Summary
This Form 8-K filing by Apple Inc. on May 24, 2012, announces amendments to outstanding unvested restricted stock unit (RSU) awards for employees, excluding the CEO, Timothy D. Cook. These amendments will allow RSU holders to receive 'dividend equivalents' if Apple pays ordinary cash dividends. This change is in response to Apple's previously announced intention to start quarterly dividend payments in the fourth quarter of its 2012 fiscal year. The purpose of these dividend equivalents is to ensure that RSU holders are treated consistently with shareholders and that the original equity-based incentives remain intact. The dividend equivalents will be subject to the same vesting and payment terms as the underlying RSUs, and will be paid in cash or used to offset taxes depending on the employee's domicile. Notably, CEO Timothy D. Cook has requested to forgo these dividend equivalents on his own RSUs, foregoing an estimated $75 million in value.
Key Highlights
- 1Apple amended outstanding unvested restricted stock unit (RSU) awards for employees (excluding CEO Timothy D. Cook) to include dividend equivalents.
- 2These dividend equivalents will be granted if Apple pays ordinary cash dividends on its common stock.
- 3The change aligns with Apple's previously announced intention to initiate quarterly dividend payments in Q4 FY2012.
- 4The dividend equivalents are intended to preserve the equity incentive value for RSU holders and treat them consistently with shareholders.
- 5Dividend equivalents will follow the same vesting and payment terms as the underlying RSUs.
- 6CEO Timothy D. Cook will not receive dividend equivalents on his RSUs, waiving an estimated $75 million.
- 7The dividend equivalents will be paid in cash or used to offset employee taxes, depending on the employee's domicile.