Exhibit 10.21

STOCK AWARD AGREEMENT UNDER

THE MICROSOFT CORPORATION 2001 STOCK PLAN

(Service-Based)

Award Number <<GrantIdentifier>>

1. Award.

(a) Microsoft Corporation (the “Company”) in the exercise of its sole discretion
under the Microsoft Corporation 2001 Stock Plan (the “Plan”), does on
<<GrantDate>> (the “Award Date”) hereby award to <<FullName>> (“Awardee”)
<<Granted SAs>> Stock Awards (“SAs”) upon the terms and conditions of this Award
Agreement. Capitalized terms used but not defined in this Award Agreement shall
have the meanings assigned to them in the Plan.

(b) SAs represent the Company’s unfunded and unsecured promise to issue Common
Shares at a future date, subject to the terms of this Award Agreement and the
Plan. Awardee has no rights under the SAs other than the rights of a general
unsecured creditor of the Company.

2. Vesting of SAs.

(a) Subject to the terms of this Award Agreement and the Plan and provided that
Awardee remains continuously employed through the vesting dates set out below,
the SAs shall vest as follows:

[Vesting schedule for SEIP Awards]

 

Vesting Date    Percentage
of Earned SAs  

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8/31/2016 (the “Initial Vest Date”)

     25%   

Each 6 month anniversary of the Initial Vest Date

     12.5%   

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Vesting will not occur before the first NASDAQ Stock Market regular trading day
that is on or after the applicable vesting date.

(b) Awardee agrees that the SAs subject to this Award Agreement, and other
incentive or performance-based compensation Awardee receives or has received
from the Company, shall be subject to the Company’s executive compensation
recovery policy, as amended from time to time.

(c) AWARDEE’S RIGHTS IN THE SAs SHALL BE AFFECTED, WITH REGARD TO BOTH VESTING
SCHEDULE AND TERMINATION, BY LEAVES OF ABSENCE, CHANGES IN THE NUMBER OF HOURS
WORKED, PARTIAL DISABILITY, AND OTHER CHANGES IN AWARDEE’S EMPLOYMENT STATUS AS
PROVIDED IN THE COMPANY’S CURRENT POLICIES FOR THESE MATTERS. ACCOMPANYING THIS
AWARD AGREEMENT IS A CURRENT COPY OF THESE POLICIES. THESE POLICIES MAY CHANGE
FROM TIME TO TIME WITHOUT NOTICE IN THE COMPANY’S SOLE DISCRETION, AND AWARDEE’S
RIGHTS WILL BE GOVERNED BY THE POLICIES IN EFFECT AT THE TIME OF ANY EMPLOYMENT
STATUS CHANGE. E-MAIL “BENEFITS” FOR A COPY OF THE MOST CURRENT POLICIES.

3. Termination.    Unless terminated earlier under Section 4, 5 or 6 below, an
Awardee’s rights under this Award Agreement with respect to the SAs under this
Award Agreement shall terminate at the time the SAs are converted into Common
Shares and distributed to Awardee.

 

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4. Termination of Awardee’s Status as a Participant.    Except as otherwise
specified in Section 5, 6 and 7 below, in the event of termination of Awardee’s
Continuous Status as a Participant (as that term is defined in Section 2(j) of
the Plan), Awardee’s rights under this Award Agreement in any unvested SAs shall
terminate. For the avoidance of doubt, an Awardee’s Continuous Status as a
Participant terminates at the time Awardee’s actual employer ceases to be the
Company or a “Subsidiary” of the Company, as that term is defined in
Section 2(y) of the Plan, and except as otherwise specified in Section 5, 6 and
7 below, no person shall have any rights as an Awardee under this Award
Agreement unless he or she is in Continuous Status as a Participant on the Award
Date.

5. Disability of Awardee.    Notwithstanding the provisions of Section 5 above,
in the event of termination of Awardee’s Continuous Status as a Participant as a
result of total and permanent disability (as that term is defined in
Section 12(c) of the Plan), outstanding unvested SAs under this Award Agreement
shall become immediately vested.

6. Death of Awardee.    Notwithstanding the provisions of Section 5 above, if
Awardee is, at the time of death, in Continuous Status as a Participant,
outstanding unvested SAs under this Award Agreement shall become immediately
vested.

7. Retirement of Awardee; Severance.

(a) Notwithstanding the provisions of Section 4 above, in the event of Awardee’s
Retirement, Awardee shall be treated as continuously employed through the
vesting dates in Section 2(a) above. For this purpose, “Retirement” means
termination of employment with the Company or a Subsidiary after the earlier of
(a) age 65, or (b) attaining age 55 and 15 years of Continuous Service, provided
that immediately prior to termination of employment Awardee is employed by
Microsoft (or a Subsidiary) in the United States.

