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CIC Severance Plan - Micron Electronics Inc.

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                           MICRON ELECTRONICS, INC.


                              CIC SEVERANCE PLAN



                               January 11, 2001,
                           as amended March 2, 2001




Micron Electronics, Inc.,
 a Minnesota corporation
900 East Karcher Road
Nampa, Idaho 83687
<PAGE>

                               TABLE OF CONTENTS

                                                             Page
ARTICLE 1..................................................     1
   Effective Date; Plan Year; ERISA........................     1
     1.01    Effective Date................................     1
     1.02    Plan Year.....................................     1
     1.03    ERISA.........................................     2

ARTICLE 2..................................................     2
   Application to Company or Affiliates....................     2
     2.01    Eligible Employers............................     2
     2.02    Adoption Procedure............................     2

ARTICLE 3..................................................     2
   Eligibility and Participation...........................     2
     3.01    Eligible Employees............................     2
     3.02    Participation.................................     3
     3.03    Determination of Eligibility and Participation     3

ARTICLE 4..................................................     3
   CIC Severance Benefits..................................     3
     4.01    Entitlement to CIC Severance Benefits.........     3
     4.02    CIC Severance Pay.............................     5
     4.03    Rehire                                             6
     4.04    Time and Manner of Payment....................     6
     4.05    Forfeitability of Severance Benefits..........     6
     4.06    Alternative Benefits..........................     7

ARTICLE 5..................................................     7
   Administration..........................................     7
     5.01    Administrator.................................     7
     5.02    The Administrator's Powers and Duties.........     7
     5.03    The Company and Employer Functions............     7
     5.04    Claims Procedures.............................     8
     5.05    Indemnity and Bonding.........................     8
     5.06    Expenses......................................     9

ARTICLE 6..................................................     9
   General Provisions......................................     9
     6.01    Enforceability and Exclusive Benefit..........     9
     6.02    Amendment and Termination.....................     9
     6.03    Not Contract of Employment....................     9
     6.04    Unfunded......................................    10
     6.05    Nonassignment.................................    10
     6.06    Applicable Law................................    10

<PAGE>

                                 INDEX OF TERMS

Term                               Section
                                                   Page        Page

Administrator                      5.01                                 7
Affiliate                          2.01-2                               2

Change in Control                  4.01-3                               3
CIC Severance Plan                 Preamble                             1
Code                               2.01-2                               2
Company                            Heading                              1

Effective Date                     1.01                                 1
Eligible Employees                 3.01                                 2
Employer                           2.01-3                               2
ERISA                              1.03-1                               2

Offer of Comparable Employment     4.01-4                               4

Participant                        3.02                                 3
Plan Year                          1.02                                 1

Regular Pay                        4.02-2                               6


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                           MICRON ELECTRONICS, INC.
                              CIC SEVERANCE PLAN

                               January 11, 2001,
                           as amended March 2, 2001



Micron Electronics, Inc.,
 a Minnesota corporation
900 East Karcher Road
Nampa, Idaho 83687                                                      Company

     The Company recognizes that, as is the case with many publicly held
corporations, the possibility of an asset sale or other change in control may
exist, and that the uncertainty and questions which such possibility may raise
among management may result in the departure or distraction of management
personnel to a detriment of the Company and its stockholders.  The Company has
determined that in the event of that contingency, it is imperative to be able to
rely upon management's continuance and leadership and that appropriate steps
should be taken to reinforce and encourage that leadership and to reward the
management's essential service.  The Company has adopted this CIC Severance Plan
for Eligible Employees (the "CIC Severance Plan") effective January 11, 2001, as
amended March 2, 2001, to provide an orderly and ongoing system of severance
benefits to be paid to Eligible Employees in appropriate situations related to a
Change in Control of the Company.  The CIC Severance Plan supersedes and
replaces the resolutions of the Compensation Committee of the Company's Board of
Directors with respect to "Severance Payouts Upon Change in Control" dated April
29, 1997, and November 23, 1998.  The CIC Severance Plan further supersedes and
replaces any other resolutions or any plans, policies, or agreements maintained
or made by Micron Electronics, Inc. or any adopting affiliate that provides for
the payment or provision of pay or benefits in the event of a Change in Control
of the Company covering its Eligible Employees.

