Sample Business Contracts

Employment and Noncompete Agreement - Micron Electronics Inc.

Employment Forms

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     This Employment and Noncompete Agreement ("Agreement") is by
and between Micron Electronics, Inc., a Minnesota corporation
(the "Company"), and__________________, an individual and officer of
the Company (the "Officer"), and is effective as of the last date
signed below.

     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

     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.
The date such notice is received by the other party shall be
deemed the "Termination Date."  Upon receipt by the Officer of a
notice of termination from the Company, and upon the Company's
request, the Officer will resign immediately as an Officer and/or

     2.   Effect of Termination.  Effective on the Termination
Date, and for a period defined in Paragraph 2(a) (the "Transition
Period"), the Officer shall continue as an employee only for
purposes of receiving the benefits specified in Paragraph 3.
During the Transition Period, the Officer may continue in a
consulting role with the Company, or continue as a non-officer
employee with the Company, if both parties agree.

          (a)  Transition Period.  For purposes of  this
agreement, the "Transition Period" shall be  twelve (12) months,
plus the amount of  any TOP time and leave time, if any, which
the Officer has accrued as of the Termination Date.

          (b)  Change of Officer Status.     In the event that
the Officer or the Company terminates the Officer's status as an
Officer of the Company but not as an employee, both parties agree
that such change in status will be treated as a termination for
purposes of this Agreement,  and that the date of such change in
status will be deemed the Termination Date.  Following the
Transition Period, the Officer shall be entitled only to such
compensation and benefits for his or her services as an employee
that may be mutually agreed upon between the Company and the
Officer.  In no circumstance shall benefits under Paragraph 3 be
paid to an Officer for a period longer than the first Transition
Period created by a change of status or termination.

     3.   Benefits During Transition Period.  Provided the
Officer complies with the terms of this Agreement, the Officer
will receive during the Transition Period all benefits
customarily provided to officers of the Company, including, but
not limited to salary, bonuses, Officer bonuses, and the
continued vesting of any granted stock options, as if the
Officer's employment as an officer had continued during that
period. "Customarily provided" refers to Company practices and
plans with respect to officer benefits and compensation in effect
as of the Termination Date.  For purposes of this provision,
however, it will be understood that the Officer, during the
Transition Period, will not be entitled to any new grants of
interest in future Officer bonus pools, nor to any new grants of
stock options.  It also is agreed and understood by Officer that,
with respect to any performance accelerated options, no
acceleration shall occur if the performance objectives attendant
to such options are satisfied during the Transition Period.  It
will be further understood that the Officer will not be 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 Termination Date.
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.

     4.  Agreement Not to Compete or Solicit.  During such
time as the Officer is employed by the Company  and upon the
Officer's termination, continuing throughout the Transition
Period, and in consideration of the benefits specified in
Paragraph 3 above and the terms and obligations of this
Agreement,  Officer agrees as follows:

          (a)  Acknowledgment.  Officer recognizes and
acknowledges that it is essential for the proper protection of
the Company and its business interests that the Officer be
restrained (a) from competing against the Company during the
Officer's employment and for a reasonable period following the
termination of the Officer's employment with the Company; (b)
from soliciting or inducing any officer or employee of the
Company to leave the employ of the Company; (c) from hiring or
attempting to hire any officer or employee of the Company; and
(d) from soliciting the trade of or trading with the customers
and suppliers of the Company for any business purpose.  Officer
further recognizes and acknowledges that the Company's business
interests that require and justify protection include, without
limitation, trade secrets, confidential information, proprietary
information, customer or supplier information and lists,
accounts, knowledge and skill acquired with the Company, customer
or supplier relations, and avoiding unfair competition.

          (b)  Covenant Not to Compete.  The Officer shall not
engage in competition with the Company, render advice or service
to any entity In Competition With the Company, or engage in any
other employment, occupation, consulting or other business
activity directly related to the business in which the Company
is now involved or becomes involved during the term of the
Officer's employment or during the Transition Period.  The phrase
"In Competition With the Company" as used herein shall be deemed
to include competition with the Company or its respective
successors or assigns, or the businesses of any of them.  A
person, firm, business, or other entity is In Competition With
the Company if it is engaged in the design, development,
manufacture, marketing, or sale of semiconductor memory products,
personal computers, servers, printed circuit boards, memory
modules, related personal computer peripheral equipment, or any
other business in which the Company, or any parent, subsidiary or
affiliate of the Company is currently engaged or becomes engaged
during the term of the Officer's employment or the Transition
Period, including any business which is substantially similar to
or competitive with any such business or products.

