Last Updated 11 May 2021

Formal Letter for Job

Category Contract, Dell, Job, Justice
Essay type Research
Words 9170 (36 pages)
Table of contents

“The federal securities laws require publicly traded companies to disclose information on an ongoing basis. For example, domestic issuers (other than small business issuers) must submit annual reports on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K for a number of specified events and must comply with a variety of other disclosure requirements. The annual report on Form 10-K provides a comprehensive overview of the company's business and financial condition and includes audited financial statements. Although similarly named, the annual report on Form 10-K is distinct from the “annual report to shareholders,” which a company must send to its shareholders when it holds an annual meeting to elect directors. Historically, Form 10-K had to be filed with the SEC within 90 days after the end of the company's fiscal year.

However, in September 2002, the SEC approved a Final Rule that changed the deadlines for Form 10-K and Form 10-Q for “accelerated filers” -- meaning issuers that have a public float of at least $75 million, that have been subject to the Exchange Act’s reporting requirements for at least 12 calendar months, that previously have filed at least one annual report, and that are not eligible to file their quarterly and annual reports on Forms 10-QSB and 10-KSB. These shortened deadlines will be phased in over time. In December 2005, the SEC voted to adopt amendments that create a new category of "large accelerated filers" that includes companies with a public float of $700 million or more. The amendments also redefine "accelerated filers" as companies that have at least $75 million, but less than $700 million, in public float. As described in Release No. 33-8644 (Revisions to Accelerated Filer Definition and Accelerated Deadlines for Filing Periodic Reports), the current 10-K and 10-Q deadlines for accelerated filers are as follows:..”

As of June 30, 2013, we had accrued aggregate liabilities of $412 million in other current liabilities and $162 million in other long-term liabilities for all of our legal matters that were contingencies as of that date. While we intend to defend these matters vigorously, adverse outcomes that we estimate could reach approximately $400 million in aggregate beyond recorded amounts are reasonably possible. Were unfavorable final outcomes to occur, there exists the possibility of a material adverse impact on our financial statements for the period in which the effects become reasonably estimable.

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Risk to a company arising from the possibility of liability for damages resulting from the purchase, ownership, or use of a good or service offered by that company. Liability risk can be identified and mitigated through careful product design and testing, but may also be inherent in the nature of the product to some extent, as in the case of automobiles or pharmaceutical supplies.

"Material litigation" means any litigation that, according to generally accepted accounting principles, is deemed significant to anapplicant's or licensee's financial health and would be required to be referenced in the applicant's or licensee's annual audited financial statements, report to shareholders or similar documents.

In November 2004, Novell, Inc. ("Novell") filed a complaint in U.S. District Court for the District of Utah (later transferred to federal court in Maryland), asserting antitrust and unfair competition claims against Microsoft related to Novell's ownership of WordPerfect and other productivity applications during the period between June 1994 and March 1996. In June 2005, the trial court granted Microsoft’s motion to dismiss four of Novell's six claims. In March 2010, the trial court granted summary judgment in favor of Microsoft as to all remaining claims. The court of appeals reversed that ruling as to one claim. Trial of that claim took place from October to December 2011 and resulted in a mistrial because the jury was unable to reach a verdict. In July 2012, the trial court granted Microsoft's motion for judgment as a matter of law. Novell has appealed this decision to the U.S. Court of Appeals for the Tenth Circuit, which heard oral arguments in May 2013.

Microsoft has maintained throughout this case that Novell’s arguments lack merit, and gratified with ruling dismissing the last of Novell’s claims and putting this matter to rest.
Shareholder: As shareholders, we should give attention on this lawsuit because the amount of compensation is a considerable figure. On the other hand, since the lawsuit has lasted for years, we have to take litigation cost into consideration. In addition, potential impact of reputation should also be concerned.

European Commission vs Microsoft Corporation

In December 2009, the European Commission adopted a decision that rendered legally binding commitments offered by Microsoft to address the Commission's concerns about the inclusion of Web browsing software in Windows. Among other things, Microsoft committed to display a "Browser Choice Screen" on Windows- based PCs in Europe where Internet Explorer is set as the default browser. Due to a technical error, Microsoft failed to deliver the requisite software to enable that display to PCs that came preinstalled with a version of Windows 7 called Windows 7 Service Pack 1. On July 17, 2012, the Commission announced that it had opened proceedings to investigate whether Microsoft had failed to comply with this commitment. The Commission stated that if a company is found to have breached a legally binding commitment, the company may be fined up to 10% of its worldwide annual revenue.
Microsoft did deliver the requisite software to PCs running the original version of Windows 7 and earlier editions of Windows. Following notification by the Commission of reports that some PCs were not receiving the update, Microsoft promptly fixed the error and advised the Commission of what we had discovered. PCs that come preinstalled with Windows 7 Service Pack are now receiving the Browser Choice Screen software, as intended.As shareholders, we should pay close attention to this law matter not only because of the steep fines but also because of the market shares in Europe.

Motorola vs Microsoft Corporation

Detail Background (from 2013 10-k Item 8 Note 17 Contingency): In October 2010, Microsoft filed patent infringement complaints against Motorola Mobility (“Motorola”) with the International Trade Commission (“ITC”) and in U.S. District Court in Seattle for infringement of nine Microsoft patents by Motorola’s Android devices. Since then, Microsoft and Motorola have filed additional claims against each other in the ITC, in federal district courts in Seattle, Wisconsin, Florida, and California, and in courts in Germany and the United Kingdom. In April 2012, following complaints by Microsoft and Apple, the European Union’s competition office opened two antitrust investigations against Motorola to determine whether it has abused certain of its standard essential patents to distort competition in breach of European Union antitrust rules. In June 2012, we received a request for information from the U.S. Federal Trade Commission (“FTC”) apparently related to an FTC investigation into whether Motorola’s conduct violates U.S. law. The nature of the claims asserted and status of individual matters are summarized below.

