<PAGE>
FORM 10-Q
_________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
_________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarter period ended June 3, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
_________
Commission File Number: 1-10658
Micron Technology, Inc.
State or other jurisdiction of incorporation or organization: Delaware
_________
Internal Revenue Service - Employer Identification No. 75-1618004
8000 S. Federal Way, Boise, Idaho 83716-9632
(208) 368-4000
_________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No ___
---
The number of outstanding shares of the registrant's Common Stock as of July
8, 1999 was 250,777,049 shares of Common Stock and 15,810,277 shares of Class A
Common Stock.
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
MICRON TECHNOLOGY, INC.
Consolidated Balance Sheets
(Dollars in millions, except for par value)
<TABLE>
<CAPTION>
June 3, September 3,
As of 1999 1998
- --------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and equivalents $ 350.6 $ 558.8
Liquid investments 1,309.9 90.8
Receivables 561.5 489.5
Inventories 441.5 291.6
Prepaid expenses 18.5 8.5
Deferred income taxes 72.8 61.7
-------- --------
Total current assets 2,754.8 1,500.9
Product and process technology, net 213.8 84.9
Property, plant and equipment, net 3,644.5 3,035.3
Other assets 172.5 82.4
-------- --------
Total assets $6,785.6 $4,703.5
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable and accrued expenses $ 597.3 $ 460.7
Short-term debt -- 10.1
Deferred income 13.0 7.5
Equipment purchase contracts 81.8 168.8
Current portion of long-term debt 105.2 98.6
-------- --------
Total current liabilities 797.3 745.7
Long-term debt 1,553.6 758.8
Deferred income taxes 264.3 284.2
Other liabilities 82.0 61.4
-------- --------
Total liabilities 2,697.2 1,850.1
-------- --------
Minority interests 162.9 152.1
Commitments and contingencies
Common Stock, $0.10 par value, authorized 1.0 billion shares, issued
and outstanding 250.6 million and 217.1 million shares respectively 25.1 21.7
Class A Common Stock, $0.10 par value, authorized 32 million shares,
issued and outstanding 15.8 million shares 1.6 --
Additional capital 1,837.4 565.4
Retained earnings 2,062.9 2,114.3
Accumulated other comprehensive loss (1.5) (0.1)
-------- --------
Total shareholders' equity 3,925.5 2,701.3
-------- --------
Total liabilities and shareholders' equity $6,785.6 $4,703.5
======== ========
</TABLE>
Certain fiscal 1998 amounts have been restated as a result of a pooling-of-
interests merger.
See accompanying notes to consolidated financial statements.
1
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statement of Operations
(Amounts in millions, except for per share data)
(Unaudited)
<TABLE>
<CAPTION>
June 3, May 28,
For the quarter ended 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 863.8 $ 612.7
------- --------
Costs and expenses:
Cost of goods sold 674.8 606.0
Selling, general and administrative 124.1 111.4
Research and development 81.6 70.7
Other operating expense, net 11.1 3.4
------- --------
Total costs and expenses 891.6 791.5
------- --------
Operating loss (27.8) (178.8)
Gain on issuance of subsidiary stock, net -- 0.2
Interest income (expense), net (14.4) 0.5
------- --------
Loss before income taxes and minority interests (42.2) (178.1)
Income tax benefit 17.1 70.8
Minority interests in net income (2.6) (2.1)
------- --------
Net loss $ (27.7) $ (109.4)
======= ========
Loss per share:
Basic $ (0.10) $ (0.51)
Diluted (0.10) (0.51)
Number of shares used in per share calculations:
Basic 266.3 215.8
Diluted 266.3 215.8
</TABLE>
Certain fiscal 1998 amounts have been restated as a result of a pooling-of-
interests merger.
See accompanying notes to consolidated financial statements.
2
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statement of Operations
(Amounts in millions, except for per share data)
(Unaudited)
<TABLE>
<CAPTION>
June 3, May 28,
For the nine months ended 1999 1998
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $2,683.2 $2,333.2
Costs and expenses:
Cost of goods sold 2,097.6 2,093.6
Selling, general and administrative 352.7 376.0
Research and development 234.7 209.9
Other operating expense, net 37.3 32.1
-------- --------
Total costs and expenses 2,722.3 2,711.6
-------- --------
Operating loss (39.1) (378.4)
Gain (loss) on sale of investments and subsidiary stock, net (0.1) 157.1
Gain on issuance of subsidiary stock, net 1.6 0.8
Interest income (expense), net (34.0) 1.0
-------- --------
Loss before income taxes and minority interests (71.6) (219.5)
Income tax benefit 28.5 77.1
Minority interests in net income (8.3) (11.4)
-------- --------
Net loss $ (51.4) $ (153.8)
======== ========
Loss per share:
Basic $ (0.20) $ (0.72)
Diluted (0.20) (0.72)
Number of shares used in per share calculations:
Basic 258.8 215.2
Diluted 258.8 215.2
</TABLE>
Certain fiscal 1998 amounts have been restated as a result of a pooling-of-
interests merger.
See accompanying notes to consolidated financial statements.
3
<PAGE>
MICRON TECHNOLOGY, INC.
Consolidated Statements of Cash Flows
(Dollars in millions)
(Unaudited)
<TABLE>
<CAPTION>
June 3, May 28,
For the nine months ended 1999 1998
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (51.4) $ (153.8)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 612.9 434.7
Change in assets and liabilities, net of effects of acquisition and
sale of MCMS
Decrease in receivables 32.4 17.9
Decrease (increase) in inventories (117.7) 52.4
Increase (decrease) in accounts payable and accrued
expenses, net of plant and equipment payables 41.9 (45.0)
Tax effect of stock options in additional paid in capital 36.9 3.7
Increase (decrease) in long-term product and process
rights liability 1.8 (33.4)
Gain on sale and issuance of subsidiary stock (1.6) (157.9)
Other 8.8 (13.3)
---------- --------
Net cash provided by operating activities 564.0 105.3
---------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Expenditures for property, plant and equipment (513.8) (564.2)
Proceeds from sale of subsidiary stock, net of MCMS cash -- 235.9
Purchase of available-for-sale and held-to-maturity securities (2,368.4) (611.3)
Proceeds from sales and maturities of securities 1,116.1 796.6
Other 3.6 9.2
---------- --------
Net cash used for investing activities (1,762.5) (133.8)
---------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Cash received in conjunction with acquisition 681.1 --
Proceeds from issuance of common stock 583.7 15.2
Proceeds from issuance of debt 34.0 31.4
Repayments of debt (93.4) (99.4)
Payments on equipment purchase contracts (218.6) (32.5)
Other 3.5 1.1
---------- --------
Net cash provided by (used for) financing activities 990.3 (84.2)
---------- --------
Net decrease in cash and equivalents (208.2) (112.7)
Cash and equivalents at beginning of period 558.8 621.5
---------- --------
Cash and equivalents at end of period $ 350.6 $ 508.8
========== ========
SUPPLEMENTAL DISCLOSURES
Interest paid $ (67.4) $ (36.1)
Income taxes refunded (paid), net 185.5 (41.3)
Noncash investing and financing activities:
Equipment acquisitions on contracts payable and capital leases 135.3 130.2
Cash received in conjunction with acquisition:
Fair value of assets acquired $ 949.3 $ --
Liabilities assumed (138.0) --
Debt issued (836.0) --
Stock issued (656.4) --
---------- --------
$ (681.1) $ --
========== ========
</TABLE>
Certain fiscal 1998 amounts have been restated as a result of a pooling-of-
interests merger.
See accompanying notes to consolidated financial statements.
4
<PAGE>
Notes to Consolidated Financial Statements
(All tabular dollar amounts are stated in millions)
1. Unaudited interim financial statements
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (consisting solely of normal
recurring adjustments) necessary to present fairly the consolidated financial
position of Micron Technology, Inc., and subsidiaries (the "Company" or "MTI"),
and their consolidated results of operations and cash flows. The Company has
restated its prior period financial statements, as a result of the merger with
Rendition, Inc. ("Rendition") which was accounted for as a business combination
using the pooling-of-interests method.
These unaudited interim financial statements should be read in conjunction
with the consolidated financial statements and accompanying notes included in
the Company's Form 10-K for the year ended September 3, 1998.
<TABLE>
<CAPTION>
2. Supplemental balance sheet information June 3, September 3,
1999 1998
- ----------------------------------------------------------------------------------
Receivables
- ----------------------------------------------------------------------------------
<S> <C> <C>
Trade receivables $ 409.1 $ 294.4
Income taxes receivable 87.7 191.9
Allowance for returns and discounts (23.9) (11.9)
Allowance for doubtful accounts (7.9) (6.5)
Other receivables 96.5 21.6
------- ----------
$ 561.5 $ 489.5
======= ==========
Inventories
- ----------------------------------------------------------------------------------
Finished goods $ 238.6 $ 93.3
Work in progress 146.6 139.6
Raw materials and supplies 56.3 58.7
------- ----------
$ 441.5 $ 291.6
======= ==========
Product and process technology
- ----------------------------------------------------------------------------------
Product and process technology, at cost $ 315.7 $ 161.7
Less accumulated amortization (101.9) (76.8)
-------- ----------
$ 213.8 $ 84.9
======== ==========
Property, plant and equipment
- ----------------------------------------------------------------------------------
Land $ 42.2 $ 34.8
Buildings 1,130.6 915.5
Equipment 3,840.8 3,025.7
Construction in progress 734.7 704.6
-------- ----------
5,748.3 4,680.6
Less accumulated depreciation and amortization (2,103.8) (1,645.3)
-------- ----------
$3,644.5 $ 3,035.3
======== ==========
</TABLE>
As of June 3, 1999, property, plant and equipment included total
unamortized costs of $709.5 million for the Company's semiconductor memory
manufacturing facility in Lehi, Utah, of which $649.1 million has not been
5
<PAGE>
Notes to Consolidated Financial Statements, continued
placed in service and is not being depreciated. Timing of the completion of the
remainder of the Lehi production facilities is dependent upon market conditions.
Market conditions which the Company expects to evaluate include, but are not
limited to, worldwide market supply and demand of semiconductor products and the
Company's operations, cash flows and alternative uses of capital. The Company
continues to evaluate the carrying value of the facility and as of June 3, 1999,
it was determined to have no impairment.
Depreciation expense was $196.9 million and $569.1 million, respectively,
for the third quarter and first nine months of 1999, and $139.0 million and
$406.9 million for the third quarter and first nine months of 1998.
<TABLE>
<CAPTION>
June 3, September 3,
1999 1998
- -------------------------------------------------------------------------------------------------
Accounts payable and accrued expenses
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Accounts payable $ 353.4 $ 235.6
Salaries, wages and benefits 86.9 85.6
Interest payable 27.1 7.7
Taxes payable other than income 23.6 44.5
Product and process technology payable 40.2 46.4
Other 66.1 40.9
---------- ----------
$ 597.3 $ 460.7
========== ==========
<CAPTION>
Debt
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Convertible Subordinated Notes payable, due October 2005, with
an effective yield to maturity of 8.4%, net of unamortized
discount of $66.8 million $ 673.2 $ --
Convertible Subordinated Notes payable, due July 2004,
interest rate of 7% 500.0 500.0
Subordinated Notes payable, due October 2005, with an effective
yield to maturity of 10.7%, net of unamortized discount of
$39.2 million 170.8 --
Notes payable in periodic installments through July 2015,
weighted average interest rate of 7.37% and 7.38%,
respectively 279.9 315.2
Capitalized lease obligations payable in monthly installments
through August 2004, weighted average interest rate of
7.55% and 7.61%, respectively 34.9 42.2
---------- ----------
1,658.8 857.4
Less current portion (105.2) (98.6)
---------- ----------
$ 1,553.6 $ 758.8
========== ==========
</TABLE>
The convertible subordinated notes due October 2005 (the "Convertible Notes")
with an effective yield-to-maturity of 8.4% have a face value of $740 million, a
stated interest rate of 6.5% and are convertible into shares of the Company's
common stock at $60 per share. The Convertible Notes are not subject to
redemption prior to October 2000 and are redeemable from that date through
October 2002 only if the common stock price is at least $78.00 for a specified
trading period. The Convertible Notes have not been registered with the
Securities and Exchange Commission, however the holder has registration rights.
(See note 7 - "Acquisition")
6
<PAGE>
Notes to Consolidated Financial Statements, continued
The 7% convertible subordinated notes due July 2004 are convertible into
shares of the Company's common stock at $67.44 per share. The notes are
redeemable through July 2001 if the common stock price is at least $87.67 for a
specified trading period. The notes were offered under a $1 billion shelf
registration statement pursuant to which the Company may issue from time to time
up to $500 million of additional debt or equity securities. The subordinated
notes due October 2005 with a yield to maturity of 10.7% have a face value of
$210 million and a stated interest rate of 6.5%.
