Microsoft Announces Plans for July 2008 Transition for Bill Gates

Working full time at Microsoft through June 2008, Gates then will continue
as chairman and advisor while increasing Foundation efforts; Ray Ozzie and
Craig Mundie to assume expanded roles.

REDMOND, Wash. — June 15, 2006 — Microsoft Corp. today announced that
effective July 2008 Bill Gates, chairman, will transition out of a
day-to-day role in the company to spend more time on his global health and
education work at the Bill & Melinda Gates Foundation. The company
announced a two-year transition process to ensure that there is a smooth
and orderly transfer of Gates’ daily responsibilities, and said that after
July 2008 Gates would continue to serve as the company’s chairman and an
advisor on key development projects.

The company announced that Chief Technical Officer Ray Ozzie will
immediately assume the title of chief software architect and begin working
side by side with Gates on all technical architecture and product oversight
responsibilities, to ensure a smooth transition. Similarly, Chief Technical
Officer Craig Mundie will immediately take the new title of chief research
and strategy officer and will work closely with Gates to assume his
responsibility for the company’s research and incubation efforts; Mundie
also will partner with general counsel Brad Smith to guide Microsoft’s
intellectual property and technology policy efforts.

“Our business and technical leadership has never been stronger, and
Microsoft is well-positioned for success in the years ahead. I feel very
fortunate to have such great technical leaders like Ray and Craig at the
company,” Gates said. “I remain fully committed and full time at Microsoft
through June 2008 and will be working side by side with Ray and Craig to
ensure that a smooth transition occurs.”

“This was a hard decision for me,” Gates added. “I’m very lucky to have two
passions that I feel are so important and so challenging. As I prepare for
this change, I firmly believe the road ahead for Microsoft is as bright as
ever.”

In September 2005 Microsoft Chief Executive Officer Steve Ballmer organized
the company into three divisions under presidents Jim Allchin, Kevin
Johnson, Robbie Bach and Jeff Raikes, who were given much greater
responsibility for product development and strategy decisions within their
respective businesses. In August 2005 the company appointed Kevin Turner as
chief operating officer.

“Bill and I are confident we’ve got a great team that can step up to fill
his shoes and drive Microsoft innovation forward without missing a beat,”
Ballmer said. “We will continue to hire the world’s best technical talent
and give them the tools to do their best work, and we will continue to
tackle the biggest challenges and opportunities for our customers by
investing for the long term.”

Ballmer and Gates noted that Microsoft has been steadily expanding its
senior leadership in recent years, and that today’s announcement continues
a transition process that has been underway for several years. In January
2000, Gates assumed the role of chief software architect and Ballmer
assumed the role of CEO, responsible for all day-to-day operations and
company business strategy.

“This is a very sensible and thorough approach. A two-year transition will
ensure that the company has a smooth transfer of strategy and knowledge
from Bill to the next generation of leaders,” said James I. Cash, Ph.D.,
member of the Microsoft board of directors and former James E. Robison
Professor, Harvard Business School. “Steve and his management team are very
impressive, and I’m confident the company will not miss a step.”

Ozzie, 50, worked on the first electronic spreadsheet, VisiCalc, in the
early 1980s, then joined Lotus Development Corp. in 1983 to develop Lotus
Symphony, an MS-DOS-based integrated software management product that
combined word processing, spreadsheet, business graphics, data management
and communications capabilities. In 1984, Ozzie formed Iris Associates Inc.
to develop Lotus Notes. In 1997 Ozzie founded Groove Networks, where he
developed Groove Virtual Office. Microsoft acquired Groove Networks in
April 2005 and named Ozzie chief technical officer.

Mundie, 56, joined Microsoft in 1992 to create and run the Consumer
Platforms Division, which was responsible for developing non-PC platform
and service offerings including the Microsoft Windows CE operating system;
software for handheld PCs, Pocket PCs and Auto PCs; and early telephony
products. Mundie also started Microsoft’s digital TV efforts and acquired
and managed the WebTV Networks Inc. subsidiary. Mundie is also the original
champion of the Trustworthy Computing Initiative at Microsoft, which has
influenced Microsoft’s software development strategy. His current
responsibilities also include global technology policy and a variety of
technical and business incubation activities.

Ozzie and Mundie will continue to report to Gates. At an appropriate time
during the two-year transition period, they will shift to reporting to
Ballmer.

Gates, 50, started Microsoft in 1975 with childhood friend Paul Allen. He
took Microsoft public in 1986 and was the company’s chairman and CEO until
2000, when Ballmer took over as CEO. For the past six years Gates has
focused on Microsoft’s software development as the company’s chairman and
chief software architect. In 2000, with his wife, he formed the Bill &
Melinda Gates Foundation, whose assets now are $29.1 billion.

Founded in 1975, Microsoft has pioneered many of the software innovations
that paved the way for the digital information revolution and launched the
PC industry. Beginning with MS-DOS, Microsoft’s first operating system, and
continuing with products such as Microsoft Office, Microsoft Windows and
Xbox, the company has developed a broad range of software, services and
solutions that have transformed the way people work, communicate and play.
Microsoft has 63,000 employees in more than 100 countries and generates
annual sales of more than $40 billion (U.S.). With products for desktop
PCs, servers and mobile devices, Microsoft continues to be the worldwide
leader in helping people and businesses realize their full potential.

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