International Trade Commission

The hearing in Microsoft’s ITC case against Motorola took place in August 2011 on seven of the nine patents originally asserted in the complaint. In December 2011, the administrative law judge (“ALJ”) issued an initial determination that Motorola infringed one Microsoft patent, and recommended that the ITC issue a limited exclusion order against Motorola prohibiting importation of infringing Motorola Android devices. In May 2012, the ITC issued the limited exclusion order recommended by the ALJ, which became effective on July 18, 2012. Microsoft has appealed certain aspects of the ITC ruling adverse to Microsoft and Motorola has appealed the ITC exclusion order to the Court of Appeals for the Federal Circuit. In addition, in July 2013, Microsoft filed an action in U.S. district court in Washington, D.C. seeking an order to compel enforcement of the ITC’s May 2012 import ban against infringing Motorola products by the Bureau of Customs and Border Protection (“CBP”), after learning that CBP had failed to fully enforce the order.

In November 2010, Motorola filed an action against Microsoft in the ITC alleging infringement of five Motorola patents by Xbox consoles and accessories and seeking an exclusion order to prohibit importation of the allegedly infringing Xbox products into the U.S. In April 2012, the ALJ found that Xbox products infringe four of the five patents asserted by Motorola. The ALJ recommended that the ITC issue a limited exclusion order and a cease and desist order. Both Microsoft and Motorola sought ITC review of the ALJ’s findings. In June 2012, Microsoft filed a motion to terminate the investigation as to certain patents based on facts arising as the result of Google’s acquisition of Motorola. The ITC determined that it would review the ALJ’s initial determination in its entirety and remanded the matter to the ALJ (1) to apply certain ITC case precedent, (2) to rule on Microsoft’s June 2012 motion to terminate, and (3) set a new target date for completion of the investigation. The ALJ held a hearing in December 2012 and set a target date for a final ITC ruling in July 2013. At Motorola’s request, the ITC terminated its investigation as to four Motorola patents, leaving only one Motorola patent at issue before the ITC. In March 2013, the ALJ ruled that there has been no violation as to the remaining Motorola patent. Motorola sought ITC review of the ALJ’s determination, which the ITC denied in May 2013.

U.S. District Court

The Seattle District Court case filed in October 2010 by Microsoft as a companion to Microsoft’s ITC case against Motorola has been stayed pending the outcome of Microsoft’s ITC case. In November 2010, Microsoft sued Motorola for breach of contract in U.S. District Court in Seattle, alleging that Motorola breached its commitments to standards-setting organizations to license to Microsoft certain patents on reasonable and non-discriminatory (“RAND”) terms and conditions. Motorola has declared these patents essential to the implementation of the H.264 video standard and the 802.11 Wi-Fi standard. In suits described below, Motorola or a Motorola affiliate subsequently sued Microsoft on those patents in U.S. District Courts, in the ITC, and in Germany. In February 2012, the Seattle District Court granted a partial summary judgment in favor of Microsoft ruling that  Motorola entered into binding contractual commitments with standards organizations committing to license its declared-essential patents on RAND terms and conditions; and Microsoft is a third-party beneficiary of those commitments. The court rejected Motorola’s argument that Microsoft had repudiated its right to a RAND license, and ruled a trial is needed to determine whether Motorola is in breach of its obligation to enter into a patent license with Microsoft and, if so, the amount of the RAND royalty. In April 2012, the court issued a temporary restraining order preventing Motorola from taking steps to enforce an injunction in Germany relating to the H.264 video patents. In May 2012, the court converted that order into a preliminary injunction.

Motorola appealed the court’s injunction orders to the Court of Appeals for the Ninth Circuit, which affirmed the orders in September 2012. The Seattle District Court held a trial in November 2012 to determine the RAND royalty for Motorola’s H.264 and 802.11 patents. In December 2012, the Seattle District Court ruled that Motorola could not obtain injunctive relief in connection with any of its claims for infringement of its H.264 and 802.11 patents. In April 2013, the court set per unit royalties for Motorola’s H.264 and 802.11 patents, which resulted in an immaterial Microsoft liability. Trial of Microsoft’s breach of contract claim is set for August 26, 2013.

Cases filed by Motorola in Wisconsin, California, and Florida, with the exception of one currently stayed case in Wisconsin (a companion case to Motorola’s ITC action), have been transferred to the U.S District Court in Seattle. Motorola and Microsoft both seek damages as well as injunctive relief. No trial dates have been set in any of the transferred cases, and the court has stayed these cases on agreement of the parties.

In the transferred cases, Motorola asserts 15 patents are infringed by many Microsoft products including Windows Mobile 6.5 and Windows Phone 7, Windows Marketplace, Silverlight, Windows Vista and Windows 7, Exchange Server 2003 and later, Exchange ActiveSync, Windows Live Messenger, Lync Server 2010, Outlook 2010, Office 365, SQL Server, Internet Explorer 9, Xbox, and Kinect.

In the Motorola action originally filed in California, Motorola asserts that Microsoft violated antitrust laws in connection with Microsoft’s assertion of patents against Motorola that Microsoft has agreed to license to certain qualifying entities on RAND terms and conditions. In counterclaims in the patent actions brought by Motorola, Microsoft asserts 14 patents are infringed by Motorola Android devices and certain Motorola digital video recorders.

Two of the patents are asserted by Motorola to be essential to implementation of the H.264 video standard, and Motorola alleges that H.264 capable products including Xbox 360, Windows 7, Media Player, and Internet Explorer infringe those patents. Motorola seeks damages and an injunction. In May 2012, the court issued an injunction relating to all H.264 capable Microsoft products in Germany. However, due to orders in the separate litigation pending in Seattle, Washington described above, Motorola is enjoined from taking steps to enforce the German injunction. Damages would be determined in later proceedings. Microsoft has appealed the rulings of the first instance court.

