to comprise 60% of the supplier's revenues. Disclosure of the letter of intent could lock the company into terms that it could otherwise renegotiate as discussions continue. Competing suppliers would now know not only that the company is negotiating with someone else but also the terms on which the other agreement is being negotiated. The company's or the supplier's competitors could take any number of actions to disrupt or take advantage of the intended transaction. In the meantime, the term sheet may not reflect the final terms on which the supply agreement will be entered into; however, the analyst community will immediately have begun to speculate on the impact of the potential agreement on both parties. If the transaction does not proceed to a definitive agreement, or is concluded on different terms, disgruntled stockholders who traded on the basis of speculation about the impact of the agreement may seek to sue the company or the supplier to recover their losses.

We strongly urge the Commission to reconsider whether the perceived potential benefits to investors of knowing in advance about speculative transactions that may never be completed or may be completed on substantially different terms outweighs the serious potential costs to the company's business that may result from premature disclosure.

B. Termination of a Material Agreement (Item 1.02)

Proposed Item 1.02 would require disclosure when a material agreement not entered into in the ordinary course of business is terminated. It is daunting to contemplate a compliance procedure that would reach all of the employees in the company who might be the initial recipients of a written notice terminating an agreement. For a material extraordinary agreement, information about the written notice would eventually reach upper management, but the filing period for this type of disclosure must allow sufficient time for the information to be communicated to upper management, analyzed and the filing prepared.

In addition, the triggering event is unclear because disclosure is not required during negotiations or discussions regarding termination but disclosure is required once the company receives written notice of the termination. The receipt of a termination letter could be simply the first step in a negotiation process (indeed, some contracts contain escalation procedures for termination that begin with notice of intent to terminate). However, with an immediate filing obligation, the company could be left with insufficient time to pursue saving the contractual relationship and disclosure of the termination notice could reduce the potential for successful negotiations. If there is a dispute regarding the right to terminate an agreement, it would be a common tactic for the party seeking termination to send a formal termination notice to attempt to drive the matter to a conclusion. If the company believes the termination notice is invalid and is continuing to dispute and negotiate the termination, is disclosure required? If so, then the company would also need to disclose that the termination is disputed and the circumstances surrounding the dispute. This disclosure could upset already delicate negotiations and have serious additional commercial impact to the company when the disclosure is really premature. If the Commission determines to include this item in Form 8-K, we suggest modifying the triggering event so that disclosure is not required for notices of termination until an executive officer determines that good faith negotiations will not avoid the termination or litigation is filed related to a disputed termination.

C. Termination or Reduction of a Business Relationship with a Customer (Item 1.03)

Item 1.03 should be eliminated or the triggering event should be modified so it is tied to actual confirmation with a customer that a termination or reduction has occurred, and an executive officer's conclusion that it cannot be avoided by good faith negotiations and will result in a 10% or more decline in revenues. Tying the triggering event to executive officer "awareness" that the event has occurred requires speculation about whether the event has happened, followed by a public disclosure which potentially could do harm to the customer relationship and the company's financial prospects.

Many companies, including Intel, do business based primarily on purchase orders. There may be master agreements setting out general terms, but purchase orders would determine the amount of the customer's business. Consequently, no formal notification from customers is required when customers intend to reduce or terminate business, they simply cease making purchase orders. Over what period does the company have to track a reduction in the customer's purchase orders before an executive officer becomes aware that there is a loss of 10% or more of revenues and a filing is required? Are the executive officers required to speculate on the impact of customer financial difficulties or corporate events involving customers and then reach a conclusion that a reduction has occurred? Would the acquisition of a customer by a competitor, or the announcement of a design win with the competitor, followed by a decline in purchase orders trigger a speculative filing announcing that the company believes there has been a reduction in business with the customer? We do not believe that such speculative disclosure adds value to investors or the analyst community, and any perceived value from such speculative disclosure is outweighed by the prospects for liability to the company if the company makes a wrong guess and fails to disclose, or discloses and the speculation turns out to be incorrect.