The Company has a $400 million secured revolving credit agreement which
expires May 2000. The interest rate on borrowed funds is based on various
pricing options at the time of borrowing. The agreement contains certain
restrictive covenants pertaining to the Company's semiconductor operations,
including a maximum debt to equity covenant. As of June 3, 1999, MTI had no
borrowings outstanding under the agreement.
Micron Electronics, Inc. ("MEI"), an approximately 63% owned subsidiary of
the Company, has a $100 million unsecured credit agreement expiring in June
2001. Under the credit agreement, MEI is subject to certain financial and other
covenants including certain financial ratios and limitations on the amount of
dividends paid by MEI. As of June 3, 1999, MEI was eligible to borrow the full
amount under its credit agreement but had no borrowings outstanding.
3. Other operating expense, net
Other operating expense for the third quarter of 1999 includes a net $13.4
million loss from the write down and disposal of semiconductor memory operations
equipment. Other operating expense for the first nine months of 1999 includes a
$15.0 million second quarter charge to write down certain flat panel display
assets, partially offset by a $5.1 million reduction in employee benefit
accruals in the third quarter and $5.2 million from cancellation of a
compensation program in the second quarter.
Other operating expense for the first nine months of 1998 includes charges
associated with PC operations of $13.0 million resulting from employee
termination benefits and consolidation of domestic and international operations
and $5.2 million from the write off of software development costs, as well as
$9.3 million related to the disposal and write down of semiconductor memory
operations equipment.
4. Income taxes
The effective tax rate for the third quarter and first nine months of 1999
was approximately 40%, primarily reflecting the U.S. corporate income tax rate
and the net effect of state taxation. The Company is currently evaluating
permanent reinvestment of foreign earnings associated with certain of the
Company's international operations which have been granted favorable tax
treatment. Taxes on earnings of domestic subsidiaries not consolidated for tax
purposes may cause the effective tax rate to vary significantly from period to
period.
The effective tax rate for the third quarter and first nine months of 1998
was 40% and 35%, respectively. The income tax rate for the third quarter and
first nine months of 1998 reflects the write off in the second quarter of 1998
of a $4 million deferred tax asset relating to the Company's consolidation of
its NetFRAME enterprise server operations.
7
<PAGE>
Notes to Consolidated Financial Statements, continued
5. Earnings (loss) per share
Basic earnings per share is calculated using the average number of common
shares outstanding. Diluted earnings per share is computed on the basis of the
average number of common shares outstanding plus the effect of outstanding stock
options using the "treasury stock method" and convertible debentures using the
"if-converted" method. Earnings per share computations exclude stock options
and potential shares for convertible debentures to the extent that their effect
would have been antidilutive.
<TABLE>
<CAPTION>
Quarter ended Nine months ended
June 3, May 28, June 3, May 28,
1999 1998 1999 1998
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net loss available for common shareholders,
Basic and Diluted $ (27.7) $ (109.4) $ (51.4) $ (153.8)
======== ========= ========= ==========
Weighted average common stock outstanding - Basic 266.3 215.8 258.8 215.2
Net effect of dilutive stock options -- -- -- --
-------- --------- --------- ----------
Weighted average common stock and common stock
equivalents - Diluted 266.3 215.8 258.8 215.2
======== ========= ========= ==========
Basic loss per share $ (0.10) $ (0.51) $ (0.20) $ (0.72)
======== ========= ========= ==========
Diluted loss per share $ (0.10) $ (0.51) $ (0.20) $ (0.72)
======== ========= ========= ==========
Antidilutive shares excluded from computation 6.0 12.6 0.6 10.9
======== ========= ========= ==========
</TABLE>
6. Comprehensive Income
The Company adopted Statement of Financial Accounting Standards ("SFAS")
No. 130, "Reporting Comprehensive Income," as of the first quarter of 1999. SFAS
No. 130 establishes rules for the reporting and display of comprehensive income
and its components.
The components of comprehensive income are as follows:
<TABLE>
<CAPTION>
June 3, May 28,
For the quarter ended 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Net loss $ (27.7) $ (109.4)
Unrealized loss on investments (0.1) --
-------- --------
Total comprehensive loss (27.8) (109.4)
======== ========
<CAPTION>
June 3, May 28,
For the nine months ended 1999 1998
- --------------------------------------------------------------------------------
<S> <C> <C>
Net loss $ (51.4) $ (153.8)
Foreign currency translation adjustment -- (0.5)
Unrealized loss on investments (1.4) --
-------- --------
Total comprehensive loss $ (52.8) $ (154.3)
======== ========
</TABLE>
8
<PAGE>
Notes to Consolidated Financial Statements, continued
7. Acquisition
On September 30, 1998, the Company completed its acquisition (the
"Acquisition") of substantially all of the memory operations of Texas
Instruments Incorporated ("TI") for a net purchase price of approximately $832.8
million. The Acquisition was consummated through the issuance of debt and equity
securities. In connection with the transaction, the Company issued 28.9 million
shares of MTI common stock, $740 million principal amount of Convertible Notes
and $210 million principal amount of subordinated notes. In addition to TI's net
memory assets, the Company received $681.1 million in cash. The Acquisition was
accounted for as a business combination using the purchase method of accounting.
The purchase price was allocated to the assets acquired and liabilities assumed
based on their estimated fair values. The Company and TI also entered into a
ten-year, royalty-free, life-of-patents, patent cross license that commenced on
January 1, 1999. The Company made royalty payments to TI under a prior cross
license agreement for operations through December 31, 1998.
The following unaudited pro forma information presents the consolidated
results of operations of the Company as if the Acquisition had taken place at
the beginning of each period presented.
<TABLE>
<CAPTION>
June 3, May 28,
For the nine months ended 1999 1998
- --------------------------------------------------------------------------
<S> <C> <C>
Net sales $2,738.5 $2,958.9
Net loss (68.7) (433.9)
Basic loss per share (0.26) (1.78)
Diluted loss per share (0.26) (1.78)
</TABLE>
These pro forma results of operations have been prepared for comparative
purposes only and do not purport to be indicative of the results of operations
which actually would have resulted had the Acquisition occurred on the dates
indicated, or which may result in the future.
8. Merger
On September 14, 1998, the Company completed its merger with Rendition. The
Company issued approximately 3.6 million shares of Common Stock in exchange for
all of the outstanding stock of Rendition. The merger qualified as a tax-free
exchange and was accounted for as a business combination using the "pooling-of-
interests" method. Accordingly, the Company's financial statements have been
restated to include the results of Rendition for all periods presented. The
following table presents a reconciliation of net sales and net income (loss) as
previously reported by the Company for the quarter and nine months ended May 28,
1998, to those presented in the accompanying consolidated financial statements.
<TABLE>
<CAPTION>
For the quarter ended MTI Rendition Combined
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $ 609.9 $ 2.8 $ 612.7
Net loss $ (106.1) $ (3.3) $ (109.4)
<CAPTION>
For the nine months ended MTI Rendition Combined
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $2,320.0 $ 13.2 $2,333.2
Net loss $ (144.7) $ (9.1) $ (153.8)
</TABLE>
9
<PAGE>
Notes to Consolidated Financial Statements, continued
9. Equity investment
On October 19, 1998, the Company issued to Intel approximately 15.8 million
stock rights (the "Rights") for a purchase price of $500 million. The Rights
were converted into non-voting Class A Common Stock of the Company on January
14, 1999. The Class A Common Stock represented approximately 6% of the
Company's outstanding common stock as of June 3, 1999. The Class A Common Stock
will automatically be converted into the Company's common stock upon a transfer
to a holder other than Intel or a 90% owned subsidiary of Intel. The Class A
Common Stock issued to Intel has not been registered under the Securities Act of
1933, as amended, and is therefore subject to certain restrictions on resale.
The Company and Intel entered into a securities rights and restrictions
agreement which provides Intel with certain registration rights and places
certain restrictions on Intel's voting rights and other activities with respect
to the shares of MTI Class A Common Stock or common stock. Intel also has the
right to designate a director nominee, acceptable to the Company, to the
Company's Board of Directors.
In consideration for Intel's investment, the Company has agreed to commit
to the development of direct Rambus DRAM ("RDRAM") and to certain production and
capital expenditure milestones and to make available to Intel a certain
percentage of its semiconductor memory output over a five-year period, subject
to certain limitations. The conversion ratio of the Class A Common Stock is
subject to adjustment under certain formulae at the election of Intel in the
event MTI fails to meet the production or capital expenditure milestones. No
adjustment will occur to the conversion ratio under such formulae (i) unless the
price of the Company's common stock for a twenty day period ending two days
prior to such milestone dates is lower than $31.625 (the market price of the
Company's common stock at the time of investment), or (ii) if the Company
achieves the production and capital expenditure milestones. In addition, if an
adjustment occurs, in no event will the Company be obligated to issue more than:
(a) a number of additional shares having a value exceeding $150 million, or (b)
15,810,277 shares.
10. Joint Ventures
In connection with the Acquisition, the Company acquired a 30% ownership
interest in TECH Semiconductor Singapore Pte. Ltd. ("TECH") and a 25% ownership
interest in KMT Semiconductor Limited ("KMT"). TECH and KMT operate wafer
fabrication facilities for the manufacture of DRAM products. TECH, which
operates in Singapore, is a joint venture between the Company, the Singapore
Economic Development Board, Canon Inc., and Hewlett-Packard Company. KMT, which
operates in Japan, is a joint venture between the Company and Kobe Steel, Ltd.
TECH and KMT are collectively referred to herein as the "JVs." The Company has
rights and obligations to purchase all of the production meeting its
specifications from the JVs at prices determined quarterly. In addition, the
Company is a party to various agreements whereby the Company receives fees for
services performed on behalf of the JVs. All JV transactions are recognized as
part of the net cost of JV output. The Company accounts for its investments in
these JVs under the equity method.
The Company is amortizing the purchase price allocated to the JV supply
arrangements on a straight-line basis over the remaining contractual life of the
arrangements. Amortization expense from the JV supply arrangements was $0.7
million and $1.9 million, respectively, for the third quarter and first nine
months of 1999.
The Company incurred net costs of $106.1 million and $221.3 million for
product purchases from the JVs in the third quarter and first nine months of
1999, respectively. The Company sold semiconductor memory manufacturing
equipment to the JVs totaling $2.1 million and $3.5 million in the third quarter
and first nine months of 1999, respectively. Aggregate receivables from and
payables to the JVs were $45.5 million and $42.8 million, respectively, as of
June 3, 1999.
10
<PAGE>
Notes to Consolidated Financial Statements, continued
11. Commitments and contingencies
As of June 3, 1999, the Company had commitments of approximately $585.6
million for equipment purchases and $46.2 million for the construction of
buildings.
The Company has from time to time received, and may in the future receive,
communications alleging that its products or its processes may infringe on
product or process technology rights held by others. The Company has accrued a
liability and charged operations for the estimated costs of settlement or
adjudication of asserted and unasserted claims for alleged infringement prior to
the balance sheet date. Determination that the Company's manufacture of
products has infringed on valid rights held by others could have a material
adverse effect on the Company's financial position, results of operations or
cash flows and could require changes in production processes and products.
The Company is currently a party to various other legal actions arising out
of the normal course of business, none of which are expected to have a material
effect on the Company's financial position or results of operations.
12. Asset Sale
On May 19, 1999, the Company completed the sale of certain of its flat
panel display assets to PixTech, Inc. ("PixTech"). Pursuant to the terms of the
transaction, in exchange for the transfer of certain assets (including
manufacturing equipment and $4.35 million in cash) and liabilities to PixTech,
the Company received 7,133,562 shares of PixTech Common Stock and warrants to
purchase an additional 310,000 shares of PixTech Common Stock at an exercise
price of $2.25. The Company wrote down its flat panel display assets by $15
million during the second quarter of 1999 in anticipation of this transaction.
13. Subsequent Event
Subsequent to the end of the third quarter, the Company decided to
discontinue funding of its radio frequency identification development ("RFID")
efforts as the Company continues to focus its resources on its core
semiconductor efforts. It is anticipated that the Company's majority owned RFID
subsidiary, Micron Communications, Inc., will cease operations in the fourth
quarter of 1999 resulting in a consolidated pre-tax charge of $9 to $12 million.
11
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- --------------------------------------------------------------------------------
of Operations
- -------------
Micron Technology, Inc. and its subsidiaries are hereinafter referred to
collectively as the "Company" or "MTI." The Company designs, develops,
manufactures and markets semiconductor memory products, primarily DRAM, and
through its approximately 63% owned subsidiary, Micron Electronics, Inc.
("MEI"), develops, markets, manufactures and supports PC systems.
On September 30, 1998, the Company completed the acquisition (the
"Acquisition") of substantially all of the semiconductor memory operations (the
"Acquired Operations") of Texas Instruments Incorporated ("TI"). The Company's
results of operations for the first nine months of 1999 reflect eight months'
results of operations for the Acquired Operations.
