UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO
FILED PURSUANT TO RULE 13d-2(1)
(Amendment No.)*
Micron Technology, Inc.
(Name of Issuer)
Common Stock, $.10 par value
(Title of Class of Securities)
595112
(CUSIP Number)
Peter N. Detkin
Acting General Counsel
Vice President, Legal and Assistant General Counsel
Intel Corporation
2200 Mission College Boulevard
Santa Clara, CA 95052
Telephone: (408) 765-8080
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 19, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D and is filing this schedule because of Rule 13d-1 (e), 13d-
1 (f) or 13d-1 (g), check the following box [ ].
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter the disclosures provided
in a prior cover page.
The information required in the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 (the "Act") or otherwise subject to
the liabilities of that section of the Act but shall be subject to
all other provisions of the Act (however, see the Notes).
<PAGE>
CUSIP No: 595112 Schedule 13D Page 2 of 12
1. NAME OF REPORTING PERSON: INTEL CORPORATION
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON: 94-1672743
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A (a)
GROUP** (b)
3. SEC USE ONLY
4. SOURCE OF FUNDS: WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION: DELAWARE
7. SOLE VOTING POWER: 15,810,277
NUMBER OF
SHARES 8. SHARED VOTING POWER: 0
BENEFICIALLY
OWNED BY EACH 9. SOLE DISPOSITIVE POWER: 15,810,277
REPORTING
PERSON WITH 10. SHARED DISPOSITIVE POWER: 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON: 15,810,277
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11)
EXCLUDES CERTAIN SHARES**
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11): 6.1%
14. TYPE OF REPORTING PERSON:** CO
**SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
CUSIP No: 595112 Schedule 13D Page 3 of 12
ITEM 1. Security and Issuer.
(a) Name of Principal Executive Offices of Issuer:
Micron Technology, Inc. (the "Issuer")
8000 South Federal Way
Boise, Idaho 83706
(b) Title of Class of Equity Securities:
Common Stock, $.10 par value
ITEM 2. Identity and Background.
(a) Name of Person Filing:
Intel Corporation (the "Reporting Person")
(b) Address of Principal Business Office:
2200 Mission College Boulevard
Santa Clara, CA 95052-8119
(c) Principal Business:
Manufacturer of microcomputer components,
modules and systems
(d) Criminal Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been
convicted in any criminal proceeding.
(e) Civil Proceedings:
During the last five years, neither the
Reporting Person nor any executive officer or
director of the Reporting Person has been party
to any civil proceeding of a judicial or
administrative body of competent jurisdiction
as a result of which such person was or is
subject to any judgment, decree or final order
enjoining future violations of, or prohibiting
or mandating activities subject to, Federal or
State securities laws or finding any violation
with respect to such laws.
<PAGE>
CUSIP No: 595112 Schedule 13D Page 4 of 12
(f) Place of Organization:
Delaware
Attached hereto as Appendix A is information required
by this Item 2 with respect to the executive officers
and directors of the Reporting Person. All such
individuals are U.S. citizens, except as otherwise
indicated on Appendix A.
ITEM 3. Source and Amount of Funds or Other Consideration.
(a) Source of Funds:
Funds for the purchase of the Securities (as
defined in Item 4) were derived from the
Reporting Person's working capital.
(b) Amount of Funds:
$500 million was paid to acquire stock rights,
which are exercisable or exchangeable (at no
additional consideration) for 15,810,277 shares
of non-voting Class A Common Stock, if and when
created by amendment of the Issuer's
Certificate of Incorporation, or the same
number of shares of Common Stock.
ITEM 4. Purpose of the Transaction.
On October 19, 1998, the Reporting Person acquired
stock rights ("Rights") for $500 million. The Rights
are exercisable or exchangeable for non-voting Class A
Common Stock, when and if issued, or for Common Stock.
If exercised currently, the number of shares
represents approximately 6.1% of the Issuer. The
Rights are exercisable at any time, subject to
creation of the Class A Common Stock and compliance
with any applicable regulatory requirements. The
investment was intended to support the development and
supply of next generation memory products.
The Reporting Person presently holds the Securities as
an investment. Depending upon the Reporting Person's
evaluation of market conditions, market price,
alternative investment opportunities, liquidity needs
and other factors, the Reporting Person will from time
to time explore opportunities for liquidating all or a
portion the Securities, through one or more sales
pursuant to public or private offerings or otherwise.
The Reporting Person may determine to retain some
portion of the Securities as an investment.
In addition, the Reporting Person entered into a
Supply Agreement with the Issuer pursuant to which the
Reporting Person will have the right to purchase a
<PAGE>
CUSIP No: 595112 Schedule 13D Page 5 of 12
portion of the output of the Issuer. Such purpose is
further described in the Press Release (as defined
below in Item 7) attached as Exhibit 5 to this
Schedule 13D.
ITEM 5. Interest in Securities of the Issuer.
(a) Number of Shares 15,810,277(1)
Beneficially Owned:
Right to Acquire: 15,810,277 shares
of Class A Common
Stock or Common
Stock(1)
Percent of Class: 6.1% of the
Issuer's
outstanding Common
Stock (based upon
258,462,223 shares
of Common Stock
outstanding,
determined from
representations
made by the Issuer
to the Reporting
Person in the
Securities
Purchase Agreement
(as defined in
Item 7). 100% of
the Class A Common
Stock, when and if
issued
(b) Sole Power to Vote, Direct
the Vote of, Dispose of, or
Direct the Disposition of 15,810,277(1)
Shares:
(c) Recent Transactions: As described more
fully in Item 4,
on October 19,
1998, the
Reporting Person
acquired stock
rights ("Rights")
exercisable or
exchangeable for
15,810,277 shares
of Class A Common
Stock or Common
Stock at a price
of $31.625 per
Right.
[FN]
(1) Includes 15,810,277 shares of Common Stock that the Reporting
Person has a right to acquire upon exercise or exchange of the
Rights or conversion of the Class A Common Stock, when and if
issued. Such shares are beneficially owned by the Reporting Person
under Rule 13d-3 because the Reporting Person has a right to
acquire such shares within the next 60 days. The Rights and the
Class A Comon Stock are non-voting securities.
</FN>
<PAGE>
CUSIP No: 595112 Schedule 13D Page 6 of 12
(d) Rights with Respect to
Dividends or Sales N/A
Proceeds:
(e) Date of Cessation of Five
Percent Beneficial N/A
Ownership:
ITEM 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the
Issuer.
Pursuant to the Rights and Restrictions Agreement (as
defined in Item 7), the Reporting Person has, under
certain circumstances, various rights including: (a)
registration of the Common Stock issuable upon
exercise or exchange of the Rights or conversion of
the Class A Common Stock, when and if issued, pursuant
to certain shelf, demand and piggyback registration
rights granted to the Reporting Person; (b) upon
request of the Reporting Person, the Issuer has agreed
to use its reasonable efforts to appoint a person
designated by the Reporting Person to the Board of
Directors of the Issuer, subject to such person being
reasonably acceptable to the Issuer (no request has
been made as of the date of this filing). Pursuant to
the Rights and Restrictions Agreement, the Reporting
Person has certain standstill obligations relating to
its acquisition of voting securities of the Issuer.
In addition, the Securities Purchase Agreement, the
Stock Rights Agreement (as defined in Item 7) and the
Certificate of Amendment (as defined in Item 7) place
certain restrictions on the transfer of the
securities. See the Securities Purchase Agreement,
the Rights and Restrictions Agreement, the Certificate
of Amendment and the Stock Rights Agreement for a
further description of these and other provisions.
ITEM 7. Material to be Filed as Exhibits.
Exhibit 1* Securities Purchase Agreement between the
Issuer and the Reporting Person dated
October 15, 1998 (the "Securities Purchase
Agreement")
Exhibit 2 Form of Certificate of Amendment of
Certificate of Incorporation defining the
rights of the Class A Common Stock (the
"Certificate of Amendment")
Exhibit 3 Securities Rights and Restrictions
Agreement between the Issuer and the
Reporting Person, dated as of October 19,
1998 (the "Rights and Restrictions
Agreement")
Exhibit 4* Stock Rights Agreement between the Issuer
and the Reporting Person, dated as of
October 19, 1998 (the "Rights and
Restrictions Agreement")
Exhibit 5 Press Release dated October 16, 1998 (the
"Press Release")
Exhibit 6 Signature Authority dated October 20, 1998
<PAGE>
CUSIP No: 595112 Schedule 13D Page 7 of 12
*Portions of these Exhibits have been redacted
pursuant to a request for confidential treatment.
<PAGE>
CUSIP No: 595112 Schedule 13D Page 8 of 12
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement
is true, complete and correct.
Dated as of October 27, 1998.
INTEL CORPORATION
By: /s/ Peter N. Detkin
Peter N. Detkin
Acting General Counsel
Vice President, Legal and
Assistant General Counsel
<PAGE>
CUSIP No: 595112 Schedule 13D Page 9 of 12
APPENDIX A
DIRECTORS
The following is a list of all Directors of Intel Corporation and
certain other information with respect to each Director. All
Directors are United States citizens, except as noted below.
Name: Craig R. Barrett
Business Address: 2200 Mission College Boulevard, Santa Clara,
CA 95052
Principal President and Chief Executive Officer of
Occupation: Intel Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and
address of systems.
corporation or 2200 Mission College Boulevard
other organization Santa Clara, CA 95052
on which employment
is conducted:
Name: John Browne
Business Address: Britannic House, 1 Finsbury Circus,
London EC2M 7BA
Principal Group Chief Executive
Occupation:
Name, principal The British Petroleum Company p.l.c., an
business and integrated oil company.
address of Britannic House, 1 Finsbury Circus,
corporation or London EC2M 7BA
other organization
on which employment
is conducted:
Citizenship: British
Name: Winston H. Chen
Business Address: 3945 Freedom Circle, Suite 760, Santa Clara,
CA 95054
Principal Chairman of Paramitas Foundation
Occupation:
Name, principal Paramitas Foundation, a charitable
business and foundation.
address of 3945 Freedom Circle, Suite 760
corporation or Santa Clara, CA 95054
other organization
on which employment
is conducted:
<PAGE>
CUSIP No: 595112 Schedule 13D Page 10 of 12
Name: Andrew S. Grove
Business Address: 2200 Mission College Boulevard, Santa Clara,
CA 95052
Principal Chairman of the Board of Directors of Intel
Occupation: Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and
address of systems.
corporation or 2200 Mission College Boulevard
other organization Santa Clara, CA 95052
on which employment
is conducted:
Name: D. James Guzy
Business Address: 1340 Arbor Rd. Menlo Park, CA 94025
Principal Chairman of The Arbor Company
Occupation:
Name, principal
business and The Arbor Company, a limited partnership
address of engaged in the electronics and computer
corporation or industry.
other organization 1340 Arbor Rd.
on which employment Menlo Park, CA 94025
is conducted:
Name: Gordon E. Moore
Business Address: 2200 Mission College Boulevard, Santa Clara,
CA 95052
Principal Chairman Emeritus of the Board of Intel
Occupation: Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and
address of systems.
corporation or 2200 Mission College Boulevard
other organization Santa Clara, CA 95052
on which employment
is conducted:
Name: Arthur Rock
Business Address: One Maritime Plaza, Suite 1220, San
Francisco, CA 94111
Principal Venture Capitalist
Occupation:
Name, principal Arthur Rock and Company, a venture capital
business and firm.
address of One Maritime Plaza, Suite 1220
corporation or San Francisco, CA 94111
other organization
on which employment
is conducted:
<PAGE>
CUSIP No: 595112 Schedule 13D Page 11 of 12
Name: Jane E. Shaw
Business Address: 1310 Orleans Drive, Sunnyvale, CA 94089
Principal Chairman and Chief Executive Officer
Occupation:
Name, principal AeroGen, Inc., a private company
business and specializing in controlled delivery of drugs
address of to the lungs.
corporation or 1310 Orleans Drive, Sunnyvale, CA 94089
other organization
on which employment
is conducted:
Name: Leslie L. Vadasz
Business Address: 2200 Mission College Boulevard, Santa Clara,
CA 95052
Principal Senior Vice President, Director, Corporate
Occupation: Business Development, Intel Corporation
Name, principal Intel Corporation, a manufacturer of
business and microcomputer components, modules and
address of systems.
corporation or 2200 Mission College Boulevard
other organization Santa Clara, CA 95052
on which employment
is conducted:
Name: David B. Yoffie
Business Address: Harvard Business School, Soldiers Field Park
1-411, Boston, MA 92163
Principal Max and Doris Starr, Professor of
Occupation: International Business Administration
Name, principal Harvard Business School, an educational
business and institution.
address of Harvard Business School
corporation or Soldiers Field Park 1-411
other organization Boston, MA 92163
on which employment
is conducted:
Name: Charles E. Young
Business Address: 10920 Wilshire Boulevard, Suite 1835, Los
Angeles, CA 90024
Principal Chancellor Emeritus
Occupation:
Name, principal
business and University of California at Los Angeles, an
address of educational institution.
corporation or 10920 Wilshire Boulevard, Suite 1835
other organization Los Angeles, CA 90024
on which employment
is conducted:
<PAGE>
CUSIP No: 595112 Schedule 13D Page 12 of 12
EXECUTIVE OFFICERS
The following is a list of all executive officers of Intel
Corporation excluding executive officers who are also directors.
Unless otherwise indicated, each officer's business address is 2200
Mission College Boulevard, Santa Clara, CA 95952-8119, which
address is Intel Corporation's business address. All executive
officers are United States citizens.
Name: Paul S. Otellini
Title: Executive Vice President, Director, Intel Architecture
Business Group
Name: Gerhard H. Parker
Title: Executive Vice President, General Manager, New
Business Group
Name: Albert Y. C. Yu
Title: Senior Vice President, General Manager,
Microprocessor Products Group
Name: Andy D. Bryant
Title: Vice President and Chief Financial Officer
Name: F. Thomas Dunlap, Jr.
Title: Vice President, General Counsel and Secretary
Name: Sean M. Maloney
Title: Vice President, Director, Sales and Marketing Group
Name: Arvind Sodhani
Title: Vice President, Treasurer
Name: Michael R. Splinter
Title: Vice President, General Manager, Technology and
Manufacturing Group
Exhibit 1
CONFIDENTIAL
CERTAIN INFORMATION HAS BEEN REDACTED.
CONFIDENTIAL TREATMENT REQUIRED.
SECURITIES PURCHASE AGREEMENT
MICRON TECHNOLOGY, INC.
INTEL CORPORATION
October 15, 1998
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS................................................ 1
1.1 Certain Defined Terms................................. 1
1.2 Index of Other Defined Terms.......................... 4
2. AGREEMENT TO PURCHASE AND SELL SECURITIES.................. 5
2.1 Agreement to Purchase and Sell Securities............. 5
2.2 The Closing........................................... 5
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............. 5
3.1 Organization Good Standing and Qualification.......... 5
3.2 Capitalization........................................ 6
3.3 Due Authorization..................................... 6
3.4 Valid Issuance of Securities.......................... 6
3.5 Compliance with Securities Laws....................... 7
3.6 Governmental Consents................................. 7
3.7 Non-Contravention..................................... 7
3.8 Litigation............................................ 8
3.9 Compliance with Law and Charter Documents............. 8
3.10 SEC Documents......................................... 8
3.11 Absence of Certain Changes Since Balance Sheet........ 9
3.12 RDRAM Device Specification Modifications.............. 10
3.13 Full Disclosure....................................... 10
4. REPRESENTATIONS AND WARRANTIES OF INTEL.................... 10
4.1 Investigation; Economic Risk.......................... 10
4.2 Purchase for Own Account.............................. 10
4.3 Exempt from Registration; Restricted Securities....... 10
i
<PAGE>
4.4 Accredited Investor................................... 11
4.5 Legends............................................... 11
4.6 Organization Good Standing and Qualification.......... 11
4.7 Due Authorization..................................... 11
4.8 Governmental Consents................................. 11
4.9 Non-Contravention..................................... 12
5. AFFIRMATIVE COVENANTS OF THE COMPANY....................... 12
5.1 Use of Proceeds....................................... 12
5.2 Authorization of Class A Common Stock................. 12
5.3 Reports of Qualified Expenditures..................... 12
5.4 Cooperation in HSR Act Filings........................ 12
5.5 Audit................................................. 12
6. CLOSING CONDITIONS......................................... 13
6.1 Conditions to Intel's Obligations..................... 13
6.2 Conditions to the Company's Obligations............... 14
7. CONFIDENTIALITY OBLIGATIONS................................ 15
7.1 Obligations........................................... 15
7.2 Certain Definitions................................... 15
7.3 Non-Disclosure of Agreements.......................... 15
7.4 Public Announcements.................................. 16
7.5 Third Party Information............................... 16
7.6 Other Disclosures..................................... 16
8. MISCELLANEOUS.............................................. 16
8.1 Governing Law......................................... 16
8.2 Survival.............................................. 16
8.3 Successors and Assigns................................ 16
ii
<PAGE>
8.4 Entire Agreement...................................... 16
8.5 Notices............................................... 16
8.6 Amendments............................................ 17
8.7 Delays or Omissions................................... 17
8.8 Legal Fees............................................ 17
8.9 Titles and Subtitles.................................. 18
8.10 Counterparts.......................................... 18
8.11 Severability.......................................... 18
8.12 Dispute Resolution.................................... 18
8.13 No Third Parties Benefited............................ 18
8.14 Meaning of Include and Including...................... 18
8.15 Fees, Costs and Expenses.............................. 18
8.16 Competition........................................... 18
iii
<PAGE>
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is
entered into as of October 15, 1998 by and between Micron
Technology, Inc., a Delaware corporation (the "Company" or the
"Corporation") and Intel Corporation, a Delaware corporation
("Intel").
WHEREAS, Intel is willing, pursuant to the terms and
conditions of this Agreement, to purchase from the Company for five
hundred million dollars ($500,000,000) Rights which are exercisable
for shares of a new class of common stock convertible into regular
common stock of the Company at such time as the new class of common
stock has been created and, until such time, for shares of regular
common stock of the Company;
WHEREAS, at the closing of the transactions contemplated
hereby, the Company and Intel will enter into the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. DEFINITIONS.
1.1 Certain Defined Terms; Interpretation. The following
terms shall have the following respective meanings.
"Affiliate" shall mean, with respect to any Person, any Person
directly or indirectly controlling, controlled by, or under common
control with, such other Person. For purposes of this definition,
"control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or
otherwise; the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Business Day" shall mean any day on which commercial banks
are not authorized or required to close in either Boise, Idaho or
San Francisco, California.
"Capital Expenditures" shall mean the sum of all expenditures
paid or, with respect to equipment that is in use, accrued that, in
accordance with U.S. generally accepted accounting principles,
should be included in or reflected by the property, plant or
equipment or similar fixed asset account reflected in the balance
sheet of the applicable person.
"Certificate of Amendment" shall mean the Certificate of
Amendment of the Certificate of Incorporation of the Company
authorizing the Class A Common Stock and defining the rights,
preferences and privileges with respect thereto substantially in
the form attached hereto as Exhibit D.
"Class A Common Stock" shall mean shares of Class A Common
Stock of the Company having the preferences and other rights set
forth in the Certificate of Amendment.
<PAGE>
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder,
all as the same shall be in effect from time to time.
"First Minimum Production Milestone". The First Minimum
Production Milestone requires that the Company and its subsidiaries
build and have available to ship (including those actually shipped)
an aggregate number of RDRAM devices in [________] equal to the
First Minimum Required Production.
"First Minimum Required Production" shall mean a number of
RDRAM units equal to the lower of (i) [_______] units of RDRAM;
(ii) Intel's Percentage Call on Capacity with respect to the
Company's overall output of discrete memory components (measured in
accordance with Section 7.0 of the Supply Agreement), regardless of
the actual production of RDRAM devices and (iii) the number of
units represented by [___]% of the reasonably projected memory
requirements for Intel's RDRAM unique chip set production, net of
MTH devices (as defined in the Supply Agreement).
"First Production Milestone Date" shall mean [_______], unless
postponed or waived in accordance with the provisions of Section
7(f) of the Rights Agreement or Section 3.f of the Certificate of
Amendment, in which case such date shall be the date established in
accordance with such sections, unless waived in its entirety.
"HSR Act" shall mean Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Maximum Adjustment Amount" shall mean $[_______].
"Maximum FGI" shall mean [______] RDRAM units.
"Maximum FGI Date" shall mean [______].
"Maximum Percentage" shall mean [___]% of the total number of
shares of Common Stock outstanding at October 19, 1998.
"Maximum Shares" shall mean [______] shares of Common Stock
(appropriately adjusted to reflect the effect of stock splits,
reclassifications, stock dividends, recapitalizations, combinations
or similar events affecting the Common Stock occurring after
October 15, 1998).
"Minimum Qualified Expenditures" shall mean [________] dollars
($[___]).
"Qualified Expenditures" shall mean the sum of all
expenditures by the Company and its subsidiaries (including any
such expenditures subsequent to May 28, 1998 and prior to October
19, 1998 not to exceed $[____]) and all expenditures by any joint
ventures from the date the Company is or becomes a party (up to a
maximum of $[_____] for each of not more than two such joint
ventures provided that the Company controls the output of such
joint ventures, but in any event including KTI Semiconductor
Limited and TECH Semiconductor Singapore Pte. Ltd.), which are
Capital Expenditures for the development, creation or expansion of
manufacturing capacity for RDRAM or other devices using 0.18 or
smaller micron processes and which capacity is located in
facilities which are on the Company's roadmap for conversion to
0.18 micron or smaller processes, or volume manufacturing capacity
for RDRAM devices (including assembly and test of such devices)
(including equipment initially installed for production at lower
density
<PAGE>
process parameters (e.g., 0.21 micron) which is convertible to 0.18
micron or smaller processes and which is located in facilities
which are on the Company's roadmap for conversion to 0.18 micron or
smaller processes) or which are necessary research and development
expenditures for the development of RDRAM up to a maximum of
$[_____] which are not otherwise includable as Capital
Expenditures. Expenditures for capitalized leases will constitute
Qualified Expenditures but only for leases of new equipment
(payments with respect to previously leased equipment will not
qualify).
"Person" shall mean individual, corporation, company,
voluntary association, partnership, joint venture, limited
liability company, trust, estate, unincorporated organization,
governmental authority or other entity.
"Required Qualified Expenditures" shall mean [________]
dollars ($[_____]).
"RDRAM" means an integrated circuit with a principal function
of memory storage which is a dynamic random access memory and which
incorporates Rambus' direct RDRAM interface technology licensed to
the Company by Rambus, Inc. References to numbers of units or
devices of RDRAM or Rambus shall mean the number of RDRAM or Rambus
units or devices stated in [________] (regardless of the actual
memory levels of the individual units or devices).
"Rights" shall mean the securities issuable pursuant to the
Stock Rights Agreement attached to this Agreement as Exhibit A and
having the rights, preferences, privileges and restrictions defined
therein.
"Rights Agreement" shall mean the Stock Rights Agreement
attached to this Agreement as Exhibit A to be executed and
delivered by the Company and Intel at or prior to the Closing.
"Rights and Restrictions Agreement" shall mean the Securities
Rights and Restrictions Agreement in the form attached hereto as
Exhibit B to be executed and delivered by the Company and Intel at
or prior to the Closing.
"SEC" shall mean the Securities and Exchange Commission.
Second Minimum Production Milestone. The Second Minimum
Production Milestone requires that the Company and its subsidiaries
build and have available to ship (including those actually shipped)
an aggregate number of RDRAM devices in [_________], equal to the
Second Minimum Required Production, unless modified in accordance
with the provisions of Section 7(e) of the Rights Agreement or 3.e
of the Certificate of Amendment, in which case such milestone shall
be as so modified.
"Second Minimum Required Production" shall mean a number of
RDRAM units equal to the lower of (i) [________] units of RDRAM;
(ii) Intel's Percentage Call on Capacity (as defined in the Supply
Agreement) with respect to the Company's overall output of discrete
memory components (measured in accordance with Section 7.0 of the
Supply Agreement), regardless of the actual production of RDRAM
devices and (iii) the number of units represented by [___]% of the
reasonably projected memory requirements for Intel's RDRAM unique
chip set production, net of MTH devices (as defined in the Supply
Agreement), unless modified in accordance with the provisions of
Section 3.e of the Certificate of Amendment.
<PAGE>
"Second Production Milestone Date" shall mean [______], unless
postponed or waived in accordance with the provisions of Section
7(f) of the Rights Agreement or Section 3.f of the Certificate of
Amendment, in which case such date shall be the date established in
accordance with such sections, unless waived in its entirety.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder, all
as the same shall be in effect from time to time.
"Supply Agreement" shall mean the Supply Agreement in the form
attached to this Agreement as Exhibit C to be executed and
delivered by the Company and Intel at or prior to the Closing.
"Volume Production" shall mean the production of [________]
per month of RDRAM devices.
1.2 Index of Other Defined Terms. In addition to the terms
defined above, the following terms shall have the respective
meanings given thereto in the sections indicated below:
Defined Term Section
"Action" 3.8
"Agreement" Preamble
"Audited Financial Statements" 3.10(b)
"Balance Sheet Date" 3.10(b)
"Closing" 2.2
"Company" Preamble
"Confidential Information" 7.2
"Disclosure Letter" 3
"Form 10-K" 3.10(a)
"Form 10-Q's" 3.10(a)
"GAAP" 3.10(b)
"Intel" Preamble
"Material Adverse Effect" 3.1
"SEC Documents" 3.10(a)
"Transaction Agreements" 7.2
2. AGREEMENT TO PURCHASE AND SELL SECURITIES.
2.1 Agreement to Purchase and Sell Securities. The Company
hereby agrees to issue to Intel at the Closing (as defined below)
and Intel agrees to purchase from the Company at the Closing,
Rights representing in the aggregate the right to purchase a number
of shares of Class A Common Stock equal to $500 million divided by
$31.625, for an aggregate purchase price of $500 million (the
"Purchase Price").