                                   ARTICLE 1

                       Effective Date; Plan Year; ERISA

     1.01  Effective Date

     The effective date of this CIC Severance Plan is January 11, 2001.  The
benefits of Eligible Employees who receive notice of termination from employment
from the Company on or after that date shall be determined under the CIC
Severance Plan.

     1.02  Plan Year

     The initial plan year shall be a short year beginning on January 11, 2001
and ending on December 31, 2001.  Thereafter the plan year shall be a calendar
year.
<PAGE>

     1.03  ERISA

           1.03-1  The CIC Severance Plan is intended to be and shall be
administered and maintained as a welfare benefit plan under section 3(1) of the
Employee Retirement Income Security Act of 1974 ("ERISA"), providing certain
benefits to participants on certain severances from employment.

           1.03-2  The CIC Severance Plan is not intended to be a pension plan
under section 3(2)(A) of ERISA and shall be maintained and administered so as
not to be such a plan.  The CIC Severance Plan is intended to come within, and
shall be administered and maintained to come within, the severance pay plan
exception thereto in Department of Labor regulations section 2510.3-2(b).

                                   ARTICLE 2

                     Application to Company or Affiliates

     2.01  Eligible Employers

           2.01-1  The Company maintains the CIC Severance Plan for its Eligible
Employees.  Any Affiliate approved by the Company may adopt and maintain the CIC
Severance Plan for its Eligible Employees or other designated class of
employees.

           2.01-2  "Affiliate" means a corporation, person or other entity that
is a member, with the Employer, of a controlled or affiliated service group
under section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986 (the
"Code").

           2.01-3  "Employer" means Company and any adopting Affiliate.  The CIC
Severance Plan is a single plan maintained by the Company and any adopting
Affiliate.

     2.02  Adoption Procedure

     An adopting Employer shall execute an adoption statement that shall include
the effective date, date of adoption and any special provisions that are to be
applicable only to employees of the Affiliate.

                                   ARTICLE 3

                         Eligibility and Participation

     3.01  Eligible Employees

     Eligible Employees are Management Directors, Area Vice Presidents, Vice
Presidents and other Key Contributors.  The term "Key Contributors" as used
herein shall include employees that are designated as eligible under this CIC
Severance Plan by the Administrator

                                       2
<PAGE>

in accordance with applicable guidelines approved by the Compensation Committee
of the Company's Board of Directors for the designation of Key Contributors.

     3.02  Participation

          3.02-1  Any Eligible Employee who becomes entitled to severance
benefits under 4.01 is a Participant in the CIC Severance Plan.  A Participant
must satisfy the requirements of 4.01 to be entitled to severance benefits under
the CIC Severance Plan.

          3.02-2  An Eligible Employee who is a Participant in the CIC Severance
Plan shall not participate in the Micron Electronics Severance Pay Plan for
Employees.

     3.03  Determination of Eligibility and Participation

     All questions of eligibility and participation of employees shall be
determined by the Administrator, whose decision shall be final.

                                   ARTICLE 4

                            CIC Severance Benefits

     4.01  Entitlement to CIC Severance Benefits

           4.01-1  Except as provided in 4.01-2, an Eligible Employee who is
involuntarily terminated from employment with Employer due to a Change in
Control under 4.01-3 and receives notice of such termination from the Company on
or after the effective date of the CIC Severance Plan is entitled to CIC
Severance Benefits.

           4.01-2  An Eligible Employee who receives an Offer of Comparable
Employment under 4.01-4 before or after the effective date of termination shall
not be entitled to CIC Severance Benefits.

           4.01-3  For 4.01-1, a "Change in Control" occurs in the event of any
of the following:

               (a) Any Person, as such term is used in Sections 13(d) and 14(d)
           of the Securities Exchange Act of 1934, as amended (the "Exchange
           Act"), is or becomes the beneficial owner (as defined in Rule 13d-3
           under the Exchange Act), directly or indirectly, of securities of the
           Company representing 50 percent or more of the combined voting power
           of the Company's then outstanding securities;

               (b) The shareholders of the Company approve a merger or other
           consolidation of the Company with or into any other entity, other
           than a merger or consolidation that would result in the holders of
           the voting securities of the Company outstanding

                                       3
<PAGE>

           immediately prior thereto holding securities which represent
           immediately after such merger or consolidation more than 50 percent
           of the combined voting power of the entity which survives such merger
           or consolidation or the parent of the entity which survives such
           merger or consolidation.

