Document:

2001 Stock Plan

  
 EXHIBIT 10.1

  
 MICROSOFT CORPORATION 
  
 2001 STOCK PLAN 
 (as amended and restated September 11, 2003) 
  
 1. Purpose of the Plan. The purposes of this Stock Plan are to attract and retain the best available individuals for positions of substantial
responsibility, to provide additional incentive to such individuals, and to promote the success of the Company’s business by aligning the financial interests of Employees and Consultants providing personal services to the Company or to any
Parent or Subsidiary of the Company with long-term shareholder value. 
  
 Awards granted hereunder may be Incentive Stock Options, Nonqualified Stock Options, Stock Awards, or SARs, at the discretion of the Board and as reflected in the terms of the Award Agreement. 
  
 2. Definitions. As used herein, the following definitions shall apply:

  
 (a) “Award” shall mean any
award or benefits granted under the Plan, including Options, Stock Awards, and SARs. 
  
 (b) “Award Agreement” shall mean a written or electronic agreement between the Company and the Awardee setting forth the
terms of the Award. 
  
 (c)
“Awardee” shall mean the holder of an outstanding Award. 
  
 (d) “Board” shall mean (i) the Board of Directors of the Company or (ii) both the Board and the Committee, if a Committee has been appointed in accordance with Section 4(a) of the Plan. 
  
 (e) “Code” shall mean the Internal Revenue
Code of 1986, as amended. 
  
 (f)
“Committee” shall mean the Compensation Committee appointed by the Board of Directors in accordance with Section 4(a) of the Plan, if one is appointed; provided, however, if the Board of Directors appoints more than one Committee
pursuant to Section 4(a), then “Committee” shall refer to the appropriate Committee, as indicated by the context of the reference. 
  
 (g) “Common Shares” shall mean the common shares of Microsoft Corporation. 
  
 (h) “Company” shall mean Microsoft
Corporation, a Washington corporation and any successor thereto. 
  
 (i) “Consultant” shall mean any person, except an Employee, engaged by the Company or any Parent or Subsidiary of the Company, to render personal services to such entity, including as an advisor.

  

 (j) “Continuous Status as a Participant” shall mean (1) for Employees,
the absence of any interruption or termination of service as an Employee, and (2) for Consultants, the absence of any interruption, expiration, or termination of such person’s consulting or advisory relationship with the Company or the
occurrence of any termination event as set forth in such person’s Award Agreement. Continuous Status as a Participant shall not be considered interrupted (i) for an Employee in the case of sick leave, maternity leave, infant care leave, medical
emergency leave, military leave, or any other leave of absence authorized in writing by a Vice President of the Company prior to its commencement, and (ii) for a Consultant, in the case of any temporary interruption in such person’s
availability to provide services to the Company which has been authorized in writing by a Vice President of the Company prior to its commencement. 
  
 (k) “Conversion Options” shall mean the Options described in Section 6(c) of the Plan. 
  
 (l) “Employee” shall mean any person,
including an officer, who is a common law employee of, receives remuneration for personal services to, is reflected on the official human resources database as an employee of, and is on the payroll of the Company or any Parent or Subsidiary of the
Company. A person is on the payroll if he or she is paid from the payroll department of the Company, or any Parent or Subsidiary of the Company. Persons providing services to the Company, or to any Parent or Subsidiary of the Company, pursuant to an
agreement with a staff leasing organization, temporary workers engaged through or employed by temporary or leasing agencies, and workers who hold themselves out to the Company, Parent, or Subsidiary to which they are providing services as being
independent contractors, or as being employed by or engaged through another company while providing the services are not Employees for purposes of this Plan, whether or not such persons are, or may be reclassified by the courts, the Internal Revenue
Service, the U. S. Department of Labor, or other person or entity as, common law employees of the Company, Parent, or Subsidiary, either solely or jointly with another person or entity. 
  
 (m) “Effective Date” shall mean January 1, 2001. 
  
 (n) “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended. 
  
 (o) “FLSA” shall mean the Fair Labor Standards Act of 1938, as amended. 
  
 (p) “Incentive Stock Option” shall mean any Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code. 
  
 (q) “Maximum
Annual Participant Award” shall have the meaning set forth in Section 5(b). 
  
 (r) “Nonqualified Stock Option” shall mean an Option not intended to qualify as an Incentive Stock Option. 
  
 (s) “Option” shall mean a stock option
granted pursuant to Section 6 of the Plan. 
  

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 (t) “Parent” shall mean a “parent corporation,” whether now or
hereafter existing, as defined in Section 424(e) of the Code. 
  
 (u) “Participant” shall mean an Employee or Consultant. 
  
 (v) “Plan” shall mean this 2001 Stock Plan, including any amendments thereto. 
  
 (w) “Share” shall mean one Common Share, as
adjusted in accordance with Section 14 of the Plan. 
  
 (x) “SAR” shall mean a stock appreciation right awarded pursuant to Section 8 of the Plan. 
  
 (y) “Stock Award” shall mean a grant of Shares or of a right to receive Shares or their cash equivalent (or both)
pursuant to Section 7 of the Plan. 
  
 (z)
“Subsidiary” shall mean (i) in the case of an Incentive Stock Option a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, and (ii) in the case of a Nonqualified Stock
Option, a Stock Award or an SAR, in addition to a subsidiary corporation as defined in (i), a limited liability company, partnership or other entity in which the Company controls 50 percent or more of the voting power or equity interests.

