{"id":41274,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/richard-belluzzo-note.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"richard-belluzzo-note","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/richard-belluzzo-note.html","title":{"rendered":"Richard Belluzzo Note"},"content":{"rendered":"<pre>\n                              \n\n$15,000,000.00                 Redmond, Washington             December 12, 2000\n\n\n     Subject to the terms and conditions herein, MICROSOFT CORPORATION\n(\"Company\") agrees to lend RICHARD BELLUZZO (\"Maker\") the principal amount to\nFifteen Million Dollars (U.S.) ($15,000,000.00) (the \"Principal\") and, for value\nreceived, Maker promises to pay Company, or its assigns or order (\"Payee\"), the\nprincipal sum of Fifteen Million Dollars (U.S.)($15,000,000.00), with interest\nas provided herein. Unless otherwise provided herein, both Principal and\nInterest, defined below, shall be payable in lawful money of the United States\nof America, which shall be legal tender for public and private debts.\n\n1.   Interest. Interest shall accrue from the date of payment on the unpaid\nPrincipal outstanding, and shall be compounded annually until this Note is paid\nin full, at the lowest applicable federal interest rate available in the month\nof December 2000 (i.e., 5.87%)(the \"Interest\"). Interest will be calculated\nbased on a 365 day year and applied to the actual number of days elapsed. The\nsum of Principal and Interest accrued as of any date shall constitute the \"Total\nObligations\" as of such date.\n\n2.   Maturity Date. Absent a Default Event, and subject to the terms limiting\nthe Company's recourse hereunder, the Total Obligation, if not sooner paid,\nshall be due and payable in a single installment on the fifth (5\/th\/)\nanniversary of the date hereof, or the date on which Maker's employment with the\nCompany terminates, whichever is earlier (\"Maturity Date\"). Maker and any\nendorsers of this Note hereby waive demand, grace, notice, presentment for\npayment, and protest, and agree and consent that the Company may renew this\nNote, and extend the time of payment, without notice, and without releasing any\nparty hereto.\n\n3.   Prepayment. Maker may prepay the Total Obligation, in whole or in part ,at\nany time before the Maturity Date, in cash, without being required to pay any\npenalty or premium for such priviledge.\n\n4.   Payment Method.\n\n     4.1  On or after the Maturity Date, the payment of amounts owed under this\nNote may be made, at Maker's discretion, in cash and\/or by forefeiting vested\nCompany stock options subject to the 99\/00 Grants having an aggregate Vested\nValue (defined below in Subsection 6.1) equal to the amount being repaid. For\npurposes of this Note, the term of September 1, 1999 for 1,000,000 shares; (ii)\ngrant of March 6, 2000 for 1,000,000 shares; (iii) grant of May 30, 2000 for\n500,000 shares; and (iv) grant of May 30, 2000 for 1,000,000 shares.\n\n     4.2  If Maker fails to repay the Adjusted Total Obligation (defined in\nSubsection 6.2) within one hundred twenty (120) days after the Maturity Date,\nCompany may thereafter obtain repayment utilizing, at its discretion, any of the\napplicable repayment methods or combinations thereof as set forth in Section 5.\nIn the event that the Company elects to cancel options subject to the 99\/00\nGrants in order to satisfy any part of the Adjusted Total Obligation, Company\nshall use the Vested Value of such options as defined in Subsection 6.1 to\ndetermine the aggregate pre-tax value of said options.\n\n     4.3  If the Company forgives any portion of the Total Obligation, pursuant\nto the terms limiting recourse hereunder, then such amount shall be treated as a\nforgiveness of debt owed by Maker, and shall be reported by the Company as\nincome to Maker.\n\n\n\n5.   Recourse. The Company's recourse against Maker for repayment of the\nPrincipal and Interest shall be only as follows:\n\n     5.1 If Maker is still in the employ of Company on the fifth anniversary of\nthis Note, or if Maker's employment is terminated by the Company without Cause\nor Maker resigns for Good Reason at any time, the Company may obtain repayment\nof the Adjusted Total Obligation by one or a combination of the following\nmethods: (i) by canceling the minimum necessary number of options subject to the\n99\/00 Grants to cover the amount being repaid, and (ii) through limited personal\nrecourse against Maker to the extent Maker has exercised any part of the 99\/00\nGrants; namely, the excess aggregate fair market value (i.e. the closing price\non the date of exercise) of the Company common stock obtained as a result of\nsuch exercise over the aggregate exercise price thereof. For purposes of this\nNote, the term \"Cause\" shall mean Maker's commission of a felony, or gross\nnegligence or willfull misconduct resulting in material damage to the Company;\nand \"Good