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, 2013. 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
Fidelity is the administrator of the
Plan (the Plan Administrator). The Plan Administrator believes the Plan meets 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 10,115,416, 11,605,570, and 13,574,853 Shares through the Plan during the years ended December 31, 2019, 2018, and 2017,
respectively. Under the Plan, 100,252,908 Shares were reserved for future issuance as of December 31, 2019. The maximum number of Shares that will be offered under the Plan is 200,000,000.
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