<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 16, 1998
SECURITIES AND EXCHANGE COMMISSION
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
MICROSOFT CORPORATION
(Exact name of registrant as specified in its charter)
WASHINGTON 91-1144442
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
One Microsoft Way
Redmond, Washington 98052-6399
(425) 882-8080
(Address, including zip code, and telephone
number including area code, of registrant's principal
executive office)
________________________________________
Robert A. Eshelman
General Counsel, Finance and Administration
One Microsoft Way
Redmond, Washington 98052-6399
(425) 882-8080
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications to:
Jamie D. Pedersen
Preston Gates & Ellis LLP
5000 Columbia Center
701 Fifth Avenue
Seattle, Washington 98104-7078
________________________________________
Approximate date of commencement of proposed sale to the public: At such
time or times after the effective date of this Registration Statement as the
Selling Shareholders shall determine.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
CALCULATION OF REGISTRATION FEE*
<TABLE>
<CAPTION>
Title of each class Proposed maximum Proposed maximum
of securities to be Amount to be offering price per aggregate offering Amount of
registered registered share* price* registration fee*
------------------- ------------ ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
Common Shares par
value
$.000025 2,257,237 shares $130.72 $295,066,020.64 $82,028.35
</TABLE>
* Estimated pursuant to Rule 457(c) solely for purposes of calculating
amount of registration fee, based upon the average of the high and low prices
reported on December 14, 1998, as reported on the Nasdaq Stock Market.
The Index to Exhibits is located at Page II-4.
<PAGE>
PROSPECTUS
----------
MICROSOFT CORPORATION
2,257,237 Common Shares
Par Value of $.000025 Per Share
THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER CERTAIN "RISK FACTORS" IN DETERMINING WHETHER TO
PURCHASE THE MICROSOFT COMMON SHARES. SEE PAGE 2.
________________________________________
This Prospectus is part of a registration statement that we filed with the
SEC using the "shelf" registration process. It covers 2,257,237 shares of our
Common Stock. These shares may be offered and sold from time to time by certain
of our stockholders (the "Selling Shareholders") who acquired the shares when
one of our subsidiaries, MSLE, Inc., merged with LinkExchange, Inc. We will not
receive any of the proceeds from the sale of the Common Shares. We will bear
the costs relating to the registration of the Common Shares, which we estimate
to be $99,028.35.
The Common Shares are traded on the Nasdaq Stock Market under the symbol
MSFT. The average of the high and low prices of the Common Shares as reported
on the Nasdaq Stock Market on December 14, 1998 was $130.72 per Common Share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________________________________
The date of this Prospectus is December 16, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
WHERE YOU CAN FIND MORE INFORMATION...................... 1
THE COMPANY.............................................. 2
RISK FACTORS............................................. 2
USE OF PROCEEDS.......................................... 2
SELLING SHAREHOLDERS..................................... 2
PLAN OF DISTRIBUTION..................................... 3
LEGAL MATTERS............................................ 4
EXPERTS.................................................. 4
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND IN ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. NO
ONE HAS BEEN AUTHORIZED TO PROVIDE YOU WITH DIFFERENT INFORMATION.
THE SHARES OF COMMON STOCK ARE NOT BEING OFFERED IN ANY JURISDICTION WHERE
THE OFFER IS NOT PERMITTED.
YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS OR ANY
PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE
FRONT OF THE DOCUMENTS.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
. GOVERNMENT FILINGS. We file annual, quarterly and special reports and
other information with the Securities and Exchange Commission (the "SEC").
You may read and copy any document that we file at the SEC's public reference
rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. Our SEC filings are also available to you free of charge at
the SEC's web site at http://www.sec.gov. Most of our SEC filings are also
available to you free of charge at our web site at
http://www.microsoft.com/MSFT.
. STOCK MARKET. The Common Shares are traded as "National Market Securities"
on the Nasdaq National Market. Material filed by Microsoft can be inspected
at the offices of the National Association of Securities Dealers, Inc.,
Reports Section, 1735 K Street, N.W., Washington, D.C. 20006.