  
 3. Shares Subject to the Plan. Subject to the
provisions of Sections 14 and 16 of the Plan, the maximum aggregate number of Shares (increased, proportionately, in the event of any stock split or stock dividend with respect to the Shares) which may be awarded and delivered under the Plan shall
not exceed the sum of (a) any Shares available for future awards, as of the Effective Date, under the Microsoft Corporation 1991 Stock Option Plan, as amended (“1991 Stock Plan”) and (b) any Shares that are represented by awards under the
1991 Stock Plan which, after the Effective Date, are forfeited, expire, are cancelled without delivery of Shares, or otherwise result in the return of Shares to the Company, minus (c) 100,000,000 Shares (unadjusted for any stock split or stock
dividend with respect to the Shares). The Shares may be authorized, but unissued, or reacquired Common Shares. 
  
 Subject to the provisions of the following sentence, if an Award should expire or become unexercisable for any reason without having been
exercised in full, the undelivered Shares which were subject thereto shall, unless the Plan shall have been terminated, become available for future Awards under the Plan. Notwithstanding anything to the contrary contained herein, any Awards of
Options that are transferred to a third party pursuant to a program under which the holder of certain Options may transfer such Options to such third party in exchange for cash or other consideration, shall be removed from the Plan and the Shares
subject to such Awards shall not be available for regrant under the Plan regardless of whether the transferred Options are exercised or expire without exercise. 
  

4. Administration of the Plan. 
  
 (a) Procedure. The Plan shall be administered by the Board of Directors of the Company. 
  

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 (i) The Board of Directors may appoint one or more Committees each consisting of not less
than two members of the Board of Directors to administer the Plan on behalf of the Board of Directors, subject to such terms and conditions as the Board of Directors may prescribe. Once appointed, such Committees shall continue to serve until
otherwise directed by the Board of Directors. 
  
 (ii) From time to time the Board of Directors may increase the size of the Committee(s) and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, or fill vacancies
however caused. 
  
 (b) Powers of the
Board. Subject to the provisions of the Plan, the Board shall have the authority, in its discretion: (i) to grant Incentive Stock Options, Nonqualified Stock Options, Stock Awards, and SARs; (ii) to determine, in accordance with Section 11(b) of
the Plan, the fair market value of the Shares; (iii) to determine, in accordance with Section 11(a) of the Plan, the exercise price per share of Awards to be granted; (iv) to determine the Participants to whom, and the time or times at which, Awards
shall be granted and the number of Shares to be represented by each Award; (v) to interpret the Plan; (vi) to prescribe, amend, and rescind rules and regulations relating to the Plan; including the form of Award Agreement, and manner of acceptance
of an Award, (vii) to determine the terms and provisions of each Award to be granted (which need not be identical) and, with the consent of the Awardee, modify or amend each Award; (viii) to authorize conversion or substitution under the Plan of any
or all Conversion Options; (ix) to accelerate or defer (with the consent of the Awardee) the exercise date of any Option; (x) to authorize any person to execute on behalf of the Company any instrument required to effectuate the grant of an Award
previously granted by the Board; and (xi) to make all other determinations deemed necessary or advisable for the administration of the Plan. 
  
 (c) Effect of Board’s Decision. All decisions, determinations, and interpretations of the Board shall be final and binding on
all Participants and Awardees. 
  
 5. Eligibility.

  
 (a) Awards may be granted to Participants and
to persons to whom offers of employment as an Employee have been extended; provided that Incentive Stock Options may only be granted to Employees. For avoidance of doubt, directors are not eligible to participate in the Plan unless they are
Employees or Consultants. 
  
 (b) The maximum
number of Shares with respect to which an Award or Awards may be granted to any Participant in any one taxable year of the Company (the “Maximum Annual Participant Award”) shall not exceed 20,000,000 Common Shares (increased,
proportionately, in the event of any stock split or stock dividend with respect to the Shares). If an Option is in tandem with an SAR, such that the exercise of the Option or SAR with respect to a Share cancels the tandem SAR or Option right,
respectively, with respect to each Share, the tandem Option and SAR rights with respect to each Share shall be counted as covering but one Share for purposes of the Maximum Annual Participant Award. 
  

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 6. Options. 
  
 (a) Each Option shall be designated in the written or electronic option agreement as either an Incentive
Stock Option or a Nonqualified Stock Option. However, notwithstanding such designations, to the extent that the aggregate fair market value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the
first time by any Employee during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Nonqualified Stock Options. 
  
 (b) For purposes of Section 6(a), Options shall be taken into account in the order in which they were
granted, and the fair market value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  
 (c) Options converted or substituted under the Plan for any or all outstanding stock options and stock appreciation rights held by
employees, consultants, advisors or other option holders granted by entities subsequently acquired by the Company (“Conversion Options”) shall be effective as of the close of the respective mergers and acquisitions of such entities by the
Company. The Conversion Options may be Incentive Stock Options or Nonqualified Stock Options, as determined by the Committee; provided, however, that stock appreciation rights in the acquired entity shall only be converted to or substituted with
Nonqualified Stock Options. The Conversion Options shall be options to purchase the number of Common Shares determined by multiplying the number of shares of the acquired entity’s common stock underlying each such stock option or stock
appreciation right immediately prior to the closing of such merger or acquisition by the number specified in the applicable merger or acquisition agreement for conversion of each share of such entity’s common stock to a Common Share (the
“Merger Ratio”). Such Conversion Options shall be exercisable at an exercise price per Common Share (increased to the nearest whole cent) equal to the exercise price per share of the acquired entity’s common stock under each such
stock option or stock appreciation right immediately prior to closing divided by the Merger Ratio. No fractional Common Shares will be issued upon exercise of Conversion Options. In lieu of such issuance, the Common Shares issued pursuant to each
such exercise shall be rounded to the closest whole Share. All other terms and conditions applicable to such stock options and stock appreciation rights prior to closing of the acquisition, including vesting, shall remain unchanged under the
Conversion Options. 
  
