SEVERANCE AGREEMENT
EXHIBIT
10.50
This
Severance Agreement (the “Agreement”) is by and between Micron Technology, Inc.,
a Delaware corporation (the “Company”), and Xxxxxx
X. Xxxxxx, an individual and Officer of the Company, (the “Officer”), and
is effective as of April 9,
2008.
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.
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(a). 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,
except as provided in Section 4(b) hereof.
4(b). ADDITIONAL TRANSITION PERIOD. During the
first two years of the Officer’s employment with the Company, the Officer’s
Transition Period shall be extended by an additional two years, provided,
however that (i) the additional two years will be reduced over the Officer’s
first two years of service on a daily basis, pro rata, so that the standard
one-year Transition Period applies at the end of such two years and (ii) if the
Officer chooses to leave the Company voluntarily during his first two years of
service, such additional two-year extension, or remaining pro-rata amount
thereof, will automatically be eliminated. At the end of (i) above,
or in the event of (ii) above, the Officer’s Transition Period will be the
standard one-year period as provided in 4(a).
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 does not
cease to be 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.
A
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 to the accrual of TOP time
(however, Non-Officer Employees would participate in the Company’s Time Off
Plan). 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 April 9, 2008.
| MICRON TECHNOLOGY, INC. | OFFICER | ||
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/s/
Xxxxxx X. Xxxxxxxx
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/s/
Xxxxxx X. Xxxxxx
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| By: |
Xxxxxx
X. Xxxxxxxx
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Name: |
Xxxxxx
X. Xxxxxx
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| Title: |
Chairman and CEO
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Title: |
Chief Financial
Officer and
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VP
of Finance
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4/11/08
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4/9/08
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Date
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Date
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Exhibit
5(a)
Compensation
During the Transition Period
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(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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