When you save a password-protected document in a format other than "Word
Document (*.doc)", Word removes the password protection but displays the
following message as a warning that the password will be lost:
This document is password protected. Saving this document in a format
other than the current version of Word will result in the loss of this
protection. Do you want to continue?
You can reopen, edit, and resave the converted file in Word or another word
processor without the need to specify the password.
Note that this behavior is also true if you save the document and protect
it from revisions, annotations, or forms with a password.
All export binary file format converters supplied with Word use the
Microsoft Rich Text Format (RTF) as an intermediate format when saving in a
non-default format. The RTF specification does not support the retention of
password information. The converter therefore does not retain password
protection when saving a document in any format besides the default.
To open an existing Word document prior to saving in a different format,
you must know the document's password. Therefore, the limitation referenced
in the "Symptoms" section of this article does not represent a compromise
of security in Word. You need to be aware that to retain password
protection in a "Word Document (*.doc)," you must work with a
password-protected document in the same version of Word that the Word
document was protected in.
For additional information about converting password protected documents in
Word, please see the following article in the Microsoft Knowledge Base:
WD: Word Cannot Convert Password Protected Documents