 7. Stock Awards. 
  
 (a) Stock Awards may be granted either alone, in addition
to, or in tandem with other Awards granted under the Plan. Any Stock Award granted to an Employee who is non-exempt for purposes of the FLSA shall include a vesting period of not less than six (6) months. After the Committee determines that it will
offer a Stock Award, it will advise the Awardee in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions, including vesting, if any, related to the offer, including the number of Shares that the Awardee
shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the Awardee must accept the offer. The offer shall be accepted by execution of an Award Agreement in the manner determined by the
Committee. 
  

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 (b) Unless the Committee determines otherwise, the Award Agreement shall provide for the
forfeiture of the non-vested Common Shares underlying such Stock Award upon the Awardee ceasing to be a Participant. To the extent that the Awardee purchased the Shares granted under such Stock Award and any such Shares remain non-vested at the time
the Awardee ceases to be a Participant, the cessation of Participant status shall cause an immediate sale of such non-vested Shares to the Company at the original price per Common Share paid by the Awardee. 
  
 8. SARs. 
  
 (a) The Committee shall have the full power and authority,
exercisable in its sole discretion, to grant SARs to selected Awardees. The Committee is authorized to grant both tandem stock appreciation rights (“Tandem SARs”) and stand-alone stock appreciation rights (“Stand-Alone SARs”) as
described below. 
  
 (b) Tandem SARs.

  
 (i) Awardees may be granted a Tandem SAR,
exercisable upon such terms and conditions as the Committee shall establish, to elect between the exercise of the underlying Section 6 Option for Common Shares or the surrender of the Option in exchange for a distribution from the Company in
an amount equal to the excess of (A) the fair market value (on the Option surrender date) of the number of Shares in which the Awardee is at the time vested under the surrendered Option (or surrendered portion thereof) over (B) the aggregate
exercise price payable for such vested Shares. 
  
 (ii) No such Option surrender shall be effective unless it is approved by the Committee, either at the time of the actual Option surrender or at any earlier time. If the surrender is so approved, then the distributions to which the Awardee
shall become entitled under this Section 8(b) may be made in Common Shares valued at fair market value on the Option surrender date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate. 
  
 (iii) If the surrender of an Option is not approved by the
Committee, then the Awardee shall retain whatever rights he or she had under the surrendered Option (or surrendered portion thereof) on the Option surrender date and may exercise such rights at any time prior to the later of (A) five (5) business
days after the receipt of the rejection notice or (B) the last day on which the Option is otherwise exercisable in accordance with the terms of the instrument evidencing such Option, but in no event may such rights be exercised more than ten (10)
years after the date of the Option grant. 
  
 (c)
Stand-Alone SARs. 
  
 (i) An Awardee may
be granted a Stand-Alone SAR not tied to any underlying Option under Section 6 of the Plan. The Stand-Alone SAR shall cover a specified number of Common Shares and shall be exercisable upon such terms and conditions as the Committee shall
establish. Upon exercise of the Stand-Alone SAR, the holder shall be entitled to receive a distribution from the Company in an amount equal to the excess of (A) the aggregate fair market value (on the exercise date) of the Common Shares underlying
the exercised right over (B) the aggregate base price in effect for those Shares. 
  

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 (ii) The number of Common Shares underlying each Stand-Alone SAR and the base price in
effect for those Shares shall be determined by the Committee at the time the Stand-Alone SAR is granted. In no event, however, may the base price per Share be less than the fair market value per underlying Common Share on the grant date. 

 
 (iii) The distribution with respect to an exercised
Stand-Alone SAR may be made in Common Shares valued at fair market value on the exercise date, in cash, or partly in Shares and partly in cash, as the Committee shall deem appropriate. 
  
 (d) The Common Shares underlying any SARs exercised under this Section 8 shall not be available for
subsequent issuance under the Plan. 
  
 9. Term of Plan.
The Plan shall become effective as of the Effective Date. It shall continue in effect until terminated under Section 17 of the Plan. 
  
 10. Term of Award. The term of each Award shall be no more than ten (10) years from the date of grant. However, in the case of an Incentive Stock
Option granted to a Participant who, at the time the Option is granted, owns Shares representing more than ten percent (10%) of the voting power of all classes of shares of the Company or any Parent or Subsidiary, the term of the Option shall be no
more than five (5) years from the date of grant. 
  
 11.
Exercise Price and Consideration. 
  
 (a)
The per Share exercise price under each Award shall be such price as is determined by the Board, subject to the following: 
  
 (i) In the case of an Incentive Stock Option 
  
 (A) granted to an Employee who, at the time of the grant of such Incentive Stock Option, owns shares representing more than ten percent
(10%) of the voting power of all classes of shares of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the fair market value per Share on the date of grant. 
  
