Form of Executive Officer Incentive Plan Stock Award Agreement



 Exhibit 10.18 
 Stock Award Agreement 
 Executive Incentive Program 

STOCK AWARD AGREEMENT UNDER 

THE MICROSOFT CORPORATION 2001 STOCK PLAN 
 Award Number <<GrantIdentifier>> 
 1. Award of Stock
Awards.    Microsoft Corporation (hereinafter the “Company”), in the exercise of its sole discretion pursuant to the Microsoft Corporation 2001 Stock Plan (the “Plan”), does
on <<GrantDate>> (the “Award Date”) hereby award to <<FullName>> (the “Awardee”) <<SharesGrantedQuantity>> Stock Awards (“SAs”) upon the terms and
subject to the conditions hereinafter contained. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Plan. 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 Date	  	Percentage
of SAs	 
	
	

		
	 [Insert Award Approval Date] (“Initial Vest Date”)
	  	 	25%	  
	 [1st 8/31 after Initial Vest Date]
	  	 	25%	  
	 [2nd 8/31 after Initial Vest Date]
	  	 	25%	  
	 [3rd 8/31 after Initial Vest Date]
	  	 	25%	  
	
	


 Vesting will not occur before the first NASDAQ Stock Market regular trading day that is on or after the applicable
vesting date above. 
 (b) Awardee agrees that the SAs subject to this 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 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 IN SUCH MATTERS. ACCOMPANYING THIS AWARD AGREEMENT IS A CURRENT COPY OF THE COMPANY’S POLICIES IN SUCH MATTERS. 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 AT
ANY POINT IN TIME. 







 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 issued under this Award Agreement shall terminate at the time such SAs are converted into Common Shares and distributed to Awardee. 

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 such 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 4 above, in the event of termination of
Awardee’s Continuous Status as a Participant as a result of total and permanent disability (as such term is defined in Section 12(c) of the Plan) on or after the last business day of the August immediately preceding the Award Date,
outstanding unvested shares under this SA shall become immediately vested. 
 6. Death of
Awardee.    Notwithstanding the provisions of Section 4 above, if Awardee is, at the time of death, in Continuous Status as a Participant on or after the last business day of the August immediately preceding the
Award Date, outstanding unvested SAs under the Award shall become immediately vested. 
 7. Retirement of
Awardee.    Notwithstanding the provisions of Section 4 above, in the event of Awardee’s Retirement, Awardee shall be treated as continuously employed through the vesting periods in Section 2(a) above. For
this purpose, “Retirement” means termination of employment with the Company or its direct and indirect subsidiaries 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 the Awardee is employed by Microsoft (or its direct and indirect subsidiaries) in the United States 
 This Section 7 will only apply to a Retirement if (a) the Retirement occurs on or after the last business day of the August immediately preceding 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 its
direct and indirect subsidiaries, 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 its direct or indirect subsidiaries, 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. 







 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, such vested SAs shall be converted into
an equivalent number of Common Shares that will be distributed to Awardee within 90 days after the date of the vesting event, or in the event of Awardee’s death, to Awardee’s legal representative within 90 days after date of death;
provided that SAs that vest on or before the Initial Vest Date, shall be converted into an equivalent number of Common Shares that will be distributed to Awardee (1) after the number of SAs subject to this Award Agreement is determined, and
(2) between the Initial Vest Date and the last day of the first September containing the Initial Vest Date. Notwithstanding the 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 such accelerated vesting. The distribution to Awardee, or in the case of Awardee’s death, to
Awardee’s legal representative, of Common Shares in respect of the vested SAs shall be evidenced by a stock certificate, appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company, or other appropriate
means as determined by the Company. 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, or in the event of Awardee’s death, Awardee’s legal representative, 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 the 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 a SA, the Company shall round the shares 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 a stock certificate, appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company, or other appropriate means, 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. 
 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 such 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 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 the 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 the 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 such 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.    The authority to manage and control the operation and administration of this Award Agreement
shall be vested in the Committee (as such term is defined in Section 2(f) of the Plan), 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.    Notwithstanding anything in this Award Agreement to the contrary, the terms of 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. 
 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 as evidenced below, 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 Section 2(b) of this Award Agreement. 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. Awardee further acknowledges that Awardee must accept this Award Agreement in the manner prescribed by the Company no later than the first anniversary of the Award Date. 

18. Board Approval.    These SAs have been awarded pursuant to the Plan and accordingly this Award of SAs is
subject to approval by an authorized committee of the Board of Directors. If this Award of SAs has not already been approved, the Company agrees to submit this Award for approval as soon as practical. If such approval is not obtained, this
award is null and void. 
 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 Section 2(b)), the Notice of Receipt of Stock Awards (if any), 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. 
 EXECUTED as of the Award Date above written. 

MICROSOFT CORPORATION 
 Lisa
Brummel,
 Chief People Officer 
 AWARDEE’S ACCEPTANCE: 
 I have read and fully understood this Award Agreement and, as referenced
in Section 17 above, I accept and agree to be bound by all of the terms, conditions and restrictions contained in this Award Agreement and the other documents referenced in it. I intend to express my acceptance of the Award and this Award
Agreement by typing my name in Awardee acceptance window provided in “step 2” of the award acceptance checklist, and I further intend the typing of my name to have the same force and effect in all respects as a handwritten signature.