Motorola asserts one of the patents covers certain syncing functionality in the ActiveSync protocol employed by Windows Phone 7, Outlook Mobile, Hotmail Mobile, Exchange Online, Exchange Server, and Hotmail Server. Motorola seeks damages and an injunction. In April 2013, the court stayed the case pending the outcome of parallel proceedings in which Microsoft is seeking to invalidate the patent. Should an injunction order be issued and enforced by Motorola, Microsoft may be able to mitigate the adverse impact by altering its products to avoid Motorola’s infringement claims.

In lawsuits Microsoft filed in Germany in September, October, and December 2011 and in April 2012, Microsoft asserts Motorola Android devices infringe Microsoft patents. Microsoft seeks damages and an injunction. In May, July, and September 2012, courts in Germany issued injunctions on three patents against Motorola Android devices and in May and July ruled against Microsoft on two patents. Microsoft is taking steps to enforce the injunctions. Damages will be determined in later proceedings. Each party has appealed or is expected to appeal the rulings against it. Motorola is also seeking to invalidate Microsoft’s patents in parallel court proceedings.

United Kingdom

Court of Justice, Chancery Division, Patents Court, in London, England, seeking to revoke the UK part of the European patent asserted by Motorola in Germany against the ActiveSync protocol. In February 2012, Motorola counterclaimed alleging infringement of the patent and seeking damages and an injunction. A trial took place in December 2012, and the court ruled that Motorola’s patent is invalid and revoked. The court also ruled that the patent, even if valid, would be licensed under the grant-back clause in Google’s ActiveSync license. Motorola has appealed.

Microsoft and Motorola filed patent infringement complaints against each other. 2. Microsoft sued Motorola for breach of contract in U.S. District Court in Seattle, alleging that Motorola breached its commitments to standards-setting organizations to license to Microsoft certain patents on reasonable and non-discriminatory (“RAND”) terms and conditions.

Although management currently believes that resolving claims against us, individually or in aggregate, will not have a material adverse impact on our financial statements, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future. These risks would concern the shareholders since the unexpected big expenditures and the losing markets of specific products would affect Microsoft’s profits next year.

Did your company attach any "material contracts" as exhibits to 10Q and 10K reports? What types of contracts are these? If it is a CEO employment contract, are there noncompete, nonsolicitation, and confidentiality provisions? Do the contracts contain any provisions that surprised you? I found several contracts from 10K and 10Q, the detailed information are as follows. However, please note that only the Retirement agreement is specially mentioned in 10K, and the rest are just in the paragraph without attaching any contents of the contracts. In that case, I would regard the Retirement agreement as a “material contract”.

And as you can see, I’ve highlighted those parts in yellow that are noncompete, nonsolicitation, and confidentiality provisions in the enclosed pages. As for the provisions that surprised me, actually I don’t really think that there’s any provision that I would feel surprised. Anyway, if I must have to mention one, I would say the “No Assistance”, which is highlighted in red. Because I cannot justify the reasons why not to assist, what if Steve didn’t know there was a thing until he retired, or things like that. Anyway, in the contrary, from the employer’s perspective, we can still come up reasons to set up this provision. I guess we need to brainstorm for this sub-question. 1) Retirement agreement

Mr. Sinofsky has responsibility for the overall Windows business, from development to business strategy and marketing for Windows, Windows Live, and Internet Explorer. Steven Sinofsky resigned from his employment with Microsoft Corporation (“Microsoft”), effective December 31, 2012 (“Separation Date”).

 Yahoo! Commercial Agreement (refer to 10K “COMMITMENTS AND GUARANTEES”) On December 4, 2009, Microsoft entered into a 10-year agreement with Yahoo! Inc. (“Yahoo!”) whereby Microsoft will provide the exclusive algorithmic and paid search platform for Yahoo! websites. Microsoft provided Yahoo! with revenue per search guarantees for a period of 18 months after implementation of the Microsoft search ads platform in each country, extended by an additional 12 months for the U.S. and Canada. These guarantees are calculated, paid, and adjusted periodically and are rate guarantees, not guarantees of search volume. We estimate the remaining cost of the revenue per search guarantees during the guarantee period could range up to $120 million.

Contracts with consumers (refer to 10K “OPERATIONS”) Microsoft contracts most of his manufacturing activities for Xbox 360 and related games, Kinect for Xbox 360, various retail software packaged products, Surface devices, and Microsoft PC accessories to third parties.

Licensing contracts (refer to 10K “LICENSING OPTIONS”) Microsoft provides organizations with multiple licenses of products and services acquired at one time instead of acquiring separate packaged product through retail channels. He uses different programs designed to provide flexibility for organizations of various sizes: Open Licensing, Select Plus Licensing, Partner Licensing, and Enterprise Agreement Licensing.

Derivative instruments related contract (refer to 10K and 10Q “DERIVATIVES”) Microsoft uses derivative instruments to manage risks related to foreign currencies, equity prices, interest rates, and credit; to enhance investment returns; and to facilitate portfolio diversification.

 Steven Sinofsky resigned from his employment with Microsoft Corporation (“Microsoft”), effective December 31, 2012 (“Separation Date”). We wish to agree on the consideration described in Paragraph 2 below, to which he would not be otherwise entitled, and in exchange for that consideration we have chosen to sign this Retirement Agreement and Full and Final Release of Claims (“Agreement”). Steven acknowledges that his execution of this Agreement is knowing and voluntary and that he has had a reasonable period of time in which to consider whether to sign this Agreement. No coercion or undue influence has been exerted on him to execute this Agreement.  Consideration. In exchange for his compliance with this Agreement and Sections 2, 3 and 6 of the Microsoft Corporation Employee Non-Disclosure Agreement (hereafter “Employee Agreement,” attached hereto as Exhibit , and honoring the commitments undertaken in this Agreement, Microsoft agrees to pay Steven the value  of the shares of stock that would have vested and become payable under his Company stock awards with grant numbers 0000000811105, 0000001087120, 0000001180497, and 0000001299366 in connection with a qualifying “retirement” under the stock award agreements for the stock awards on the Separation Date; and  in recognition of his half year employment in fiscal year 2013, 50% of the shares of stock that would have vested and become payable under the Company stock award with grant number 0000001299375 (collectively, the “Stock Awards,”), all based on the vesting schedule that would have applied in connection with a qualifying “retirement” on his separation date under his Stock Awards.