2.2 The Closing. The purchase and sale of the Rights shall
take place at the offices of Gibson, Dunn & Crutcher, 1530 Page
Mill Road, Palo Alto, California 94304, at 10:00 a.m. California
time, on October 19, 1998, or at such other time and place as the
Company and Intel mutually agree upon (which time and place is
referred to in this Agreement as the "Closing"). At the Closing,
the Company will deliver to Intel certificates representing the
Rights being purchased, against delivery to the Company by Intel of
the consideration set forth in Section 2.1
<PAGE>
by wire transfer of funds to an account designated by the Company
at least two (2) Business Days prior to the Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to Intel that the
statements in this Section 3 are true and correct, except as set
forth in the Disclosure Letter from the Company dated the date
hereof (the "Disclosure Letter") or disclosed in the SEC Documents
(as defined below):
3.1 Organization Good Standing and Qualification. The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all
corporate power and authority required to (a) carry on its business
as presently conducted, and (b) enter into this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement, to issue the Rights, and to consummate the
transactions contemplated hereby and thereby. The Company is
qualified to do business and is in good standing in each
jurisdiction in which the failure to so qualify would have a
Material Adverse Effect. As used in this Agreement, "Material
Adverse Effect" means a material adverse effect, or a group of such
effects which are related, on the business, operations, financial
condition or results of operations, of the applicable party and its
subsidiaries, taken as a whole.
3.2 Capitalization. The authorized and outstanding capital
stock of the Company at October 8, 1998, without giving effect to
the transactions contemplated by this Agreement, is as set forth in
the Disclosure Letter or the SEC Documents. All outstanding shares
of capital stock have been duly authorized, and all such issued and
outstanding shares have been validly issued and are fully paid and
nonassessable. The Disclosure Letter or the SEC Documents include
information regarding equity securities reserved for issuance to
officers, directors, employees or independent contractors or
affiliates of the Company under the Company's employee stock option
and purchase plans and upon conversion of convertible securities.
Except as set forth in the Disclosure Letter or the SEC Documents,
there are no other equity securities, options, warrants, calls,
rights, commitments or agreements of any character to which the
Company is a party or by which it is bound obligating the Company
to issue, deliver, sell, repurchase or redeem, or cause to be
issued, delivered, sold, repurchased or redeemed, any shares of the
capital stock of the Company or obligating the Company to grant,
extend or enter into any such equity security, option, warrant,
call, right, commitment or agreement.
3.3 Due Authorization. The Company has the requisite
corporate power and authority to enter into this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement and to perform its obligations hereunder and
thereunder. The execution and delivery of this Agreement, the
Rights Agreement, the Rights and Restrictions Agreement and the
Supply Agreement, and performance by the Company of its obligations
hereunder and thereunder, have been duly authorized by all
necessary corporate action on the part of the Company (including
its directors and stockholders), except for stockholder approval of
the Certificate of Amendment and the issuance of the Class A Common
Stock pursuant thereto. This Agreement constitutes, and the Rights
Agreement and the Rights and Restrictions Agreement, when executed
and delivered by the parties thereto, will constitute, valid and
legally binding obligations of the Company, enforceable against the
Company in accordance with their respective terms, except (a) as
may be limited by (i) applicable bankruptcy, insolvency,
reorganization or others laws of general application relating to or
affecting the enforcement of creditors' rights generally and (ii)
the effect of rules of law governing the availability of equitable
<PAGE>
remedies and (b) as rights to indemnity or contribution may be
limited under federal or state securities laws or by principles of
public policy thereunder.
3.4 Valid Issuance of Securities.
(a) Valid Issuance and Enforceability of Rights. The
Rights have been duly authorized and, when executed in accordance
with the provisions of the Rights Agreement and delivered to and
paid for Intel in accordance with the provisions of this Agreement,
will be valid and binding obligations of the Company, enforceable
in accordance with their terms, except (a) as may be limited by (i)
applicable bankruptcy, insolvency, reorganization, or other laws of
general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of laws
governing the availability of equitable remedies and (b) as rights
to indemnity or contribution may be limited under federal or state
securities laws or by principles of public policy thereunder.
(b) Valid Issuance of Common Stock. The shares of
Common Stock issuable upon exchange or exercise of the Rights have
been duly authorized and reserved, and when issued upon exchange or
exercise of the Rights in accordance with the terms of the Rights
Agreement, will be duly and validly issued, fully paid and
nonassessable. Upon or prior to filing of the Certificate of
Amendment, the shares of Common Stock issuable upon conversion of
the Class A Common Stock will have been duly authorized and
reserved, and upon conversion of the Class A Common Stock pursuant
to the terms of the Certificate of Amendment, will be duly and
validly issued, fully paid and nonassessable.
(c) Valid Issuance of Class A Common Stock. The shares
of Class A Common Stock issuable upon exchange or exercise of the
Rights have been duly authorized by the Board of Directors of the
Company. Assuming due authorization by the stockholders of the
Company and the filing by the Company of the Certificate of
Amendment with the Secretary of State of the State of Delaware, the
shares of Class A Common Stock issuable upon exchange or exercise
of the Rights will be duly reserved for issuance by the Company,
and when issued upon exchange or exercise of the Rights in
accordance with the terms of the Rights Agreement, will be duly and
validly issued, fully paid and nonassessable.
3.5 Compliance with Securities Laws. Assuming the accuracy
of the representations made by Intel in Section 4 hereof, the
Rights and the shares of Class A Common Stock or Common Stock
issuable upon exercise or exchange of the Rights will be issued to
Intel in compliance with applicable exemptions from (i) the
registration and prospectus delivery requirements of the Securities
Act and (ii) the registration and qualification requirements of all
applicable securities laws of the states of the United States.
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated
by this Agreement, except: (i) compliance with the HSR Act which
may be required for the exercise of the Rights to acquire Common
Stock; (ii) the filing of a report on Form 8-K by the Company with
the SEC following the Closing; (iii) the filing of such
qualifications or filings under the Securities Act and the
regulations thereunder and all applicable state securities laws as
may be required in connection with the transactions contemplated by
this Agreement; (iv) the listing of the Common Stock issuable upon
exercise or exchange of the Rights or conversion of the Class A
Common Stock on the New York Stock
<PAGE>
Exchange; (v) the filing of the Certificate of Amendment with the
Secretary of State of the State of Delaware; and (vi) as expressly
required or contemplated by the terms of the Rights and
Restrictions Agreement. All such qualifications and filings in
connection with the initial issuance of the Rights will have been
made or be effective on the Closing.
3.7 Non-Contravention. The execution, delivery and
performance of this Agreement, the Rights Agreement and the Rights
and Restrictions Agreement by the Company, and the consummation by
the Company of the transactions contemplated hereby and thereby, do
not and will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of the Company, as amended; (ii) constitute
a violation of any provision of any federal, state, local or
foreign law binding upon or applicable to the Company; or (iii)
constitute a default or require any consent under, give rise to any
right of termination, cancellation or acceleration of, or to a loss
of any benefit to which the Company is entitled under, or result in
the creation or imposition of any lien, claim or encumbrance on any
assets of the Company under, any contract to which the Company is a
party or any permit, license or similar right relating to the
Company or by which the Company may be bound, except in the case of
clause (ii) and (iii) as, individually or in the aggregate, would
not have a Material Adverse Effect.
3.8 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation ("Action") pending: (a) against the
Company, properties or assets or, to the best of the Company's
knowledge, against any officer, director or employee of the Company
in connection with such officer's, director's or employee's
relationship with, or actions taken on behalf of, the Company,
which the Company believes is reasonably likely to have a Material
Adverse Effect, or (b) that seeks to prevent, enjoin, alter or
delay the transactions contemplated by this Agreement. The Company
is not a party to or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which it believes is reasonably likely to have a
Material Adverse Effect. No Action by the Company is currently
pending nor does the Company intend to initiate any Action which it
believes is reasonably likely to have a Material Adverse Effect.
3.9 Compliance with Law and Charter Documents. The Company
is not in violation or default of any provisions of its Certificate
of Incorporation or Bylaws, both as amended. The Company has
complied and is in compliance with all applicable statutes, laws,
and regulations and executive orders of the United States of
America and all states, foreign countries and other governmental
bodies and agencies having jurisdiction over the Company's business
or properties, except for any violations that would not, either
individually or in the aggregate, have a Material Adverse Effect.
3.10 SEC Documents.
(a) Reports. The Company has furnished or made
available to Intel prior to the date hereof copies of its Annual
Report on Form 10-K for the fiscal year ended August 28, 1997
("Form 10-K"), its Quarterly Reports on Form 10-Q for the fiscal
quarters ended November 30, 1997, February 28, 1998 and May 28,
1998 (the "Form 10-Q's"), and all other registration statements,
reports and proxy statements filed by the Company with the SEC on
or after October 31, 1997 (the Form 10-K, the Form 10-Q's and such
registration statements, reports and proxy statements are
collectively referred to herein as the "SEC Documents"). Each of
the SEC Documents, as of the respective date thereof (or if amended
or superseded by a filing prior to the closing date of this
Agreement, then on the date of such filing), did not, and each of
the registration statements, reports and proxy statements filed by
the Company with the SEC after
<PAGE>
the date hereof and prior to the Closing will not, as of the date
thereof (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing), contain any
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they were made, not
misleading. The Company is not a party to any material contract,
agreement or other arrangement which was required to have been
filed as an exhibit to the SEC Documents that was not so filed.
(b) Financial Statements. The SEC Documents include the
Company's audited financial statements (the "Audited Financial
Statements") for the fiscal year ended August 31, 1997, and its
unaudited financial statements for the nine-month period ended May
31, 1998 (the "Balance Sheet Date"). Since the Balance Sheet Date,
the Company has duly filed with the SEC all registration statements
reports and proxy statements required to be filed by it under the
Exchange Act and the Securities Act. The audited and unaudited
consolidated financial statements of the Company included in the
SEC Documents filed prior to the date hereof fairly present, in
conformity with generally accepted accounting principles ("GAAP")
(except as permitted by Form 10-Q) applied on a consistent basis
(except as may be indicated in such financial statements or the
notes thereto), the consolidated financial position of the Company
and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject to normal year-end audit adjustments in
the case of unaudited interim financial statements).
3.11 Absence of Certain Changes Since Balance Sheet . Since
the Balance Sheet Date, except as disclosed in or contemplated by
the SEC Documents, the business and operations of the Company have
been conducted in the ordinary course consistent with past
practice, and there has not been:
(a) any declaration, setting aside or payment of any
dividend or other distribution of the assets of the Company with
respect to any shares of capital stock of the Company or any
repurchase, redemption or other acquisition by the Company or any
subsidiary of the Company of any outstanding shares of the
Company's capital stock;
(b) any damage, destruction or loss, whether or not
covered by insurance, except for such occurrences that have not
resulted, and are not expected to result, in a Material Adverse
Effect;
(c) any waiver by the Company of a valuable right or of
a material debt owed to it, except for such waivers that have not
resulted and are not expected to result, in a Material Adverse
Effect;
(d) any material change or amendment to, or any waiver
of any material rights under a material contract or arrangement by
which the Company or any of its assets. or properties is bound or
subject, except for changes, amendments or waivers that are
expressly provided for or disclosed in this Agreement or that have
not resulted, and are not expected to result, in a Material Adverse
Effect;
(e) any change by the Company in its accounting
principles, methods or practices or in the manner it keeps its
accounting books and records, except any such change required by a
change in GAAP; and
<PAGE>
(f) any other event or condition of any character,
except for such events and conditions that have not resulted,
either individually or collectively, in a Material Adverse Effect.
3.12 RDRAM Device Specification Modifications. As of the date
of this Agreement the Company is not aware of any RDRAM device
specification modifications that the Company believes require
unreasonable process modifications.
3.13 Full Disclosure. The information contained in this
Agreement, the Disclosure Letter and the SEC Documents with respect
to the business, operations, results of operations and financial
condition of the Company, and the transactions contemplated by this
Agreement, taken together, are true and complete in all material
respects and do not omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
4. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF INTEL.
Intel represents and warrants to the Company as follows:
4.1 Investigation; Economic Risk. Intel has received or has
had full access to all of the information it considers necessary or
appropriate to make an informed investment decision with respect to
the Rights that are convertible or exercisable into Class A Common
Stock or Common Stock to be purchased by Intel under this
Agreement. Intel further has had an opportunity to ask questions
and receive answers from the Company regarding the terms and
conditions of the offering of the Rights and the Class A Common
Stock or Common Stock into which they are convertible or
exercisable and to obtain additional information (to the extent the
Company possessed such information or could acquire it without
unreasonable effort or expense) necessary to verify any information
furnished to the investor or to which Intel had access. The
foregoing, however, does not in any way limit or modify the
representations and warranties made by the Company in Section 3.
Intel understands that the purchase of the Rights that are
exchangeable or exercisable into Class A Common Stock or Common
Stock involves substantial risk. Intel acknowledges that it is
able to fend for itself in the transactions contemplated by this
Agreement and has the ability to bear the economic risks of its
investment pursuant to this Agreement and has such knowledge and
experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Rights
and the Class A Common Stock or Common Stock into which they are
convertible or exercisable and protecting its own interests in
connection with this investment.
4.2 Purchase for Own Account. The Rights, Class A Common
Stock and Common Stock which Intel may acquire will be acquired for
Intel's own account, not as a nominee or agent, and not with a view
to or in connection with the sale or distribution of any part
thereof.
4.3 Exempt from Registration; Restricted Securities. Intel
understands that the sale of the Rights and the issuance of the
Class A Common Stock or Common Stock upon exercise or exchange
thereof will not be registered under the Securities Act on the
ground that the sale provided for in this Agreement is exempt from
registration under of the Securities Act, and that the reliance of
the Company on such exemption is predicated in part on Intel's
representations set forth in this Agreement. Intel understands
that the Rights and the Class A Common Stock or Common Stock
issuable upon exercise or exchange thereof are restricted
securities within the meaning of Rule 144 under the Act, and must
be held indefinitely unless they are subsequently registered or an
exemption from such registration is available. Intel
understands that the
<PAGE>
Company is under no obligation to register any of the securities
sold hereunder except as provided in the Rights and Restrictions
Agreement.
4.4 Accredited Investor. Intel is an "accredited investor"
as that term is defined in Rule 501(a)(8) of Regulation D as
promulgated by the SEC under the Securities Act.
4.5 Legends. Intel agrees that the Rights, Class A Common
Stock and the Common Stock issuable upon exercise or conversion
thereof will bear legends and be subject to the restrictions on
transfer as provided in the Rights and Restrictions Agreement. In
addition, Intel agrees that the Company may place stop transfer
orders with its transfer agents with respect to such instruments.
The appropriate portion of the legend shall be removed in
accordance with the provisions of the Rights and Restrictions
Agreement and the stop transfer orders shall be removed promptly
upon delivery to the Company of such satisfactory evidence as
reasonably may be required by the Company that such stop orders are
not required to ensure compliance with the Securities Act.
4.6 Organization Good Standing and Qualification. Intel is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all corporate power
and authority required to (a) carry on its business as presently
conducted, and (b) enter into this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement and
to consummate the transactions contemplated hereby and thereby.
4.7 Due Authorization. Intel has the requisite corporate
power and authority to enter into this Agreement, the Rights
Agreement, the Rights and Restrictions Agreement and the Supply
Agreement and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement, and
performance by Intel of its obligations hereunder and thereunder,
have been duly authorized by all necessary corporate action on the
part of Intel. This Agreement constitutes, and the Rights
Agreement and the Rights and Restrictions Agreement, when executed
and delivered by the parties thereto, will constitute, valid and
legally binding obligations of Intel, enforceable against the Intel
in accordance with their respective terms, except (a) as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or
others laws of general application relating to or affecting the
enforcement of creditors' rights generally and (ii) the effect of
rules of law governing the availability of equitable remedies and
(b) as rights to indemnity or contribution may be limited under
federal or state securities laws or by principles of public policy
thereunder.
4.8 Governmental Consents. No consent, approval, order or
authorization of, or registration qualification, designation,
declaration or filing with, any federal, state or local
governmental authority on the part of Intel is required in
connection with the consummation of the transactions contemplated
by this Agreement, except: (i) compliance with the HSR Act which
may be required for the exercise of the Rights to acquire Common
Stock; and (ii) as expressly required or contemplated by the terms
of the Rights and Restrictions Agreement.
4.9 Non-Contravention. The execution, delivery and
performance of this Agreement, the Rights Agreement and the Rights
and Restrictions Agreement by Intel, and the consummation by Intel
of the transactions contemplated hereby and thereby, do not and
will not (i) contravene or conflict with the Certificate of
Incorporation or Bylaws of Intel, as amended; (ii) constitute a
violation of any provision of any federal, state, local or foreign
law binding upon or applicable to Intel; or (iii) constitute a
default or require any consent under, give rise to any right of
<PAGE>
termination, cancellation or acceleration of, or to a loss of any
benefit to which Intel is entitled under, or result in the creation
or imposition of any lien, claim or encumbrance on any assets of
Intel under, any contract to which Intel is a party or any permit,
license or similar right relating to Intel or by which Intel may be
bound, except in the case of clause (ii) and (iii) as, individually
or in the aggregate, would not have a Material Adverse Effect.
5. AFFIRMATIVE COVENANTS OF THE COMPANY.
The Company covenants to Intel as follows:
5.1 Use of Proceeds. The Company will use the proceeds from
the sale of the Rights pursuant to this Agreement for Qualified
Expenditures.
5.2 Authorization of Class A Common Stock. The Company will
use reasonable efforts to obtain stockholder approval of an
amendment to its Certificate of Incorporation at its next annual
stockholders meeting and will promptly thereafter cause a
Certificate of Amendment substantially in the form attached hereto
as Exhibit D to be filed with the Delaware Secretary of State of
the State of Delaware.
5.3 Reports of Qualified Expenditures. The Company shall
provide to Intel, in a mutually acceptable form, on a quarterly
basis commencing December 31, 1998, a report of Qualified
Expenditures made, sufficient to permit an audit of such
expenditures pursuant to Section 7(m) of the Rights Agreement.
5.4 Cooperation in HSR Act Filings. In the event of a
proposed exercise of Rights to acquire Common Stock or voluntary
conversion of the Class A Common Stock which would require a filing
by Intel under the HSR Act, the Company will cooperate with Intel
and use reasonable efforts to comply with any applicable
requirements of the HSR Act; provided, however, that the Company
shall not be under any obligation to comply with any request that
it reasonably determines is unduly burdensome. Any filing fees
under the HSR Act shall be paid by Intel.
5.5 Audit. The Company will maintain relevant records to
support all Qualified Expenditures and Production milestones. Such
records will be retained in accordance with the Company's normal
record retention policies. Upon written request, the Company will
make available to Intel documents and other information that are
reasonably necessary to verify the Company's compliance with the
terms of the Transaction Agreements; provided that Intel enters
into an agreement with the Company to maintain in confidence the
Company's confidential information disclosed pursuant to the audit,
to the extent that existing agreements do not cover such
information. Intel may also request in writing that an audit be
performed by an independent auditor with respect to the Qualified
Expenditures and Production milestones necessary to verify the
Special Conversion Adjustments. If Intel elects to have such an
audit performed, the Company will make available to such
independent auditor, financial, technical and other information and
records relevant to auditing the Qualified Expenditures and
Production milestones in order to verify the Special Conversion
Adjustments that may be reasonably requested by such independent
auditor. The independent auditor selected shall be mutually
acceptable to Intel and the Company and compensated by Intel.
Prior to beginning such audit or receiving such information, the
independent auditor will enter into an agreement with the Company
to maintain in confidence the Company's confidential information.
The Company shall cooperate with the independent auditor in
responding to requests for the Company
<PAGE>
information and records. The independent auditor will promptly
conduct and issue a report to the Company and Intel. If the
independent auditor determines that the Company has failed to
comply with any of the terms hereof being audited, such independent
auditor shall only disclose to Intel and the Company the results of
the audit without revealing the Company's confidential information.
If the independent auditor determines that a further Special
Conversion Adjustment is required hereunder, such auditor shall
only disclose in its audit report to the Company and Intel the (i)
amount of the additional Special Conversion Adjustment that is
required hereunder; and (ii) a calculation as to how such amounts
were actually determined, if applicable.
6. CLOSING CONDITIONS.
6.1 Conditions to Intel's Obligations. The obligations of
Intel to consummate the transactions contemplated by this Agreement
at the Closing are subject to the fulfillment or waiver, on or
before the Closing, of each of the following conditions:
(a) Representations and Warranties True. Each of
the representations and warranties of the Company contained in
Section 3 will be true and correct in all material respects on and
as of the date hereof and on and as of the date of the Closing,
with the same effect as though such representations and warranties
had been made as of the Closing.
(b) Performance. The Company will have performed
and complied with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or
complied with by it on or before the Closing and will have obtained
all approvals, consents and qualifications necessary to complete
the purchase and sale described herein.
(c) Compliance Certificate. The Company will have
delivered to the Intel at the Closing a certificate signed on its
behalf by its Chief Executive Officer or Chief Financial Officer
certifying that the conditions specified in Section 6.1(a) and (b)
hereof have been fulfilled.
(d) Securities Exemptions. The offer and sale of
the Rights to Intel pursuant to this Agreement and the Rights
Agreement will be exempt from the registration requirements of the
Securities Act and the registration and/or qualification
requirements of all applicable state securities laws.
(e) Proceedings and Documents. All corporate and
other proceedings in connection with the transactions contemplated
at the Closing and all documents incident thereto will be
reasonably satisfactory in form and substance to Intel, and Intel
will have received all such counterpart originals and certified or
other copies of such documents as it may reasonably request. Such
documents shall include (but not be limited to) the following:
(i) Certified Charter Documents. A copy of the
Certificate of Incorporation certified as of a recent date by the
Secretary of State of Delaware as a complete and correct copy
thereof, and the Bylaws of the Company (as amended through the date
of the Closing), certified by the Secretary of the Company as true
and correct copies thereof as of the Closing.
(ii) Board Resolutions. A copy, certified by the
Secretary of the Company, of the resolutions of the Board of
Directors of the Company providing for the approval of the
transactions contemplated by this Agreement, the Rights Agreement,
the Rights and
<PAGE>
Restrictions Agreement and the Supply Agreement and the issuance of
the Rights and the Class A Common Stock or Common Stock issuable
upon exercise or conversion thereof.
(f) Opinion of Company Counsel. Intel will have
received an opinion on behalf of the Company, dated as of the date
of the Closing, from counsel to the Company, in form and substance
reasonably satisfactory to Intel.
(g) Other Agreements. The Company will have executed
and delivered the Rights Agreement, the Rights and Restrictions
Agreement and the Supply Agreement.
6.2 Conditions to the Company's Obligations. The obligations
of the Company to consummate the transactions contemplated by this
Agreement at the Closing are subject to the fulfillment or waiver
on or before the Closing, of each of the following conditions:
(a) Representations and Warranties True. The
representations and warranties of Intel contained in Section 4 will
be true and correct in all material respects on and as of the date
hereof and on and as of the date of the Closing with the same
effect as though such representations and warranties had been made
as of the Closing.
(b) Performance. Intel will have performed and complied
with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it
on or before the Closing and will have obtained all approvals,
consents and qualifications necessary to complete the purchase and
sale described herein.
(c) Payment of Purchase Price. Intel will have
delivered to the Company the Purchase Price of the Rights as
specified in and in accordance with Section 2.1.
(d) Securities Exemptions. The offer and sale of the
Rights to Intel pursuant to this Agreement will be exempt from the
registration requirements of the Securities Act and the
registration and/or qualification requirements of all applicable
state securities laws.
(e) Other Agreements. Intel will have executed and
delivered the Rights Agreement, the Rights and Restrictions
Agreement and the Supply Agreement.
7. CONFIDENTIALITY OBLIGATIONS.
7.1 Obligations. Except to the extent required by law or
judicial order or except as provided herein, each party to this
Agreement will hold any of the other's Confidential Information (as
defined in the next paragraph) in confidence and will: (i) use the
same degree of care to prevent unauthorized disclosure or use of
the Confidential Information that the receiving party uses with its
own information of like nature (but in no event less than
reasonable care), (ii) limit disclosure of the Confidential
Information, including any materials regarding the Confidential
Information that the receiving party has generated, to such of its
employees and contractors as have a need to know the Confidential
Information to accomplish the purposes of this Agreement, and (iii)
advise its employees, agents and contractors of the confidential
nature of the Confidential Information and of the receiving party's
obligations under this Agreement and the Corporate Non-Disclosure
Agreement #19096.
7.2 Certain Definitions. For purposes of this Agreement, the
term "Confidential Information" refers to this Agreement, the
Rights Agreement, the Supply Agreement and the
<PAGE>
Rights and Restrictions Agreement (collectively, the "Transaction
Agreements"). Any employee or contractor of the receiving party
having access to the Confidential Information will be required to
sign a non-disclosure agreement protecting the Confidential
Information if not already bound by such a non-disclosure
agreement.
7.3 Non-Disclosure of Agreements. Except to the extent
required by law or judicial order or except as provided herein,
neither party shall disclose the Transaction Agreements or any of
their terms without the other's prior written approval, which
approval will not be delayed or unreasonably withheld. Either
party may disclose the Transaction Agreements to the extent
required by law or judicial order, provided that if such disclosure
is pursuant to judicial order or proceedings, the disclosing party
will notify the other party promptly before such disclosure and
will cooperate with the other party to seek confidential treatment
with respect to the disclosure if requested by the other party and
provided further that if such disclosure is required pursuant to
the rules and regulations of any federal, state or local
organization, the parties will cooperate to seek confidential
treatment of the Transaction Agreements to the maximum extent
possible under law.
7.4 Public Announcements. Upon execution of this Agreement,
the parties will agree on the content of a joint press release
announcing the existence of the transactions contemplated by this
Agreement, which press release will be issued as mutually agreed by
the parties.
