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July 3, 2013 at 3:43 PM
Sinofsky signs non-compete agreement with Microsoft; will help company in lawsuits against it
Steven Sinofsky, the former president of Windows who left the company in November, has agreed to not compete with the company by accepting employment at certain competitors or by encouraging certain Microsoft customers to choose competing products.
In addition, he’s agreed to not bad-mouth Microsoft and to not solicit Microsoft employees to work elsewhere, according to a document filed by the company with the Securities and Exchange Commission.
Sinofsky has also agreed to cooperate with Microsoft on lawsuits brought by or against the company. Sinofsky has played a role, in testimony or depositions, on patent lawsuits brought against Microsoft.
[Update 5:33 p.m.: The non-compete and non-disparagement clauses expire after the end of this year. Sinofsky's agreement to cooperate on lawsuits expires on Jan. 1, 2017.]
In return, Microsoft has agreed to pay Sinofsky the monetary value of his outstanding unvested stock awards, which had been granted before fiscal year 2013, and 50 percent of the shares of stock awarded for his performance during the 2013 fiscal year. He will get the monetary value of those stock awards — a total of 418,361 shares — as they vest over the next three years, the SEC filing says.
At today’s share price, that would amount to $14.2 million — though, of course, the actual amount Sinofsky will get will vary according to value of the shares as the stock awards vest.
Microsoft said in a statement that:
This agreement provides a number of important considerations for Microsoft including a commitment that Steven will continue assisting with intellectual property and litigation until Jan. 1, 2017.
Given Steven’s 23 years of strong service at Microsoft, which included leading teams that produced six versions of Office and two versions of Windows, the company will continue to provide him with 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.
Microsoft’s retirement policy is that it allows the existing stock awards of any employee who works there 15 years or more and retires after age 55 to continue to vest.
Though Sinofsky is 47 years old, not 55, his agreement appears to follow that model.