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, 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.
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.
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 8,429,825, 10,115,416, and
11,605,570 Shares through the Plan during the years ended
December 31, 2020, 2019, and 2018, respectively. Under the
Plan, 91,823,083 Shares were reserved for future issuance as of
December 31, 2020. The maximum number of Shares that will be
offered under the Plan is 200,000,000.