7.5 Third Party Information. Neither party will be required
to disclose to the other any confidential information of any third
party without having first obtained such third party's prior
written consent.
7.6 Other Disclosures. All confidential information
exchanged by the parties will be disclosed pursuant to the Intel
Corporation/Micron Technology, Inc. Corporate Non-Disclosure
Agreement #19096.
8. MISCELLANEOUS.
8.1 Governing Law. This Agreement shall be governed in all
respects by and construed in accordance with the laws of the State
of Delaware, without regard to provisions regarding choice of laws.
Jurisdiction shall be in the courts of the state of domicile of the
defending party to the original action.
8.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any
party hereto and the closing of the transactions contemplated
hereby, provided that the representations and warranties set forth
herein shall terminate as of the first anniversary of the date
hereof (other than with respect to any claims asserted prior to
such date, as to which they shall survive solely for the purpose of
resolving such claims until the resolution thereof).
8.3 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors
and administrators of the parties hereto. This Agreement and the
rights and obligations herein may not be assigned by Intel without
the prior written consent of the Company, except to a Qualified
Subsidiary (as defined in the Rights and Restrictions Agreement).
This Agreement and the rights and obligations herein may not be
assigned by the Company without the prior written consent of Intel.
<PAGE>
8.4 Entire Agreement. This Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement, and
the agreements, exhibits and schedules referred to herein and
therein constitute the entire understanding and agreement between
the parties with regard to the subjects hereof and thereof;
provided, however, that nothing in this Agreement shall be deemed
to terminate or supersede the provisions of any confidentiality and
nondisclosure agreements executed by the parties hereto prior to
the date hereof, which agreements shall continue in full force and
effect until terminated in accordance with their respective terms.
8.5 Notices. Except as may be otherwise provided herein, all
notices, requests, waivers and other communications made pursuant
to this Agreement shall be in writing and shall be delivered to
the other party (a) in person; (b) by facsimile to the address and
number set forth below, when promptly followed up by another of the
delivery methods permitted by this Section 8.5; (c) by U.S. mail,
registered or certified, return receipt requested, postage prepaid
and addressed to the other party as set forth below; or (d) by a
national-recognized overnight delivery service that keeps records
of deliveries and attempted deliveries (such as FedEx), postage
prepaid, addressed to the parties as set forth below with next-
business-day delivery guaranteed, provided that the sending party
receives a confirmation of delivery from the delivery service
provider.
To Intel: To the Company:
Intel Corporation Micron Technology, Inc.
2200 Mission College Blvd. 8000 S. Federal Way
Santa Clara, CA 95052 P.O. Box 6
Attn: Treasury Portfolio Boise, Idaho 83707
Manager
Attn: Chief Financial
Officer
Fax Number: (408) 765-1859 Fax Number: (208) 308-
2900
with copies to: with copies to:
Intel Corporation Micron Technology, Inc.
2200 Mission College Blvd. 8000 South Federal Way
Santa Clara, CA 95052 P.O. Box 6
Attn: General Counsel Boise, Idaho 83716
Fax Number: (408) 765-6038 Attn: General Counsel
Fax Number: (208) 308-
4509
A party may change or supplement the addresses given above, or
designate additional addresses, for purposes of this Section 8.5 by
giving the other party written notice of the new address in the
manner set forth above.
8.6 Amendments. Any term of this Agreement may be amended
only with the prior written consent of the Company and Intel.
8.7 Delays or Omissions. No delay or omission to exercise
any right, power or remedy accruing to the Company or to Intel,
upon any breach or default of any party hereto under this
Agreement, shall impair any such right, power or remedy of the
Company or Intel, nor shall it be construed to be a waiver of any
such breach or default, or an acquiescence therein, or of any
similar breach or default thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of
the Company or Intel of any breach or default under this
<PAGE>
Agreement or any waiver on the part of the Company or Intel of any
provisions or conditions of this Agreement, must be in writing and
shall be effective only to the extent specifically set forth in
such writing. All remedies, either under this Agreement, or by law
or otherwise afforded to the Company or Intel shall be cumulative
and not alternative.
8.8 Legal Fees. In the event of any action at law, suit in
equity or arbitration proceeding in relation to this Agreement or
any units or securities of the Company issued or to be issued, the
prevailing party shall be paid by the other party a reasonable sum
for attorney's fees and expenses for such prevailing party.
8.9 Titles and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only
and are not to be considered in construing this Agreement.
8.10 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all
of which together shall constitute one instrument.
8.11 Severability. Should any provision of this Agreement be
determined to be illegal or unenforceable, such determination shall
not affect the remaining provisions of this Agreement.
8.12 Dispute Resolution. The parties agree to negotiate in
good faith to resolve any dispute between them regarding this
Agreement. If the negotiations do not resolve the dispute to the
reasonable satisfaction of both parties, then each party shall
nominate one senior officer of the rank of Vice President or higher
as its representative. These representatives shall, within thirty
(30) days of a written request by either party to call such a
meeting, meet in person and alone (except for one assistant for
each party) and shall attempt in good faith to resolve the dispute.
If the disputes cannot be resolved by such senior managers in such
meeting, the parties agree that they shall, if requested in writing
by either party, meet within thirty (30) days after such written
notification for one day with an impartial mediator and consider
dispute resolution alternatives other than litigation. If an
alternative method of dispute resolution is not agreed upon within
thirty (30) days after the one day mediation, either party may
proceed as they see fit. This procedure shall be a prerequisite
before taking any additional action hereunder.
8.13 No Third Parties Benefited. This Agreement is made and
entered into for the protection and benefit of the parties hereto
and their permitted successors and assigns, and, except as
expressly provided herein, no other Person shall be a direct or
indirect beneficiary of or have any direct or indirect cause of
action or claim in connection with this Agreement or any of the
documents executed in connection herewith.
8.14 Meaning of Include and Including. Whenever in this
Agreement the word "include" or "including" is used. it shall be
deemed to mean "include, without limitation" or "including. without
limitation." as the case may be. and the language following
"include" or "including" shall not be deemed to set forth an
exhaustive list.
8.15 Fees, Costs and Expenses. All fees, costs and expenses
(including attorney's' fees and expenses) incurred by either party
hereto prior to the Closing in connection with the preparation,
negotiation and execution of this Agreement, the Rights Agreement,
the Rights and Restrictions Agreement and the Supply Agreement and
the consummation of the transactions contemplated hereby and
thereby (including the costs associated with any filings with, or
compliance with any of the requirements of, any governmental
authorities), shall be the sole and exclusive responsibility of
such party.
<PAGE>
8.16 Competition. Nothing set forth herein shall be deemed to
preclude, limit or restrict the Company's or Intel's and their
respective Affiliates' ability to compete with the other.
IN WITNESS WHEREOF, the parties have executed this Securities
Purchase Agreement as of the date first written above.
INTEL CORPORATION. MICRON TECHNOLOGY,
INC.
By:/s/____________________ By:/s/____________________
Name: Name:
Title: Title:
{Signature Page to Securities Purchase Agreement}
<PAGE>
EXHIBIT A
(Rights Agreement)
<PAGE>
EXHIBIT B
(Rights and Restrictions Agreement)
<PAGE>
EXHIBIT C
(Supply Agreement)
<PAGE>
EXHIBIT D
(Form of Certificate of Amendment)
Exhibit 2
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
MICRON TECHNOLOGY, INC.
Pursuant to Section 242 of the
Delaware General Corporation Law
Micron Technology, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation" or the
"Company"), hereby certifies that:
FIRST: At a meeting of the Board of Directors of the
Corporation (the "Board of Directors") resolutions were duly
adopted setting forth a proposed amendment of the Certificate of
Incorporation of the Corporation, declaring the advisability of
such amendment and calling a meeting of the stockholders of the
Corporation for consideration thereof. The Board of Directors on
________, ____, duly adopted the following resolution, which
resolution remains in full force and effect as of the date hereof:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing Article 4 thereof, to read in
full as follows:
4. (a) Shares Authorized. The total number of shares
of stock which the corporation shall have the authority to issue is
one billion thirty two million (1,032,000,000), consisting of (i)
one billion (1,000,000,000) shares of Common Stock, par value $0.10
per share (the "Common Stock") and (ii) thirty two million five
hundred thousand (32,000,000) shares of Class A Common Stock, par
value $0.10 per share (the "Class A Common Stock").
(b) Class A Common Stock.
Section 1. Liquidation Rights. In the event of any voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, the holders of each share of Class A
Common Stock shall be entitled to share ratably in any distribution
of any of the assets or funds of the Corporation to the holders of
the Common Stock (each share of the Class A Common Stock being
treated as the number of shares of Common Stock into which it could
then be converted for such purpose).
Section 2. Transfer of Class A Common Stock. No person or entity
holding shares of Class A Common Stock may transfer, sell, assign,
devise or bequeath any of such holder's interest in his or its
Class A Common Stock, and the Corporation and the transfer agent
for the Class A Common Stock shall not register the transfer of
such shares of Class A Common Stock, whether by sale, assignment,
gift, devise, bequest, appointment or otherwise, except to a
Permitted Transferee (as defined below) of such holder. For
purposes of this Section 2, the term "Permitted Transferee" with
respect to any holder of Class A Common Stock shall mean (i) the
Corporation, (ii) a Qualified Subsidiary (provided that if at any
time such Qualified Subsidiary ceases to be a Qualified Subsidiary
such Class A Common Stock will automatically convert into Common
Stock pursuant to Section 3.b) or (iii) Intel Corporation.
Notwithstanding the foregoing, the provisions of this Section 2 do
not prohibit transfers that result in automatic conversion pursuant
to Section 3.b, provided, that the transfer agent shall not
register the transfer of such shares of Class A
<PAGE>
Common Stock or the Common Stock into which they automatically
convert unless concurrently with such transfer, the certificate
representing such shares of Class A Common Stock to be so
transferred shall be surrendered and exchanged for a certificate
representing the applicable number of shares of Common Stock into
which such shares of Class A Common Stock are automatically
converted by virtue of such transfer.
Section 3. Conversion of Class A Common Stock.
a. Voluntary Conversion. At any time and from time to time
after the issuance of the Class A Common Stock, any holder of Class
A Common Stock may convert any or all of the shares of Class A
Common Stock held by such holder into shares of Common Stock at the
then effective conversion ratio. The conversion ratio at which
shares of Common Stock shall be deliverable upon conversion (the
"Conversion Ratio") shall initially be one-for-one. Such initial
Conversion Ratio shall be subject to adjustment, in order to adjust
the number of shares of Common Stock into which the Class A Common
Stock is convertible, as hereinafter provided.
b. Automatic Conversion. Each share of Class A Common Stock
shall automatically be converted into shares of Common Stock at the
then effective Conversion Ratio upon the transfer by any holder of
Class A Common Stock to a person or entity who is not a Permitted
Transferee of such holder.
c. Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of the Class A Common Stock.
In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such
fraction multiplied by the then fair market value of one share of
Common Stock, as determined in good faith by the Board of
Directors. Before any holder of Class A Common Stock shall be
entitled to receive certificates for the shares of Common Stock
issued upon conversion, such holder shall surrender the certificate
or certificates for such Class A Common Stock, duly endorsed, at
the principal office of the Corporation and shall state therein his
name or the name, or names, of his nominees in which he wishes the
certificate or certificates for shares of Common Stock to be
issued. No voluntary conversion shall be permitted unless and
until the holder shall submit to the Corporation either (i)
evidence of compliance with the filing and waiting period
requirements of the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR Act") or (ii) a certificate of an officer of
the holder that the conversion does not require any filing under
the HSR Act. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of
Class A Common Stock or to such holder's nominee or nominees, a
certificate or certificates for the number of shares of Common
Stock to which such holder or such holder's nominee shall be
entitled as aforesaid, together with cash in lieu of any fraction
of a share. Subject to the foregoing, in the case of automatic
conversion under Section 3.b, such conversion shall be deemed to
have been made immediately prior to the close of business on the
date of such automatic conversion and upon surrender of the
certificate representing the Class A Common Stock to be converted
in the case of a voluntary conversion pursuant to Section 3.a above
( the "Conversion Date"). The person or persons entitled to
receive the shares of Common Stock issuable upon conversion shall
be treated for all purposes as the record holder or holders of such
shares of Common Stock on such date; provided that the certificates
representing the Class A Common Stock have been duly endorsed for
transfer and delivered to the Corporation or its transfer agent.
d. Stock Splits, Mergers, etc. In case of any subdivision
(by stock split, stock dividend or otherwise) of the Common Stock
or any combination of the Class A Common Stock (by reverse stock
split or otherwise), the Conversion Ratio shall be proportionately
increased, and conversely in the case of combination of the Common
Stock (by reverse stock split or otherwise) or any subdivision of
the Class A Common Stock (by stock split, stock dividend or
otherwise), the Conversion Ratio shall be proportionately
decreased, with such adjustment to the Conversion Ratio to be
effective immediately after the opening of business on the day
following the day which such subdivision or combination, as the
case may be, becomes effective. In case of any reorganization,
reclassification or change of shares of the Common Stock (other
than a change in par value or from par value to no par value as a
result of a subdivision or combination), or in the case of any
consolidation of the Corporation with one or more corporations or a
merger of the Corporation with another corporation (other than a
consolidation or
<PAGE>
merger in which the Corporation is the resulting or surviving
corporation and which does not result in any reclassification or
change of outstanding shares of Common Stock), provision shall be
made so that each holder of a share of Class A Common Stock shall
have the right at any time thereafter as nearly as practicable, so
long as the conversion right hereunder with respect to such share
would exist had such event not occurred, to convert such share into
the kind and amount of shares of stock and other securities and
properties (including cash) receivable upon such reorganization,
reclassification, change, consolidation or merger by a holder of
the number of shares of Common Stock into which such shares of
Class A Common Stock might have been converted immediately prior to
such reorganization, reclassification, change, consolidation or
merger. In the event of such a reorganization, reclassification,
change, consolidation or merger, effective provision shall be made
in the certificate of incorporation of the resulting or surviving
corporation or otherwise for the protection of the conversion
rights of the shares of Class A Common Stock that shall be
applicable, as nearly as reasonably may be, to any such other
shares of stock and other securities and property (including cash)
deliverable upon conversion of shares of Common Stock into which
Class A Common Stock might have been converted immediately prior to
such event.
e. Special Conversion Adjustments. The number of shares of
Common Stock receivable upon conversion of a share of Class A
Common Stock shall be adjusted in the event that the Corporation
fails to achieve any one or more of the Qualified Expenditures
Milestone, the First Minimum Production Milestone or the Second
Minimum Production Milestone on the applicable milestone dates in
the manner described below. On or prior to twenty five (25) days
after an applicable milestone date, the Corporation shall deliver
to Intel Corporation a certificate of an executive officer of the
Corporation certifying whether the applicable milestone has been
achieved, and if such milestone has not been achieved, such
additional data (including, but not limited to the amount of
Qualified Expenditures made and actual RDRAM production during the
applicable period) required to calculate the appropriate conversion
adjustment. Upon receipt of such certificate with the required
information, Intel Corporation shall have thirty (30) days in which
to notify the Corporation in writing of its irrevocable election to
exercise a Special Conversion Adjustment. If Intel Corporation has
not provided an irrevocable written notice electing to exercise a
Special Conversion Adjustment within the such period, then no there
shall be no Special Conversion Adjustment with respect to the
applicable milestone. Except as specifically provided herein, the
failure to exercise a Special Conversion Adjustment with respect to
one milestone shall not impair Intel Corporation's ability to
exercise a Special Conversion Adjustment with respect to the
failure to achieve a different milestone.
f. Postponement of Milestone Dates; Modification of
Milestones. (i) In the event that the Corporation's ability to
achieve the Qualified Expenditure Milestone by the Qualified
Expenditures Milestone Date is significantly impaired by events or
circumstances outside of its control, such as Force Majeure or
limited availability of required equipment or materials, the
milestone date will be appropriately postponed.
(ii) In the event that (A) the Corporation fails to achieve
either the First Minimum Production Milestone or the Second Minimum
Production Milestone as a result of (v) design or specification
errors by Rambus where such design and specification errors impact
the majority of the producers of RDRAM devices, (w) delays
resulting from material specification changes by Rambus where such
specification changes impact the majority of the producers of RDRAM
devices, (x) any delay in the delivery of materials, documentation
or specifications by Rambus where such delays impact the majority
of the producers of RDRAM devices, (y) device specification
modifications requiring unreasonable process modifications, or (z)
any events or circumstances outside of the Corporation's control,
such as Force Majeure or limited availability of required equipment
or materials, (B) if as of the last day of the period which is the
measurement period for achieving such milestone there is not at
least one other major memory manufacturer that has achieved Volume
Production of RDRAM devices, the First Minimum Production
Milestone or the Second Minimum Production Milestone shall be
either postponed or waived, respectively, as appropriate. In
addition, if on the Maximum FGI Date, the RDRAM device finished
goods inventory of the Corporation and its subsidiaries exceeds the
Maximum FGI, the Second Minimum Production Milestone will be
modified, as appropriate.
<PAGE>
(iii) In the event of the occurrence of any of the foregoing
events or circumstances, as a result of which either a milestone
date or milestone is to be postponed, waived or modified, no
Special Conversion Adjustment shall occur as a result of the
failure to achieve the applicable milestone by the applicable
milestone date, unless and until the Corporation and Intel
Corporation shall have agreed upon the appropriate postponement,
waiver or modification. Notwithstanding the above, upon such
agreement, the Special Conversion Adjustment shall be applied as of
the agreed upon date, notwithstanding that such agreement is
reached after such date. If no agreement can be reached, the
dispute will be settled in accordance with Section 8.12 of the
Securities Purchase Agreement.
g. Failure to Achieve Qualified Expenditures Milestone.
Subject to the provisions hereof:
(i) If the Corporation fails to make at least the
Minimum Qualified Expenditures on or prior to the Qualified
Expenditures Milestone Date, the Conversion Ratio shall be adjusted
by multiplying the current Conversion Ratio by a fraction, the
numerator of which shall be the Initial Purchase Price and the
denominator of which shall be the greater of (i) the average
closing sales price on the New York Stock Exchange for the Common
Stock during the 20 trading day period ending two trading days
prior to the Qualified Expenditures Milestone Date, or (ii) 50% of
the Initial Purchase Price.
(ii) If the Corporation makes Qualified Expenditures of
more than the Minimum Qualified Expenditures but less than the
Required Qualified Expenditures on or prior to the Qualified
Expenditures Milestone Date, the Conversion Ratio shall be
increased. The amount of the increase in the Conversion Ratio
(expressed as a decimal) shall be determined by first (w) dividing
the Initial Purchase Price by the greater of (i) the average
closing sales price on the New York Stock Exchange for the Common
Stock during the 20 trading day period ending two trading days
prior to the applicable milestone date, or (ii) 50% of the Initial
Purchase Price, then (x) subtracting 1.0 from the result, then (y)
multiplying this result by a fraction, the numerator of which shall
be (A) the Required Qualified Expenditures minus (B) the amount of
Qualified Expenditures and the denominator of which shall be the
Required Qualified Expenditures, and (z) dividing the result by 2.
The new Conversion Ratio shall then be the result of the above
calculation plus the prior Conversion Ratio.
h. Failure to Achieve First Minimum Production Milestone.
Subject to the provisions hereof, if the Corporation fails to
achieve the First Minimum Production Milestone, the increase in the
Conversion Ratio (expressed as a decimal) shall be determined by
first (w) dividing the Initial Purchase Price by the greater of (i)
the average closing sales price on the New York Stock Exchange for
the Common Stock during the 20 trading day period ending two
trading days prior to the applicable milestone date, or (ii) 50% of
the Initial Purchase Price, then (x) subtracting 1.0 from the
result, then (y) multiplying this result by a fraction, the
numerator of which shall be the First Minimum Production Milestone
for the quarter minus the actual RDRAM production achieved during
the quarter and the denominator of which shall be the First Minimum
Production Milestone for the quarter, and (z) dividing the result
by 2. The new Conversion Ratio shall then be the result of the
above calculation plus the prior Conversion Ratio.
i. Failure to Achieve Second Minimum Production Milestone.
Subject to the provisions hereof, if the Corporation fails to
achieve the Second Minimum Production Milestone the increase in the
Conversion Ratio (expressed as a decimal) shall be determined by
first (w) dividing the Initial Purchase Price by greater of (A) the
average closing sales price on the New York Stock Exchange for the
Common Stock during the 20 trading day period ending two trading
days prior to the applicable milestone date, or (ii) 50% of the
Initial Purchase Price, then (x) subtracting 1.0 from the result,
then (y) multiplying this result by a fraction, the numerator of
which shall be the Second Minimum Required Production for the
quarter minus the actual RDRAM production achieved during the
quarter and the denominator of which shall be the Second Minimum
Required Production for the quarter and (z) dividing the result by
2. The new Conversion Ratio shall then be the result of the above
calculation plus the prior Conversion Ratio.
<PAGE>
j. Multiple Special Conversion Adjustments; Prior
Adjustments. If more than one Special Conversion Adjustment occurs
hereunder (or comparable adjustments under the Stock Rights
Agreement ("Rights Special Conversion Adjustments"), subsequent
Special Conversion Adjustments shall be calculated as provided
herein, but only the number of additional shares in excess of the
number issuable using the Initial Conversion Ratio (as defined in
this Section 3.j) (appropriately adjusted to reflect the effect of
any stock splits, reclassifications, stock dividends,
recapitalizations, combinations or other similar events affecting
the Common Stock occurring after the creation of the Class A Common
Stock), shall be issuable in respect of such subsequent Special
Conversion Adjustment upon conversion of the Class A Common Stock.
For purposes of this Section 3.j, the "Initial Conversion Ratio"
will be one-to-one (appropriately adjusted to reflect the effect of
any stock splits, reclassifications, stock dividends,
recapitalizations, combinations or other similar events affecting
the Common Stock occurring after the creation of the Class A Common
Stock), provided, however, that in the event of the occurrence of a
Rights Special Conversion Adjustment that resulted in an adjustment
to the Exchange Ratio in accordance with the provisions of the
Stock Rights Agreement prior to the creation of the Class A Common
Stock, the Initial Conversion Ratio shall be equal to a fraction,
the numerator of which shall be one (appropriately adjusted to
reflect the effect of any stock splits, reclassifications, stock
dividends, recapitalizations, combinations or other similar events
affecting the Common Stock occurring after creation of the Class A
Common Stock), and the denominator of which shall be the exchange
ratio in effect under the Stock Rights Agreement immediately prior
to the creation of the Class A Common Stock. Notwithstanding
anything else to the contrary set forth herein, the Conversion
Ratio shall not be adjusted for any events, circumstances or
milestones for which adjustments have been made (or may be made as
a result of completion of an audit or resolution of any dispute as
to the appropriate amount of an adjustment required thereunder)
pursuant to the Stock Rights Agreement.
k. Cash Option. In lieu of all or a portion of a Special
Conversion Adjustment, the Corporation may elect to make a cash
payment in respect of all or a portion of the dollar amount of the
Special Conversion Adjustment (such election to be made within five
(5) business days of Intel Corporation's Special Conversion
Adjustment election, and such amount shall be paid within five (5)
business days of the Corporation's election). The dollar amount in
respect of any Special Conversion Adjustment to be paid in cash
shall be calculated by multiplying the additional shares issuable
to Intel Corporation upon conversion of the Class A Common Stock
following the Special Conversion Adjustment by the average closing
sales price on the New York Stock Exchange for the Common Stock
during the 20 trading day period ending two trading days prior to
the applicable milestone date.
l. Limitations on Special Conversion Adjustments. Anything
in Sections 3.h and 3.j to the contrary notwithstanding, no Special
Conversion Adjustment will be made for failure to achieve the First
Minimum Production Milestone or Second Minimum Production Milestone
if a Special Conversion Adjustment election pursuant to clause (i)
of Section 3.g above is made by Intel Corporation. In addition,
anything in Sections 3.e through 3.j notwithstanding, Special
Conversion Adjustments will be limited, and not given effect, to
the extent required to ensure (1) that the value of additional
shares of Common Stock and other securities or property and any
related payments (including payments in lieu of adjustments
pursuant to Section 3.k hereof) issued or issuable or payable as a
result of such adjustments, together with any shares of Common
Stock and other securities or property and any related payments
issued or issuable or payable as a result of the Special Conversion
Adjustments with respect to the Rights, does not exceed the Maximum
Adjustment Amount (with the value of such additional shares,
securities and property measured as of the milestone date with
respect to the applicable Special Conversion Adjustments resulting
in such additional shares, securities or property and any related
payments, which, in the case of the Common Stock, shall be based on
the average closing sales price on the New York Stock Exchange for
the Common Stock during the 20 trading day period ending two
trading days prior to the milestone date corresponding to such
Special Conversion Adjustment); and (2) that the aggregate number
of shares of Common Stock issued or issuable upon exercise of
Rights or upon conversion of Class A Common Stock does not exceed
the lesser of (i) the Maximum Percentage and (ii) the Maximum
Shares.
m. Existing Stock Certificates. Irrespective of any
adjustments in the number or kind of shares issuable upon the
conversion of the Class A Common Stock, certificates representing
Class A Common Stock theretofore or thereafter issued may continue
to express the same number and kind of shares as are stated in the
certificates initially issuable pursuant hereto.
n. Payment of Taxes. The Corporation will pay all
documentary stamp taxes and other governmental charges (excluding
all foreign, federal, state or local income, franchise, property,
net worth, capital, estate, inheritance, gift or similar taxes) in
connection with the issuance or delivery of the Class A Common
Stock, as well as all such taxes attributable to the initial
issuance or delivery of Common Stock upon the conversion of Class A
Common Stock. The Corporation shall not, however, be required to
pay any tax that may be payable in respect of any subsequent
transfer of the Class A Common Stock or any transfer involved in
the issuance and delivery of Common Stock in a name other than that
in which the Class A Common Stock or Common Stock to which such
issuance relates were registered, and, if any such tax would
otherwise be payable by the Corporation, no such issuance or
delivery shall be made unless and until the person requesting such
issuance has paid to the Corporation the amount of any such tax, or
it is established to the reasonable satisfaction of the Corporation
that any such tax has been paid.
o. Common Stock Reserved. The Corporation shall reserve and
keep available out of its authorized but not outstanding Common
Stock such number of shares of Common Stock as shall, from time to
time be, sufficient for conversion of the Class A Common Stock.