Exhibit B conclusively sets forth the shares of stock subject to this Agreement and the applicable vesting dates therefor. Payment will be  in cash, made within fifteen (15) days following each vesting date under the stock awards, calculated by multiplying the number of shares that vest by the closing price of Microsoft common stock as reported on on the last open market trading day preceding the vesting date, and reduced by required taxes and withholding. Steven understands and agrees that, in order to be eligible for the payments described in this Paragraph 2, he will be required to sign and provide to Microsoft a written certification (in the form attached hereto as Exhibit  that he has complied with the terms of this agreement in all material respects, at least five (5) business days before the payment date. Microsoft agrees that it shall make these payments and provide these benefits unless Steven materially breaches this Agreement and fails to cure such breach within ten (10) days of written notice from Microsoft of such breach.

Employee Agreement, Noncompetition and Nonsolicitation. Steven understands that Sections 2, 3 and 6 of the Employee Agreement remains fully binding and enforceable according to their terms (the “Continuing Obligations”). Microsoft acknowledges and agrees that, other than the Continuing Obligations, the Employee Agreement is terminated and has no further force or effect. In addition to the Continuing Obligations, Steven agrees that he will not for a period of twelve (12) months after the Separation Date  accept direct or indirect employment with the following companies, Amazon, Apple, EMC, Facebook, Google, Oracle, VMWare; directly or indirectly communicate with any client or customer of Microsoft or its subsidiaries listed on Exhibit D for the purpose of encouraging such client or customer to cease doing business with Microsoft or  intentionally do any of the following: encourage, induce, attempt to induce or assist another to induce or attempt to induce any person employed by Microsoft or by one of Microsoft’s subsidiaries to terminate his or her employment with Microsoft or its subsidiary or to work for any entity other than Microsoft or its subsidiary or interfere with the relationship between Microsoft and any officer thereof. For the sake of clarity, clause shall not be violated if an employee of Microsoft is employed by an entity with which Steven is associated so long as he did not engage in activities described in clause . Steven has returned to Microsoft his Microsoft cardkey(s), corporate American Express card and phone card, if any, and any other Microsoft Property in his possession or control, including but not limited to hardware, software, source code, patent applications, budgets, personnel files, financial or marketing data, status reports, customer lists, customer contact information, personnel data, and any other proprietary or confidential data, documents and materials in any form or media (collectively, “Microsoft Property”).

He has also agreed to permanently delete all Microsoft Property from any non-Microsoft computer, electronic device, storage device, storage system, or storage service that is in his possession or under his control, including (without limitation) desktop and laptop computers, mobile telephones, tablet devices, memory sticks, disks, and hard drives. He acknowledges and agrees that nothing in this Agreement is intended to, nor shall it, relieve him of any obligation he has under Sections 2, 3 and 6 the Employee Agreement. Anything to the contrary notwithstanding, nothing in this Agreement shall prevent Steven from retaining a home computer and security system, papers and other materials of a personal nature, including personal diaries, calendars and Rolodexes, information relating to his compensation or relating to reimbursement of expenses, agreements relating to his employment, and information that he reasonably believes may be needed for tax purposes. He also shall be permitted to retain copies of plans and programs relating to his employment that do not contain Microsoft confidential information.

Cooperation. For the four (4) year period following the separation date, Steven agrees that, upon reasonable request, he will reasonably cooperate with Microsoft, its subsidiaries and affiliates, and any of their officers, directors, agents, employees, attorneys and advisors in Microsoft’s investigation of, preparation for, and prosecution or defense of any matter(s) brought by or against Microsoft or any Released Party with respect to litigation concerning: facts or circumstances about which he has any actual or alleged knowledge or expertise that was obtained during his employment with Microsoft; or  any of his acts or omissions, real or alleged, of his employment with Microsoft. Steven agrees that, upon reasonable notice, he will appear and provide full and truthful testimony in proceedings associated with the above referenced matters, provided that Microsoft shall reimburse him for all reasonable travel expenses (on a basis consistent with senior executive officers of Microsoft) associated with the giving of testimony and shall work with him as practicable to schedule the activities contemplated by this paragraph so as not to unreasonably interfere with his other personal or professional commitments. Microsoft agrees to defend, indemnify, and hold him harmless from and against all Claims to the extent that the Claims arise out of or relate to any of his acts or omissions, real or alleged, during his employment with Microsoft or in connection with his services under this Paragraph 4, except as prohibited by law. Release of Claims. Steven hereby agrees, that on behalf of himself and his marital community, heirs, executors, successors and assigns, to release (i.e., give up) all known and unknown claims that he currently has against any of the Released Parties. For purposes of this Agreement, the Released Parties means: Microsoft and any of its current and former parents, subsidiaries, affiliates, related companies, joint ventures, their predecessors and successors, and with respect to each such entity, all of its past, present and future officers, directors, agents, shareholders, administrators, representatives, employees, attorneys, insurers, successor or assigns, each in his/her capacity as such. Steven understands and agrees that this release includes, but is not limited to, any and all claims or causes of action arising under:

Any federal law relating to employment discrimination, termination of employment, benefits, wages, reasonable accommodation, or rights of disabled employees, such as the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., the Americans with Disabilities Act, the Equal Pay Act, the Fair Labor Standards Act, the Family and Medical Leave Act, Title VII of the 1964 Civil Rights Act, the Employee Retirement Income Security Act of 1974, and the Worker Adjustment and Retraining Notification Act.

