SAN FRANCISCO -- Former

Advanced Micro Devices

(AMD) - Get Report

CEO Hector Ruiz is set to net $3 million for splitting the chipmaker in two.

The payment , disclosed in a regulatory filing Friday, is in addition to a new two-year contract that could be worth as much as $11.5 million for Ruiz to serve as nonvoting chairman of AMD's former manufacturing arm.

On Tuesday, AMD revealed the long-awaited details of its

plan to adopt a so-called "asset-light" model

, in which the Sunnyvale, Calif., company would focus on designing microprocessors and spin off its chip factories into a separate business.

The deal, which Ruiz worked on for more than a year, is a complex affair that involves financing from two Middle Eastern government investment funds and is subject to clearing various regulatory hurdles.

Ruiz served as AMD's CEO from 2002 until July 2008, when he was replaced by Dirk Meyer. Under Ruiz's leadership, the company achieved some of its

greatest successes, but subsequently suffered devastating setbacks

as competition with

Intel

(INTC) - Get Report

and operational snafus ravaged the firm's financial health.

Shares of AMD, which closed Friday at $3.81, have steadily fallen since the begininng of 2007, when they traded at $20.

By separating its manufacturing operations, AMD will unburden itself from the massive capital investments required to maintain state of the art chip factories.

As chairman of the Foundry Company, as AMD is temporarily calling the new entity, Ruiz will earn an annual salary of $1.15 million, with a maximum annual bonus opportunity of up to 400% of his base salary. A special $3 million bonus is subject to the closing of the deal to create Foundry and Ruiz's assuming the chairmanship of Foundry.