 (B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the fair market value per Share on the date of grant. 
  
 (ii) Except for Conversion Options under Section 6(c), the per Share exercise price under a Nonqualified Stock Option or SAR shall be no
less than seventy-five percent (75%) of the fair market value per Share on the date of grant. Notwithstanding the foregoing (or any other provision of the Plan), Options and SARs that are granted to Employees who are non-exempt for purposes of the
FLSA, shall satisfy the requirements for exclusion from regular rate of pay for purposes of the FLSA and shall have an exercise price that is at least eighty-five percent (85%) of the fair market value of the underlying Shares at the time of grant;
furthermore, such Options or SARs shall not be exercisable within the six (6) month period immediately following the date of grant, except, if so provided in the Award Agreement, in the event of the Awardee’s death, disability, or retirement,
upon a change in corporate control of the Company, or under such other circumstances as are permitted under the FLSA or rules and regulations thereunder. 
  

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 (iii) The maximum aggregate number of Shares underlying all Nonqualified Stock Options
and SARs with a per Share exercise price of less than fair market value on any grant date that may be granted under this Plan is 50,000,000 Shares (increased, proportionately, in the event of any stock split or stock dividend with respect to the
Shares). 
  
 (b) The fair market value per Share
shall be the closing price per share of the Common Share on the Nasdaq Stock Market (“Nasdaq”) on the date of grant. If the Shares cease to be listed on Nasdaq, the Board shall designate an alternative method of determining the fair market
value of the Shares. 
  
 (c) The consideration to
be paid for the Shares to be issued upon exercise of an Award, including the method of payment, shall be determined by the Board at the time of grant and may consist of cash and/or check. Payment may also be made by delivering a properly executed
exercise notice together with irrevocable instructions to a broker to promptly deliver to the Company the amount of sale proceeds necessary to pay the exercise price. If the Awardee is an officer of the Company within the meaning of Section 16 of
the Exchange Act, he may, in addition, be allowed to pay all or part of the purchase price with Shares which, as of the exercise date, the officer has owned for six (6) months or more. If the Awardee is a participant in the 1998 Microsoft
Corporation Stock Option Gain And Bonus Deferral Program, he may in addition be allowed to pay all or part of the purchase price of any deferred Option with Shares. Shares used by officers to pay the exercise price shall be valued at their fair
market value on the exercise date. 
  
 (d) Prior
to issuance of the Shares upon exercise of an Award, the Awardee shall pay any federal, state, and local income and employment tax withholding obligations applicable to such Award. If an Awardee is an officer of the Company within the meaning of
Section 16 of the Exchange Act, he may elect to pay such withholding tax obligations by having the Company withhold Shares having a value equal to the amount required to be withheld, and any Award under the Plan may permit or require that such
withholding tax obligations be paid by having the Company withhold Shares having a value equal to the amount required to be withheld. The value of the Shares to be withheld shall equal the fair market value of the Shares on the day the Award is
exercised. The right of an officer to dispose of Shares to the Company in satisfaction of withholding tax obligations shall be deemed to be approved as part of the initial grant of an Award, unless thereafter rescinded, and shall otherwise be made
in compliance with Rule 16b-3 and other applicable regulations, and any Award under the Plan may permit or require that such withholding tax obligations be paid by having the Company withhold Shares having a value equal to the amount required to be
withheld. 
  

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 12. Exercise of Award. 
  
 (a) Procedure for Exercise; Rights as a Shareholder. Any Award granted hereunder shall be exercisable
at such times and under such conditions as determined by the Board at the time of grant, and as shall be permissible under the terms of the Plan. 
  
 An Award may not be exercised for a fraction of a Share. 
  
 An Award shall be deemed to be exercised when written or electronic notice of such exercise has been given
to the Company in accordance with the terms of the Award by the person entitled to exercise the Award and full payment for the Shares with respect to which the Award is exercised has been received by the Company. Full payment may, as authorized by
the Board, consist of any consideration and method of payment allowable under Section 11(c) of the Plan. Until the issuance (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company) of
the share certificate evidencing such Shares, no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares subject to the Award, notwithstanding the exercise of the Award. The Company shall issue
(or cause to be issued) such share certificate promptly upon exercise of the Award. In the event that the exercise of an Award is treated in part as the exercise of an Incentive Stock Option and in part as the exercise of a Nonqualified Stock Option
pursuant to Section 6(a), the Company shall issue a share certificate evidencing the Shares treated as acquired upon the exercise of an Incentive Stock Option and a separate share certificate evidencing the Shares treated as acquired upon the
exercise of a Nonqualified Stock Option, and shall identify each such certificate accordingly in its share transfer records. No adjustment will be made for a dividend or other right for which the record date is prior to the date the share
certificate is issued, except as provided in Section 14 of the Plan. 
  
 Exercise of an Award in any manner and delivery of the Shares subject to such Award shall result in a decrease in the number of Shares which thereafter may be available, both for purposes of the Plan and for sale
under the Award, by the number of Shares as to which the Award is exercised. 
  