The following discussion contains trend information and other forward
looking statements (including statements regarding future operating results,
future capital expenditures and facility expansion, new product introductions,
technological developments, acquisitions and the effect thereof and industry
trends) that involve a number of risks and uncertainties. The Company's actual
results could differ materially from the Company's historical results of
operations and those discussed in the forward looking statements. Factors that
could cause actual results to differ materially include, but are not limited to,
those identified in "Certain Factors." This discussion should be read in
conjunction with the Company's Annual Report on Form 10-K for the year ended
September 3, 1998. All period references are to the Company's fiscal periods
ended June 3, 1999, September 3, 1998, or May 28, 1998, unless otherwise
indicated. All per share amounts are presented on a diluted basis unless
otherwise stated. All 1998 financial data of the Company has been restated to
include the results of operations of Rendition, Inc., which was merged with the
Company on September 11, 1998.
Results of Operations
<TABLE>
<CAPTION>
Third Quarter Nine Months
--------------------- ---------------------
1999 1998 1999 1998
--------------------- ---------------------
<S> <C> <C> <C> <C>
Net sales $863.8 $ 612.7 $2,683.2 $2,333.2
Net income (loss) (27.7) (109.4) (51.4) (153.8)
Earnings (loss) per share (0.10) (0.51) (0.20) (0.72)
</TABLE>
Per megabit pricing for the Company's semiconductor memory products
declined approximately 26% and 39%, respectively, for the third quarter and
first nine months of 1999 as compared to the corresponding periods of 1998.
Average selling prices per megabit for the Company's entire line of
semiconductor memory products declined 21% comparing the third quarter of 1999
to the second quarter of 1999. Average selling prices for the Company's primary
product, the 64 Meg Synchronous DRAM ("SDRAM") declined by 27% in the same
period. This deterioration in average selling prices has had an adverse effect
on the Company's results of operations. The Company is unable to predict pricing
conditions for future periods.
For the second quarter of 1999, net income was $22 million, or $0.08 per
share, on net sales of $1,026 million. Results of operations for the first nine
months of 1999 were adversely affected by a $15 million write down of certain of
the Company's flat panel display assets in the second quarter.
Net Sales
<TABLE>
<CAPTION>
Third Quarter Third Quarter
------------------------------------ -------------------------------------
1999 1998 1999 1998
------------------------------------ -------------------------------------
Net Sales % Net Sales % Net Sales % Net Sales %
------------------------------------ -------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Semiconductor memory products $ 593.0 68.7 $ 290.2 47.4 $ 1,699.6 63.3 $ 1,013.8 43.4
PC systems 270.8 31.3 310.3 50.6 932.4 34.8 1,151.9 49.4
Other 0.0 0.0 12.2 2.0 51.2 1.9 167.5 7.2
------- ----- ------- ----- --------- ----- --------- -----
Total net sales $ 863.8 100.0 $ 612.7 100.0 $ 2,683.2 100.0 $ 2,333.2 100.0
======= ===== ======= ===== ========= ===== ========= =====
</TABLE>
Semiconductor memory products' net sales include MTI semiconductor memory
products incorporated in MEI PC products. Such sales totaled $10.6 million and
$5.8 million in the third quarters of 1999 and 1998, respectively,
12
<PAGE>
and $35.7 million and $23.4 million in the first nine months of 1999 and 1998,
respectively. "Other" net sales for the first nine months of 1998 include
revenue of $123.6 million from MEI's contract manufacturing subsidiary, which
was sold in February 1998.
Net sales of semiconductor memory products for the third quarter and first
nine months of 1999 increased by 104% and 68%, respectively, as compared to the
corresponding periods of 1998. The increase in net sales for these periods was
primarily due to an increase in megabits of semiconductor memory sold and was
partially offset by lower average selling prices. Total megabits sold increased
by approximately 175% for both the third quarter and first nine months of 1999,
as compared to the corresponding periods of 1998. Megabit sales increased as
the Company increased its market share with major OEMs and expanded its customer
base. The Company's ability to meet these increased shipments was the result of
production gains principally due to shifts in the Company's mix of semiconductor
memory products to higher average density products, ongoing transitions to
successive reduced die size ("shrink") versions of existing memory products and,
to a lesser extent, additional output from the Acquired Operations. Average
selling prices per megabit of memory declined 26% comparing the third quarter of
1999 to the third quarter of 1998 and declined 39% comparing the first nine
months of 1999 to the first nine months of 1998. The Company's principal memory
product in the third quarter and first nine months of 1999 was the 64 Meg SDRAM,
which comprised approximately 66% of the net sales of semiconductor memory for
these periods. Net sales of semiconductor memory products decreased by 15% in
the third quarter of 1999 as compared to the second quarter of 1999 principally
due to a 21% decline in per megabit pricing, partially offset by an 8% increase
in total megabits sold.
Net sales of PC systems were lower in the third quarter and first nine months
of 1999 compared to the corresponding periods of 1998 primarily as a result of
declines in overall average selling prices of 6% and 13%, respectively. Unit
sales were relatively flat comparing the third quarter and first nine months of
1999 with the corresponding periods of 1998. Net sales of PC systems for the
third quarter of 1999 were lower than for the second quarter of 1999 primarily
as a result of a 13% decrease in unit sales. Declining sales in the consumer
business, partially offset by an increase in commercial and government sales,
was the primary reason for the overall decline in sales of the Company's PC
systems. Average selling prices for PC systems were relatively flat comparing
the third quarter of 1999 with the second quarter of 1999.
Gross Margin
<TABLE>
<CAPTION>
Third Quarter Nine Months
---------------------------- ---------------------------
1999 % Change 1998 1999 % Change 1998
---------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Gross margin $189.0 2,720.9% $ 6.7 $585.6 144.4% $239.6
as a % of net sales 21.9% 1.1% 21.8% 10.3%
</TABLE>
The Company's gross margin percentage on sales of semiconductor memory
products was 23% for the third quarter and first nine months of 1999, compared
to (20)% and 10%, respectively, for the corresponding periods of 1998. The
increase in gross margin percentage on sales of semiconductor memory products
for the third quarter and first nine months of 1999 compared to the
corresponding periods in 1998 was primarily the result of decreases in per
megabit manufacturing costs. Comparative decreases in per megabit manufacturing
costs were achieved primarily through shifts in the Company's mix of
semiconductor memory products to higher average density products and transitions
to shrink versions of existing products. The effect of these factors was
partially offset by decreases in average selling prices, and to a lesser extent,
the inclusion of eight months of results for the Acquired Operations which have
higher per-unit manufacturing costs.
The gross margin percentage on the Company's semiconductor memory products for
the second quarter of 1999 was 32%. The decline in gross margin percentage for
semiconductor memory products in the third quarter as compared to the second
quarter of 1999 was primarily the result of the 21% decline in average selling
prices per megabit of memory. The effect on gross margin of this decline in
average selling prices was partially offset by decreases in per megabit
manufacturing costs achieved through continued increases in production
efficiencies, including ongoing transitions to shrink versions of existing
memory products, shifts in the Company's mix of semiconductor memory products to
higher average density products, and an increase in the number of wafers
processed. In the third quarter of 1999, the Company produced approximately 17%
more megabits of memory than in the second quarter.
13
<PAGE>
In connection with the Acquisition, the Company acquired the right and
obligation to purchase all of the production meeting its specifications from two
joint ventures, TECH Semiconductor Singapore Pte. Ltd. ("TECH") and KMT
Semiconductor Limited ("KMT"). TECH and KMT are collectively referred to herein
as the "JVs." The Company purchases assembled and tested components from the
JVs at prices determined quarterly and which are based on the Company's average
sales prices. Primarily as a result of the rate of decline in average selling
prices, the Company essentially broke even on gross margins for JV products sold
in the third quarter of 1999. In any future reporting period, gross margins
resulting from the Company's sales of JV product may positively or negatively
impact gross margins otherwise realized for semiconductor memory products
manufactured in the Company's wholly-owned facilities.
The gross margin percentage for the Company's PC operations for the third
quarter and first nine months of 1999 was 16% and 15%, respectively, compared to
19% and 10% for the corresponding periods of 1998. The gross margin for the
Company's PC operations was 14% for the second quarter of 1999. The gross
margin in the first nine months of 1998 was negatively impacted by a decline in
average selling prices of the Company's notebook products. Absent the effects
of sales of notebook systems in the third quarter of 1998 which were sold at
prices higher than anticipated in the write down of such products in the
preceding quarter, the Company's overall PC gross margin percentage would have
been approximately 17% in the third quarter of 1998. PC gross margins in the
third quarter of 1999 improved from the second quarter of 1999 primarily due to
better product line management and reduced levels of product returns. The
Company expects to continue to experience significant pressure on PC gross
margins as a result of intense competition in the PC industry and consumer
expectations of more powerful PC systems at lower prices.
Selling, General and Administrative
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------------ ---------------------------
1999 % Change 1998 1999 % Change 1998
------------------------------ ---------------------------
<S> <C> <C> <C> <C> <C> <C>
Selling, general and administrative $124.1 11.4% $111.4 $352.7 (6.2)% $376.0
as a % of net sales 14.4% 18.2% 13.1% 16.1%
</TABLE>
Selling, general and administrative expenses were higher in the third quarter
and lower in the first nine months of 1999 as compared to the corresponding
periods of 1998. Selling, general and administrative expenses for the Company's
PC operations decreased substantially for these comparative periods primarily as
a result of enhanced operational efficiencies and cost reductions achieved by
the Company's PC operations and the sale of 90% of MEI's interest in its
contract manufacturing subsidiary in fiscal 1998. Selling, general and
administrative expenses associated with the Company's semiconductor memory
operations increased significantly for the third quarter and first nine months
of 1999 as compared to the corresponding periods of 1998 and include
approximately $11 million and $33 million, respectively, in expenses associated
with the Acquired Operations. Selling, general and administrative expenses for
the first nine months of 1998 reflect a $6 million contribution to a university
in support of engineering education. Selling, general and administrative
expenses were flat comparing the third quarter to the second quarter of 1999.
Implementation of new business software systems within the Company's
semiconductor memory operations may increase depreciation expense by up to $3
million per quarter by the end of fiscal 2000.
Research and Development
<TABLE>
<CAPTION>
Third Quarter Nine Months
--------------------------- ----------------------------
1999 % Change 1998 1999 % Change 1998
--------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
Research and development $81.6 15.4% $70.7 $234.7 11.8% $209.9
as a % of net sales 9.4% 11.5% 8.7% 9.0%
</TABLE>
Research and development expenses relating to the Company's semiconductor
memory operations, which constitute substantially all of the Company's research
and development expenses, vary primarily with the number of wafers processed,
personnel costs, and the cost of advanced equipment dedicated to new product and
process development. Research and development efforts are focused on advanced
process technology, which is the primary determinant in transitioning to next
generation products. Application of advanced process technology currently is
concentrated on design of shrink versions of the Company's 64 and 128 Meg SDRAMs
and on design and development of the Company's 256 Meg SDRAM and direct Rambus
DRAM ("RDRAM"), Double Data Rate ("DDR"), SyncLink DRAM ("SLDRAM"), Flash and
SRAM memory products. Other research and development
14
<PAGE>
efforts are currently devoted to the design and development of graphics
accelerator products, PC systems and PC core logic.
Research and development expenses in the third quarter and first nine months
of 1999 include costs of resources obtained in the Acquisition being utilized to
broaden the Company's range of DRAM product offerings. The expansion of product
offerings is considered necessary to support the customer base required for sale
of the Company's increased production.
The Company substantially transitioned all operations from .25 micron (u) to
.21u process technology at its Boise site early in the second quarter of 1999
and expects to further transition such operations to .18u in late calendar 1999.
The Company anticipates that process technology will move to .15u line widths in
the next few years as needed for the development of future generation
semiconductor products. Transitions to smaller line widths at the Acquired
Operations are expected to lag behind transitions at the Boise site by several
months as process technology development and initial manufacturing is expected
to be completed first at the Boise site.
Other Operating Expense, net
Other operating expense for the third quarter of 1999 includes a net $13
million loss from the write down and disposal of semiconductor memory operations
equipment. Other operating expense for the first nine months of 1999 includes a
$15 million second quarter charge to write down flat panel display assets,
partially offset by a $5 million reduction in employee benefit accruals in the
third quarter and $5 million from the cancellation of a compensation program in
the second quarter.
Other operating expense for the first nine months of 1998 includes charges
associated with the Company's PC Operations of $13 million resulting from
employee termination benefits and consolidation of domestic and international
operations and $5 million from the write off of software development costs, as
well as $9 million related to the disposal and write down of semiconductor
memory operations equipment.