               (c) The Company sells, liquidates or distributes all or
           substantially all of its assets in a single transaction or series of
           transactions to a buyer or buyers who are not Affiliates.

               (d) The Company's Board of Directors adopts a Wind Down
           Resolution and the Company sells, liquidates or distributes all or
           substantially all of the assets of a Business Unit in a single
           transaction or series of transactions to a buyer or buyers who are
           not Affiliates. A transaction shall constitute a Change in Control
           under this 4.01-3(d) with respect to (i) the Eligible Employees of
           the subject Business Unit, and not for the employees of any other
           Business Unit, and (ii) the Eligible Employees who are employed in
           the Company's general corporate or administration functions providing
           services directly to the subject Business Unit and who are terminated
           from employment due to a Change in Control under this 4.01-3(d). The
           term "Wind Down Resolution" as used herein shall mean a resolution
           adopted by the Company's Board of Directors to liquidate and wind
           down a Business Unit. The term "wind down" is interchangeable with
           the term "wind up," and may include, without limitation, every act
           necessary by the Company to "wind down" or "wind up" the business and
           affairs of a Business Unit within the meaning of applicable law and
           as determined appropriate by the Board under the circumstances. The
           term "Business Unit" as used herein shall mean a reportable segment
           of the Company as referred to in the Company's latest Form 10-K or
           Form 10-Q filed under the Exchange Act, or such other reporting
           segment, division or operating unit as may be designated by the
           Administrator.

           4.01-4  For 4.01-2, an Offer of Comparable Employment is an offer of
employment made on or before the date of a Change in Control by any Employer, or
any Person or buyer under 4.01-3, to an employee that provides following such
Change in Control for (i) a Comparable Job Position, and (ii) wages, benefits
and location similar to those which the Eligible Employee enjoyed immediately
before the Change in Control as reasonably determined by Employer.  A Comparable
Job Position shall mean, as reasonably determined by Employer: (i) a job
position that is similar to the job position which the Eligible Employee held
with Employer immediately before the Change in Control, or (ii) a job position
that

                                       4
<PAGE>

involves, requires or relates to the Eligible Employee's area or areas of
expertise or experience.

           4.01-5  Unless otherwise specified by Employer in writing, a
Participant shall not be entitled to severance benefits under the CIC Severance
Plan if any of the following occur with respect to such Participant:

               (a) Failure to waive any other severance or other separation
           benefits under any agreement or arrangement with Employer or any
           Affiliate or any voluntary early retirement program maintained by
           Employer or Affiliate or any severance plan maintained by Employer or
           an Affiliate, other than the CIC Severance Plan.

               (b) Involuntary termination of employment for reasons other than
           Change in Control, including, but not limited to, involuntary
           termination for unsatisfactory performance, unacceptable behavior,
           misconduct, violations of Employer's policies, or other disciplinary
           problems.

               (c) Failure to execute a waiver and release of claims against
           Employer and Affiliates in the form provided by Employer within the
           specified consideration period or execution and later revocation of
           the waiver and release of claims form within the revocation period
           stated therein.

               (d) Voluntary termination of employment for any reason.  A
           termination is voluntary even if continued employment depends on
           relocation to another job site or acceptance of a position with a
           different base or variable compensation, title or responsibilities.

     4.02  CIC Severance Pay

           4.02-1  Subject to 4.04, 4.05 and 4.06, Participants who are eligible
for CIC severance benefits under 4.01 shall be entitled to receive CIC Severance
Pay equal to a number of months of regular pay as follows:

                               CIC SEVERANCE PAY

           Eligible Employees                     Number
           Class Designation                    of Months
           -----------------                    ---------

           Board-appointed Vice Presidents          6
           Non-board appointed Vice Presidents
             and Area Vice Presidents               4

                                       5
<PAGE>

           Management Directors                     3
           Key Contributors                         2

           4.02-2  For the purposes of 4.02-1 and Participants who are not
employed as sales representatives by an Employer, "regular pay" means base pay
on the date of termination, excluding any overtime, bonuses, incentives,
severance pay, reimbursements, any other allowances and any other type of extra
or variable compensation.  For the purposes of 4.02-1 and Participants who are
employed as sales representatives by an Employer, "regular pay" means base pay
plus target incentives or sales commissions on the date of termination,
excluding any overtime, bonuses, other incentives, severance pay,
reimbursements, any other allowances and any other type of extra or variable
compensation.

