Microsoft, Sinofsky agree on 'retirement' terms

A new SEC filing notes that former Windows President Steven Sinofsky will be freed from his noncompete clauses after the end of calendar 2013.

Mary Jo Foley
Mary Jo Foley
Mary Jo Foley has covered the tech industry for 30 years for a variety of publications, including ZDNet, eWeek and Baseline. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008). She also is the cohost of the "Windows Weekly" podcast on the TWiT network.
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Former Windows President Steven Sinofsky. Microsoft

Microsoft and its former Windows president, Steven Sinofsky, have come to terms over Sinofsky's November 12, 2012, resignation from the company.

A Securities and Exchange Commission filing published June 3 and dated June 25 offers details about the "retirement agreement" between the two parties.

Sinofsky, who left Microsoft abruptly after the Windows 8 launch last year, will be freed from his noncompete clause as of December 31, 2013, after which time he will be free to work for a Microsoft competitor. Up until that date, Sinofsky has agreed not to disparage Microsoft; not to advocate that certain Microsoft customers choose competitors' products; and not to encourage Microsoft employees to quit or work for other companies.

According to the filing, Sinofsky also "agreed to a release of claims against Microsoft and its related parties." This may be more of a formality than anything else, as Sinofsky is not believed to have instigated any lawsuit against Microsoft.

In return, Microsoft is paying Sinofsky the value of his outstanding unvested stock awards granted prior to Microsoft's fiscal year 2013 (which ended June 30), plus 50 percent of the shares of stock awarded to him during fiscal 2013 -- a total of 418,361 shares. Payments will be made over time through August 2016, with the value of the shares determined by market price as of each vesting date. These shares are estimated to be worth $14 million.

Microsoft also agreed to indemnify Sinofsky against "claims arising from acts or omissions relating to his employment at Microsoft pursuant to the Company's Articles of Incorporation." (Again, this appears to be more a formality than anything else at this point, as far as we know.)

A Microsoft spokesperson provided the following statement about the SEC filing:

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. This agreement provides a number of important considerations for Microsoft, including a commitment that Steven will continue assisting with intellectual property litigation until January 1, 2017.

I'm not sure what kind of IP litigation Sinofsky may have been involved with and/or may be involved with at this time. Microsoft did not provide any specific examples.

Sinofsky left Microsoft abruptly after the Windows 8 launch last year. He has said publicly that it was his choice to leave the company when and how he did. At the time of his departure, there was a lot of scuttlebutt around alleged disagreements between Sinofsky and other members of the Microsoft management team, including CEO Steve Ballmer, about Microsoft's plans around interdivisional collaboration.

Sinofsky is currently on sabbatical and teaching at Harvard Business School.

This story originally appeared as "Microsoft and former Windows chief Sinofsky agree on 'retirement' terms" on ZDNet.