. INFORMATION INCORPORATED BY REFERENCE. The SEC allows us to "incorporate by
reference" the information we file with them, which means that we can
disclose important information to you by referring you to those documents.
The information incorporated by reference is considered to be part of this
prospectus, and information that we file later with the SEC will
automatically update and supersede previously filed information, including
information contained in this document.
We incorporate by reference the documents listed below and any future filings
we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 until this offering has been completed:
1. Microsoft's Annual Report on Form 10-K which includes various pages from
its Annual Report to Shareholders for the year ended June 30, 1998.
2. Microsoft's Quarterly Report on Form 10-Q for the quarter ended September
30, 1998.
3. Microsoft's Proxy Statement dated September 25, 1998.
4. The description of the Common Stock of Microsoft, which is contained in
the registration statement of Microsoft filed on Form S-3, dated December
13, 1996.
You may request free copies of these filings by writing or telephoning us at
the following address:
Investor Relations Department
Microsoft Corporation
One Microsoft Way
Redmond, Washington 98052-6399
(425) 882-8080
email: [email protected]
You may also review and/or download free copies of items 1, 2 and 3 at our web
site at http://www.microsoft.com/MSFT.
________________________________________
1
<PAGE>
THE COMPANY
Microsoft Corporation was founded as a partnership in 1975 and
incorporated in 1981. Microsoft develops, manufactures, licenses, sells, and
supports a wide range of software products including:
. scalable operating systems for intelligent devices, personal computers
("PCs"), and servers;
. server applications for client/server environments;
. business and consumer productivity applications;
. software development tools; and
. Internet and intranet software and technologies.
Microsoft's interactive efforts include entertainment and information
software programs; the MSN(TM) network of Internet products and services; and
alliances with companies involved with other forms of digital interactivity.
Microsoft also sells personal computer input devices and books, and researches
and develops advanced technologies for future software products.
Microsoft's business strategy is to develop a broad line of software
products for business and personal use, and to distribute these products through
diverse channels, including distributors, resellers, system integrators, retail
stores, and preinstalled on new computer hardware.
Microsoft is organized as a Washington corporation with its principal
executive offices located at One Microsoft Way, Redmond, Washington 98052-6399.
Our telephone number is (425) 882-8080 and our electronic mail address is
[email protected].
RISK FACTORS
You should carefully consider Risk Factors for our stock which are
discussed at pages 30-33 of our Annual Report to Shareholders and other
information incorporated by reference. See page 1 of this Prospectus.
USE OF PROCEEDS
All net proceeds from the sale of the Common Shares covered by this
Prospectus will go to the Selling Shareholders who offer and sell their shares.
We will not receive any proceeds from the sale of the Common Shares by the
Selling Shareholders.
SELLING SHAREHOLDERS
All of the Common Shares registered for sale under this Prospectus will
be owned immediately after registration by all of the former shareholders of
LinkExchange (the "Selling Shareholders").
All of the shares offered by the Selling Shareholders were acquired in
connection with the merger of MSLE, Inc., a wholly owned Washington subsidiary
of Microsoft ("Sub"), with and into LinkExchange, Inc. ("LinkExchange"), a
California corporation (the "Merger"). Under the terms of the Merger, Microsoft
agreed to register the Common Shares received by the Selling Shareholders in
connection with the Merger. In agreements related to the Merger, each Selling
Shareholder entered into an investment agreement with Microsoft (the "Investment
Agreement"). The shares held by the Selling Shareholders do not exceed one
percent (1%) of Microsoft's outstanding capitalization. In the past three
years, none of the Selling Shareholders has had a material relationship with
Microsoft, except that certain Selling Shareholders have become non-officer
employees of LinkExchange or Microsoft after the Merger.
2
<PAGE>
PLAN OF DISTRIBUTION
Microsoft is registering the Common Shares covered by this Prospectus for
the Selling Shareholders. As used in this Prospectus, "Selling Shareholders"
includes the pledgees, donees, transferees or others who later hold the Selling
Shareholders' interests. Microsoft will pay the costs and fees of registering
the Common Shares, but the Selling Shareholders will pay any brokerage
commissions, discounts or other expenses relating to the sale of the Common
Shares.
