Microsoft Cites Strong Growth and Product Momentum at Annual Shareholder Meeting

REDMOND, Wash. — Nov. 16, 2010 — Speaking at Microsoft Corp.’s annual shareholder meeting today, Chief Executive Officer Steve Ballmer highlighted the strength of the company’s execution over the past year and increased momentum for Microsoft’s cloud solutions, and he expressed strong optimism for Windows Phone 7, Kinect for Xbox 360 and the company’s other consumer products in the upcoming holiday season.

“All across the company, we are delivering compelling products and record financial results,” Ballmer said. “I’m as excited about our future as I have ever been. Our opportunities to transform people’s lives on a global scale have never been greater.”

Ballmer highlighted the positive reviews and consumer excitement around the company’s new Windows Phone 7 devices and groundbreaking Kinect for Xbox 360 gaming system, and noted that Kinect sales already passed 1 million units in its first ten days on the market.

“People are falling in love with Kinect, and they are just flying off the shelves,” Ballmer said. “As soon as people experience controller-free gaming and entertainment, they want it. And the excitement over Kinect is also translating into even more excitement for our Xbox 360 consoles and games.”

He also underscored that Microsoft is delivering the most comprehensive end-to-end cloud offering and is making great progress on both the platform and applications front. Customer demand and excitement for Microsoft’s cloud and commercial online services continue to grow, as demonstrated by rapid customer adoption of Windows Azure, the significant customer interest in the company’s recently announced Microsoft Office 365 service, and the steady growth in consumer cloud services like Xbox LIVE and Bing.

The following proposals were acted on by the company’s shareholders at the shareholder meeting:

  • Elected nine directors to serve until the next annual meeting of shareholders

  • Ratified the selection of Deloitte & Touche LLP as the company’s independent auditor

  • Rejected a shareholder proposal to create a new board committee on environmental sustainability

All director nominees and the ratification of the independent auditor each received a vote of more than 94 percent of votes cast. The shareholder proposal received less than 4 percent of votes cast.

Microsoft’s board of directors consists of William H. Gates, Microsoft chairman; Steven A. Ballmer, Microsoft chief executive officer; Dina Dublon, former chief financial officer of JPMorgan Chase; Raymond V. Gilmartin, former chairman, president and chief executive officer of Merck & Co. Inc.; Reed Hastings, founder, chairman and chief executive officer of Netflix Inc.; Maria M. Klawe, president of Harvey Mudd College; David F. Marquardt, general partner at August Capital; Charles H. Noski, executive vice president and chief financial officer of Bank of America Corp.; and Helmut Panke, former chairman of the board of management at BMW Bayerische Motoren Werke AG. Seven of the nine board members are independent of Microsoft, which is consistent with the requirement in the company’s governance guidelines that a substantial majority be independent.

The board has five committees: an Audit Committee, a Compensation Committee, a Governance and Nominating Committee, a Finance Committee, and an Antitrust Compliance Committee.

Committee memberships changed during the fiscal year. James I. Cash Jr. retired from the board as of the company’s annual shareholder meeting on Nov. 19, 2009. Following the election of directors at that meeting, Marquardt was appointed to the Governance and Nominating Committee, Klawe was appointed to the Antitrust Compliance Committee, and Panke was appointed to the Audit Committee and was appointed chair of the Antitrust Compliance Committee. In May 2010, Noski stepped down from the Finance Committee.

The Audit Committee members are Dublon, Panke and Noski (chairperson). The Compensation Committee members are Dublon (chairperson), Hastings and Panke. The Finance Committee members are Hastings and Marquardt (chairperson). The Governance and Nominating Committee members are Gilmartin (chairperson) and Marquardt. The Antitrust Compliance Committee members are Gilmartin, Klawe and Panke (chairperson).

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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