Any state, local or foreign law relating to employment discrimination, termination of employment, benefits, wages, reasonable accommodation, or rights of disabled employees, including, but not limited to, the Washington Law against Discrimination.

Any other basis for legal or equitable relief whether based on express or implied contract, tort, statute, regulation, ordinance, common law, or other legal or equitable ground. Steven agrees that this Agreement is not an admission of guilt or wrongdoing by the Released Parties and acknowledges that the Released Parties do not believe or admit that they have done anything wrong.. Steven understands that he is not waiving any  claims that the law does not permit him to waive,  claims arising from events occurring after the date he signs this Agreement,  claims for indemnification, contribution or for D&O coverage or claims for accrued benefits or compensation (except for claims pertaining to any awarded but unvested stock awards). Steven represents that he has not filed or caused to be filed any lawsuit, complaint, or charge against Microsoft or any of the Released Parties with respect to any claim this Agreement purports to waive with any governmental agency or in any court, and that he will not file, cause to file, initiate, or pursue (except as otherwise provided in this Agreement or required by law) any such complaints, charges, or lawsuits at any time hereafter other than to enforce his rights under this Agreement.

Microsoft, on its behalf and on behalf of each Released Party in their capacity as such, hereby releases all known claims any of them have against Steven, excluding any claim related to fraud or misappropriation of Microsoft property.  Steven agree to keep all details of this Agreement and the details surrounding his separation in strict confidence except that he may make disclosures as follows:   to his immediate family;  to his financial and legal advisors who have a reasonable need to know this information; to the extent he is compelled by subpoena or other legal process to disclose such information; or to the extent reasonably required in order to prosecute or defend any action for breach of this Agreement. Steve agrees that if he does share this Agreement or any information in it with any of the aforementioned individuals, he will instruct such person(s) that the information is strictly confidential and that they may not share it with anyone else. The Parties agree that, to the extent that Microsoft discloses the terms of the Agreement in any filing with the Securities & Exchange Commission pursuant to the applicable securities laws and regulations, the foregoing obligation to maintain the confidentiality of the terms of this Agreement ceases with respect to the information disclosed in the filing.  Steven agrees not to make any disparaging remarks about Microsoft, its officers or directors, its products, or the Released Parties, including but not limited to disparaging statements relating to his employment with or separation from Microsoft; provided that commencing January 1, 2016, this clause shall not be violated by statements or communications (in any medium) that  do not rely on confidential information obtained by Steven during his employment at Microsoft and  are made directly or indirectly by Steven (regarding Microsoft products, services, or business practices or decisions that are created, rendered or implemented after January 1, 2016 or regarding Microsoft products or services made after January 1, 2014 and that are made in connection with, related to or during the course of Steven’s employment, engagement or other relationship with another business organization.

Microsoft agrees that it and its directors and members of the company’s Senior Leadership Team (or any successor team thereto) will not make any disparaging remarks about him, including but not limited to disparaging statements relating to Steven’s employment with or separation from Microsoft. Notwithstanding the foregoing, nothing in this Paragraph 6 shall prevent any person from:  responding publicly to any incorrect, disparaging or derogatory public statement to the extent reasonably necessary to correct or refute such public statement, or  making any truthful statement to the extent:  necessary with respect to any litigation, arbitration or mediation involving this Agreement, including, but not limited to, the enforcement of this Agreement, or (y) required by law or by any court, arbitrator, mediator or administrative of legislative body (including any committee thereof) with actual or apparent jurisdiction to order such person to disclose or make accessible such information. No Assistance. Steven agrees not to provide assistance to any current or former Microsoft employee to initiate, pursue, or raise any complaints, concerns, claims, or litigation of any kind against the Released Parties, unless compelled to do so by a valid subpoena or court order. If compelled to testify or otherwise provide evidence in any proceeding, he will provide Microsoft with reasonably prompt notice of receipt of an order or other demand for his participation by giving notice to Brad Smith, General Counsel, Microsoft Corporation, One Microsoft Way, Redmond, WA 98052, in sufficient time for Microsoft to oppose such testimony or participation. To the extent prohibited by law, this paragraph does not prevent him from participating in government investigations Future Employment. Steven understands and agrees that, as a condition of receiving the consideration described in Paragraph 2, he will not be entitled to any future employment with Microsoft or any subsidiary, joint venture, or affiliate of Microsoft in which Microsoft owns an interest of 50 percent or more (collectively, “Microsoft or its Affiliates”). He further agrees that he will not apply for, or otherwise seek future employment by Microsoft or its Affiliates, and that he will not institute or join any action, lawsuit or proceeding against Microsoft or its Affiliates for any failure to employ him.

 Microsoft and Steven acknowledge and agree that this Agreement contains the entire agreement of Microsoft and him as to matters addressed in it except as set forth in Paragraph 3 and that it merges any and all prior written and oral communications concerning those matters. Other than what is expressly stated in this Agreement, no different or additional promises or representations of any kind have been made to induce him to sign this Agreement, which he signs freely and in the absence of any coercion or duress whatsoever. Steven understands that the terms of this Agreement may not be modified, amended or superseded except by a subsequent written agreement signed by his self and the undersigned Microsoft representative. 10. Withholding of money owed. Except as would constitute an impermissible offset for purposes of Section 409A of the Internal Revenue Code, he authorizes Microsoft to withhold from any monies owed to him by Microsoft as of the Separation Date, via payroll deductions, any and all monies due to Microsoft from him, including without limitation cash and travel advances, amounts due the Company Store, employee benefit plan deductions, other advances and any unpaid credit or phone card charges. He understands that any such payroll deductions are for his convenience and for his full benefit. 11. Governing Law and Dispute Resolution.

