6c9b165cc8b8487

VOTING PROCEDURES

Your vote is very important. Your shares can only be voted at the Annual Meeting if you are present or represented by proxy. Whether or not you plan to attend the Annual Meeting, you are encouraged to vote by proxy to assure that your shares will be represented. Most shareholders have a choice of voting by the Internet, a toll-free telephone number or requesting and completing a proxy card and mailing it in the postage-paid envelope provided. Please refer to your Notice of Availability of Proxy Materials to see which options are available to you. Proxies submitted by telephone or online must be received by 12:00 midnight, EDT, on Tuesday, May 7, 2013.

You may revoke your proxy at any time before it is voted at the Annual Meeting by (a) giving written notice to our Secretary, (b) submitting a proxy bearing a later date, or (c) casting a ballot at the Annual Meeting. Properly executed proxies that are received before the Annual Meeting’s adjournment will be voted in accordance with the directions provided. If you submit a proxy without providing directions, your shares will be voted by the individuals named on your proxy card as recommended by our Board. If you wish to give a proxy to someone other than those named on the proxy card, cross out those names and insert the name(s) of the person(s), not more than three, to whom you wish to give your proxy.

Who can vote? Shareholders of record as of the close of business on March 12, 2013 are entitled to vote. On that day, 126,340,672 shares of Common Stock were outstanding and eligible to vote. A list of shareholders eligible to vote will be available at our headquarters, located at 1001 Murphy Ranch Road, Milpitas, CA, 95035, beginning April 23, 2013. Shareholders may examine this list during normal business hours for any purpose relating to the Annual Meeting.

How does the Board recommend I vote? The Board recommends a vote “FOR” each Board nominee (Item 1), “FOR” the ratification of the Board of Directors’ appointment of KPMG LLP as our independent registered public accountants for the upcoming year (Item 2), “FOR” the approval of an amendment to our Amended and Restated 2008 Equity Compensation Plan to modify the individual award limit cap for participants (Item 3), and “FOR” approval of the compensation of our NEOs (Item 4).

What shares are included in the proxy card? The proxy card represents all the shares of voting stock registered to your account. Each share is entitled to one vote on each matter presented other than in the election of Directors. Our Amended and Restated Certificate of Incorporation provides for cumulative voting for Directors. With cumulative voting, at each election of Directors, each holder of Class A Common Stock is entitled to votes equal to the number of shares they hold multiplied by the number of Directors to be elected. The holder may cast all of their votes for a single candidate or may distribute them among any number of candidates.

How are votes counted? The Annual Meeting will be held if a quorum, consisting of a majority of the outstanding shares of common stock entitled to vote, is represented. Broker non-votes and abstentions will be counted for purposes of determining whether a quorum has been reached. The affirmative vote of a majority of eligible shares present, in person or by proxy, at the Annual Meeting, and actually cast, is required to approve all matters. When nominees, such as banks and brokers, holding shares on behalf of beneficial owners do not receive voting instructions from the beneficial owners, the nominees may vote those shares only on routine matters such as the ratification of the appointment of independent accountants. On all non-routine matters, such as the election of Directors, nominees who have not received instructions from beneficial owners cannot vote and there is a so-called “broker non-vote” on that matter. Broker non-votes and abstentions are not counted in tabulations of the votes cast by shareholders and will have no effect in determining whether there has been an affirmative majority vote on a particular matter.

Who will count the vote? Broadridge Financial Solutions, Inc. will tally the vote, which will be certified by the Inspector of Elections.

Is my vote confidential? Proxies, ballots and voting tabulations are available for examination only by the Inspector of Elections and tabulators. Your vote will not be disclosed to the Board or to our management other than the Inspector of Elections and except as may be required by law.

Table of Contents

CORPORATE GOVERNANCE

In accordance with Delaware General Corporation Law and our Amended and Restated Certificate of Incorporation and Restated Bylaws, our business, property and affairs are managed under the direction of the Board. The Board has responsibility for reviewing our overall performance rather than day-to-day operations. Its primary responsibility is to oversee the actions of our management, and in so doing, serve the best interests of Intersil and its shareholders. The Board selects and provides for the succession of executive officers, and subject to recommendations by the Nominating and Governance Committee, nominates individuals to serve as directors upon election at our Annual Meeting or to fill any vacancies on the Board. The Board reviews corporate objectives and strategies, and evaluates and approves significant policies and proposed major commitments of corporate resources. The Board participates in decisions that could have a significant economic impact on Intersil. Management keeps the Directors informed of corporate activities through regular written reports and presentations at Board and committee meetings.

The Board believes that good corporate governance practices are essential to fostering good shareholder relations and creating shareholder value. We continually review our governance practices to ensure their relevance and appropriateness for Intersil and all of our shareholders. The Board’s corporate governance guidelines (which includes director independence criteria), the charters of each of the Board’s committees, our code of corporate conduct, and our code of ethics for our Chief Executive Officer and senior financial officers are available on the Investor Relations pages of our website at www.intersil.com. Shareholders may request copies of these documents free of charge by writing to Intersil Corporation, 1001 Murphy Ranch Road, Milpitas, CA 95035, Attn: Investor Relations.

Board Leadership Structure. The roles of Chief Executive Officer (“CEO”) and Chairman of the Board are separate in recognition of the differences between the two roles. The CEO provides the strategic direction and the day-to-day leadership and performance, while the Chairman of the Board is an independent director with well-defined roles and responsibilities. This leadership structure is appropriate given that, among other things, the Chairman provides guidance to the CEO, presides over Board meetings and executive sessions which take place at each regularly scheduled Board meeting, acts as the liaison between the independent directors and the CEO, and facilitates full and open discussion among management and the independent directors. We believe that this structure allows the Board to fulfill its duties effectively and efficiently.

Members of the Board and its Committees. The table below provides a list of our Directors as well as the Committee(s) on which they served in 2012. Each of the incumbent Directors attended at least 83% of the total number of Board and Committee meetings on which they served. In February 2013, Mercedes Johnson and Donald Macleod became members of the Compensation Committee and Greg Lang transferred to the Nominating and Governance Committee.

Directors	Audit Committee	Compensation Committee	Nominating and Governance Committee
Robert W. Conn^[1]	Robert W. Conn	James V. Diller^[3]	James V. Diller^[3]
James V. Diller, CEO	Mercedes Johnson	Gary E. Gist	Jan Peeters
Gary E. Gist^[1],[4]	Jan Peeters^[2]	Gregory Lang	Robert N. Pokelwaldt^[2]
Mercedes Johnson^[1]	Robert N. Pokelwaldt	James A. Urry^[2]	James A. Urry
Gregory Lang^[1]
Donald Macleod (Chairman)^{[1], [4}^]
Jan Peeters^[1]
Robert N. Pokelwaldt^[1]
James A. Urry^[1]

Nine Board of Director meetings were held in 2012; five actions were taken by unanimous written consent	Nine Audit Committee meetings were held in 2012; no actions were taken by unanimous written consent	Ten Compensation Committee meetings were held in 2012; six actions were taken by unanimous written consent	Four meetings were held by the Nominating and Governance Committee in 2012; one action was taken by unanimous written consent

Table of Contents

[1] The Board has determined that these Directors are independent under the listing standards of The NASDAQ Stock Market.

[2] Chairman of the Committee.

[3] Effective December 9, 2012, Mr. Diller was appointed Interim President and CEO of Intersil. He is ineligible to serve as a member of the Compensation Committee or the Nominating and Governance Committee during the period in which he serves as an interim officer of Intersil.

[4] Effective December 9, 2012, Mr. Gist resigned as Chairman of the Board and Mr. Macleod was appointed Chairmain of the Board.

Directors Attendance at the Annual Meeting. We strongly encourage each of our Directors to attend the Annual Meeting. Last year, each of the incumbent Directors, except Robert Conn, attended the Annual Meeting.

Committees of the Board. The Board has established three standing committees: the Audit Committee, the Compensation Committee and the Nominating and Governance Committee. The charter of each committee is available on the Investor Relations section of our website at www.intersil.com.

Audit Committee—maintains the sole responsibility to appoint, approve engagements of, and oversee the independence and performance of our independent accountants. In addition, the Audit Committee oversees the integrity of our financial reporting and compliance with laws and regulations related to our financial reporting. They also have the responsibility to establish procedures for the receipt and treatment of complaints regarding our financial reporting, internal accounting controls or other related auditing matters. The Audit Committee has the authority to engage counsel and other advisors to assist in carrying out its responsibilities. Messrs. Peeters and Pokelwaldt, and Ms. Johnson qualify as “financial experts” according to applicable securities laws and SEC regulations, and each has been designated by the Board as a financial expert.

Compensation Committee—reviews and approves the compensation of executive officers and certain other highly compensated individuals. In addition, the Compensation Committee administers certain benefit plans and makes recommendations to the Board regarding compensation of Board members. They also have the authority to administer, grant and issue awards under our equity compensation plan. The Board has determined that each member of the Compensation Committee is an “outside director” within the meaning of the Treasury Regulations promulgated under Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”.)

Nominating and Governance Committee—identifies, reviews, evaluates and recommends potential candidates to serve on the Board, as Chairman and as members of committees. In addition, the Nominating and Governance Committee serves as a focal point for communication between such candidates, our Directors who are not members of the Nominating and Governance Committee, and our management. They also monitor, evaluate and recommend corporate governance guidelines.

The Board’s Role in Risk Oversight. The Board’s role in our risk oversight process includes receiving regular reports from members of senior management on areas of material risk to Intersil, including operational, financial, legal, regulatory, and strategic risks. The Audit Committee of the Board regularly reviews areas of material risk through an ongoing process of Enterprise Risk Management (“ERM”) to understand company-wide risk identification, risk management and risk mitigation strategies. The ERM process reviews areas of material risk at least annually and such reviews are discussed with the Audit Committee on a regular basis. The Chairman of the Audit Committee reports on the discussion during the next full Board meeting. The Board provides management guidance through the ERM process. This process enables the Board and its Committees to coordinate the risk oversight role, particularly with respect to risk interrelationships. We believe that the practices described above combined with our current leadership structure facilitate effective Board oversight of our significant risks.

Shareholder Communications. Parties interested in communicating directly with any of the individual Directors or the Board as a group may do so by writing to Investor Relations via e-mail at , or by mail to Intersil Corporation, 1001 Murphy Ranch Road, Milpitas, California 95035. Our policy is to deliver such communications directly to the Board.

Table of Contents

Director Compensation and Related Party Transactions. Outside Directors are compensated in quarterly installments at the below annual amounts. These amounts are paid directly to each Director with the exception of Mr. James A. Urry, an employee of Augusta Columbia Capital Group LLC, who had a portion of his cash compensation payable for Board and committee memberships paid directly to Augusta Columbia Capital Group LLC for the period of January 2012 through September 2012.

	Chairman	Members
Board Members	$ 75,000	$ 45,000
Audit Committee	$ 20,000	$ 10,000
Compensation Committee	$ 12,000	$ 6,000
Nominating and Governance Committee	$ 10,000	$ 5,000

Director compensation is generally reviewed annually. In order to enhance the alignment of interests between Directors and shareholders, Directors are required to own a certain minimum dollar value of Intersil common stock. In 2012, the common stock ownership requirement was twice the value of the annual retainer, which must be attained by the fifth anniversary of the date of the Director’s initial election to the Board. Each non-employee director has either met this requirement or is on track to do so within the designated period.

Outside Directors also receive equity compensation consisting of a one-time appointment grant of 4,000 deferred stock units (“DSUs”) and stock options to purchase 25,000 shares of Intersil common stock. Thereafter, Outside Directors receive an annual grant of 4,000 DSUs and stock options to purchase 5,000 shares of Intersil common stock.

Directors are reimbursed for travel expenses incurred while attending Board and committee meetings. Related party transactions, if any, are reviewed by the Audit Committee. There were no related party transactions during fiscal year 2012.

Compensation Committee Interlocks and Insider Participation. During fiscal year 2012, no member of the Compensation Committee while serving as such was an officer or employee of Intersil, or any of its subsidiaries, or was formerly an officer of Intersil or any of its subsidiaries, other than Mr. Diller, who was formerly the CEO of Elantec Semiconductor, Inc., an Intersil subsidiary. Effective December 9, 2012, Mr. Diller is no longer a member of the Compensation Committee as a result of his appointment as our Interim President and CEO. No member of the Compensation Committee had any relationship requiring disclosure under any paragraph of Item 404 or Item 402(j)(3) of Regulation S-K.

Submission of Director Nominations. The Nominating and Governance Committee will consider director nominees submitted by shareholders in accordance with the procedures set forth in our Restated Bylaws. Those procedures require a shareholder to deliver notice to our Secretary or Assistant Secretary at our principal executive offices. Delivery generally must be not less than 90 or more than 120 days prior to the first anniversary of the preceding year’s Annual Meeting of Shareholders. If the date of the Annual Meeting is more than 30 days before or more than 70 days after such anniversary date, notice by the shareholder must be delivered between 90 and 120 days prior to the Annual Meeting or, if the first public announcement of the date of the Annual Meeting is less than 100 days prior to the Annual Meeting, the 10th day following the public announcement.

Such notice must be in writing and must include:

(i)	the name and address of the nominating shareholder, as they appear in shareholder listings,

(ii)	the class and number of shares of Intersil stock which are owned beneficially and of record by the nominating shareholder,

(iii)

the nominee’s written consent to being listed in the proxy statement as a nominee and to serving as a director if elected, and

(iv)

any information regarding the nominee that is required under Regulation 14A of the Exchange Act to be included in a proxy statement relating to the election of Directors. Candidates recommended by the shareholders are evaluated on the same basis as other candidates (other than Directors standing for re-election) recommended by our Directors, officers, third party search firms or other sources.

Table of Contents

Criteria and Diversity. Among the minimum qualifications, skills, and attributes that the Nominating and Governance Committee looks for in nominees are the following:

(a)	integrity, competence, and judgment essential to effective decision-making,

(b)	ability and willingness to commit the necessary time and energy to prepare for, attend, and participate in meetings of the Board and one or more of its standing committees,

(c)	freedom from other outside involvements that would materially interfere with the individual’s responsibilities as a director,

(d)	background and experience that complements or supplements the background and experience of other Board members,

(e)	freedom from interests that would present the appearance of being adverse to, or in conflict with, the interests of Intersil, and

(f)	a proven record of accomplishment through demonstrated leadership in business, education, government service, finance, manufacturing or other relevant experiences that would tend to enhance Board effectiveness.

The evaluation process may include a comprehensive background and reference check, a series of personal interviews with members of the Board and the Nominating and Governance Committee, and a thorough review by the Committee of the nominee’s qualifications and other relevant characteristics, taking into consideration the criteria set forth above. In addition, the Nominating and Governance Committee considers cultural and geographical diversity in the director identification and nomination process as described in our Corporate Governance Guidelines. If the Committee determines that a candidate should be nominated for election to the Board, it will present its findings and recommendation to the full Board for approval.

Majority Voting for Directors. In February 2012, our Board amended our Bylaws to provide for a majority voting standard for the election of our directors in uncontested elections. Previously, our Bylaws were silent as to the voting standard for directors, and directors were elected using a plurality standard set forth in the Delaware General Corporation Law. In contested director elections, the plurality standard will apply, which means the nominees receiving the greatest numbers of votes will be elected to serve as directors. To be elected in an uncontested election, the votes “for” a director must exceed the votes “against” the director. Abstentions and any broker non-votes will have no effect on the election of directors. If an incumbent director is not elected and no successor has been elected at the meeting, he or she will promptly tender his or her conditional resignation following certification of the vote. The Nominating and Governance Committee will consider the resignation offer and recommend to the Board whether to accept such offer. The Board will act on the recommendation within 90 days following receipt of the tender. After coming to a decision, the Board will publicly disclose its decision whether to accept the director’s resignation offer (and the reasons for rejecting the offer, if applicable). If the Board does not accept the resignation, the director will continue to serve until the next annual meeting and until a successor has been elected and qualified or until his or her earlier resignation, removal or death. If the Board accepts the resignation, then the Board, in its sole discretion, may fill any resulting vacancy or may decrease the size of the Board. The election of directors at the Annual Meeting is an uncontested election and thus the majority voting standard applies.