The natural response to the above concern would be to tie the disclosure to some kind of communication with the customer confirming that the termination or reduction of business has in fact occurred. However, if customers have no obligation to notify, when would the company need to reach out and contact a customer to discuss what their level of business is going to be? Tying the disclosure to mere receipt of a written communication from the customer would also be problematic, because a tight filing deadline for disclosure on Form 8 K would not give the company a chance to negotiate with the customer and save the relationship. The obligation to make a filing could make the deterioration of the relationship a fait accompli. For this reason, we suggest, at a minimum, that the filing should not be triggered until an executive officer has concluded good faith negotiations will not avoid the reduction or termination.

We ask the Commission to consider these issues in seeking to clarify the triggering event for disclosure, and also to consider whether this type of disclosure is relevant enough to investors to justify current disclosure on a Form 8-K given the potentials for harm to the company's business or the business of the customer caused by the disclosure.

D. Creation of a Direct or Contingent Financial Obligation That is Material to the Registrant (Item 2.03)

If Item 2.03 is adopted as proposed, the requested disclosure is so broad that it will require daily monitoring of every agreement signed or purchase order issued by a company and its consolidated subsidiaries to determine if it contains any material payment obligations. The potential range of agreements covered by this proposed item is much broader than Item 1.01 because there is no "ordinary course of business" caveat. The term "financial obligation" goes beyond obligations of indebtedness and covers an extremely broad range of potential agreements. For example, this term could encompass any agreements which contain royalty payment obligations, "take or pay" supply arrangements which require the company to pay for materials whether or not they are used, purchase orders or agreements committing the company to pay for significant capital equipment or plant construction and other similar "ordinary course of business" obligations. Therefore, the disclosure called for by this item will impose a very significant compliance burden. Detailed disclosure of these types of business agreements also raises serious competitive concerns.

Section 401(a) of the Sarbanes-Oxley Act of 2002 (the "Sarbanes Act") amends the Exchange Act to require the Commission to issue final rules providing for disclosure of off-balance sheet transactions with unconsolidated entities in quarterly and annual reports. We believe that rather than imposing a current disclosure requirement with the breadth of Item 2.03 at this time, the Commission should step back and consider this proposed disclosure item in the context of the changes that will need to be made to the quarterly and annual reports in response to Section 401(a). We believe that a careful analysis will show that the majority of the disclosure called for by this item could be confined to the 10-Q and 10-K reports. Adopting Form 8-K requirements only in connection with the required changes to Forms 10-Q and 10-K will ensure that the disclosure rules for financial obligations are coordinated and non-duplicative.

In considering whether to impose any current disclosure requirement for financial obligations, and the deadline for such a filing, the Commission should take into account the fact that not all material contracts come to the executive officer group within a company for signature. Companies of Intel's size with extensive worldwide operations cannot operate efficiently without dispersed contract signature authority. The number of people who have authority to issue purchase orders under previously signed agreements is even larger.

The Commission should also take into account the recent exposure draft issued by the Financial Accounting Standards Board on Guarantor's Accounting and Disclosure Requirements for Guarantees that would require recognition of certain contingent guaranty obligations in the company's financial statements and/or require incremental disclosure, and consider whether improved financial statement disclosure will suffice.

Any current disclosure requirement adopted should be limited to financial obligations entered into outside of the ordinary course of business and with a specific materiality threshold of 5% of total assets. The Commission also should consider giving guidance on whether a contingent financial obligation includes, for example, opening a line of credit which has not yet been drawn down, and whether disclosure would be required for newly established master purchase agreements or only for material purchase orders issued under such an agreement. It would be quite difficult to assess the materiality of a master purchase agreement since the amount of products that will be purchased is unknown at time of entry into the agreement. Finally, because this item as drafted covers a number of potential business agreements that could contain sensitive proprietary information, the same comments made above in connection with Item 1.01 pertaining to confidential treatment requests would apply to the filing of agreements as exhibits under this item.