          (c)  Covenant of Non-Solicitation of Employees.  The
Officer shall not directly or indirectly, personally or through
others, employ or solicit for employment, or advise or recommend
to any other person, firm, business or entity that they employ or
solicit for employment, any employee of the Company; provided,
however, that the Company shall not preclude the Officer from
giving an employment reference at the request of an employee of
the Company  or at the request of a prospective employer of such
employee.  The Officer shall not encourage, induce, attempt to
induce, solicit or attempt to solicit any employee of the
Company,  or any parent, subsidiary or affiliate of the Company
to leave his or her employment with the Company,  or any of
parent, subsidiary or affiliate of the Company.

          (d)  Covenant of Non-Interference or Solicitation or
Diversion of Business.  The Officer shall not, directly or
indirectly, personally or through others, contact, solicit,
advise, encourage, induce, or consult any client, account, or
customer of the Company  for the purpose or with the effect of
causing such client, account or customer to purchase, license or
otherwise obtain products or services from a person, firm,
business or entity In Competition With the Company.  Similarly,
during the Period of Restriction, Officer shall not, directly or
indirectly interfere with the business relationship between the
Company and its customers, dealers, distributors, suppliers,
vendors, independent contractors, service providers, or other
parties with which the Company has business relationships, or
encourage or induce (or attempt to induce) any such party to
terminate its relationship with the Company, or to modify the
terms of such relationship in a manner adverse to the best
interests of the Company.

          (e)  Covenant of Non-Solicitation of Customers and
Suppliers.  Officer agrees that during the Officer's time of
employment with the Company the Officer shall not, directly or
indirectly, personally or through others, solicit the trade of,
or trade with, any customer or prospective customer, or supplier
or prospective supplier of the Company for any business purpose
other than for the benefit of the Company.  Officer further
agrees that during the Transition Period, Officer shall not,
directly or indirectly, personally or through others,  solicit
the trade of, or trade with, any customers or suppliers, or
prospective customers or suppliers, of the Company.

          (f)  Acknowledgment of Reasonableness of Restrictions.
Officer specifically acknowledges and agrees that the covenants
and nature of the limitations upon Officer's activities as
specified herein, together with the duration and scope of such
covenants and restrictions, are reasonable limitations on
Officer's activities, and that the restrictions are required to
preserve, promote and protect the business interests and good-
will of the Company and impose no greater restraint than is
reasonably necessary to secure such protection.

          (g)  Interpretation of Covenants.  In the event that
any covenant or the provisions of any covenant or restriction in
this Agreement shall be held invalid or unenforceable by a court
of competent jurisdiction for any reason, including, but not
limited to, the duration or scope thereof, such invalidity or
unenforceability shall attach only to the specific covenant or
provision determined to be unenforceable and the remaining
covenants or provisions of the specific covenant shall remain in
full force and effect for the greatest time period and for the
broadest scope permitted by applicable law.  Officer and the
Company  intend that each of the covenants shall be deemed to be
a series of separate covenants, one for each and every county of
each and every state of the United States of America, and one for
each and every political subdivision of each and every other
country where the covenants shall be effective.

     5.   Accounting for Profits.  Officer covenants and agrees
that in the event Officer violates any of Officer's restrictions
or obligations under this Agreement the Company shall be entitled
to an accounting and payment of all profits, compensation,
commissions, remuneration or other benefits which Officer
directly or indirectly has received and/or may receive as a
result of growing out of or in connection with the violation of
any such restrictions or obligations.  Officer and the Company
acknowledge and agree that such remedy shall be in addition to
and not in limitation of any injunctive relief or other rights or
remedies to which the Company is or may be entitled at law, in
equity or under this Agreement.