Table of Contents

ELECTION OF DIRECTORS

ITEM 1 ON PROXY BALLOT

Directors are elected at each Annual Meeting and hold office until the election held at the following Annual Meeting. A majority of the votes of eligible shares present in person or by proxy and actually cast is required for the election of directors. Our Amended and Restated Certificate of Incorporation, and our Restated Bylaws, provide for a Board of not fewer than five and not more than eleven members. The Board currently consists of ten Directors.

Director candidates are nominated by the Board upon the recommendation of the Nominating and Governance Committee. The Nominating and Governance Committee has recommended the ten nominees below, each of whom is currently a Director. Shareholders are also entitled to submit the names of director candidates for consideration by the Nominating and Governance Committee in accordance with the procedures set forth in our Restated Bylaws and summarized under the heading “Corporate Governance—Submission of Director Nominations.”

The person named on the form of proxy will vote the shares “FOR” the nominees, unless you instruct otherwise. Each nominee has consented to stand for election. In the event that one or more of the nominees should become unavailable to serve at the time of the Annual Meeting, the shares represented by proxy will be voted for the remaining nominees and any substitute nominee(s) designated by the Board. Shareholders may cumulate their votes for Directors, and the Director elections are then determined by a majority of the votes cast.

Director Qualifications

Our Director nominees have a reputation for integrity, honesty and adherence to high ethical standards. Each Director has demonstrated business acumen and an ability to exercise sound judgment, as well as a commitment of services to Intersil and our Board. Finally, we value their significant experience on other boards of directors.

The following biographies provide a brief description of each nominee’s age, principal occupation and business experience, (as of March 12, 2013) and Directorships held in other corporations.

Nominees	Positions and Offices Held with Intersil
Necip Sayiner	President, CEO and Director
Donald Macleod	Chairman of the Board
Robert W. Conn	Director
James V. Diller	Director
Gary E. Gist	Director
Mercedes Johnson	Director
Gregory Lang	Director
Jan Peeters	Director
Robert N. Pokelwaldt	Director
James A. Urry	Director

BUSINESS EXPERIENCE OF DIRECTORS

Dr. Necip Sayiner, President, CEO and Director, age 47, has served as our President, CEO and Director since March 14, 2013. Prior to joining Intersil, from September 2005 to April 2012, he served as President and Chief Executive Officer, and Director of Silicon Laboratories, a fabless semiconductor company engaged in the design of analog-intensive, mixed-signal integrated circuits. Prior to joining Silicon Laboratories, Dr. Sayiner held various leadership positions at Agere Systems Inc., which included Executive Vice President and General Manager, Enterprise and Networking Division from August 2004 to September 2005; and Vice President and General Manager, Networking ICs Division from March 2002 to August 2004. Dr. Sayiner’s qualifications to serve as a Director include his analog integrated circuit company management experience, including President, CEO and Director at a publicly-traded semiconductor company and his product development and engineering experience.

Table of Contents

Donald Macleod, Chairman of the Board. Mr. Macleod, age 64, has been Chairman of the Board since December 2012. Mr. Macleod joined our Board as a Director on September 4, 2012. Mr. Macleod served as President and CEO of National Semiconductor Corporation, an analog semiconductor company, from November 2009 to September 2011 when National Semiconductor was acquired by Texas Instruments Incorporated. Mr. Macleod joined National Semiconductor in 1978 and served in a variety of executive positions prior to becoming CEO, including Chief Operating Officer and CFO. He served as the Chairman of the Board of National Semiconductor from May 2010 to September 2011 and currently serves on the Board of Directors of Avago Technologies Limited, a global manufacturer of optoelectronics and analog interface components, a position he has held since November 2007. Mr. Macleod also serves on the Board of Directors of a privately-held company. Mr. Macleods’ qualifications to serve as a Director include his more than 30 years of experience in senior management and executive positions in the semiconductor industry (both in Europe and the United States), his experience as a financial executive at a semiconductor company and as a board member of publicly-traded semiconductor companies.

Robert W. Conn, Director. Dr. Conn, age 70, has been a Director since April 2000. Dr. Conn was appointed President and director of the Kavli Foundation, a philanthropic organization, in April 2009. Dr. Conn has been President of Conn Engineering & Consulting, Inc. since 2002. In addition, he has been a Professor and Dean of Engineering, Emeritus, at the University of California, San Diego since 2004. From 2002 to 2008, Dr. Conn was Managing Director of Enterprise Partners Venture Capital. From 1994 to July 2002, Dr. Conn was the Dean of the Jacobs School of Engineering, University of California, San Diego, and the Walter J. Zable Endowed Chair in Engineering. Dr. Conn served on the Board of Directors of ChipPAC, Inc. from 2002 through 2004, and on the Board of Directors of STATS ChipPAC, Inc. from 2004 through 2007. Presently, he is a member of the National Academy of Engineering. Dr. Conn has previously served on the Board of Directors of several privately-held companies. Dr. Conn’s qualifications to serve as a Director include his academic experience as Professor of Engineering and Dean of a major university engineering department and his experience as a venture capitalist specializing in technology companies.

James V. Diller, Director. Mr. Diller, age 77, has been a Director since May 2002. He served as Interim President and CEO of Intersil from December 9, 2012 to March 13, 2013. Mr. Diller is a retired Chairman of the Board of Elantec Semiconductor, Inc., a post he held from 1997 to May 2002. Mr. Diller served as a Director of Elantec Semiconductor, Inc. from 1986 to May 2002 when Elantec was acquired by Intersil. From November 1998 to July 2000, he served as Elantec’s President and CEO. Mr. Diller is a founder of PMC-Sierra, Inc., a company that engages in the design, development, marketing, and support of communications semiconductors, storage semiconductors, and microprocessors and was its President and CEO from 1983 to 1997; he is currently Vice Chairman of the Board of Directors. In addition, Mr. Diller became Chairman of the Board of Avago Technologies Limited, a global manufacturer of optoelectronics and analog interface components, in January 2010 and previously served on the Board of Avago since December 2005. He was a Director of Sierra Wireless, Inc. from 1993 through 2003. Mr. Diller’s qualifications to serve as a Director include his extensive analog IC company management experience in positions such as Chairm

Gary E. Gist, Director. Mr. Gist, age 66, has served as a Director since our inception in August 1999 and as Chairman of the Board from May 2005 to December 2012. Mr. Gist served as vice president of Palomar Display Products, a privately held company that engages in the development and integration of displays and computer systems for demanding applications used in harsh environments. He has also served as a member of the Board of Directors of Palomar Display Products since May 2009. From 1995 to 2008, Mr. Gist served as the President and CEO of Palomar Technological Companies. Mr. Gist also serves on the Board of Directors of a privately-held company. Mr. Gist’s qualifications to serve as a Director include his management experience as Director, CEO and President of a technology company providing products to the semiconductor industry and his financial experience as a CPA with a prominent public accounting firm.

Mercedes Johnson, Director. Ms. Johnson, age 59, has been a Director since August 2005. Ms. Johnson was previously the Senior Vice President of Finance and Chief Financial Officer (“CFO”) at Avago Technologies from November 2005 until her retirement in August 2008. Prior to her employment with Avago, Ms. Johnson worked for Lam Research Corporation, serving as its Senior Vice President of Finance from June 2004 to January 2005, and as its CFO from April 1997 to May 2004. Ms. Johnson has served as a member of the Board of Directors of Micron Technology, Inc. since June 2005 and has served as a member of the Board of Directors of Juniper Networks since May 2011. She also served on the Board of Directors for Storage Technology Corporation from January 2004 to August 2005. Ms. Johnson’s qualifications to serve as a Director include her experience as a senior financial executive at semiconductor and semiconductor equipment companies, and as a board member of publicly-traded semiconductor companies.

Table of Contents

Gregory Lang, Director. Mr. Lang, age 49, has been a Director since February 2006. Mr. Lang has served as President, CEO and Director of PMC-Sierra, Inc., a company that engages in the design, development, market and support of semiconductor solutions for storage, mobile and optical networks, since May 2008. In March 2008, Mr. Lang resigned his position as President, CEO and Director of Integrated Device Technology Inc. (“IDT”). Mr. Lang joined IDT as President in October 2001, was appointed CEO in January 2003 and elected to the IDT Board of Directors in September 2003. Prior to joining IDT, Mr. Lang held the position of Vice President and General Manager of Intel’s platform networking group. Previously he managed Intel’s Ethernet, storage I/O processing, home networking and broadband businesses. Mr. Lang’s qualifications to serve as a Director include his more than 25 years of experience in the semiconductor industry in positions including CEO, President and Vice President and General Manager.

Donald Macleod, Director. Mr. Macleod, age 64, has been Chairman of the Board since December 2012. Mr. Macleod joined our Board as a Director on September 4, 2012. Mr. Macleod served as President and CEO of National Semiconductor Corporation, an analog semiconductor company, from November 2009 to September 2011 when National Semiconductor was acquired by Texas Instruments Incorporated. Mr. Macleod joined National Semiconductor in 1978 and served in a variety of executive positions prior to becoming CEO, including Chief Operating Officer and CFO. He served as the Chairman of the Board of National Semiconductor from May 2010 to September 2011 and currently serves on the Board of Directors of Avago Technologies Limited, a global manufacturer of optoelectronics and analog interface components, a position he has held since November 2007. Mr. Macleod also serves on the Board of Directors of a privately-held company. Mr. Macleods’ qualifications to serve as a Director include his more than 30 years of experience in senior management and executive positions in the semiconductor industry (both in Europe and the United States), his experience as a financial executive at a semiconductor company and as a board member of publicly-traded semiconductor companies.

Jan Peeters, Director. Mr. Peeters, age 61, has been a Director since April 2000. Mr. Peeters is Chairman and CEO of Olameter Inc., a meter asset and data management company, which he formed in 1998. He presently serves, since 1998, as Chairman of Cogeco Inc. and Cogeco Cable Inc., publicly-traded Canadian companies in the areas of broadcasting and cable. In addition, Mr. Peeters serves as Chairman, since 2009, on the Board of GFFI, a small-cap financing company. Mr. Peeters served as Chairman on the Board of iNovia Capital, a venture capital company from 1999 to 2011. He also served as Governor of McGill University from 1999 to 2009 and he served on the Board of Directors of Call-Net, a publicly-traded Canadian telecommunications company, from 1999 to 2002. He was previously founder, vice-chairman, president and CEO of Fonorola Inc., a facilities-based long-distance telephone company from 1988 to 1998, at which time it was acquired by Call-Net Enterprises Inc. Mr. Peeters’ qualifications to serve as a Director include his senior executive experience at public and private companies in positions such as Chairman, Director and CEO.

Robert N. Pokelwaldt, Director. Mr. Pokelwaldt, age 76, has been a Director since April 2000. Mr. Pokelwaldt was previously Chairman and CEO of YORK International Corporation, a manufacturer of air conditioning and cooling systems from January 1993 until his retirement in October 1999. While at YORK International Corporation, he also served as President, CEO and Director from June 1991 to January 1993 and was President and Chief Operating Officer from January 1990 to June 1991. Mr. Pokelwaldt retired from the Board of Directors of Carpenter Tech in May 2004 and he retired from the Board of Directors of Mohawk Industries, Inc. in May 2011. Mr. Pokelwaldt’s qualifications to serve as a Director include his senior executive experience at public and private companies in positions such as Chairman, Director and CEO.

James A. Urry, Director. Mr. Urry, age 59, has been a Director since our inception in August 1999. Mr. Urry has served as Chief Investment Officer and Managing Partner at Augusta Columbia Capital Group LLC since May 2011. Prior to this, Mr. Urry was a Partner at Court Square Capital Partners, a private equity firm from July 2007 to May 2011. Court Square Capital Partners was established as a result of a spin-off from Citigroup Venture Capital Ltd. in 2007. Previous to this, Mr. Urry was a Partner at Citigroup Venture Capital Ltd. from 1989 to June 2007. Mr. Urry served on the Board of Directors of Lyris, Inc. from June 2007 to August 2011 He also served as a Director of AMI Semiconductor prior to the merger of AMI and ON Semiconductor on March 12, 2008. Mr. Urry’s qualifications to serve as a Director include his experience as a senior executive at private equity firms, and as a Director at a public semiconductor firm.

The Board of Directors recommends a vote “FOR” each of the nominees listed.

Table of Contents

RATIFICATION OF APPOINTMENT OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

ITEM 2 ON PROXY BALLOT

The Board, acting upon the recommendation of the Audit Committee, asks that the shareholders ratify the selection of KPMG LLP as Intersil’s independent registered public accounting firm to audit and report upon our financial statements for the 2013 fiscal year. Ratification requires the affirmative vote of a majority of eligible shares present at the Annual Meeting in person or by proxy and actually cast. Unless otherwise specified by the shareholders, the shares of stock represented by the proxy will be voted FOR ratification of the appointment of KPMG LLP as our independent accountants.

In the event the shareholders fail to ratify the appointment, the Board will reconsider its selection. Even if the selection is ratified, the Board, in its discretion, may direct the appointment of a different independent accounting firm at any time during the year if the Board determines that such a change would be in the best interests of Intersil and our shareholders.

One or more representatives of KPMG LLP are expected to be at the Annual Meeting. They will have an opportunity to make a statement and will be available to respond to appropriate questions.

The Board of Directors recommends that the shareholders vote “FOR” the

ratification of the selection of KPMG LLP to serve as Intersil’s independent

registered public accounting firm for the 2013 fiscal year.

Table of Contents

APPROVAL OF AN AMENDMENT TO THE INTERSIL CORPORATION AMENDED AND

RESTATED 2008 EQUITY COMPENSATION PLAN TO

MODIFY THE INDIVIDUAL AWARD LIMIT CAP FOR PARTICIPANTS

ITEM 3 ON PROXY BALLOT

The Board has approved, subject to shareholder approval, an amendment to increase the individual award limit cap on (i) shares that may be granted to any one individual during a calendar year to 2,500,000 shares (an increase of 1,833,333) and (ii) awards payable in cash to any one individual during a calendar year to $4,000,000 (an increase of $2,000,000). The Board believes that this increase is necessary in order to allow us to attract and retain an exceptional management team and to allow us to offer a competitive compensation package within our industry. Discussions with our Compensation Consultants indicated that these limits were roughly in the 50^th percentile of other Equity Plan limits of our peers. Furthermore, this increase will provide us with more discretion to grant awards that are not subject to the $1,000,000 deduction limit of Code Section 162(m).

The affirmative vote of the majority of shares present at the Annual Meeting in person or by proxy and actually cast is required for approval of the amendment to the 2008 Equity Plan.

A summary description of the 2008 Equity Plan is provided below. This summary is qualified in its entirety by the full text of the 2008 Equity Plan, a copy of which is attached to this Proxy Statement as Exhibit A.

The Board of Directors recommends that the shareholders vote “FOR” the amendment to

the Intersil Corporation Amended and Restated 2008 Equity Compensation Plan.

Summary of the 2008 Equity Plan

Purpose. The Board adopted the 2008 Equity Plan to enable key employees, directors and consultants to participate in the equity ownership of Intersil through awards of options, restricted stock, stock appreciation rights, deferred stock units, phantom shares and other stock-based awards. The purpose of the 2008 Equity Plan is to (i) align the interests of the eligible individuals with the interests of our shareholders, (ii) provide incentives for eligible individuals to exert maximum efforts for our success, (iii) attract and retain the best available talent, and (iv) reward key personnel for their part in increasing shareholder value.

Effective Date and Termination. Our Board adopted the 2008 Equity Plan on February 9, 2011, and our shareholders approved the 2008 Equity Plan on May 4, 2011 at our 2011 Annual Meeting. Our shareholders approved an amendment to the 2008 Equity Plan on May 2, 2012 at our 2012 Annual Meeting. The 2008 Equity Plan will terminate on May 4, 2021, unless earlier terminated by the Board.

Administration. The 2008 Equity Plan is administered by the Compensation Committee of the Board (the “Committee”). The Committee is currently composed of four members, each of whom is a “non-employee director” as defined under Rule 16b-3(b)(3) promulgated by the SEC under the Exchange Act and an “outside director” as defined under Section 162(m) of the Code and the regulations thereunder. The Board has designated certain members or officers to serve as a Secondary Committee and has delegated to the Secondary Committee authority to grant awards to eligible individuals who are not subject to the requirements of Rule 16b-3 under the Exchange Act or section 162(m) of the Code, subject to compliance with all legal requirements. The Secondary Committee has the same authority with respect to selecting the individuals to whom awards are granted and establishing the terms and conditions of awards as the Committee has under the terms of the 2008 Equity Plan.