           4.02-3  For the purposes of 4.02-1, the amount of CIC Severance Pay
may be reduced by an amount of up to 60 days' pay and benefits for each of the
Participants whose involuntary termination due to a Change in Control the
Company or an Affiliate deems covered by the Worker Adjustment and Retraining
Notification Act (29 U.S.C. (S) 2101 et seq.) ("WARN").  A Participant who
receives a notice from Employer under WARN and continues working for Employer
during the notice period as designated by Employer shall not incur a reduction
of CIC Severance Pay under this 4.02-3 with respect to the days actually worked
by the Participant during such notice period.

     4.03  Rehire

     A Participant who has received CIC Severance Pay and who is rehired by
Employer or is hired by any Affiliate shall not be required to repay any CIC
Severance Pay received as of the date of hire or rehire.

     4.04  Time and Manner of Payment

           4.04-1  CIC Severance Pay shall be paid in a lump sum.  Payment will
be made as soon as practicable following the later of the Participant's
termination date or the expiration of the revocation period described in the
waiver and release of claims form under 4.01-5(c).

          4.04-2  Employer may withhold from any amounts paid under the CIC
Severance Plan any income tax or other amounts as allowed or required by law.

     4.05  Forfeitability of Severance Benefits

     Any right to severance benefits shall be forfeitable until the Participant
has been involuntarily terminated from employment due to Change in Control and
has satisfied all of the requirements and conditions for entitlement under 4.01.
The CIC Severance Plan may be amended or terminated as provided in Article 6 to
partially or wholly eliminate or otherwise change the benefits in 4.01 to the
extent they are forfeitable.

                                       6
<PAGE>

     4.06  Alternative Benefits

     The Compensation Committee shall retain complete discretion to change the
amount of or the manner of determining the severance benefits payable to any
Eligible Employee at any time before payment of benefits begins under 4.04-1.

                                   ARTICLE 5

                                 Administration

     5.01  Administrator

           5.01-1  The CIC Severance Plan shall be administered by the
Compensation Committee of the Company's Board of Directors or its designee who
in such capacity shall be the Administrator.

           5.01-2  The Administrator may resign on 15 days' notice to the
Company.  The Company may remove the Administrator without having to show cause.
The vacancy shall be filled as soon as reasonably practicable.  Until a new
appointment is made, the Company shall act as the Administrator.

     5.02  The Administrator's Powers and Duties

           5.02-1  The Administrator shall interpret the CIC Severance Plan,
decide any questions about the rights of Participants and in general administer
the CIC Severance Plan.  Any decision by the Administrator shall be final and
bind all parties.  The Administrator shall have absolute discretion to carry out
the Administrator's responsibilities under this section.

           5.02-2  The Administrator may delegate all or part of the
administrative duties to one or more agents and may retain advisors and agents
for assistance.  The Administrator may consult with, and rely upon the advice of
counsel, who may be counsel for the Company or any Affiliate.

           5.02-3  The Administrator shall be the plan administrator under
federal laws and regulations applicable to plan administration and shall comply
with such laws and regulations.  The Administrator shall be the agent for
service of process on the CIC Severance Plan at the Company's address.

     5.03  The Company and Employer Functions

           5.03-1  Except as provided in 5.03-2, all authority of the Company or
Employer, including, in the case of the Company, the power to amend or terminate
the CIC Severance Plan, shall be exercised by the Company's Compensation
Committee or Board of Directors, as applicable, who may delegate some or all of
the authority to any officer.

           5.03-2  The chief executive officer of the Company or delegate may
amend the CIC Severance Plan in writing, on advice of counsel, to make
technical, administrative or

                                       7
<PAGE>

editorial changes to comply with applicable law or to simplify or clarify the
CIC Severance Plan.

           5.03-3  The Board of Directors of the Company or any other Employer
shall have no administrative authority or function with respect to the CIC
Severance Plan.  Being a member of the Board shall not, in itself, make a person
a plan fiduciary.