 (b) Termination of Status as a Participant. In the event of termination of an Awardee’s Continuous Status as a Participant, such Awardee may exercise his or her rights under any outstanding Awards to the
extent exercisable on the date of termination (but in no event later than the date of expiration of the term of such Award as set forth in the Award Agreement). To the extent that the Awardee was not entitled to exercise his or her rights under such
Awards at the date of such termination, or does not exercise such rights within the time specified in the individual Award Agreements, the Awards shall terminate. 
  
 (c) Disability of Awardee. Notwithstanding the provisions of Section 12(b) above, in the event
of termination of an Awardee’s Continuous Status as a Participant as a result of total and permanent disability (i.e., the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of twelve (12) months), the Awardee may exercise the Award, but only to the extent of the right to exercise that would have
accrued had the Awardee remained in Continuous Status as a Participant for a period of twelve (12) months after the date on which the Participant ceased performing services as a result of the total and permanent disability. Such exercise must occur
within eighteen (18) months (or such shorter time as is specified in the grant) from the date on which the Participant ceased performing services as a result of the total and permanent disability (but in no event later than the date of expiration of
the term of such Award as set forth in the Award Agreement). To the extent that the Awardee was not entitled to exercise such Award within the time specified herein, the Award shall terminate. 
  

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 (d) Death of Awardee. Notwithstanding the provisions of Section 12(b)
above, in the event of the death of an Awardee: 
  
 (i) who is at the time of death a Participant, the Award may be exercised, at any time within twelve (12) months following the date of death, by the Awardee’s estate or by a person who acquired the right to exercise the Award by
bequest or inheritance, but only to the extent of the right to exercise that would have accrued had the Awardee continued living and remained in Continuous Status as a Participant twelve (12) months after the date of death; or 
  
 (ii) whose Award has not yet expired but whose Continuous
Status as a Participant terminated prior to the date of death, the Award may be exercised, at any time within twelve (12) months following the date of death, by the Awardee’s estate or by a person who acquired the right to exercise the Award by
bequest or inheritance, but only to the extent of the right to exercise that had accrued at the date of termination. 
  
 (e) Notwithstanding subsections (b), (c), and (d) above, the Board shall have the authority to extend the expiration date of any
outstanding option in circumstances in which it deems such action to be appropriate (provided that no such extension shall extend the term of an Award beyond the date on which the Award would have expired if no termination of the Employee’s
Continuous Status as a Participant had occurred). 
  
 13.
Non-Transferability of Awards. An Award 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 and may be exercised, during the lifetime of the
Awardee, only by the Awardee; provided that the Board may permit further transferability, on a general or specific basis, and may impose conditions and limitations on any permitted transferability. 
  
 14. Adjustments to Shares Subject to the Plan. 
  
 The number of Shares covered by each outstanding Award, the
Maximum Annual Employee Award and the number of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as
well as the price per Share covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination, or
reclassification of the Shares, or any other increase or decrease in the number of issued Shares effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be
deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding, and conclusive. Except as expressly provided herein, no issuance by
the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an Award. 
  

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 In the event of the proposed dissolution or liquidation of the Company, the Award will
terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Award shall terminate as of a date fixed by
the Board and give each Awardee the right to exercise an Award as to all or any part of the Shares subject to an Award, including Shares as to which the Award would not otherwise be exercisable. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company with or into another corporation, each Award shall be assumed or an equivalent award shall be substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless such successor corporation does not agree to assume the Award or to substitute an equivalent award, in which case the Board shall, in lieu of such assumption or substitution, provide for the Awardee to have the right to
exercise the Award as to all of the Shares subject to Awards, including Shares as to which the Award would not otherwise be exercisable. If the Board makes an Award fully exercisable in lieu of assumption or substitution in the event of a merger or
sale of assets, the Board shall notify the Awardee that the Award shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Award will terminate upon the expiration of such period. 
  
 15. Time of Granting Awards. The date of grant of an Award shall, for
all purposes, be the date on which the Company completes the corporate action relating to the grant of such Award and all conditions to the grant have been satisfied, provided that conditions to the exercise of an Award shall not defer the date of
grant. Notice of a grant shall be given to each Participant to whom an Award is so granted within a reasonable time after the determination has been made. 
  
 16. Substitutions and Assumptions. The Board shall have the right to substitute or assume Awards in connection with mergers, reorganizations,
separations, or other transactions to which Section 424(a) of the Code applies, provided such substitutions and assumptions are permitted by Section 424 of the Code and the regulations promulgated thereunder. The number of Shares reserved pursuant
to Section 3 may be increased by the corresponding number of Awards assumed and, in the case of a substitution, by the net increase in the number of Shares subject to Awards before and after the substitution. 
  
 17. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may amend or
terminate the Plan from time to time in such respects as the Board may deem advisable (including, but not limited to amendments which the Board deems appropriate to enhance the Company’s ability to claim deductions related to stock option
exercises); provided that any increase in the number of Shares subject to the Plan, other than in connection with an adjustment under Section 14 of the Plan, shall require approval of or ratification by the shareholders of the Company.

  
 (b) Participants in Foreign Countries.
The Board shall have the authority to adopt such modifications, procedures, and subplans as may be necessary or desirable to comply with provisions of the laws of foreign countries in which the Company or its Subsidiaries may operate to assure the
viability of the benefits from Awards granted to Participants performing services in such countries and to meet the objectives of the Plan. 
  