Table of Contents

The Committee has the following powers and authority with regard to the 2008 Equity Plan:

(i)	to interpret and administer the 2008 Equity Plan;

(ii)	to select the employees, directors and consultants to receive awards under the 2008 Equity Plan;

(iii)

to determine the type and amount of awards to be granted to participants;

(iv)	to determine the times at which awards will be granted;

(v)

to determine the terms and conditions of awards granted under the 2008 Equity Plan (including, but not limited to, restrictions as to vesting, transferability or forfeiture, exercisability or settlement of an award and waivers or accelerations thereof, and waivers of or modifications to performance goals relating to an award, based in each case on such considerations as the Committee shall determine) and the terms of agreements which will be entered into with participants with respect to the 2008 Equity Plan;

(vi)	to adopt regulations for carrying out the 2008 Equity Plan and make changes in such regulations as it shall from time to time, think advisable; and

(vii)

to amend the 2008 Equity Plan if such power is so delegated by the Board.

Participation. All of our employees and consultants and all of our Directors are eligible to participate in the 2008 Equity Plan. As of March 12, 2013, we had approximately 1,315 employees, 0 consultants and 9 Directors.

Shares of Stock Available for Grant. The 2008 Equity Plan currently authorizes 34,352,316 shares for issuance under our general share pool, 21,695,097 shares of which have been issued as of the date of this Proxy Statement. An additional 2,913,705 shares are available for issuance under the 2008 Equity Plan solely with respect to the exercise of options granted in connection with our 2009 stock option exchange program. Each share issued pursuant to an award other than a stock option or stock appreciation right (“SAR”) will reduce the number of shares available for issuance by 2.33 shares. For example, if all awards under the 2008 Equity Plan are made in the form of restricted stock grants, approximately 14,743,483 shares will be available for issuance pursuant to such grants. The shares may be treasury shares or authorized but unissued shares. If this amendment is approved by our shareholders, the maximum number of shares that may be granted to any one individual may not exceed 2,500,000 during any calendar year, or in the case of awards payable in cash, such awards granted to any one individual may not exceed $4,000,000 during any calendar year.

Term of Awards. The maximum term of any option or stock appreciation right granted under the 2008 Equity Plan is seven years from the date of grant.

Certain Vesting Requirements. Subject to the terms of the 2008 Equity Plan, awards of deferred stock units, other stock-based awards, phantom shares and restricted stock shall vest ratably over a period of not less than three years unless the vesting of such awards is based upon the achievement of performance criteria, in which case such awards will vest over a period of not less than one year. Notwithstanding the foregoing, the Committee may, in its sole discretion, grant awards of deferred stock units, other-stock-based awards, phantom shares and restricted stock representing, in the aggregate, not more than 10% of the number of shares reserved for issuance under the 2008 Equity Plan that are not subject to any minimum vesting period requirement.

Changes in Capital Structure. In the event of certain changes in our capital structure, such as a merger, consolidation, reorganization, share exchange, sale of substantially all of our assets or stock, stock dividend, stock split or other similar event, the Committee will make appropriate adjustments in the number and kind of shares authorized by the 2008 Equity Plan and other adjustments to outstanding awards as it deems appropriate.

Change of Control. In the event of a change-in-control (as defined in the 2008 Equity Plan), the Committee may, at its discretion (i) cancel any outstanding vested options and SARs in exchange for a cash payment of an amount equal to the difference, if any, between the then fair market value of the stock underlying the award less the exercise price of the award, (ii) after having given the award holder a chance to exercise any outstanding options or SARs, terminate any or all of the award holder’s unexercised options or SARs, (iii) where we are not the surviving corporation, cause the surviving corporation to assume or replace all outstanding options or SARs with awards involving the common stock of the successor corporation on terms necessary to preserve the rights of award holders, (iv) accelerate the vesting of options, SARs, restricted stock and other awards made under the 2008 Equity Plan, or (v) take any other actions it deems appropriate. In addition, unless otherwise provided by the Committee, all phantom shares, deferred stock units and other stock-based awards will generally be settled in a lump sum payment upon a change-in-control.

Table of Contents

Amendment and Termination of the 2008 Equity Plan. The Board (or the Committee, if such power is so delegated by the Board) may amend, modify, suspend or terminate the 2008 Equity Plan, provided that shareholder approval of any amendment is obtained as required by applicable laws or regulations. The Committee may also amend any outstanding award without a participant’s consent, but an amendment to a participant’s award may not adversely impact the participant without his or her consent unless the amendment is required by law. However, neither the Board nor the Committee may, without approval of our shareholders, implement a program that provides for the repricing, replacing or cash buy-back, of underwater awards.

Performance Goals. Awards may be granted or vested contingent upon attaining goals related to our performance or the performance of any of our subsidiaries, divisions or business units (including divisions and business units of subsidiaries). Performance goals will be based upon one or more of the following: revenue; revenue growth; earnings before interest, taxes, depreciation and amortization (“EBITDA”); operating income; net operating income after tax; pre- or after-tax income; cash flow; cash flow per share; net earnings; earnings per share; return on equity; return on capital employed; return on assets; economic value added (or an equivalent metric); share price performance; total shareholder return; improvement in or attainment of expense levels; improvement in or attainment of working capital levels; or debt reduction.

Options. The Committee may grant options that are intended to be incentive stock options under Section 422 of the Code and non-qualified stock options. The price per share at which our common stock may be purchased upon exercise of an option may not be less than the fair market value of a share of common stock on the date of grant (or 110% of the fair market value of a share of common stock on the date of grant in the case of an incentive stock option granted to a more than 10% shareholder). The option price of an option awarded under the 2008 Equity Plan may not be reduced after the grant of such option except in the case of a change in our capital structure, unless the reduction is approved by a majority of the shares present and voted at a duly called meeting of the shareholders. The maximum term of an option is seven years from the date of grant (or 5 years from the date of grant in the case of an incentive stock option granted to a more than 10% shareholder).

A participant may pay the option price: (i) in cash or with a certified or bank cashier’s check at the time of exercise, (ii) with the consent of the Committee, by delivery of an assignment of a sufficient amount of the proceeds from the sale of shares of common stock to be acquired pursuant to such exercise, or (iii) with the consent of the Committee, in whole or in part in common stock held by the participant and valued at their fair market value on the date of exercise. The ability of a participant to exercise his or her options following termination of employment is addressed in the relevant award agreements.

The Committee may include in an option agreement a provision enabling the participant to exercise shares subject to options prior to the full vesting of the option. Any shares so acquired will remain subject to the vesting schedule of the underlying option and, prior to the time those shares become vested and following the participant’s termination of employment, we will be permitted to repurchase any shares so acquired for an amount equal to the lesser of the exercise price paid or the fair market value of the shares on the date of the repurchase.

Stock Appreciation Rights. A SAR allows a recipient to receive, upon exercise of the right, the increase in the fair market value of a specified number of shares of common stock from the date of grant to the date of exercise. Payment upon exercise of a SAR may be made in cash or common stock (including restricted stock). The ability of a participant to exercise his or her SARs following termination of employment is addressed in the relevant award agreements.

Restricted Stock. In a restricted stock award, the Committee grants to a participant shares of common stock that are subject to forfeiture upon specified events and/or the failure to achieve specified performance goals during a specified restriction period. During the restriction period, holders of restricted stock have the right to receive dividends from (which dividends are subject to the same restrictions as the underlying shares) and to vote the shares of restricted stock. Unless otherwise determined by the Committee, shares of restricted stock that have not yet become vested will be forfeited when a participant’s service is terminated for any reason.

Table of Contents

Phantom Shares. The award of a phantom share gives a participant the right to receive payment of the fair market value of a share of common stock (or such lesser amount as determined by the Committee) upon the vesting of such phantom share award (or such later date as may be elected by the participant). The Committee establishes the terms and conditions of a phantom share award in an award agreement at the time the award is granted, including when such shares vest. Phantom shares will be settled upon vesting or at the end of a deferral period, either in cash or in shares of common stock or in any combination of the foregoing, as determined by the Committee. Payment will generally be made in a single lump sum, except that the Committee may allow a participant to elect to receive payment in installments over a period not to exceed 10 years. Unless otherwise determined by the Committee, phantom shares that are not vested upon a participant’s separation from service will be forfeited.

Deferred Stock Units. In a deferred stock unit (“DSU”) award, we will deliver, subject to certain conditions, a fixed number of shares of common stock to the participant at the end of a vesting period, or if elected by the participant, at the end of a deferral period which occurs after the award has vested. During the vesting and deferral period(s), the participant has no voting rights with respect to any shares deliverable in connection with the DSU. Amounts equal to any dividends declared prior to vesting, and post-vesting during the deferral period(s), will be paid to the participant, without interest, at the time when the shares are no longer subject to vesting or a deferral period(s). Unless otherwise determined by the Committee, all unvested DSUs will be forfeited upon a participant’s separation from service.

Other Stock-Based Awards. The Committee is authorized to grant any other type of stock-based award that is payable in, or valued in whole or in part by reference to, shares of our common stock and that is deemed by the Committee to be consistent with the purposes of the 2008 Equity Plan.

New Plan Benefits; Closing Price of Common Stock. Because grants of awards will be made from time to time by the Committee to those persons whom the Committee determines in its discretion should receive grants of awards, the benefits and amounts that may be received in the future by persons eligible to participate in the 2008 Equity Plan are not presently determinable. On March 12, 2013, the closing price of our common stock was $8.85 per share.

Certain Awards Granted Under the 2008 Equity Plan. The table set forth below indicates, as of March 12, 2013, for each of the named executive officers and the various groups indicated, the number of shares of our common stock underlying awards that have been granted (even if not currently outstanding) under the 2008 Equity Plan since its approval by shareholders at our 2011 Annual Shareholders Meeting.


			Market Stock Options (MSOs)		Market Stock Units (MSUs)
Name and Position	Option Awards	Stock Awards	Target	Maximum	Target	Maximum
James V. Diller^[1] Interim President and CEO	405,000	4,000	―	―	―	―
David B. Bell Former President and CEO	179,190	63,750	185,258	277,887	57,733	86,599
Jonathan A. Kennedy Senior Vice President and CFO	82,000	25,000	83,646	125,469	25,847	38,770
Andrew M. Cowell Senior Vice President, Power Management Products Group	145,000	52,700	164,702	247,053	41,130	61,695
Susan J. Hardman Senior Vice President, Analog and Mixed-Signal Products Group	82,000	25,000	83,069	124,603	25,668	38,502
David M. Loftus Senior Vice President, Worldwide Sales and Corporate Marketing	70,000	21,500	83,069	124,603	25,668	38,502
All Current Executive Officers as a Group^[2]	995,300	196,400	633,510	950,265	187,094	280,641
All Current Directors Who Are Not Executive Officers as a Group	60,000	32,000	―	―	―	―
Each Associated of Any Director, Executive Officer or Nominee^[3]	33,800	10,440	―	―	24,599	36,898
Each Other Person Who Received or is to Receive 5 Percent of Such Options, Warrants or Rights	―	―	―	―	―	―
All Employees, Including All Current Officers Who Are Not Executive Officers, as a Group	849,460	1,700,318	147,413	221,119	168,424	252,636

[1]	Includes equity that Mr. Diller received in April 2012 associated with Director compensation.

[2]	Excludes equity that Mr. Bell received in 2012 since he is no longer employed with Intersil.

[3]	Includes shares issued to an officer of Intersil who is married to one of our Executive officers.

Table of Contents

Summary of U.S. Federal Income Tax Consequences

The following discussion is a summary of certain federal income tax considerations that may be relevant to participants in the 2008 Equity Plan. The discussion is for general informational purposes only and does not purport to be complete or address specific federal income tax considerations that may apply to a participant based on his or her particular circumstances, nor does it address state or local income tax or other tax considerations that may be relevant to a participant.

PARTICIPANTS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR FEDERAL INCOME TAX CONSEQUENCES TO THEM OF PARTICIPATING IN THE 2008 EQUITY PLAN, AS WELL AS WITH RESPECT TO ANY APPLICABLE STATE OR LOCAL INCOME TAX OR OTHER TAX CONSIDERATIONS.

Incentive Stock Options

Upon the grant of an incentive stock option (as defined in Section 422(b) of the Code), the option holder does not recognize any income and we (“Intersil or a subsidiary, as applicable”) are not entitled to a deduction. In addition, no income for regular income tax purposes will be recognized by an option holder upon the exercise of an incentive stock option if the requirements of the 2008 Equity Plan and the Code are satisfied, including, without limitation, the requirement that the option holder remain employed by Intersil or a subsidiary during the period beginning on the date of grant and ending on the day three months (or, in the case of the option holder’s disability, one year) before the date the option is exercised. If an option holder has not remained an employee of Intersil or a subsidiary during the period beginning on the date of grant of an incentive stock option and ending on the day three months (or one year in the case of the option holder’s disability) before the date the option is exercised, the exercise of such option will be treated as the exercise of a non-qualified stock option and will have the tax consequences described below in the section entitled “Non-Qualified Stock Options.”

The federal income tax consequences of a disposition of the shares of common stock acquired pursuant to the exercise of an incentive stock option depends upon when the disposition of such shares occurs.

If the disposition of such shares occurs more than two years after the date of grant of the incentive stock option and more than one year after the date of exercise, any gain or loss recognized upon such disposition will be long-term capital gain or loss and we will not be entitled to any income tax deduction with respect to such incentive stock option.

If the disposition of such shares occurs within two years after the date of grant of the incentive stock option or within one year after the date of exercise (a “Disqualifying Disposition”), the excess, if any, of the amount realized over the option price will be treated as taxable income to the option holder and, subject to Section 162(m) of the Code, we will be entitled to a deduction equal to the amount of ordinary income recognized by the option holder on such disposition. The amount of ordinary income recognized by the option holder in a Disqualifying Disposition (and the corresponding deduction, if any, to us) is limited to the lesser of the gain on such sale and the difference between the fair market value of the shares on the date of exercise and the option price. Any gain realized in excess of this amount will be treated as short-term or long-term capital gain (depending upon whether the shares have been held for more than one year). If the option price exceeds the amount realized upon such a disposition, the difference will be short-term or long-term capital loss (depending upon whether the shares have been held for more than one year).

If a participant is subject to the Alternative Minimum Tax (“AMT”), the tax consequences to the participant may differ than provided above. For purposes of calculating the AMT, upon the exercise of an incentive stock option, a taxpayer is required to include in his “alternative minimum taxable income” for the taxable year in which such exercise occurs an amount equal to the amount of income the taxpayer would have recognized if the option had not been an incentive stock option (i.e., the difference between the fair market value of the shares of common stock on the date of exercise and the option price). As a result, unless the shares of common stock acquired upon the exercise of the incentive stock option are disposed of in a taxable transaction in the same year in which such option is exercised, the option holder may incur AMT as a result of the exercise of an incentive stock option.

Table of Contents

Except as provided in the paragraph immediately below, if an option holder elects to tender shares of common stock in partial or full payment of the option price for shares to be acquired upon the exercise of an incentive stock option, the option holder will not recognize any gain or loss on such tendered shares. No income will be recognized by the option holder in respect of the shares received by the option holder upon the exercise of an incentive stock option if the requirements of the 2008 Equity Plan and the Code described above are met. The number of shares received equal to the number of shares surrendered will have a tax basis equal to the tax basis of the surrendered shares. Shares of common stock received in excess of the number of shares surrendered will have a tax basis of zero. The holding period of the shares received equal to the number of shares tendered will be the same as such tendered shares’ holding period, and the holding period for the excess shares received will begin just after the date of exercise. Solely for purposes of determining whether a Disqualifying Disposition has occurred with respect to such shares received upon the exercise of the incentive stock option, all shares are deemed to have been acquired on the date of exercise.

