Contract
Exhibit
99.2
This
Severance Agreement (the
“Agreement”) is by and between Micron Technology, Inc., a Delaware corporation
(the “Company”), and _____________, an individual and Officer of the Company,
(the “Officer”), and is effective as of ________, 2007.
WHEREAS,
the parties recognize that it
is in the best interest of the Company to provide for a smooth transition
when
there is a change in management, and wish to recognize the valued contributions
of the Officer; and
WHEREAS,
the Company desires to provide
the Officer with benefits in consideration for his or her execution of this
Agreement and the instrument titled Agreement Not to Compete or Solicit (the
“Noncompete Agreement”);
NOW
THEREFORE, the parties agree as
follows:
1. TERMINATION
OF THE OFFICER. Either the Company or the Officer may at any time
terminate the Officer’s active employment with the Company for any reason,
voluntary or involuntary, with or without cause, by providing notice to that
effect in writing.
2. LOSS
OF OFFICER STATUS. Upon receipt by the Officer of a notice of termination
from
the Company, or at any other time upon the Company’s request, the Officer shall
resign immediately as an officer and/or director of the
Company. Effective on the date the Company specified the Officer is
no longer an officer of the Company, the Officer may terminate his or her
employment with the Company and act as a consultant to the Company or continue
as a non-officer employee with the Company, provided in each case the parties
so
agree in writing.
3. SEPARATION
FROM SERVICE. The date of the Officer’s “Separation from Service”
shall be the earliest of: (i) the date of the Officer’s death; or (ii) the date
after which the Company and the Officer reasonably anticipate that the level
of
bona fide services the Officer will perform, whether as an employee or
consultant, will permanently decrease to 20 percent or less of the average
level
of bona fide services performed (whether as an employee or contractor) over
the
immediately preceding 36-month period (or the full period of services to
the
Company if the Officer provided services to the Company for less than 36
months).
4. TRANSITION
PERIOD. For purposes of this agreement, the “Transition Period” shall
be a one year period immediately following the date of the Officer’s Separation
from Service.
5(a). COMPENSATION
DURING THE TRANSITION PERIOD. Provided the Officer complies with the
terms of this Agreement and the terms of the Noncompete Agreement, the Officer,
or the Officer's estate in the event of the Officer's death, will receive
during
the Transition Period compensation and cash in lieu of employee benefits
as
provided on Exhibit 5(a), attached hereto and incorporated herein by this
reference.
5(b). EXECUTIVE
BONUS AFTER LOSS OF OFFICER STATUS. An Officer who ceases to be an
Officer but not an employee of the Company, and who has not yet incurred
a
Separation from Service (referred to herein as a "Non-Officer Employee"),
shall
receive, in lieu of an executive bonus pursuant to Section 5(a)(ii) of Exhibit
5(a), an executive bonus, if at all, subject to the following terms and
conditions:
If
as of
the date of the Officer’s loss of officer status the Non-Officer Employee was a
designated participant for an executive bonus plan performance period but
the
board of directors or a committee thereof has not yet taken action on any
required goal achievement certification for such performance period, the
Non-Officer Employee will be entitled to receive his or her executive bonus
in
the amount so certified, at the same time and in the same manner as the
continuing officers of the Company receive payment of their executive bonuses
for such performance period, if and only if (A) the specified goals are
achieved, as certified by the Company's board of directors or a committee
thereof, (B) payment is made for such achievement pursuant to the terms and
conditions of the bonus program to the other participating officers, (C)
the
Non-Officer Employee is an employee of the Company at the time of payment
and
(D) the Non-Officer Employee complies with the terms of this Agreement and
the
terms of the Noncompete Agreement.
An
Non-Officer Employee that receives a bonus pursuant to the term of this Section
5(b) shall not be entitled to receive an additional bonus pursuant to Section
5(a)(ii) of Exhibit 5(a) during his or her Transition Period.
5(c). FURTHER
CLARIFICATIONS. It is understood that the Officer, during the period
of time in which he or she is a Non-Officer Employee and at any time during
the
Transition Period, is not entitled pursuant to this Agreement to renew his
or
her participation in any executive bonus program, receive any new grants
of
stock options or restricted stock, or, except in the case where the Company
terminates the Officer’s status as an officer of the Company but not as an
employee, to the accrual of TOP time. It is further understood that the Officer
is not entitled to payment of any compensation that is deferred past the
Transition Period due to payment criteria of an incentive program, as those
criteria existed as of the date of the Officer’s Separation from
Service. For the avoidance of doubt, the Officer shall not be
entitled to any payment which is earned and payable after the Transition
Period
pursuant to the terms of the
applicable
plan or program. No action by the Company or the Company’s Board of
Directors may affect the Officer’s receipt of the benefits set forth above,
other than as provided herein.
