SEC Form 5

FORM 5		UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ANNUAL STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940	OMB APPROVAL OMB Number: 3235-0362 Estimated average burden hours per response: 1.0
	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
	Form 3 Holdings Reported.
	Form 4 Transactions Reported.

1. Name and Address of Reporting Person* BURGUM DOUGLAS J (Last) (First) (Middle) ONE MICROSOFT WAY (Street) REDMOND WA 98052-6399 (City) (State) (Zip)	2. Issuer Name and Ticker or Trading Symbol MICROSOFT CORP [ MSFT ]	5. Relationship of Reporting Person(s) to Issuer (Check all applicable) Director 10% Owner X Officer (give title below) Other (specify below) Senior Vice President
	3. Statement for Issuer's Fiscal Year Ended (Month/Day/Year) 06/30/2005
	4. If Amendment, Date of Original Filed (Month/Day/Year)	6. Individual or Joint/Group Filing (Check Applicable Line) X Form filed by One Reporting Person Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)	4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned at end of Issuer's Fiscal Year (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
				Amount	(A) or (D)	Price
Common Stock							782,083(1)	D
Common Stock							6,117(2)	I	By 401(k)

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)	5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
					(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares
Performance Rights	$0(3)						08/31/2006(4)	08/31/2008	Common Stock	64,533		64,533(5)(6)	D
Employee Stock Option (right to buy) #0286829	$6.9546(7)						07/25/2005(8)	07/25/2010	Common Stock	15,244		15,244(7)	D
Employee Stock Option (right to buy) #0287912	$6.9546(9)						07/25/2005	07/25/2010	Common Stock	14,380		14,380(9)	D
Employee Stock Option (right to buy) #0291450	$23.3719(10)						10/04/2005(11)	04/04/2011	Common Stock	2,222,222		2,222,222(10)	D

Explanation of Responses:

1. Includes 271 shares acquired on June 30, 2005 under the Microsoft employee stock purchase plan. Also includes an increase to the existing 2002, 2003 and 2004 stock awards in the aggregate of 2,363 shares in connection with the $3.00 special dividend paid to shareholders of record on November 17, 2004.

2. 401(k) balance as of June 30, 2005

3. 1-for-1

4. One-third of the number of shares of common stock ultimately awarded under the shared performance stock award ("SPSA") will be distributed to the reporting person on or about August 31, 2006 (the "initial vest date"), an additional one-third shall vest and be distributed to the reporting person on each of the first and second anniversaries of the initial vest date, provided that the Reporting Person remains continuously employed through the applicable vesting date.

5. Represents an increase in the minimum number of shares of common stock issuable under the SPSA for the fiscal 2004-2006 performance period in connection with the $3.00 special dividend paid to shareholders of record on November 17, 2004.

6. The number of shares ultimately received depends on the company's performance against specified performance targets. At the end of the performance period, the number of shares of stock and stock awards will be determined by adjusting upward or downward from a target in a range between 33% and 150%. The number reported herein is based on the 33% minimum. The final performance percentage on which the payout will be based, considering company performance metrics established for the performance period, will be determined by the board or a board committee in its sole discretion. Shares of stock are issued at the end of the performance period and as the stock awards vest over the following two years, provided that the reporting person remains continuously employed through the applicable vest date.

7. This option was previously reported as an option covering 13,720 shares at an exercise price of $7.7273 per share, and has been adjusted in connection with the $3.00 special dividend paid to shareholders of record on November 17, 2004.

8. 7,622 shares are vested and immediately exercisable and 7,622 shares vest and become exercisable on July 25, 2005.

9. This option was previously reported as an option covering 12,942 shares at an exercise price of $7.7273 per share, and has been adjusted in connection with the $3.00 special dividend paid to shareholders of record on November 17, 2004.

10. This option was previously reported as an option covering 1,000,000 shares at an exercise price of $51.94 per share, and has been adjusted as a result of a 2-for-1 stock split on February 14, 2003. This option has been further adjusted in connection with the $3.00 special dividend paid to shareholders of record on November 17, 2004.

11. 1,666,666 shares are vested and immediately exercisable, 277,778 shares will vest and become exercisable on each of October 4, 2005 and April 4, 2006.

Remarks:

	Keith R. Dolliver, Attorney-in-Fact for Douglas J. Burgum	07/08/2005
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
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