This Section 7 will only apply to a Retirement if (a) the Retirement occurs more
than one year after the Award Date, (b) Awardee executes a release in
conjunction with the Retirement in the form provided by the Company, and
(c) Awardee’s employment does not terminate due to misconduct (as determined in
the sole discretion of the Company’s senior corporate officer in charge of the
Human Resources department), including but not limited to misconduct in
violation of Company policy and misconduct that adversely affects the Company’s
interests or reputation.

For purposes of this Section 7, “Continuous Service” means that Awardee has
continuously remained an employee of the Company or a Subsidiary, measured from
Awardee’s “most recent hire date” as reflected in the Company records. For an
Awardee who became an employee of the Company following the acquisition of his
or her employer by the Company or a Subsidiary, service with the acquired
employer shall count toward Continuous Service, and Continuous Service shall be
measured from Awardee’s acquired company hire date as reflected in the Company’s
records.

If the Awardee dies after an eligible Retirement under this Section 7, then any
shares that would, but for the Awardee’s death, be distributed pursuant to this
Section 7 on vesting dates that follow the Awardee’s death shall be immediately
vested and distributed in accordance with this Award Agreement.

(b) Awardee may vest in shares following Awardee’s termination of employment to
the extent provided in a Company severance benefit plan, including the Senior
Executive Severance Benefit Plan. In no event, however, shall any accelerated or
continued vesting under a Company severance benefit plan change the time of
payment specified under this Award Agreement.

8. Value of Unvested SAs.    In consideration of the award of these SAs, Awardee
agrees that upon and following termination of Awardee’s Continuous Status as a
Participant for any reason (whether or not in breach of applicable laws), and
regardless of whether Awardee is terminated with or without cause, notice, or
pre-termination procedure or whether Awardee asserts or prevails on a claim that
Awardee’s employment was terminable only for cause or only with notice or
pre-termination procedure, any unvested SAs under this Award Agreement shall be
deemed to have a value of zero dollars ($0.00).

9. Conversion of SAs to Common Shares; Responsibility for Taxes.

(a) Provided Awardee has satisfied the requirements of Section 9(b) below, on
the vesting of any SAs, the vested SAs shall be converted into an equivalent
number of Common Shares that will be distributed to Awardee (or Awardee’s legal
representative, if applicable) within 90 days after the date of the vesting
event. Notwithstanding the

 

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foregoing, if accelerated vesting of an SA occurs pursuant to a provision of the
Plan not addressed in this Award Agreement, distribution of the related Common
Share shall not occur until the date distribution would have occurred under this
Award Agreement absent this accelerated vesting. The distribution to Awardee
(Awardee’s legal representative, if applicable) of Common Shares in respect of
the vested SAs shall be evidenced by means that the Company determines to be
appropriate. In the event ownership or issuance of Common Shares is not feasible
due to applicable exchange controls, securities regulations, tax laws or other
provisions of applicable law, as determined by the Company in its sole
discretion, Awardee (Awardee’s legal representative, if applicable) shall
receive cash proceeds in an amount equal to the value of the Common Shares
otherwise distributable to Awardee, as determined by the Company in its sole
discretion, net of amounts withheld in satisfaction of the requirements of
Section 9(b) below.

(b) Regardless of any action the Company or Awardee’s actual employer takes with
respect to any or all income tax (including federal, state and local taxes),
social insurance, payroll tax, payment on account, or other tax-related
withholding items (“Tax-Related Items”) that arise in connection with the SAs,
Awardee acknowledges and agrees that the ultimate liability for any Tax-Related
Items determined by the Company in its discretion to be legally due by Awardee,
is and remains Awardee’s responsibility. Awardee acknowledges and agrees that
the Company and/or Awardee’s actual employer (i) make no representations or
undertakings regarding the treatment of any Tax-Related Items in connection with
any aspect of the SAs, including the grant of the SAs, the vesting of SAs, the
conversion of SAs into Common Shares or the receipt of an equivalent cash
payment, the subsequent sale of any Common Shares acquired and the receipt of
any dividends; and (ii) do not commit to and are under no obligation to
structure the terms of the grant or any aspect of the SAs to reduce or eliminate
Awardee’s liability for any Tax-Related Items.