It is anticipated that the Company will record a consolidated pre-tax charge
of $9 to $12 million to other expense in the fourth quarter as the result of the
discontinuation of its radio frequency identification ("RFID") development
efforts. (See "Subsequent Event")
Income Taxes
The effective tax rate for the third quarter and first nine months of 1999 was
approximately 40%, primarily reflecting the U.S. corporate income tax rate and
the net effect of state taxation. The Company is currently evaluating permanent
reinvestment of foreign earnings associated with certain of the Company's
international operations which have been granted favorable tax treatment. Taxes
on earnings of domestic subsidiaries not consolidated for tax purposes may cause
the effective tax rate to vary significantly from period to period.
The effective tax rate for the third quarter and first nine months of 1998 was
40% and 35%, respectively. The income tax rate for the first nine months of
1998 reflects the write off in the second quarter of 1998 of a $4 million
deferred tax asset relating to the Company's consolidation of its NetFRAME
enterprise server operations.
Recently Issued Accounting Standards
Recently issued accounting standards include Statement of Financial Accounting
Standards ("SFAS") No. 131 "Disclosures about Segments of an Enterprise and
Related Information," issued by the FASB in June 1997, Statement of Position
("SOP") 98-1 "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use," issued by the AICPA in March 1998 and SFAS No. 133
"Accounting for Derivative Instruments and Hedging Activities," issued by the
FASB in June 1998.
SFAS No. 131 requires public companies to report financial and other
information about key revenue-producing segments of the entity for which such
information is available and is utilized by the chief operating decision-makers.
Implementation of SFAS No. 131 is required for the Company's year end 1999.
15
<PAGE>
SOP 98-1 requires companies to capitalize certain costs of computer software
developed or obtained for internal use. The Company, which currently
capitalizes costs of purchased internal-use computer software and expenses costs
of internally developed internal-use software as incurred, expects to adopt the
standard in the first quarter of 2000 for developmental costs incurred in that
quarter and thereafter. The adoption is expected to result in an initial
decrease in selling, general and administrative expense due to the
capitalization of certain business system software costs that are not being
capitalized under the Company's current practice. Subsequent period expenses
are expected to reflect a higher level of depreciation expense resulting from
the relatively higher carrying value of the Company's capitalized software
accounted for under SOP 98-1.
SFAS No. 133 requires that all derivatives be recorded as either assets or
liabilities in the balance sheet and marked to market on an ongoing basis. SFAS
No. 133 applies to all derivatives including stand-alone instruments, such as
forward currency exchange contracts and interest rate swaps, or embedded
derivatives, such as call options contained in convertible debt investments.
Along with the derivatives, the underlying hedged items are also to be marked to
market on an ongoing basis. These market value adjustments are to be included
either in the statement of operations or as a component of comprehensive income,
depending on the nature of the transaction. Implementation of SFAS No. 133 is
required for the Company by the first quarter of 2001. The Company is currently
evaluating the effect SFAS 133 will have on its future results of operations and
financial position.
Liquidity and Capital Resources
As of June 3, 1999, the Company had cash and liquid investments totaling $1.7
billion, representing an increase of $1.0 billion during the first nine months
of 1999. In the first quarter of 1999, the Company received $681 million in
conjunction with the Acquisition and $500 million from the sale of stock to
Intel Corporation. The Company's other principal source of liquidity during the
first nine months of 1999 was net cash flow from operations of $564 million.
The principal uses of funds during the first nine months of 1999 were $514
million for property, plant and equipment expenditures, $312 million for
repayments of equipment contracts and debt and a $118 million increase in
inventory.
The Company believes that in order to transition the Acquired Operations to
the Company's product and process technology, develop new product and process
technologies, support future growth, achieve operating efficiencies and maintain
product quality, it must continue to invest in manufacturing technology,
facilities and capital equipment, research and development, and product and
process technology. The Company currently estimates it will spend approximately
$1 billion in 1999 for purchases of equipment and for construction and
improvement of buildings, of which it has spent approximately $649 million to
date. As of June 3, 1999, the Company had entered into contracts extending into
2000 for approximately $586 million for equipment purchases and approximately
$46 million for the construction of facilities.
The Company has an aggregate of $500 million in revolving credit agreements,
including a $400 million secured agreement expiring in May 2000 which contains
certain restrictive covenants pertaining to the Company's semiconductor memory
operations, including a maximum total debt to equity ratio. As of June 3, 1999,
the Company was in compliance with all covenants under the facilities and had no
borrowings outstanding under the agreements. There can be no assurance that the
Company will continue to be able to meet the terms of the covenants and
conditions in the agreements, borrow under the agreements or negotiate
satisfactory successor agreements.
As of June 3, 1999, approximately $363 million of the Company's consolidated
cash and liquid investments were held by MEI. Cash generated by MEI is not
readily available to finance operations or other expenditures of MTI's
semiconductor memory operations
16
<PAGE>
Significant Transactions - Acquisition
On September 30, 1998, the Company completed its acquisition of substantially
all of TI's memory operations. The Acquisition was consummated through the
issuance of debt and equity securities. TI received 28.9 million shares of MTI
common stock, $740 million principal amount of convertible notes (the
"Convertible Notes") and $210 million principal amount of subordinated notes
(the "Subordinated Notes"). In addition to TI's net memory assets, the Company
received $681 million in cash. The Company and TI also entered into a ten-year,
royalty-free, life-of-patents, patent cross license that commenced on January 1,
1999.
The MTI common stock, Convertible Notes and Subordinated Notes issued in the
transaction have not been registered under the Securities Act of 1933, as
amended, and are, therefore, subject to certain restrictions on resale. The
Company and TI entered into a securities rights and restrictions agreement as
part of the transaction which provides TI with certain registration rights and
places certain restrictions on TI's voting rights and other activities with
respect to shares of MTI common stock. The Convertible Notes and the
Subordinated Notes issued in the transaction bear interest at the rate of 6.5%
and have a term of seven years. The Convertible Notes are convertible into 12.3
million shares of MTI common stock at a conversion price of $60 per share. The
Convertible Notes are not subject to redemption prior to October 2000 and are
redeemable from that date through October 2002 only if the common stock price is
at least $78.00 for a specified trading period. The Subordinated Notes are
subordinated to the Convertible Notes, the Company's outstanding 7% Convertible
Subordinated Notes due July, 2004, and substantially all of the Company's other
indebtedness.
The assets acquired by the Company in the Acquisition include a wafer
fabrication operation in Avezzano, Italy, an assembly/test operation in
Singapore, and an inactive wafer fabrication facility in Richardson, Texas. Also
included in the Acquisition was TI's minority interest in two joint ventures,
TECH and KMT, and TI's rights and obligations to purchase 100% of the joint
venture production meeting the Company's specifications. TECH, which operates in
Singapore, is now owned by the Company, Canon, Inc., Hewlett-Packard Singapore
(Private) Limited, a subsidiary of Hewlett Packard Company, and EDB Investments
Pte. Ltd., which is controlled by the Economic Development Board of the
Singapore government; and KMT, which operates in Japan, is now owned by the
Company and Kobe Steel, Ltd. MTI acquired a 30% interest in TECH and a 25%
interest in KMT. The Company filed Form 8-K/A on October 16, 1998, which
incorporates historical and pro forma financial information with respect to the
Acquisition. Pro forma financial information is also included in the notes to
the financial statements in this Form 10-Q.
Although the Company believes the Acquisition further leverages its
technology, the Company anticipates that the Acquisition will continue to have a
near term adverse impact upon the Company's results of operations and cash
flows. The Company is in the process of transferring its .21u and .18u product
and process technology into the Acquired Operations (primarily the wholly owned
fabrication facilities in Avezzano, Italy and the joint-venture facilities) and
expects the transfer to be substantially complete by 1999 calendar year end.
Output of the Company's semiconductor memory products has increased directly as
a result of the manufacturing capacity obtained in the Acquisition and should
increase further as a result of the transfer of the Company's product and
process technology to the Acquired Operations. Until the Company is able to
complete the transfer of its product and process technology into the Acquired
Operations, the Company expects that the per unit costs associated with products
manufactured at the Acquired Operations will continue to significantly exceed
the per unit costs of products manufactured at the Company's Boise, Idaho
facility, resulting in a near-term adverse impact on the Company's gross margin
percentage. The ten-year, royalty-free, life-of-patents, patent cross license
entered into with TI resulted in a reduction in the Company's royalty expenses
beginning January 1999.
Subsequent Event
Subsequent to the end of the third quarter, the Company decided to discontinue
funding of its RFID development efforts as the Company continues to focus its
resources on its core semiconductor efforts. It is anticipated that the
Company's majority owned RFID subsidiary, Micron Communications, Inc., will
cease operations in the fourth quarter resulting in a consolidated pre-tax
charge of $9 to $12 million.
17
<PAGE>
Year 2000
Like many other companies, the Year 2000 computer issue creates risks for the
Company. If internal systems do not correctly recognize and process date
information beyond the year 1999, the Company's operations could be adversely
impacted as a result of system failures and business process interruption.
Semiconductor Operations
The Company has been addressing the Year 2000 computer issue for its
semiconductor operations with a plan that began in early 1996. To manage its
Year 2000 program, the Company has divided its efforts into the primary program
areas of: (i) information technology ("IT"), which includes computer and network
hardware, operating systems, purchased development tools, third-party and
internally developed software, files and databases, end-user extracts and
electronic interfaces; (ii) embedded technology within manufacturing and
facilitation equipment; and (iii) external dependencies, which include
relationships with suppliers and customers.
The Company is following four general steps for each of these program areas:
"Ownership," wherein each department manager is responsible for assigning
ownership for the various Year 2000 issues to be tested; "Identification" of
systems and equipment and the collection of Year 2000 data in a centralized
place to track results of compliance testing and subsequent remediation;
"Compliance Testing," which includes the determination of the specific test
routine to be performed on the software or equipment and determination of year
2000 compliance for the item being tested; and "Remediation," which involves
implementation of corrective action, verification of successful implementation,
finalization of, and, if need be, execution of, contingency plans.
As of June 3, 1999, the Ownership and Identification steps were essentially
complete for all three program areas: IT, manufacturing and facilitation
equipment and external dependencies. The Compliance Testing and Remediation
steps are substantially complete for the IT area at the Boise site. The Company
is relying in part on TI computer networks, information technology services and
licensed software with respect to certain of the recently acquired semiconductor
operations, much of which is currently used by TI in its manufacturing
processes. The Company is taking various steps to remove its dependence on the
TI systems, including the implementation of new business systems beginning in
September 1999. Nonetheless, dependency upon TI systems will span calendar years
1999 and 2000, and Year 2000 issues may arise. The Company is working with TI to
identify and correct any Year 2000 issues, and at this time does not anticipate
any material Year 2000 issues with respect to the TI systems. (See "Certain
Factors")
Compliance Testing of semiconductor manufacturing and facilitation equipment
is over 85% complete, and Remediation efforts for tested equipment is in excess
of 90% complete. The Company is working with suppliers of products and services
to determine and monitor their level of compliance and Compliance Testing. Year
2000 readiness of significant customers is also being assessed. The Company's
evaluation of Year 2000 compliance as it relates to the Company's external
dependencies is substantially complete.
As of June 3, 1999, the Company had incurred aggregate incremental costs of
approximately $2.5 million and estimates it will spend an additional $1 million
to address the Year 2000 issue with respect to its semiconductor operations. The
Company is executing its Year 2000 readiness plan solely through its employees.
Year 2000 Compliance Testing and reprogramming is being done in conjunction with
other ongoing maintenance and reprogramming efforts.
With respect to Remediation, the Company has prepared various types of
contingency plans to address potential problem areas with internal systems and
with suppliers and other third parties. Internally, each software and hardware
system has been assigned to on-call personnel who are responsible for bringing
the system back on line in the event of a failure. Externally, the Company's
Year 2000 plan includes identification of alternate sources for providers of
goods and services. The Company has completed its internal contingency plans and
expects its external contingency plans to be substantially complete by the third
calendar quarter of 1999.
18
<PAGE>
PC operations
The Company's PC operations have been addressing the Year 2000 issue
independently but in a manner similar to the Company's semiconductor operations.
With respect to IT systems for the Company's PC operations, MEI believes, as
of June 3, 1999, that the inventory, assessment and remediation phases are
essentially complete, and quality assurance testing is approximately 25%
complete. With respect to non-IT systems, the inventory and assessment phases
are essentially complete and the remediation phase is approximately 90%
complete. MEI estimates August 1999 for completion of remediation of its mission
critical IT and non-IT systems, with the remainder of calendar 1999 to be used
for resolution of any unforeseen difficulties and quality assurance testing. As
of June 3, 1999, MEI had incurred aggregate incremental costs of approximately
$2 million and estimates it will spend an additional $1 to $2 million to address
the Year 2000 issue with respect to its PC operations.
MEI's contingency plan generally contemplates replacement or alternative
sources of those goods and services necessary to the Company's manufacturing and
business operations. MEI expects that development of contingency plans for its
PC operations will continue through calendar 1999.
