SUGGESTED MESSAGE TO DISTRIBUTE TO EMPLOYEES TO: FR: RE: DT: ALL COMPANY U.S. EMPLOYEES YOUR COMPANY CEO/CFO WE NEED YOUR HELP ON STOCK OPTIONS ISSUE JUNE X, 2004
Employee ownership has been a part of our company's culture since day one. Further, most of the major innovations of the last twenty years in technology, biotechnology and in areas from office products to overnight shipping have come from companies like ours that use stock options to motivate employees. We all contribute to our success and we should all benefit when the company is successful. Stock options, the basic tenet of employee ownership, are now in serious jeopardy. In late April, the Financial Accounting Standards Board (FASB) released a draft plan stating that they intend to treat stock options as an expense. The valuation they propose would make it very difficult to continue broad-based employee stock option programs like the one we currently have. We need your help if we are to have a chance of continuing our broad-based employee stock option program. We are now at a critical time in the stock options fight. To help on this issue, please consider doing all of the following: 1. ATTEND THE STOCK OPTIONS EVENT IN PALO ALTO ON JUNE 24. If you are a California-based employee who receives stock options we encourage you to attend a lunchtime event on June 24 at the Palo Alto Town Square in front of City Hall (250 Hamilton Avenue). Please show your support for broad-based stock option programs. The one-hour program will commence at 11:45AM (arrive no later than 11:30AM). If you are interested in attending the event, please contact xxxx@yourcompany.com for more information. We will provide transportation and box lunches for the first XX employees who sign-up – first-come, first-served. Employees are also encouraged to carpool or take public transportation. Palo Alto Town Square is walking distance from Palo Alto Caltrain Station. We need to show the FASB how important this issue is, so please consider taking a long lunch hour and supporting broadbased stock option programs. 2. SEND A MESSAGE TO THE FASB AND URGE THEM NOT TO EXPENSE STOCK OPTIONS. Tell a personal story about how stock options have helped you and influenced your work. How do they motivate you? How have they or will they help you and your family financially? How have stock options aligned you with the interests of shareholders? Using your own words to address the importance of stock options will be the most impactful, but please feel free to draw on some of our key corporate messages as well. (Please feel free to use these concepts in your note, but please do not cut and paste.) Accounting Issues:
Ø The artificially high valuation for a stock option required by FASB will eliminate stock options as a tool which has driven innovation and productivity. Ø Stock options do not meet the definition of an expense because they do not use company assets. Ø The true cost of a stock option is dilution of earnings per share (EPS) and is already accounted for when options are exercised. Competition: Ø U.S. companies need stock options to compete with other countries on a global basis. (Example: Chinese companies use stock options and they do not treat them as an expense.) Ø Expensing stock options could have a dramatic impact on American high tech leadership, innovation and job creation. In today’s economic environment, the number one rule should be “first, do no harm”. Please send an e-mail to director@fasb.org, File Reference No. 1102-100, addressed to Chairman Robert H. Herz. We need employees’ voices to be heard on this issue. For more information, please visit www.savestockoptions.org. Please send a note today - the deadline for comments is June 30th. Also, please be aware that your message will be posted on the FASB website. To see what other fellow employees are writing, please see some excerpts from FASB letters: http://www.savestockoptions.org/fasb_june30_excerpts.html 3. SEND A MESSAGE TO CONGRESS. Currently, there is legislation in the U.S. Senate and House that we support. Please visit http://savestockoptions.grassroots.com/ and follow instructions to send a message to your Members of Congress to support broadbased stock option programs, or thank them if they already are supportive. The tool identifies your members of Congress by zip code. 4. SIGN THE PETITION IN SUPPORT OF STOCK OPTIONS. We need to send the message to the FASB and to Congress that there are over 14 million people who have received stock options in the United States. We need to let them know that this is an important issue to many people. To sign the petition encouraging the FASB not to expense stock options, please visit: http://savestockoptions.grassroots.com/fasbPetition/ 5. ENCOURAGE FRIENDS AND FAMILY TO SIGN THE PETITION. Encourage your friends and family to sign the petition supporting broad-based stock option plans. If they do not currently receive stock options, let them know that if the FASB moves to expense stock options they will likely never receive them. Encourage high school and university students to sign the petition so that they may one day have the chance to receive stock options. To send to friends and family, please visit: http://savestockoptions.grassroots.com/spreadthewordTest/ Thank you for your attention on this extremely important issue.
(signed) Your CEO/CFO/Senior Executive