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 (c) Effect of Amendment or Termination. Any such amendment or termination of the
Plan shall not affect Awards already granted and such Awards shall remain in full force and effect as if this Plan had not been amended or terminated, unless mutually agreed otherwise between the Awardee and the Board, which agreement must be in
writing and signed by the Awardee and the Company. 
  
 18.
Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such compliance. 
  
 19. Reservation of Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

  
 20. No Employment/Service Rights. Nothing in the Plan
shall confer upon any Participant the right to an Award or to continue in service as an Employee or Consultant for any period of specific duration, or interfere with or otherwise restrict in any way the rights of the Company (or any Parent or
Subsidiary employing or retaining such person), or of any Participant or Awardee, which rights are hereby expressly reserved by each, to terminate such person’s services at any time for any reason, with or without cause. 
  
 21. Shareholder Approval. The Plan, as amended and restated, is
subject to approval by the shareholders of the Company. 
  

	*	All share numbers in the Plan reflect the 2-for-1 stock split effected February 2003. 

  

 121999 Stock Plan for Non-Employee Directors

  
 EXHIBIT 10.2

  
 MICROSOFT CORPORATION 
 1999 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS 
 (as amended and restated September 11, 2003) 
  

	 	1.	Purpose 

  
 The purpose of the Microsoft Corporation 1999 Stock Plan for Non-Employee Directors (the “Plan”) is to attract and retain the services of
experienced and knowledgeable independent directors of Microsoft Corporation (the “Corporation”) for the benefit of the Corporation and its stockholders and to provide additional incentive for such directors to continue to work for the
best interests of the Corporation and its stockholders through continuing ownership of its common stock. 
  

	 	2.	Shares Subject to the Plan 

  
 The total number of shares of common stock of the Corporation (“Shares”) for which Awards (as defined in Section 4) may be granted under the
Plan shall not exceed 3,500,000 in the aggregate, subject to adjustment in accordance with Section 12 hereof. Within the foregoing limitation, Shares underlying Awards that have been granted pursuant to the Plan but which Awards have lapsed or
otherwise terminated without delivery of Shares shall become available for the grant of additional Awards. 
  

	 	3.	Administration of Plan 

  
 The Board of Directors of the Corporation shall administer the Plan. The Board may delegate responsibility for administration of the Plan to a Board
committee (the “Committee”) composed solely of two or more directors, each of whom is a “Non-Employee Director” (as that term is defined in Rule 16b-3(b) promulgated by the Securities and Exchange Commission pursuant to its
authority under the Securities Exchange Act of 1934 (the “Exchange Act”)). The Board or the Committee, as the case may be, shall have the power to construe the Plan, to determine all questions arising thereunder, and to adopt and amend
such rules and regulations for the administration of the Plan as it may deem desirable. References to the “Board” in this Plan shall be deemed to refer to either the Board or the Committee, whichever is appropriate in the context in which
the word is used. 
  

	 	4.	Discretionary Award Grants 

  
 Pursuant to this Plan, the Board may grant in its discretion an Award (as defined in this Section 4) to any person who (a) is elected a director of the
Corporation, and (b) is not, and has not during the immediately preceding 12 month period been, an employee of the Corporation or any subsidiary of the Corporation. An “Award” may be either (i) a grant of a stock option (an
“Option”) or (ii) a grant of Shares or of a right to receive Shares or their cash equivalent (or both) (a “Stock Award”). No Awards under this Section 4 may be granted to any individual director with respect to more than 10,000
shares for any calendar year or, in the case of a newly elected director, more than 25,000 shares for the year in which the director is first elected. No director shall have any claim or right to be granted an Award under this Plan. Having received
an Award under this Plan shall not give a director any right to receive any other Award under this Plan and the Board may determine that any or all director(s) are not eligible to receive an Award under this Plan for an indefinite period or for a
specified year or years. 
  

	 	5.	Award Agreement 

  
 Each Award granted under the Plan shall be evidenced by an Award agreement (the “Agreement”) duly executed on behalf of the Corporation and by
the director to whom such Award is granted, which Agreements may but need not be identical and which shall (a) comply with and be subject to the terms and conditions of the Plan and (b) provide that the director agrees to continue to serve as a
director of the Corporation during the term for which he or she was elected. Any Agreement may contain such other terms, provisions, and conditions not inconsistent with the Plan as may be determined by the Board. No Award shall be deemed granted
within the meaning of the Plan and no purported grant of any Award shall be effective, until such Agreement shall have been duly executed on behalf of the Corporation and the director to whom the Award is to be granted. 
  

	 	6.	Stock Awards 

  
 (a) Stock Awards may be granted either alone, in addition to, or in tandem with other Awards granted under the Plan. After the Board
determines that it will offer a Stock Award, it will advise the director in writing or electronically, by means of an Agreement, of the terms, conditions and restrictions, including vesting, if any, related to the offer, including the number of
Shares that the director shall be entitled to receive or purchase, the price to be paid, if any, and, if applicable, the time within which the director must accept the offer. The offer shall be accepted by execution of an Agreement in the manner
determined by the Board. 
  
 (b) Unless the Board
determines otherwise, the Agreement shall provide for the forfeiture of the non-vested Shares underlying such Stock Award upon the director ceasing to be a director for any reason, including death. To the extent that the director purchased the
Shares granted under such Stock Award and any such Shares remain non-vested at the time the director ceases to be a director, the cessation of director status shall cause an immediate sale of such non-vested Shares to the Company at the original
price per Share paid by the director. 
  