Certain Factors
In addition to the factors discussed elsewhere in this Form 10-Q and in the
Company's Form 10-K for the fiscal year ended September 3, 1998, the following
are important factors which could cause actual results or events to differ
materially from those contained in any forward looking statements made by or on
behalf of the Company.
The semiconductor memory industry is characterized by rapid technological
change, frequent product introductions and enhancements, difficult product
transitions, relatively short product life cycles, and volatile market
conditions. These characteristics historically have made the semiconductor
industry highly cyclical, particularly in the market for DRAMs, which are the
Company's primary products. The semiconductor industry has a history of
declining average sales prices as products mature. Long-term average decreases
in sales prices for semiconductor memory products approximate 30% on an
annualized basis; however, significant fluctuations from this rate have occurred
from time to time, including in recent years.
The selling prices for the Company's semiconductor memory products fluctuate
significantly with real and perceived changes in the balance of supply and
demand for these commodity products. Growth in worldwide supply has outpaced
growth in worldwide demand in recent years, resulting in a significant decrease
in average selling prices for the Company's semiconductor memory products. The
Company's finished goods inventory increased substantially during the third
quarter due to the current market oversupply of semiconductor memory products
and the expansion of the Company's mix of semiconductor memory product
offerings. The semiconductor industry in general, and the DRAM market in
particular, has experienced a severe downturn. Per megabit prices declined
approximately 60% in 1998 following a 75% decline in 1997 and a 45% decline in
1996 and pricing is down approximately 39% for the first nine months of 1999 as
compared to the first nine months of 1998. The Company is unable to predict
pricing conditions for future periods. In the event that average selling prices
continue to decline at a faster rate than the rate at which the Company is able
to decrease per unit manufacturing costs, the Company's operations, cash flows
and financial condition would be increasingly adversely affected.
The Company and its competitors are seeking improved yields, smaller die size
and fewer mask levels in their product designs. These improvements could result
in a significant increase in worldwide capacity leading to further downward
pressures on prices. Consolidation by competitors in the semiconductor memory
industry may place the Company at a disadvantage in competing with competitors
that have greater capital resources and could create the potential for greater
worldwide investment in semiconductor memory capacity which could further exert
downward pressure on prices. In 1998, many of the Company's Korean and Japanese
semiconductor memory competitors were impacted by deteriorating economic
conditions in Southeast Asia, resulting in decreased capital investment by
Korean and Japanese DRAM manufacturers. Recent evidence of economic improvement
in the region, particularly Korea, could indicate increased sources of capital
may be or may become available to finance technology advancements and expansion
projects, and could result in a significant increase in worldwide supply leading
to
19
<PAGE>
further downward pricing pressure. In addition, if the Company is successful in
the transfer of its product and process technology into the acquired fabrication
facilities, the amount of worldwide semiconductor memory capacity could
increase, resulting in further downward pricing pressure on the Company's
semiconductor memory products.
Approximately 85% of the Company's sales of semiconductor memory products
during the third quarter of 1999 were directly into the PC or peripheral
markets. DRAMs are the most widely used semiconductor memory component in most
PC systems. Should the rate of growth of sales of PC systems or the rate of
growth in the amount of memory per PC system decrease, the growth rate for sales
of semiconductor memory could also decrease, placing further downward pressure
on selling prices for the Company's semiconductor memory products. The Company
is unable to predict changes in industry supply, major customer inventory
management strategies, or end user demand, which are significant factors that
influence prices for the Company's semiconductor memory products.
On September 30, 1998, the Company acquired substantially all of TI's memory
operations. The integration and successful operation of the Acquired Operations
is dependent upon a number of factors, including, but not limited to, the
Company's ability to transfer its product and process technology in a timely and
cost-effective manner into the wholly-owned acquired fabrication facility and
joint venture facilities. The Company is in the process of transferring its
.21 (micron) and .18 (micron) product and process technology into these
fabrication facilities and expects the transfer to be substantially complete
by the end of calendar 1999. However, there can be no assurance that the
Company will be able to meet this timeline. Until such time as the Company is
able to complete the transfer of its product and process technology into the
acquired fabrication facilities, it is expected that the per unit costs
associated with the products manufactured at the acquired fabrication
facilities will continue to significantly exceed the per unit costs of
products manufactured at the Company's Boise, Idaho, facility. As a result, it
is expected that the Acquisition will continue to have a near term adverse
effect on the Company's results of operations and cash flows.
Over the past several years the Company's productivity gains have continued
to increase its semiconductor memory output. In addition, as a result of the
Acquisition the Company expects its production levels to increase further in
the future. In recent periods, sales of additional output have been achieved
by increasing market share with several of the Company's larger OEM customers,
and through sales to a broader customer base including accounts of lesser size
and potentially lesser financial stability. In the event the Company is unable
to further increase its market share with OEM customers, broaden its customer
base, or experiences reductions in the level of OEM orders, the Company's
results of operations and cash flows could be adversely affected.
The semiconductor memory industry is characterized by frequent product
introductions and enhancements. The Company's ability to reduce per unit
manufacturing costs of its semiconductor memory products is largely dependent on
its ability to design and develop new generation products and shrink versions of
existing products and its ability to ramp such products at acceptable rates to
acceptable yields, of which there can be no assurance. As the semiconductor
industry transitions to higher bandwidth products including RDRAM, DDR and
SLDRAM, the Company may encounter difficulties in achieving the semiconductor
manufacturing efficiencies that it has historically achieved. The Company's
productivity levels, die per wafer yields, and in particular, backend test and
assembly equipment requirements are expected to be affected by a transition to
higher bandwidth products, likely resulting in higher per megabit production
costs. There can be no assurance that the Company will successfully transition
to these products or that it will be able to achieve its historical rate of cost
per megabit reductions.
The Company is engaged in ongoing efforts to enhance its production processes
to reduce per unit costs by reducing the die size of existing products. The
result of such efforts has generally led to significant increases in megabit
production. There can be no assurance that the Company will be able to maintain
or approximate increases in megabit production at a level approaching that
experienced in recent years or that the Company will not experience decreases in
manufacturing yield or production as it attempts to implement future
technologies. Further, from time to time, the Company experiences volatility in
its manufacturing yields, as it is not unusual to encounter difficulties in
ramping latest shrink versions of existing devices or new generation devices to
commercial volumes.
The Acquisition is expected to continue to have a significant effect on the
Company's future results of operations and cash flows, including, but not
limited to: a negative impact on gross margin in the near term due in
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<PAGE>
part to significantly higher per unit manufacturing costs at the Acquired
Operations; costs related to the assimilation of the Acquired Operations;
increased selling, general and administrative expenses in support of the larger
and more geographically dispersed operations; increased research and development
expense associated with the Company's efforts to broaden its range of DRAM
product offerings; increased interest expense associated with the Convertible
Notes and Subordinated Notes issued in the transaction and increased capital
spending relating to the wholly-owned Acquired Operations in Avezzano, Italy and
Singapore.
The Company has limited experience in integrating or operating geographically
dispersed manufacturing facilities. The integration and operation of the
acquired facilities has placed, and continues to place, strains on the Company's
management and information systems resources. Failure by the Company to
effectively manage the integration of the acquired facilities could have a
material adverse effect on the Company's results of operations.
In connection with the Acquisition, the Company and TI entered into a
transition services agreement requiring TI to provide certain services and
support to the Company for specified periods following the Acquisition. Among
other items, TI is to provide information technology, finance and accounting,
human resources, equipment maintenance, facilities and purchasing services under
the services agreement. The successful integration and operation of the acquired
facilities is partially dependent upon the continued successful provision of
services by TI under the services agreement. There can be no assurance that the
services and support called for under the services agreement will be provided in
a manner sufficient to meet anticipated requirements. The failure to obtain
sufficient services and support could impair the Company's ability to
successfully integrate the acquired facilities and could have a material adverse
affect on the Company's results of operations.
In accordance with the transition services agreement, the Company continues to
rely in part on TI computer networks and information technology services with
respect to certain of the Acquired Operations. During this period and beyond,
the Company will also be utilizing software obtained or licensed from TI to
conduct specific portions of the business. Dependency upon TI systems will span
calendar years 1999 and 2000, during which period Year 2000 issues may arise.
The Company is planning for the implementation of new business systems beginning
in September 1999, which is expected to eliminate some of the Company's
dependence on TI systems. Failure to successfully implement the first stages of
these successor business systems would complicate the Company's dependence upon
TI systems. If unforeseen difficulties are encountered in ending the Company's
reliance upon TI's software, hardware or services or in segregating the
companies' information technology operations or with Year 2000 issues, the
Company's results of operations could be materially adversely affected.
In connection with the Acquisition, the Company acquired the right and
obligation to purchase all of the production meeting its specifications from its
JVs. The Company purchases assembled and tested components from the JVs at
prices determined quarterly and which are based on the Company's average sales
prices. Primarily as a result of the rate of decline in average selling prices,
the Company essentially broke even on gross margins for JV products sold in the
third quarter of 1999. In any future reporting period, gross margins resulting
from the Company's sales of JV product may positively or negatively impact gross
margins otherwise realized for semiconductor memory products manufactured in the
Company's wholly-owned facilities. In an ongoing industry condition of relative
over supply, both TECH and KMT may experience financial conditions requiring
additional financing to sustain operations. There can be no assurance that TECH
or KMT will be able to secure adequate financing, thereby potentially impacting
the Company's supply of product from one or both of these JVs.
International sales comprised approximately 27% and 28%, respectively, of the
Company's net sales in the third quarter and first nine months of 1999, as
compared to 20% in 1998. The Company expects international sales to continue to
increase as a result of the Acquisition. International sales and operations are
subject to a variety of risks, including those arising from currency
fluctuations, export duties, changes to import and export regulations, possible
restrictions on the transfer of funds, employee turnover, labor unrest, longer
payment cycles, greater difficulty in collecting accounts receivable, the
burdens and costs of compliance with a variety of international laws and, in
certain parts of the world, political instability. While to date these factors
have not had a significant adverse impact on the Company's results of
operations, there can be no assurance that there will not be such an impact in
the future.
The Company's operating results are significantly impacted by the operating
results of its consolidated subsidiaries, particularly MEI. MEI's past operating
results have been, and its future operating results may be,
21
<PAGE>
subject to seasonality and other fluctuations, on a quarterly and an annual
basis, as a result of a wide variety of factors, including, but not limited to,
industry competition, MEI's ability to accurately forecast demand and selling
prices for its PC products, fluctuating market pricing for PCs and semiconductor
memory products, seasonal government purchasing cycles, inventory obsolescence,
MEI's ability to effectively manage inventory levels, changes in product mix,
manufacturing and production constraints, fluctuating component costs, the
effects of product reviews and industry awards, critical component availability,
seasonal cycles common in the PC industry, the timing of new product
introductions by MEI and its competitors and global market and economic
conditions. Changing circumstances, including but not limited to, changes in the
Company's core operations, uses of capital, strategic objectives and market
conditions, could result in the Company changing its ownership interest in its
subsidiaries.
The PC industry is highly competitive and has been characterized by intense
pricing pressure, generally low gross margin percentages, rapid technological
advances in hardware and software, frequent introduction of new products, and
rapidly declining component costs. The Company's PC operations compete with a
number of PC manufacturers, which sell their products primarily through direct
channels, including Dell Computer Corp. and Gateway 2000, Inc. The Company also
competes with PC manufacturers, such as Apple Computer, Inc., Compaq Computer
Corporation, Hewlett-Packard Company, International Business Machines
Corporation, NEC Corporation and Toshiba Corporation among others. Several of
these manufacturers, which have traditionally sold their products through
national and regional distributors, dealers and value added resellers, retail
stores and direct sales forces, now sell their products through the direct
channel. In addition, the Company expects to face increased competition in the
U.S. direct sales market from foreign PC suppliers and from foreign and domestic
suppliers of PC products that decide to implement, or devote additional
resources to, a direct sales strategy. In order to gain an increased share of
the United States PC direct sales market, these competitors may effect a pricing
strategy that is more aggressive than the current pricing in the direct sales
market or may have pricing strategies influenced by relative fluctuations in the
U.S. dollar compared to other currencies. The Company continues to experience
significant pressure on its PC operating results as a result of intense
competition in the PC industry, consumer expectations of more powerful PC
systems at lower prices and the relatively recent introduction and proliferation
of products in the "sub-$1,000" PC markets.
Historically, the Company has reinvested substantially all cash flow from
semiconductor memory operations in capacity expansion and enhancement programs.