If an option holder tenders shares of common stock that were previously acquired upon the exercise of an incentive stock option in partial or full payment of the option price for shares to be acquired upon the exercise of another incentive stock option, and the tender of such shares occurs within two years after the date of grant of the first such incentive stock option or within one year after such shares were transferred to the option holder on the exercise of such incentive stock option, the tender of such shares will be a Disqualifying Disposition with the tax consequences described above regarding Disqualifying Dispositions. The shares of common stock acquired upon such exercise will be treated as shares of common stock acquired upon the exercise of an incentive stock option.

Non-Qualified Stock Options

Upon the grant of a non-qualified stock option, an option holder does not recognize taxable income, and we are not entitled to a deduction. Upon the exercise of a non-qualified stock option, an option holder will recognize compensation taxable as ordinary income equal to the excess of the fair market value of the shares received over the option price of the non-qualified stock option and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. An option holder’s tax basis in the shares of common stock received upon the exercise of a non-qualified stock option will be equal to the amount paid for such shares plus the amount required to be included in income, and the option holder’s holding period for such shares will begin at the date just after such exercise. Upon the sale of the shares received from the exercise of a non-qualified stock option, the option holder will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year. The amount of such gain or loss will be equal to the difference between the amount realized in connection with the sale of the shares and the option holder’s tax basis in such shares.

If a non-qualified stock option is exercised in whole or in part with shares of common stock held by the option holder, the option holder will not recognize any gain or loss on such tendered shares. The number of shares received by the option holder upon such an exchange that are equal in number to the number of tendered shares will retain the tax basis and the holding period of the tendered shares for capital gain purposes, and the number of shares received by the option holder upon such exchange that are in excess of the number of shares tendered will have a tax basis equal to the fair market value of such shares on the date of exercise (and the holding period of such shares will begin just after the exercise date).

Stock Appreciation Rights

Upon the grant of a stock appreciation right, a participant does not recognize taxable income, and we are not entitled to a deduction. Upon exercise or settlement of a stock appreciation right, a participant will recognize compensation taxable as ordinary income in an amount equal to the cash or the fair market value of the shares received and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. A participant’s tax basis in shares of common stock received upon the exercise of a stock appreciation right will be equal to the fair market value of such shares on the exercise date, and the participant’s holding period for such shares will begin just after the exercise or settlement date. Upon the sale of shares of common stock received in exercise of a stock appreciation right, the participant will recognize short-term or long-term capital gain or loss, depending on whether the shares have been held for more than one year. The amount of such gain or loss will be equal to the difference between the amount realized in connection with the sale of the shares and the participant’s tax basis in such shares.

Table of Contents

Restricted Stock

Restricted stock will be considered subject to a substantial risk of forfeiture for federal income tax purposes. If a participant who receives such restricted stock does not make the election described below, the participant will not recognize any taxable income upon the grant of restricted stock and we are not entitled to a deduction at such time. When the forfeiture restrictions with respect to the restricted stock lapse, the participant will recognize compensation taxable as ordinary income equal to the fair market value of the shares at that time, less any amount paid for the shares and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. A participant’s tax basis in restricted stock will be equal to the fair market value of such restricted stock on the date on which the forfeiture restrictions lapse, and the participant’s holding period for the shares will begin just after such date. Upon a sale of the shares, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year at the time of sale. Such gain or loss will be equal to the difference between the amount realized upon the sale of the shares and the participant’s tax basis in such shares.

Participants granted restricted stock may make an election under Section 83(b) of the Code to recognize compensation taxable as ordinary income with respect to the shares when such shares are received rather than when the forfeiture restrictions lapse. The amount of such compensation income will be equal to the fair market value of the shares on the date of grant (valued without taking into account restrictions other than restrictions that by their terms will never lapse), less any amount paid for the shares. Subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. By making a Section 83(b) election, the participant will recognize no additional ordinary compensation income with respect to the shares when the forfeiture restrictions lapse, and will instead recognize short-term or long-term capital gain or loss with respect to the shares when they are sold, depending upon whether the shares have been held for more than one year. The participant’s tax basis in the shares with respect to which a Section 83(b) election is made will be equal to their fair market value on the date of grant, and the participant’s holding period for such shares will begin just after that date. If the shares are subsequently forfeited, the participant will not be entitled to a deduction as a result of such forfeiture, but will be entitled to claim a short-term or long-term capital loss (depending upon whether the shares have been held for more than one year prior to forfeiture) with respect to the shares, but only to the extent of the consideration paid, if any, by the participant for such shares.

Generally, during the restriction period, dividends and distributions paid with respect to restricted stock will be treated as compensation taxable as ordinary income (not dividend income) received by the participant and, subject to Section 162(m) of the Code, we will receive a corresponding deduction. Dividend payments received with respect to shares of restricted stock for which a Section 83(b) election has been made or which are paid after the restriction period lapses generally will be treated and taxed as dividend income.

Deferred Stock Units

Upon the grant of a deferred stock unit award, a participant does not recognize taxable income and we are not entitled to a deduction. When the award is settled (either upon vesting or when the deferral period for the award ends) and the participant receives shares of common stock, the participant will recognize compensation taxable as ordinary income equal to the fair market value of the shares on the settlement date and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. A participant’s tax basis in shares of common stock received at the end of a vesting or deferral period will be equal to the fair market value of such shares, and the participant’s holding period will begin just after such date. Upon the sale of such shares, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year. Such gain or loss will be equal to the difference between the amount realized upon the sale of the shares and the tax basis of the shares. Dividend equivalents will be taxable to participants upon distribution as compensation, and accordingly, the participant will recognize compensation taxable as ordinary income (not dividend income) in such amount and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. In addition, as discussed below, some deferred stock unit awards may be considered deferred compensation and must comply with the requirements of Section 409A of the Code in order to avoid early income inclusion, additional taxes and interest.

Table of Contents

Phantom Shares

Upon the grant of a phantom share award, a participant does not recognize taxable income and we are not entitled to a deduction. When a participant receives payment of a phantom share award (which may occur on the vesting date or a later date), the participant will recognize compensation taxable as ordinary income in an amount equal to the cash or fair market value of the shares received and, subject to Section 162(m) of the Code, we will be entitled to a corresponding deduction. If a participant receives shares of common stock in settlement of phantom shares, the participant will have a tax basis in such shares equal to their fair market value on the date of settlement and the participant’s holding period with respect to such shares will begin just after such date. Upon the sale of shares received by the participant in settlement of phantom shares, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year. Such gain or loss will be equal to the difference between the amount realized upon the sale of the shares and the tax basis of the shares. In addition, as discussed below, some phantom share awards may be considered deferred compensation and must comply with the requirements of Section 409A of the Code in order to avoid early income inclusion, additional taxes and interest.

Other Stock-Based Awards

The tax treatment of other stock-based awards will generally be governed by the principles set forth in Sections 61, 83 and 451 of the Code. This tax treatment will vary depending on the type of award but should generally be analogous to the tax treatment of stock options, stock appreciation rights, restricted stock, deferred stock units and phantom shares, as described above, as the case may be. Accordingly, in most cases, an other stock-based award, if payable in shares, will be subject to ordinary income taxation when the forfeiture restrictions, if any, in respect of any such award lapse and the shares are transferred to the participant, whichever occurs later, and, if an other stock-based award is payable in cash, such award will be taxable upon the actual or constructive receipt of any such cash payment. Generally, subject to Code Section 162(m), we will be entitled to a deduction at the time the participant recognizes ordinary income in respect of an other stock-based award, equal to the amount of ordinary income recognized by the participant. A participant’s tax basis in any shares received will generally be equal to the fair market value of such shares when the forfeiture restrictions lapse or the shares are transferred, whichever occurs later. The participant’s holding period for the shares will generally begin when the forfeiture restrictions lapse or when the Shares are transferred, whichever occurs later. Upon the sale of such shares, the participant will recognize short-term or long-term capital gain or loss, depending upon whether the shares have been held for more than one year. Such gain or loss will be equal to the difference between the amount realized upon the sale of the shares and the tax basis of the shares.

Please see the section above entitled “Restricted Stock” for the general federal income tax treatment of common stock that is received in settlement of other stock-based awards and which is subject to a substantial risk of forfeiture for federal income tax purposes upon receipt.

Section 162(m)

Under Section 162(m) of the Code, we generally may not deduct remuneration paid to the CEO and the three next highest paid executive officers other than the CFO (as disclosed on our proxy statement) to the extent that such remuneration exceeds $1,000,000, unless such remuneration is performance-based compensation. Under the 2008 Equity Plan, the Committee may, in its discretion, grant awards that are intended to qualify as performance-based compensation.

Section 409A

Section 409A of the Code contains certain restrictions on the ability to defer receipt of compensation to future tax years. Any award that provides for the deferral of compensation, such as phantom shares or deferred stock units that are settled more than two and one-half months after the end of the year in which they vest, must comply with Section 409A of the Code in order to avoid the adverse tax consequences set forth below. If the requirements of Section 409A of the Code are not met, all amounts deferred under the 2008 Equity Plan during the taxable year and all prior taxable years (to the extent not already included in gross income) will generally be included in the participant’s taxable income in the later of the year in which such violation occurs or the year in which such amounts are no longer subject to a substantial risk of forfeiture, even if such amounts have not been actually paid to the participant. In addition, such violation will result in an additional tax to the participant of 20% of the deferred amount plus interest computed from the date the award was earned, or if later, the date on which it vested. Participants are urged to consult their tax advisors to determine if Code Section 409A is applicable to their awards.

Table of Contents

Section 280G

If the vesting and/or payment of an award made to a “disqualified individual” (as defined in Section 280G of the Code) occurs in connection with a change-in-control, such vesting and/or payment, either alone or when combined with other compensation payments which such disqualified individual is entitled to receive, may result in an “excess parachute payment” (as defined in Section 280G of the Code). Section 4999 of the Code generally imposes a 20% excise tax on the amount of any such “excess parachute payment” received by such “disqualified individual” and Section 280G of the Code would prevent us from deducting such “excess parachute payment.”

Table of Contents

ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

ITEM 4 ON PROXY BALLOT

As required by Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the Board is seeking a non-binding shareholder advisory vote on the compensation of each person who served as our CEO during 2012, our CFO, and our three most highly compensated executive officers other than our CEOs and CFO (collectively, our “Named Executive Officers” or NEOs”) as set forth on the Summary Compensation Table in the Compensation Discussion and Analysis (the “CD&A”) below. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our NEOs, as disclosed in the Executive Compensation section and accompanying tables and narrative disclosures of this Proxy Statement.

Results of Prior Annual Meetings. The Compensation Committee considers your vote when evaluating our compensation programs and practices applicable to the NEOs and in determining future compensation. During our 2011 Annual Shareholder Meeting, approximately 88% of our shareholders who voted on the frequency of our advisory vote on NEO compensation voted in favor of having an advisory vote on the compensation of our NEOs on an annual basis. Although that vote was non-binding, our Board agreed and adopted an annual vote frequency. In addition, during our 2012 Annual Shareholder Meeting, shareholders representing approximately 91% of our shares voting at such meeting voted in favor of the 2011 compensation of our NEOs (commonly referred to as “Say-on-Pay” vote).

Recent Highlights of our Executive Compensation Program. Below are some of the changes to our executive compensation program that we have implemented over the past two years to ensure that executive compensation is aligned with our performance.

In 2011, we modified our annual performance-based equity program for our NEOs and executive leadership team and implemented a MSU Program comprised of performance-based equity grants in the form of Market Stock Options (“MSOs”) and Market Stock Units (“MSUs”). The MSU Program ensures that (a) at least 50% of our NEOs’ annual equity grants are performance-based (versus a majority of the annual equity grants being time-based awards); and (b) the performance metrics (i.e., operating income vs. total shareholder return (“TSR”)) for our short-term and long-term incentive compensation programs are not the same.

·	We added clawback provisions that went into effect in 2011 for all Section 16 officers.

·	Executive change-in-control agreements entered into after November 30, 2011will not include a provision for payment of taxes imposed under Section 4999 of the Internal Revenue Code, as amended.

We revised our peer group to include companies which are more closely sized to us, resulting in our overall peer group including companies that are approximately 50% larger than us and companies that are approximately 50% smaller than us. We continue to believe that some of the larger peer companies in our compensation peer group need to be included as we tend to compete with these companies for executive talent, as well as compete with them in the markets we serve.

We proactively reach out to a variety of shareholders to seek more detailed feedback regarding our executive compensation program. Our Compensation Committee carefully considers this feedback when making decisions regarding executive compensation. In addition, members of our Compensation Committee spend considerable time reviewing our compensation components, including examining benchmark data and compensation practices with Compensia, the Compensation Committee’s independent compensation consultant.

·	Based on feedback received from our shareholders, we have further improved the transparency and quality of our disclosures to provide better insight into the compensation of our executives.

We pay careful attention to any feedback we receive from our shareholders pertaining to our executive compensation program and continually analyze our pay structure to ensure it appropriately aligns with our performance and is competitive within the industry.

Table of Contents

Our compensation program is designed to pay our NEOs for performance. As described in the CD&A, our compensation program for our NEOs is heavily weighted toward “at-risk” performance-based pay. For example, in 2012, 100% of our Interim CEO’s compensation, approximately 60% of our former CEO’s target compensation opportunity and approximately 62% of our other NEOs’ target compensation opportunity was performance-based. Such compensation included participation in performance-based cash incentive plans, grants of stock options which only have value if our stock price increases and/or participation in our MSU Program, which provides for performance-based options and deferred stock units that are earned only if our TSR ranks above a specified percentile of our peers’ TSR. For 2012 grants, our MSU Program further rewards only exceptional performance by providing that if we outperform the required percentage of our peers but no positive growth in TSR is seen, the maximum payout of the awards is only 50% of target. In addition, as described in the CD&A, our NEOs’ 2012 cash incentives were based entirely on our operating income results, because we believe that operating income is an important factor in the creation of shareholder value. Consistent with our emphasis on performance-based pay, none of our NEOs received discretionary bonuses in 2012.

Our compensation program is designed to align our NEOs’ interests with our shareholders’ interests. Equity awards granted to our NEOs comprise a substantial portion of their annual compensation. Performance-based equity grants, in the form of MSUs and MSOs issued under our MSU Program, are generally subject to vesting over a period of three years. Time-based equity, in the form of DSUs, Restricted Stock Units (RSUs) and stock options, is generally subject to vesting over a period of four years. We believe that these multi-year vesting periods help align the interests of our NEOs with those of our shareholders because a substantial portion of their compensation is tied to our long-term success.

Moreover, our CEO and CFO are required to maintain certain levels of ownership of our stock (exclusive of stock options). We believe that by focusing our CEO and CFO on the creation of long-term value, these two elements serve to align their interests with those of our shareholders. Mr. Bell was subject to this ownership requirement while he was employed by us. However, because Mr. Diller is serving as our CEO on an interim basis, he is not subject to this requirement (although he is subject to the ownership requirements applicable to members of our Board ).

Our compensation program is designed to be fair and competitive. Our Compensation Committee, which is responsible for establishing the compensation of our NEOs, is comprised solely of independent directors. In addition, our Compensation Committee retains an independent compensation consultant to advise it on competitive market practices and other areas of NEO compensation. We consistently benchmark our compensation against our peer companies to ensure our compensation program is fair and competitive.

Based on the foregoing, the Board recommends that our shareholders approve the following resolution (the “Executive Compensation Resolution”):

RESOLVED, that the compensation paid to our NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion is hereby APPROVED.

The Board of Directors recommends that the shareholders vote “FOR” approval

of the Executive Compensation Resolution.

Table of Contents

SUBMISSION OF SHAREHOLDER PROPOSALS AND DIRECTOR NOMINATIONS

The shareholder meeting for the next fiscal year will be held on or about May 7, 2014. Shareholders wishing to have a proposal included in our 2014 Proxy Statement must submit the proposal so that our Secretary receives it no later than November 15, 2013, which is 120 days prior to the first anniversary of the date this Proxy Statement was released to shareholders. The SEC rules set forth standards as to what shareholder proposals are required to be included in a proxy statement.

For any proposal that is not submitted for inclusion in next year’s Proxy Statement (as described above) but is instead sought to be presented directly at next year’s Annual Meeting, SEC rules permit management to vote proxies in our discretion if (a) we receive notice of the proposal before the close of business on February 7, 2014 and we advise shareholders in next year’s Proxy Statement about the nature of the matter and how management intends to vote on such matter, or (b) we do not receive notice of the proposal prior to the close of business on February 7, 2014. Notices of intention to present proposals at the 2014 Annual Meeting should be addressed to the Senior Vice President, General Counsel and Secretary of Intersil Corporation.