E. Events Triggering a Direct or Contingent Financial Obligation That is Material to the Registrant (Item 2.04)

This item has the same issues as Item 2.03 because of the breadth of the term "financial obligation" and the heavy compliance burden imposed on the company to confirm no events of default or acceleration have occurred under any ordinary course of business agreements containing material financial obligations. We recommend the Commission defer adoption of this item and consider it along with Item 2.03 and the required changes to Form 10-K and 10-Q under the Sarbanes Act. However, if the Commission proceeds to adopt a current filing requirement, we would suggest the following modifications to reduce the burden and confine the filings to the information most relevant to investors:

F. Exit Activities Including Material Write-Offs and Restructuring Charges (Item 2.05)

We believe that the triggering criteria for an 8-K disclosure of exit activities should be when the plan has been approved, an estimate of the related costs determined and agreed to by the appropriate officer, and an initial liability incurred. If there will not be a single, immediate charge, but the company expects to recognize costs over multiple accounting periods, the disclosure should be triggered by the officer's agreement on estimated costs, and should include an estimate of the total cost (if such an estimate is possible) and the amount expected to be recognized in the current accounting period.

With the changes in accounting principles included in SFAS No. 146 (Accounting for Costs Associated with Exit or Disposal Activities), commitment to a course of action is no longer necessarily the point at which a liability is incurred. A number of criteria, including communication to affected employees, must be met before employee termination costs are considered incurred and if continued employment is required beyond a minimum notification period, the cost will be accrued over the service period. Contract termination and other costs will not be recorded until a liability is incurred, e.g. until the contract is terminated. In many cases, a series of charges will be incurred over multiple accounting periods as opposed to one charge determined at the commitment date.

Under the rule as proposed, a plan that has been approved but has not been communicated to employees or customers and where no liability has yet been incurred would trigger an 8-K filing. A decision to exit a particular business activity is obviously of great concern to the impacted employees and customers of the company. This type of decision would not be made without some estimations of the related costs, but it would take a short period of time after approval of the initial plan to calculate estimated costs with the degree of certainty and accuracy required for an SEC filing. Our proposed modification to the triggering event would permit sufficient time for these estimates to be done, and also would permit employee and customer notifications to occur in an orderly manner while estimates of the related costs are being finalized.

G. Material Impairments (Item 2.06)

Intel believes that this item should be narrowed so that it applies only to unusual impairment decisions made during a quarter and does not require filings in any quiet period during which the company is preparing for a coordinated announcement of actual or expected financial results, e.g. from quarter close to earnings release. The Commission should clarify that the rule applies to unusual, individually material impairments that are not the result of routine balance sheet review processes which could take place at multiple times throughout a quarter, such as booking the bad debt reserve or inventory valuation on a monthly basis. Amounts determined at an interim point in a quarter will not necessarily represent the amounts that will be discussed in the quarterly financial statements, footnotes and MD&A, and public disclosure of these interim amounts will only serve to confuse the investor.

The triggering event for this filing requirement is when the board or the company's officer(s) authorized to make impairment decisions determines that a material impairment charge is required. We see significant issues with this triggering event as it relates to the processes that occur during quiet periods in preparation for a coordinated financial release. During these periods, companies typically will not comment on the company's financial results or operations. The reason for this is that discussions occur and decisions are made on a daily basis as to the data coming from the quarterly results and what bookings will be made to reflect that data. The quiet period permits the company to make a single, coordinated announcement to the investing public and the analyst community. Piecemeal disclosure of impairment information during the close process could cause serious market confusion, especially since the information would be disclosed at a time when the company is not yet in a position to give complete information about its results that would give context to the impairment information. Under the proposed item, it is conceivable that a company could have to make multiple 8-K filings during the quiet period, potentially on a piecemeal basis, each time there is a meeting with the Chief Financial Officer in which the company makes a decision on any impairments that will be taken. It is possible for a decision to appear "final" at one point during the close process and then be changed subsequently if new data emerges. An 8-K filing made on the basis of the initial "decision" would then need to be amended if the decision was reversed based on new data prior to the earnings release.