The Parties agree that the laws of the State of Washington will govern in any action brought by either himself or Microsoft to interpret or enforce the terms of this Agreement, without regard to principles of conflicts of laws that would call for the application of the substantive law of any jurisdiction other than the State of Washington. The Parties further agree that any dispute arising in connection with the execution and/or operation of this Agreement or the Employee Agreement shall be resolved in the following manner unless otherwise agreed to by the Parties. The Parties agree to first attempt to resolve all disputes through informal negotiations. The Party contending there is a breach or other issue arising from or related to this Agreement shall provide written notice to the other Party describing with specific the nature of the breach of other issue. Within five (5) days after delivery of the written notice, the other Party shall respond in writing stating its position.

If the Parties are unable to resolve the dispute through informal negotiations, the Parties agree to resolve all disputes by binding arbitration before a qualified mutually selected arbitrator. The Party initiating the arbitration shall bear the burden of proof of breach and actual damages; provided, however, that no actual damages need to be proven for the arbitrator to award the liquidated damages provided for in this Agreement. The arbitrator shall issue a written decision within fifteen (15) days of the end of the hearing. The decision of the arbitrator shall be final and binding and may be enforced and a judgment entered in any court of competent jurisdiction. The arbitration itself, and all testimony, documents, briefs, and arguments therein, shall be kept confidential, except to the extent described in the exceptions listed in clauses (1) through (4) of Paragraph 6(a) above.

Notwithstanding the foregoing agreements in subparagraphs (1) and (2) of this section, the Parties agree that breach of the confidentiality and non-disparagement provisions set forth in Paragraph 6 could cause irreparable injury to the other party and that such other party will have the right to seek immediate injunctive relief or other equitable relief enjoining any threatened or actual breach in a court in King County or the Western District of Washington. 12. Current Address. Through the fourth anniversary of the Separation Date, Steven agrees to provide Brad Smith, General Counsel, Microsoft Corporation, One Microsoft Way, Redmond, WA 98052, with his current home address and telephone number. 13. Severability. The provisions of this Agreement are severable, and if any part of this Agreement is found to be unenforceable (with the exception of the noncompetition and nonsolicitation obligations set forth in Paragraph 3 and the Release contained in Paragraph 5), the remainder of this Agreement will remain fully valid and enforceable. To the extent any terms of this Agreement are called into question, all provisions shall be interpreted in a manner that would make them consistent with current law.

In compliance with the terms of the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act, Steven expressly acknowledges that he have been given twenty-one (21) days to review this Agreement before signing it. He also understands that he may revoke this Agreement for a period of seven (7) days following his signature of it and will send such revocation in writing postmarked within the seven-day period to Brad Smith, and that it is not effective or enforceable until that seven-day revocation period has expired. He understands that he may sign this Agreement before the end of the 21-day consideration period but may not be required to do so. Steven fully understands that if he signs this Agreement prior to expiration of the 21-day consideration period, he will be waiving his right to the remainder of the 21-day consideration period. Steven understand that he was advised to seek legal counsel prior to signing this Agreement. The Effective Date of this Agreement shall be the day following expiration of the seven-day revocation period. Employee acknowledgment

As an employee of MICROSOFT CORPORATION, a Delaware corporation (“MICROSOFT”), and in consideration of the compensation now and hereafter paid to me, I will devote my best efforts to furthering the best interests of MICROSOFT. During my employment I will not engage in any activity or investment (other than an investment of less than .01% of the shares of a company traded on registered stock exchange), that conflicts with MICROSOFT’s business interests, including without limitation, any business activity not contemplated by this Agreement,  occupies my attention so as to interfere with the proper and efficient performance of my duties at MICROSOFT, or interferes with the independent exercise of my judgment in MICROSOFT’s best interests. As used herein, MICROSOFT’s “business” means the development, marketing and support of software for business and professional use, including operating systems, languages and applications programs as well as books and hardware for the microcomputer marketplace. 2. At times during my employment and thereafter, I will not disclose to anyone outside MICROSOFT nor use for any purpose other than my work for MICROSOFT a) any confidential or proprietary technical, financial, marketing, manufacturing or distribution or other technical or business information or trade secrets of MICROSOFT, including without limitation, concepts, techniques, processes, methods, systems, designs, circuits, cost data, computer programs, formulas, development or experimental work, work in progress, customers and suppliers, b) any information MICROSOFT has received from others which MICROSOFT is obligated to treat as confidential or proprietary or c) any confidential or proprietary information which is circulated within MICROSOFT via its internal electronic mail system or otherwise. I will also not disclose any confidential or proprietary information to anyone inside MICROSOFT except on a “need-to-know” basis. If I have any questions as to what comprises such confidential proprietary information or trade secrets, or to whom, if anyone, inside of Microsoft, it may be disclosed, I will consult with my manager at MICROSOFT. I will make prompt and full disclosure to MICROSOFT, will hold in trust for the sole benefit of MICROSOFT, and will assign exclusively to MICROSOFT all my right, title, and interest in and to any and all inventions, discoveries, designs, developments, improvements, copyrightable material, and trade secrets (collectively herein “Inventions”) that I, solely or jointly, may conceive, develop, or reduce to practice during the period of time I am in the employ of MICROSOFT. I hereby waive and quitclaim to MICROSOFT any and all claims of any nature whatsoever that I now or hereafter may have for infringement of any patent resulting from any patent applications for any inventions so assigned to MICROSOFT. My obligation to assign shall not apply to any invention about which I can prove that

It was developed entirely on my own time; and no equipment, supplies, facility, or trade secret information of MICROSOFT was used in its development; and it does not relate  directly to the business of MICROSOFT or  to the actual or demonstrably anticipated research or development of MICROSOFT; and it does not result from any work performed by me for MICROSOFT. I will assign to MICROSOFT or its designee all my right, title, and interest in and to any and all Inventions full title to which may be required to be in the United States by any contract between MICROSOFT and the United States or any of its agencies. 4 I have attached hereto a list describing all Inventions belonging to me and made by me prior to my employment with MICROSOFT that I wish to have excluded from this Agreement. If no such list is attached, I represent that there are no such Inventions. If in the course of my employment at MICROSOFT, I use in or incorporate into a MICROSOFT product, process, or machine, an Invention owned by me or in which I have an interest, MICROSOFT is hereby granted and shall have an exclusive royalty-free, irrevocable, worldwide license to make, have made, use, and sell that invention without restriction as to the extent of my ownership or interest.