Reason\" shall mean that: (i) Maker's responsibilities to Company were\nsignificantly diminished; (ii) Makers job location is moved by Company out of\nKing Country, Washington; (iii) the Company is split into two or more\nindependent companies for any reason, whether or not pursuant to a final,\nnon-appealable judgment or settlement in the Company's pending action with the\nDepartment of Justice or otherwise; or (iv) there is a change in control of the\nCompany, which for the purposes of this Note means the acquisition, directly or\nindirectly, by any person or related group of persons of beneficial ownership of\nsecurities possessing more than fifty (50%) percent of the total combined voting\npower of the Company's outstanding securities, or a merger or consolidation in\nwhich securities possessing at least fifty (50%) percent of the total combined\nvoting power of the Company's outstanding securities are transferred to a person\nor persons different from the persons holding those securities immediately prior\nto such transaction or sale, or the sale transfer or other disposition of\nseventy-five(75%) percent or more of the Company's assets in liquidation or\ndissolution of the Company.\n\n     5.2 If Maker is not in the employ of the Company and has been terminated by\nthe Company for Cause, or resigned without Good Reason, the Company may obtain\nrepayment of the Adjusted Total Obligation by one or a combination of the\nfollowing methods, at its discretion: (i) by canceling the minimum necessary\nnumber of options subject to the 99\/00 Grants to cover the amount being repaid,\nand (ii) through full personal recourse against Maker.\n\n     5.3 If Maker's employment is terminated by the Company due to death or\nDisability prior to the fifth anniversary of this Note, the Company may obtain\nrepayment of the Total Obligation by one or a combination of the following\nmethods, at its discretion: (i) by canceling the minimum necessary number of\noptions subject to the 99\/00 Grants to cover the amount being repaid, and (ii)\nthrough full personal recourse against Maker or Maker's estate, as the case may\nbe; provided, however, that if the after-tax value of the 99\/00 Grants, minus\nthe Total Obligation, is less than Five Million Dollars ($5,000,000), the\nCompany will forgive such portion of the Adjusted Total Obligation as is\nnecessary to leave Maker or Maker's estate, respectively, with a net amount of\nFive Million Dollars ($5,000,000) after repayment to the Company. For purposes\nof this Note, \"Disability\" has the meaning set fourth in the Company's 1991\nStock Option Plan\n\n6.   Valuation Payment Mechanism. The Vested Value of the 99\/00 Grants shall\nbe determined in accordance with the following \"Valuation Payment Mechanism\":\n\n     6.1 Vested Value Determination: As soon as practicable after the Maturity\nDate, the Company shall determine the Vested Value of the 99\/00 Grants. The\n\"Vested Value\" of the 99\/00 Grants shall equal the sum of the Vested Values of\neach respective option grant comprising the 99\/00 Grants. The \"Vested Value\" of\nany stock option grant shall be equal to: (i) the excess of) (y) the average\nclosing price of Company stock on the twenty (20) trading days immediately\npreceding the Maturity Date\n\n                                        2\n\n\n\nover (z) the exercise price of the respect grant, multiplied by (ii) the number\nof shares of the respective grant that are then vested; provided that the Vested\nValue of any options that have been exercised shall be equal to the excess of\nthe closing price (as of the date of exercise) of Company common stock obtained\nas a result of such exercise over the exercise price thereof.\n\n         6.2 Adjusted Total Obligation Determination: Effective on the Maturity\nDate, the Total Obligation shall be adjusted and repaid in accordance with the\nfollowing terms (as so adjusted, the \"Adjusted Total Obligation\"):\n\n         (a) If Maker's employment is terminated on or before the second\n         anniversary of the Note, Maker shall immediately repay the Total\n         Obligation in full.\n\n         (b) If Maker's Employment terminates after the second and on or before\n         the third anniversaries of the Note, repayment shall be as follows: If\n         the Vested Value of the 99\/00 Grants exceeds the Total Obligation,\n         Maker shall immediately repay the Total Obligation in full. If the\n         Vested Value of the 99\/00 Grants is less than the Total Obligation, the\n         company shall forgive that portion of the Total Obligation that exceeds\n         the Vested Value of the 99\/00 Grants, provided, however, that the\n         amount of forgiveness shall not exceed Four Million Dollars\n         ($4,000,000) plus interest to the date of repayment, and Maker shall\n         immediately repay the balance of the Total Obligation not forgiven.