RETIREMENT AGREEMENT AND FULL AND FINAL RELEASE OF CLAIMS 1. Steven Sinofsky resigned from his employment with Microsoft Corporation ("Microsoft"), effective December 31, 2012 ("Separation Date"). We wish to agree on the consideration described in Paragraph 2 below, to which he would not be otherwise entitled, and in exchange for that consideration we have chosen to sign this Retirement Agreement and Full and Final Release of Claims ("Agreement"). Steven acknowledges that his execution of this Agreement is knowing and voluntary and that he has had a reasonable period of time in which to consider whether to sign this Agreement. No coercion or undue influence has been exerted on him to execute this Agreement. 2. Consideration. In exchange for his compliance with this Agreement and Sections 2, 3 and 6 of the Microsoft Corporation Employee Non-Disclosure Agreement (hereafter "Employee Agreement," attached hereto as Exhibit A), and honoring the commitments undertaken in this Agreement, Microsoft agrees to pay Steven the value (i) of the shares of stock that would have vested and become payable under his Company stock awards with grant numbers 0000000811105, 0000001087120, 0000001180497, and 0000001299366 in connection with a qualifying "retirement" under the stock award agreements for the stock awards on the Separation Date; and (ii) in recognition of his half year employment in fiscal year 2013, 50% of the shares of stock that would have vested and become payable under the Company stock award with grant number 0000001299375 (collectively, the "Stock Awards,"), all based on the vesting schedule that would have applied in connection with a qualifying "retirement" on his separation date under his Stock Awards. Exhibit B conclusively sets forth the shares of stock subject to this Agreement and the applicable vesting dates therefor. Payment will be (A) in cash, (B) made within fifteen (15) days following each vesting date under the stock awards, (C) cal