distribution through December 30, 2020 and
suspend outstanding scheduled loan payments until 2021, increased
the maximum loan limit for loans taken as a result of COVID-19 through September 22,
2020, and suspended required minimum distributions for the 2020
calendar year, including 2020 payments that would have been
required to be made by April 1, 2021, unless elected
Active participants may take a withdrawal from the
Plan in the event of a financial hardship. A hardship withdrawal is
limited to the amount necessary to meet the participant’s immediate
financial need. Hardship withdrawals are further limited to
pre-tax catch-up contributions, after-tax contributions (including
earnings thereon), Roth contributions, Roth catch-up contributions, and rollover
contributions (excluding acquisition rollovers).
Active participants may also generally take a
withdrawal at any time from their rollover and after-tax accounts within the Plan.
After reaching age 591⁄2, active participants may withdraw
all, or any portion, of the balance in their accounts.
Distributions, in full or any portion, may also occur if the
participant terminates employment, retires, becomes permanently
disabled, or dies. Distributions of investments in Microsoft Common
Stock may be taken in the form of Microsoft Common Stock or cash.
Distributions may be made in installments.
Participants may also withdraw all, or any portion,
of their pre-tax and Roth
contributions during a leave of absence to perform qualified
military service of at least 30 days, subject to a six-month suspension on future
to the Plan, or if they elect a qualified reservist distribution.
The distribution generally must be made in a single lump sum cash
payment, except that distributions of investments in Microsoft
Common Stock may be taken in the form of Microsoft Common Stock or
Active and terminated participants may convert any
Plan balances (other than outstanding loans) to a Roth account
within the Plan.
Plan administrative expenses are paid by the
Company to the extent not paid or offset by the Plan. Participants
are responsible for fees associated with certain transactions or
services they utilize, such as loan originations and maintenance,
domestic relations order qualifications, dividend check processing,
overnight check fees, and professional management service fees.
Participants also pay commission charges to Fidelity for buying and
selling Microsoft Common Stock within the Plan.
Plan Amendment and Termination
The Company has the right to amend or terminate the
Plan. If the Plan is terminated, all account balances will be
distributed in the form and manner determined by the Plan
Risks and Uncertainties
The Plan utilizes various investment instruments,
including common stock, mutual funds, common collective trusts, and
separately managed accounts. Investment securities, in general, are
exposed to various risks, such as interest rate risk, credit risk,
and overall market volatility. Due to the level of risk associated
with certain investment securities, including systemic market
disruptions, the ongoing COVID-19 pandemic, and geopolitical
events, it is reasonably possible that changes in the values of
investment securities will occur in the near term and that such
changes could materially affect the amounts reported in the
Estimates and Assumptions
The preparation of financial statements in
conformity with GAAP requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and changes therein. Actual results and outcomes may
differ from management’s estimates and assumptions due to risks and
uncertainties. The Plan has no contingent assets or liabilities for
any periods presented in these financial statements.