 I will execute any proper oath or verify any proper document in connection with carrying out the terms of this Agreement. If, because of my mental or physical incapacity or for any other reason whatsoever, MICROSOFT is unable to secure my signature to apply for or to pursue any application for any United States or foreign patent or copyright covering inventions assigned to MICROSOFT as stated above, I hereby irrevocably designate and appoint MICROSOFT and its duly authorized officers and agents as my agent and attorney in fact, to act for me and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of U.S. and foreign patents and copyrights thereon with the same legal force and effect as if executed by me. I will testify at MICROSOFT’s request and expense in any interference, litigation, or other legal proceeding that may arise during or after my employment.

I recognize that MICROSOFT has received and will receive confidential or proprietary information from third parties subject to a duty on MICROSOFT’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. During the term of my employment and thereafter I owe MICROSOFT and such third parties a duty not to disclose such confidential or proprietary information to anyone except as necessary in carrying out my work for MICROSOFT and consistent with MICROSOFT’s agreement with such third party. I will not use such information for the benefit of anyone other than MICROSOFT or such third party, or in any manner inconsistent with any agreement between MICROSOFT and such third party of which I am made aware.

During my employment at MICROSOFT I will not use improperly or disclose any confidential or proprietary information or trade secrets of my former or current employers, principals, partners, co-venturers, clients customers, or suppliers of the vendors or customers of such persons or entities and I will not bring onto the premises of MICROSOFT any unpublished document or any property belonging to any such persons or entities or their vendors or customers unless such persons or entities have given verbal consent. I will not violate any non-disclosure or proprietary rights agreement I might have signed in connection with any such person or entity.

 I acknowledge that my employment will be of indefinite duration and that either MICROSOFT or I will be free to terminate this employment relationship at will and at any time with or without cause. I also acknowledge that any representations to the contrary are unauthorized and void, unless contained in a formal written employment contract signed by an officer of Microsoft or its Director of Training and Personnel Administration. I further acknowledge that the terms and conditions of this Agreement shall survive termination of my employment.

At the time I leave the employ of MICROSOFT, I will return to MICROSOFT all papers, drawings, notes, memoranda, manuals, specifications, designs, devices, documents, diskettes and tapes, and any other material on any media containing or disclosing any confidential or proprietary technical or business information. I will also return any keys, pass cards, identification cards or other property belonging to MICROSOFT. 10. For a period of one year after termination of my employment, I will not accept employment or engage in activities directly or indirectly competitive with the business (as defined in paragraph 1 above) or with the actual or demonstrably anticipated research or development of MICRSOFT as of my termination date.

While employed at MICROSOFT and for a period of one year from the termination of my employment I will not induce or attempt to influence directly or indirectly any Employee of MICROSOFT to terminate his employment with MICROSOFT or to work for me or any other person or entity.

I acknowledge that any violation of this Agreement by me will cause irreparable injury to MICROSOFT, and MICROSOFT shall be entitled to extraordinary relief in court, including, but not limited to, temporary restraining orders, preliminary injunctions, and permanent injunctions, without the necessity of posting bond or security..

If court proceedings are required to enforce any provision or to remedy any breach of this Agreement, the prevailing party shall be entitled to an award of reasonable and necessary expenses of litigation, including reasonable attorneys’ fees. 14. I agree that this Agreement shall be governed for all purposes by the laws of the State of Washington as such law applies to contracts to be performed within Washington by residents of Washington and that venue for any action arising out of this Agreement shall be properly laid in King County, Washington or in the Federal District Court for the Western District of Washington. If any provision of this Agreement shall be declared excessively broad, it shall be construed so as to afford MICROSOFT the maximum protection permissible by law. If any provision of this Agreement is void or is so declared, such provision shall be severed from this Agreement, which shall otherwise remain in full force and effect. This Agreement sets forth the entire Agreement of the parties as to employment at MICROSOFT and any representations promises, or conditions in connection therewith not in writing and signed by both parties shall not be binding upon either party.

As part of Microsoft's loan of $2 billion to a group trying to buy PC maker Dell, the two companies must modify the payment terms of Dell's current agreements with Microsoft, a document filed with U.S. regulators said. CEO and founder Michael Dell and private-equity firm Silver Lake Partners have proposed to buy Dell for $24.4 billion, a move they said would allow the then-private firm to accelerate its transformation from PC seller to a vendor pushing higher-margin software and services to enterprises. But the $2 billion from the Redmond, Wash. developer apparently comes with some strings. Prior to the buyout's conclusion, Microsoft and Dell must "negotiate in good faith and enter into, as soon as reasonably practical" one or more agreements "to modify, alter or amend ... the standard terms for payment under the existing commercial agreements between [Microsoft and Dell]," the securities purchase agreement filed March 29 with the U.S. Securities and Exchange Commission (SEC) stated.

The changes will includes ones to the master OEM relationship agreements between the two firms, the document added. A master OEM agreement is an umbrella agreement that spells out the software licensing terms between a developer and an OEM, reseller or customer. Those agreements typically include payment rates -- which may vary depending on the number of licenses purchased and may include minimum quantities that the OEM, reseller or customer commits to buy. Details were not included in the filing with the SEC, and the securities purchase agreement gave no hint which party the payment changes would benefit: Microsoft, which has leverage from the $2 billion loan, or Dell, which could threaten to deemphasize PCs and Windows unless it was given a break. "Payment terms" usually refers to the time a buyer has to pay the seller, but those terms often include discounts for early payment or to prod the buyer in directions the seller desires. If Dell is able to win most-favored status through the changes, analysts have said other OEMs, such as the world's top two, HP and Lenovo, may fear they're getting shortchanged, and rethink their plans for Windows. Or the modifications could be wider-sweeping -- the mention of the master OEM agreement hints at such -- to formalize what one analyst said was a likely "gentleman's agreement" between the companies. In early February, when Dell announced the buyout plan, Patrick Moorhead, principal analyst with Moor Insights & Strategy, speculated that Microsoft's $2 billion contribution was contingent on Dell stepping up its use of Microsoft's products, or promising not to dabble in alternative operating systems, such as Google's Chrome OS.

