<PAGE>
Schedule 14a
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
Filed by the registrant [X]
Filed by a party other than the registrant [_]
Check the appropriate box:
[X] Preliminary proxy statement
[_] Definitive proxy statement
[_] Definitive additional materials
[_] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
MICROSOFT CORPORATION
(Name of Registrant as Specified in its Charter)
MICROSOFT CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------
(2) Aggregate number of securities to which transaction applies:
--------------
(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
--------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
-----------------------------
(3) Filing Party:
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(4) Date Filed:
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[LOGO OF MICROSOFT CORPORATION]
Redmond, Washington
February , 1999
Dear Shareholder:
Shareholders of record as of January 29, 1999 are encouraged to vote on the
enclosed proposal, which amends the Company's Articles of Incorporation,
increasing the total number of shares to accommodate the proposed two-for-one
split of the Company's common stock.
The Board of Directors has approved this amendment, subject to shareholder
approval. Management encourages a vote FOR this proposal.
I urge you to sign, date, and promptly return the enclosed proxy in the
enclosed postage-paid envelope, or follow the easy instructions on the insert
for Internet voting.
To complete this vote, the Company will hold a special meeting of
shareholders of Microsoft Corporation, which will be held on Friday, March 12,
1999, at . Please note that the only item on
the agenda for this meeting will be voting on this amendment. This will be a
brief, business-only meeting, with no other matters to be discussed.
Other than matters directly relating to the proposed two-for-one stock
split, the management of the Company will be making no presentations at the
special meeting, and senior members of management will not be in attendance.
We anticipate the actual meeting will take no longer than 10 minutes.
If you decide to attend this special meeting and vote in person, you will of
course have that opportunity. Please note that, in anticipation of light
attendance, no special parking arrangements have been made, and parking will
be extremely limited.
On behalf of the Board of Directors, I would like to express our
appreciation for your continued interest in the affairs of the Company.
Sincerely,
/s/ Robert J. Herbold
Robert J. Herbold
Executive Vice President and Chief
Operating Officer
<PAGE>
MICROSOFT CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
February , 1999
To the Shareholders:
A special meeting of the shareholders of Microsoft Corporation will be held
at , on March 12, 1999, at 8:00 a.m. for the following
purposes:
1. To consider and vote upon a proposed amendment to the Company's
Articles of Incorporation to increase the authorized common stock
from 4,000,000,000 to 12,000,000,000 and halve the par value of the
common stock from $.000025 per share to $.0000125 per share in order
to accommodate the proposed two-for-one split of the Company's common
stock; and
2. To transact such other business as may properly come before the
meeting.
Only shareholders of record at the close of business on January 29, 1999 are
entitled to notice of, and to vote at, this meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ William H. Neukom
William H. Neukom
Secretary
Redmond, Washington
February , 1999
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign, date,
and return the enclosed Proxy at your earliest convenience. This will
ensure the presence of a quorum at the meeting. Promptly signing, dating,
and returning the Proxy will save the Company the expenses and extra work
of additional solicitation. An addressed envelope for which no postage is
required if mailed in the United States is enclosed for that purpose.
Sending in your Proxy will not prevent you from voting your stock at the
meeting if you desire to do so, as your Proxy is revocable at your
option.
<PAGE>
MICROSOFT CORPORATION
One Microsoft Way
Redmond, Washington 98052
PROXY STATEMENT FOR SPECIAL MEETING
OF SHAREHOLDERS
To Be Held March 12, 1999
This Proxy Statement, which was first mailed to shareholders on February ,
1999, is furnished in connection with the solicitation of proxies by the Board
of Directors of Microsoft Corporation (the "Company"), to be voted at a
special meeting of the shareholders of the Company, which will be held at 8:00
a.m. on March 12, 1999, at , for the
purpose set forth in the accompanying Notice of Special Meeting of
Shareholders. Shareholders who execute proxies retain the right to revoke them
at any time prior to the exercise of the powers conferred thereby, by
delivering a signed statement to the Secretary of the Company at or prior to
the special meeting or by executing another proxy dated as of a later date.
The cost of solicitation of proxies is to be borne by the Company.
Shareholders of record at the close of business on January 29, 1999 will be
entitled to vote at the meeting on the basis of one vote for each share held.
On January 29, 1999, there were shares of common
stock outstanding, held of record by shareholders.
PROPOSAL: APPROVAL OF AN AMENDMENT TO THE COMPANY'S
ARTICLES OF INCORPORATION
The Board of Directors has approved, and is recommending to the Shareholders
for approval at the Special Meeting, an amendment to Article Four of the
Company's Articles of Incorporation (1) to increase the number of shares of
Common Stock which the Company is authorized to issue from 4,000,000,000 to
12,000,000,000, and (2) to halve the par value of each share of Common Stock
from $.000025 to $.0000125. The Board of Directors determined that this
amendment is advisable and should be considered at the Special Meeting to be
held March 12, 1999. The full text of the proposed amendment to the Articles
of Incorporation is set forth below. The Company is currently authorized to
issue 100,000,000 million shares of preferred stock, par value $.01 per share,
and the proposed amendment will not affect this authorization.
