Microsoft was one of the first companies to have an underwater options exchange for cash, and did so long before the market downturn in 2008. According to a statement the company issued on December 11, 2003, 18,503 of the 36,539 eligible employees at Microsoft elected to participate (a 51% participation rate). A total of 344.6 million options were transferred as a result of the program, representing 55% of the 621.4 million eligible options. The total potential payment to employees as a result of the program is $382 million, including $218 million that was paid at the end of December 2003. Another installment was paid in December 2005, and the remainder will be paid to employees in December 2006. For a discussion of the tax treatment to the participants, see another FAQ in this section.

A report by Reuters ("JPMorgan Looks To Unload Losing Microsoft Position" by Dan Wilchins, September 1, 2005) says that JPMorgan lost money on the transaction because Microsoft's stock price has been less volatile than many observers expected. The report also claims that these losses have deterred other securities firms from offering similar services.