Section 4. No Redemption. The Class A Common Stock shall not be
redeemable.
Section 5. Voting Rights; Non-Voting Security. The holders of
shares of Class A Common Stock shall have no voting rights except
as provided in the Certificate of Incorporation or by applicable
law.
Section 6. Dividend Rights In the event any dividend or other
distribution payable in cash or other property is declared on the
Common Stock (excluding any dividend or other distribution for
which adjustment to the Conversion Ratio is provided by Section 3.d
hereof), each holder of shares of Class A Common Stock on the
record date for such dividend or distribution shall be entitled to
receive on the date of payment or distribution of such dividend or
other distribution the same cash or other property which such
holder would have received if on such record date such holder was
the holder of record of the number (including for purposes of this
Section 6 any fraction) of shares of Common Stock into which the
shares of Class A Common Stock then held by such holder are then
convertible.
Section 7. Certain Definitions; Interpretation.
For purposes hereof the following terms shall have the
meanings set forth below.
First Minimum Production Milestone. The First Minimum
Production Milestone shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
First Minimum Required Production. First Minimum Required
Production shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
First Production Milestone Date. The First Production
Milestone Date shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Force Majeure. Force Majeure shall mean an act of God, fire,
flood, accident, riot war, government intervention, embargoes,
strikes, labor difficulties, equipment failure, late delivery of
supplies, supplier shortages or other difficulties which are beyond
the reasonable control and without the fault or negligence of a
party whose performance has been affected.
<PAGE>
Initial Purchase Price. Initial Purchase Price means $31.625,
appropriately adjusted to reflect the effect of any stock splits,
reclassifications, stock dividends, recapitalizations, combinations
or other similar events affecting the Common Stock occurring after
October 19, 1998.
Maximum Adjustment Amount. Maximum Adjustment Amount shall
have the meaning ascribed to such term in the Securities Purchase
Agreement.
Maximum FGI. Maximum FGI shall have the meaning ascribed to
such term in the Securities Purchase Agreement.
Maximum FGI Date. Maximum FGI Date shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Maximum Percentage. Maximum Percentage shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Maximum Shares. Maximum Shares shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Minimum Qualified Expenditures. Minimum Qualified
Expenditures shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Qualified Expenditures. Qualified Expenditures shall have the
meaning ascribed to such term in the Securities Purchase Agreement.
Qualified Expenditures Milestone. The Qualified Expenditures
Milestone means the expenditure of at least the Required Qualified
Expenditures on or before the Qualified Expenditures Milestone
Date.
Qualified Expenditures Milestone Date. The Qualified
Expenditures Milestone Date shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
Qualified Subsidiary. Qualified Subsidiary shall have the
meaning ascribed to such term in the Rights and Restrictions
Agreement.
Rambus. Rambus means Rambus, Inc. , a Delaware corporation,
and any successor to all or substantially all of Rambus Inc.'s
business (by acquisition or otherwise).
RDRAM. RDRAM shall have the meaning ascribed to such term in
the Supply Agreement.
Required Qualified Expenditures. Required Qualified
Expenditures shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Rights. Rights shall have the meaning ascribed to such term
in the Stock Rights Agreement.
Rights and Restrictions Agreement. Rights and Restrictions
Agreement shall mean that certain Securities Rights and
Restrictions Agreement, dated as of October 19, 1998, as amended
from time to time, by and between the Corporation and Intel
Corporation.
Second Minimum Production Milestone. The Second Minimum
Production Milestone shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
Second Minimum Required Production. Second Minimum
Required Production shall have the meaning ascribed to such term in
the Securities Purchase Agreement.
<PAGE>
Second Production Milestone Date. The Second Production
Milestone Date shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Securities Purchase Agreement. Securities Purchase Agreement
shall mean that certain Securities Purchase Agreement, dated
October 15, 1998, as amended from time to time, by and between the
Corporation and Intel Corporation.
Special Conversion Adjustment. A Special Conversion
Adjustment shall mean an adjustment to the number of shares of
Common Stock receivable upon conversion of Class A Common Stock, as
provided in Section 3 hereof.
Stock Rights Agreement. Stock Rights Agreement shall mean
that certain Stock Rights Agreement, dated as of October 19, 1998,
as amended from time to time, by and between the Corporation and
Intel Corporation.
Supply Agreement. Supply Agreement shall mean that certain
Supply Agreement, dated as of October 19, 1998, as amended from
time to time, by and between the Corporation and Intel Corporation.
Volume Production. Volume Production shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
<PAGE>
SECOND: Pursuant to a resolution of the Board of Directors, a
meeting of the stockholders of the Corporation was duly called and
held, at which meeting the necessary number of shares as required
by statute were voted in favor of the amendment.
THIRD: The amendment has been duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, the corporation has caused this
Certificate of Amendment to be executed by a duly authorized
officer on the ______ day of ______________, 1999.
MICRON TECHNOLOGY, INC.
By: /s/______________________________
Exhibit 3
SECURITIES RIGHTS AND RESTRICTIONS AGREEMENT
THIS SECURITIES RIGHTS AND RESTRICTIONS AGREEMENT (this
"Agreement") is made as of October 19, 1998, between MICRON
TECHNOLOGY, INC., a Delaware corporation ("Micron"), and INTEL
CORPORATION, a Delaware corporation ("Intel").
RECITALS
A. Intel has agreed to purchase from Micron, and Micron has
agreed to sell to Intel, Class A Common Stock ("Class A Common
Stock") or, pending authorization and creation of the Class A
Common Stock, stock rights (the "Rights") to be issued by the
Company pursuant to that certain Stock Rights Agreement, dated of
even date herewith (the "Stock Rights Agreement"), on the terms and
conditions set forth in that certain Securities Purchase Agreement,
dated October 15, 1998, by and between Micron and Intel (the
"Securities Purchase Agreement"). The Rights are exchangeable for
Class A Common Stock or Common Stock (the "Common Stock") of the
Company, and the Class A Common Stock is convertible into Common
Stock of the Company.
B. The Securities Purchase Agreement provides for the
execution and delivery of this Agreement at the closing of the
transactions contemplated thereby.
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and conditions herein and in the Securities
Purchase Agreement, the parties hereto hereby agree as follows:
<PAGE>
SECTION 1
DEFINITIONS
1.1 Certain Definitions. As used in this Agreement:
(a) "Affiliate" means, with respect to any Person, any
Person directly or indirectly controlling, controlled by, or
under common control with, such other Person. For purposes of
this definition, "control" when used with respect to any
Person, means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of
voting securities, by contract or otherwise; the terms
"controlling" and "controlled" have meanings correlative to
the foregoing. Notwithstanding the above, unless expressly
provided to the contrary herein, the term Affiliate shall
exclude officers, directors and any employee benefit plan or
pension plan of a Person.
(b) "Beneficial ownership" or "beneficial owner" has the
meaning provided in Rule 13d-3 promulgated under the Exchange
Act. References to ownership of Voting Securities hereunder
mean beneficial ownership.
(c) "Class A Common Stock" has the meaning set forth in
paragraph A of the Recitals hereto.
(d) "Common Stock" has the meaning set forth in
paragraph A of the Recitals hereto.
(e) "Change in Control of Micron" shall mean a merger,
consolidation or other business combination or the sale of all
or substantially all of the assets of Micron (other than a
transaction pursuant to which the holders of the voting stock
of Micron outstanding immediately prior to such transaction
have the entitlement to exercise, directly or indirectly,
fifty percent (50%) or more of the Total Voting Power of the
continuing, surviving entity or transferee immediately after
such transaction).
(f) "Demand Registration Statement" has the meaning set
forth in Section 4.1(a).
(g) "Demand Request" has the meaning set forth in
Section 4.1(a).
(h) "Demand/Tranche Managing Underwriters" has the
meaning set forth in Section 4.4(c).
(i) "Demand/Tranche Market Cut-Back" has the meaning set
forth in Section 4.4(d).
(j) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
<PAGE>
(k) "Group" or "group" shall have the meaning provided
in Section 13(d)(3) of the Exchange Act and the rules and
regulations promulgated thereunder, but shall exclude any
institutional underwriter purchasing Voting Securities of
Micron in connection with an underwritten registered offering
for purposes of a distribution of such securities.
(l) "Hedging Transactions" means engaging in short sales
and the purchase and sale of puts and calls and other
derivative securities, so long as Intel retains beneficial
ownership of the Shares.
(m) "Indemnified Party" has the meaning set forth in
Section 4.6(c).
(n) "Indemnifying Party" has the meaning set forth in
Section 4.6(c).
(o) "Intel Pooling Transaction Lock-Up" has the meaning
set forth in Section 4.9(a).
(p) "Intel Public Offering Lock-Up" has the meaning set
forth in Section 4.9(a).
(q) "Micron Public Offering Lock-Up" has the meaning set
forth in Section 4.9(b).
(r) "Person" shall mean any person, individual,
corporation, partnership, trust or other nongovernmental
entity or any governmental agency, court, authority or other
body (whether foreign, federal, state, local or otherwise).
(s) "Piggyback Market Cut-Back" has the meaning set
forth in Section 4.3(c).
(t) "Piggyback Registrable Securities" has the meaning
set forth in Section 4.3(a).
(u) "Piggyback Registration Statement" has the meaning
set forth in Section 4.3(a).
(v) "Piggyback Request" has the meaning set forth in
Section 4.3(a).
(w) "Piggyback Underwriting Agreement" has the meaning
set forth in Section 4.3(b).
(x) "Qualified Subsidiary" shall mean a corporation or
other Person at least 90% of the outstanding Voting Securities
of which are owned, directly or indirectly, by Intel.
(y) "Register," "registered" and "registration" refer to
a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such
registration statement.
<PAGE>
(z) "Registrable Securities" means (i) the (1) all the
shares of Common Stock of the Company issued or issuable upon
exercise or conversion of the Rights or the Class A Common
Stock and (2) any shares of Common Stock of the Company issued
as (or issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a
dividend or other distribution with respect to, or in exchange
for or in replacement of, any such securities described in
clause (1) of this subsection (w). Notwithstanding the
foregoing, Registrable Securities shall exclude any
Registrable Securities sold by a person in a transaction in
which rights under this Section 4 are not assigned in
accordance with this Agreement or any Registrable Securities
sold in a public offering, whether sold pursuant to Rule 144
promulgated under the Securities Act, in a registered
offering, or otherwise.
(aa) "Registration Expenses" has the meaning set forth in
Section 4.5(a).
(bb) "Restricted Securities" has the meaning set forth in
Section 3.3(a).
(cc) "Rights" has the meaning set forth in paragraph A of the
recitals hereto.
(dd) "Securities Act" means the Securities Act of 1933, as
amended.
(ee) "Securities Purchase Agreement" has the meaning set forth
in paragraph A of the Recitals hereto.
(ff) "SEC" means the Securities and Exchange Commission
or any other federal agency at the time administering the
Securities Act.
(gg) "Shares" means the shares of Common Stock of the Company
issued or issuable upon exercise or conversion of the Rights
or the Class A Common Stock.
(hh) "Shelf Registrable Securities" has the meaning set forth
in Section 4.2(a).
(ii) "Shelf Registration Statement" has the meaning set
forth in Section 4.2(a).
(jj) "Shelf Request" has the meaning set forth in
Section 4.2(a).
(kk) "Stock Rights Agreement" has the meaning set forth in
paragraph A of the Recitals hereto.
(ll) "Suspension Condition" has the meaning set forth in
Section 4.4(f).
(mm) "Tranche Registrable Securities" has the meaning set
forth in Section 4.2(b).
(nn) "Tranche Request" has the meaning set forth in
Section 4.2(b).
<PAGE>
(oo) "Transaction Related Securities" means (i) Shares,
(ii) shares of Class A Common Stock issued or issuable upon
exercise or conversion of the Rights, (iii) the Rights and
(iv) shares of Common Stock and other securities of the
Company issued as (or issuable upon conversion or exercise of
any warrant, right or other security as) a dividend or other
distribution with respect to or in exchange for or in
replacement of, or upon conversion or exercise of any such
securities.
(pp) "Voting Securities" means (i) all securities of Micron,
entitled, in the ordinary course, to vote in the election of
directors of Micron and (ii) for the purposes of this
Agreement only, all securities of Micron, directly or
indirectly, convertible into or exchangeable or exercisable
for shares of Common Stock (including the Rights), the Voting
Power of which shall be deemed equal to the number of shares
of Common Stock, directly or indirectly, issuable upon the
conversion, exchange or exercise of such securities. Voting
Securities shall not include stockholder rights or other
comparable securities having Voting Power only upon the
happening of a trigger event or comparable contingency and
which can only be transferred together with the Voting
Securities to which they attach. References herein to
meetings of holders of Voting Securities shall include
meetings of any class or type thereof,
(qq) "Voting Power" or "Total Voting Power" of Micron (or any
other corporation) refer to the votes or total number of votes
which at the time of calculation may be cast in the election
of directors of Micron (or such corporation) at any meeting of
stockholders of Micron (or such corporation) if all securities
entitled to vote in the election of directors of Micron (or
such corporation) were present and voted at such meeting;
provided that for purposes of references herein made to any
Person's "Voting Power" or percentage beneficial ownership of
"Total Voting Power," any rights (other than rights referred
to in any rights plan of Micron (or any such other
corporation) or a successor to such rights plan so long as
such rights can only be transferred together with the Voting
Securities to which they attach) of such Person to acquire
Voting Securities (whether or not the exercise of any such
right shall be conditioned upon the passage of time or any
other contingency) shall be deemed to have been exercised in
full.
(rr) "180-Day Limitation" has the meaning set forth in
Section 4.4(a).
All capitalized terms used and not defined herein shall have
the respective meanings assigned to such terms in the
Securities Purchase Agreement.
<PAGE>
SECTION 2
STANDSTILL AND RELATED COVENANTS
2.1 Intel Ownership of Micron Securities. On the date
hereof, and without giving effect to the transactions contemplated
by the Securities Purchase Agreement, neither Intel nor any
Affiliate of Intel beneficially owns any Voting Securities of
Micron, other than Voting Securities held in equity index funds or
by employee benefit plans or pension plans.
2.2 Standstill Provisions.
(a) Intel shall not acquire, directly or indirectly, and
shall not cause or permit any Affiliate of Intel to acquire,
directly or indirectly (through market purchases or
otherwise), record or beneficial ownership of any Voting
Securities of Micron representing, when taken together with
all securities owned by such Persons, in excess of a
percentage greater than nineteen and ninety nine hundredths
(19.99%) (the "Standstill Percentage") of the Total Voting
Power of Micron without the prior written consent of Micron's
Board of Directors; provided, however, that the prior written
consent of the Board of Directors of Micron shall not be
required for the acquisition of any Voting Securities of
Micron pursuant to the conversion of any of the shares of
Class A Common Stock or the exercise of any of the Rights or
resulting from a stock split, stock dividend or similar
recapitalization by Micron. Nothing contained in this Section
2.2 shall adversely affect any right of Intel to acquire
record or beneficial ownership of Voting Securities of Micron
pursuant to any rights plan instituted by Micron. Ownership
of Voting Securities by employee benefit plans or pension
plans shall not be beneficial ownership by Intel for purposes
of this Section 2.2.
(b) Intel and its Affiliates will not be obliged to
dispose of any Voting Securities to the extent that the
aggregate percentage of the Total Voting Power of Micron
represented by Voting Securities beneficially owned by Intel
and its Affiliates or which Intel and its Affiliates has a
right to acquire is increased beyond the Standstill Percentage
(i) as a result of a recapitalization of Micron or a
repurchase or exchange of securities by Micron or its
Affiliates; (ii) as a result of an equity index transaction,
provided that Intel and its Affiliates shall not vote such
shares; (iii) by way of stock dividends or other distributions
or rights or offerings made available to holders of shares of
Voting Securities generally; or (iv) with the prior written
consent of Micron's Board of Directors.
2.3 Voting Trust. Intel shall not, and shall not cause or
permit any Affiliate of Intel to, deposit any Voting Securities of
Micron in a voting trust or, except as otherwise provided herein,
subject any Voting Securities of Micron to any arrangement or
agreement with respect to the voting of such Voting Securities of
Micron.
<PAGE>
2.4 Solicitation of Proxies. Without the prior written
consent of Micron's Board of Directors, Intel shall not, and shall
not cause or permit any Affiliate of Intel to, directly or
indirectly (i) initiate, propose or otherwise solicit Micron
stockholders for the approval of one or more stockholder proposals
with respect to Micron or induce or attempt to induce any other
Person to initiate any stockholder proposal, (ii) make, or in any
way participate in, any "solicitation" of "proxies" (as such terms
are defined or used in Regulation 14a-1 under the Exchange Act)
with respect to any Voting Securities of Micron, or become a
"participant" in any "election contest" (as such terms are used in
Rule 14a-11 of Regulation 14A under the Exchange Act), with respect
to Micron or (iii) call or seek to have called any meeting of the
holders of Voting Securities of Micron.
2.5 Acts in Concert with Others. Except as contemplated
herein, Intel shall not, and shall not cause or permit any
Affiliate of Intel to, participate in the formation of any Person
which owns or seeks to acquire beneficial ownership of, or
otherwise acts in concert in respect of the voting or disposition
of, Voting Securities of Micron. Without limiting the generality
of the foregoing, and except as contemplated herein, Intel shall
not, and shall not cause or permit any Affiliate of Intel to:
(i) join a partnership, limited partnership, syndicate or other
group, or otherwise act in concert with any third person, for the
purpose of acquiring, holding, or disposing of Voting Securities of
Micron; (ii) seek election to or seek to place a representative on
the Board of Directors of Micron; (iii) seek the removal of any
member of the Board of Directors of Micron; (iv) otherwise seek
control of the management, Board of Directors or policies of
Micron; (v) solicit, propose or seek to effect any form of business
combination transaction with Micron or any Affiliate thereof, or
any restructuring, recapitalization or similar transaction with
respect to Micron or any Affiliate thereof; (vi) solicit, make or
propose or announce an intent to make, any tender offer or exchange
offer for any Voting Securities of Micron; (vii) disclose an
intent, purpose, plan or proposal with respect to Micron or any
Voting Securities of Micron inconsistent with the provisions of
this Agreement, including an intent, purpose, plan or proposal that
is conditioned on or would require Micron to waive the benefit of
or amend any provision of this Agreement; or (vii) assist,
participate in, or solicit any effort or attempt by any Person to
do or seek to do any of the foregoing. Intel shall not, and shall
not cause or permit any Affiliate of Intel to, make any
recommendation or proposal to any Person to engage in any of the
actions covered by Section 2.4 and this Section 2.5 hereof.
2.6 Termination. The provisions of this Section 2 shall
terminate upon the earlier to occur of: (i) such time as Intel
(together with all Affiliates of Intel) beneficially owns in the
aggregate Voting Securities of Micron representing less than five
percent (5%) of the Total Voting Power of Micron; or (ii) the
closing or other completion of a Change in Control of Micron.
SECTION 3
RESTRICTIONS ON TRANSFER OF
SECURITIES; COMPLIANCE WITH SECURITIES LAWS
<PAGE>
3.1 Restrictions on Transfer of Voting Securities of Micron.
Intel shall not, and shall not cause or permit any Affiliate of
Intel to, directly or indirectly, offer to sell, contract to sell,
make any short sale of, or otherwise sell, dispose of, loan, gift,
pledge or grant any options or rights with respect to, any
Transaction Related Securities of Micron, now or hereafter
acquired, or with respect to which Intel (or any Affiliate of
Intel) has or hereafter acquires the power of disposition (or enter
into any agreement or understanding with respect to the foregoing),
except, in the case of the Shares and shares of Class A Common
Stock, as set forth in the following clauses (a) through (g), and,
in the case of the Rights, as set forth in clause (a) and (b):
(a) to Micron, or any Person or group approved in
writing in advance by Micron's Board of Directors;
(b) to any Qualified Subsidiary of Intel, so long as
such subsidiary agrees in writing (in form reasonably
acceptable to counsel for Micron) to hold such Voting
Securities of Micron subject to all the provisions of this
Agreement, and also agrees to transfer such Voting Securities
of Micron to Intel or another Qualified Subsidiary of Intel if
it ceases to be a Qualified Subsidiary of Intel;
(c) pursuant to a public offering of Voting Securities
of Micron registered under the Securities Act; provided,
however, that such offering is structured to distribute such
securities in accordance with procedures reasonably designed
to ensure that beneficial ownership of the Voting Securities
of Micron with aggregate Voting Power of more than five
percent (5%) of the Total Voting Power of Micron then in
effect shall not be transferred during such distribution to
any single Person or group;
<PAGE>
(d) through a sale of Voting Securities of Micron
pursuant to Rule 144 under the Securities Act; provided,
however, that any such sale (i) complies with the manner of
sale provisions under paragraph (f) of Rule 144 or (ii) is of
securities with Voting Power aggregating less than five
percent (5%) of the Total Voting Power of Micron and is not
made knowingly directly or indirectly to: (A) any Person or
group which has theretofore filed a Schedule 13D with the SEC
with respect to any class of "equity security" (as defined in
Rule 13a11-1 under the Exchange Act) of Micron and which, at
the time of such sale, continues to reflect beneficial
ownership in excess of five percent (5%) of the Total Voting
Power of Micron; (B) any Person or group known to Intel
(without inquiry or investigation) to beneficially own in
excess of five percent (5%) of any Voting Securities of Micron
or to be accumulating stock on behalf of or acting in concert
with any such Person or group or a Person or group
contemplated by clause (A) above; or (C) any Person or group
that has announced or commenced an unsolicited offer for any
Voting Securities of Micron or publicly initiated, proposed or
otherwise solicited Micron stockholders for the approval of
one or more stockholder proposals with respect to Micron or
publicly made, or in any way participated in, any
"solicitation" of "proxies" (as such terms are defined or used
in Regulation 14A under the Exchange Act) with respect to any
Voting Securities of Micron, or become a "participant" in any
"election contest" (as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act);
(e) pursuant to any private sale of Voting Securities of
Micron exempt from the registration requirements under the
Securities Act, provided that no such sale may be made to any
Person or group which, after giving effect to such sale, will
beneficially own or have the right to acquire Voting
Securities of Micron with aggregate Voting Power of more than
five percent (5%) of the Total Voting Power of Micron unless
such Person or group is an institutional investor that
acquires such Voting Securities solely for investment, in
which case the total number of Voting Securities that may be
sold to such Person or group shall be limited so that such
Person or group shall not own or have the right to acquire
more than ten percent (10%) of the Total Voting Power of
Micron after giving effect to the proposed sale; and,
provided, further, that, if such securities are "restricted
securities" as defined in Rule 144, any such purchaser (and
any transferee of such purchaser) shall agree to take and hold
such securities subject to the provisions and upon the
conditions specified in this Section 3, and it will be a
condition precedent to the effectiveness of any such transfer
that Intel shall have delivered to Micron a written agreement
of such purchaser to that effect in form and substance
reasonably satisfactory to Micron (which may contain a
representation by such purchaser as to the beneficial
ownership of Voting Securities of Micron, which may be relied
upon by Intel (absent actual knowledge to the contrary) for
purposes of compliance with the applicable requirements of
this Section 3.1(e));
<PAGE>
(f) in response to an offer to purchase or exchange for
cash or other consideration any Voting Securities, in any case
which is not opposed by the Board of Directors of Micron
within the time such Board is required, pursuant to
regulations under the Exchange Act, to advise the stockholders
of Micron of such Board's position with respect to such offer,
or, if no such regulations are applicable, within ten (10)
business days of the commencement of such offer, or pursuant
to a merger, consolidation or other business combination
involving Micron approved by the Board of Directors of Micron;
or
(g) subject to Micron's prior consent (which shall not
be unreasonably withheld), pursuant to bona fide pledges of
such Voting Securities to institutional lenders (provided that
the number of such lenders to which, or for the benefit of
which, such pledges may be made, shall not exceed twenty (20)
in the aggregate), to secure a loan, guarantee, letter of
credit facility or other indebtedness or financial support;
provided that each such lender to which, or for the benefit of
which, such pledge is made agrees in writing to hold such
Voting Securities subject to all provisions of this Agreement,
including the limitations on any sale or other disposition of
such Voting Securities.
Nothing in this Section 3.1 shall be construed to
prohibit Hedging Transactions with respect to securities of Micron
provided that such transactions do not result in non-compliance
with the foregoing restrictions insofar such provisions relate to,
and are limited in their application to, the Transaction Related
Securities.
3.2 Restrictive Legends.
(a) The certificate or certificates representing the
(i) the Shares, (ii) the Rights, (iii) any shares of Class A
Common Stock issued or issuable upon exercise or conversion of
the Rights and (iv) any securities issued in respect of the
foregoing as a result of any stock split, stock dividend,
recapitalization, reclassification or similar transaction
(collectively, the "Restricted Securities") shall be stamped
or otherwise imprinted with a legend substantially in the
following form (in addition to any legend required under
applicable state securities laws):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION
OF COUNSEL SATISFACTORY TO THE ISSUER AS TO THE AVAILABILITY
OF AN EXEMPTION FROM REGISTRATION.
(b) The certificate or certificates representing the
Restricted Securities also shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER, INCLUDING ANY SALE, PLEDGE OR OTHER
HYPOTHECATION, SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER
AND INTEL CORPORATION, A COPY OF WHICH AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST
<PAGE>
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
(c) The certificate or certificates representing the
Rights also shall be stamped or otherwise imprinted with a
legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
PROVISIONS OF THE STOCK RIGHTS AGREEMENT WHICH CONTAINS
CERTAIN RESTRICTIONS ON TRANSFER AND OTHER RIGHTS AND
OBLIGATIONS. COPIES OF THE STOCK RIGHTS AGREEMENT MAY BE
OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE COMPANY AT
ITS PRINCIPAL EXECUTIVE OFFICES.