	 	7.	Options  

  
 (a) The Board shall set the exercise price for an Option granted pursuant to Section 4 of the Plan in its discretion. 
  
 (b) Each Option shall expire no more than ten years from the
date of the granting thereof, but shall be subject to earlier termination as follows: 
  
 (i) In the event of the death of an Option holder, the Option granted to such person may be exercised to the extent exercisable on the
date of death, within the earlier of (x) 180 days after the date of death of such person and (y) the date on which the Option expires by its terms, by the estate of such person, or by any person or persons who acquired the right to exercise such
Option by will or by the laws of descent and distribution. 
  
 (ii) In the event that an Option holder ceases to be a director of the Corporation, other than by reason of his or her death, an Option granted to such person may be exercised, to the extent exercisable on the date
such person ceases to be a director, within the earlier of (x) 180 days after the date such person ceases to be a director and (y) the date on which the Option expires by its terms. 
  

 2 

	 	8.	Vesting and Exercise of Awards 

  
 (a) The Board shall set the vesting schedule for Awards granted pursuant to Section 4 of the Plan in its discretion. 
  
 (b) To the extent that the right to exercise an Option has
vested and is in effect, the Option may be exercised from time to time, by giving written notice, signed by the person or persons exercising the Option, to the Corporation, stating the number of whole Shares with respect to which the Option is being
exercised, accompanied by payment in full for such Shares, which payment may be in whole or in part in shares of the common stock of the Corporation already owned by the person or persons exercising the Option, valued at fair market value on the
date of payment. For purposes hereof, the fair market value of the Shares covered by an Option shall be the closing price of the Shares on the applicable date as reported in the National Market List of the National Association of Securities Dealers
Inc. Automated Quotation System or on the principal national securities exchange on which the Shares are then listed for trading. 
  
 (c) Upon exercise of the Option, delivery of a certificate for fully paid and non-assessable Shares shall be made at the principal office
of the Corporation in the State of Washington to the person or persons exercising the Option as soon as practicable (but in no event more than 30 days) after the date of receipt of the notice of exercise by the Corporation, or at such time, place,
and manner as may be agreed upon by the Corporation and the person or persons exercising the Option. 
  
 (d) Upon a Stock Award becoming fully vested and nonforfeitable, delivery of a certificate for fully paid and non-assessable Shares shall
be made at the principal office of the Corporation in the State of Washington to the person to whom the Stock Award was granted as soon as practicable (but in no event more than 30 days) after the date on which the Stock Award becomes fully vested
and nonforfeitable, or at such time, place, and manner as may be agreed upon by the Corporation and the holder of the Stock Award. 
  
 (e) Prior to issuance of the Shares in connection with an Award, the director receiving the Award may request the Corporation to withhold
and pay on the director’s behalf any federal, state, and local income tax obligations applicable to such Award by having the Corporation withhold Shares having a value equal to the amount requested to be withheld, and any Award under the Plan
may permit that such withholding tax be paid by having the Corporation withhold Shares having a value equal to the amount requested to be withheld. The value of the Shares to be withheld shall equal the fair market value of the Shares on the day the
Award is exercised or granted, as applicable. The right of a director to dispose of Shares to the Corporation in satisfaction of withholding tax obligations shall be deemed to be approved as part of the initial grant of an Award, unless thereafter
rescinded, and shall otherwise be made in compliance with Rule 16b-3 and other applicable regulations. 
  

 3 

	 	9.	Merger, Consolidation, Sale of Assets, etc., Resulting in a Change in Control 

  
 (a) In the event of a Change in Control (as hereinafter defined), notwithstanding the vesting provisions
contained in the Agreement granting an Option or Stock Award, as applicable, to a director pursuant to this Plan, such Option shall become fully exercisable or Stock Award shall become fully vested and nonforfeitable if, within one year of such
Change in Control, such director shall cease for any reason to be a member of the Board. For purposes hereof, a Change in Control of the Corporation shall be deemed to have occurred if (i) there shall be consummated (x) any consolidation or merger
of the Corporation in which the Corporation is not the continuing or surviving corporation or pursuant to which shares of the common stock of the Corporation would be converted into cash, securities, or other property, other than a merger of the
Corporation in which the holders of the common stock of the Corporation immediately prior to the merger have the same proportionate ownership of common stock of the surviving corporation immediately after the merger, or (y) any sale, lease,
exchange, or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Corporation; or (ii) the stockholders of the Corporation approve any plan or proposal for the liquidation or
dissolution of the Corporation; or (iii) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act), other than William H. Gates III, shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange
Act) of 30% or more of the Corporation’s outstanding common stock; or (iv) during any period of two consecutive years, individuals who at the beginning of such period constitute the entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the nomination for election by the Corporation’s stockholders, of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at
the beginning of the period. 
  
 (b) Any exercise
of an Option permitted pursuant to this Section 9 shall be made within 180 days of the related director’s termination as a director of the Corporation. 
  

	 	10.	Awards Not Transferable 

  
 An Award granted pursuant to the Plan 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 and may be exercised, during the lifetime of the holder of an Award, only by the holder; provided that the Board may permit further transferability, on a general or specific basis, and may impose conditions and
limitations on any permitted transferability. 
  

