Microsoft and New Mexico Plaintiffs Settle New Mexico Class Action Lawsuit

SANTA FE, New Mexico, and REDMOND, Wash., Aug. 3, 2004 — The law firms of Hinkle, Hensley, Shanor, & Martin, L.L.P., Lerach, Coughlin, Stoia, & Robbins, L.L.P., and Freedman, Boyd, Daniels, & Hollander, L.L.P. counsel for a proposed class of New Mexico consumers, and Microsoft Corp. jointly announced today that a settlement has been reached in a class action lawsuit alleging that Microsoft Corp. violated New Mexicos antitrust and unfair competition laws.

The settlement, which received preliminary approval on July 29, 2004 from the First Judicial District Court for the State of New Mexico, will make vouchers available to class members that may be used to buy any manufacturer’s desktop, laptop and tablet computers; any software available for sale to the general public and used with those computer products; and specified peripheral devices for use with computers. The total amount of vouchers issued will depend on the number of class members who claim vouchers, and the maximum value of the vouchers that may be issued to class members will be $31.5 million.

Under the terms of the settlement agreement, Microsoft will provide one-half of the difference between $31.5 million and the value of vouchers issued to class members to New Mexicos public schools in the form of vouchers that may be used by the schools to purchase a broad range of hardware products, Microsoft® and non-Microsoft software, and professional development services. The vouchers will be made available to public schools in which 50 percent or more of the students are eligible for reduced-fee or free meals under the National School Lunch Program or distributed as determined by the judge presiding over the settlement. Such schools will also receive vouchers worth 50 percent of the difference between the amount of vouchers issued to class members and the amount redeemed by them.

“This settlement not only provides benefits for New Mexico consumers and businesses, but also to schools within the state by giving them the means to upgrade their existing computer systems and become more technologically advanced,” said David Freedman, attorney for the plaintiffs.

“Were pleased by the opportunity to help schools all across New Mexico get the computers and software they need,” said Brad Smith, general counsel for Microsoft. “This settlement allows us to focus on the future and building great software, and avoids the cost and uncertainty of litigation.”

Details of the settlement are set forth in a settlement agreement filed in the First Judicial District Court for the State of New Mexico. Under the settlement, consumers and businesses that, between December 8, 1995 and December 31, 2002, resided in New Mexico and purchased certain Microsoft operating system, productivity suite, spreadsheet or word processing software for use in New Mexico and not for resale will be eligible to apply for the vouchers.

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