(d) The certificate or certificates representing shares
of Class A Common Stock also shall be stamped or otherwise
imprinted with a legend substantially in the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
PROVISIONS OF THE COMPANY'S CERTIFICATE OF INCORPORATION
WHICH CONTAINS CERTAIN RESTRICTIONS ON TRANSFER AND OTHER
RIGHTS AND OBLIGATIONS. COPIES OF THE CERTIFICATE OF
INCORPORATION MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST
MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE
SECRETARY OF THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICES.
<PAGE>
3.3 Procedures for Certain Transfers.
(a) The holder of each certificate representing
Restricted Securities, by acceptance thereof, agrees to comply
in all respects with the provisions of this Section 3.
(b) Prior to any proposed transfer of any Restricted
Securities pursuant to Sections 3.1(a), (b), (e) and (g)
hereof, Intel shall give written notice to Micron of its
intention to effect such transfer. Each such notice shall
describe the manner and circumstances of the proposed transfer
in sufficient detail, and shall be accompanied by either:
(i) a written opinion of legal counsel (including in-house
counsel), who shall be reasonably satisfactory to Micron,
addressed to Micron and reasonably satisfactory in form and
substance to Micron's counsel, to the effect that the proposed
transfer of the Restricted Securities may be effected without
registration under the Securities Act; or (ii) a "no action"
letter from the SEC and a copy of any request by Intel
(together with all supplements or amendments thereto), which
shall have been provided to Micron at or prior to the time of
first delivery to the SEC's staff, to the effect that the
transfer of such securities without registration will not
result in a recommendation by the staff of the SEC that action
be taken with respect thereto, whereupon Intel shall be
entitled to transfer such Restricted Securities in accordance
with the terms of the notice delivered by Intel to Micron.
(c) In connection with any proposed transfer of
Restricted Securities pursuant to Section 3.1(d) hereof, Intel
shall comply with all applicable requirements of Rule 144
under the Securities Act and the reasonable requirements of
Micron's transfer agent with respect to sales of Restricted
Securities pursuant to Rule 144.
(d) Each certificate evidencing the Restricted
Securities transferred as herein provided (other than a
transfer pursuant to Section 3.1(c)) shall bear the
appropriate restrictive legend set forth (or described) in
Section 3.3(a) above, except that such certificate shall not
bear such restrictive legend if: (i) in the opinion of counsel
for Micron, such legend is not required in order to establish
compliance with any provisions of the Securities Act; (ii) the
Restricted Securities have been held by the holder for more
than two years, and the holder represents to counsel for
Micron that it has not been an "affiliate" (as such term is
defined for purposes of Rule 144) of Micron during the three-
month period prior to the sale and shall not become an
affiliate (as such term is defined for purposes of Rule 144)
of Micron without resubmitting the Restricted Securities for
reimposition of the legend; or (iii) the Restricted Securities
have been sold pursuant to Rule 144 and in compliance with
Section 3.1(d). In addition, each certificate evidencing the
Restricted Securities transferred pursuant to this Section 3
(other than transfers pursuant to Sections 3.1(c) and 3.1(d)
hereof) shall bear the legend set forth in Section 3.2(b)
above.
<PAGE>
3.4 Covenant Regarding Exchange Act Filings. With a view to
making available to Intel the benefits of Rule 144 promulgated
under the Securities Act, and any other rules or regulations of the
SEC which may at any time permit Intel to sell any Restricted
Securities without registration, until the date of termination of
this Agreement, Micron agrees to use commercially reasonable
efforts to file with the SEC in a timely manner all reports and
other documents required to be filed under the Exchange Act.
3.5 Termination. The provisions of this Section 3 (other
than Sections 3.2 and 3.3) shall terminate upon the later to occur
of: (i) the fifth anniversary date of this Agreement and (ii) such
time as Intel (together with all Affiliates of Intel) beneficially
owns in the aggregate Voting Securities of Micron representing less
than five percent (5%) of the Total Voting Power of Micron or upon
the closing or other completion of a Change in Control of Micron.
SECTION 4
REGISTRATION RIGHTS
4.1 Demand Registration.
<PAGE>
(a) If at any time after March 31, 1999, Micron shall
receive from Intel a written request (a "Demand Request") that
Micron register on Form S-3 under the Securities Act (or if
such form is not available, any registration statement form
then available to Micron) Registrable Securities equal to at
least the lesser of two percent (2%) of the Voting Securities
outstanding on the date of such Demand Request and securities
having an aggregate market value of in excess of $100 million
on such date, then Micron shall use commercially reasonable
efforts to cause the Registrable Securities specified in such
Demand Request (the "Demand Registrable Securities") to be
registered as soon as reasonably practicable so as to permit
the offering and sale thereof and, in connection therewith,
shall prepare and file with the SEC as soon as practicable
after receipt of such Demand Request, a registration statement
(a "Demand Registration Statement") to effect such
registration; provided, however, that each such Demand Request
shall: (i) specify the number of Demand Registrable Securities
intended to be offered and sold by Intel pursuant thereto
(which number of Demand Registrable Securities shall not be
less than the lesser of two percent (2%) of the Registrable
Securities outstanding on the date of such Demand Request and
securities having an aggregate market value of in excess of
$100 million on such date); (ii) express the present intention
of Intel to offer or cause the offering of such Demand
Registrable Securities pursuant to such Demand Registration
Statement, (iii) describe the nature or method of distribution
of such Demand Registrable Securities pursuant to such Demand
Registration Statement (including, in particular, whether
Intel plans to effect such distribution by means of an
underwritten offering or other method); and (iv) contain the
undertaking of Intel to provide all such information and
materials and take all such actions as may be required in
order to permit Micron to comply with all applicable
requirements of the Securities Act, the Exchange Act and the
rules and regulations of the SEC thereunder, and to obtain any
desired acceleration of the effective date of such Demand
Registration Statement.
(b) The procedures to be followed by Micron and Intel,
and the respective rights and obligations of Micron and Intel,
with respect to the preparation, filing and effectiveness of
Demand Registration Statements and the distribution of Demand
Registrable Securities pursuant to Demand Registration
Statements under this Section 4.1 are set forth in Section 4.4
hereof.
4.2 Shelf Registration.
<PAGE>
(a) If at any time after March 31, 1999, Micron shall
receive from Intel a written request (a "Shelf Request") that
Micron register pursuant to Rule 415(a)(1)(i) under the
Securities Act (or any successor rule with similar effect) a
delayed offering of all Registrable Securities held by Intel,
then Micron shall use commercially reasonable efforts to cause
the Registrable Securities specified in such Shelf Request
(the "Shelf Registrable Securities") to be registered as soon
as reasonably practicable so as to permit the sale thereof
and, in connection therewith, shall (i) prepare and file with
the SEC as soon as practicable after receipt of such Shelf
Request, a shelf registration statement on Form S-3 relating
to such Shelf Registrable Securities, if such Form S-3 is
available for use by Micron (or any successor form of
registration statement to such Form S-3), to effect such
registration (a "Shelf Registration Statement"), to enable the
distribution of such Shelf Registrable Securities; provided,
however, that each such Shelf Request shall: (i) express the
intention of Intel to offer or cause the offering of such
Shelf Registrable Securities pursuant to such Shelf
Registration Statement on a delayed basis in the future;
(ii) describe the nature or method of the proposed offer and
sale of such Shelf Registrable Securities pursuant to such
Shelf Registration Statement (including, in particular,
whether Intel plans to effect such distribution by means of an
underwritten offering or other method); and (iii) contain the
undertaking of Intel to provide all such information and
materials and take all such actions as may be required in
order to permit Micron to comply with all applicable
requirements of the Securities Act, the Exchange Act and the
rules and regulations of the SEC thereunder, and to obtain any
desired acceleration of the effective date of such Shelf
Registration Statement. Intel shall not be entitled to make
more than one Shelf Request during any three hundred sixty-
five (365) day period.
<PAGE>
(b) It is expressly agreed by the parties that the sole
purpose of Micron filing and maintaining an effective a Shelf
Registration Statement for the delayed offering of Shelf
Registrable Securities by Intel is to make the process of
distributing Registrable Securities by Intel more convenient
for both parties by reducing or eliminating the need to file a
new Demand Registration Statement each time that Intel decides
to sell Registrable Securities. After a Shelf Registration
Statement has been declared effective under the Securities Act
by the SEC, then, upon the written request of Intel (a
"Tranche Request"), Micron shall prepare such amendments to
such Shelf Registration Statement (including post-effective
amendments), if any, and such amendments or supplements to the
prospectus relating to the Registrable Securities to be
offered thereunder pursuant to such Tranche Request (the
"Tranche Registrable Securities"), as is necessary to
facilitate the distribution of such Tranche Registrable
Securities pursuant to such Tranche Request; provided,
however, that such Tranche Request shall: (i) specify the
number of Tranche Registrable Securities intended to be
offered and sold by Intel pursuant thereto (which number of
Tranche Registrable Securities shall not be less than the
lesser of two percent (2%) of the Voting Securities
outstanding on the date of such Tranche Request and securities
having an aggregate market value of in excess of $100 million
on such date); (ii) express the present intention of Intel to
offer or cause the offering of such Tranche Registrable
Securities pursuant to the Shelf Registration Statement,
(iii) describe the nature or method of distribution of such
Tranche Registrable Securities pursuant to the Shelf
Registration Statement (including, in particular, whether
Intel plans to effect such distribution by means of an
underwritten offering or other method); and (iv) contain the
undertaking of Intel to provide all such information and
materials and take all such actions as may be required in
order to permit Micron to comply with all applicable
requirements of the Securities Act, the Exchange Act and the
rules and regulations of the SEC thereunder.
(c) The procedures to be followed by Micron and Intel,
and the respective rights and obligations of Micron and Intel,
with respect to the preparation, filing and effectiveness of
Shelf Registration Statements and the distribution of Tranche
Registrable Securities pursuant to Shelf Registration
Statements under this Section 4.2 are set forth in Section 4.4
hereof.
4.3 Piggyback Registration.
<PAGE>
(a) If at any time after March 31, 1999, Micron shall
determine to register any of its equity or equity-linked
securities (other than registration statements relating to
(i) employee, consultant or distributor compensation or
incentive arrangements (including employee benefit plans),
(ii) acquisitions or any transaction or transactions under
Rule 145 under the Securities Act (or any successor rule with
similar effect), (iii) distributions by principal
stockholders, their Affiliates or transferees (unless
consented to by such principal stockholders, Affiliates or
transferees), or (iv) pursuant to Rule 415 under the
Securities Act), then Micron will promptly give Intel written
notice thereof and include in such Micron-initiated, non-
shelf, registration statement (a "Piggyback Registration
Statement"), and in any underwriting involved therein, all
Registrable Securities (the "Piggyback Registrable
Securities") specified in a written request made by Intel (a
"Piggyback Request") within five (5) business days after
receipt of such written notice from Micron; provided, however,
that nothing in this Section 4.3(a), or any other provision of
this Agreement, shall be construed to limit the absolute right
of Micron, for any reason and in its sole discretion: (i) to
delay, suspend or terminate the filing of any Piggyback
Registration Statement; (ii) to delay the effectiveness of any
Piggyback Registration Statement; (iii) to terminate or reduce
the number of Piggyback Registrable Securities to be
distributed pursuant to any Piggyback Registration Statement
(including, without limitation, pursuant to Section 4.3(c)
hereof); or (iv) to withdraw such Piggyback Registration
Statement.
(b) If the Piggyback Registration Statement of which
Micron gives notice is for an underwritten offering, Micron
shall so advise Intel as a part of the written notice given
pursuant to Section 4.3(a). In such event, the right of Intel
to registration pursuant to this Section 4.3 shall be
conditioned upon the agreement of Intel to participate in such
underwriting and in the inclusion of such Piggyback
Registrable Securities in the underwriting to the extent
provided herein. Intel shall (together with Micron and any
other holders distributing securities in such Piggyback
Registration Statement, if any) enter into an underwriting
agreement (the "Piggyback Underwriting Agreement") in
customary form with the underwriter or underwriters selected
for such underwriting by Micron.
<PAGE>
(c) Notwithstanding any other provision of this
Agreement, if the managing underwriters of any underwritten
offering pursuant to a Piggyback Request determine, in their
sole discretion that, after including all the shares to be
offered by Micron and all the shares of any other Persons
entitled to registration rights with respect to such Piggyback
Registration Statement (pursuant to other agreements with
Micron), marketing factors require a limitation of the number
of Piggyback Registrable Securities to be underwritten, the
managing underwriters of such offering may exclude any and all
of the Piggyback Registrable Securities, provided that such
cut-back is made pro rata with respect to any other securities
proposed to be included in such registration statement
pursuant to "piggy-back" registration rights (a "Piggyback
Market Cut-Back"). If Intel disapproves of the terms of any
such underwriting, it may elect to withdraw therefrom by
written notice to Micron and the managing underwriters. Any
Piggyback Registrable Securities excluded or withdrawn from
such underwriting shall be withdrawn from such Piggyback
Registration Statement.
(d) Except to the extent specifically provided in this
Section 4.3 hereof, the procedures to be followed by Micron
and Intel, and the respective rights and obligations of Micron
and Intel, with respect to the distribution of any Piggyback
Registrable Securities by Intel pursuant to any Piggyback
Registration Statement filed by Micron shall be as set forth
in the Piggyback Underwriting Agreement, or any other
agreement or agreements governing the distribution of such
Piggyback Registrable Securities pursuant to such Piggyback
Registration Statement.
4.4 Demand and Shelf Registration Procedures, Rights and
Obligations. The procedures to be followed by Micron and Intel,
and the respective rights and obligations of Micron and Intel, with
respect to the preparation, filing and effectiveness of Demand
Registration Statements and Shelf Registration Statements,
respectively, and the distribution of Demand Registrable Securities
and Tranche Registrable Securities, respectively, pursuant thereto,
are as follows:
<PAGE>
(a) Intel shall not be entitled to make more than one
Demand Request or Tranche Request during any one hundred
eighty (180) day period (the "180-Day Limitation"); provided,
however, that (i) any Demand Request that: (A) does not result
in the corresponding Demand Registration Statement being
declared effective by the SEC; (B) is withdrawn by Intel
following the imposition of a stop order by the SEC with
respect to the corresponding Demand Registration Statement;
(C) is withdrawn by Intel as a result of the exercise by
Micron of its suspension rights pursuant to Sections 4.4(e) or
(f) hereof; or (D) is withdrawn by Intel as a result of a
Demand/Tranche Market Cut-Back (as defined in Section 4.4(d)
hereof); and (ii) any Tranche Request that: (A) is withdrawn
by Intel following the imposition of a stop order by the SEC
with respect to the corresponding Shelf Registration
Statement; (B) is withdrawn by Intel as a result of the
exercise by Micron of its suspension rights pursuant to
Sections 4.4(e) or (f) hereof; or (C) s withdrawn by Intel as
a result of a Demand/Tranche Market Cut-Back, shall not count
for the purposes of determining compliance with the 180-Day
Limitation. Any Demand Request or Tranche Request that is
withdrawn by Intel for any reason other than as set forth in
the previous sentence shall count for purposes of determining
compliance with the 180-Day Limitation. Piggyback Requests
shall not count for purposes of determining compliance with
the 180-Day Limitation regardless of whether a Piggyback
Registration Statement is filed, declared effective or
withdrawn or whether any distribution of Piggyback Registrable
Securities is effected, terminated or cut-back (pursuant to
Section 4.3(c) hereof, or otherwise). Intel shall not be
entitled to offer or sell any securities pursuant to a Demand
Registration Statement or Shelf Registration Statement unless
and until, following a Demand Request or a Tranche Request, as
applicable, Micron has made all required filings with the SEC
with respect to the distribution of Registrable Securities
contemplated by such Demand Request or Tranche Request, as
applicable, such filings have become effective and Micron has
notified Intel of the foregoing and that no Suspension
Condition then exists.
<PAGE>
(b) Micron shall use commercially reasonable efforts to
cause each Demand Registration Statement and Shelf
Registration Statement to be declared effective promptly and
to keep such Demand Registration Statement and Shelf
Registration Statement continuously effective until the
earlier to occur of: (i) the sale or other disposition of the
Registrable Securities so registered; (ii) (X) in the case of
a firmly committed, underwritten offering, sixty (60) days
after (A) if pursuant to a Demand Registration Statement, the
effective date of any Demand Registration Statement or (B) if
pursuant to a Tranche Request, the date of the final
prospectus used to confirm sales in connection with the
underwritten offering of Tranche Registrable Securities, and
(Y) in the case of all other plans of distribution, (A) if
pursuant to a Demand Registration Statement, fifteen (15)
business days after the effective date of such Demand
Registration Statement or (B) if pursuant to a Tranche
Request, fifteen (15) business days after the earlier of the
effectiveness of the amendment to the Shelf Registration
Statement or the filing of the amendment or supplement to the
prospectus included in such registration statement required to
facilitate such distribution and the date of the notice
required by the last sentence of Section 4.4(a) hereof if no
such amendment or supplement is so required; and (iii) the
termination of Intel's registration rights pursuant to
Section 4.10 hereof. Micron shall prepare and file with the
SEC such amendments and supplements to each Demand
Registration Statement and Shelf Registration Statement and
each prospectus used in connection therewith as may be
necessary to make and to keep such Demand Registration
Statement and Shelf Registration Statement effective and to
comply with the provisions of the Securities Act with respect
to the sale or other disposition of all Registrable Securities
proposed to be distributed pursuant to such Demand
Registration Statement and Shelf Registration Statement until
the earlier to occur of: (i) the sale or other disposition of
the Registrable Securities so registered; (ii) (X) in the case
of a firmly committed, underwritten offering, sixty (60) days
after (A) if pursuant to a Demand Registration Statement, the
effective date of any Demand Registration Statement or (B) if
pursuant to a Tranche Request, the date of the final
prospectus used to confirm sales in connection with the
underwritten offering of Tranche Registrable Securities, and
(Y) in the case of all other plans of distribution, (A) if
pursuant to a Demand Registration Statement, fifteen (15)
business days after the effective date of such Demand
Registration Statement or (B) if pursuant to a Tranche
Request, fifteen (15) business days after the earlier of the
effectiveness of the amendment to the Shelf Registration
Statement or the filing of the amendment or supplement to the
prospectus included in such registration statement required to
facilitate such distribution and the date of the notice
required by the last sentence of Section 4.4(a) hereof if no
such amendment or supplement is so required; and (iii) the
termination of Intel's registration rights pursuant to
Section 4.10 hereof.
<PAGE>
(c) In connection with any underwritten offering
pursuant to a Demand Registration Statement or a Shelf
Registration Statement which Intel has requested be
underwritten, Micron, on the one hand, and Intel, on the other
hand, shall each select one investment banking firm to serve
as co-manager of such offering. The co-manager selected by
Micron shall be subject to the prior approval of Intel, which
approval shall not be unreasonably withheld, and the co-
manager selected by Intel shall be subject to the prior
approval of Micron, which approval shall not be unreasonably
withheld. Each of the co-managers so selected by Micron and
Intel are hereinafter collectively referred to as the
"Demand/Tranche Managing Underwriters." The Demand/Tranche
Underwriter selected by Intel shall be the lead Demand/Tranche
Managing Underwriter, whose responsibilities shall include
running the "books" for any offering. Micron shall, together
with Intel, enter into an underwriting agreement with the
Demand/Tranche Managing Underwriters, which agreement shall
contain representations, warranties, indemnities and
agreements then customarily included by an issuer in
underwriting agreements with respect to secondary
distributions under demand registration statements or shelf
registration statements, as the case may be, and shall
stipulate that the Demand/Tranche Managing Underwriters will
receive equal commissions and fees and other remuneration in
connection with the distribution of any Demand Registrable
Securities or Tranche Registrable Securities thereunder.
(d) Notwithstanding any other provision of this
Agreement, in connection with any underwritten offering, the
number of Demand Registrable Securities or Tranche Registrable
Securities proposed to be distributed by Intel pursuant to any
Demand Request or Tranche Request may be limited by the
Demand/Tranche Managing Underwriters if such Demand/Tranche
Managing Underwriters determine that the sale of such Demand
Registrable Securities or Tranche Registrable Securities would
significantly and adversely affect the market price of the
Common Stock (a "Demand/Tranche Market Cut-Back"). If Intel
disapproves of the terms of any proposed underwritten offering
under a Demand Registration Statement or a Shelf Registration
Statement (including, without limitation, any reduction in the
number of Demand Registrable Securities or Tranche Registrable
Securities, as the case may be, to be sold by Intel thereunder
pursuant to this Section 4.4(d)), Intel may elect to withdraw
therefrom by written notice to Micron and the Demand/Tranche
Managing Underwriters. Any Demand Registrable Securities
excluded or withdrawn from such underwriting shall also be
withdrawn from any applicable Demand Registration Statement.
<PAGE>
(e) Notwithstanding any other provisions of this
Agreement, in the event that Micron receives a Demand Request,
Shelf Request or Tranche Request at a time when Micron
(i) shall have filed, or has a bona fide intention to file, a
registration statement with respect to a proposed public
offering of equity or equity-linked securities or (ii) has
commenced, or has a bona fide intention to commence, a public
offering of equity or equity-linked securities pursuant to an
existing effective shelf or other registration statement, then
Micron shall be entitled to suspend, for a period of up to
ninety (90) days after the receipt by Micron of such Demand
Request, Shelf Request or Tranche Request, the filing of any
Demand Registration Statement or Shelf Registration Statement
or the implementation of any Tranche Request.
<PAGE>
(f) Notwithstanding any other provision of this
Agreement, in the event that Micron determines that: (i) non-
public material information regarding Micron exists, the
immediate disclosure of which would be significantly
disadvantageous to Micron; (ii) the prospectus constituting a
part of any Demand Registration Statement or Shelf
Registration Statement covering the distribution of any Demand
Registrable Securities or Tranche Securities contains an
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; or (iii) an
offering of Demand Registrable Securities or Tranche
Registrable Securities would materially interfere with any
proposed material acquisition, disposition or other similar
corporate transaction or event involving Micron (each of the
events or conditions referred to in clauses (i), (ii) and
(iii) of this sentence is hereinafter referred to as a
"Suspension Condition"), then Micron shall have the right to
suspend the filing or effectiveness of any Demand Registration
Statement or Shelf Registration Statement or to suspend any
distribution of Demand Registrable Securities or Tranche
Registrable Securities pursuant to any effective Demand
Registration Statement or Shelf Registration Statement for so
long as such Suspension Condition exists. Micron will as
promptly as practicable provide written notice to Intel when a
Suspension Condition arises and when it ceases to exist. Upon
receipt of notice from Micron of the existence of any
Suspension Condition, Intel shall forthwith discontinue
efforts to: (i) file or cause any Demand Registration
Statement or Shelf Registration Statement to be declared
effective by the SEC (in the event that such Demand
Registration Statement or Shelf Registration Statement has not
been filed, or has been filed but not declared effective, at
the time Intel receives notice that a Suspension Condition has
arisen); or (ii) offer or sell Demand Registrable Securities
or Tranche Registrable Securities (in the event that such
Demand Registration Statement or Shelf Registration Statement
has been declared effective at the time Intel receives notice
that a Suspension Condition has arisen). In the event that
Intel had previously commenced or was about to commence the
distribution of Demand Registrable Securities or Tranche
Registrable Securities pursuant to a prospectus under an
effective Demand Registration Statement or Shelf Registration
Statement, then Micron shall, as promptly as practicable after
the Suspension Condition ceases to exist, make available to
Intel (and to each underwriter, if any, participating in such
distribution) an amendment or supplement to such prospectus.
If so directed by Micron, Intel shall deliver to Micron all
copies, other than permanent file copies then in Intel's
possession, of the most recent prospectus covering such Demand
Registrable Securities or Tranche Registrable Securities at
the time of receipt of such notice.
<PAGE>
(g) Notwithstanding any other provision of this
Agreement, Micron shall not be permitted to postpone (i) the
filing or effectiveness of any Demand Registration Statement
or Shelf Registration Statement or (ii) the distribution of
any Demand Registrable Securities or Tranche Registrable
Securities pursuant to an effective Demand Registration
Statement or an effective Shelf Registration Statement
pursuant to Sections 4.4(e), 4.4(f) or 4.9(a) hereof for an
aggregate of more than one hundred thirty-five (135) days in
any one hundred eighty day (180) day period (including any
market standoff periods applicable to Intel pursuant to
Section 4.9(a) hereof); provided, however, that in the event
that any Intel Pooling Transaction Lock-Up (as defined in
Section 4.9(a) hereof) would expire by its terms on a date
that would extend beyond the one hundred thirty-five (135) day
limitation, then Micron shall have the right to (i) postpone
the filing or effectiveness of any Demand Registration
Statement or Shelf Registration Statement or (ii) the
distribution of any Demand Registrable Securities or Tranche
Registrable Securities pursuant to an effective Demand
Registration Statement or an effective Shelf Registration
Statement until such time as such Intel Pooling Transaction
Lock-Up expires.
(h) Micron shall promptly notify Intel of any stop order
issued or, to Micron's knowledge, threatened to be issued by
the SEC with respect to any Demand Registration Statement or
Shelf Registration Statement as to which a Tranche Request is
pending, and will use its best efforts to prevent the entry of
such stop order or to remove it if entered at the earliest
possible date.
(i) Micron shall furnish to Intel (and any underwriters
in connection with any underwritten offering) such number of
copies of any prospectus (including any preliminary prospectus
and any amended or supplemented prospectus), in conformity
with the requirements of the Securities Act, as Intel (and
such underwriters) shall reasonably request in order to effect
the offering and sale of any Demand Registrable Securities or
Tranche Registrable Securities to be offered and sold, but
only while Micron shall be required under the provisions
hereof to cause the Demand Registration Statement or Shelf
Registration Statement pursuant to which such Demand
Registrable Securities or Tranche Registrable Securities are
intended to be distributed to remain current.