AUDIT COMMITTEE REPORT

Report of the Audit Committee to the Full Board of Directors of Intersil Corporation

The information contained in this report shall not be deemed to be “soliciting material” or “filed” or incorporated by reference in future filings with the SEC, or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by reference into a document filed under the Securities Act of 1933, as amended, or the Exchange Act.

The Audit Committee appoints the independent accounting firm, which reports directly to the Audit Committee, to audit our financial statements. The Audit Committee consults with, and reviews recommendations made by, the accounting firm with respect to our financial statements, financial records and financial controls and makes recommendations to the Board as it deems appropriate from time to time. Pre-approving both audit and non-audit engagements with the independent accountants is also the responsibility of the Audit Committee. The Board adopted a written charter setting forth the functions the Audit Committee is to perform and this report is made pursuant to that charter.

The Audit Committee oversees our financial reporting process on behalf of the Board. Management is responsible for the financial reporting process including our system of internal control, and for the preparation of consolidated financial statements in accordance with generally accepted accounting principles. The independent accountants are responsible for auditing those financial statements and expressing an opinion on the conformity of those financial statements with accounting principles generally accepted in the United States. The Committee’s responsibility is to monitor and review these processes. It is not the Audit Committee’s duty or responsibility to conduct auditing or accounting reviews.

The Audit Committee met with management periodically during fiscal year 2012 to consider the adequacy of our internal controls, and discussed these matters and the overall scope and plans for the audit with KPMG LLP, our independent accountants during that time period. The Audit Committee also discussed with senior management and KPMG LLP our disclosure controls and procedures and the certifications by our CEOs and CFO, which are required by the SEC.

The Audit Committee established procedures for the receipt, retention and treatment of complaints received regarding accounting, internal accounting controls or auditing matters and for the confidential, anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the 2012 Annual Report on Form 10-K with management, including a review of the quality, in addition to the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

Table of Contents

The Audit Committee reviewed with KPMG LLP, their judgments as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Audit Committee under auditing standards generally accepted in the United States, including the matters required to be discussed by Statement on Auditing Standards No. 114. The Audit Committee has received the written disclosures as well as the letter from KPMG LLP required by applicable requirements of the Public Company Accounting Oversight Board regarding the independent accountants’ communications with the audit committee concerning independence. In addition, the Audit Committee reviewed auditor independence with KPMG LLP, including the compatibility and effect on their independence of non-audit services performed.

The Audit Committee discussed with KPMG LLP the overall scope and plans for their audit. The Audit Committee met with KPMG LLP with and without management present, to discuss the results of their examination, their evaluation of our internal controls, and the overall quality of our financial reporting. The Audit Committee held nine (9) meetings and took no action by unanimous written consent in fiscal year 2012.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board (and the Board approved) that the audited financial statements be included in the Annual Report on Form 10-K for the fiscal year ended December 28, 2012 for filing with the SEC.

The Audit Committee has appointed the firm of KPMG LLP, independent registered public accountants, to audit and report upon our financial statements for the fiscal year ending January 3, 2014. We are requesting shareholder ratification of the appointment of KPMG LLP. In appointing KPMG LLP as our auditors for fiscal year 2013, the Audit Committee has considered whether KPMG LLP’s provision of services other than audit services are compatible with maintaining their independence.

	AUDIT COMMITTEE

	Jan Peeters, Committee Chairman
	Robert W. Conn
	Mercedes Johnson
	Robert N. Pokelwaldt

Table of Contents

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS—This CD&A provides an overview of our executive compensation programs, describes the material factors underlying our 2012 compensation provided to our NEOs, and provides greater clarity to the information presented in the tables which follow this CD&A. This CD&A contains statements regarding certain performance targets and goals we have used or may use to determine appropriate compensation. These targets and goals are disclosed in the limited context of our compensation program and should not be understood to be statements of management’s expectations or estimates of financial results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Executive Summary

Our executive compensation program is designed to motivate and retain our officers to increase shareholder value and balance short-term and long-term performance. We accomplish this goal by employing a “pay-for-performance” approach to NEO compensation. As a result, a significant portion of the compensation of our NEOs is “at-risk,” as their compensation is specifically dependent upon the short-term and long-term performance of Intersil. For example, as demonstrated in the two charts below, in 2012, approximately 60% of the target compensation opportunity of our former CEO and approximately 62% of the target compensation opportunity of our other NEOs, was “at risk.” In addition, 100% of the compensation of our interim CEO is “at-risk.” The amounts deemed to be “at-risk” are time-based stock options (since they have no value unless our stock price increases after grant), performance-based stock options (since they are earned only if we outperform a specified percentage of our peers in TSR and will have value only if our stock price increases after grant), performance-based deferred stock units (since they are earned only if we outperform a specified percentage of our peers in TSR) and short-term semi-annual cash bonuses (since payment is made only if we achieve certain operating income targets).

In addition to performance, the Compensation Committee places an emphasis on retention. Equity-based awards granted to NEOs generally have a vesting period of two to four years, and thus serve as a valuable retention tool while also tying a substantial portion of our NEOs’ compensation to our long-term success.. The Compensation Committee has also established stock ownership guidelines for our CEO and CFO to ensure that their net worth is meaningfully tied to our value.

During 2012, the Compensation Committee engaged Compensia, an independent compensation consultant, to provide non-biased advice regarding executive compensation. In addition, in setting NEO compensation, the Compensation Committee reviews compensation information from peer companies as well as other companies that compete with us for talent. Generally, base salary is targeted at or near the 50^th percentile of our peer group, total cash compensation is targeted at or near the 60^th percentile of our peer group, and overall equity compensation is targeted at or near the 60^th percentile of our peer group. The Compensation Committee believes that providing compensation within these ranges relative to our peer group is appropriate and allows us to attract and retain the talent necessary to execute our business plans and achieve our goals.

Table of Contents

Below is a description, purpose and expected performance relationship of the primary elements of NEO compensation. This table is a summary description and should be reviewed in conjunction with the remainder of this CD&A.

Compensation Type	Purpose and Value	Performance Relationship
Short-Term Compensation:
Base Salary	To provide a competitive source of income throughout the year.	Merit-based increases in base salary are provided in recognition of individual performance and contributions to our success.
Semi-Annual Cash Bonuses	To motivate and reward for achieving operating income performance goals. The use of two six-month performance periods during each fiscal year focuses the NEOs on achieving the desired operating income performance goals.	Semi-annual cash bonuses are provided under our Executive Incentive Plan only if minimum levels of performance are attained during the relevant six-month performance period.
Long-Term Compensation:
Performance-Based Deferred Stock Units (“PDSUs”) and Performance-Based MSUs and MSOs issued under our MSU Program	PDSUs – to retain and motivate executives to out-perform a group of peer companies in revenue and operating income over a three-year period. MSU Program – for 2012, the goal was to motivate executives to out-perform the average TSR of our peer companies.	PDSUs were issued from 2006 to 2010 and were earned only in the event that our revenue and operating income over a three year period exceeded certain levels relative to our peer group. The number of PDSUs earned (which are settled in common stock) varies depending on the extent to which we out-perform our peer group. The final PDSU grant made in 2010 will vest and performance will be assessed in April 2013. MSU Program awards granted in 2012 are earned only in the event that our TSR is greater than the 50th percentile rank in performance compared to our peer group of companies. In order for executives to receive a 100% MSU payout, our TSR must be at the 75^th percentile rank in performance compared to our peer group of companies and be positive growth.
Time-Based Stock Options	To retain and motivate executives to increase shareholder value.	Because the strike price of stock options granted equals the fair market value of our Common Stock on the grant date, value is realized with respect to stock options only if our share price increases after grant. Stock options are inherently performance based compensation.
RSUs and DSUs	To retain and motivate executives to increase shareholder value.	Because each RSU and DSU has a value equal to one share of our Common Stock, the value of an award will increase after grant only if shareholder value is created. Similarly, if our stock price decreases after grant, the value of the award will also decrease.

Below are some of the recent changes we have implemented to ensure that executive compensation is aligned with our performance and is consistent with the Compensation Committee’s executive compensation philosophy.

Table of Contents

We modified our annual performance-based equity program for our NEOs and executive leadership team and implemented the MSU Program comprised of performance-based equity grants in the form of MSO and MSUs. The MSU Program ensures that (a) at least 50% of our NEOs’ annual equity grants are performance-based (versus a majority of the annual equity grants being time-based options or DSUs); and (b) the performance metric (i.e., operating income vs. TSR) for our short-term and long-term incentive compensation programs are not the same.

·	We added clawback provisions that went into effect in 2011for all Section 16 officers.

·	Executive change-in-control agreements entered into after November 30, 2011 will not include a provision for payment of taxes imposed under Section 4999 of the Internal Revenue Code, as amended.

We revised our peer group to include companies which are more closely sized to us, resulting in our overall peer group including companies that are approximately 50% larger than us and companies that are approximately 50% smaller than us. We continue to believe that some of the larger peer companies in our compensation peer group need to be included as we tend to compete with these companies for executive talent as well as compete with them in the markets we serve.

·	Based on feedback received from our shareholders, we have further improved the transparency and quality of our disclosures to provide better insight into the compensation of our executives.

Compensation Committee Consideration of 2012 Shareholder Vote on Executive Compensation

In determining and approving the compensation of our NEOs, the Compensation Committee monitors the results of our annual advisory vote on executive compensation. At our 2012 Annual Shareholders Meeting, our NEOs’ 2011 compensation was approved by approximately 91% of the shares treated as being voted (commonly referred to as “Say-on-Pay” vote). Although this vote is non-binding, the Compensation Committee viewed this unequivocal endorsement of our executive compensation decisions and policies as an additional factor supporting the Compensation Committee’s conclusion that our current approach to executive compensation has been successful.

Role of Compensation Committee

The Compensation Committee:

·	reviews and approves our executive compensation philosophy;

·	establishes, oversees and directs our executive compensation programs and policies;

·	reviews and approves the salary and other compensation (such as incentive pay) of our officers and other key executives (including the NEOs); and

·	administers our 2008 Equity Plan and our Executive Incentive Plan.

Table of Contents

In determining the forms and amount of compensation to be provided to our executive officers, the Compensation Committee seeks to align executive compensation with our financial performance in order to enhance shareholder value. The Compensation Committee also considers our overall business plan (which is established on a semi-annual basis by the Board) in setting the NEOs’ compensation to ensure that our compensation practices and policies remain consistent with our business goals. From January 1, 2012 through December 8, 2012, the Compensation Committee consisted of four non-employee directors: James A. Urry, Gary E. Gist, Gregory Lang and James V. Diller. On December 9, 2012, James Diller became our Interim President and CEO and as a result, Mr. Diller will no longer serve on the Compensation Committee while serving as an officer. The full background of each member of the Compensation Committee can be found under the “Business Experience of Directors” section.

In 2012, the Compensation Committee retained Compensia to act as an independent compensation advisor. Compensia reports directly to the Compensation Committee and assists the Compensation Committee in evaluating and designing our executive and director compensation program and policies. Compensia also assists the Compensation Committee by evaluating compensation data and proposals prepared by Radford (who works with our management team on the preparation of such information) and by making recommendations to the Compensation Committee on such proposals. In fiscal year 2012, Compensia was engaged to assist in determining our peer group of companies, provide and analyze market data and advice regarding executive and director compensation plan design, and conduct risk assessments of our executive compensation program. In connection with its work for the Compensation Committee, Compensia is invited to attend many of the Compensation Committee’s meetings and, upon request of the Compensation Committee, attends executive sessions with the Compensation Committee. Compensia is retained only by the Compensation Committee and does not provide any other consulting services to Intersil. Compensia provided an independence letter to the Compensation Committee stating that they meet the independence standards prescribed by the SEC for all work performed for the Compensation Committee during fiscal year 2012.

In 2012, we engaged Radford to work with our management team to prepare compensation proposals for submission to the Compensation Committee, as well as to analyze our peer group of companies and provide other market data on executive compensation. The Compensation Committee uses the data and recommendations prepared by Radford in its discussions with Compensia when determining executive officer compensation and our overall compensation policies and practices generally. We believe that Radford provides valuable data on executive compensation by leveraging its extensive database and significant industry expertise. Through Radford’s services, we are able to not only compare our practices with the high technology industry but can specifically use their data and expertise to compare our compensation practices with an identified list of peer semiconductor industry companies.

In 2012, the Compensation Committee held ten (10) meetings and acted by Unanimous Written Consent six (6) times. Generally, the management team, consisting of the Senior Vice President of Human Resources, the Corporate Compensation Director and the CEO, reviews data from Radford and prepares recommendations for the Compensation Committee related to cash and equity compensation for the NEOs, as well as for the overall employee population. The Compensation Committee, the management team and Radford then meet to discuss these recommendations or specific compensation issues. Final decisions on compensation matters are then made by the Compensation Committee with Compensia, its independent advisor, participating in the discussion.

The Compensation Committee, at times, met in executive sessions without the management team. Compensia was generally present at the executive sessions to provide unbiased guidance on any material or data presented, including advice on decisions, guidance on executive compensation trends or interpretation of complex data. The Compensation Committee also met regularly with Radford and key executives, such as the Senior Vice President, Human Resources and the Corporate Compensation Director, to review best practices and marketplace trends in order to remain educated on compensation issues, and to review recommendations from Radford and/or management regarding compensation and equity for executives and other employees. In addition, each year, the management team works with the Chairman of the Compensation Committee to establish a full compensation agenda for the following year to be approved by the Compensation Committee.

Table of Contents

Compensation Philosophy and Objectives

Our compensation philosophy consists of developing programs and practices that:

(i)	attract and retain exceptional executives;

(ii)	motivate and reward behavior consistent with our values that will yield desired financial results;

(iii)

maximize shareholder value by emphasizing both the short-term and long-term focus of the business;

(iv)	are highly responsive to our performance; and

(v)	facilitate congruence between shareholder interests and employee interests through ownership of the common stock.

Consistent with this philosophy, the Compensation Committee believes that a substantial percentage of our NEOs’ compensation should be in the form of incentive compensation and long-term equity awards that are tied directly to performance and the value of our common stock. The Compensation Committee believes that tying the NEOs’ compensation to our performance will better align the interests of the NEOs with our shareholders.

Compensation Analysis

The Compensation Committee engages in significant market analysis to determine appropriate compensation in our industries. In determining appropriate compensation, Radford, Compensia and the Compensation Committee use a comparative framework to identify peer companies and utilize data sources to assess job levels and compensation programs and practices. This framework draws information primarily from the semiconductor industry, but also considers a broader base from the overall high technology industry. The information utilized in making these determinations is provided by Radford through its extensive survey network, as well as from public filings of peer companies regarding executive pay. The following factors are used to establish an appropriate group of peer companies within our industry in comparing compensation, benefits and equity information:

(i)	company revenue (typically considering companies in the $500 million – $2.0 billion range);

(ii)	company size (typically 500 – 4,000 employees);

(iii)

company products (specifically if there is a significant analog chip component to their business); and

(iv)	labor competition (if Intersil (at times) competes with the organization for labor).

The aforementioned criteria was designed to identify companies that are similar in revenue and employee population with Intersil and that would typically compete for talent with Intersil, making them appropriate for measuring compensation practices. In 2012, our peer group included the following companies:

Analog Devices	Linear Technology	Power Integrations
Avago Technologies	Maxim Integrated Products	Semtech
Cypress Semiconductor	Micrel	Silicon Laboratories
Fairchild Semiconductor	Microchip Technology	Standard Microsystems
Integrated Device Technology	Microsemi
International Rectifier	ON Semiconductor

For determining 2013 compensation, in October 2012, the Compensation Committee approved modifications to our peer group of companies by adding Cirrus Logic, PMC-Sierra and Skyworks to our peer group based on their revenue and relative size and ON Semiconductor and Avago Technologies were removed in order to better align the overall aggregate size and revenue of our peer group. In addition, Standard Microsystems was removed from our peer group of companies due to the acquisition of Standard Microsystems by Microchip Technology.

