Microsoft Board of Directors Establishes Antitrust Compliance Committee
Nov. 08, 2002
Company Board Moves Promptly to Fulfill Compliance Obligations

REDMOND, Wash., Nov. 8, 2002 — In compliance with the judgment entered by the Federal District Court last week, Microsoft Corp.'s board of directors today passed a resolution establishing an Antitrust Compliance Committee. The resolution charges the committee with executing the duties of the final judgment related to compliance. Board member Dr. James I. Cash was selected to be chairman of the committee.

"The board recognizes the importance of full compliance with the final judgment entered by the court. This committee will take its responsibilities very seriously, and is committed to meeting the obligations outlined in the court's final judgment," Cash said.

Cash, a professor at Harvard Business School and chairman of Harvard Business School Publishing, has served as a trustee or overseer for nonprofit organizations and on the board of directors for several public companies. Before joining the Harvard faculty, he worked for several years in the high-tech field as a data processor, systems analyst and programmer. He joined the Microsoft board in June 2001.

The ruling issued by District Court Judge Colleen Kollar-Kotelly on Nov. 1 calls for the establishment of a Compliance Committee within 30 days of entry of the final judgment. The order further directs that the committee consist of at least three members of the board of directors who are not present or former employees of Microsoft.

Dr. Cash will be joined on the committee by Microsoft board members Raymond Gilmartin and Ann McLaughlin Korologos. Gilmartin is chairman, president and chief executive officer of Merck & Co. Inc. and is an active participant in groups and organizations in the health industry. Korologos served as U.S. secretary of labor and was chair of the Aspen Institute, an international nonprofit education institution. She is currently a senior advisor at Benedetto, Garland & Co.

"Microsoft has moved rapidly to fulfill our responsibilities here," said Microsoft Board Chairman and Chief Software Architect Bill Gates. "We recognize that we will be closely scrutinized by the government and our competitors. We will devote all the time, energy and resources needed to meet our new obligations."

The resolution, passed in a unanimous vote of Microsoft's board at a regularly scheduled meeting in Redmond, states that "the board recognizes and appreciates the important roles the Department of Justice and each of the states attorneys general will play in their oversight of Microsoft's compliance with the final judgment and orders," and "charges the committee with responsibility for executing the duties assigned to it by the final judgment."

The final judgment requires the Compliance Committee to hire a compliance officer who will report directly to the Compliance Committee and Microsoft Chief Executive Officer Steve Ballmer.

Attached is the Microsoft Board of Directors Resolution to Establish Antitrust Compliance Committee.

RESOLUTION TO ESTABLISH
ANTITRUST COMPLIANCE COMMITTEE

WHEREAS, on Nov. 1, 2002, the District Court for the District of Columbia (the "Court " ) entered a final judgment in State of New York, et al, v. Microsoft Corporation , (Civil Action No. 98-1233 (CKK), the "States Case " ), Section IV.B.1 of which requires that the board of directors create within 30 days a new compliance committee consisting of three or more directors, all of whom are not present or former Microsoft employees;

WHEREAS, on Nov. 1, 2002, the Court entered an order in the States Case conditionally approving the Second Revised Proposed Final Judgment ( "SRPFJ " ) submitted by the states of New York, Ohio, Illinois, Kentucky, Louisiana, Maryland, Michigan, North Carolina and Wisconsin and the company, and also entered an order in United States of America v. Microsoft Corporation , (Civil Action No. 98-1232 (CKK)) conditionally approving the SRPFJ (collectively the "Orders " );

WHEREAS, the board wants to move promptly to fulfill its responsibilities and to demonstrate its commitment to ensure that the company meets fully all of its obligations under the final judgment and orders; and

WHEREAS, the board recognizes and appreciates the important roles the Department of Justice and each of the State Attorneys General will play in their oversight of Microsoft's compliance with the final judgment and orders as contemplated by the Court.

NOW THEREFORE BE IT RESOLVED, the board hereby establishes an Antitrust Compliance Committee and charges this committee with responsibility for executing the duties assigned to it by the final judgment. The committee shall always consist of not less than three members, all of whom shall be neither present nor former company employees.

FURTHER RESOLVED, the Board appoints James I. Cash as chairman of the Antitrust Compliance Committee, and appoints Ann McLaughlin Korologos and Raymond V. Gilmartin as members of the committee.

FURTHER RESOLVED, members of the Antitrust Compliance Committee shall serve until their successors are duly designated, and any vacancy in the membership of the Antitrust Compliance Committee may be filled by the board at any regular or special meeting of the board from the membership of the board.

FURTHER RESOLVED, the Antitrust Compliance Committee shall be governed by the same rules regarding meetings (including meetings by conference telephone or similar communications equipment), action without meetings, notice, waiver of notice, and quorum and voting requirements as applicable to the board, and the Antitrust Compliance Committee shall be, and is hereby, authorized and empowered to fix and adopt its own rules of procedure not inconsistent with (a) any provision hereof, (b) any provision of the bylaws of the corporation, or (c) the laws of the state of Washington.

FURTHER RESOLVED, the Antitrust Compliance Committee shall keep, or cause to be kept, adequate minutes of all proceedings occurring at each of its meetings and shall report to the Board any and all action taken by the Committee since the last meeting of the Board. All members of the Antitrust Compliance Committee shall be furnished with copies of the minutes of each meeting of the Antitrust Compliance Committee.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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