Microsoft Shareholders OK $3 Dividend

Tue Nov 9, 2004

BELLEVUE, Wash. (Reuters) - Microsoft Corp. (MSFT.O: Quote, Profile, Research) shareholders on Tuesday approved changes to its stock-based employee compensation plans that would maintain the value of stock options and awards, allowing the software giant to go forward with a planned $3-per-share special dividend.

Executives at the world's largest software maker proposed the changes to ensure that Microsoft employees will not see the value of their stock options and awards drop when the shares decrease by $3 to reflect the movement of cash from Microsoft's bank to shareholders' pockets. The special dividend is payable on Dec. 2 for shareholders of record on Nov. 17.

The special dividend was announced in July as part of Microsoft's plan to return part of its $64 billion cash hoard to shareholders.

For stock options, the price at which shares can be bought will be adjusted downward and the number of options will be increased according to a predefined formula. For employees compensated under Microsoft's more recent stock award program, adopted when Microsoft stopped issuing stock options last year, the number of shares awarded will be increased.

Some 94 percent of shares voted were in support of the measure at Microsoft's annual meeting in Bellevue, Washington, the city between Seattle and Microsoft's headquarters in Redmond.

The board was re-elected by a 97-percent majority.

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