The Selling Shareholders may sell the Common Shares in the over-the-counter
market or otherwise, at market prices prevailing at the time of sale, at prices
related to the prevailing market prices, or at negotiated prices. In addition,
the Selling Shareholders may sell some or all of their Common Shares through:
. a block trade in which a broker-dealer may resell a portion of the
block, as principal, in order to facilitate the transaction;
. purchases by a broker-dealer, as principal, and resale by the broker-
dealer for its account; or
. ordinary brokerage transactions and transactions in which a broker
solicits purchasers.
When selling the Common Shares, the Selling Shareholders may enter into
hedging transactions. For example, the Selling Shareholders may:
. enter into transactions involving short sales of the Common Shares by
broker-dealers;
. sell Common Shares short themselves and redeliver such shares to close
out their short positions;
. enter into option or other types of transactions that require the
Selling Shareholder to deliver Common Shares to a broker-dealer, who
will then resell or transfer the Common Shares under this Prospectus; or
. loan or pledge the Common Shares to a broker-dealer, who may sell the
loaned shares or, in the event of default, sell the pledged shares.
The Selling Shareholders may negotiate and pay broker-dealers commissions,
discounts or concessions for their services. Broker-dealers engaged by the
Selling Shareholders may allow other broker-dealers to participate in resales.
However, the Selling Shareholders and any broker-dealers involved in the sale or
resale of the Common Shares may qualify as "underwriters" within the meaning of
the Section 2(11) of the Securities Act of 1933 (the "Act"). In addition, the
broker-dealers' commissions, discounts or concession may qualify as
underwriters' compensation under the Act. If the Selling Shareholders qualify
as "underwriters," they will be subject to the prospectus delivery requirements
of Section 153 of the Act, which may include delivery through the facilities of
the NASD.
In addition to selling their Common Shares under this Prospectus, the
Selling Shareholders may:
. Agree to indemnify any broker-dealer or agent against certain
liabilities related to the selling of the Common Shares, including
liabilities arising under the Act;
. Transfer their Common Shares in other ways not involving market makers
or established trading markets, including directly by gift,
distribution, or other transfer; or
. Sell their Common Shares under Rule 144 of the Act rather than under
this Prospectus, if the transaction meets the requirements of Rule 144.
3
<PAGE>
LEGAL MATTERS
For purposes of this offering, Preston Gates & Ellis LLP, Seattle,
Washington, is giving its opinion on the validity of the Common Shares. As of
the date of this Prospectus, attorneys in Preston Gates & Ellis LLP who have
worked on substantive matters for Microsoft own fewer than 500,000 Common
Shares.
EXPERTS
The financial statements included in our 1998 Annual Report on Form
10-K have been audited by Deloitte & Touche LLP, independent auditors. We have
incorporated these financial statements by reference in this Prospectus and in
the registration statement in reliance upon Deloitte & Touche LLP's report given
on their authority as experts in accounting and auditing.
[Remainder of Page Intentionally Left Blank]
4
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses relating to the registration of Shares will be borne by the
registrant. Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
Registration Fee --
Securities and Exchange Commission $82,028.35
Accountants' Fees $ 5,000.00
Legal Fees $10,000.00
Miscellaneous $ 2,000.00
Total $99,028.35
</TABLE>
Item 15. Indemnification of Directors and Officers.
Article XII of the Restated Articles of Incorporation of Microsoft
authorizes Microsoft to indemnify any present or former director or officer to
the fullest extent not prohibited by the WBCA, public policy or other applicable
law. Chapter 23B.8.510 and .570 of the WBCA authorizes a corporation to
indemnify its directors, officers, employees, or agents in terms sufficiently
broad to permit such indemnification under certain circumstances for liabilities
(including provisions permitting advances for expenses incurred) arising under
the 1933 Act.