5(d). GROSS-UP
CALCULATIONS. All compensation provided pursuant to this Agreement is
subject to applicable taxes and withholding. All “gross-up”
calculations and payments will be based on the standard supplemental withholding
rates provided by federal and state guidelines. The Company will not
use the Officer’s personal effective tax rate for these
calculations. Gross-up payments will be considered as compensation on
the Officer’s W-2 at the end of the year.
6. CONFIDENTIALITY. The
reasons for, and circumstances of, an Officer’s termination of employment or
change in officer status shall be kept confidential and shall not be disclosed;
provided that the Company may disclose such information as the Company
determines, in its sole discretion, is either required by law to be disclosed
or
necessary to be disclosed to serve a valid business purpose.
7. RELEASE. Upon
receipt of all benefits under this Agreement, the Officer and Company settle,
waive, and voluntarily release any and all claims each has or may have against
the other, inclusive of any of the Company’s affiliates, officers, directors,
employees or agents, both individually and in their official capacities,
which
claims are accruing prior to the end of the Transition Period.
8. FINAL
AGREEMENT. Except as set forth below, this Agreement supersedes all
prior agreements, and is the entire and final understanding of the parties
as to
the subject matter hereof. No modification of, or amendment to, this
Agreement shall be effective unless in writing signed by both parties. This
Agreement is in addition to, and does not supersede or modify in any fashion,
the provisions of the Noncompete Agreement entered into by the parties hereto
or
the provisions of any Assignment of Rights & Inventions and/or Confidential
Information agreements previously executed by Officer in favor of Micron
(collectively, “Additional
Agreements”). The obligations contained in the Additional Agreements
shall continue independent of the obligations of one another and of this
Agreement. For avoidance of doubt, the “Period of Restriction”
as defined in the Noncompete Agreement shall continue in full force
and effect
in accordance with the terms of the Noncompete Agreement.
9. 409A
COMPLIANCE; TIMING OF PAYMENTS. Notwithstanding anything in this
Agreement to the contrary, if any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Internal Revenue Code
(“Code”) Section 409A and the applicable Treasury Regulations (together,
“Section 409A”) would otherwise be payable or distributable under this Agreement
by reason of the Officer’s Separation from Service during a period in which the
Officer is a Specified Employee (as defined below), then, subject to
any
permissible acceleration of payment by the Company under Treas. Reg. Section
1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of
interest), or (j)(4)(vi) (payment of employment taxes):
(i) if
the payment or distribution is payable in a lump sum, the Officer’s right to
receive payment or distribution of such non-exempt deferred compensation
will be
delayed until the earlier of the Officer’s death or the first day of the seventh
month following the Officer’s Separation from Service; and
(ii) if
the payment or distribution is payable over time, the amount of such non-exempt
deferred compensation that would otherwise be payable during the six-month
period immediately following the Officer’s Separation from Service will be
accumulated and the Officer’s right to receive payment or distribution of such
accumulated amount will be delayed until the earlier of the Officer’s death or
the first day of the seventh month following the Officer’s Separation from
Service, whereupon the accumulated amount will be paid or distributed to
the
Officer and the normal payment or distribution schedule for any remaining
payments or distributions will resume.
For
purposes of this Agreement, the
term “Specified Employee” has the meaning given such term in Section 409A,
provided, however, that, as permitted in Treas. Reg. §1.409A-1(i), the Company’s
Specified Employees and its application of the six-month delay rule of Code
Section 409A(a)(2)(B)(i) shall be determined in accordance with rules adopted
by
the Compensation Committee of the Board of Directors, which shall be applied
consistently with respect to all nonqualified deferred compensation arrangements
of the Company, including this Agreement.
IN
WITNESS WHEREOF, the parties have
executed this Agreement, effective as of ____________.
MICRON
TECHNOLOGY, INC.