<PAGE>
(j) Micron shall use commercially reasonable efforts to
register or qualify the Demand Registrable Securities and
Tranche Registrable Securities covered by each Demand
Registration Statement and Shelf Registration Statement,
respectively, under the state securities or "blue sky" laws of
such states as Intel shall reasonably request, maintain any
such registration or qualification current, until the earlier
to occur of: (i) the sale or other disposition of the
Registrable Securities so registered; (ii) (X) in the case of
a firmly committed, underwritten offering, sixty (60) days
after (A) if pursuant to a Demand Registration Statement, the
effective date of any Demand Registration Statement or (B) if
pursuant to a Tranche Request, the date of the final
prospectus used to confirm sales in connection with the
underwritten offering of Tranche Registrable Securities, and
(Y) in the case of all other plans of distribution, (A) if
pursuant to a Demand Registration Statement, fifteen (15)
business days after the effective date of such Demand
Registration Statement or (B) if pursuant to a Tranche
Request, fifteen (15) business days after the earlier of the
effectiveness of the amendment to the Shelf Registration
Statement or the filing of the amendment or supplement to the
prospectus included in such registration statement required to
facilitate such distribution and the date of the notice
required by the last sentence of Section 4.4(a) hereof if no
such amendment or supplement is so required; and (iii) the
termination of Intel's registration rights pursuant to
Section 4.10 hereof; provided, however, that Micron shall not
be required to take any action that would subject it to the
general jurisdiction of the courts of any jurisdiction in
which it is not so subject or to qualify as a foreign
corporation in any jurisdiction where Micron is not so
qualified.
(k) Micron shall furnish to Intel and to each
underwriter engaged in an underwritten offering of Demand
Registrable Securities or Tranche Registrable Securities, a
signed counterpart, addressed to Intel or such underwriter, of
(i) an opinion or opinions of counsel to Micron (with respect
to Micron and securities law compliance by Micron) and (ii) a
comfort letter or comfort letters from Micron's independent
public accountants, each in customary form and covering such
matters of the type customarily covered by opinions or comfort
letters, as the case may be, as Intel or the managing
underwriters may reasonably request.
(l) Micron shall use commercially reasonable efforts to
make appropriate members of its management reasonably
available for due diligence purposes, "road show"
presentations and analyst presentations in connection with any
distributions of Demand Registrable Securities or Tranche
Registrable Securities pursuant to a Demand Registration
Statement or a Shelf Registration Statement.
(m) Micron shall use commercially reasonable efforts to
cause all Demand Registrable Securities and Tranche
Registrable Securities to be listed on each securities
exchange on which similar securities of Micron are then
listed.
<PAGE>
(n) Micron shall make generally available to its
securityholders, as soon as reasonably practicable, an
earnings statement covering a period of twelve (12) months,
beginning three months after the effective date of any Demand
Registration Statement relating to the distribution of Demand
Registrable Securities or the date of any final prospectus
used to confirm sales in connection with any offering of
Tranche Registrable Securities, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act.
(o) Micron shall take all such other actions either
reasonably necessary or desirable to permit the Registrable
Securities held by Intel to be registered and disposed of in
accordance with the methods of disposition described herein.
4.5 Expenses.
(a) All of the out-of-pocket costs and expenses incurred
by Micron in connection with any registration pursuant to
Sections 4.1 and 4.2 (up to $100,000 in the case of a Demand
Registration Statement, $75,000 in the case of a Shelf
Registration Statement and $50,000 in the case of any
amendments or supplements required in connection with a
Tranche Request, plus, in all instances, the actual amount of
any filing fees) shall (subject to Section 4.7) be borne by
Intel; provided that Intel shall not be required to reimburse
Micron for compensation of Micron's officers and employees,
regular audit expenses, and normal corporate costs incurred in
connection with such registration. The costs and expenses of
any such registration shall include, without limitation, the
reasonable fees and expenses of Micron's counsel and its
accountants and all other out-of-pocket costs and expenses of
Micron incident to the preparation, printing and filing of the
registration statement and all amendments and supplements
thereto and the cost of furnishing copies of each preliminary
prospectus, each final prospectus and each amendment or
supplement thereto to underwriters, dealers and other
purchasers of the securities so registered, the costs and
expenses incurred in connection with the qualification of such
securities so registered under the securities or "blue sky"
laws of various jurisdictions, the fees and expenses of
Micron's transfer agent and all other costs and expenses of
complying with the provisions of this Section 4 with respect
to such registration (collectively, the "Registration
Expenses").
(b) Micron shall pay all Registration Expenses incurred
by Micron in connection with any registration statements that
are initiated pursuant to Section 4.3 of this Agreement, other
than incremental filing fees associated with the inclusion of
the Registrable Securities in the registration statement.
Intel shall pay all expenses incurred on its behalf with
respect to any registration pursuant to Section 4.3,
including, without limitation, any counsel for Intel and all
underwriting discounts and selling commissions with respect to
the Registrable Securities sold by it pursuant to such
registration statement.
4.6 Indemnification.
<PAGE>
(a) In the case of any offering registered pursuant to
this Section 4, Micron hereby indemnifies and agrees to hold
harmless Intel (and its officers and directors), any
underwriter (as defined in the Securities Act) of Registrable
Securities offered by Intel, and each Person, if any, who
controls Intel or any such underwriter within the meaning of
Section 15 of the Securities Act against any losses, claims,
damages or liabilities, joint or several, to which any such
Persons may be subject, under the Securities Act or otherwise,
and to reimburse any of such Persons for any legal or other
expenses reasonably incurred by them in connection with
investigating any claims or defending against any actions,
insofar as such losses, claims, damages or liabilities arise
out of or are based upon (a) any untrue statement or alleged
untrue statement of a material fact contained in the
registration statement under which such Registrable Securities
were registered under the Securities Act pursuant to this
Section 4, the prospectus contained therein (during the period
that Micron is required to keep such prospectus current), or
any amendment or supplement thereto, or the omission or
alleged omission to state therein (if so used) a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances in which
they were made, not misleading or (b) any violation or alleged
violation by Micron of the Securities Act, the Exchange Act,
any federal or state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any
federal or state securities law in connection with the
offering covered by such registration statement, except
insofar as such losses, claims, damages or liabilities arise
out of or are (i) based upon any such untrue statement or
omission or alleged untrue statement or omission made in
reliance upon information furnished to Micron in writing by
Intel or any underwriter for Intel specifically for use
therein, or (ii) made in any preliminary prospectus, and the
prospectus contained in the registration statement as declared
effective or in the form filed by Micron with the SEC pursuant
to Rule 424 under the Securities Act shall have corrected such
statement or omission and a copy of such prospectus shall not
have been sent or otherwise delivered to such Person at or
prior to the confirmation of such sale to such Person.
<PAGE>
(b) By requesting registration under this Section 4,
Intel agrees, if Registrable Securities held by Intel are
included in the securities as to which such registration is
being effected, and each underwriter shall agree, in
substantially the same manner and to substantially the same
extent as set forth in the preceding paragraph, to indemnify
and to hold harmless Micron and its directors and officers and
each Person, if any, who controls Micron within the meaning of
the Securities Act against any losses, claims, damages or
liabilities, joint or several, to which any of such Persons
may be subject under the Securities Act or otherwise, and to
reimburse any of such Persons for any legal or other expenses
incurred in connection with investigating or defending against
any such losses, claims, damages or liabilities, but only to
the extent it arises out of or is based upon (a) an untrue
statement or alleged untrue statement or omission or alleged
omission of a material fact in any registration statement
under which the Registrable Securities were registered under
the Securities Act pursuant to this Section 4, any prospectus
contained therein, or any amendment or supplement thereto,
which was based upon and made in conformity with information
furnished to Micron in writing by Intel or such underwriter
expressly for use therein or (b) any violation or alleged
violation by Intel of the Securities Act, the Exchange Act,
any federal or state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any
federal or state securities law in connection with the
offering covered by such registration statement.
(c) Each party entitled to indemnification under this
Section 4.6 (the "Indemnified Party") shall give notice to the
party required to provide indemnification (the "Indemnifying
Party") promptly after such Indemnified Party has actual
knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense
of any such claim or any litigation resulting therefrom,
provided that counsel for the Indemnifying Party, who shall
conduct the defense of such claim or litigation, shall be
approved by the Indemnified Party (whose approval shall not be
unreasonably withheld), and the Indemnified Party may
participate in such defense at its own expense[, provided,
that that an Indemnified Party shall have the right to retain
its own counsel, with the fees and expenses to be paid by the
Indemnifying Party, to the extent that representation of such
Indemnified Party by the counsel retained by the Indemnifying
Party would be inappropriate due to actual or potential
conflict of interests between such Indemnified Party and any
other party represented by such counsel in such proceeding],
and provided further that the failure of any Indemnified Party
to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 4
unless such failure resulted in actual material detriment to
the Indemnifying Party. No Indemnifying Party, (i) in the
defense of any such claim or litigation, shall, except with
the consent of each Indemnified Party, which consent shall not
be unreasonably withheld, consent to entry of any judgment or
enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation, or
(ii) shall be liable for amounts paid in any settlement if
such settlement is effected without the consent of the
Indemnifying Party, which consent shall not be unreasonably
withheld.
<PAGE>
(d) In order to provide for just and equitable
contribution to joint liability under the Securities Act or
the Exchange Act in any case in which either (i) any Person
exercising rights under this Agreement, or any controlling
person of any such Person, makes a claim for indemnification
pursuant to this Section 4 but it is judicially determined (by
the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or
the denial of the last right of appeal) that such
indemnification may not be enforced in such case
notwithstanding the fact that this Section 4 provides for
indemnification in such case, or (ii) contribution under the
Securities Act or the Exchange Act may be required on the part
of any such selling Person or any such controlling Person in
circumstances for which indemnification is provided under this
Section 4; then, and in each such case, Micron and such Person
will contribute to the aggregate losses, claims, damages or
liabilities to which they may be subject (after contribution
from others) in such proportion so that such Person is
responsible for the portion represented by the percentage that
the public offering price of its Registrable Securities
offered by and sold under the registration statement bears to
the public offering price of all securities offered by and
sold under such registration statement, and Micron and other
selling Persons are responsible for the remaining portion;
provided, however, that, in any such case: (A) no such Person
will be required to contribute any amount in excess of the
public offering price of all such Registrable Securities
offered and sold by such Person pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) will be entitled to contribution from any
person or entity who was not guilty of such fraudulent
misrepresentation.
4.7 Issuances by Micron or Other Holders. As to each
registration or distribution referred to in Sections 4.1 and 4.2,
additional shares of the Common Stock to be sold for the account of
Micron or other holders may be included therein, provided that the
inclusion of such securities in such registration or distribution
may be conditioned or restricted if, in the opinion of the
Demand/Tranche Managing Underwriters, marketing factors require a
limitation of the number of shares to be underwritten. The
Registration Expenses incurred by Micron, Intel and any other
holders participating in such registration or distribution shall be
borne by Micron, Intel and any other holders participating in such
registration or distribution in proportion to the aggregate number
of shares to be sold by Micron, Intel and such other holders.
4.8 Information by Intel. Intel shall furnish to Micron such
information regarding Intel in the distribution of Registrable
Securities proposed by Intel as Micron may reasonably request in
writing and as shall be required in connection with any
registration, qualification or compliance referred to in this
Section 4.
4.9 Market Standoff Agreements.
<PAGE>
(a) In connection with the public offering by Micron of
any of its securities, Intel agrees that, upon the request the
underwriters managing any underwritten offering of Micron's
securities, Intel shall agree in writing (the "Intel Public
Offering Lock-Up") that neither Intel (nor any Affiliate of
Intel) will, directly or indirectly, offer to sell, contract
to sell, make any short sale of, or otherwise sell, dispose
of, loan, gift, pledge or grant any options or rights with
respect to, any securities of Micron (other than those
included in such registration statement, if any) now or
hereafter acquired by Intel (or any Affiliate of Intel) or
with respect to which Intel (or any Affiliate of Intel) has or
hereafter acquires the power of disposition without the prior
written consent of Micron and such underwriters for such
period of time (not to exceed fourteen (14) days prior to the
date such offering is expected to commence and ninety (90)
days after the date of the final prospectus delivered to the
underwriters for use in confirming sales in such offering) as
may be requested by Micron and the underwriters, except that
Intel and its Affiliates shall be permitted to enter into
transactions that have the effect of maintaining or continuing
pre-existing Hedging Transaction positions by continuing,
renewing or replacing any such positions on substantially
equivalent terms; provided, however, that in no event shall
Intel (or any Affiliate of Intel) be required to enter into
such an agreement more than once during any twelve (12) month
period. Furthermore, if Intel is an Affiliate of Micron,
Intel agrees that, at the request of Micron, Intel shall agree
in writing (the "Intel Pooling Transaction Lock-Up") that,
except for transactions that have the effect of maintaining or
continuing pre-existing Hedging Transactions positions which
transactions Micron's independent accountants determine (which
determination shall be conclusive) may be permitted without
affecting the accounting of a proposed business combination as
a pooling of interests, neither Intel (nor any Affiliate of
Intel) shall, directly or indirectly, offer to sell, contract
to sell, make any short sale of, or otherwise sell, dispose
of, loan, pledge or grant any options or rights with respect
to, any securities of Micron now or hereafter acquired
directly by Intel (or any Affiliate of Intel) or with respect
to which Intel (or any Affiliate of Intel) has or hereafter
acquires the power of disposition without the prior written
consent of Micron for such period of time as shall be
necessary for Micron to complete any business combination
transaction in the form of a pooling of interests; provided
that Micron's independent accountants shall have concluded,
after reasonable inquiry, that, at the relevant time with
respect to such proposed pooling of interests transaction,
Intel is or was an "affiliate" of Micron for purposes of the
accounting rules governing pooling of interests transactions.
Intel agrees that Micron may instruct its transfer agent to
place stop-transfer notations in its records to enforce the
provisions of the Intel Public Offering Lock-Up and the Intel
Pooling Transaction Lock-Up contained in this Section 4.9(a).
<PAGE>
(b) In connection with any proposed public offering by
Intel of any Registrable Securities, Micron agrees that, upon
the request of Intel or the underwriters managing any
underwritten offering of Intel's securities, Micron shall
agree in writing (the "Micron Public Offering Lock-Up") that
neither Micron (nor any Affiliate of Micron) will, directly or
indirectly, offer to sell, contract to sell, make any short
sale of, or otherwise sell, dispose of, loan, gift, pledge or
grant any options or rights with respect to, any securities of
Micron (other than those included in such registration
statement, if any, or grants of stock options or issuances of
Common Stock upon the exercise of outstanding stock options
under Micron's existing employee benefit plans) now or
hereafter acquired by Micron (or any Affiliate of Micron) or
with respect to which Micron (or any Affiliate of Micron) has
or hereafter acquires the power of disposition without the
prior written consent of Intel and such underwriters for such
period of time (not to exceed fourteen (14) days prior to the
date such offering is expected to commence and ninety (90)
days) after the date of the final prospectus delivered to the
underwriters for use in confirming sales in such offering) as
may be requested by Intel and the underwriters; provided,
however, that neither Micron (nor any Affiliate of Micron)
shall bound by such Micron Public Offering Lock-Up more than
once during any 180-day period.
4.10 Termination. The provisions of this Section 4 (other than
Sections 4.5 and 4.6) shall terminate upon the earlier to occur of:
(i) the fifth anniversary date of this Agreement, (ii) such time as
Intel (and any Affiliates of Intel) beneficially own in the
aggregate less than 5,000,000 shares of Common Stock (including all
Shares issuable upon exercise or conversion of Rights or Class A
Common Stock), and (iii) in the case of Sections 4.1 through 4.4,
Section 4.7 and Section 4.8, such time as Intel may sell all
securities of Micron acquired pursuant to the Securities Purchase
Agreement which it which it continues to own within a ninety (90)
day period under Rule 144.
<PAGE>
SECTION 5
BOARD REPRESENTATION
5.1 Board of Directors. Upon the written request of Intel,
Micron shall use reasonable efforts to cause one person designated
by Intel and reasonably acceptable to the Chief Executive Officer
of Micron to be elected to the Micron Board of Directors (either by
creating a vacancy on the Board of Directors or including such
Person on the slate at Micron's next annual meeting of
stockholders). For purposes of this Section 6.1, reasonable bases
for rejecting a proposed nominee include, among others, concerns
about competence, failure to have significant and direct experience
in or with the semiconductor memory business, business or personal
conflicts (actual or potential), and evidence of business or
personal relationships with existing or former directors or
executive officers, evidencing an inability to function on a
congenial basis with any existing directors. Any nominee who is an
employee or officer of Intel or of any Affiliate of Intel will be
an officer of Intel holding the position of corporate vice
president or higher.
5.2 Termination. The provisions of this Section 5 shall
terminate on the earlier of (i) the fifth anniversary of the date
of this Agreement; (ii) at such time as Intel (together with all
Affiliates of Intel) beneficially owns in the aggregate Transaction
Related Securities of Micron representing less than five percent
(5%) of the Total Voting Power of Micron or upon the closing or
other completion of a Change in Control of Micron, or (iii) upon
exercise of the Conversion Adjustment in accordance with
Section 4.b.3 of the Certificate of Amendment or Section 7 of the
Stock Rights Agreement (notwithstanding settlement of any such
adjustment with cash).
SECTION 6
MISCELLANEOUS
6.1 Governing Law. This Agreement shall be governed in all
respects by the laws of the State of Delaware as applied to
contracts entered into solely between residents of, and to be
performed entirely within, such state.
<PAGE>
6.2 Successors and Assigns. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. This Agreement may not be
assigned by a party without the prior written consent of the other
party; provided that, without the consent of Micron, Intel may
assign this Agreement (and the rights and obligations hereunder) to
any Qualified Subsidiary in connection with a transfer of Voting
Securities of Micron to such Affiliate of Intel pursuant to
Section 3.1(b), and without the consent of Intel, Micron may assign
all or part of this Agreement (and the rights and obligations
hereunder) to the successor or an assignee of all or substantially
all of Micron's business; provided that, in each case, such
assignee expressly assumes the relevant obligations of this
Agreement (by a written instrument delivered to the other party, in
form and substance reasonably acceptable to it) and,
notwithstanding such assignment, the parties hereto shall each
continue to be bound by all of their respective obligations
hereunder. This Agreement is not intended and shall not be
construed to create any rights or remedies in any parties other
than Intel and Micron and no Person shall assert any rights as
third party beneficiary hereunder.
6.3 Entire Agreement; Amendment. This Agreement contains the
entire understanding and agreement between the parties with regard
to the subject matter hereof and thereof and supersedes all prior
agreements and understandings among the parties relating to the
subject matter hereof. Neither this Agreement nor any term hereof
may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of
any such amendment, waiver, discharge or termination is sought.
6.4 Notices and Dates.
(a) All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be delivered personally (including by courier) or given
by facsimile transmission to the parties at the following
addresses (or to such other address as a party may have
specified by notice given to the other pursuant to this
provision) and shall be deemed given when so received:
if to Micron, to:
Micron, Inc.
8000 South Federal Way
Boise, Idaho 83716-9632
Attention: Roderic W. Lewis, Esq.
General Counsel
Telephone: (208) 368-4517
Facsimile: (208) 368-4540
with a copy to:
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, California 94304
Attention: John A. Fore, Esq.
Telephone: (650) 493-9300
Facsimile: (650) 493-6811
<PAGE>
if to Intel, to:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attention: Treasury Portfolio Manager
Facsimile: (408) 765-1859
with a copy to:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attention: General Counsel
Facsimile: (408) 765-6038
All such notices, requests and other communications shall be deemed
received on the date of receipt by the recipient thereof if
received prior to 5 p.m. in the place of receipt and such day is a
business day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received
until the next succeeding business day in the place of receipt.
Each person making a communication hereunder by facsimile shall
promptly confirm by telephone to the person to whom such
communication was addressed each communication made by it by
facsimile pursuant hereto but the absence of such confirmation
shall not affect the validity of any such communication. A party
may change or supplement the addresses given above, or designate
additional addresses, for purposes of this Section 6.4 by giving
the other party written notice of the new address in the manner set
forth above.
<PAGE>
(b) In the event that any date provided for in this
Agreement falls on a Saturday, Sunday or legal holiday, such
date shall be deemed extended to the next business day.
6.5 Language Interpretation. In the interpretation of this
Agreement, unless the context otherwise requires, (a) words
importing the singular shall be deemed to import the plural and
vice versa, (b) words denoting gender shall include all genders,
(c) references to persons shall include corporations or other
entities and vice versa, and (d) references to parties, sections,
schedules, paragraphs and exhibits shall mean the parties,
sections, schedules, paragraphs and exhibits of and to this
Agreement, unless otherwise indicated by the context.
6.6 Table of Contents; Titles; Headings. The table of
contents and section headings of this Agreement are for reference
purposes only and are to be given no effect in the construction or
interpretation of this Agreement. All references herein to
Sections, unless otherwise identified, are to Sections of this
Agreement.
6.7 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the
same agreement, and shall become a binding agreement when one or
more counterparts have been signed by each party and delivered to
the other party.
6.8 Severability. If any provision of this Agreement or
portion thereof is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated.
6.9 Injunctive Relief. Intel, on the one hand, and Micron,
on the other, acknowledge and agree that irreparable damage may
occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties
shall be entitled to seek an injunction or injunctions to prevent
or cure breaches of the provisions of this Agreement and to enforce
specific performance of the terms and provisions hereof in any
court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which
they may be entitled at law or equity.
<PAGE>
6.10 Dispute Resolution. The parties agree to negotiate in good
faith to resolve any dispute between them regarding this Agreement.
If the negotiations do not resolve the dispute to the reasonable
satisfaction of both parties, then each party shall nominate one
senior officer of the rank of Vice President or higher as its
representative. These representatives shall, within thirty (30)
days of a written request by either party to call such a meeting,
meet in person and alone (except for one assistant for each party)
and shall attempt in good faith to resolve the dispute. If the
disputes cannot be resolved by such senior managers in such
meeting, the parties agree that they shall, if requested in writing
by either party, meet within thirty (30) days after such written
notification for one day with an impartial mediator and consider
dispute resolution alternatives other than litigation. If an
alternative method of dispute resolution is not agreed upon within
thirty (30) days after the one day mediation, either party may
begin litigation proceedings. This procedure shall be a
prerequisite before taking any additional action hereunder.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective authorized officers as of the
date aforesaid.
MICRON TECHNOLOGY, INC.,
a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
INTEL CORPORATION,
a Delaware corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
[Signature Page to Securities Rights and Restrictions Agreement]
Exhibit 4
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE ISSUER AS TO THE AVAILABILITY OF AN
EXEMPTION FROM REGISTRATION. THE SECURITIES REPRESENTED BY THIS
INSTRUMENT ARE SUBJECT TO RESTRICTIONS ON TRANSFER, INCLUDING ANY
SALE, PLEDGE OR OTHER HYPOTHECATION, SET FORTH IN AN AGREEMENT
BETWEEN THE ISSUER AND INTEL CORPORATION, A COPY OF WHICH AGREEMENT
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF
RECORD OF THIS INSTRUMENT TO THE SECRETARY OF THE COMPANY AT ITS
PRINCIPAL EXECUTIVE OFFICES.
CONFIDENTIAL
CERTAIN INFORMATION HAS BEEN REDACTED.
CONFIDENTIAL TREATMENT REQUIRED.
STOCK RIGHTS AGREEMENT
This STOCK RIGHTS AGREEMENT is dated as of October 19,
1998 (this "Agreement") and entered into by and between Micron
Technology, Inc., a Delaware corporation (the "Company"), and Intel
Corporation, a Delaware corporation ("Intel"). All capitalized
terms used but not defined herein shall have the meanings ascribed
to them in the Securities Purchase Agreement (as hereinafter
defined).
WHEREAS, pursuant to a Securities Purchase Agreement,
dated as of October 15, 1998 (the "Securities Purchase Agreement"),
by and between the Company and Intel, the Company is issuing and
selling to Intel, in consideration of the payment of five hundred
million dollars ($500 million), certain stock rights, which provide
Intel the right to acquire, for no additional consideration, shares
of Class A Common Stock or Common Stock of the Company;
WHEREAS, the Company proposes to issue to Intel certain
rights (the "Rights") to purchase up to an aggregate of 15,810,277
shares (subject to adjustment) of Class A Common Stock or Common
Stock (the shares of Class A Common Stock, Common Stock and other
securities issuable upon exercise of the Rights being referred to
herein as the "Rights Shares"); and
WHEREAS, the Company and Intel are concurrently entering
into a Securities Rights and Restrictions Agreement, dated as of
the date hereof (the "Rights and Restrictions Agreement"), pursuant
to which the Company and Intel have agreed, among other things, to
certain rights and restrictions with respect to the transfer of the
Rights and Rights Shares.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereto agree as
follows:
<PAGE>
SECTION 1. Rights Certificates. The Company will
issue and deliver to Intel a certificate or certificates evidencing
the Rights (the "Rights Certificates") pursuant to and in
accordance with the terms of the Securities Purchase Agreement.
Such certificate or certificates shall be substantially in the form
set forth as Exhibit A attached hereto. Rights Certificates shall
be dated the date of issuance by the Company.
SECTION 2. Execution of Rights Certificates. Rights
Certificates shall be signed on behalf of the Company by its Chief
Executive Officer, President or a Vice President and attested by
its Secretary or an Assistant Secretary.
SECTION 3. Registration. The Company shall number
and register the Rights Certificates in a register (the "Rights
Register") as they are issued. The Company may deem and treat the
registered holder(s) from time to time of the Rights Certificates
(the "Holders") as the absolute owner(s) thereof (notwithstanding
any notation of ownership or other writing thereon made by anyone)
for all purposes and shall not be affected by any notice to the
contrary. The Rights shall be registered initially in such name or
names as Intel shall designate.
