8-KMaterial AgreementsExhibits & Filings

MICROSOFT CORP 8-K Report, Material Agreement (Nov 15, 2004)

Filed November 15, 2004For Securities:MSFT

Summary

Microsoft Corporation filed an 8-K on November 15, 2004, detailing the shareholder approval and subsequent effectiveness of amendments to its various stock and option plans on November 9, 2004. These amendments were primarily aimed at enhancing the Board's ability to adjust awards, grant limitations, and the number of shares covered by the plans in response to shareholder distributions other than normal cash dividends. The most significant immediate impact of these amendments is the unconditional declaration of a special dividend of $3.00 per share, which was conditionally declared on July 20, 2004. The adjustments to employee awards and the increase in the maximum number of shares issuable under the plans to account for these awards occurred on November 15, 2004, coinciding with the ex-dividend date for this special dividend. Investors should note the increased flexibility granted to the Board regarding stock-based compensation adjustments.

Key Highlights

  • 1Shareholders approved amendments to Microsoft's 2001 Stock Plan, 1991 Stock Option Plan, 1999 Stock Plan for Non-Employee Directors, Stock Option Plan for Non-Employee Directors, and Stock Option Plan for Consultants and Advisors.
  • 2Amendments grant the Board authority to adjust stock awards, grant limits, and share pools in response to shareholder distributions beyond normal cash dividends.
  • 3The special dividend of $3.00 per share, previously conditionally declared, became unconditional following shareholder approval of the plan amendments.
  • 4Adjustments to employee stock awards and increases in the number of shares available under the plans occurred on November 15, 2004.
  • 5The ex-dividend date for the special $3.00 per share dividend was November 15, 2004.
  • 6The amended and restated plans are filed as exhibits to this 8-K report.

Frequently Asked Questions

The primary purpose of the amendments is to provide the Board of Directors with the explicit authority to make appropriate adjustments to stock awards, grant limitations, and the total number of shares covered by the plans. This authority is particularly important in the event of distributions to shareholders that are not considered normal cash dividends.

The shareholder approval of these plan amendments on November 9, 2004, made the previously conditionally declared special dividend of $3.00 per share unconditional. The adjustments to employee stock awards due to this dividend and the related increase in share availability for the plans took effect on November 15, 2004, which was the ex-dividend date.

Employees holding stock options or awards may see adjustments to their grants to account for the special dividend. The amendments ensure that the company can make equitable adjustments to outstanding awards without enlarging the rights and benefits beyond what is appropriate, considering the distribution and applicable laws.

Yes, the amendments specifically grant the Board the power to make adjustments to awards, grant limits, and share pools in the event of future distributions of assets to shareholders other than normal cash dividends, providing greater flexibility for the company to manage its equity compensation.