     5.04  Claims Procedures

           5.04-1  Any person claiming a benefit or requesting information, an
interpretation or a ruling under the CIC Severance Plan shall present the
request in writing to the Administrator.  The Administrator or delegate will
respond in writing as soon as practicable.

           5.04-2  If the claim or request is denied, the written notice of
denial shall state:

               (a) The reasons for denial, with specific reference to the terms
           of the written document on which denial is based.

               (b) A description of any additional material or information
           required for review of the claim and an explanation of why it is
           necessary.

               (c) An explanation of the CIC Severance Plan=s claims review
           procedure.

           5.04-3  Any person whose claim or request is denied, or who has not
received a response within 90 days, may request review by notice in writing to
the Administrator.  The original decision will be reviewed by the Administrator
or delegate, who may, but shall not be required to, grant the claimant a
hearing.  On review, whether or not there is a hearing, the claimant may have
representation, examine pertinent documents and submit issues and comments in
writing.

           5.04-4  The decision on review shall normally be made within 60 days.
If an extension of time is required for a hearing or other special
circumstances, the Participant shall be so notified and the time limit shall be
120 days.  The decision shall be in writing and shall state the reasons and the
relevant plan provisions.  All decisions on review shall be final and binding on
all parties concerned.  If the Participant does not receive a decision within
the time limit, the claim shall be considered wholly denied on review.

     5.05  Indemnity and Bonding

           5.05-1  The Company shall indemnify and defend any CIC Severance Plan
fiduciary who is an officer, director or employee of the Company against any
claim or liability

                                       8
<PAGE>

that arises from any action or inaction in connection with the CIC Severance
Plan, subject to the following rules:

               (a) Coverage shall be limited to actions taken in good faith that
           the fiduciary reasonably believed were not opposed to the best
           interest of the CIC Severance Plan.

               (b) Negligence by the fiduciary shall be covered to the fullest
           extent permitted by law.

               (c) Coverage shall be reduced to the extent of any insurance
           coverage.

           5.05-2  The CIC Severance Plan fiduciaries shall be bonded to the
extent required by applicable law.

     5.06  Expenses

           5.06-1  An Administrator who is employed full-time by Employer shall
not be separately compensated for services as the Administrator.  The
Administrator shall be reimbursed by the Company for all expenses incurred while
acting as the Administrator.

           5.06-2  The Company may allocate the cost of any administrative fees
or expenses among Employers.  Otherwise, all expenses and fees shall be paid by
the Company.

                                   ARTICLE 6

                              General Provisions

     6.01  Enforceability and Exclusive Benefit

     The Company and Employers intend the terms of the CIC Severance Plan,
including those relating to the coverage and benefits, to be legally
enforceable.  The Company and Employers further intend that the CIC Severance
Plan be maintained for the exclusive benefit of Eligible Employees of Employers.

     6.02  Amendment and Termination

     Subject to 4.05, the Company may amend or terminate the CIC Severance Plan
at any time.

     6.03  Not Contract of Employment

     Nothing in the CIC Severance Plan shall give any employee the right to
continue employment.  The CIC Severance Plan shall not prevent discharge of any
employee at any time for any reason.

                                       9
<PAGE>

     6.04  Unfunded

     All benefits payable under the CIC Severance Plan shall be unfunded and
shall be payable only from the general assets of Employer.  The Participants
shall have no interest in any assets of Employer and shall have no rights
greater than the rights of any unsecured general creditor of Employer.

     6.05  Nonassignment

     The rights of a Participant under the CIC Severance Plan are personal.  No
interest of a Participant under the CIC Severance Plan may be assigned,
transferred, seized by legal process or subjected to the claims of creditors in
any way.  A Participant's rights under the CIC Severance Plan are not subject in
any manner to anticipation, alienation, sale, transfer, assignment, pledge or
encumbrance.

     6.06  Applicable Law

     The CIC Severance Plan shall be construed according to the laws of the
State of Idaho, except as preempted by federal law.

     Adopted:

     Company                  MICRON ELECTRONICS, INC.


                              By:      /s/
                              Name:    JoAnne S. Pfeifer
                              Title:   Vice President, Administration
                                       Corporate Secretary

                              Date:    March 20, 2001

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