Case | HBS Case Collection | November 2011 (Revised September 2012)

Underwater Engineer at Intel Corporation

by E. Scott Mayfield


Molly Miller, an Intel employee and shareholder, must decide whether to vote FOR or AGAINST Intel's proposed 2009 option exchange program. Given recent declines in Intel's stock price, more than 99% of Intel's outstanding employee stock options are "underwater," and employee motivation and retention are serious concerns. If the program is approved by shareholders, Molly must decide whether to participate in the program and tender her underwater employee stock options. As a shareholder and an employee, Molly must assess the pros and cons of Intel's proposed exchange program from both perspectives. In addition, she must consider Intel's proposal in light of the alternative approaches pursued by other corporations that have recently confronted the problem of underwater employee stock options.

Keywords: Stock Options; Employee Stock Ownership Plan; Semiconductor Industry;


Mayfield, E. Scott. "Underwater Engineer at Intel Corporation." Harvard Business School Case 212-047, November 2011. (Revised September 2012.)