Purposes and Effects of Proposed Increase in the Number of Authorized Shares
of Common Stock
The proposed amendment would increase the number of shares of Common Stock
which the Company is authorized to issue from 4,000,000,000 to 12,000,000,000.
The additional 8 billion shares would be a part of the existing class of
Common Stock and, if and when issued, would have the same rights and
privileges as the shares of Common Stock presently issued and outstanding. At
January 29, 1999, shares of Common Stock were outstanding.
The Board of Directors believes it is desirable to increase the number of
shares of Common Stock the Company is authorized to issue to accomplish the
proposed stock split, to reserve an amount of shares sufficient to satisfy the
requirements set forth above, and to provide the Company with adequate
flexibility in the future. Except for the proposed stock split, the Company
has no present commitments, agreements, or intent to issue additional shares
of Common Stock, other than with respect to currently reserved shares, in
connection with transactions in the ordinary course of the Company's business,
or shares which may be issued under the Company's stock option, stock
purchase, and other existing employee benefit plans.
Under Washington law, the proposed stock split cannot occur unless
Shareholders approve the proposed amendment to Article Four of the Company's
Articles of Incorporation. The proposed amendment to Article Four would permit
the issuance of additional shares up to the new 12 billion maximum
authorization without further action or authorization by Shareholders (except
as may be required in a specific case by law or the Nasdaq
<PAGE>
National Market rules). The Board believes it is prudent for the Company to
have this flexibility. The holders of Common Stock of the Company are not
entitled to preemptive rights or cumulative voting. Accordingly, the issuance
of additional shares of Common Stock might dilute, under certain
circumstances, the ownership and voting rights of Shareholders. The proposed
increase in the number of shares of Common Stock the Company is authorized to
issue is not intended to inhibit a change in control of the Company. The
availability for issuance of additional shares of Common Stock could
discourage, or make more difficult, efforts to obtain control of the Company.
For example, the issuance of shares of Common Stock in a public or private
sale, merger, or similar transaction would increase the number of outstanding
shares, thereby possibly diluting the interest of a party attempting to obtain
control of the Company. The Company is not aware of any pending or threatened
efforts to acquire control of the Company.
Purposes and Effects of Proposed Two-for-One Common Stock Split.
The Board of Directors anticipates that the increase in the number of
outstanding shares of Common Stock of the Company resulting from a two-for-one
stock split will place the market price of the Common Stock in a range more
attractive to investors, particularly individuals. The Common Stock is listed
for trading on the Nasdaq National Market, and the Company will apply for
listing of the additional shares of Common Stock to be issued in the event the
proposed stock split is approved. If the proposed amendment is adopted, each
shareholder of record at 5:00 p.m., eastern standard time, on March 12, 1999,
would be the record owner of, and entitled to receive, a certificate or
certificates representing one additional share of Common Stock, par value
$.0000125 per share, for each share of Common Stock then owned of record by
such shareholder. In addition, certificates representing shares of Common
Stock, $.000025 par value, would be deemed to represent the same number of
shares of Common Stock having a par value of $.0000125 per share.
Consequently, certificates representing shares of Common Stock should be
retained by each shareholder and should not be returned to the Company or to
its transfer agent. It will not be necessary to submit outstanding
certificates for exchange. In addition, appropriate adjustments will be made
to the Company's stock option and other employee incentive plans.
If effected, the proposed stock split will result in certain appropriate
adjustments to terms of the Company's 2 3/4% Convertible Exchangeable
Principal Protected Preferred Stock (the "Series A Preferred"). Holders of
Series A Preferred will be separately notified of those adjustments.
Tax Effect of the Two-for-One Stock Split
The Company has been advised by counsel that the proposed stock split would
result in no gain or loss or realization of taxable income to owners of Common
Stock under existing United States federal income tax laws. The cost basis for
tax purposes of each new share and each retained share of Common Stock would
be equal to one-half of the cost basis for tax purposes of the corresponding
share immediately preceding the stock split. In addition, the holding period
for the additional shares issued pursuant to the stock split would be deemed
to be the same as the holding period for the original share of Common Stock.
The laws of jurisdictions other than the United States may impose income taxes
on the issuance of the additional shares and Shareholders are urged to consult
their tax advisors. If Shareholders dispose of their shares after the stock
split, they may pay higher brokerage commissions on the same relative interest
in the Company because that interest is represented by a greater number of
shares. Shareholders may wish to consult their brokers to ascertain the
brokerage commission that would be charged for disposing of the greater number
of shares. If the proposed amendment is adopted, the Shareholders' equity
accounts of the Company would not change. The par value of a share of Common
Stock after the split would be halved, from the current $.000025 per share to
$.0000125 per share. The number of shares issued and outstanding would double.