The directors and officers of Microsoft are entitled to indemnification by
each of the Selling Shareholders against any cause of action, loss, claim,
damage, or liability to the extent it arises out of or is based upon the failure
of any Selling Shareholder (or his donees, legatees, or pledgees) and each
underwriter to comply with the Prospectus delivery requirements under the
federal securities laws or any applicable state securities laws or upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in this Registration Statement and the Prospectus contained herein, as the
same shall be amended or supplemented, made in reliance upon or in conformity
with written information furnished to Microsoft by such Selling Shareholder or
such underwriter.
In addition, Microsoft maintains directors' and officers' liability
insurance under which Microsoft's directors and officers are insured against
loss (as defined in the policy) as a result of claims brought against them for
their wrongful acts in such capacities.
Item 16. List of Exhibits.
The Exhibits to this registration statement are listed in the Index to
Exhibits on page II-4.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
1933 Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent post-
effective amendment thereof) which, individually or in the
II-1
<PAGE>
aggregate, represent a fundamental change in the information set forth in
this registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by Microsoft pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the 1933 Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) For purposes of determining any liability under the 1933 Act, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act) that
is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
[Remainder of Page Intentionally Left Blank]
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Redmond, State of Washington on December 16, 1998.
MICROSOFT CORPORATION
/s/ William H. Gates III
------------------------
William H. Gates III
Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints William H. Gates III, his attorney-in-fact, for
him in any and all capacities, to sign any amendments to this registration
statement, and to file the same, with exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact, or his substitute, may
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Dated
-----
<S> <C> <C>
/s/ Gregory B. Maffei Vice President, Finance; Chief Financial December 16, 1998
- ------------------------------------ Officer (Principal Financial and
Gregory B. Maffei Accounting Officer)
/s/ William H. Gates III Chairman, Chief Executive Officer, December 16, 1998
- ------------------------------------ Director (Principal Executive Officer)
William H. Gates III
/s/ Paul G. Allen Director December 16, 1998
- ------------------------------------
Paul G. Allen
/s/ Jill E. Barad Director December 16, 1998
- ------------------------------------
Jill E. Barad
/s/ Richard A. Hackborn Director December 16, 1998
- ------------------------------------
Richard A. Hackborn
/s/ David F. Marquardt Director December 16, 1998
- ------------------------------------
David F. Marquardt
/s/ William G. Reed, Jr. Director December 16, 1998
- ------------------------------------
William G. Reed, Jr.
/s/ Jon A. Shirley Director December 16, 1998
- ------------------------------------
Jon A. Shirley
</TABLE>
II-3
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page or Footnote
- ------------- ----------- ----------------
<S> <C> <C>
5 Opinion of Counsel re: legality See attached.
23.1 Consent of Deloitte & Touche LLP as Independent Auditors See attached.
23.2 Consent of Preston Gates & Ellis LLP See footnote /(1)/
24 Power of Attorney See page II-3
</TABLE>
- -------------------
/1/ Contained within Exhibit 5.
II-4
<PAGE>
EXHIBIT 5
OPINION OF PRESTON GATES & ELLIS LLP
December 16, 1998
Microsoft Corporation
One Microsoft Way
Redmond, WA 98052
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the registration of 2,257,237 shares of common stock,
par value $.000025 per share (the "Common Shares") of Microsoft Corporation (the
"Company") with the Securities and Exchange Commission on a Registration
Statement on Form S-3 (the "Registration Statement"), relating to the sales, if
any, of the Common Shares by the selling shareholders, we have examined such
documents, records and matters of law as we have considered relevant. Based upon
such examination and upon our familiarity as counsel for the Company with its
general affairs, it is our opinion that:
The Common Shares being registered are legally issued, fully paid, and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Preston Gates & Ellis LLP
By /s/ Richard B. Dodd
Richard B. Dodd
<PAGE>
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Microsoft Corporation of our report dated July 16, 1998 (August 3,
1998, as to Subsequent Sale Note) incorporated by reference in the Annual
Report on Form 10-K of Microsoft Corporation for the year ended June 30, 1998,
and to the reference to us under the heading "Experts" in the Prospectus, which
is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Seattle, Washington
December 4, 1998