If Item 2.06 is added to Form 8-K, the Commission should incorporate a clear materiality standard to give issuer's certainty as to which impairments are material from an investor's point of view (as opposed to determining materiality for purposes of concluding whether to book the impairment). We would suggest incorporating a materiality threshold tied to a percentage of total assets or equity.

H. Rating Agency Decisions (Item 3.01)

Item 3.01 would require disclosure for communications from any rating agency to whom the company "provides information" other than routine SEC reports. We would suggest modifying the item so that it applies only to ratings issued by nationally recognized statistical rating organizations (as referred to in Rule 15c3-1 under the Exchange Act), such as S&P and Moodys, and to other rating agencies from whom the company has solicited a rating. A solicited rating or a rating given by a nationally recognized rating organization would require a higher degree of cooperation and attention from the company, and would be more likely to go through senior finance personnel who would know the related communications needed to be forwarded promptly to those responsible for SEC reporting. As an alternative, the Commission could give further guidance in the item as to what constitutes "providing information" to a ratings agency to make it clearer that a significant amount of information has to have been provided, or information has to have been provided on a regular basis, as opposed to responding to a one-off request.

I. Unregistered Sales of Equity Securities (Item 3.03)

As both an investor and a registrant, Intel believes that the Form 8-K disclosure requirements should be limited to only those disclosures that are most meaningful to investors, to avoid inundating investors with immaterial current information reports that obscure the truly important filings. While we believe that some of the proposed new items, such as Items 3.02 and 4.02, strengthen the Form 8-K requirements by adding disclosures that are truly significant and should be made on a current basis, Intel submits that proposed Item 3.03 should be reconsidered.

We believe that quarterly disclosure of unregistered sales of equity securities is sufficient. If the Commission believes that current disclosure should be required, it should be limited only to material issuances. If Item 3.03 is included in Form 8-K, we suggest limiting its coverage to unregistered issuances of a material percentage of equity securities, such as 5% of outstanding shares (perhaps with the same aggregation principles as in Regulation D to prevent companies from doing multiple offerings to avoid the filing), and perhaps to any unregistered issuances of securities to directors and executive officers. Disclosure of immaterial issuances could then be included in the next 10-Q or 10-K filing.

J. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report (Item 4.02); Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers (Item 5.02)

We have only minor comments about these proposed items. The Commission should clarify that the company may file the accountant's agreement or disagreement with the disclosure at the same time as the company makes its filing, if the company is able to do so. In addition, if the accountant's comments are not incorporated into the initial filing, the accountant should have a designated time period of perhaps five business days in which to respond to the filing. The item should expressly provide that if the accountant does not submit a timely response, the company need take no further action.

We similarly suggest incorporating a requirement in item 5.02(a) for the director to submit his or her response within a prescribed period of time, such as five business days, and expressly provide that if the director does not submit a timely response, the company need take no further action. We also suggest modifying Items 5.02(b) and (c) to clarify that the disclosure only needs to be made with respect to officers (including officers who will no longer be directors as a result of the change in their officer status) when the officer or the company otherwise publicly announces the departure, reassignment or appointment to a new office. We believe this change is necessary to clarify the exact timing of the triggering event in situations where no written notification is received or given, and to permit the company to announce officer changes in an orderly manner within the company.

Intel is proposing a filing deadline of five business days for these items. However, if a two-day deadline is set for Item 5.02, it may not allow sufficient time for collection of data required under Items 5.02(c)(2),(3) and (4) and 5.02(d)(4), and the instructions should permit this information to be added by subsequent amendment.

K. Material Events Regarding the Registrant's Employee Benefit, Retirement and Stock Ownership Plans (Item 5.04)

If Item 5.04 were to be included in Form 8-K, it would need to be reconciled with Section 306 of the Sarbanes Act to avoid having different disclosure obligations under ERISA and the securities laws for retirement plans, and to clarify the applicability to stock-based plans. However, Intel believes that the inclusion of Item 5.04 is unnecessary and inadvisable because it will require companies to file 8-K reports for routine administrative events, e.g., blackouts related to transition to the systems and processes of a new service provider for the plan, that are only of significance to plan participants, notice to plan participants is already required elsewhere and an 8-K filing would be inadequate to notify the plan participants. We believe that the proposed disclosure of routine administrative blackouts has no relevance to, and could in fact be confusing and potentially misleading to, the general investing public who could attach unnecessary significance to the matter. Therefore, we submit that it is inappropriate to add this item to Form 8-K.

