Microsoft has agreed to cash out 418,361 shares of unvested stock awarded to ex-Windows boss Steven Sinofsky before he left the company on November 12, 2012.
If all of them were paid out today, with the stock trading at ~$34, Sinofsky would be getting $14.2 million.
Specifically, Microsoft will pay Sinofsky for all of his outstanding unvested stock granted prior to its fiscal year 2013, which just ended in June. He’ll also get half of the stock awarded for his performance during fiscal year 2013, it said.
Microsoft will pay Sinofsky over time, through August 2016. He’ll get the market price on the day the stock is payable so if the stock falls, it will be less than $14 million and if rises, he’ll get more.
The SEC agreement also revealed other terms of Sinofsky’s retirement. He can’t take a job with one of Microsoft’s competitors before Dec. 31, 2013. He was forbidden from poaching Microsoft employees or customers, from bashing Microsoft and from revealing Microsoft’s intellectual property secrets. They both agreed not to sue each other, too.
Vesting is typically used to ensure that an employee will stick around. In this case, Microsoft PR told Foley that given Sinofsky’s 23 years at the company, Microsoft offered him “the economic value of the stock awards he earned during his employment, similar to the retirement benefits we provide employees who work at least 15 years and retire at 55 or older.”
With this agreement, Sinofsky is also obligated to help Microsoft “with intellectual property litigation until January 1, 2017,” Microsoft PR pointed out. Sinofsky has been involved with at least two such lawsuits in the past few years, Foley reports.
Business Insider Emails & Alerts
Site highlights each day to your inbox.