Such an agreement could have been driven by Microsoft's fear that a privatized Dell would abandon the traditional PC market, said Moorhead, noting that Microsoft would rather have several strong OEM partners rather than just one or two. Other possibilities include Microsoft pressuring Dell to pledge support for Windows RT, the tablet-only operating system launched last October. In fact, Dell recently backed Windows RT, one of the few OEMs to do so, saying it remained committed to the OS despite its shaky start and the plunging prices of tablets. Previously, Microsoft has declined to discuss details of the $2 billion loan or answer questions about the deal. In February, the company issued a statement saying, "Microsoft is committed to the long term success of the entire PC ecosystem and invests heavily in a variety of ways to build that ecosystem for the future.

We will continue to look for opportunities to support partners who are committed to innovating and driving business for their devices and services built on the Microsoft platform." Assuming Michael Dell and Silver Lake buy Dell, the company would certainly stay in the tablet market, including those running Windows. Reports submitted to Dell's board of directors by the Boston Consulting Group, a management consulting firm the board asked to help it evaluate the buyout offer, built their forecasts on the assumption that while Dell would continue to lose share in global PC sales, it should be able to generate revenue of $1.1 billion in fiscal 2016 by grabbing 9% of the U.S. Windows tablet market, and 4.5% of the emerging markets' share. Microsoft's $2 billion  which will purchase notes issued by Dell that pay 7.35% in interest played a crucial role in the buyout plan, according to other filings with the SEC.

Late last year, Silver Lake threatened to bow out of the deal unless it was allowed to talk to Microsoft about chipping in. In less than two weeks, Microsoft's board gave the go-ahead to invest $2 billion. Silver Lake and Microsoft have a history of working together. In 2011, the private equity firm brokered the sale of Skype to Microsoft for $8.5 billion, and that same year made a failed bid for Yahoo that reportedly included Microsoft as one of several partners. More information about the agreements between Microsoft and Dell may come to light in later SEC filings either as the deal nears execution or when it's finalized, assuming stockholders agree to the buyout. The date of the stockholder vote has not been set. Last Thursday, Dell submitted a preliminary notice of the meeting, but the date and time were left blank.

In addition, Greenfield Online announced that immediately prior to entry into the merger agreement with Microsoft it had terminated its previously announced merger agreement with affiliates of Quadrangle Group LLC (together with its affiliates, “Quadrangle”) following the expiration of the matching rights granted to Quadrangle under the Quadrangle merger agreement. In connection with the termination of the Quadrangle merger agreement, Greenfield Online is required to pay Quadrangle a $5 million fee.  Microsoft Corp and Skype Global announced that they have entered into a definitive agreement under which Microsoft will acquire Skype, the leading Internet communications company, for $8.5 billion in cash from the investor group led by Silver Lake. The agreement has been approved by the boards of directors of both Microsoft and Skype.

“The subsidiary must be established and recognized by the parent, as well as third parties, as an independent corporation managed by a board of directors. The parent company typically controls the subsidiary by being the sole or controlling-majority stockholder - so it has the power to elect and remove the board of directors. To maintain control of a subsidiary and at the same time allow the subsidiary to operate as an independent entity under the direction of its board of directors, a parent business enterprise should: be the sole shareholder; include voting control provisions in the subsidiary's articles of incorporation along with provisions that prohibit amendment of the articles without the approval of the sole shareholder; prepare comprehensive bylaws defining the designation and authority of officers, their term of office, their removal (for cause, or for any or no reason);  include in the bylaws the procedure whereby the parent elects and removes directors; and prohibit bylaw amendments without the sole shareholder's approval, etc.”

There are 7 categories (areas requiring contracts?) of Microsoft Corporation that would require having contracts and by the globalized nature of the company, would therefore require international contracts: Direct Investments, customers, investors, strategic alliances subsidiaries, customers, suppliers, and employees.

Direct Investments (capital IQ) - 300 direct investments around the world Europe - 66 direct investments
80% of its investments are in information technology
10% of its investments are in consumer discretionary - all subsidiaries/ operating units - 4 total, 2 are distributors, 1 is a movie and entertainment company ( provides mobile music entertainment services to telecommunications operators and media companies), another is a leisure product company.

  • Asia/Pacific- 41 direct investments (13.7%)
    Africa / Middle East- 23 direct investments (7.7%)
    Latin America - 19 direct investments (6.3%)
    Canada/United States - 50.1% 150 direct investments with 1 investment pending Canada - 9.9%
    United States - 40.2%

These direct investments are diversified, pning the industries of information technology, consumer directives (*need explanation of this!*), healthcare, telecommunications, financials, and industrials. So in direct investments alone, more than half of all of Microsoft Corps’ direct investments (59.8%) are in foreign countries.

Customers (46.89% of total revenue comes from international sales) (10K) come up with specific numbers here, if possible) When it comes to MIcrosofts customers - where contracts will always be required, there are 5 categories, each with customers in foreign countries: borrower, Client services (Banco Chil, Bank of India), Customer (AirAsia, Air Mauritius, Caltex Australia Ltd), Distributors (Brightpoint Middle East FZE (UAE)), Licensees (Atari Societe anonyme, Republic of Azebaijan, Hon hai - a venture capital firm based in Taiwan, Telefonica Czech Republic - Czech Republic). Suppliers Microsoft corps has 297 suppliers, worldwide, from companies based in China (China national software and service company limited), India (Country club Ltd), and France ( Societe Anonyme), to name a few. The

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