Prior to the relevant taxable or tax-withholding event, as applicable, Awardee
shall pay, or make adequate arrangements satisfactory to the Company or to
Awardee’s actual employer (in their sole discretion) to satisfy all obligations
for Tax-Related Items. In this regard, Awardee authorizes the Company or
Awardee’s actual employer to withhold all applicable Tax-Related Items from
Awardee’s wages or other cash compensation payable to Awardee by the Company or
Awardee’s actual employer. Alternatively, or in addition, the Company or
Awardee’s actual employer may, in their sole discretion, and without notice to
or authorization by Awardee, (i) sell or arrange for the sale of Common Shares
to be issued upon the vesting of SAs or other event to satisfy the withholding
obligation, and/or (ii) withhold in Common Shares, provided that the Company and
Awardee’s actual employer shall withhold only the amount of shares necessary to
satisfy the minimum withholding amount or such other amount determined by the
Company as not resulting in negative accounting consequences for the Company.
Awardee will be deemed to have been issued the full number of Common Shares
subject to the SAs, notwithstanding that a number of whole vested Common Shares
are held back solely for the purpose of paying the Tax-Related Items. Awardee
shall pay to the Company or to Awardee’s actual employer any amount of
Tax-Related Items that the Company or Awardee’s actual employer may be required
to withhold as a result of Awardee’s receipt of SAs, the vesting of SAs, or the
conversion of vested SAs to Common Shares that cannot be satisfied by the means
described in this paragraph. Except where applicable legal or regulatory
provisions prohibit and notwithstanding anything in the Plan to the contrary,
the standard process for the payment of an Awardee’s Tax-Related Items shall be
for the Company or Awardee’s actual employer to withhold in Common Shares only
to the amount of shares necessary to satisfy the minimum withholding amount or
such other amount determined by the Company as not resulting in negative
accounting consequences for the Company. The Company may refuse to deliver
Common Shares to Awardee if Awardee fails to comply with Awardee’s obligation in
connection with the Tax-Related Items as described in this section 9.

(c) In lieu of issuing fractional Common Shares, on the vesting of a fraction of
an SA, the Company shall round the shares down to the nearest whole share and
any such share that represents a fraction of a SA will be included in a
subsequent vest date.

(d) Until the distribution to Awardee of the Common Shares in respect of the
vested SAs is evidenced by deposit in Awardee’s brokerage account, Awardee shall
have no right to vote or receive dividends or any other rights as a shareholder
with respect to such Common Shares, notwithstanding the vesting of SAs. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date Awardee is recorded as the owner of the Common Shares,
except as provided in Section 14 of the Plan.

(e) By accepting the Award of SAs evidenced by this Award Agreement, Awardee
agrees not to sell any of the Common Shares received on account of vested SAs at
a time when applicable laws or Company policies prohibit a sale. This
restriction shall apply so long as Awardee is an Employee, Consultant or outside
director of the Company or a Subsidiary of the Company.

 

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10. Non-Transferability of SAs.    Awardee’s right in the SAs awarded under this
Award Agreement and any interest therein may not be sold, pledged, assigned,
hypothecated, transferred, or disposed of in any manner, other than by will or
by the laws of descent or distribution. SAs shall not be subject to execution,
attachment or other process.

11. Acknowledgment of Nature of Plan and SAs.    In accepting the Award, Awardee
acknowledges that: (a) the Plan is established voluntarily by the Company, it is
discretionary in nature and may be modified, amended, suspended or terminated by
the Company at any time, as provided in the Plan;

(b) the Award of SAs is voluntary and occasional and does not create any
contractual or other right to receive future awards of SAs or other awards, or
benefits in lieu of SAs even if SAs have been awarded repeatedly in the past;

(c) all decisions with respect to SAs or other future awards, if any, will be at
the sole discretion of the Company;

(d) Awardee’s participation in the Plan is voluntary;

(e) the future value of the underlying Common Shares is unknown and cannot be
predicted with certainty;

(f) if Awardee receives Common Shares, the value of the Common Shares acquired
on vesting of SAs may increase or decrease in value;

(g) notwithstanding any terms or conditions of the Plan to the contrary and
consistent with Section 4 above, in the event of termination of Awardee’s
Continuous Status as a Participant under circumstances where Section 7 above
does not apply (whether or not in breach of applicable laws), Awardee’s right to
receive SAs and vest under the Plan, if any, will terminate effective as of the
date that Awardee is no longer actively employed and will not be extended by any
notice period mandated under applicable law. Awardee’s right to receive Common
Shares pursuant to any SAs after termination of Continuous Status as a
Participant, if any, will be calculated as of the date of termination of
Awardee’s active employment and will not be extended by any notice period
mandated under applicable law. The senior corporate officer in charge of the
Human Resources department shall have the exclusive discretion to determine when
Awardee is no longer actively employed for purposes of the award of SAs; and

(h) Awardee acknowledges and agrees that, regardless of whether Awardee is
terminated with or without cause, notice or pre-termination procedure or whether
Awardee asserts or prevails on a claim that Awardee’s employment was terminable
only for cause or only with notice or pre-termination procedure, Awardee has no
right to, and will not bring any legal claim or action for, (a) any damages for
any portion of any SAs that have been vested and converted into Common Shares,
or (b) termination of any unvested SAs under this Award Agreement.

