NOTES TO FINANCIAL STATEMENTS
NOTE 1 DESCRIPTION OF THE PLAN AND ACCOUNTING POLICIES
Accounting Principles
The financial statements and
accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America.
General
The Microsoft Corporation Employee Stock Purchase Plan (the Plan) became effective on January 1, 2022. The Plan is a successor to the
Microsoft Corporation 2013 Employee Stock Purchase Plan (the Predecessor Plan), which was terminated effective December 31, 2021, and carries forward the material provisions of the Predecessor Plan. The Plan is intended to provide
eligible employees of Microsoft Corporation (the Company) who wish to become shareholders of the Company a convenient method of doing so. The Plan covers substantially all employees of the Company who are considered regular employees,
whose hire date is before the first business day of the three-month offering period, and whose customary employment is for more than five months in any calendar year.
Plan Administration
The administrator of the Plan (the
Plan Administrator) is the Compensation Committee of the Board of Directors of the Company or other persons acting in this capacity pursuant to a delegation of authority from the Compensation Committee. The Plan is intended to meet the
qualification standards of Section 423 of the Internal Revenue Code of 1986, pursuant to which the Plan is not subject to taxation. The Plan is not subject to the provisions of the Employee Retirement Income Security Act of 1974.
Contributions
Plan participants (Participants)
may make contributions to the Plan through payroll deductions for the purpose of purchasing the Companys common stock (Shares). Participant contributions are recorded in the period that the Participants payroll deductions are
made. Participant contributions are not subject to vesting and are therefore fully vested at all times.
Share Purchases
Participants may elect to purchase Shares at 90% of the closing price reported on the exchange where the Shares are traded (Fair Market
Value) on the last business day of each three-month offering period. The Plan operates with separate consecutive offering periods ending March 31, June 30, September 30, and December 31, with offering dates of April 1,
July 1, October 1, and January 1, respectively. Shares are recorded as purchased on the trade date, which is the last business day of each offering period. Once Shares are settled in the subsequent period, they are distributed to each
Participants account by the stock transfer agent.
Participants purchased 7,499,761 Shares through the Plan during the year ended
December 31, 2022, and purchased 7,013,581 and 8,429,825 Shares through the Predecessor Plan during the years ended December 31, 2021 and 2020, respectively.
The maximum number of Shares that were offered under the Predecessor Plan was 200,000,000. The maximum number of shares that will be offered under the
Plan is 84,809,502, which is equal to the number of shares that were available but not used under the Predecessor Plan as of December 31, 2021. As of December 31, 2022, 77,309,741 Shares were reserved for future issuance.
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