Microsoft 2009 Annual Report Download - page 72

PAGE 72
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
EMPLOYEE STOCK PURCHASE PLAN
We have an employee stock purchase plan for all eligible employees. Compensation expense for the employee
stock purchase plan is recognized in accordance with SFAS No. 123(R). Shares of our common stock may be
purchased by employees at three-month intervals at 90% of the fair market value on the last day of each three-
month period. Employees may purchase shares having a value not exceeding 15% of their gross compensation
during an offering period. Employees purchased the following shares:
(Shares in millions) 2009
2008 2007
Y
ear Ended June 30,
Shares purchased 24
18 17
Average price per share $ 20.13
$ 26.78 $25.36
At June 30, 2009, 83 million shares were reserved for future issuance.
SAVINGS PLAN
We have a savings plan in the United States that qualifies under Section 401(k) of the Internal Revenue Code, and a
number of savings plans in international locations. Participating U.S. employees may contribute up to 50% of their
salary, but not more than statutory limits. We contribute fifty cents for each dollar a participant contributes in this
plan, with a maximum contribution of 3% of a participant’s earnings. Matching contributions for all plans were $262
million, $238 million, and $218 million in fiscal years 2009, 2008, and 2007, respectively, and were expensed as
contributed. Matching contributions are invested proportionate to each participant’s voluntary contributions in the
investment options provided under the plan. Investment options in the U.S. plan include Microsoft common stock,
but neither participant nor our matching contributions are required to be invested in Microsoft common stock.
STOCK PLANS
We have stock plans for directors and for officers, employees, consultants, and advisors. At June 30, 2009, an
aggregate of 714 million shares were authorized for future grant under our stock plans, which cover stock options,
stock awards, and shared performance stock awards. Awards that expire or are canceled without delivery of shares
generally become available for issuance under the plans. We issue new shares to satisfy stock option exercises.
Stock Awards
Stock awards (“SAs”) are grants that entitle the holder to shares of Microsoft common stock as the award vests. Our
SAs generally vest over a five-year period.
Shared Performance Stock Awards
Shared performance stock awards (“SPSAs”) are a form of SA in which the number of shares ultimately received
depends on our business performance against specified performance targets.
The Company granted SPSAs for fiscal years 2009, 2008, and 2007 with performance periods of July 1, 2008
through June 30, 2009, July 1, 2007 through June 30, 2008, and July 1, 2006 through June 30, 2007, respectively.
At the end of each performance period, the number of shares of stock subject to the award is determined by
multiplying the target award by a percentage ranging from 0% to 150%. The percentage is based on performance
metrics for the performance period, as determined by the Compensation Committee of the Board of Directors in its
sole discretion. An additional number of shares, approximately 12.2% of the total target SPSAs, are available as
additional awards to participants based on individual performance. One-quarter of the shares of stock subject to
each award vest following the end of the performance period, and an additional one-quarter of the shares vest on
each of the following three anniversaries of the grant date. Following the end of the fiscal year 2008 and 2007
performance periods, the Compensation Committee of the Board of Directors determined that the number of shares
of SPSAs to be issued were 18 million and 11 million respectively, based on the actual performance against metrics
established for the performance period. The number of shares of SPSAs to be issued for the fiscal year 2009
performance period will be determined in the first quarter of fiscal year 2010.