12. No Employment Right.    Awardee acknowledges that neither the fact of this
Award of SAs nor any provision of this Award Agreement or the Plan or the
policies adopted pursuant to the Plan shall confer upon Awardee any right with
respect to employment or continuation of current employment with the Company or
with Awardee’s actual employer, or to employment that is not terminable at will.
Awardee further acknowledges and agrees that neither the Plan nor this Award of
SAs makes Awardee’s employment with the Company or Awardee’s actual employer for
any minimum or fixed period, and that this employment is subject to the mutual
consent of Awardee and the Company or Awardee’s actual employer, and may be
terminated by either Awardee or the Company or Awardee’s actual employer at any
time, for any reason or no reason, with or without cause or notice or any kind
of pre- or post-termination warning, discipline or procedure.

13. Administration.    Except as otherwise expressly provided in the Plan, the
authority to manage and control the operation and administration of this Award
Agreement shall be vested in the Committee, and the Committee shall have all
powers and discretion with respect to this Award Agreement as it has with
respect to the Plan. Any interpretation of the Award Agreement by the Committee
and any decision made by the Committee with respect to the Award Agreement shall
be final and binding on all parties. References to the Committee in this Award
Agreement shall be read to include a reference to any delegate of the Committee
acting within the scope of his or her delegation.

14. Plan Governs.    Except as provided in Schedule A, this Award Agreement
shall be subject to the terms of the Plan, and this Award Agreement is subject
to all interpretations, amendments, rules and regulations promulgated by the
Committee from time to time pursuant to the Plan.

15. Notices.    Any written notices provided for in this Award Agreement that
are sent by mail shall be deemed received three business days after mailing, but
not later than the date of actual receipt. Notices shall be directed, if to
Awardee, at Awardee’s address indicated by the Company’s records and, if to the
Company, at the Company’s principal executive office.

 

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16. Electronic Delivery.    The Company may, in its sole discretion, decide to
deliver any documents related to SAs awarded under the Plan or future SAs that
may be awarded under the Plan by electronic means or request Awardee’s consent
to participate in the Plan by electronic means. Awardee hereby consents to
receive such documents by electronic delivery and agrees to participate in the
Plan through an on-line or electronic system established and maintained by the
Company or another third party designated by the Company.

17. Acknowledgment.    By Awardee’s acceptance of this Award Agreement in the
manner prescribed by the Company, Awardee acknowledges that Awardee has received
and has read, understood and accepted all the terms, conditions and restrictions
of this Award Agreement, the Plan, and the current policies referenced in
Sections 2(b) and 2(c) above. Awardee understands and agrees that this Award
Agreement is subject to all the terms, conditions, and restrictions stated in
this Award Agreement and in the other documents referenced in the preceding
sentence, as the latter may be amended from time to time in the Company’s sole
discretion.

18. Board Approval.    These SAs have been awarded pursuant to the Plan and this
Award of SAs has been approved by the Compensation Committee of the Board of
Directors or the Board of Directors.

19. Governing Law and Venue.    This Award Agreement shall be governed by the
laws of the State of Washington, U.S.A., without regard to Washington laws that
might cause other law to govern under applicable principles of conflicts of law.
The venue for any litigation related to this Award Agreement will be in King
County, Washington.

20. Severability.    If one or more of the provisions of this Award Agreement
shall be held invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby and the invalid, illegal or unenforceable
provisions shall be deemed null and void; however, to the extent permissible by
law, any provisions that could be deemed null and void shall first be construed,
interpreted or revised retroactively to permit this Award Agreement to be
construed so as to foster the intent of this Award Agreement and the Plan.

21. Complete Award Agreement and Amendment.    This Award Agreement (including
the policies referenced in Sections 2(b) and 2(c)) and the Plan constitute the
entire agreement between Awardee and the Company regarding SAs. Any prior
agreements, commitments or negotiations concerning these SAs are superseded.
This Award Agreement may be amended only by written agreement of Awardee and the
Company, without consent of any other person, provided that no consent is
necessary to an amendment that in the reasonable judgment of the Committee
confers a benefit on Awardee. Awardee agrees not to rely on any oral information
regarding this Award of SAs or any written materials not identified in this
Section 21.

22. Code Section 409A.    This Award Agreement shall be interpreted, operated,
and administered in a manner so as not to subject Awardee to the assessment of
additional taxes or interest under Code section 409A, and this Award Agreement
shall be amended as the Company, in its sole discretion, determines is necessary
and appropriate to avoid the application of any such taxes or interest.

 

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