Sample Business Contracts
Employment Agreement - Micron Electronics Inc. and Joel J. Kocher
Employment Forms
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CONFIDENTIAL TREATMENT REQUESTED
January 10, 1998
VIA REGULAR MAIL AND FACSIMILE
Mr. Joel J. Kocher
84 Pascal Lane
Austin, TX 78746
Re: Employment Offer
Dear Mr. Kocher:
Micron Electronics, Inc. ("Micron" or "Company") is
pleased to offer you a position as President and Chief
Operating Officer of Micron on the terms and conditions set
forth below, which terms and conditions are subject to and
contingent upon final approval by Micron's Board of
Directors:
1. Arrangements have been made for you to join Micron
on or before January 12, 1998. This offer of employment is
conditioned upon successful completion of applicant
procedures, including but not limited to application
materials, and drug screen test, as well as signing Company
forms, including but not limited to Assignment of Inventions
and Rights, Confidentiality or Nondisclosure Agreement, and
an Acknowledgment to abide by the Company's Team Member
Handbook. You also will have the opportunity to enter into
an Employment and Noncompete Agreement with Micron similar
to other Company executives. Your Employment and Noncompete
Agreement will be subject to final approval by Micron's
Board of Directors, and is anticipated to be substantially
in the form of the document which is enclosed for your
reference.
2. Your responsibility at Micron will be as President
and Chief Operating Officer reporting to me. Micron is
involved in a fast-paced high technology industry. As a
result, you will be called upon to perform a variety of
activities and fulfill differing responsibilities as needed.
3. Your salary will be $350,000 per year unless
varied by the Board of Directors. In addition, you will be
eligible to participate in the Company's Executive Bonus
Program with a bonus pool allocation of .25% of Micron's net
income and subject to the terms of the Company's Executive
Bonus Plan.
4. Subject to Board of Directors approval, upon
commencing employment, you will be granted an option of
650,000 shares at the Fair Market Value on the date of
grant, subject to the terms and conditions of Micron's
standard stock option agreement and 1995 Stock Option Plan
where applicable, and as follows:
(a) 400,000 shares shall be issued under Micron's
1995 Stock Option Plan and shall vest at the rate
of 20% per year;
(b) 100,000 shares shall be granted under
Micron's 1995 Stock Option Plan and shall vest
only after completion of seven years of employment
with Micron, but with vesting accelerated in full
if prior to such seven year period (i) the Company
earns $[XX] billion in net revenue from its core
PC business, (ii) the Company attains a [XX]% net
margin from its core PC business and (iii) the
Company attains cash balance increases of $[XX]
million over a twelve-month period from its core
PC business, in each case over the four
immediately preceding fiscal quarters;
(c) 75,000 shares shall be granted as a non-plan
grant outside of Micron's 1995 Stock Option Plan
and shall vest only after completion of seven
years of employment with Micron, but with vesting
accelerated in full if prior to such seven year
period (i) the Company earns $[XX] billion in net
revenue from its core PC business, (ii) the
Company attains a [XX]% net margin from its core
PC business and (iii) the Company attains cash
balance increases of $[XX] million over a twelve-
month period from its core PC business, in each
case over the four immediately preceding fiscal
quarters; and
(d) 75,000 shares shall be granted as a non-plan
grant outside of Micron's 1995 Stock Option Plan
and shall vest only after completion of seven
years of employment with Micron, but with vesting
accelerated in full if prior to such seven year
period (i) the Company earns $[XX] billion in net
revenue from its core PC business, (ii) the
Company attains a [XX]% net margin from its core
PC business and (iii) the Company attains cash
balance increases of $[XX] million over a twelve-
month period from its core PC business, in each
case over the four immediately preceding fiscal
quarters.
[XX] CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN
PORTIONS OF THIS DOCUMENT. SUCH OMITTED PORTIONS HAVE
BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.
<PAGE>
For purposes of this paragraph 4 herinabove, the
provisions of Micron's 1995 Stock Option Plan regarding
vesting of options in the event of a Change in Control shall
apply to all shares in the option granted to you. The
portion of the option for non-plan shares may not be
exercised while any portion of the option for shares under
the Micron 1995 Stock Option Plan are vested and
exercisable. The term "core PC business" as used above
includes Micron's personal computer, server, and related
peripheral equipment business, together with any affiliated
businesses, but expressly excludes herein the Spectek and
Micron Custom Manufacturing Services, Inc. (or MCMS, Inc.)
businesses or operations. For purposes of the
subparagraphs 4(b)(iii), 4(c)(iii) and 4(d)(iii), above, any
proceeds from a transaction involving the Company's
divestiture, sale, disposal or transfer of any of its
interest in Micron Custom Manufacturing Services, Inc. will
be excluded for purposes of determining the Company's cash
balance. Finally, Micron's Board of Directors may at any
time and in its discretion lower the financial conditions
for accelerated vesting of the shares as set forth in
subparagraphs 4(b) through 4(d), above.
5. Micron will pay for reasonable relocation
expenses, including associated Federal, State and FICA
taxes.
6. Your Medical, Dental and Vision insurance coverage
will become effective after completion of the month of hire
plus an additional calendar month of employment. Benefit
plans are subject to change or amendment by Micron.
Benefits for pre-existing conditions are not
provided under Micron's medical plan during the first eleven
months of coverage for treatment recommended or received
within the six-month period ending on the enrollment date.
Credit will be given for previous coverage under most
medical insurance programs as long as there is no break in
coverage over 63 days prior to your hire date at Micron.
This is no pre-existing condition waiting period for
pregnancy. If you are eligible for COBRA coverage through
your prior employer, you may want to continue that coverage
in conjunction with Micron's medical plan until you have
completed the waiting period for coverage, if necessary.
If you have any questions or desire further
clarification of this offer of employment, please contact
me. If you are in agreement with the terms and conditions
of this offer, please sign where indicated and return this
letter to me.
We hope this new relationship will be productive
for you and Micron. Everyone is looking forward to your
contribution to the success of the company.
Very truly yours,
Joseph M. Daltoso
Chairman and Chief Executive
Officer
Approved and accepted this 13th day of January, 1998.
---- -------
By: /s/ Joel J. Kocher
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Joel J. Kocher