THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Microsoft Corporation (MSFT)

9/28/2005 Proxy Information

Mr. Gates is the sole shareholder of Corbis Corporation, a company that provides digitized images and production services. The Company paid Corbis approximately $701,000 in fiscal year 2005 as licensing fees for digital images. Those licenses were entered into at armÕs length, and are similar to license agreements Microsoft enters into from time to time with other providers of digital images. The terms of the Corbis transactions are established by Corbis and the relevant business group at Microsoft seeking to use the digital images in MicrosoftÕs products, services, and marketing materials. The Company believes the terms are no less favorable to Microsoft than what are offered by Corbis to other large customers. Mr. Gates is not involved in negotiating agreements with Corbis or setting price or other terms, either on behalf of Microsoft or Corbis. MicrosoftÕs Audit Committee has reviewed and approved these arrangements.

A son of Mr. Shirley, a brother-in-law of Robert J. (Robbie) Bach, an executive officer of the Company, and a brother-in-law of Eric D. Rudder, an executive officer of the Company, were employed by the Company or one of its subsidiaries in fiscal year 2005, and each of them received fiscal year 2005 compensation that exceeded $60,000. Mr. ShirleyÕs son left the Company in March 2005

9/20/2004 Proxy Information

Mr. Gates is the sole shareholder of Corbis Corporation, a company that provides digitized images and production services. The Company paid Corbis approximately $1,018,000 in fiscal year 2004 as licensing fees for digital images. Those licenses were entered into at armÕs length, and are similar to license agreements Microsoft enters into from time to time with other providers of digital images. The terms of the Corbis transactions are established by Corbis and the relevant business group at Microsoft seeking to use the digital images in MicrosoftÕs products, services, and marketing materials. The Company believes the terms are no less favorable to Microsoft than what are offered by Corbis to other large customers. Mr. Gates is not involved in negotiating agreements with Corbis or setting price or other terms, either on behalf of Microsoft or Corbis. MicrosoftÕs Audit Committee has reviewed and approved these arrangements.

A son of Mr. Shirley, a director of the Company; a brother-in-law of Robert J. (Robbie) Bach, an executive officer of the Company; and a brother-in-law of Eric D. Rudder, an executive officer of the Company, were employed by the Company or one of its subsidiaries in fiscal year 2004, and each of them received fiscal year 2004 compensation that exceeded $60,000.

9/18/2003 Proxy Information

Mr. Gates is the sole shareholder of Corbis Corporation, a company that provides digitized images and production services. The Company paid Corbis approximately $282,000 in fiscal year 2003 as licensing fees for digital images. Those licenses were entered into at armÕs length, and are similar to license agreements Microsoft may enter into from time to time with other providers of digital images. The terms of the Corbis transactions are established by Corbis and the relevant business group at Microsoft seeking to use the digital images in MicrosoftÕs products, services, and marketing materials. The Company believes the terms are no less favorable to Microsoft than what are offered by Corbis to other large customers. Mr. Gates is not involved in negotiating agreements with Corbis or setting price or other relevant terms, either on behalf of Microsoft or Corbis. MicrosoftÕs board of directors was made aware of these arrangements.

A son of Mr. Shirley, a director of the Company; a brother and brother-in-law of Orlando Ayala, one of the CompanyÕs executive officers during fiscal year 2003; a brother-in-law of Robert J. (Robbie) Bach, an executive officer of the Company; and a brother-in-law of Eric D. Rudder, an executive officer of the Company, were employed by the Company or one of its subsidiaries in fiscal year 2003, and each of them received fiscal year 2003 compensation that exceeded $60,000.