Apple has tweaked the way it awards shares to executives in order to satisfy tax obligations.
In a Securities and Exchange (SEC) filing, the company yesterday revealed itself to have entered into a material definitive agreement to apply the change.
On August 9, 2005 the Compensation Committee of the Board of Directors of Apple has agreed to retain shares to the value of an executive’s tax obligations.
The Board: “Consented in advance to allow Apple's executive officers to satisfy their tax withholding obligations arising upon the vesting of restricted stock or restricted stock units by electing to have Apple withhold that number of shares with a fair market value equal to the minimum amount to be withheld under applicable tax laws. Based on the restricted stock and restricted stock units currently outstanding, the first applicable vesting date occurs during the second quarter of fiscal 2006,” the company’s filing explains.
If an executive officer chooses this option, then the shares withheld will be cancelled and will not be available for re-issuance under the 2003 Employee Stock Plan.