	 	11.	No Rights as Stockholder Until Holder 

  
 Neither the recipient of an Award under the Plan nor his successors in interest shall have any rights as a stockholder of the Corporation with respect to
any Shares subject to an Award granted to such person until such person becomes a holder of record of such Shares. 
  

 4 

	 	12.	Adjustments Upon Changes in Capitalization or Merger 

  
 Subject to any required action by the stockholders of the Corporation, the number of shares of common stock covered by each outstanding Award, and the
number of shares of common stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per
share of common stock covered by each outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued shares of common stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the common stock, or any other increase or decrease in the number of issued shares of common stock effected without receipt of consideration by the Corporation; provided, however, that conversion of any convertible securities of
the Corporation shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Corporation of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of
shares of common stock subject to an Award. 
  
 In the event of
the proposed dissolution or liquidation of the Corporation, an outstanding Award (i.e., an Option that has not been exercised or a Stock Award that has not become fully vested and nonforfeitable) will terminate immediately prior to the consummation
of such proposed action, unless otherwise provided by the Board. The Board may, in the exercise of its sole discretion in such instances, declare that any Option shall terminate as of a date fixed by the Board and give each Option holder the right
to exercise an Option as to all or any part of the stock covered by such Option, including Shares as to which the Option would not otherwise be exercisable. In the event of a proposed sale of all or substantially all of the assets of the
Corporation, or the merger of the Corporation with or into another corporation, each Award shall be assumed or an equivalent Award shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation, unless
such successor corporation does not agree to assume each and every Award or to substitute an equivalent Award, in which case the Board shall, in lieu of such assumption or substitution, provide for the immediate full vesting of any Stock Awards not
yet fully vested, or provide for the Option holder to have the right to exercise such Option as to all of the stock covered by such Option, including Shares as to which such Option would not otherwise be exercisable, or both. If the Board makes an
Option fully exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Board shall notify the Option holder that the Option shall be fully exercisable for a period of fifteen (15) days from the date of such
notice, and the Option will terminate upon the expiration of such period. 
  

	 	13.	Restrictions on Issue of Shares 

  
 Notwithstanding anything in this Plan to the contrary, the Corporation may delay the issuance of Shares covered by any Award and the delivery of a
certificate for such Shares until one of the following conditions shall be satisfied: 
  
 (a) the Shares to be issued in connection with the grant or exercise of an Award, as applicable, are at the time of the issue of such
Shares by the Corporation effectively registered under applicable federal securities laws now in force or hereafter amended; or 
  
 (b) counsel for the Corporation shall have given an opinion, which opinion shall not be unreasonably conditioned or withheld, that such
Shares are exempt from registration under applicable federal securities laws now in force or hereafter amended. 
  

 5 

 It is intended that all grants of Stock Awards and exercises of Options shall be effective. Accordingly,
the Corporation shall use its best efforts to bring about compliance with the above conditions within a reasonable time, except that the Corporation shall be under no obligation to cause a registration statement or a post-effective amendment to any
registration statement to be prepared at its expense solely for the purpose of covering the issuance of Shares in connection with the grant or exercise of any Award. 
  

	 	14.	Purchase for Investment 

  
 Unless the Shares to be issued in connection with the grant or exercise of an Award granted under the Plan have been effectively registered under the
Securities Act of 1933 as now in force or hereafter amended, the Corporation shall be under no obligation to issue any Shares covered by any Award unless the person or persons to whom the Shares are to be issued, in whole or in part, shall give a
written representation and undertaking to the Corporation, which is satisfactory in form and scope to counsel to the Corporation and upon which, in the opinion of such counsel, the Corporation may reasonably rely, that he or she is acquiring the
shares issued or transferred to him or her for his or her own account as an investment and not with a view to, or for sale in connection with, the distribution of any such Shares, and that he or she will make no transfer of the same except in
compliance with any rules and regulations in force at the time of such transfer under the Securities Act of 1933, or any other applicable law, and that if Shares are issued or transferred without such registration a legend to this effect may be
placed upon the certificates representing the Shares. 
  

	 	15.	Effective Date 

  
 The effective date (the “Effective Date”) of this Plan is November 10, 1999, the date on which the Plan was approved by stockholders of the
Corporation. The Plan is amended and restated as of September 11, 2003, subject to approval by stockholders of the Corporation. 
  

	 	16.	Expenses of the Plan 

  
 All costs and expenses of the adoption and administration of the Plan shall be borne by the Corporation and none of such expenses shall be charged to any
director. 
  

	 	17.	Termination and Amendment of Plan 

  
 Unless sooner terminated as herein provided, the Plan shall terminate ten years from the Effective Date. The Board may at any time terminate the Plan or
make such modification or amendment thereof as it deems advisable; provided, however, that stockholder approval will be required for any amendment that will (a) increase the total number of shares as to which Awards may be granted under the Plan,
(b) modify the class of persons eligible to receive Awards, or (c) otherwise require stockholder approval under any applicable law or regulation. In addition, the Board shall not amend the provisions in the Plan regarding the amount, pricing, and
timing for grants pursuant to this Plan more than once every six months, other than to comport with changes in the Internal Revenue Code, or the rules thereunder. Termination or any modification or amendment of the Plan shall not, without the
consent of an Award holder, affect his or her rights under an Award previously granted to him or her. 
  

	*	All share numbers in the Plan reflect the 2-for-1 stock split effected February 2003. 

  

 6

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