Participant notification of administrative blackouts is adequately covered under existing laws. We believe such disclosure was implicitly required under ERISA prior to adoption of the Sarbanes Act. However, Section 306 of the Sarbanes Act now expressly imposes participant notification requirements for administrative blackouts applicable to retirement plans. We also believe that companies who fail to provide adequate notification about administrative blackouts to participants in stock-based compensation plans similarly expose themselves to the possibility of liability claims under the securities laws or state employment and contract laws. We do not believe that an 8-K filing would be a meaningful supplement to our typical participant communications, nor do we believe that an 8-K filing would satisfy Section 306, since that section requires notifications to be written in a form that is understandable to the average plan participant. The format of an 8-K report is too formal and unfamiliar to employees, and we would not rely on our plan participants to routinely check the SEC's EDGAR web site for 8-K filings by the company. We believe individual participant notices and postings on the company's employee web site are far more effective to notify plan participants of these types of events.

We do not believe companies should be burdened with a current 8-K reporting obligation unless there is a significant interest in informing investors immediately of the event. The only possible significance that an administrative blackout has to investors who are not plan participants is a narrow interest in knowing when retirement plan administrative blackouts have occurred, so that if director or officer trading occurred during the blackout period, and the company fails to bring an action to recover any profits, the stockholder may bring an action to recover such profits on behalf of the company under Section 306(a)(2)(B) of the Sarbanes Act. If the Commission believes this narrow interest justifies disclosure, we submit that disclosure in the next 10-Q or 10-K filing should be sufficient.

V. Disclosure Regarding Waivers of Corporate Codes of Conduct

The Commission has sought comment on whether it should propose a Form 8-K item requiring disclosure of waivers of corporate ethics or conduct rules. Section 406 of the Sarbanes Act directs the Commission to propose regulations addressing periodic disclosure regarding whether or not the issuer has adopted a code of ethics, and immediate disclosure of any changes in or waivers of the code of ethics, for "senior financial officers." In addition, both the New York Stock Exchange and Nasdaq have proposed rules requiring publication of issuers' codes of ethics applicable to executive officers and directors and disclosure of waivers granted to those individuals.

In adopting final rules, the Commission will need to reconcile the differences among these pronouncements and provide issuers with a comprehensive but non-duplicative mechanism for making the required disclosures. The triggering event for waiver disclosure should be approval by the committee or officer designated by the company to approve such waivers. Intel also urges the Commission to give clearer guidance to issuers on whether immaterial waivers must be disclosed. Intel has adopted a detailed set of corporate business principles that are applicable to all employees and there are situations in which mundane, immaterial waivers of these principles can be appropriate. For example, Intel has a guideline that employees should not give or receive gifts with a value of greater than $25. This guideline is subject to certain stated exceptions, but the company also approves case-by-case exceptions, e.g., for giving gifts of a greater value in connection with ceremonial events such as the celebration of the closing of a significant transaction. The Commission's rules on waiver disclosures should be directed to only the most material aspects of the code of ethics, to avoid unnecessary filing obligations for immaterial disclosures.

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We thank you for consideration of our views and we would be pleased to discuss the issues further at your convenience. I can be contacted at 408-765-9771, or you can contact Cary Klafter, Legal Department Director of Corporate Affairs, at 408-765-1215, Barbara Canup, External Reporting Controller, at 408-653-7939, or John Hertz, Accounting Policy Controller, at 503-696-7476.

Very truly yours,

/s/ Patrice C. Scatena

Patrice C. Scatena
Senior Counsel, Corporate Affairs and Treasury Operations
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052-8119