Table of Contents

Compensation Components

Overview

We utilize three main components to compensation: base pay, cash incentive pay and equity compensation. Our philosophy is to pay base salary at approximately market rates and provide above market total cash earning opportunities when individual and company performance meets or exceeds specified targets. We believe this strengthens our ability to attract and retain talent from both larger and smaller peer companies. This philosophy is applied consistently to executives and non-executives alike. In addition to comparing compensation to our peer group, an individual’s incentive and equity compensation is based upon individual and company performance for a defined performance period, as explained below.

Because Mr. Diller, our Interim President and CEO, is only receiving equity compensation for his interim role as President and CEO, there is no base salary, semi-annual cash incentive or total cash compensation information provided for him in the sections noted below.

On March 11, 2013, we announced that we have entered into an Employment Agreement with Dr. Necip Sayiner associated with his role as our President, CEO, and Director effective March 14, 2013. In addition to the base salary and incentive targets detailed in the sections below, Dr. Sayiner will also receive a new hire grant in the amount of 433,000 time-based DSUs which vest 25% annually over the next four years and 433,000 performance-based MSUs which will cliff vest on the third anniversary of the date of grant, if the performance standards associated with the MSU Program are met. Additionally, we announced that our CFO, Jonathan Kennedy resigned and his employment with Intersil will end on April 5, 2013.

Base Salary

The annual base salaries are set at levels designed to provide the NEOs with a competitive source of income throughout the year, while recognizing that a substantial portion of their compensation will be contingent on performance, generally in the form of semi-annual cash incentives and equity-based awards. Mr. Bell’s base salary was determined by the Compensation Committee taking into consideration benchmark data of our peer group of companies as well as input from Compensia, the Compensation Committee’s independent consultant. Base salaries of other NEOs are recommended by our CEO, reviewed and approved annually by the Compensation Committee and may be adjusted in accordance with the following:

·	Base salary data provided by Radford regarding our defined peer group and larger industry market.

·	Internal review performed by the Senior Vice President of Human Resources and CEO and presented to the Compensation Committee both individually and relative to our other executives.

·	Individual performance of the executive, expected future contributions, and the scope and nature of responsibilities.

With respect to 2012, merit increases in annual base salary, to reward the NEOs for their contributions towards our success, were made in March 2012 as follows:

		Annual Base Salary
NEO	Percent increase	Beginning	Ending
David B. Bell	3.2%	$ 620,000	$ 640,000
Jonathan A. Kennedy	5.1%	$ 352,000	$ 370,000
Andrew M. Cowell^[¹^]	2.3%	$ 310,000	$ 355,000
Susan J. Hardman	4.3%	$ 345,000	$ 360,000
David M. Loftus	1.1%	$ 372,000	$ 376,000

[1] The ending base salary for Mr. Cowell reflects a merit increase to base salary of 2.3% ($310,000 to $317,000) that he received in March 2012 and a promotional increase of 12.0% ($317,000 to $355,000) that he received in May 2012 when he was promoted to SVP, Power Management Products Group. The promotional increase that Mr. Cowell received placed him at approximately the 50^th percentile of market based on benchmark information.

Table of Contents

Semi-Annual Cash Incentive

Our compensation philosophy supports that a substantial portion of the NEOs’ annual compensation should be tied to our financial results in order to reward only exceptional individual performance and overall company success. Cash incentive compensation for NEOs is delivered through our Executive Incentive Plan (“EIP”). EIP payouts are based on a fixed percentage of adjusted operating income (“AOI”) established each year as part of our annual planning process which is GAAP operating income excluding amortization of purchased intangibles, costs associated with restructuring, asset impairment charges, acquisition related expenses, equity expense, significant unforeseen legal costs or settlements, and other adjustments deemed appropriate by the Compensation Committee, as well as individual performance. Payout amounts are directly tied to Intersil’s operating profitability. Actual AOI must meet at least 50% of Intersil’s semi-annual operating plans in order for executives to receive any payout.

For 2012, EIP bonuses were based on 7.5% of AOI. The Sub-Committee of the Compensation Committee (the “Sub-Committee”) determined that rewarding the NEOs based upon AOI ensures that executive incentive pay is tied to Intersil’s operating profitability. Adjusted Operating Income goals for 2012 were as follows (in millions):

	Threshold	Target
Adjusted Operating Income:
First Half 2012	$17.54	$35.08
Second Half 2012	$16.71	$33.42

In order to earn an incentive payout, we must reach 50% of our AOI goal for each semi-annual performance period. A bonus pool was then created by multiplying the AOI by 7.5%. After the bonus pool was established based on our AOI, a payout factor for each employee, including the NEOs, is determined. The payout factor for 2012 equaled 7.5% of AOI, divided by the aggregate target bonuses of all employees participating in our Success Sharing and Leadership Incentive Plans, which includes the EIP. This payout factor, which is the same for all employees, was then multiplied by each individual’s target bonus opportunity to determine his or her bonus.

The table below shows each NEO’s target and maximum bonus opportunity for the first and second half of 2012, as well as the amount of incentive bonuses paid to the NEOs under the EIP for 2012. These bonuses are listed in the Summary Compensation Table (see the column titled “Non-Equity Incentive Plan Compensation”). Because our AOI for the first half of 2012 was below threshold, the first half incentive payout was 0%. Our AOI for the second half of 2012 resulted in a payout factor of 35.50% and for the total year, resulted in a 17.75% payout.


NEO	First Half 2012 Target/Maximum Bonus	First Half 2012 Incentive Payout	Second Half 2012 Target/Maximum Bonus	Second Half 2012 Incentive Payout	Total 2012 Incentive Payout
David B. Bell^[1]	$368,000/$736,000	$ -	$368,000/$736,000	$ -	$ -
Jonathan A. Kennedy	$145,000/$290,000	$ -	$145,000/$290,000	$ 51,475	$ 51,475
Andrew M. Cowell	$145,000/$290,000	$ -	$145,000/$290,000	$ 51,475	$ 51,475
Susan J. Hardman	$144,000/$288,000	$ -	$144,000/$288,000	$ 51,120	$ 51,120
David M. Loftus	$144,000/$288,000	$ -	$144,000/$288,000	$ 51,120	$ 51,120

[1] Mr. Bell’s employment ceased on December 9, 2012, therefore he did not receive a payout under the EIP for 2012.

Total Cash Compensation

Our philosophy is to target executive cash compensation at or near the 50^th percentile of market for base salary and at or near the 60^th percentile of market for total cash compensation. In 2012, our NEOs received, in aggregate, base pay at approximately the 55^th percentile of market and significantly below the 50^th percentile of market for total cash compensation due to our cash incentive payouts resulting in approximately 18% of target. Because Mr. Diller received only a stock option grant as compensation for his service as our interim President and CEO, these figures were determined without including Mr. Diller. We expect to continue with this general philosophy for base salary and total cash compensation in 2013. The Compensation Committee believes that providing base salary and total cash compensation within this range relative to our peer group will allow us to attract and retain the talent necessary to execute our business plans and achieve our goals.

Table of Contents

Equity Compensation

Our equity compensation philosophy takes into account factors such as employee participation rate, performance and retention. Equity compensation is distributed to a majority of our exempt employees and to a limited number of non-exempt employees. Grants of equity-based awards are intended to reward performance, and as a result, emphasis is placed on distributing the appropriate amount of grants to individuals who can have a direct impact on our performance. During the annual review of executive compensation, the Compensation Committee reviews the mix of time-based and performance-based equity. In 2012, the Compensation Committee used a mix of performance-based and time-based equity awards for both executives and non-executives.

We believe that long-term performance is supported through an equity ownership culture that utilizes performance-based and time-based stock option grants and performance-based and time-based full value awards to encourage sustained performance by executive officers, as well as to ensure that their long-term interests are aligned with those of our shareholders. Our equity compensation program for our NEOs is a combination of DSUs, PDSUs, MSUs, RSUs, employee stock options and MSOs, all of which are granted under our 2008 Equity Plan. From time to time, the Compensation Committee considers alternative measures that best align pay-for-performance and strategic objectives. For example, as described above, in 2011, the Compensation Committee implemented our MSU Program which uses grants of MSUs and MSO, both of which are earned only if we achieve certain performance goals.

The Compensation Committee authorizes the issuance of equity grants and awards under our 2008 Equity Plan. Similar to base salary considerations, the Compensation Committee considers market and compensation data, as well as each NEO’s overall equity compensation position, existing long-term incentives, retention and performance, when determining the number of equity awards to grant to an NEO. Generally, we aim to deliver and combination of time-based and performance-based equity compensation to executives at approximately the 50^th percentile versus the peer group and overall industry market described above. The Compensation Committee believes that granting time-based and performance-based equity awards within this range relative to our peer group will allow us to attract and retain the talent necessary to execute our business plans and achieve our goals.

For 2012, in the aggregate, annual equity grants to the NEOs were generally granted at the 60^th- 65^th percentile versus our peer group, half of which were performance-based grants. Performance-based awards are not ultimately paid out unless we meet certain performance metrics. Because of the uncertainty regarding whether performance-based awards will be earned, we believe that it is appropriate to grant a total equity compensation opportunity above the 50^th percentile of our peer group. The maximum equity award opportunity for 2012 will be earned only if we outperform a substantial majority of our peer group and have positive TSR for the performance period.

Timing of awards—The NEOs’ annual grants are typically awarded at the same time that annual grants are distributed to non-executive employees unless the award is connected to another significant event such as new hire, recognition, retention, promotion or contractual agreement. Annual grants for all employees are awarded during our annual performance management and salary review cycle which typically occurs in the March/April timeframe.

Executive Ownership Requirements—The Compensation Committee has established minimum ownership requirements for certain senior executives. The ownership requirements, expressed as a multiple of base salary, are shown in the table below. Executive ownership is calculated using the fair value of full value awards granted (vested and unvested) and the greater of the cost basis or current value of shares purchased through option exercise, our employee stock purchase plan or in the open market, and “in the money” value of vested, unexercised options. Consideration is given to the current value (number of shares owned multiplied by the current price at ownership implementation) for shares owned.

Position	Multiple of Base Salary	Time to Attain
CEO	3X	2018
CFO^[¹^]	1X	2014

[1]	Mr. Kennedy was on track to meet the minimum ownership requirement for the CFO; however, as was announced on March 11, 2013, Mr. Kennedy has resigned from Intersil effective April 5, 2013.

In order to further ensure that the financial interests of the NEOs are aligned with the interests of shareholders, we prohibit NEOs and certain other employees from taking a short position in our stock. In addition, NEOs are prohibited from trading our stock

Table of Contents

beginning three weeks or more prior to scheduled earnings announcements until two trading days following scheduled earnings announcements. Trading restrictions are also placed prior to unscheduled significant/material announcements.

Time-Based Stock Options—Time-based stock options granted have an exercise price equal to the fair market value of our common stock on the date of grant. They typically vest 25% on the first anniversary of the date of grant and 6.25% quarterly thereafter based upon continued employment over a four year period. They generally expire seven years after the date of grant. The Compensation Committee approves the pool of stock options to be distributed during the year to all employees, including the NEOs, whether in the form of annual, recognition, retention, promotion, and new hire grants. Annually, the Compensation Committee reviews and approves specific guidelines under which stock option grants may be made. The Compensation Committee also receives a quarterly summary of stock options and other awards granted during each quarter. We generally issue annual grants of time-based stock options on the first trading day of April each year.

The table below indicates time-based stock options granted to our NEOs in 2012. Our NEOs will not receive any time-based stock options in 2013 due to our considerations associated with keeping our run rate at an appropriate level while taking into account benchmark information.

	2012 Grants
NEO	Time-Based Stock Options	Exercise Price
James Diller^[1]	5,000	$ 11.22
	400,000	$ 7.56
David B. Bell	179,190	$ 11.22
Jonathan A. Kennedy	82,000	$ 11.22
Andrew M. Cowell^[2]	38,000	$ 11.22
	32,000	$ 10.33
Susan J. Hardman	82,000	$ 11.22
David M. Loftus	70,000	$ 11.22

[1] Mr. Diller received 5,000 stock options on April 2, 2012 as part of his director compensation. This grant vests 100% on the first anniversary of the date of the grant. He was also granted 400,000 stock options associated with his role as Interim President and CEO. This stock option grant was issued on December 9, 2012. These options vest upon the earlier of (a) December 9, 2013; (b) the hiring of a new CEO; or (c) in the event of a change-in-control.

[2] Mr. Cowell received 38,000 stock options in April 2012 in conjunction with our annual performance review cycle and 32,000 stock options in June 2012 associated with his promotion to SVP, Power Management Products Group.

Except as noted above with respect to Mr. Diller, our 2012 time-based stock options vest over four years at the rate of 25% on the first anniversary of the date of grant and 6.25% per quarter thereafter and expire seven years from the date of grant.

Time-Based DSUs—Time-based DSUs typically vest annually at 25% per year beginning on the first anniversary of the date of grant and become fully vested in 4 years subject to continued employment on the vesting date. The use of time-based DSUs has been incorporated into our overall equity compensation philosophy and practices for stock eligible employees across our organization.

The following table indicates time-based DSU awards issued to our NEOs in 2012.

NEO	2012 DSU Awards
James V. Diller^[¹^]	4,000
David B. Bell	63,750
Jonathan A. Kennedy	25,000
Andrew M. Cowell^[²^]	12,700 10,000
Susan J. Hardman	25,000
David M. Loftus	21,500

Table of Contents

[1]

Mr. Diller received 4,000 DSUs as part of his director compensation. This DSU award was issued on April 2, 2012 and vests incrementally over a three year period with 33% vesting on the first and second anniversaries of the date of the award and 34% vesting on the third anniversary of the date of the award.

[2]	Mr. Cowell received 12,700 time-based DSUs in April 2012 in conjunction with our annual performance review cycle and 10,000 DSUs in June 2012 associated with his promotion to SVP, Power Management Products Group.

Recipients may elect to defer receipt of the common stock represented by the DSU award for a deferral period, subject to the terms and conditions of the award. Dividend equivalents will accrue during the vesting and/or deferral period and are paid out following the vesting date or the expiration of the deferral period (if applicable).

PDSUs—To reinforce our high-performance, results-oriented culture, prior to 2011, we issued PDSUs, which vest based upon our performance in revenue growth and operating income growth compared to a peer group of companies. The actual number of PDSUs issued depends on such performance. PDSUs were structured in this manner so that our performance would be measured relative to peers, assuming that industry wide economic fluctuations would be normalized by using a “relative-to-peer” measurement for both operating income and revenue growth. In order to determine the actual payout, the calculation compares base revenue and operating income at the beginning of the performance period to the Cumulative Average Growth Rate (CAGR) during a subsequent three year period. For 2009 grants, performance was measured over the entire three year period ending in April 2012 and based on performance relative to our peers, the 2009 PDSUs had 0% payout. For 2010 grants, performance is measured on a year-to-year basis over the three-year cliff vesting schedule, thereby “locking in” the performance of one-third of the grant each year. Payout is based on how our revenue and operating income growth rank compares to the peer group, as determined in accordance with a performance matrix. The actual number of shares ultimately awarded may range from 0% – 150% of the original grant based upon our performance.

The following is the performance matrix for our 2010 PDSUs, which shows the percentage of the award that is earned based on where our operating income and revenue rank within our peer group during the relevant one-year performance periods.

	Revenue
Operating Income	Bottom Quartile	Third Quartile	Second Quartile	Top Quartile
Top Quartile	25%	75%	125%	150%
Second Quartile	0%	75%	100%	125%
Third Quartile	0%	50%	75%	75%
Bottom Quartile	0%	0%	0%	25%

With respect to the 2010 PDSUs grants, a 50% payout has been determined for the first year of performance due to revenue and operating income being in the third quartile vs. peers and a 0% payout has been determined for the second year of performance due to revenue and operating income being in the bottom quartile vs. peers. The payout for the third year of performance is projected to be 0%. As a result, the NEOs earned the following number of PDSUs with respect to the 2010 PDSU grants: Mr. Kennedy 2,333 shares; Ms. Hardman 2,333 shares and Mr. Loftus 2,333 shares. These earned PDSUs will not become vested until April 1, 2013, subject to the NEO’s continued employment on such date. Mr. Bell’s PDSU payout of 7,964 shares was determined in accordance with the severance provisions of his employment agreement. Mr. Cowell did not receive PDSU grants in 2010.