The Company's cash flow from operations depends primarily on average selling
prices and per unit manufacturing costs of the Company's semiconductor memory
products. If for any extended period of time average selling prices decline
faster than the rate at which the Company is able to decrease per unit
manufacturing costs, the Company may not be able to generate sufficient cash
flows from operations to sustain operations. Cash generated by MEI is not
readily available to finance operations or other expenditures of MTI's
semiconductor memory operations. The Company has an aggregate of $500 million in
revolving credit agreements, $100 million of which is available to PC operations
and $400 million of which is available to semiconductor memory operations. The
$400 million facility expires in May 2000 and the $100 million facility expires
in June 2001. There can be no assurance that either or both of the facilities
will be renewed. Each of the respective facilities contains certain financial
and other restrictive covenants pertaining to the Company's operations. There
can be no assurance that the Company will continue to be able to meet the terms
of the covenants or be able to borrow the full amount of the credit facilities.
There can be no assurance that, if needed, external sources of liquidity will be
available to fund the Company's operations or its capacity and product and
process technology enhancement programs. Failure to obtain financing could
hinder the Company's ability to make continued investments in such programs,
which could materially adversely affect the Company's business, results of
operations and financial condition.
As of June 3, 1999, TI and Intel held an aggregate of 44,743,369 shares of
common stock, representing 17% of the Company's total outstanding common stock.
These shares have not been registered with the Securities and Exchange
Commission ("SEC"), however TI and Intel each have registration rights. Until
such time as TI and Intel substantially reduce their holdings of Company common
stock, the Company may be hindered in obtaining new equity capital. As of June
3, 1999, the Company had convertible subordinated notes with a face value of
$500 million outstanding which are registered with the SEC and are convertible
into 7,413,997 shares of common stock. TI holds notes with a face value of $740
million which are convertible into 12,333,333 shares of common stock. TI's
resale of these notes could limit the Company's ability to raise capital through
the issuance of additional convertible debt instruments.
22
<PAGE>
Completion of the Company's semiconductor manufacturing facility in Lehi, Utah
was suspended in February 1996, as a result of the decline in average selling
prices for semiconductor memory products. As of June 3, 1999, the Company had
invested approximately $710 million in the Lehi facility. Timing of completion
of the remainder of the Lehi production facilities is dependent upon market
conditions. Market conditions which the Company expects to evaluate include, but
are not limited to, worldwide market supply and demand of semiconductor products
and the Company's operations, cash flows and alternative uses of capital. There
can be no assurance that the Company will be able to fund the completion of the
Lehi manufacturing facility. The failure by the Company to complete the facility
would likely result in the Company being required to write off all or a portion
of the facility's cost, which could have a material adverse effect on the
Company's business and results of operations. In addition, in the event that
market conditions improve, there can be no assurance that the Company can
commence manufacturing at the Lehi facility in a timely, cost effective manner
that enables it to take advantage of the improved market conditions.
The semiconductor and PC industries have experienced a substantial amount of
litigation regarding patent and other intellectual property rights. In the
future, litigation may be necessary to enforce patents issued to the Company, to
protect trade secrets or know-how owned by the Company, or to defend the Company
against claimed infringement of the rights of others. The Company has from time
to time received, and may in the future receive, communications alleging that
its products or its processes may infringe product or process technology rights
held by others. The Company has entered into a number of patent and intellectual
property license agreements with third parties, some of which require one-time
or periodic royalty payments. It may be necessary or advantageous in the future
for the Company to obtain additional patent licenses or to renew existing
license agreements. The Company is unable to predict whether these license
agreements can be obtained or renewed on terms acceptable to the Company.
Adverse determinations that the Company's manufacturing processes or products
have infringed on the product or process rights held by others could subject the
Company to significant liabilities to third parties or require material changes
in production processes or products, any of which could have a material adverse
effect on the Company's business, results of operations and financial condition.
The Company is dependent upon a limited number of key management and technical
personnel. In addition, the Company's future success will depend in part upon
its ability to attract and retain highly qualified personnel, particularly as
the Company engages in worldwide operations and adds different product types to
its product line, which will require parallel design efforts and significantly
increase the need for highly skilled technical personnel. The Company competes
for such personnel with other companies, academic institutions, government
entities and other organizations. The Company has experienced, and expects to
continue to experience, increased recruitment of its existing personnel by other
employers. The Company's ability to retain key acquired personnel will be a
critical factor in the Company's ability to successfully integrate the Acquired
Operations. There can be no assurance that the Company will be successful in
hiring or retaining qualified personnel. Any loss of key personnel or the
inability to hire or retain qualified personnel could have a material adverse
effect on the Company's business and results of operations.
23
<PAGE>
Item 3. Quantitative and Qualitative Disclosures about Market Risk
- -------------------------------------------------------------------
Substantially all of the Company's liquid investments and long-term debt are
at fixed interest rates, and therefore the fair value of these instruments is
affected by changes in market interest rates. However, substantially all of the
Company's liquid investments mature within one year. As a result, the Company
believes that the market risk arising from its holdings of financial instruments
is minimal. The Company's results of operations and financial position for the
first nine months of 1999 reflect a higher volume of foreign currency
transactions and account balances than in previous periods related to the
foreign operations obtained through the Acquisition. As of June 3, 1999, the
Company held aggregate cash and receivables in foreign currency valued at
approximately US $41 million and aggregate foreign currency payables valued at
approximately US $87 million (including long-term liabilities denominated in
Italian Lira valued at approximately US $17 million). Foreign currency
receivables and payables are comprised primarily of Italian Lira, Singapore
Dollars, Japanese Yen and British Pounds.
24
<PAGE>
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Shareholders
- --------------------------------------------------------
The registrant's 1998 Annual Meeting of Shareholders was held on January 14,
1999. At the meeting, the following items were submitted to a vote of the
shareholders:
(a) The following nominees for Directors were elected. Each person elected
as a Director will serve until the next annual meeting of shareholders or until
such person's successor is elected and qualified.
Votes Votes Cast
Name of Nominee Cast For Against/Withheld
---------------- -------- ----------------
Steven R. Appleton 225,154,554 2,618,813
James W. Bagley 225,343,551 2,429,816
Robert A. Lothrop 225,138,478 2,634,889
Thomas T. Nicholson 225,312,482 2,460,885
Don J. Simplot 225,100,462 2,672,905
John R. Simplot 225,274,734 2,498,633
Gordon C. Smith 225,317,612 2,455,755
William P. Weber 225,346,282 2,427,085
(b) The amendment to the Company's Certificate of Incorporation was approved
with 177,536,151 votes in favor, 16,854,355 votes against, 1,030,526 abstentions
and 32,352,335 broker non-votes.
(c) The amendment to the 1989 Employee Stock Purchase Plan was approved with
222,791,913 votes in favor, 3,771,250 votes against, 1,210,204 abstentions and 0
broker non-votes.
(d) The 1998 Non-Employee Director Stock Incentive Plan was approved with
206,171,261 votes in favor, 20,189,950 votes against, 1,412,155 abstentions and
0 broker non-votes.
(e) The ratification and appointment of PricewaterhouseCoopers LLP as
independent public accountants of the Company for the fiscal year ending
September 2, 1999 was approved with 226,747,712 votes in favor, 360,382 votes
against, 665,273 abstentions and 0 broker non-votes.
Item 5. Other Matters
- ----------------------
On July 7, 1999, the Company filed a report on Form 8-K relating to the
resignation of Mr. John R. Simplot from the Company's Board of Directors.
25
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following are filed as a part of this report:
Exhibit
Number Description of Exhibit
------ -----------------------------------------------
3.7 By-laws of the Registrant, as amended
10.110 1994 Stock Option Plan
10.128 Nonstatutory Stock Option Plan
10.132 1998 Nonstatutory Stock Option Plan
10.139 1989 Employee Stock Purchase Plan
10.140 1998 Non-Employee Director Stock Incentive Plan
27 Financial Data Schedule
(b) The registrant did not file any reports on Form 8-K during the fiscal
quarter ended June 3, 1999.
26
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Micron Technology, Inc.
-------------------------------------------------
(Registrant)
Dated: July 16, 1999 /s/ Wilbur G. Stover, Jr.
-------------------------------------------------
Wilbur G. Stover, Jr., Vice President of Finance
and Chief Financial Officer (Principal Financial
and Accounting Officer)
27
<PAGE>
EXHIBIT 3.7
BYLAWS
OF
MICRON TECHNOLOGY, INC.
ARTICLE I
OFFICES
SECTION 1. The registered office shall be 100 West Tenth Street, in the
City of Wilmington, County of New Castle, State of Delaware.
SECTION 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the Board of Directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. All meetings of the stockholders shall be held at the principal
office of the corporation in the City of Boise, State of Idaho, or at such other
place either within or without the State of Delaware as shall be designated in
the notice of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of stockholders shall be held on such day and
such hour as shall be designated from time to time by the Board of Directors and
stated in the notice of the meeting. At such meeting, the stockholders shall
elect a Board of Directors and transact such other business as may properly be
brought before the meeting.
SECTION 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten nor more than sixty days before the date of the
meeting.
SECTION 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
SECTION 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Certificate of
Incorporation, may be called by the Board of Directors, the Chairman of the
Board, the president, or by the holders of shares entitled to cast not less than
twenty percent (20%) of the votes at the meeting. Such request shall state the
purpose or purposes of the proposed meeting.
SECTION 6. Written notice of a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given to each stockholder entitled to vote at such meeting not less
than ten nor more than sixty days before the date of the meeting.
<PAGE>
SECTION 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.
SECTION 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the Certificate of
Incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
SECTION 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the Certificate of Incorporation, a different vote is required in which case
such express provision shall govern and control the decision of the question.
SECTION 10. Unless otherwise provided in the Certificate of Incorporation,
each stockholder shall at every meeting of the stockholders be entitled to one
vote in person or by proxy for each share of the capital stock having voting
power held by such stockholder, regardless of class, but no proxy shall be voted
on or after three years from its date, unless the proxy provides for a longer
period. Vote may be viva voice or by ballot; provided, however, that elections
for directors must be by ballot upon demand by a shareholder at the meeting and
before the voting begins. At all elections of directors of the corporation each
stockholder having voting power shall be entitled to exercise the right of
cumulative voting as provided in the Certificate of Incorporation.
SECTION 11. Unless otherwise provided in the Certificate of Incorporation,
any action required to be taken at any annual or special meeting of stockholders
of the corporation, or any action which may be taken at any annual or special
meeting of the stockholders, may be taken without a meeting, without prior
notice and without a vote, of a consent in writing, setting forth the action so
taken, shall be signed by the holders of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize or take such
action at a meeting at which notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
SECTION 1. The authorized number of directors of the corporation shall be
nine. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
SECTION 2. The directors shall be elected at each annual meeting of
shareholders, but if any such annual meeting is not held, or the directors are
not elected thereat, the directors may be elected at any special meeting of the
shareholders held for that purpose. All directors shall hold office until the
expiration of the term for which elected and until their respective successors
are elected, except in the case of death, resignation or removal of any
director. A director need not be a shareholder.
SECTION 3. Any director may resign effective upon giving written notice
to the Chairman of the Board, the President, the Secretary or the Board of
Directors of the corporation, unless the notice specifies a late time for the
effectiveness of such resignation. If the resignation is effective at a future
time, a successor may be elected to take office when the resignation becomes
effective.
<PAGE>
SECTION 4. The entire Board of Directors or any individual director may be
removed from office, prior to the expiration of their or his term of office only
in the manner and within the limitations provided by the General Corporation Law
of Delaware.
No reduction of the authorized number of directors shall have the effect of
removing any director prior to the expiration of such director's term of office.
SECTION 5. A vacancy in the Board of Directors shall be deemed to exist in
case of the death, resignation or removal of any director, or if the authorized
number of directors be increased, or if the shareholders fail at any annual or
special meeting of shareholders at which any director or directors are elected
to elect the full authorized number of directors to be voted for at that
meeting.
Vacancies in the Board of Directors may be filled by a majority of the
directors then in office, whether or not less than a quorum, or by a sole
remaining director. Each director so elected shall hold office until the
expiration of the term for which he was elected and until his successor is
elected at an annual or a special meeting of the shareholders, or until his
death, resignation or removal.
The shareholders may elect a director or directors at any time to fill any
vacancy or vacancies not filled by the directors. Any such election by written
consent shall require the consent of a majority of the outstanding shares
entitled to vote.
SECTION 6. The business of the corporation shall be managed by or under
the direction of its Board of Directors which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the Certificate of Incorporation or these Bylaws directed or required to be
exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 7. The Board of Directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
SECTION 8. The first meeting of each newly elected Board of Directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
Board of Directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the Board of Directors, or as shall be specified in a
written waiver signed by all of the directors.
SECTION 9. Regular meetings of the Board of Directors may be held without
notice at such time and at such place as shall from time to time be determined
by the Board.
SECTION 10. Special meetings of the Board may be called by the president
on two days' notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of the Chairman of the Board or
two directors.
SECTION 11. At all meetings of the Board a majority of the authorized
number of directors shall constitute a quorum for the transaction of business
and the act of a majority of the directors present at any meeting at which there
is a quorum shall be the act of the Board of Directors, except as may be
otherwise specifically provided by statute or by the Certificate of
Incorporation. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present.
