Stryker Corp. (NYSE:SYK) and former CEO Stephen MacMillan agreed to a separation agreement that will immediately pay him $5.5 million in cash, plus the rights to purchase up to $65 million worth of company stock, among other perks.
In filings with the federal Securities & Exchange Commission, the company said MacMillan will "receive a payment of $5,500,000 on or about February 29, 2012."
That’s equal to 24 months of MacMillan’s annual base salary of $1.25 million, plus 200% of his "current target annual bonus of 125% of base salary." He will also still receive his 2011 bonus of $1.16 million, which will be paid at the same time as other executives receive their performance bonuses, typically by the end of March.
MacMillan will keep about 1.2 million shares in stock options he’s been granted over his 7-year tenure. Those options, valued at about $65 million based on SYK’s closing price of $53.92 at the close of market yesterday, will vest immediately and remain exercisable for 2 years.
And he’ll forfeit the option to purchase 676,000 shares as part of the agreement, but will have the right in 3 years to purchase another 23,500 options as part of a performance bonus.
Stryker will also pick up the tab on MacMillan’s medical, dental and vision benefits for 18 months and then will provide him with lump sum payments to cover his COBRA benefits for 6 months. The Kalamazoo, Mich.-based device maker will also provide its former leader with office space and outplacement services. The company characterized MacMillan’s resignation earlier this month as a "termination without cause."
MacMillan also agreed not to disclose any confidential information about the company, or compete directly with Stryker for a period of 2 years.
MacMillan abruptly resigned Feb. 9 to devote his time to dealing with family issues. He has since resigned his seat on the board of Texas Instruments (NSDQ:TXN).
The move, which coincided with the orthopedic industry’s annual confab at the American Assn. of Orthopedic Surgeons annual meeting, shocked the device world, as MacMillan was considered an accomplished leader who had guided Stryker to growth in a horrific business climate.
On Wall Street, shares of Stryker stock were up more than 1.5% to $54.76 in late-day trading today.