SECTION 4. Restrictions on Transfer; Registration of
Transfers and Exchanges. Subject to any applicable conditions to
transfer contained in the Securities Purchase Agreement or the
Rights and Restrictions Agreement, the Company shall from time to
time register the transfer of any outstanding Rights Certificates
in the Rights Register to be maintained by the Company upon
surrender of the Rights Certificates accompanied by a written
instrument or instruments of transfer in form reasonably satisfacto
ry to the Company, duly executed by the registered holders thereof,
the duly appointed legal representative thereof or a duly autho
rized attorney. Upon any such registration of transfer, a new
Rights Certificate shall be issued to the transferee holder(s) and
the surrendered Rights Certificate shall be canceled and disposed
of by the Company.
No person or entity holding Rights may transfer, sell,
assign, devise or bequeath any of such holder's interest in his or
its Rights, and the Company shall not register the transfer of such
Rights, whether by sale, assignment, gift, devise, bequest,
appointment or otherwise, except to a Permitted Transferee (as
defined below) of such holder. For purposes of this Section 4, the
term "Permitted Transferee" shall mean (i) the Company, (ii) a
Qualified Subsidiary(provided that if at any time such Qualified
Subsidiary ceases to be a Qualified Subsidiary such Rights will
automatically convert into Common Stock ) or (iii) Intel. Each
Right shall automatically be exchanged for shares of Common Stock
at the then effective Exchange Ratio upon the transfer by any
holder of a Right to a person or entity who is not a Permitted
Transferee. Notwithstanding anything to the contrary set forth
herein, the transfer agent shall not be required to register the
transfer of such Rights or the Common Stock into which they are
automatically exchanged unless concurrently with such transfer the
certificate representing such Rights to be so transferred shall be
surrendered and exchanged for a certificate representing the
applicable number of shares of Common Stock into which such Rights
are automatically exchanged by virtue of such transfer.
<PAGE>
SECTION 5. Exercise of Rights. Subject to the terms
of this Agreement, each holder of a Rights Certificate shall have
the right, which may be exercised commencing the date hereof and
until 5:00 p.m., California time, on December 31, 2058 (the
"Expiration Date") to receive from the Company the number of fully
paid and nonassessable Rights Shares (and such other consideration)
which the holder may at the time be entitled to receive on exercise
of such Rights. Any Rights not exercised prior to 5:00 p.m.,
California time, on the Expiration Date shall become void and all
rights thereunder and all rights in respect thereof under this
Agreement shall cease as of such time. The amounts payable to the
Company under the Securities Purchase Agreement shall be the
exercise price of the Rights, and no additional consideration is
payable upon exercise of the Rights.
Rights may be exercised upon surrender to the Company at
its office designated for such purpose (as provided in Section 13
hereof) of the Rights Certificate or Certificates to be exercised
with the exercise notice attached thereto duly filled in and
signed.
Subject to the provisions of Section 8 hereof, upon such
surrender of Rights Certificates in accordance with the terms
hereof, the Company shall issue and cause to be delivered, as
promptly as practicable, to or upon the written order of the holder
and in such name or names as such holder may designate a
certificate or certificates for the number of full Rights Shares
issuable upon the exercise of such Rights (and such other
consideration as may be deliverable upon exercise of such Rights)
and cash for fractional Rights Shares as provided in Section 7
hereof. The certificate or certificates for such Rights Shares
shall be deemed to have been issued and the person so named therein
shall be deemed to have become a holder of record of such Rights
Shares as of the date of the surrender of such Rights, irrespective
of the date of delivery of such certificate or certificates for
Rights Shares (the "Exercise Date").
Each Rights Certificate shall be exercisable, at the
election of the holder thereof, either in full or from time to time
in part. In the event that a Rights Certificate is exercised in
respect of fewer than all of the Rights Shares issuable on such
exercise at any time prior to the date of expiration of the Rights,
a new certificate evidencing the remaining Rights will be issued
and delivered pursuant to the provisions of this Section 5 and
Section 2 hereof.
All Rights Certificates surrendered upon exercise of
Rights shall be canceled and disposed of by the Company. The
Company shall keep copies of this Agreement and any notices given
or received hereunder available for inspection by the holders
during normal business hours at its office.
Notwithstanding the above, Rights may not be exercised
for Common Stock unless and until the holder shall submit to the
Company either evidence of compliance with the filing requirements
of the HSR Act or a certificate of an officer of the holder to the
effect that the acquisition of Common Stock upon exercise of the
Rights does not require any filing under the HSR Act.
<PAGE>
In the event that a Qualified Subsidiary that is a holder
of Rights ceases at any time to be a Qualified Subsidiary, the
Rights so held shall represent only the right to receive the Common
Stock in to which they are exchangeable, and the Company shall
deliver the shares of Common Stock issuable upon exchange thereof
upon (i) surrender of the Rights Certificates to the Company, (ii)
if required, the holder furnishing appropriate endorsements and
transfer documents, and (iii) if required by Section 8, payment of
all transfer and similar taxes if the shares of Common Stock are
not being issued to the holder.
SECTION 6. Automatic Exchange of Rights.
Upon creation of the Class A Common Stock and approval of
the issuance of the shares of Class A Common Stock by the Board of
Directors of the Company, and without any further action by the
Company or Intel, the Rights shall become exchangeable for and
shall only represent the right to receive shares of Class A Common
Stock at the Exchange Ratio (as defined below) then in effect. The
Company shall provide written notice to Intel when the conditions
set forth in the previous sentence have been satisfied (the date of
such notice is hereinafter referred to as the "Exchange Date"). On
the Exchange Date, the Rights shall represent only the right to
receive the Class A Common Stock into which they are exchangeable,
and the Company shall deliver the shares of Class A Common Stock
issuable upon exchange thereof upon (i) surrender of the Rights
Certificates to the Company, (ii) if required, the holder
furnishing appropriate endorsements and transfer documents, and
(iii) if required by Section 8, payment of all transfer or similar
taxes, if the shares being issued are not being issued to the
holder or a Qualified Subsidiary.
SECTION 7. Number of Rights; Adjustments to Rights;
Dividends; Fractional Rights Shares.
(a) Exchange Ratio. Each Right represents the right to
receive one share of Class A Common Stock or Common Stock, as
adjusted in the manner provided below ("Exchange Ratio").
(b) Fractional Shares. No fractional shares of Class A
Common Stock or Common Stock shall be issued upon conversion or
exercise of Rights. In lieu of any fractional shares to which the
holder would otherwise be entitled, the Company shall pay cash
equal to such fraction multiplied by the then fair market value of
one share of Common Stock, as determined in good faith by the Board
of Directors. The Company shall, as soon as practicable
thereafter, cause its transfer agent to issue and deliver at such
office to such holder of Rights Certificates or to such holder's
nominee or nominees, a certificate or certificates for the number
of shares of Class A Common Stock or Common Stock, as the case may
be, to which such holder or such holder's nominee shall be entitled
as aforesaid, together with cash in lieu of any fraction of a
share. The person or persons entitled to receive the shares of
Class A Common Stock or Common Stock issuable upon exchange or
exercise of Rights shall be treated for all purposes as the record
holder or holders of such shares of Class A Common Stock or Common
Stock on the Exercise Date or the Exchange Date, as the case may
be.
<PAGE>
(c) Adjustment for Stock Splits, etc. In case of any
subdivision (by stock split, stock dividend or otherwise) of the
Common Stock or any combination of the Class A Common Stock (by
reverse stock split or otherwise), the Exchange Ratio shall be
proportionately increased, and conversely in the case of
combination of the Common Stock (by reverse stock split or
otherwise) or any subdivision of the Class A Common Stock (by stock
split, stock dividend or otherwise), the Exchange Ratio shall be
proportionately decreased, with such adjustment to the Exchange
Ratio to be effective immediately after the opening of business on
the day following the day which such subdivision or combination, as
the case may be, becomes effective. In case of any reorganization,
reclassification or change of shares of the Class A Common Stock or
Common Stock (other than a change in par value or from par value to
no par value as a result of a subdivision or combination), or in
the case of any consolidation of the Company with one or more
corporations or a merger of the Company with another corporation
(other than a consolidation or merger in which the Company is the
resulting or surviving corporation and which does not result in any
reclassification or change of outstanding shares of Class A Common
Stock or Common Stock), provision shall be made so that each holder
of a Right shall have the right at any time thereafter as nearly as
practicable, so long as the exercise or exchange rights hereunder
with respect thereto would exist had such event not occurred, to
exercise or exchange such Right into the kind and amount of shares
of stock and other securities and properties (including cash)
receivable upon such reorganization, reclassification, change,
consolidation or merger by a holder of the number of shares of
Class A Common Stock or Common Stock into which the Rights might
have been converted immediately prior to such reorganization,
reclassification, change, consolidation or merger. In the event of
such a reorganization, reclassification, change, consolidation or
merger, effective provision shall be made in the certificate of
incorporation of the resulting or surviving corporation or
otherwise for the protection of the exercise or exchange rights of
the holders of Rights that shall be applicable, as nearly as
reasonably may be, to any such other shares of stock and other
securities and property (including cash) deliverable upon exercise
or exchange of the Rights that might have been issued immediately
prior to such event.
(d) Dividends. In the event that the Company declares a
dividend or other distribution in respect of its Common Stock
(other than a dividend payable in shares of Common Stock), the
holders of Rights hereunder shall be entitled to receive such
dividend or distribution as if the Rights had been exercised or
converted immediately prior to the record date for such dividend or
distribution.
(e) Special Conversion Adjustments. The number of shares of
Class A Common Stock or Common Stock receivable upon exercise or
exchange of a Right shall be adjusted in the event that the Company
fails to achieve any one or more of the Qualified Expenditures
Milestone, the First Minimum Production Milestone or the Second
Minimum Production Milestone on the applicable milestone dates in
the manner described below. On or prior to twenty five (25) days
after an applicable milestone date, the Company shall deliver to
Intel a certificate of an executive officer of the Company
certifying whether the applicable milestone has been achieved, and
if such milestone has not been achieved, such additional data
(including, but not limited to the amount of Qualified
<PAGE>
Expenditures made and actual RDRAM production during the applicable
period) required to calculate the appropriate conversion
adjustment. Upon receipt of such certificate with the required
information, Intel shall have thirty (30) days in which to notify
the Company in writing of its irrevocable election to exercise a
Special Conversion Adjustment. If Intel has not provided an
irrevocable written notice electing to exercise a Special
Conversion Adjustment within the such period, then no there shall
be no Special Conversion Adjustment with respect to the applicable
milestone. Except as specifically provided herein, the failure to
exercise a Special Conversion Adjustment with respect to one
milestone shall not impair Intel's ability to exercise a Special
Conversion Adjustment with respect to the failure to achieve a
different milestone.
(f) Postponement of Milestone Dates; Modification of
Milestones. (i) In the event that the Company's ability to
achieve the Qualified Expenditure Milestone by the Qualified
Expenditures Milestone Date is significantly impaired by events or
circumstances outside of its control, such as Force Majeure or
limited availability of required equipment or materials, the
milestone date will be appropriately postponed.
(ii) In the event that (A) the Company fails to achieve either
the First Minimum Production Milestone or the Second Minimum
Production Milestone as a result of [___________], the First
Minimum Production Milestone or the Second Minimum Production
Milestone shall be either postponed or waived, respectively, as
appropriate. In addition, if on the Maximum FGI Date, the RDRAM
device finished goods inventory of the Company and its subsidiaries
exceeds the Maximum FGI, the Second Minimum Production Milestone
will be modified, as appropriate.
(iii) In the event of the occurrence of any of the foregoing
events or circumstances, as a result of which either a milestone
date or milestone is to be postponed, waived or modified, no
Special Conversion Adjustment shall occur as a result of the
failure to achieve the applicable milestone by the applicable
milestone date, unless and until the Company and Intel shall have
agreed upon the appropriate postponement, waiver or modification.
Notwithstanding the above, upon such agreement, the Special
Conversion Adjustment shall be applied as of the agreed upon date,
notwithstanding that such agreement is reached after such date. If
no agreement can be reached, the dispute will be settled in
accordance with Section 8.12 of the Securities Purchase Agreement.
(g) Failure to Achieve Qualified Expenditures Milestone.
Subject to the provisions hereof;
(i) If the Company fails to make at least the Minimum
Qualified Expenditures on or prior to the Qualified Expenditures
Milestone Date, the Exchange Ratio shall be adjusted by multiplying
the current Exchange Ratio by a fraction, the numerator of which
shall be the Initial Purchase Price and the denominator of which
shall be the greater of (i) the average closing sales price on the
New York Stock Exchange for the Common Stock during the 20 trading
day period ending two trading days prior to the Qualified
Expenditures Milestone Date, or (ii) 50% of the Initial Purchase
Price.
<PAGE>
(ii) If the Company makes Qualified Expenditures of more
than the Minimum Qualified Expenditures but less than the Required
Qualified Expenditures on or prior to the Qualified Expenditures
Milestone Date, the Exchange Ratio shall be increased. The amount
of the increase in the Exchange Ratio (expressed as a decimal)
shall be determined by first (w) dividing the Initial Purchase
Price by the greater of (i) the average closing sales price on the
New York Stock Exchange for the Common Stock during the 20 trading
day period ending two trading days prior to the applicable
milestone date, or (ii) 50% of the Initial Purchase Price, then (x)
subtracting 1.0 from the result, then (y) multiplying this result
by a fraction, the numerator of which shall be (A) the Required
Qualified Expenditures minus (B) the amount of Qualified
Expenditures and the denominator of which shall be the Required
Qualified Expenditures, and (z) dividing the result by 2. The new
Exchange Ratio shall then be the result of the above calculation
plus the prior Exchange Ratio.
(h) Failure to Achieve First Minimum Production Milestone.
Subject to the provisions hereof, if the Company fails to achieve
the First Minimum Production Milestones the increase in the
Exchange Ratio (expressed as a decimal) shall be determined by
first (w) dividing the Initial Purchase Price by the greater of (i)
the average closing sales price on the New York Stock Exchange for
the Common Stock during the 20 trading day period ending two
trading days prior to the applicable milestone date, or (ii) 50% of
the Initial Purchase Price, then (x) subtracting 1.0 from the
result, then (y) multiplying this result by a fraction, the
numerator of which shall be the First Minimum Required Production
for the quarter minus the actual RDRAM production achieved during
the quarter and the denominator of which shall be the First Minimum
Required Production for the quarter, and (z) dividing the result by
2. The new Exchange Ratio shall then be the result of the above
calculation plus the prior Exchange Ratio.
(i) Failure to Achieve Second Minimum Production Milestone.
Subject to the provisions hereof, if the Company fails to achieve
the Second Minimum Production Milestone the increase in the
Exchange Ratio (expressed as a decimal) shall be determined by
first (w) dividing the Initial Purchase Price by greater of (A) the
average closing sales price on the New York Stock Exchange for the
Common Stock during the 20 trading day period ending two trading
days prior to the applicable milestone date, or (ii) 50% of the
Initial Purchase Price, then (x) subtracting 1.0 from the result,
then (y) multiplying this result by a fraction, the numerator of
which shall be the Second Minimum Required Production for the
quarter minus the actual RDRAM production achieved during the
quarter and the denominator of which shall be the Second Minimum
Required Production for the quarter and (z) dividing the result by
2. The new Exchange Ratio shall then be the result of the above
calculation plus the prior Exchange Ratio.
(j) Multiple Special Conversion Adjustments. If more than
one Special Conversion Adjustment occurs, subsequent Special
Conversion Adjustments shall be calculated as provided herein, but
only the number of additional shares in excess of the number
issuable using the initial Exchange Ratio (appropriately adjusted
for stock splits, reclassifications, stock dividends,
<PAGE>
recapitalizations, combinations, or other similar events affecting
the Common Stock after October 15, 1998) shall be issuable in
respect of such subsequent Special Conversion Adjustment upon
exercise of the Rights.
(k) Cash Option. In lieu of all or a portion of a Special
Conversion Adjustment, the Company may elect to make a cash payment
in respect of all or a portion of the dollar amount of the Special
Conversion Adjustment (such election to be made within five (5)
business days of Intel's Special Conversion Adjustment election,
and such amount shall be paid within five (5) business days of the
Company's election). The dollar amount in respect of any Special
Conversion Adjustment to be paid in cash shall be calculated by
multiplying the additional shares issuable to Intel upon exercise
of the Rights following the Special Conversion Adjustment by the
average closing sales price on the New York Stock Exchange for the
Common Stock during the 20 trading day period ending two trading
days prior to the applicable milestone date.
(l) Limitations on Special Conversion Adjustments. Anything
in Sections 7 (h) and (j) to the contrary notwithstanding, no
Special Conversion Adjustment will be made for failure to achieve
the First Minimum Production Milestone or Second Minimum Production
Milestone if a Special Conversion Adjustment election pursuant to
Section 7(g)(i) above is made by Intel. In addition, anything in
Section 3(e) through 3(j) notwithstanding, Special Conversion
Adjustments will be limited, and not given effect, to the extent
required to ensure (1) that the value of additional shares of
Common Stock and other securities or property and any related
payments (including payments in lieu of adjustments pursuant to
Section 7(k) hereof) issued or issuable or payable as a result of
such adjustments does not exceed the Maximum Adjustment Amount
(with the value of such additional shares, securities and property
measured as of the milestone date with respect to the applicable
Special Conversion Adjustments resulting in such additional shares,
securities or property and any related payments, which, in the case
of the Common Stock, shall be based on the average closing sales
price on the New York Stock Exchange for the Common Stock during
the 20 trading day period ending two trading days prior to the
milestone date corresponding to such Special Conversion
Adjustment); and (2) the aggregate conversion price adjustments and
any related payments does not exceed the lesser of (i) the Maximum
Percentage or (ii) the Maximum Shares.
(m) Audit. The Company will maintain relevant records to
support all Qualified Expenditures and Production milestones. Such
records will be retained in accordance with the Company's normal
record retention policies. Upon written request, the Company will
make available to Intel documents and other information that are
reasonably necessary to verify the Company's compliance with the
terms of this Agreement; provided that Intel enters into an
agreement with the Company to maintain in confidence the Company's
confidential information disclosed pursuant to the audit, to the
extent that existing agreements do not cover such information.
Intel may also request in writing that an audit be performed by an
independent auditor with respect to the Qualified Expenditures and
Production milestones necessary to verify the Special Conversion
Adjustments. If Intel elects to have such an audit performed, the
Company will make available to such independent auditor, financial,
technical and other information and records relevant to auditing
<PAGE>
the Qualified Expenditures and Production milestones in order to
verify the Special Conversion Adjustments that may be reasonably
requested by such independent auditor. The independent auditor
selected shall be mutually acceptable to Intel and the Company and
compensated by Intel. Prior to beginning such audit or receiving
such information, the independent auditor will enter into an
agreement with the Company to maintain in confidence the Company's
confidential information. The Company shall cooperate with the
independent auditor in responding to requests for the Company
information and records. The independent auditor will promptly
conduct and issue a report to the Company and Intel. If the
independent auditor determines that the Company has failed to
comply with any of the terms hereof being audited, such independent
auditor shall only disclose to Intel and the Company the results of
the audit without revealing the Company's confidential information.
If the independent auditor determines that a further Special
Conversion Adjustment is required hereunder, such auditor shall
only disclose in its audit report to the Company and Intel the (i)
amount of the additional Special Conversion Adjustment that is
required hereunder; and (ii) a calculation as to how such amounts
were actually determined, if applicable.
(n) Rights Certificates Following Adjustments. Irrespective
of any adjustments in the number or kind of shares issuable upon
the exercise or conversion of the Rights, Rights theretofore or
thereafter issued may continue to express the same number and kind
of shares as are stated in the Rights Certificate initially
issuable pursuant to this Agreement.
SECTION 8. Payment of Taxes. The Company will pay
all documentary stamp taxes and other governmental charges
(excluding all foreign, federal or state income, franchise,
property, estate, inheritance, gift or similar taxes) in connection
with the issuance or delivery of the Rights hereunder, as well as
all such taxes attributable to the initial issuance or delivery of
Rights Shares upon the exercise or exchange of Rights. The Company
shall not, however, be required to pay any tax that may be payable
in respect of any subsequent transfer of the Rights or any transfer
involved in the issuance and delivery of Rights Shares in a name
other than that in which the Rights to which such issuance relates
were registered, and, if any such tax would otherwise be payable by
the Company, no such issuance or delivery shall be made unless and
until the person requesting such issuance has paid to the Company
the amount of any such tax, or it is established to the reasonable
satisfaction of the Company that any such tax has been paid.
SECTION 9. No Redemption. The Rights shall not be
redeemable.
SECTION 10. Mutilated or Missing Rights Certificates.
If a mutilated Rights Certificate is surrendered to the Company, or
if the holder of a Rights Certificate claims and submits an
affidavit or other evidence satisfactory to the Company to the
effect that the Rights Certificate has been lost, destroyed or
wrongfully taken, the Company shall issue a replacement Rights
Certificate. If required by the Company, such holder must provide
an indemnity bond, or other form of indemnity, sufficient in the
judgment of the Company to protect the Company from any loss which
it may suffer if a Rights Certificate is replaced. If Intel or any
other institutional holder (or nominee thereof) is the owner of any
such lost, stolen or destroyed Rights Certificate, then the
affidavit of an
<PAGE>
authorized officer of such owner, setting forth the fact of loss,
theft or destruction and of its ownership of the Rights Certificate
at the time of such loss, theft or destruction shall be accepted as
satisfactory evidence thereof, and no further indemnity shall be
required as a condition to the execution and delivery of a new
Rights Certificate other than the unsecured written agreement of
such owner to indemnify the Company from any loss which it may
suffer if a Rights Certificate is replaced.
SECTION 11. Reservation of Rights Shares. The Company
shall at all times reserve and keep available, free from preemptive
rights, out of the aggregate of its authorized but unissued Class A
Common Stock (when authorized for issuance in the Company's
Certificate of Incorporation) and Common Stock, for the purpose of
enabling it to satisfy any obligation to issue Rights Shares upon
exercise or exchange of Rights, the maximum number of shares of
Class A Common Stock or Common Stock which may then be deliverable
upon the exercise or exchange of all outstanding Rights. To the
extent that the Rights Shares are listed on any national securities
exchange, the Company shall use commercially reasonable efforts to
cause all such securities issued or reserved for issuance to be
listed on such exchange upon official notice of issuance.
The Company or, if appointed, the transfer agent for the
Common Stock and each transfer agent for any shares of the
Company's capital stock issuable upon the exercise or exchange of
any of the Rights (collectively, the "Transfer Agent") will be
irrevocably authorized and directed at all times to reserve such
number of authorized shares as shall be required for such purpose.
The Company shall keep a copy of this Agreement on file with any
such Transfer Agent. The Company will supply any such Transfer
Agent with duly executed certificates for such purposes and will
provide or otherwise make available all other consideration that
may be deliverable upon exercise or exchange of the Rights. The
Company will furnish any such Transfer Agent a copy of all notices
of adjustments and certificates related thereto, transmitted to
each holder pursuant to Section 12 or Section 13 hereof.
The Company covenants that all Rights Shares and other
capital stock issued upon exercise of Rights will, upon issuance
thereof, be validly authorized and issued, fully paid, nonassess
able, free of preemptive rights and free, subject to Section 8
hereof, from all taxes, liens, charges and security interests with
respect to the issue thereof.
SECTION 12. Notices to Rights Holders. Upon any event
affecting the number of shares of Class A Common Stock or Common
Stock receivable upon exercise or exchange of Rights, the Company
shall promptly thereafter give to each of the holders at its
address appearing on the Rights Register written notice of such
events and the effect thereof on the Rights and the Rights Shares
in accordance with the provisions of this Section 12. Where
appropriate, such notice may be given in advance and included as a
part of the notice required to be mailed under the other provisions
of this Section 12. The Company shall also provide notice to the
holders of Rights of record dates or events with respect to which
notice is given to other stockholders of the Company. Such notice
shall be given at the same time as notice is given to other
stockholders. The failure to give the notice required by this
Section 12 or any defect therein shall not affect the legality or
validity of any
<PAGE>
distribution, right, option, rights, consolidation, merger,
conveyance, transfer, dissolution, liquidation or winding up or the
vote on any action.
Nothing contained in this Agreement or in any Rights
Certificate shall be construed as conferring upon the holders
(prior to the exercise or exchange of such Rights) the right to
vote, to consent or to receive notice as a stockholder in respect
of the meetings of stockholders or the election of Directors of the
Company or any other matter, or any rights whatsoever as
stockholders of the Company; provided, however, that nothing in the
foregoing provision is intended to detract from any rights
explicitly granted to any holder hereunder.
SECTION 13. Notices to the Company and Rights Holders.
Except as may be otherwise provided herein, all notices, requests,
waivers and other communications made pursuant to this Agreement
shall be in writing and shall be delivered to the other party (a)
in person; (b) by facsimile to the address and number set forth
below, when promptly followed up by another of the delivery methods
permitted by this Section 13; (c) by U.S. mail, registered or
certified, return receipt requested, postage prepaid and addressed
to the other party as set forth below; or (d) by a national-
recognized overnight delivery service that keeps records of
deliveries and attempted deliveries (such as FedEx), postage
prepaid, addressed to the parties as set forth below with next-
business-day delivery guaranteed, provided that the sending party
receives a confirmation of delivery from the delivery service
provider.
To Intel: To the Company:
Intel Corporation Micron Technology, Inc.
2200 Mission College Blvd. 8000 S. Federal Way
Santa Clara, CA 95052 P.O. Box 6
Attn: Treasury Portfolio Manager Boise, Idaho 83716
Attn: General Counsel
Fax Number: (408) 765-1859 Fax Number: (208) 308-4509
with copies to:
Intel Corporation
2200 Mission College Blvd.
Santa Clara, CA 95052
Attn: General Counsel
Fax Number: (408) 765-6038
A party may change or supplement the addresses given above, or
designate additional addresses, for purposes of this Section 13 by
giving the other party written notice of the new address in the
manner set forth above.
