NOTES TO FINANCIAL
NOTE 1 — DESCRIPTION OF THE PLAN AND ACCOUNTING
The financial statements and accompanying notes are
prepared in accordance with accounting principles generally
accepted in the United States of America.
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.
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.
Plan participants (“Participants”) may make
contributions to the Plan through payroll deductions for the
purpose of purchasing the Company’s 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.
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
Participant’s 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