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 otherwise.
Distributions
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 participants immediate financial need. Hardship withdrawals are further limited to pre-tax contributions, 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 non-rollover contributions
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 cash.
In-Plan Roth Conversions
Active and terminated participants may convert any Plan balances (other than outstanding loans) to a Roth account within the Plan.
Administrative Expenses
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 Administrator.
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 financial statements.
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 managements estimates and
assumptions due to risks and uncertainties. The Plan has no contingent assets or liabilities for any periods presented in these financial statements.
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