<PAGE>
SECTION 12. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be taken
without a meeting, if all members of the Board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the Board or committee.
SECTION 13. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, members of the Board of Directors, or any
committee designated by the Board of Directors, may participate in a meeting of
the Board of Directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.
COMMITTEES OF DIRECTORS
SECTION 14. The Board of Directors may, by resolution passed by a majority
of the authorized number of directors, appoint an executive committee consisting
of two or more of the directors of the corporation. The Board may designate one
or more directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the committee. The executive
committee, to the extent provided in the resolution of the Board of Directors
and subject to any limitation by statute, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but it shall not have the power
or authority in reference to amending the Certificate of Incorporation, adopting
an agreement of merger or consolidation, recommending to the stockholders the
sale, lease or exchange of all or substantially all the corporation's property
and assets, recommending to the stockholders a dissolution of the corporation or
a revocation of a dissolution, or amending the Bylaws of the corporation; and,
unless the resolution or the Certificate of Incorporation expressly so provide,
it shall not have the power or authority to declare a dividend or to authorize
the issuance of stock.
SECTION 15. The Board of Directors may, by resolution adopted by a
majority of the authorized number of directors, designate such other committees,
each consisting of 2 or more directors, as it may from time to time deem
advisable to perform such general or special duties as may from time to time be
delegated to any such committee by the Board of Directors, subject to the
limitations imposed by statute or by the Certificate of Incorporation or by
these Bylaws. The Board may designate one or more directors as alternate
members of any committee, who may replace any absent member at any meeting of
the committee.
COMPENSATION OF DIRECTORS
SECTION 17. Unless otherwise restricted by the Certificate of
Incorporation or these Bylaws, the Board of Directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance of each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving
the corporation in any other capacity and receiving compensation therefor.
Members of special or standing committees may be allowed like compensation for
attending committee meetings.
ARTICLE IV
NOTICES
SECTION 1. Whenever, under the provisions of the statutes or of the
Certificate of Incorporation or of these Bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
<PAGE>
SECTION 2. Whenever any notice is required to be given under the
provisions of the Delaware statutes or of the Certificate of Incorporation or of
these Bylaws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
SECTION 1. The officers of the corporation shall be chosen by the Board of
Directors, and shall be a president, a vice-president, a secretary, and a
treasurer. The Board of Directors may also choose additional vice-presidents,
and one or more assistant secretaries and assistant treasurers. Any number of
offices may be held by the same person, unless the Certificate of Incorporation
or these Bylaws otherwise provide.
SECTION 2. The Board of Directors at its first meeting after each annual
meeting of stockholders shall choose a president, one or more vice-presidents, a
secretary and a treasurer.
SECTION 3. The Board of Directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the Board.
SECTION 4. The salaries of all officers and agents of the corporation
shall be fixed by the Board of Directors.
SECTION 5. The officers of the corporation shall hold office until their
successors are chosen and qualify. Any officer elected or appointed by the Board
of Directors may be removed at any time by the affirmative vote of a majority of
the Board of Directors. Any vacancy occurring in any office of the corporation
shall be filled by the Board of Directors.
Any officer may resign at any time by giving written notice to the
corporation. Any such resignation shall take effect at the date of the receipt
of such notice or at any later time specified therein; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
THE CHAIRMAN OF THE BOARD
SECTION 6. The Chairman of the Board, if there shall be such an officer,
shall, if present, preside at all meetings of the Board of Directors, and
exercise and perform such other powers and duties as may be from time to time
assigned to him by the Board of Directors or prescribed by these Bylaws.
THE PRESIDENT
SECTION 7. Subject to such supervisory powers, if any, as may be given by
the Board of Directors to the Chairman of the Board, if there be such an
officer, the President shall be the general manager of the corporation and
shall, subject to the control of the Board of Directors, have general
supervision, direction, and control of the business and officers of the
corporation. He shall preside at all meetings of the shareholders and in the
absence of the Chairman of the Board or if there be none, at all meetings of the
Board of Directors. He shall be ex officio a member of all the standing
committees, including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the office of
president of a corporation, and shall have such other powers and duties as may
be prescribed by the Board of Directors or by these Bylaws.
SECTION 8. He shall execute bonds, mortgages and other contracts requiring
a seal, under the seal of the corporation, except where required or permitted by
law to be otherwise signed and executed and except where the signing and
execution thereof shall be expressly delegated by the Board of Directors to some
other officer or agent of the corporation.
<PAGE>
THE VICE-PRESIDENTS
SECTION 9. In the absence of the president or in the event of his
inability or refusal to act, the vice president (or in the event there be more
than one vice president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the Board of Directors may from time to time prescribe.
SECRETARY AND ASSISTANT SECRETARY
SECTION 10. The Secretary shall attend all meetings of the Board of
Directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the Board of Directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the Board of Directors, and shall
perform such other duties as may be prescribed by the Board of Directors or
president, under whose supervision he shall be placed. He shall have custody of
the corporate seal of the corporation and he, or an assistant secretary, shall
have authority to affix the same to any instrument requiring it and when so
affixed, it may be attested by his signature or by the signature of such
assistant secretary. The Board of Directors may give general authority to any
other officer to affix the seal of the corporation and to attest the affixing by
his signature.
SECTION 11. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the Board of Directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the Board of Directors may from
time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
SECTION 12. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the Board of Directors.
SECTION 13. He shall disburse the funds of the corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the president and the Board of Directors, at
its regular meetings, or when the Board of Directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
SECTION 14. If required by the Board of Directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the Board of Directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.
SECTION 15. If the assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the Board of Directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the Board of
Directors may from time to time prescribe.
<PAGE>
ARTICLE VI
CERTIFICATE OF STOCK
SECTION 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
chairman or vice chairman of the Board of Directors, or the president or a vice
president and the treasurer or an assistant treasurer, or the secretary or an
assistant secretary of the corporation, certifying the number of shares owned by
him in the corporation.
Certificates may be issued for partly paid shares and in such case upon the
face or back of the certificates issued to represent any such partly paid
shares, the total amount of the consideration to be paid therefor, and the
amount paid thereon shall be specified.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualification, limitations or
restrictions of such preferences and/or rights shall be set forth in full or
summarized on the face or back of the certificate which the corporation shall
issue to represent such class or series of stock, provided that, except as
otherwise provided in section 202 of the General Corporation Law of Delaware, in
lieu of the foregoing requirements, there may be set forth on the face of back
of the certificate which the corporation shall issue to represent such class or
series of stock, a statement that the corporation will furnish without charge to
each stockholder who so requests the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.
SECTION 2. Any or all of the signatures on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature have been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
SECTION 3. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issues by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit to that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
SECTION 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
FIXING RECORD DATE
SECTION 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the Board of Directors may fix, in advance, a record date,
which shall not be more than sixty nor less than ten days before the date of
such meeting, nor more than sixty days prior to any such other action. A
<PAGE>
determination of shareholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
REGISTERED STOCKHOLDERS
SECTION 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
SECTION 7. The accounting books and records, and minutes of proceedings of
the shareholders and the Board of Directors and committees of the Board shall be
open to inspection upon written demand made upon the corporation by any
shareholder or the holder of a voting trust certificate, at any reasonable time
during usual business hours, for a purpose reasonably related to his interest as
a shareholder, or as the holder of such voting trust certificate. The record of
shareholders shall also be open to inspection by any shareholder or holder of a
voting trust certificate at any time during usual business hours upon written
demand on the corporation, for a purpose reasonably related to such holder's
interest as a shareholder or holder of a voting trust certificate. Such
inspection may be made in person or by an agent or attorney, and shall include
the right to copy and to make extracts.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
SECTION 1. Dividends upon the capital stock of the corporation, subject to
the provision of the Certificate of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property, or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
SECTION 2. Before payment of any dividend, there may be set aside out of
funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.
CHECKS
SECTION 3. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the Board of Directors may from time to time designate.
FISCAL YEAR
SECTION 4. The fiscal year of the corporation shall be fixed by resolution
of the Board of Directors.
SEAL
SECTION 5. The corporate seal shall have inscribed thereon the name of the
corporation, the year of its organization and the words "Corporate Seal,
Delaware." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
<PAGE>
INDEMNIFICATION
SECTION 6. The corporation shall indemnify its officers, directors,
employees and agents to the extent permitted by the General Corporation Law of
Delaware.
ARTICLE VIII
AMENDMENTS
SECTION 1. These Bylaws may be altered, amended or repealed or new Bylaws
may be adopted by the stockholders or by the Board of Directors at any regular
meeting of the stockholders or of the Board of Directors or at any special
meeting of the stockholders or the Board of Directors if notice of such
alteration, amendment, repeal or adoption of new Bylaws be contained in the
notice of such special meeting. If the power to adopt, amend or repeal Bylaws
is conferred upon the Board of Directors by the Certificate of Incorporation it
shall not divest or limit the power of the stockholders to adopt, amend or
repeal Bylaws.
I, Nancy A. Stanger, the secretary of Micron Technology, Inc., a Delaware
corporation, hereby certify:
The foregoing bylaws, comprising 14 pages, were adopted as the bylaws of
Micron Technology on May 21, 1984.
DATED: May 25, 1984
Nancy A. Stanger
Nancy A. Stanger
SEAL
<PAGE>
CERTIFICATE OF FIRST AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
We, the undersigned, being the President and Secretary, respectively, of
MICRON TECHNOLOGY, INC., a corporation organized and existing under the laws of
the State of Delaware, do hereby certify that a meeting of the Board of
Directors of this Corporation was held on December 17, 1984 and an amendment to
the Bylaws of MICRON TECHNOLOGY, INC. was unanimously adopted.
The amendment adopted was pursuant to a Resolution reading as follows:
RESOLVED: The Board hereby approves that the second paragraph of Article
II Section 10 of the Bylaws of the Company be amended to read as follows:
"At all elections of directors of the corporation each stockholder having
voting power shall be entitled to exercise the right of cumulative voting as
provided in the Certificate of Incorporation. However, no stockholder shall be
entitled to cumulate votes for a candidate or candidates unless such candidate's
name or candidate's names have been placed in nomination prior to the voting and
a stockholder has given notice at the meeting prior to the voting of the
stockholder's intention to cumulate votes. If any stockholder has given such
notice, all stockholders may cumulate their votes for candidates in nomination."
IN WITNESS WHEREOF, we have hereunto set our hands and the seal of the
Corporation this 5th day of July, 1985.
MICRON TECHNOLOGY, INC.
BY: Joseph L. Parkinson
Joseph L. Parkinson, President
(SEAL)
BY: Cathy L. Smith
Cathy L. Smith, Secretary
STATE OF IDAHO )
) ss.
County of Ada )
On this 5th day of July, 1985, before me, the undersigned, personally appeared
JOSEPH L. PARKINSON and CATHY L. SMITH, known to me to be the President and
Secretary, respectively, of MICRON TECHNOLOGY, INC., the corporation that
executed the instrument or the persons who executed the instrument on behalf of
said corporation, and acknowledged to me that such corporation executed the
same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal in
said County the day and year first above written.
Jill L. Henson
Notary Public for Idaho Residing at Boise
<PAGE>
CERTIFICATE OF SECOND AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on March 3, 1986:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
ten. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the corporate
seal of said corporation effective as of the 3rd day of March, 1986.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE THIRD AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on November 24, 1986:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
nine. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 24th day of November, 1986.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF FOURTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on September 28, 1987:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
eight. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 28th day of September, 1987.
Cathy L. Smith
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF FIFTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on March 28, 1988:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
nine. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 28th day of March, 1988.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF SIXTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on October 3, 1988:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
ten. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 17th day of October, 1988.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF SEVENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on September 25, 1989:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
nine. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 28th day September, 1989.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF EIGHTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on October 30, 1989:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
eight. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 30th day of October, 1989.
Cathy L. Smith--
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF NINTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on August 27, 1990:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
nine. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 27th day of August, 1990.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF TENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on September 24, 1990:
RESOLVED: Article III, Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
ten. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 24th day of September, 1990.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF ELEVENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on July 27, 1992:
RESOLVED: Article III Section 1 of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
eight. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 27th day of July, 1992.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF TWELFTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc. a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on May 23, 1994:
RESOLVED: Article III, Section I of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION I. The authorized number of directors of the Corporation shall be
ten.
The number of directors provided in this Section I may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 23rd day of May, 1994.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF THIRTEENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc. a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on September 1, 1994:
RESOLVED: Article III, Section I of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION I. The authorized number of directors of the Corporation shall be
eleven. The number of directors provided in this Section I may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 1st day of September, 1994.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF FOURTEENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Cathy L. Smith, Corporate Secretary of Micron Technology, Inc. a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on October 27, 1994:
RESOLVED: Article III, Section I of the Bylaws of this corporation are
hereby amended to read as follows:
SECTION I. The authorized number of directors of the Corporation shall be
ten. The number of directors provided in this Section I may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 27th day of October, 1994.