\n\n         (c) If Maker's Employment terminates after the third and on or before\n         the fourth anniversaries of the Note, repayment shall be as follows: If\n         the Vested Value of the 99\/00 Grants exceeds the Total obligation,\n         Maker shall immediately repay the Total Obligation in full. If the\n         Vested Value of the 99\/00 Grants is less than the Total Obligation, the\n         Company shall forgive that portion of the Total Obligation that exceeds\n         the Vested Value of the 99\/00 Grants, provided, however, that the\n         amount of forgiveness shall not exceed Nine Million Dollars\n         ($9,000,000) plus interest to the date of repayment, and Maker shall\n         immediately repay the balance of the Total Obligation not forgiven.\n\n         (d) If Maker's employment terminates after the fourth and on or before\n         the fifth anniversaries of the Note, repayment shall be as follows: If\n         the Vested Value of the 99\/00 Grants exceeds the Total Obligation,\n         Maker shall immediately repay the Total Obligation in full. If the\n         Vested Value of the 99\/00 Grants is less than the Total Obligation, the\n         Company shall forgive that portion of the Total Obligation that exceeds\n         the Vested Value of the 99\/00 Grants, provided, however, that the\n         amount of forgiveness shall not exceed Twelve Million Dollars\n         ($12,000,000) plus interest to the date of repayment, and Maker shall\n         immediately repay the balance of the Total Obligation not forgiven.\n\n         (e) If Maker remains employed by Company on the fifth anniversary of\n         the date of the Note, repayment shall be as follows: If the Vested\n         Value of the 99\/00 Grants exceeds the Total Obligation, Maker shall\n         immediately repay the Total Obligation in full. If the Vested Value of\n         the 99\/00 Grants is less than the Total Obligation, the Company shall\n         forgive that portion of the Total Obligation that exceeds the Vested\n         Value of the 99\/00 Grants, and Maker shall immediately repay the\n         balance of the Total Obligation not forgiven.\n\n7.       Default. Upon the commencement of any proceedings under any bankruptcy\nor insolvency laws by or against Maker (\"Default Event\"), the Company, or other\nholder or owner of this Note, may at its option accelerate the Maturity Date of\nthis Note, including all Principal and Interest thereon, without presentment,\ndemand, or notice to Maker or to any person obligated hereon: Upon the\noccurrence of a Default Event and acceleration of the Maturity Date, the amount\nof the Adjusted Total Obligation shall\n\n                                       3\n\n\n\nbecome due and payable immediately. Interest shall accrue at the same rate of\nInterest specified above until this Note is paid in full, regardless of any\nDefault Event.\n\n8.    Attorneys' Fees. If this Note is placed in the hands of an attorney for\ncollection or collected through bankruptcy or other judicial proceedings, or if\nsuit is brought hereon, Maker agrees to pay, in addition to all other amounts\nowing hereunder, all expenses and costs of collection, including reasonable\nattorneys' fees incurred by the Company.\n\n9.    Governing Law\/Severability. All terms, obligations, and provisions of this\nNote are to be determined and governed by the laws of the State of Washington,\nexcluding its choice of law provisions. Should any term or provision of this\nNote be declared invalid, such determination shall not affect the remaining\nprovisions hereof, which shall remain in full force and effect. Notwithstanding\nany provision contained herein to the contrary, the holder shall not be entitled\nto receive, collect, or apply as interest on the obligation evidenced hereby,\nany amount in excess of the maximum rate of interest permitted by applicable\nlaw.\n\n      Maker is on notice that ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,\nEXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT\nENFORCEABLE UNDER WASHINGTON LAW.\n\n                                     \"Maker\"\n\n\n                                      \/s\/ Richard Belluzzo\n                                      --------------------\n                                      Richard Belluzzo\n\n                                       4\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8221],"corporate_contracts_industries":[9513],"corporate_contracts_types":[9560,9567],"class_list":["post-41274","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-microsoft-corp","corporate_contracts_industries-technology__software","corporate_contracts_types-finance","corporate_contracts_types-finance__loan"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41274"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41274"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41274"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}