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OFFICER
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__________________________________
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_______________________________
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By:
Xxxxxx X. Xxxxxxxx
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Name:
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Chairman
and Chief Executive
Officer
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Title:
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__________________________________
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_______________________________
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Date
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Date
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Exhibit
5(a)
Compensation
During the Transition Period
(i)
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Base
salary as of the date of the Officer’s Separation from Service paid
bi-weekly on the Company’s normal payroll cycle as if the Officer had
worked during the Transition Period, provided, however, if the
Officer or
the Company terminated the Officer’s status as an officer of the Company
but not as an employee prior to the date of the Officer’s Separation from
Service, then the base salary payable pursuant to this subsection
during
the Transition Period shall be the greater of (A) the Officer’s base
salary in effect immediately prior to the Officer’s loss of officer status
or (B) the Officer’s base salary as of the date of the Officer’s
Separation from Service;
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(ii)
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an
executive bonus, subject to the following terms and
conditions:
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If
as of the date of the Officer’s Separation from Service the Officer was a
designated participant for an executive bonus plan performance
period but
the board of directors or a committee thereof has not yet taken
action on
any required goal achievement certification for such performance
period,
the Officer will be entitled to receive his or her executive bonus
in the
amount so certified, at the same time and in the same manner as
the
continuing officers of the Company receive payment of their executive
bonuses for such performance period, if and only if (A) any required
certification thereof by the board of directors or a committee
thereof
occurs during the Transition Period, (B) the specified goals are
achieved,
as certified by the Company's board of directors or a committee
thereof,
and (C) payment is made for such achievement pursuant to the terms
and
conditions of the bonus program to the other participating officers
during
the Transition Period.
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An
Officer that receives a bonus pursuant to the terms of Section
5(b) shall
not be entitled to receive an additional bonus pursuant to this
Section
during his or her Transition
Period.
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(iii)
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With
respect to "time-based" and/or "performance-based" unvested stock
options,
the continued vesting of any granted stock options in accordance
with the
terms of the applicable stock plan as if the Officer’s employment as an
officer had continued during the Transition Period, provided, however,
and
for purposes of clarification, the parties agree that the Officer
shall be
entitled to vesting for the completion of “performance-based” goals
hereunder if and only if the specified performance goal was achieved
prior
to or during the Transition Period and any required goal achievement
certification for such performance goal has been made by the board
of
directors or a committee thereof;
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(iv)
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with
respect to restricted stock awards, the lapse of any "time-based"
and/or
"performance-based" restrictions at the same time and in the same
amounts
such restrictions would have lapsed, if at all, in accordance with
the
terms of the applicable stock plan if the Officer’s employment as an
officer had continued during the Transition Period, provided, however,
and
for purposes of clarification, the parties agree that the Officer
shall be
entitled to the lapse of “performance-based” restrictions hereunder if and
only if the specified performance goal was achieved prior to or
during the
Transition Period and any required goal achievement certification
for such
performance goal has been made by the board of directors or a committee
thereof;
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(v)
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Participation
and vesting in the Company’s RAM 401(k) Plan (or a successor or
replacement plan) (the “401(k) Plan”) will cease pursuant to the terms of
the 401(k) Plan (generally, the date of the Officer’s termination of
employment) and standard termination options under the 401(k) Plan
will
apply.
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If
the Officer is contributing to the 401(k) Plan at the date of the
Officer’s Separation from Service and has not reached the maximum matching
contribution for the 401(k) Plan year(s) covered by the Transition
Period,
then an amount equal to the difference between the Officer’s actual
matching contribution and the amount of matching that the Officer
would
have received if the Officer had continued to defer his or her
income into
the 401(k) Plan at the same rate as was in effect on the date of
the
Officer’s Separation from Service will be paid to the
Officer. The payment, if any, will be calculated as though the
Officer were 100% vested in such contribution, will be grossed-up
for
taxes and will be paid 30 days after the date of the Officer’s Separation
from Service; and
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(vi)
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The
Officer’s participation, if applicable, will cease in the Company’s
non-cash benefit plans (medical, dental, life, etc.) pursuant to
the terms
of the applicable plan (generally, the end of the calendar month
which
includes the date of the Officer’s termination of employment) unless the
Officer properly elects to continue participation pursuant to any
applicable COBRA continuation or conversion rights. The Officer
may also be able to secure individual coverage with similar terms
and
conditions. It is the Officer’s responsibility to make any
timely elections required and for the payment of
premiums.
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Regardless
of the Officer’s election, to the extent the Officer was participating in
the Company’s non-cash benefit plans on the date of the Officer’s
Separation from Service, the Company will pay the Officer an amount
equal
to the difference in premiums between what the Officer would have
paid as
an employee during the Transition Period and what the Officer would
have
to pay during the Transition Period to continue coverage,
based on rates in effect at the time of calculation for the region
listed
by the Company as the Officer’s work address. If COBRA rates
are available, those rates will be used in the calculation, followed
by
any applicable conversion rate, and finally, in the absence of
COBRA or
conversion rates, by the cost of individual coverage with similar
terms
and conditions. The payment, if any, will be grossed-up for
taxes and will be paid 30 days after the date of the Officer’s Separation
from Service.
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Notwithstanding
anything herein to the contrary, no compensation will be paid for
the loss
of any applicable short-term disability
coverage.
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