NOTES TO FINANCIAL STATEMENTS
NOTE 1 DESCRIPTION OF THE PLAN AND ACCOUNTING POLICIES
Plan Description
The Microsoft Corporation Savings Plus
401(k) Plan (the Plan), a defined contribution plan, is sponsored by Microsoft Corporation (the Company or Microsoft). Participating employers included in the Plan are Microsoft Corporation; MOL Corporation;
Vexcel Corporation; Microsoft Online, Inc; Microsoft Payments, Inc; Microsoft Open Technologies, Inc; Microsoft Technology Licensing; and Undead Labs (effective December 16, 2019). These entities represent Microsoft or wholly owned subsidiaries
of Microsoft. The Plan year is January 1 through December 31. The Plan is administered by the 401(k) Administrative Committee (the Plan Administrator) and subject to the provisions of the Employee Retirement Income Security Act of
1974 (ERISA). The information below summarizes certain aspects of the Plan as in effect during 2019 and 2018, and is intended to be a summary only. Plan participants should refer to the Summary Plan Description for more complete
information.
Accounting Principles
The financial
statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP).
Eligibility
Regular and retail services employees of
participating employers who are on U.S. payroll and have reached age 18 may enroll in the Plan at any time.
Eligible Compensation
Eligible compensation includes wages, salary, bonuses, commissions, and overtime. Compensation does not include, for example, items such as
amounts earned with respect to any equity-based compensation program, award, or benefit, reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation, welfare plan benefits including health
or life insurance, severance plan payments, unused accrued vacation payments, or bonuses or expense allowances which are not based upon performance as an employee.
Contributions
Participant Contributions
Participants may contribute to the Plan on a pre-tax and/or Roth basis using eligible compensation each pay
period, subject to statutory and regulatory limitations. Participants reaching age 50 or older by the end of the Plan year may also make additional catch-up contributions to the Plan on a pre-tax and/or Roth basis. During 2019 and 2018, the maximum annual 401(k) pre-tax and Roth contribution limit was $19,000 and $18,500, respectively, and the maximum annual catch-up contribution to the Plan was $6,000. Additionally, participants could contribute up to $27,500 for 2019 and $27,250 for 2018 on an after-tax basis. A
participants aggregate contribution election (combined pre-tax, Roth, pre-tax catch-up, Roth
catch-up, and after-tax) generally may not exceed 65 percent of his or her eligible compensation per pay period. Participants may elect to suspend or reinstate
their contributions at any time.
Participants may also choose to make rollover contributions to the Plan of amounts received from an eligible
employer plan maintained by another company, including direct rollovers from such plans. Participants may also make rollover contributions to the plan from an individual retirement account or annuity described in Internal Revenue Code
(IRC) Section 408(a) or 408(b) that is eligible to be rolled over and would otherwise be includible in gross income.
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