Exhibit 99.3
Story highlights
Paul Otellini announced three changes to Intel stock programs.
The “good news” will affect nearly all employees.
A program to exchange underwater options needs approval, but could kick in by Q4.
‘Investing in you’
Walden Kirsch, Employee Communications
March 23, 2009
Coming on the heels of Intel’s recent large investment announcements in next-generation silicon
technology, CEO Paul Otellini told employees Monday that “...today I want to talk about investing in
you.”
Standing in front of employees at a special Open Forum in the SC12 auditorium, Paul unveiled three
significant stock program changes—all focused at giving Intel employees more ways to benefit from
the company’s future success. About 16,000 employees joined Paul via webcast Monday
morning—near-record attendance.
Paul called his announcement “three pieces of what I hope are good news” for us all. Please see
sidebar box for important details and Q&As for each of these announcements:
| |
• |
|
Investment Stock Grant. Eligible employees will get a special, one-time stock grant.
This grant will in effect double the grant size you receive at Focal. Like a Focal grant,
it will be awarded meritocratically and will vest over four years. It will include a mix of
RSUs and options in proportion to each employee’s Focal grant. |
| |
| |
• |
|
Increase in Focal RSUs for non-exempt employees. Focal restricted stock unit (RSU)
grants for non-exempt employees are being increased, to about double their current size.
This is a permanent change. |
| |
| |
• |
|
Stock Option Exchange Program. Stockholders will be asked to approve an exchange of
Intel employees’ underwater options, for a lesser number of new options at market price on
the date of exchange. This date will likely be in Q4, and the stock exchange will be
voluntary. Additional information about this program will be available after Intel
stockholders have voted in May. |
Calling it “essential to our competitiveness” that Intel employees be literally invested in the
company, Paul underscored his belief that Intel has a “very bright future ahead of us.” The stock
program changes, he said, would enable employees to benefit as owners as our share price rises.
Intel is one of the last major companies to offer a top-to-bottom stock program for employees at
all levels.
Noting Intel’s current share price, Paul said he believes that the new stock options (or RSUs) that
employees receive in this recessionary period should provide a “good baseline as things improve
over the years.”
Since the Stock Option Exchange Program will require stockholder approval, Paul told employees that
company leaders have already done considerable homework—meeting with institutional and other large
investors to gauge support for the program. “We spent a lot of time” with the influential agency
called Institutional Shareholder Services (ISS), which independently evaluates corporate proxy
proposals.
Paul said he believes that ISS will support the Stock Option Exchange Program, and if that happens,
stockholders should follow suit.
As he typically does when he meets with employees, Paul spent the majority of the Open Forum taking
questions, both in the room and via webcast. Excerpts follow.
What about underwater options due to expire before the exchange program starts?
Pointing out that some people have options that may expire in the following days or weeks, Paul
said that only un-expired options at the time the program begins will be eligible for swap if the
program is approved. He also noted that the option exchange program excludes the top five senior
leaders at the company, including himself.
Do execs get an Investment Stock Grant?
Yes, but not as much and not as soon. Paul said that the Investment Grant for Intel’s Management
Committee Members (MCM) will be eligible for about half as many of these special one-time options
as other employees are.
Also, their Investment Stock Grant will be given in two installments, half in 2009 and half in
2010, while employees will be awarded their entire Investment Stock Grant in 2009.
Will the Investment Stock Grants add an expense to Intel’s bottom line?
Paul said yes, the grants do represent an expense—about $400 million spread over four years—but
this not a cash cost, and is not an unduly large expense in the greater scheme of the company’s
overall healthy financials.
Should employees vote in favor of the stock exchange proxy proposal?
Paul explicitly pointed out that “it would be improper” for management to give you advice on which
way to vote. But he urged employees—almost all of whom are stockholders—to get up to speed on the
program once additional details are announced in May. “Vote your conscience,” Paul asked.
Stock program details
Here’s a summary of Paul’s three stock-related announcements:
1. The
award of a special, one-time 2009 Investment Stock Grant. Read
the Q&A [Q&A for employees regarding the Proposed
Stock Option Exchange Program (March 23, 2009)].
| |
• |
|
This Investment Stock Grant will equal the 2009 Focal stock grant in size and
composition. The effect will be to double the Focal grant size for eligible employees this
year (in countries where we offer stock). |
| |
| |
• |
|
Grants are being awarded based on meritocracy. Only those employees who receive a 2009
Focal stock grant will receive an Investment Stock Grant. |
| |
| |
• |
|
You will be informed of your individual Investment Stock Grant during your Focal
performance review with your manager. |
2. An
increase in Focal RSU grant size for non-exempt employees. Read
the Q&A [Q&A for employees regarding the Proposed
Stock Option Exchange Program (March 23, 2009)].
| |
• |
|
This increase brings Focal RSU grants to more meaningful levels, about double the
current size. |
| |
| |
• |
|
Eligible, non-exempt employees will be informed of their grant when managers meet with
them to deliver their Focal performance review. |
3.
Stock Option Exchange Program. Read the Q&A [Q&A for employees regarding the Proposed
Stock Option Exchange Program (March 23, 2009)]. Under this voluntary program, employees would be
given the chance to exchange previously granted, underwater options for a fewer number of new
options at the market price on the date of the exchange.
2
| |
• |
|
Intel will need stockholder approval in May before the program is implemented. |
| |
| |
• |
|
Implementation is planned for Q4 in countries eligible to participate, barring
significant market changes. For example, if the stock price recovers enough the exchange
might be unproductive. |
| |
| |
• |
|
No employee action is required at this time. More details will be provided after the May
stockholder meeting. |
Stock Option Exchange Program
The Stock Option Exchange Program will need Intel stockholder approval in May before the program is
implemented. Additional information about the program is contained in the Intel 2009 Proxy
Statement filed with the U.S. Securities and Exchange Commission (SEC).
The proxy is a lengthy 67-page document. You may wish to read pages 58-63 for additional
information relating to the Employee Stock Option Exchange Program. Among other details of the
program, the proxy offers examples of exchange ratios for underwater stock options. As the proxy
notes, exchange ratios cannot yet be determined.
The full proxy statement is available at the SEC web site.
The Stock Option Exchange Program has not yet commenced. Intel will file a Tender Offer Statement
on Schedule TO with the Securities and Exchange Commission (“SEC”) upon the commencement of the
Stock Option Exchange Program. Persons who are eligible to participate in the Stock Option Exchange
Program should read the Tender Offer Statement on Schedule TO and other related materials when
those materials become available, because they will contain important information about the Stock
Option Exchange Program.
In connection with the proposal to be voted on by Intel’s stockholders to approve the Stock Option
Exchange Program, Intel has filed a preliminary proxy statement with the SEC and intends to file
other relevant materials with the SEC, including a definitive proxy statement. Intel stockholders
are urged to read such materials as and when they become available and before making any voting
decision regarding the Stock Option Exchange Program, because they will contain important
information about the proposal to be voted on by stockholders with respect to the Stock Option
Exchange Program.
Intel stockholders and option holders will be able to obtain the written materials described above
and other documents filed by Intel with the SEC free of charge from the SEC’s website at
www.sec.gov. In addition, stockholders and option holders may obtain free copies of the documents
filed by Intel with the SEC by directing a written request to: Intel Corporation, 2200 Mission
College Boulevard, Santa Clara, California, 95054-1549, Attention: Investor Relations.
3