Recipients may elect to defer receipt of the common stock represented by the PDSU award for a deferral period, subject to the terms and conditions of the award. Dividend equivalents will accrue during the vesting and/or deferral period and are paid out following the vesting date or the expiration of the deferral period, provided that such dividend equivalents are paid only on PDSUs that become earned due to the achievement of performance goals.

Table of Contents

The group of companies against which our revenue growth and operating income growth is compared for the purposes of PDSUs is listed in the CD&A section of our past Proxy Statements for the applicable year of grant.

MSU Program —In 2011, the Sub-Committee approved the redesign of the performance-based elements of our equity compensation program for executives, which includes the NEOs along with other members of the executive leadership team. As a result of this redesign, the MSU Program, comprised of MSUs and MSOs, replaced PDSUs as our performance-based equity awards. The current MSU Program is based upon our TSR compared to the TSR of our group of peer companies, thus, the amount of equity awarded will be based upon our total shareholder return compared to the total shareholder return of our peers. We believe this change in the performance-based equity program more closely aligns the interests of our shareholders and Intersil’s management team, given that management will only be rewarded for performance that results in an increase in our stock price.

For the 2011 grants, the MSU Program will only payout if (a) our TSR is greater than 10%; and (b) our TSR is greater than the 50th percentile rank in performance compared to our peer group of companies. In order for executives to receive a 100% MSU Program payout, our TSR must be at the 75^th percentile rank in performance compared to our peer group of companies. Equity grants issued to executives in 2011 under the MSU Program will vest 50% on April 1, 2013 and the remaining 50% will vest on April 1, 2014, subject to continued employment and attainment of the applicable performance goals. The Compensation Committee amended the mix of time-based and performance-based equity awards to NEOs in 2011, thus ensuring that the NEOs had 50% or greater of their 2011 equity awards in performance-based equity. The measurement period of the 2011 MSU Program is two years and performance is evaluated as of April 1, 2013 for both vesting periods. At this time, it is projected that the MSO and MSU grants that vest on April 1, 2013 will payout at 0%.

The matrix below indicates the TSR parameters that will determine the percentage of the 2011 MSUs and MSOs that will be earned, assuming a minimum TSR of 10%.

Percentile Rank	Payout
90.0^th	150.0%
75.0^th	100.0%
62.5^th	50.0%
50.0^th	0.0%
Minimum ISIL TSR 10%

Results will be linearly interpolated within the payout grid.
The maximum payout is 150% of target.

The actual target number of MSOs and MSUs granted under the MSU Program was determined based upon a grant date target value. The value of the 2011 grants equaled 2x each executive’s annual incentive plan target. The 2x annual incentive target value results in a total long-term incentive payout for each executive at approximately the 75^th percentile of the long-term incentive market value.

Below is a summary of grants issued to our NEOs in 2011 under the MSU Program:

NEO	2011 MSOs Granted	2011 MSUs Granted
David B. Bell^[¹^]	185,258	57,733
Jonathan A. Kennedy	62,004	20,243
Andrew M. Cowell	87,690	30,000
Susan J. Hardman	67,277	22,267
David M. Loftus	66,073	22,024

[1] As a result of Mr. Bell’s termination on December 9, 2012, all MSOs and MSUs granted to Mr. Bell in 2011 have been forfeited.

Table of Contents

For 2012, the MSU Program was modified. The threshold of 10% TSR growth was removed, but the payout has been capped at 50% if TSR is below zero. We have also slightly modified the payout matrix in order to more closely align with benchmark information regarding performance grant programs as follows:

Percentile Rank	Payout
90.0^th	150.0%
75.0^th	100.0%
62.5^th	75.0%
50.0^th	50.0%
40.0^th	25.0%
30.0^th	0%

Results will be linearly interpolated within the payout grid.
The maximum payout is 150% of target.

Below is a summary of MSOs and MSUs granted to our NEOs in 2012.

NEO	2012 MSOs Granted	2012 MSUs Granted
David B. Bell^[¹^]	185,258	57,733
Jonathan A. Kennedy	83,646	25,847
Andrew M. Cowell	77,012	23,797
Susan J. Hardman	83,069	25,668
David M. Loftus	83,069	25,668

[1] As a result of Mr. Bell’s termination on December 9, 2012, all MSOs and MSUs granted to Mr. Bell in 2012 have been forfeited.

Equity grants issued to executives in 2012 under the MSU Program will vest 100% on April 1, 2015, subject to continued employment and attainment of the applicable performance goals. The measurement period of the 2012 MSU Program is three years and performance is evaluated as of April 1, 2015.

For 2013, we reviewed our performance equity program and made some modifications to align our program more closely to benchmark data of high technology companies that have performance equity programs based on TSR. Modifications to the program include a change to the TSR payout matrix so that “at target”, if Intersil’s TSR performance is at the 50^th percentile of the peer group there will be a 100% payout; and we have selected the S&P Semiconductor Select Index as our peer group. In addition, the number of shares being distributed to executives, including our NEOs, has been reduced so that “at target”, the total equity (time-based and performance-based) for executives will be delivered at the 50^th percentile. The TSR payout matrix for 2013 is as follows:

Percentile Rank	Payout (TSR>0%)	Payout (TSR<0%)
90.0^th	200.0%	100.0%
75.0^th	150.0%	100.0%
62.5^th	125.0%	100.0%
50.0^th	100.0%	100.0%
37.5^th	75.0%	75.0%
25.0^th	50.0%	50.0%

Results will be linearly interpolated within the payout grid.
The maximum payout is 200% of target.

Equity Run Rate—The Compensation Committee periodically reviews both the gross and the net run rate for equity compared to both our peer group and the broader industry practices when reviewing recommendations for the annual stock pool to be distributed to employees. Run rate is defined by total shares granted divided by total shares outstanding.

Table of Contents

Other Compensation

401(k)—In 2012, the NEOs were eligible to participate in the Intersil Corporation Retirement Plan (the “401(k) Plan”). All Intersil employees may begin participation in the 401(k) Plan on their first day of employment. For employees who reach their one-year anniversary, we match 100% of contributions on the first 6% of compensation deferred under the 401(k) Plan. Matching contributions are subject to a five-year vesting schedule based upon an individual’s tenure at Intersil. The 401(k) Plan also has an after-tax provision for all employees that allows additional after-tax dollars to be contributed to the 401(k) Plan.

Non-Qualified Deferred Compensation Plan—We have made available certain Non-Qualified Deferred Compensation Plans (“DCP”) which allow our executives and directors who earn compensation greater than $150,000 per year to defer up to 100% of their base salary and up to 100% of their cash incentive bonus on a pre-tax basis. Effective January 1, 2008, we adopted the Intersil Corporation Deferred Compensation Plan (the “Deferral Plan”), which provides benefits that are substantially similar to the DCP previously in effect. Upon enrollment, participants select from a number of investment choices selected by our Retirement Committee, and the investment performance of the selected funds, net of fees, is thereafter credited to the participant’s account. Under the Deferral Plan, we have the option to make discretionary contributions to the accounts of the participants which shall vest on such schedule as the Compensation Committee may determine at the time such contributions are made. In 2012, none of the NEOs made contributions to the Deferral Plan and we did not make any discretionary contributions to the Deferral Plan on behalf of any NEO.

Benefits under the DCP (other than the Deferral Plan) will be paid no earlier than the month following the participant’s termination or retirement subject to any requirement of Section 409A of the Code. However, our Retirement Committee can, in its sole discretion, pay the benefit earlier in the event of an unforeseen financial hardship. Benefits can be received in a lump sum or annual installments as elected by the participant. In the event of death, the benefits will be paid as soon as practical to the participant’s beneficiary. Under the Deferral Plan, participants can elect to receive in-service distributions no earlier than two years from the beginning of the plan year in which deferrals are made. Subject to Section 409A of the Code, participants can also elect to receive payment in the event of termination, death, or change-in-control.

Employment and Change-in-Control Agreements

David B. Bell—Mr. Bell and Intersil were parties to an employment agreement dated May 4, 2010. However, Mr. Bell’s employment under his employment agreement ceased on December 9, 2012.

For a period of two years following his termination of employment, Mr. Bell is prohibited from competing against Intersil or soliciting our employees. Mr. Bell is also required to repay any improperly received incentive compensation in the event that he commits a fraud that directly contributes to, or causes, a restatement of our financial statements.

Dr. Necip Sayiner— On March 11, 2013, Intersil and Dr. Sayiner entered into an Employment Agreement (the “Agreement”) and announced that Dr. Sayiner, had been appointed President and CEO of Intersil and elected as a member of our Board of Directors, effective March 14, 2013. Dr. Sayiner replaces James Diller, who has been serving as our Interim President and CEO pending completion of a search for a replacement for our former CEO, David Bell who resigned in December 2012. Dr. Sayiner is considered an at will employee pursuant to the terms of his Agreement. According to the term of his Agreement, Dr. Sayiner is entitled to an annual base salary of $640,000 per year and he will be eligible for a target annual bonus of $736,000 which may be adjusted upward or downward depending on performance relative to performance goals established by the Compensation Committee of our Board.

During employment and for a period of two years thereafter, Dr, Sayiner is prohibited from soliciting our employees. Dr. Sayiner is also required to repay any improperly received incentive compensation in the event that he commits a fraud that directly contributes to or causes, a restatement of our financial statements. In addition, Dr. Sayiner is entitled to receive severance benefits in the event that his employment is terminated for certain reasons, as described in the Agreement section titled, “Severance and Change-in-Control Benefits.”

In addition to the Agreement, Dr. Sayiner and Intersil entered into an Executive Change in Control Severance Benefits Agreement. The material terms of this agreement are described in the section titled “Severance and Change in Control Benefits.

All Other NEOs—We are party to an Executive Change-in-Control Severance Benefits Agreement with each of Messrs. Kennedy, Cowell and Loftus, and Ms. Hardman. The material terms of these agreements are described in the section titled “Change-in-Control Severance Agreements”.

Table of Contents

Accounting and Tax Treatment

Deductibility of Executive Compensation—As part of its role, the Compensation Committee reviews and considers the deductibility of executive compensation under Section 162(m) of the Code, which provides that we may not deduct compensation of more than $1,000,000 that is paid to certain individuals unless the compensation meets certain performance-based requirements. The Compensation Committee attempts to structure compensation such that it is fully deductible if it determines that doing so is appropriate and consistent with our executive compensation program. However, while the Compensation Committee is cognizant of the applicable requirements for qualified performance-based compensation, it may exercise its discretion to award compensation that does not meet such requirements when it considers it appropriate to do so (such as time-vested RSUs and DSUs).

Accounting for Equity-Based Compensation—We amortize the fair value of all stock options, MSOs, DSUs, RSUs, PDSUs, and MSUs over their vesting life in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation-Stock Compensation (“FASB ASC Topic 718”). We estimate prospective forfeitures as required under the guidance. Generally, we do not make compensation decisions based on the accounting treatment of any particular form of compensation.

Risk Considerations in our Compensation Program. The Compensation Committee has reviewed compensation-related risks and does not believe that our compensation programs encourage excessive or inappropriate risk-taking, or are otherwise reasonably likely to have a material adverse effect for the following reasons:

We structure our compensation program to consist of both fixed (base salary) and variable (cash and equity) components. Base salary is designed to provide income independent of our stock price or financial performance so that employees will not focus exclusively on stock price performance to the detriment of other important business metrics. Cash bonuses and equity grants are designed to reward both short and long-term performance, which we believe discourages employees from taking actions that focus only on the short-term success of Intersil. For short-term performance, cash incentive awards are generally awarded based on semi-annual operating income performance. For long-term performance, we grant various equity-based awards (as described above) that are designed to promote our sustained success. Time-based stock option awards generally vest over four years and are only valuable if our stock price increases over time. Awards granted under our MSU Program generally vest over three years based on our TSR performance relative to an identified group of peer companies. Time-based RSUs and DSUs generally vest over a period of two to four years. We feel that the variable elements motivate our executives and other employees to pursue superior short and long-term corporate results, while the fixed element is sufficiently high to discourage the taking of unnecessary or excessive risks in pursuing such results.

Because operating income performance is generally the measure for determining short-term incentive award payments, the Compensation Committee believes that executives and other employees are encouraged to take a balanced approach that focuses on generating revenue while controlling operating expenses. If we are not profitable at a reasonable level, there are no payouts under the short-term incentive award program. Our operating income performance targets are applicable to executives and employees alike, regardless of their role. The Compensation Committee believes that this encourages consistent behavior and focus across our organization, rather than establishing different performance metrics depending on an employee’s position. We also have strict internal controls over the measurement and calculation of revenue and operating income, designed to keep them from being manipulated by any employee, including our executives. All employees are required to be familiar with our Code of Corporate Conduct, which covers among other things, accuracy in keeping our books and records.

·	As part of our Insider Trading and Tipping Policy, we prohibit all hedging transactions involving Intersil stock so executives and other employees cannot insulate themselves from the effects of poor Intersil stock price performance.

Our former CEO (while he was employed) and current CFO are subject to minimum stock ownership requirements that are designed to ensure that a meaningful portion of their net worth consists of Intersil stock. The Compensation Committee believes that this reduces their incentive to engage in excessively risky behavior.

In 2011, Intersil formally adopted a Clawback Policy that applies to all our executive officers. The Clawback Policy remains in full force and affect for a period of three years after an executive officer leaves Intersil. The Clawback procedures would be activated in the event of a restatement of financial results due to material noncompliance with reporting requirements under securities laws.

Table of Contents

COMPENSATION COMMITTEE REPORT

Report of the Compensation Committee of the Board of Directors on Executive Compensation

The Compensation Committee has reviewed and discussed the above Compensation Discussion and Analysis and, based on this review and discussion, recommends to the Board that the Compensation Discussion and Analysis be incorporated by reference in Intersil’s annual report on Form 10-K for the fiscal year ended December 28, 2012 and included in this Proxy Statement.

	COMPENSATION COMMITTEE

	James A. Urry, Committee Chairman
	Gregory Lang
	Gary E. Gist

Table of Contents

SUMMARY COMPENSATION

The following table sets forth information regarding compensation for the 2010, 2011 and 2012 fiscal years for our NEOs.