<PAGE>
SECTION 14. Successors. All the covenants and
provisions of this Agreement by or for the benefit of the Company
shall bind and inure to the benefit of its respective successors
and assigns hereunder.
SECTION 15. Termination. This Agreement shall
terminate on the Exchange Date, other than with respect to
resolution of any audit performed pursuant to Section 7(m) of this
Agreement relating to a milestone date occurring prior to the
Exchange Date and the finalization of any related Special
Conversion Adjustment, and the exchange of Rights Certificates for
Rights Shares.
SECTION 16. Governing Law. This Agreement shall be
governed in all respects by and construed in accordance with the
laws of the State of Delaware without regard to provisions
regarding choice of laws.
SECTION 17. Benefits of This Agreement; No Impairment.
Nothing in this Agreement shall be construed to give to any person
or corporation other than the Company and the holders any legal or
equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the
Company and the holders. The Company shall not take any action
which would have the effect of materially impairing the rights,
privileges and preferences of the holders of the Rights set forth
herein.
SECTION 18. Counterparts. This Agreement may be
executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the
same instrument.
SECTION 19. Amendments and Waivers. No provision of
this Agreement may be amended or waived except by an instrument in
writing signed by the party sought to be bound; provided, that any
amendment or waiver sought from the holders of any provision of
this Agreement which affects holders generally shall be given by
holders of at least a majority of the Rights outstanding (or, in
the case of amendments or waivers affecting holders of Rights
Shares generally, by holders of at least a majority of the Rights
and Rights Shares, taken as one class, with each Right and each
Rights Share representing the right to one vote). Any amendment or
waiver so given shall be binding on all holders. No failure or
delay by any party in exercising any right or remedy hereunder
shall operate as a waiver thereof, and a waiver of a particular
right or remedy on one occasion shall not be deemed a waiver of any
other right or remedy or a waiver of the same right or remedy on
any subsequent occasion.
SECTION 20. Legal Fees. In the event of any action at
law, suit in equity or arbitration proceeding in relation to this
Agreement or any units or securities of the Company issued or to be
issued, the prevailing party, shall be paid by the other party a
reasonable sum for attorney's fees and expenses for such prevailing
party.
<PAGE>
SECTION 21. Dispute Resolution. The parties agree to
negotiate in good faith to resolve any dispute between them
regarding this Agreement. If the negotiations do not resolve the
dispute to the reasonable satisfaction of both parties, then each
party shall nominate one senior officer of the rank of Vice
President or higher as its representative. These representatives
shall, within thirty (30) days of a written request by either party
to call such a meeting, meet in person and alone (except for one
assistant for each party) and shall attempt in good faith to
resolve the dispute. If the disputes cannot be resolved by such
senior managers in such meeting, the parties agree that they shall,
if requested in writing by either party, meet within thirty (30)
days after such written notification for one day with an impartial
mediator and consider dispute resolution alternatives other than
litigation. If an alternative method of dispute resolution is not
agreed upon within thirty (30) days after the one day mediation,
either party may begin litigation proceedings. This procedure shall
be a prerequisite before taking any additional action hereunder.
SECTION 22. Certain Definitions.
For purposes of this Agreement the following terms shall have
the meanings set forth below.
Capital Expenditures. Capital Expenditures shall mean the
sum of all expenditures paid or, with respect to equipment that is
in use, accrued that, in accordance with U.S. generally accepted
accounting principles, should be included in or reflected by the
property, plant or equipment or similar fixed asset account
reflected in the balance sheet of the applicable person.
First Minimum Production Milestone. The First Minimum
Production Milestone shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
First Minimum Required Production. First Minimum Required
Production shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
First Production Milestone Date. The First Production
Milestone Date shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Force Majeure. Force Majeure shall mean an act of God, fire,
flood, accident, riot war, government intervention, embargoes,
strikes, labor difficulties, equipment failure, late delivery of
supplies, supplier shortages or other difficulties which are beyond
the reasonable control and without the fault or negligence of a
party whose performance has been affected.
Initial Purchase Price. Initial Purchase Price shall mean
$31.625, appropriately adjusted to reflect the effect of any stock
splits, reclassifications, stock dividends, recapitalizations,
combinations or other similar events affecting the Common Stock
occurring after October 19, 1998.
Maximum Adjustment Amount. Maximum Adjustment Amount shall
have the meaning ascribed to such term in the Securities Purchase
Agreement.
<PAGE>
Maximum FGI. Maximum FGI shall have the meaning ascribed to
such term in the Securities Purchase Agreement.
Maximum FGI Date. Maximum FGI Date shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Maximum Percentage. Maximum Percentage shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Maximum Shares. Maximum Shares shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Minimum Qualified Expenditures. Minimum Qualified
Expenditures shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Qualified Expenditures. Qualified Expenditures shall have the
meaning ascribed to such term in the Securities Purchase Agreement.
Qualified Expenditures Milestone. The Qualified Expenditures
Milestone means the expenditure of at least the Required Qualified
Expenditures on or before the Qualified Expenditures Milestone
Date.
Qualified Expenditures Milestone Date. The Qualified
Expenditures Milestone Date shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
Percentage Call on Capacity. Percentage Call on Capacity
shall have the meaning ascribed to such term in the Supply
Agreement.
Qualified Subsidiary. Qualified Subsidiary shall have the
meaning ascribed to such term in the Securities Rights and
Restrictions Agreement.
Rambus. Rambus means Rambus, Inc. , a Delaware corporation,
and any successor to all or substantially all of Rambus
Corporation's business (by acquisition or otherwise).
RDRAM. RDRAM shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
Required Qualified Expenditures. Required Qualified
Expenditures shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
<PAGE>
Rights. Rights shall have the meaning ascribed to such term
in the Stock Rights Agreement.
Second Minimum Production Milestone. The Second Minimum
Production Milestone shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
Second Minimum Required Production. Second Minimum
Required Production shall have the meaning ascribed to such term in
the Securities Purchase Agreement.
Second Production Milestone Date. The Second Production
Milestone Date shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Securities Purchase Agreement. Securities Purchase
Agreement shall mean that certain Securities Purchase Agreement,
dated October 15, 1998, as amended from time to time, by and
between the Corporation and Intel Corporation.
Securities Rights and Restrictions Agreement. Securities
Rights and Restrictions Agreement shall mean that certain
Securities Rights and Restrictions Agreement, dated as of October
19, 1998, as amended from time to time, by and between the
Corporation and Intel Corporation.
Special Conversion Adjustment. A Special Conversion
Adjustment shall mean an adjustment to the number of shares of
Common Stock receivable upon conversion of Class A Common Stock, as
provided in Section 7 hereof.
Supply Agreement. Supply Agreement shall mean that certain
Supply Agreement, dated as of October 19, 1998, as amended from
time to time, by and between the Corporation and Intel Corporation.
Volume Production. Volume Production shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
SECTION 23. Conversion Adjustment Examples. For
purposes of clarity of the Conversion Adjustment provisions of this
Agreement, the parties have attached to this Agreement as Exhibit B
several illustrative examples of the manner in which the Conversion
Adjustment provisions of this Agreement will be applied to the
specific examples presented.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
<PAGE>
INTEL MICRON TECHNOLOGY,
CORPORATION INC.
By:_________________________ By:_________________________
Name: Name:
Title: Title:
{Signature Page to Stock Rights Agreement}
<PAGE>
EXHIBIT A
[Form of Rights Certificate]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER AS TO THE AVAILABILITY OF AN EXEMPTION FROM
REGISTRATION. THE SECURITIES REPRESENTED BY THIS INSTRUMENT ARE
SUBJECT TO RESTRICTIONS ON TRANSFER, INCLUDING ANY SALE, PLEDGE OR
OTHER HYPOTHECATION, SET FORTH IN AN AGREEMENT BETWEEN THE ISSUER
AND INTEL CORPORATION, A COPY OF WHICH AGREEMENT MAY BE OBTAINED AT
NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS
INSTRUMENT TO THE SECRETARY OF THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICES.
No. __ ______ Rights
RIGHTS CERTIFICATE
MICRON TECHNOLOGY, INC.
This Rights Certificate certifies that ___________________, or
registered assigns, is the registered holder of the number of
Rights (the "Rights") set forth above to receive Class A Common
Stock, $.10 par value per share (the "Class A Common Stock") or
Common Stock, $.10 par value per share (the "Common Stock"), of
Micron Technology, Inc., a Delaware corporation (the "Company").
Each Right entitles the holder upon exercise or exchange to receive
from the Company one fully paid and nonassessable share (subject to
adjustment as provided in the Rights Agreement referred to below)
of either Class A Common Stock or Common Stock (a "Rights Share"),
upon surrender of this Rights Certificate at the office of the
Company designated for such purpose, but only subject to the
conditions set forth herein and in the Rights Agreement referred to
below. The number of Rights Shares issuable upon exercise or
exchange of the Rights are subject to adjustment upon the
occurrence of certain events, as set forth in the Rights Agreement.
The Rights are exercisable or exchangeable at any time prior to
5:00 p.m., California time, on December 31, 2058.
A-1
<PAGE>
The Rights evidenced by this Rights Certificate are part
of a duly authorized issue of Rights, and are issued or to be
issued pursuant to a Rights Agreement dated as of October 19, 1998
(the "Rights Agreement"), duly executed and delivered by the
Company, which Rights Agreement is hereby incorporated by reference
in and made a part of this instrument and is hereby referred to for
a description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Company and the holders
(the words "holders" or "holder" meaning the registered holders or
registered holder) of the Rights. Capitalized terms used herein
and not defined shall have the meanings ascribed to them in the
Rights Agreement. A copy of the Rights Agreement may be obtained
by the holder hereof upon written request to the Company.
The holder of Rights evidenced by this Rights Certificate
may exercise or exchange such Rights under and pursuant to the
terms and conditions of the Rights Agreement by surrendering this
Rights Certificate, with the form of notice of exercise properly
completed and executed at the office of the Company designated for
such purpose. Notwithstanding the above, Rights may not be
exercised or exchanged for Common Stock unless and until the holder
shall submit to the Company either evidence of compliance with the
filing requirements of the HSR Act or a certificate of an officer
of the holder to the effect that the acquisition of Common Stock
upon exercise of the Rights does not require any filing under the
HSR Act.
If upon any exercise of Rights evidenced hereby the
number of Rights exercised shall be less than the total number of
Rights evidenced hereby, the Company shall issue to the holder
hereof or its registered assignee a new Rights Certificate
evidencing the number of Rights not exercised.
The Rights Agreement provides for automatic exchange of
the Rights represented hereby into Class A Common Stock of the
Company upon the occurrence of certain events as specified in the
Rights Agreement.
The Rights Agreement provides that upon the occurrence of
certain events the number of Rights Shares issuable upon exercise
or exchange of the Rights set forth on the face hereof may, subject
to certain conditions, be adjusted.
The holder hereof will have certain registration rights
and other rights and obligations with respect to the Rights Shares
as provided in the Securities Rights and Restrictions Agreement,
dated as of October 19, 1998, by and between the Company and the
persons party thereto (the "Rights and Restrictions Agreement").
Copies of the Rights and Restrictions Agreement may be obtained by
the holder hereof upon written request to the Company.
Rights Certificates, when surrendered at the office of
the Company by the registered holder thereof in person or by a
legal representative or attorney duly authorized in
A-2
<PAGE>
writing, may be exchanged, in the manner and subject to the
limitations provided in the Rights Agreement, but without payment
of any service charge, for another Rights Certificate or Rights
Certificates of like tenor and evidencing in the aggregate a like
number of Rights.
Subject to the terms and conditions of the Rights
Agreement, upon due presentation for registration of transfer of
this Rights Certificate at the office of the Company, a new Rights
Certificate or Rights Certificates of like tenor and evidencing in
the aggregate a like number of Rights shall be issued to the
transferee(s) in exchange for this Rights Certificate, subject to
the limitations provided in the Agreement, without charge except
for any tax or other governmental charge imposed in connection
therewith.
The Company may deem and treat the registered holder(s)
hereof as the absolute owner(s) of this Rights Certificate
(notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof and of any
distribution to the holder hereof, and for all other purposes, and
the Company shall not be affected by any notice to the contrary.
Neither the Rights nor this Rights Certificate entitles any holder
hereof to any rights of a stockholder of the Company, except as
specifically provided in the Rights Agreement with respect to
dividends and distributions to stockholders.
IN WITNESS WHEREOF, Micron Technology, Inc. has caused
this Rights Certificate to be signed by its Chairman of the Board,
Chief Executive Officer, President or a Vice President and by its
Secretary or an Assistant Secretary and has caused its corporate
seal to be affixed hereunto or imprinted hereon.
Dated: October ____, 1998
MICRON TECHNOLOGY, INC.
By:______________________________
Name:____________________________
Title:___________________________
A-3
<PAGE>
CONFIDENTIAL
CERTAIN INFORMATION HAS BEEN REDACTED.
CONFIDENTIAL TREATMENT REQUIRED.
FORM OF NOTICE OF EXERCISE OR EXCHANGE
[To Be Executed Upon Exercise or Exchange of Rights]
The undersigned hereby irrevocably elects to exercise the
right, represented by this Rights Certificate, to:
(Check Applicable Box)
receive ___________ shares of Class A Common Stock
in accordance with the terms hereof.
receive ___________ shares of Common Stock in
accordance with the terms hereof. Evidence of
compliance with or exemption from the requirements
of the HSR Act must be provided.
The undersigned requests that a certificate for such
shares be registered in the name of _______________, whose address
is _______________________________ and that such shares be
delivered to __________________, whose address is
_______________________________ .
If said number of shares is less than all of the shares
of Class A Common Stock or Common Stock receivable hereunder, the
undersigned requests that a new Rights Certificate representing the
remaining balance of such shares be registered in the name of
________________________, whose address is
_______________________________, and that such Rights Certificate
be delivered to _____________________, whose address is
_______________________________.
Signature(s):________________________
NOTE: The above signature(s) must
correspond with the name written
upon the face of this Rights
Certificate in every particular,
without alteration or enlarge
ment or any change whatever. If
the Rights are held of record by
two or more joint owners, all
such owners must sign.
Dated: _____________________
<PAGE>
FORM OF ASSIGNMENT
[To be signed only upon assignment of Rights Certificate]
FOR VALUE RECEIVED, ____________________ hereby sells,
assigns and transfers unto _______________ whose address is
_________________________________ and whose social security number
or other identifying number is _________________________, the
within Rights Certificate, together with all right, title and
interest therein and to the Rights represented thereby, and does
hereby irrevocably constitute and appoint __________, attorney, to
transfer said Rights Certificate on the books of the within-named
Company, with full power of substitution in the premises.
Signature(s):________________________
NOTE: The above signature(s) must
correspond with the name written
upon the face of this Rights
Certificate in every particular,
without alteration or enlarge
ment or any change whatever. If
the Rights are held of record by
two or more joint owners, all
such owners must sign.
Dated: _____________________
<PAGE>
EXHIBIT B
[Special Conversion Adjustment Illustrative Examples]
The following are illustrative examples of the manner in which
the Special Conversion Adjustments will be applied.
[_________________]
Exhibit 5
FOR IMMEDIATE RELEASE
CONTACT: Bill Calder Kipp Bedard
Intel Corporation Micron Technology, Inc.
(408) 765-8478 (208) 368-4400
www.intel.com www.micron.com
Fax-on-demand: 800-239-0337
INTEL MAKES $500 MILLION EQUITY INVESTMENT
IN MICRON TECHNOLOGY, INC.
Funding to support memory development and supply, accelerate RDRAM
development
SANTA CLARA, CA - Oct. 16, 1998 - Intel Corporation and Micron
Technology, Inc., announced today that Intel will make a $500
million equity investment in Micron. Intel will acquire stock
rights exchangeable for common stock representing approximately 6
percent of Micron's outstanding common stock.
The investment in Micron is part of Intel's strategy to
support the development and supply of next generation memory
products and to help drive PC industry growth by accelerating the
adoption of Direct RDRAM, a high-speed memory interface technology
developed by Rambus, Inc. By providing additional financial
resources, the investment by Intel should enhance Micron's
competitive position in the DRAM industry.
"We are pleased with Intel's support for our efforts to
provide advanced memory solutions to our customers." said Steve
Appleton, president, chairman, and chief executive officer of
Micron Technology, Inc. "Micron is committed to accelerated
support, development, and production of Direct RDRAM, and we expect
to have these products available for shipment as early as the third
quarter of 1999."
"Micron is one of the industry leaders with a new generation
of products and leading-edge manufacturing technology," said Craig
Barrett, Intel president and chief executive officer. "Our goal in
making this equity investment is ensuring an adequate supply of
memory components, particularly Direct RDRAM. This is a significant
strategic investment that supports our microprocessor roadmap into
2000 and beyond."
Micron Technology, Inc., and its subsidiaries manufacture and
market DRAMs, very fast SRAMs, Flash, other semiconductor
components, memory modules, graphics accelerators, personal
computer systems, and radio frequency identification (RFID)
products. Micron's common stock is traded on the New York Stock
Exchange (NYSE) under the symbol MU. To learn more about Micron
Technology, Inc., visit its web site at www.micron.com.
Intel, the world's largest chip maker, is also a leading
manufacturer of computer, networking and communications products.
Additional information and about Intel is available at
www.intel.com
<PAGE>
Intel Investment in Micron
Q&A and Positioning
Prepared by Bill Calder
October 16, 1998
Background:
In a joint announcement today, Intel Corporation said that it will
make a $500 million equity investment in Micron Technology, Inc.
Intel's investment will support the development and supply of next
generation memory products and help drive PC industry growth by
accelerating the adoption of Direct RDRAM, a next-generation high-
speed memory interface technology.
Intel will acquire a non-voting stock right exchangeable for common
stock representing approximately 6 percent of Micron's outstanding
common stock. A non-voting stock right is a right that is granted
by the company, in this case Micron, which can then be exchanged
for common stock.
Intel historically has worked closely with manufacturers of dynamic
random access memory (DRAM). Currently, DRAM manufacturers are
experiencing a down cycle in what is typically a cyclical business.
This current cycle is driven primarily by active capacity expansion
coupled with lower demand for PC's and the Asian financial crisis.
These factors have combined to create an oversupply situation,
resulting in capital expenditure cutbacks by many of these
manufacturers.
Intel has an interest in seeing that appropriate investments
continue in the memory business. We will invest $500 million in
Micron to support the development and supply of next generation
memory products, specifically Direct RDRAM, in support of Intel's
microprocessor roadmap.
The current state of the art memory technology is synchronous DRAM,
or SDRAM. The most likely performance architecture coming to market
in the next few years, and one that Intel supports, is Direct
RDRAM. Direct RDRAM is based on a high speed interface technology
developed by Rambus, Inc. and is available under license to DRAM
manufacturers. As processor performance increases and more and more
multimedia and 3D functions are incorporated, high-bandwidth
memories are essential to sustaining system performance.
As part of this investment, Micron will ramp Direct RDRAM as early
as the third quarter of 1999 and will provide industry leadership
in aggressively ramping supply of Direct RDRAM.
Key Messages:
<PAGE>
*The investment in Micron is part of Intel's strategy to support
the development and supply of next generation memory products and
to help drive PC industry growth by accelerating the adoption of
Direct RDRAM.
*Intel has historically worked closely with DRAM producers to
insure platform performance is not limited by DRAM capability or
output.
* We believe Micron meets our strategic requirements and is
qualified to provide industry leadership in aggressively ramping
supply of RDRAM.
*We have no obligation to buy DRAM's or Direct RDRAM's from Micron
exclusively, nor is this an exclusive investment in Micron.
Questions and Answers
Q1: Why did Intel make this investment in Micron?
A1: The investment in Micron is part of Intel's strategy to support
the development and supply of next generation memory products and
to help drive PC industry growth by accelerating the adoption of
Direct RDRAM. We believe Micron meets our strategic requirements to
provide industry leadership in aggressively ramping supply of
Direct RDRAM.
Q2: What about rumored investments in other DRAM suppliers?
A2: Intel is frequently having discussions with many companies. We
have a multifaceted relationships with many other suppliers, and we
work with them on a variety of levels. But we do not speculate
about possible future actions or reveal private business
discussions that may or may not take place.
Q3: What are the terms of the Micron Deal?
A3: Intel is investing $500 million in a stock right, exchangeable
to Micron common stock.
Q4: Beyond the investment, what other agreements are there ?
A4: Micron is committed to accelerated support, development, and
production of Direct RDRAM, and we expect these products to be
available for shipment as early as the third quarter of 1999. Intel
also has a call right on a percentage of capacity.
Q5: Will Intel have a seat on Micron's Board ?
A5: Intel has a right to propose a Board member, subject to
Micron's approval, but has no intention to do so at this time.
Q6: What is the extent of your relationship with DRAM
suppliers/Micron or otherwise ?
A6: We have a long history of working with DRAM manufacturers. We
typically share information on long range demand, our product
roadmap, and market direction.
<PAGE>
Q7: How will the Micron deal affect your industry enabling efforts
with the other DRAM manufacturers?
A7: This agreement with Micron does not affect Intel's enabling
efforts. Our desire is to have adequate supply of high-performance
memory for Intel platforms. We will continue enabling activities
with the current DRAM manufacturers.
Q8: Would you do similar investments with other DRAM suppliers,
including suppliers in Asia ?
A8: We're always talking with many different companies but we can't
speculate on investment possibilities.
Q9: Why did you do this with Micron instead of a Korean DRAM
supplier ?
A9: We did this deal with Micron because we believe Micron meets
our strategic requirements and will be an industry leader in Direct
RDRAM. Intel routinely has discussions with many companies, in
Korea and elsewhere around the world. We will not comment on any
specific company, but will continue to make investment decisions
consistent with out strategic goals.
Q10: Does this mean you won't be doing business with any other DRAM
manufacturers ?
A10: No. We continue to work daily with key suppliers and business
partners in all aspects of our business. As a general rule, we
don't provide details on our arrangements with our customers or our
business partners.
DRAM/RDRAM
Q11: How bad is the DRAM situation in Intel's opinion, are you
worried about immediate supply shortages ?
A11: The DRAM business is cyclical and the industry is in a
downcycle. We do not foresee immediate shortages.
Q12: What is RDRAM ?
A12: RDRAM stands for Rambus DRAM and refers to Rambus Inc.'s high
speed interface technology. RDRAM is essentially a higher
performance DRAM and is available in three different types; Base
RDRAM, Concurrent RDRAM, and Direct RDRAM. Intel platforms use
Direct RDRAM. Rambus licenses this technology to DRAM
manufacturers.
Q13: Is this Intel investment related to RDRAMs?
A13: Yes. The investment in Micron is part of Intel's strategy to
support the development and supply of next generation memory
products and to help drive PC industry growth by accelerating the
adoption of Direct RDRAM.
Q14: Micron has to date not been a proponent of Direct RDRAM, what
changed ?
A14: Micron has committed to Direct RDRAM and will use the Intel
investment to help accelerate the development and ramp of the
technology. We expect they will begin volume production in the
third quarter of 1999. You should ask Micron for further details.
<PAGE>
Q15: Company x has asked Intel to help with the Direct RDRAM
investments for Assembly and Test, but they say there has been no progress.
What's that about ?
A15: We are always talking to many different companies but we don't
discuss details of those discussions.
Q16: Are you worried about the supply of Direct RDRAMs?
A16: The ramp of any new memory technology involves supply risk. We
believe that Micron will provide industry leadership in aggressively ramping
supply of Direct RDRAM.
Q17: Will Intel buy Direct RDRAM's or other DRAMs from Micon
exclusively?
A17: Intel has no obligation to buy Direct RDRAM's or other DRAM's
from Micron exclusively.
Other Terms/Agreement
Q18: How long does the agreement last ?
A18: Five years.
Q19: Will Intel receive any discounted product pricing as part of
this deal ?
A19: Intel will receive the same pricing consideration as other top
tier Micron customers.
Q20: Did Intel get a discount to the market value on the stock
purchase ?
A20: No, the price was based on Micron's closing price on October
15, 1998.
Q21: Does this require Hart-Scott-Rodino (HSR) approval ?
A21: No. Intel is acquiring a non-voting stock right which does not
require HSR approval.
Q22: What is a non-voting stock right?
A22: A non-voting stock right is a right that is granted by the
company, in this case Micron, which can then be exchanged for
common stock pending approval of the deal by Micron's Board of
Directors.
Q23: Why are we using non-voting stock right ?
A23: The use of non-voting stock rights provided Intel and Micron
the greatest flexibility in structuring the investment.
Miscellaneous
Q24: Does this mean that Micron will not work on SYNCLINK
technology
A24: This deal does not preclude Micron from working on other
memory technologies. As to Micron's plan with respect to SLDRAM you
will have to ask Micron.
Q25: Will this impact the Merced roadmap further?
<PAGE>
A25: Merced is not dependent on any specific memory technology.
Q26: This looks like Intel may be using its resources to stifle
competition and innovation, particularly in those companies who
have not committed to RDRAM. Can you comment on that ?
A26: There are continually technology choices in the industry and
Intel and a number of major DRAM vendors believe RDRAM is the best
choice for delivering next generation performance. So obviously
RDRAM is the type of memory whose development and supply we would
support. While supply of high performance Direct RDRAM is important
to our roadmap, we are not seeking to hinder competition or
innovation with other memory suppliers. We have no obligation to
buy DRAM's or Direct RDRAM 's from Micron exclusively.
Exhibit 6 - Delegation of Authority
October 20, 1998
To Whom it May Concern:
I will be out of the office from 10/23 returning 11/2. In my absence
Peter N. Detkin will have full signature authority.
F. Thomas Dunlap, Jr.,
Vice President, General
Counsel and Secretary