Effective Date of Proposed Amendment and Issuance of Shares for Stock Split
The proposed amendment to Article Four of the Articles of Incorporation of
the Company, if adopted by the required vote of Shareholders, will become
effective at 5:00 p.m., eastern standard time, on March 12, 1999, the proposed
record date for the determination of the owners of Common Stock entitled to
receive a certificate
2
<PAGE>
or certificates representing the additional shares. Please do not destroy or
send your present Common Stock certificates to the Company. If the proposed
amendment is adopted, those certificates will remain valid for the number of
shares shown thereon, and should be carefully preserved by you. The Company
expects that the additional shares will be distributed on or about March 26,
1999, by book-entry in the records of the Company. Shareholders will be
entitled to receive physical stock certificates upon request.
Amendment to Restated Articles of Incorporation
If approved, Article 4.1 of the Company's Restated Articles of Incorporation
would be amended and restated as follows:
ARTICLE 4.1 SHARES
The total number of shares of stock which the Corporation shall have
authority to issue is 12,100,000,000 shares, which shall consist of
12,000,000,000 shares of common stock, $.0000125 par value per share
("Common Shares") and 100,000,000 shares of preferred stock, $.01 par
value per share ("Preferred Shares"). Except as otherwise provided in
accordance with these Articles of Incorporation, the Common Shares
shall have the unlimited voting rights, with each share being entitled
to one vote, and the rights to receive the net assets of the
Corporation upon dissolution, with each share participating on a pro
rata basis.
Vote Required and Board Recommendation
The affirmative vote of holders of a majority of the Shares entitled to vote
at the meeting is required to approve the proposed amendment. If the amendment
is not approved by the shareholders, the Company's Restated Articles of
Incorporation, which authorizes the issuance of 4,000,000,000 shares of Common
Stock, will continue in effect and the two-for-one split of the Common Stock
will not take place. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSED
AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION.
3
<PAGE>
INFORMATION REGARDING BENEFICIAL OWNERSHIP OF
PRINCIPAL SHAREHOLDERS, DIRECTORS, AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's common shares by the nominees for directors, the
Company's Chief Executive Officer and the four other highest paid executive
officers ("Named Executive Officers"), and the directors and executive
officers as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership
of Common Shares as
Name of 1/29/99 Percent of Class
---- -------------------- ----------------
<S> <C> <C>
William H. Gates........................ (2)(3)
Paul G. Allen........................... (4)
Jill E. Barad........................... (5) *
Richard A. Hackborn..................... *
David F. Marquardt...................... (6) *
William G. Reed, Jr..................... (7) *
Jon A. Shirley.......................... (8) *
Steven A. Ballmer....................... (2)
Robert J. Herbold....................... (9) *
Paul A. Maritz.......................... (10) *
Michel Lacombe.......................... (11) *
Executive Officers and Directors as a
group (22 persons)..................... (12)
</TABLE>
- --------
* Less than 1%.
(1) Beneficial ownership represents sole voting and investment power. To the
Company's knowledge, the only shareholders who beneficially owned more
than 5% of the outstanding common shares as of January 29, 1999, were
Messrs. Gates and Allen.
(2) The business address for Messrs. Gates and Ballmer is: Microsoft
Corporation, One Microsoft Way, Redmond, Washington 98052.
(3) Does not include shares owned by Mr. Gates' wife, as to which
he disclaims beneficial ownership.
(4) Includes shares that may be purchased within 60 days of
January 29, 1999, pursuant to outstanding stock options ("Vested
Options"). Mr. Allen's business address is: Vulcan Northwest Inc.,
110 -- 110th Avenue N.E., Suite 550, Bellevue, Washington 98004.
(5) Includes Vested Options.
(6) Includes Vested Options.
(7) Includes Vested Options.
(8) Includes shares held by the Shirley Family Limited
Partnership, a limited partnership of which Mr. Shirley is the president
of the sole general partner, shares held by Mr. Shirley as
trustee under trusts for two grandsons, and Vested Options.
(9) Includes Vested Options.
(10) Includes Vested Options.
(11) Includes Vested Options.
(12) Includes Vested Options.
4
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[FRONT]
PROXY
FOR SPECIAL MEETING OF THE SHAREHOLDERS
MICROSOFT CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Robert J. Herbold, Gregory B. Maffei, and
Robert A. Eshelman (collectively, the "Proxies"), and each of them, with full
power of substitution, as proxies to vote the shares which the undersigned is
entitled to vote at the Special Meeting of the Shareholders to be held at the
_____________________________at 8:00 a.m. on March 12, 1999 and at any
adjournments thereof.
[ ] FOR [ ] AGAINST [ ] ABSTAIN Proposal to approve an amendment to the
Company's Articles of Incorporation to increase the number of shares of
authorized common stock from 4,000,000,000 to 12,000,000,000 shares and to
halve the par value of each share from $.000025 to $.0000125.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the special meeting.
<PAGE>
[REVERSE]
This proxy when properly signed will be voted in the manner directed herein
by the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL.
______________________________
Signature
______________________________
Signature, if held jointly
Dated: ____________________, 1999
IMPORTANT - PLEASE SIGN AND RETURN
PROMPTLY. When shares are held by joint
tenants, both should sign. When signing
as attorney, executor, administrator,
trustee, or guardian, please give full
title as such. If a corporation, please
sign in full corporate name by President
or other authorized officer. If a
partnership, please sign in partnership
name by an authorized person.