		Fiscal	Salary		Bonus	Stock Awards		Option Awards		Non-Equity Incentive Plan Compensation	All Other Compensation	Total
Name and Principal Position		Year	$^[1]		$^[2]	$^[3]		$^[3]		$^[4]	$^[5]	$
James Diller		2012	56,000	^[9]	―	44,880	^[10]	627,590	^[11]	―	3,840	732,310
	Interim President and CEO

David B. Bell		2012	622,321		―	1,119,983	^[6]	1,028,845	^[6]	―	3,352,251	6,123,400
	Former President and CEO	2011	609,231		―	1,086,947	^[7]	937,827	^[7]	359,822	38,595	3,032,422
		2010	594,231		267,387	2,013,238	^[8]	1,045,889	^[8]	427,863	98,028	4,446,636

Jonathan A. Kennedy		2012	365,167		―	461,687	^[6]	467,671	^[6]	51,475	28,794	1,374,794
	Senior Vice President and CFO	2011	336,385		―	364,411	^[7]	315,426	^[7]	115,878	22,615	1,154,715
		2010	317,692		106,026	509,400	^[8]	261,472	^[8]	129,656	23,302	1,347,548

Andrew M. Cowell		2012	338,511		―	412,611	^[6]	403,890	^[6]	51,475	11,574	1,218,061
	Senior Vice President, Power	2011	171,692		1,500	533,138	^[7]	458,001	^[7]	73,177	2,016	1,239,524
	Management Products Group

Susan J. Hardman		2012	362,151		―	460,433	^[6]	466,067	^[6]	51,120	34,097	1,373,868
	Senior Vice President, Analog and	2011	334,231		―	393,441	^[7]	343,292	^[7]	134,014	25,242	1,230,220
	Mixed Signal Products Group	2010	320,031		112,232	509,400	^[8]	261,472	^[8]	136,886	25,143	1,365,164

David M. Loftus		2012	374,926		―	421,163	^[6]	431,657	^[6]	51,120	35,994	1,314,860
	Senior Vice President, Worldwide Sales	2011	366,077		―	348,955	^[7]	312,283	^[7]	74,331	28,989	1,130,635
	and Corporate Marketing	2010	350,000		―	509,400	^[8]	261,472	^[8]	66,360	21,312	1,208,544



[1]	Represents the total amount of base salary earned for the applicable year.
[2]	Represents performance bonuses paid to the NEOs, as well as a relocation bonus in the amount of $10,000 paid to Mr. Kennedy in 2010. In 2012, no NEO received any discretionary bonuses.
[3]	Represents the grant date fair value of equity-based awards granted during each indicated year, determined in accordance with FASB ASC Topic 718. All awards are amortized over the vesting life of the award without regard to estimate for forfeitures. For a detailed discussion of our grant date fair value calculation methodology, including assumptions and estimates inherent therein, please refer to the footnotes of the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 28, 2012 filed with the SEC on February 22, 2013.
[4]	Represents the 2012, 2011 and 2010 plan year payouts as part of the Executive Incentive Plan documented in the CD&A.
[5]	Represents additional compensation related to benefits and perquisites received by the NEOs, including 401(k) match contributions, life insurance, executive tax preparation, executive physicals, severance benefits, dividends and dividend equivalents and aggregate fiscal year earnings on the Non-Qualified Deferred Compensation Plan. See the section titled "Other Compensation" in the CD&A for a list of each NEO's 2012 "All Other Compensation".
[6]	If the 2012 MSOs and MSUs paid out at their maximum amount of 150% of target, the grant date fair value of each NEO's 2012 MSOs and MSUs would increase as follows:

		MSOs				MSUs
	NEO	Minimum	At Target		At Maximum	Minimum		At Target		At Maximum
	David B. Bell	―	515,017		772,526	―		404,708		607,062
	Jonathan A. Kennedy	―	232,536		348,804	―		181,187		271,781
	Andrew M. Cowell	―	214,093		321,140	―		166,817		250,226
	Susan J. Hardman	―	230,932		346,398	―		179,933		269,899
	David M. Loftus	―	230,932		346,398	―		179,933		269,899

[7]	If the 2011 MSOs and MSUs paid out at their maximum amount of 150% of target, the grant date fair value of each NEO's 2011 MSOs and MSUs would increase as follows:

		MSOs[a]				MSUs[a]
	NEO	Minimum	At Target		At Maximum	Minimum		At Target		At Maximum
	David B. Bell	―	410,430		615,645	―		299,634		449,451
	Jonathan A. Kennedy	―	135,227		202,841	―		105,061		157,592
	Andrew M. Cowell	―	200,863		301,295	―		120,638		180,957
	Susan J. Hardman	―	146,023		219,035	―		115,566		173,349
	David M. Loftus	―	143,048		214,572	―		114,305		171,476

	[a] It is projected that the first year of the 2011 MSOs/MSUs will payout at 0%.

[8]	If the 2010 PDSUs paid out at their maximum amount of 150% of target, the grant date fair value of each NEO’s 2010 PDSUs would increase as follows:

		2010 PDSUs^[a]
	NEO	Minimum	At Target		At Maximum
	David B. Bell	―	789,328		1,183,993
	Jonathan A. Kennedy	―	207,200		310,800
	Susan J. Hardman	―	207,200		310,800
	David M. Loftus	―	207,200		310,800

	[a] It has been determined that the first year of the 2010 PDSUs will only payout at6 50% and the second and third years of the 2010 PDSUs will payout at 0%.

[9]	Mr. Diller was appointed Interim President and CEO on December 9, 2012. His base salary reported herein represents director compensation for 2012. Mr. Diller is not currently receiving any cash salary associated with his role as Interim President and CEO.
[10]	Represents 4,000 DSUs awarded to Mr. Diller as part of his director compensation. This DSU award was issued on April 2, 2012 at a fair market value of $11.22 per share. The award will vest incrementally over a three year period with 33% vesting on the first and second anniversaries of the date of the award and 34% vesting on the third anniversary of the date of the award.
[11]	Represents 5,000 stock options granted to Mr. Diller as part of his director compensation and 400,000 stock options associated with his role as Interim President and CEO. The 5,000 stock options were issued on April 2, 2012 with an exercise price of $11.22 per share. This award vests 100% on the first anniversary of the date of the grant. The stock option grant for 400,000 shares was issued on December 9, 2012 with an exercise price of $7.56 per share. These options vest upon the earlier of (a) December 9, 2013; (b) the hiring of a new CEO; or (c) in the event of a change in control.

Table of Contents

In 2012, the NEOs received miscellaneous compensation as follows:


NEO	401(k) Match	Company Paid Life Insurance Premium	Dividends Paid	Other^[1]	Aggregate Earnings of NQDC	Total
James V. Diller	$ -	$ -	$ 3,840	$ -	$ -	$ 3,840
David B. Bell	$ 8,378	$ 1,269	$ 46,530	$ 3,296,074	$ -	$ 3,352,251
Jonathan A. Kennedy	$ 10,900	$ 1,192	$ 14,520	$ -	$ 2,182	$ 28,794
Andrew M. Cowell	$ 5,487	$ 1,128	$ 3,600	$ 1,358	$ -	$ 11,573
Susan J. Hardman	$ 15,000	$ 1,228	$ 14,316	$ 3,553	$ -	$ 34,097
David M. Loftus	$ 14,259	$ 1,275	$ 11,880	$ 8,580	$ -	$ 35,994

[1] For details on Mr. Bell’s compensation, reference the Potential Payments Upon Termination and Change-in-Control Benefits section below.

Grants of Plan Based Awards

The following table sets forth information regarding plan-based grants awarded to our NEOs in fiscal year 2012.

Table of Contents


GRANTS OF PLAN BASED AWARDS

			Estimated Future Payouts Under Non-			Estimated Future Payouts Under Equity Incentive Plan Awards
			Equity Incentive Plan Awards $^[1]			Stock Awards^[2]			Option Awards^[3]
Name and Principal Position	Grant Date	Approval Date	Threshold ($)	Target (#)	Maximum ($)	Threshold (#)	Target (#)	Maximum (#)	Threshold (#)	Target (#)	Maximum (#)	All Other Stock Awards: Number of Shares of Stock or Units #[4]		All Other Option Awards: Number of Securities Underlying Options # [5]		Exercise or Base Price of Option Awards ($/share)	Grant Date Fair Value of Stock and Option Awards ($)[6]

James V. Diller
Interim President and CEO	04/02/2012	02/07/2012										4,000	^[7]				44,880
	04/02/2012	02/07/2012												5,000	^[8]	11.22	13,670
	12/09/2012	12/09/2012												400,000	^[9]	7.56	613,920

David B. Bell				736,000	1,472,000
Former President and CEO	04/02/2012	02/07/2012					57,733	86,600									404,708
	04/02/2012	02/07/2012								185,258	277,887					11.22	515,017
	04/02/2012	02/07/2012										63,750					715,275
	04/02/2012	02/07/2012										-		179,190		11.22	513,827

Jonathan A. Kennedy				290,000	580,000
Senior Vice President and CFO	04/02/2012	02/07/2012					25,847	38,771									181,187
	04/02/2012	02/07/2012								83,646	125,469					11.22	232,536
	04/02/2012	02/07/2012										25,000					280,500
	04/02/2012	02/07/2012												82,000		11.22	235,135

Andrew M. Cowell				290,000	580,000
Senior Vice President, Power	04/02/2012	02/07/2012					23,797	35,696									166,817
Management Products Group	04/02/2012	02/07/2012								77,012	115,518					11.22	214,093
	04/02/2012	02/07/2012										12,700					142,494
	04/02/2012	02/07/2012												38,000		11.22	108,965
	06/01/2012	05/04/2012										10,000					103,300
	06/01/2012	05/04/2012												32,000		10.33	80,832

Susan J Hardman				288,000	576,000
Senior Vice President, Analog and	04/02/2012	02/07/2012					25,668	38,502									179,933
Mixed Signal Products Group	04/02/2012	02/07/2012								83,069	124,604					11.22	230,932
	04/02/2012	02/07/2012										25,000					280,500
	04/02/2012	02/07/2012												82,000		11.22	235,135

David M. Loftus				288,000	576,000
Senior Vice President, Worldwide Sales	04/02/2012	02/07/2012					25,668	38,502									179,933
and Corporate Marketing	04/02/2012	02/07/2012								83,069	124,604					11.22	230,932
	04/02/2012	02/07/2012										21,500					241,230
	04/02/2012	02/07/2012												70,000		11.22	200,725

Table of Contents


[1]	Represents each NEO’s target and maximum cash payout under our Executive Incentive Plan . The actual bonuses paid to the NEOs under the Executive Incentive Plan with respect to 2012 are reported in the "Non Equity Incentive Plan Compensation" column in the Summary Compensation Table.
[2]	Represents DSUs granted to the NEOs under our MSU Program in 2012. These awards will be earned only if the TSR targets are achieved, as described in the CD&A. In addition, to the extent that an award is earned in whole or in part, it will vest 100% on April 2, 2015, subject to continued employment on such date. These awards were granted under our 2008 Equity Plan. Dividend equivalents will accrue during the vesting period and, if applicable, will be paid out following the vesting date or the expiration of the deferral period. The maximum number of shares that can be received upon vesting is 150% of the original award. The minimum or threshold is 0%.
[3]	Represents stock options granted to the NEOs under our MSU Program in 2012. These awards will be earned only if the TSR targets are achieved, as described in the CD&A. In addition, to the extent that an award is earned in whole or in part, it will vest 100% on April 2, 2015, subject to continued employment on such date. These awards were granted under our 2008 Equity Plan. The maximum number of shares that can be received upon vesting is 150% of the original award. The minimum or threshold is 0%.
[4]	Represents DSUs granted under the 2008 Equity Plan. Each of these awards vest 25% per year over a four year period. Dividends will accrue during the vesting period and will be paid out following the vesting date.
[5]	Fiscal year 2012 annual stock options were granted under the 2008 Equity Plan. Each stock option grant expires seven years from the date of each grant. These grants vest 25% on the first anniversary of the date of grant and then 6.25% per quarter thereafter until fully vested.
[6]	For a detailed discussion of our grant date fair value calculation methodology, including assumptions and estimates inherent therein, please refer to our Annual Report on Form 10-K for the year ended December 28, 2012 filed with the SEC on February 22, 2013. Such discussion is found in the Form 10-K in Notes to the Consolidated Financial Statements.
[7]	Represents 4,000 DSUs awarded to Mr. Diller on April 2, 2012 at a price of 11.22 per share associated with his director compensation. The 2012 awards will vest incrementally over a three year period with 33% vesting on the first and second anniversaries of the date of the award and 34% on the third anniversary of the date of the award.
[8]	Represents 5,000 stock options granted to Mr. Diller on April 2, 2012 at a strike price of $11.22 per share, and a calculated fair value of $2.734 per share, associated with his director compensation. Grants vest 100% on the first anniversary of the date of the grant.
[9]	Mr Diller was granted 400,000 stock options on December 9, 2012 with a strike price of $7.56 per share, and a calculated fair value of $1.53 per share, associated with his role of Interim President and CEO. These options vest upon the earlier of (a) December 9, 2013; (b) the hiring of a new CEO; or (c) in the event of a Change-in-Control.

Outstanding Equity Awards at Fiscal Year-End

The following table includes certain information with respect to the unexercised options and other equity-based awards previously awarded to the NEOs, as of December 28, 2012.


	Option Awards							Stock Awards

Name and Principal Position	Grant Date ^[1]	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options(#) Unexercisable	Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unvested Options	Option Exercise Price ($)	Option Expiration Date		Grant Date ^[2]	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Number of Unearned Shares, Units or Other Rights that Have Not Vested (#)	Market Value or Payout Value of Unearned Shares, Units or Other Rights that Have Not Vested ($)
James V. Diller	7/1/2003	15,000			26.64	07/01/13		4/1/2010	1,334	10,805
Interim President and CEO	4/3/2006	15,000			29.30	04/03/13		4/1/2011	2,667	21,603
	4/2/2007	15,000			26.77	04/02/14		4/2/2012	4,000	32,400
	6/2/2008	5,000			27.67	06/02/15
	4/1/2009	5,000			12.02	07/01/16
	4/1/2010	5,000			14.80	04/01/17
	4/1/2011	5,000			12.35	04/01/18
	4/2/2012	5,000	5,000		11.22	04/02/19	^[7]
	12/9/2012	400,000	400,000		7.56	12/09/19	^[8]

David B. Bell	4/2/2012	89,595			11.22	03/09/13
Former President and CEO	4/1/2011	134,392			12.35	03/09/13
	4/1/2010	240,000			14.80	03/09/13
	4/1/2009	240,000			12.02	03/09/13
	4/1/2008	180,000			26.42	03/09/13
	4/2/2007	350,000			26.77	03/09/13

Jonathan A. Kennedy	4/1/2011	22,960	38,265		12.35	04/01/18		4/1/2011	15,750	127,575
Senior Vice President and CFO	4/1/2010	37,500	22,500		14.80	04/01/17		4/2/2012	25,000	202,500
	5/1/2009	22,500	7,500		11.75	05/01/16		4/1/2010			2,333	18,897	^[3]
	4/1/2009	11,250	3,750		12.02	04/01/16		4/1/2011			20,243	163,968	^[4]
	4/1/2008	4,000			26.42	04/01/15		4/2/2012			25,847	209,361	^[6]
	4/2/2007	2,400			26.77	04/02/14
	4/3/2006	10,000			29.30	04/03/13
	1/3/2006	2,500			25.35	01/03/13
	4/2/2012		82,000		11.22	04/02/19
	4/1/2011			62,004	12.35	04/01/18	^[4]
	4/2/2012			83,646	11.22	04/02/19	^[6]

Andrew M. Cowell	6/1/2011	28,125	46,875		13.75	06/01/18		6/1/2011	22,500	182,250
Senior Vice President, Power	6/1/2011			87,690	13.75	06/01/18	^[5]	4/2/2012	12,700	102,870
Management Products Group	4/2/2012		38,000		11.22	04/02/19		6/1/2012	10,000	81,000
	6/1/2012		32,000		10.33	06/01/19		6/1/2011			17,333	140,397	^[5]
	4/2/2012			77,012	11.22	04/02/19	^[6]	4/2/2012			23,797	192,756	^[6]

Susan J. Hardman	4/2/2012	-	82,000		11.22	04/02/19		4/1/2011	16,875	136,688
Senior Vice President, Analog and	4/1/2011	25,135	41,890		12.35	04/01/18		4/2/2012	25,000	202,500
Mixed Signal Products Group	4/1/2010	37,500	22,500		14.80	04/01/17		4/1/2010			2,333	18,897	^[3]
	4/1/2009	52,500	7,500		12.02	04/01/16		4/1/2011			22,267	180,363	^[4]
	10/1/2008	12,500			16.34	10/01/15		4/2/2012			25,668	207,911	^[6]
	4/1/2008	40,000			26.42	04/01/15
	4/2/2007	33,000			26.77	04/02/14
	4/3/2006	35,000			29.30	04/03/13
	2/1/2006	25,000			29.64	02/01/13
	1/3/2006		6,250		25.35	01/03/13
	4/1/2011			67,277	12.35	04/01/18	^[4]
	4/2/2012			83,069	11.22	04/02/19	^[6]

David M. Loftus	4/1/2011	21,562	35,938		12.35	04/01/18		4/1/2011	14,250	115,425
Senior Vice President, Worldwide Sales	4/1/2010	37,500	22,500		14.80	04/01/17		4/2/2012	21,500	174,150
and Corporate Marketing	4/1/2009	35,000	5,000		12.02	04/01/16		4/1/2010			2,333	18,897	^[3]
	10/1/2008	100,000			16.34	10/01/15		4/1/2011			22,024	178,394	^[4]
	4/1/2012		70,000		11.22	04/02/19		4/2/2012			25,668	207,911	^[6]
	4/1/2011			66,073	12.35	04/01/18	^[4]
	4/2/2012			83,069	11.22	04/02/19	^[6]

Table of Contents

[1] Options awarded prior to 2009 are fully vested. The vesting schedules of unvested time-based options are as follows (other than those granted to Mr. Diller):

Grant Date

Vesting Schedule

Remaining Vesting Dates

4/1/2009