     6.   Indemnification.  Without in any way limiting any other
rights or remedies otherwise available to the Company at law or
in equity.  Officer shall hold harmless and indemnify the Company
from and against, and shall compensate and reimburse the Company
for, any loss, damage, injury, decline in value, lost
opportunity, liability, exposure, claim, demand, settlement,
judgment, award, fine, penalty, tax, fee (including reasonable
attorneys' fees) charge, cost (including costs of investigation)
or expense of any nature (collectively, the "Damages") which are
directly or indirectly suffered or incurred at any time by the
Company, or to which the Company otherwise becomes subject
(regardless of whether or not such Damages relate to a third
party claim), and that arise from or are directly or indirectly
connected with any breach of any covenant or obligation of
Officer contained herein.

     7.   Entitlement to Equitable Relief.  Officer and the
Company acknowledge and agree that the breach by Officer of any
covenant, restriction or obligation under this Agreement will
cause the Company substantial, immediate and irreparable harm,
that the extent of damages will be difficult to measure, and,
consequently, there is not adequate remedy at law in the event of
such breach.  Accordingly, the Company and Officer hereby agree
that the Company shall be entitled to injunctive relief, without
prejudice to any other right the Company may have in law or in
equity under this Agreement, by bringing an appropriate action
for such remedy in any court of competent jurisdiction which the
Company, in its sole discretion, deems appropriate.

     8.   Confidentiality.  The parties agree that throughout the
Transition Period no statements regarding the Officer's
termination will be made other than to indicate that the reasons
for, and circumstances of, the termination are CONFIDENTIAL and
that both the Company, the Board of Directors, and the Officer
are obligated to make "no comment" regarding the termination.
For purposes of this paragraph, "statements" include, but are not
limited to, statements to the press, analysts, and journalists.
Nothing in this paragraph is meant to prevent the Company from
disclosing any facts required to be disclosed pursuant to statute
or regulation.

     9.   Termination.  Notwithstanding the provisions of
paragraph 1, above, this Agreement automatically terminates when
the Officer turns sixty-five (65) years of age, and any
termination or change of  status of the Officer after that date
will not entitle the Officer to any of the benefits of this

     10.  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 accrued prior to the end of the
Transition Period.

     11.  Restrictive Covenants.  Officer represents and warrants
that the Officer's experience and capabilities are such that the
restrictive covenants set forth in this Agreement will not
prevent the Officer from earning a livelihood, and that Officer
will be fully able to earn and receive an adequate livelihood for
Officer and Officer's dependents if any of such provisions should
be specifically enforced against Officer.

     12.  Consent to Jurisdiction and Venue.  Officer hereby
irrevocably submits to the jurisdiction of the United States
District Court for the District of Idaho, or the District Court
in and for the County of Canyon, State of Idaho, in any action or
proceeding arising out of or relating to this Agreement, and
Officer hereby irrevocably agrees that all claims in respect of
any such action or proceeding may be heard and determined in
either such court.  Officer further irrevocably waives any
objection that Officer now or hereafter may have to the laying of
venue of any action or proceeding arising out of or relating to
this Agreement brought in either such court on the ground that
any such action or proceeding in either of such courts has been
brought in an inconvenient forum.  Nothing in this paragraph
shall affect the right of the Company to bring any action or
proceeding against Officer or Officer's property in the courts of
other jurisdictions.  Officer agrees that a final judgment in any
such action or proceeding shall to the extent permitted by
applicable law be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner
provided by applicable law related to the enforcement of

     13.  Employer Violation Not A Defense.  The existence or
allegation of any claims or causes of action of the Officer
against the Company shall not constitute a defense to the
enforcement by the Company of the covenants or obligations
contained in this Agreement.

     14.  Covenants of the Essence.  The covenants of the Officer
set forth herein are of the essence of this Agreement; they shall
be construed as independent of any other provision in this
Agreement; and the existence of any claim or cause of action of
the Officer against the Company, whether predicated on this
Agreement or not, shall not constitute a defense to the
enforcement by the Company of these covenants.

     15.  Tolling Period.  The covenants and obligations of the
Officer contained in this Agreement shall be extended by the
length of time during which the Officer shall have been in breach
of any of said provisions.

     16.  Final Agreement.  This Agreement supersedes all prior
agreements, and is the entire and final understanding of the
parties as to the subject matter hereof.

     17.  Binding Effect.  This Agreement shall be binding upon
and inure to the benefit of the parties and their respective
successors in interest of any kind whatsoever.


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