Cathy L. Smith
Corporate Secretary
(SEAL)
<PAGE>
CERTIFICATE OF FIFTEENTH
AMENDMENT TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolution was adopted
by the Board of Directors on February 5, 1996:
RESOLVED, that pursuant to Article VIII, Section 1 of the Company's
Bylaws, the Board hereby amends Article V, Section 1 of the Bylaws to read in
its entirety as follows:
The officers of the corporation shall be chosen by the Board of Directors,
and shall be a president or chief executive officer, a secretary, and a
treasurer. The Board of Directors may also choose additional officers,
including a president, vice president(s), and one or more assistant secretaries
and assistant treasurers. Any number of offices may be held by the same person,
unless the Certificate of Incorporation or these Bylaws otherwise provide.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 7th day of February, 1996.
Jan R. Reimer
Assistant Secretary
(SEAL)
<PAGE>
CERTIFICATE OF SIXTEENTH
AMENDMENT TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolutions were
adopted by the Board of Directors on September 30, 1996:
RESOLVED, that Article II, Section 10 of the Bylaws of this Company be
amended to read as follows:
SECTION 10. At all elections of directors of the corporation each
stockholder having voting power shall be entitled to exercise the right of
cumulative voting as provided in the Certificate of Incorporation. However, no
stockholder shall be entitled to cumulate votes for a candidate or candidates
unless such candidate's name or candidates' names have been placed in nomination
prior to the voting and a stockholder has given written notice to Secretary of
the corporation of the stockholder's intention to cumulate votes at least 15
days prior to the date of the meeting. If any stockholder has given such notice,
all stockholders may cumulate their votes for candidates in nomination.
RESOLVED FURTHER, that Article II of the Bylaws of this Company be amended
to add Section 12, which will read in its entirety as follows:
SECTION 12. Advance Notice of Stockholder Nominees and Stockholder
Business
(a) To be properly brought before an annual meeting or special meeting,
nominations for the election of directors or other business must be (i)
specified in the notice of meeting (or any supplement thereto) given by or
at the direction of the board of directors, (ii) otherwise properly
brought before the meeting by or at the direction of the board of
directors or (iii) otherwise properly brought before the meeting by a
stockholder.
(b) For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof in
writing to the Secretary of the corporation. To be timely, a stockholder's
notice must be delivered to or mailed and received at the principal
executive office of the corporation not less than one hundred twenty (120)
calendar days in advance of the date specified in the corporation's proxy
statement released to stockholders in connection with the previous year's
annual meeting of stockholders; provided, however, that in the event that
no annual meeting was held in the previous year or the date of the annual
meeting has been changed by more than thirty (30) days from the date
contemplated at the time of the previous year's proxy statement, notice by
the stockholder to be timely must be so received a reasonable time before
the solicitation is made. A stockholder's notice to the Secretary shall
set forth as to each matter the stockholder proposes to bring before the
annual meeting: (i) a brief description of the business desired to be
brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they appear
on the corporation's books, of the stockholder proposing such business,
(iii) the class and number of shares of the corporation which are
beneficially owned by the stockholder, (iv) any material interest of the
stockholder in such business and (v) any other information that is
required to be provided by the stockholder pursuant to Regulation 14A
under the securities Exchange Act of 1934, as amended (the "Exchange
Act"), in his capacity as a proponent to a stockholder proposal.
Notwithstanding the foregoing, in order to include information with
respect to a stockholder proposal in the proxy statement and form of proxy
for a stockholders' meeting, stockholders must provide notice as required
by the regulations promulgated under the Exchange Act. Notwithstanding
anything in these bylaws to the contrary, no business shall be conducted
at any annual meeting except in accordance with the procedures set forth
in this Section 12. The chairman of the annual meeting shall, if the facts
warrant, determine and declare at the meeting that business was not
properly brought before the meeting and in accordance with the provisions
of this Section 12, and, if he should so determine, he shall so declare at
the meeting that any such business not properly brought before the meeting
shall not be transacted.
<PAGE>
(c) Only persons who are nominated in accordance with the procedures set
forth in this paragraph (c) shall be eligible for election as directors.
Nominations of persons for election to the Board of Directors of the
corporation may be made at a meeting of stockholders by or at the
direction of the Board of Directors or by any stockholder of the
corporation entitled to vote in the election of directors at the meeting
who complies with the notice procedures set forth in this paragraph (c).
Such nominations, other than those made by or at the direction of the
Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the corporation in accordance with the provisions of
paragraph (b) of this Section 12. Such stockholder's notice shall set
forth (i) as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name, age,
business address and residence address of such person, (B) the principal
occupation or employment of such person, (C) the class and number of
shares of the corporation which are beneficially owned by such person, (D)
a description of all arrangements or understandings between the
stockholder and each nominee and any other person or persons (naming such
person or persons) pursuant to which the nominations are to be made by the
stockholder and (E) any other information relating to such person that is
required to be disclosed in solicitations of proxies for elections of
directors, or is otherwise required, in each case pursuant to Regulation
14A under the Exchange Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to such
stockholder giving notice, the information required to be provided
pursuant to paragraph (b) of this Section 12. At the request of the Board
of Directors, any person nominated by a stockholder for election as a
director shall furnish to the Secretary of the corporation that
information required to be set forth in the stockholder's notice of
nomination which pertains to the nominee. No person shall be eligible for
election as a director of the corporation unless nominated in accordance
with the procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the meeting
that a nomination was not made in accordance with the procedures
prescribed by these bylaws; and if he should so determine, he shall so
declare at the meeting, and the defective nomination shall be disregarded.
RESOLVED FURTHER, that Article III, Section 1 of the Bylaws of this
Company be amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
seven. The number of directors provided in this Section 1 may be changed by a
Bylaw duly adopted by the affirmative vote of a majority of the outstanding
shares entitled to vote or by a resolution of the Board of Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affixed the corporate seal
of said corporation effective as of the 30th day of September, 1996.
/s/ Jan R. Reimer
Assistant Secretary
(SEAL)
<PAGE>
CERTIFICATE OF SEVENTEENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolutions were adopted
by the Board of Directors on June 30, 1997:
RESOLVED, that Article III, Section 1 of the Bylaws of this Company be
amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall be
eight. The number of directors provided in this Section 1 may be changed by
a Bylaw duly adopted by the affirmative vote of a majority of the
outstanding shares entitled to vote or by a resolution of the Board of
Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affix the corporate seal of
said corporation effective as of the 30th day of June, 1997.
/s/ Jan R. Reimer
Assistant Secretary
(SEAL)
<PAGE>
CERTIFICATE OF EIGHTEENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolutions were adopted
by the Board of Directors on April 14, 1998:
RESOLVED, that Article III, Section 1 of the Bylaws of this Company be
amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall
be nine. The number of directors provided in this Section 1 may be changed
by a Bylaw duly adopted by the affirmative vote of a majority of the
outstanding shares entitled to vote or by a resolution of the Board of
Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affix the corporate seal of
said corporation effective as of the 20th day of July, 1998.
/s/ Jan R. Reimer
Assistant Secretary
(SEAL)
<PAGE>
CERTIFICATE OF NINETEENTH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolutions were adopted
by the Board of Directors on November 23, 1998:
RESOLVED, that Article III, Section 1 of the Bylaws of this Company be
amended to read as follows:
SECTION 1. The authorized number of directors of the Corporation shall
be eight. The number of directors provided in this Section 1 may be changed
by a Bylaw duly adopted by the affirmative vote of a majority of the
outstanding shares entitled to vote or by a resolution of the Board of
Directors.
IN WITNESS WHEREOF, I hereunto set my hand and affix the corporate seal of
said corporation effective as of the 23rd day of November, 1998.
/s/ Jan R. Reimer
Assistant Secretary
(SEAL)
<PAGE>
CERTIFICATE OF TWENTIETH AMENDMENT
TO THE BYLAWS OF
MICRON TECHNOLOGY, INC.
I, Jan R. Reimer, Assistant Secretary of Micron Technology, Inc., a
Delaware corporation, hereby certify that the following resolutions were adopted
by the Board of Directors on June 16, 1999:
RESOLVED, that pursuant to Article VIII, Section 1 of the Company's
Bylaws, the Board hereby amends Article III, Sections 14 and 15 of the
Bylaws to read in their entirety as follows:
"SECTION 14. The Board of Directors may, by resolution passed by a
majority of the authorized number of directors, appoint an executive
committee consisting of one or more of the directors of the corporation.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of the committee. The executive committee, to the extent provided in the
resolution of the Board of Directors and subject to any limitation by
statute, shall have and may exercise all the powers and authority of the
Board of Directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to
all papers which may require it; but it shall not have the power or
authority in reference to amending the Certificate of Incorporation,
adopting an agreement of merger or consolidation, recommending to the
stockholders the sale, lease or exchange of all or substantially all of the
corporation's property and assets, recommending to the stockholders a
dissolution of the corporation or a revocation of a dissolution, or
amending the Bylaws of the corporation; and, unless the resolution or the
Certificate of Incorporation expressly so provide, it shall not have the
power of authority to declare a dividend or to authorize the issuance of
stock.
SECTION 15. The Board of Directors may, by resolution adopted by a
majority of the authorized number of directors, designate such other
committees, each consisting of one or more directors, designate such other
committees, each consisting of one or more directors, as it may from time
to time deem advisable to perform such general or special duties as may
from time to time be delegated to any such committee by the Board of
Directors, subject to the limitations imposed by statute or the Certificate
of Incorporation or by these Bylaws. The Board may designate one or more
directors as alternate members of any committee, who may replace any absent
member at any meeting of the committee."
RESOLVED FURTHER, that any and all actions taken prior to the adoption
of the foregoing resolution by the "Employee Option Committee" of the Board
are hereby ratified, confirmed, approved and adopted as actions of the
Company.
IN WITNESS WHEREOF, I hereunto set my hand and affix the corporate
seal of said corporation effective as of the 16th day of June, 1999.
/s/ Jan R. Reimer
-------------------------
Assistant Secretary
(SEAL)
<PAGE>
Exhibit 10.110
MICRON TECHNOLOGY, INC.
1994 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock Option Plan are:
--------------------
. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
---------------
administration of stock option plans under Delaware corporate and securities
laws and the Code.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Change in Control" means the acquisition by any person or entity,
-----------------
directly, indirectly or beneficially, acting alone or in concert, of more than
thirty-five percent (35%) of the Common Stock of the Company outstanding at any
time.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
----
(f) "Committee" means a Committee appointed by the Board in accordance
---------
with Section 4 of the Plan.
(g) "Common Stock" means the Common Stock of the Company.
------------
(h) "Company" means Micron Technology, Inc., a Delaware corporation.
-------
(i) "Consultant" means any person, including an advisor, engaged by
----------
the Company or a Parent or Subsidiary to render services and who is compensated
for such services. The term "Consultant" shall also include Directors who are
not Employees of the Company.
<PAGE>
(j) "Continuous Status as and Employee or Consultant" means that the
-----------------------------------------------
employment or consulting relationship with the Company, any Parent, or
Subsidiary, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company or (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor. A
leave of absence approved by the Company shall include sick leave, military
leave, or any other personal leave approved by an authorized representative of
the Company. For purposes of Incentive Stock Options, no such leave may exceed
90 days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the 91st day of such leave any
Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory
Stock Option.
(k) "Director" means a member of the Board.
--------
(l) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(m) "Employee" means any person, including Officers and Directors,
--------
employed by the Company or any Parent or Subsidiary of the Company. Neither
service as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(o) "Fair Market Value" means, as of any date, the value of Common
-----------------
Stock determined as follows:
(i) If the Common Stock is listed on any established stock
exchange, including without limitation the New York Stock Exchange ("NYSE"), or
a national market system, the Fair Market Value of a Share of Common Stock shall
be the closing price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system (or the exchange with the
greatest volume of trading in Common Stock) on the day of determination, as
reported by Bloomberg, L.P. or such other source as the Administrator deems
reliable;
(ii) If the Common Stock is quoted on the over-the-counter market
or is regularly quoted by a recognized securities dealer, but selling prices are
not reported, the Fair Market Value of a Share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the day of
determination, as reported by Bloomberg, L.P. or such other source as the
Administrator deems reliable;
(iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
<PAGE>
(p) "Incentive Stock Option" means an Option intended to qualify as
----------------------
an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.
(q) "Nonstatutory Stock Option" means an Option not intended to
-------------------------
qualify as an Incentive Stock Option.
(r) "Notice of Grant" means a written notice evidencing certain terms
---------------
and conditions of an individual Option grant. The Notice of Grant is subject to
the terms and conditions of the Option Agreement.
(s) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
(t) "Option" means a stock option granted pursuant to the Plan.
------
(u) "Option Agreement" means a written agreement between the Company
----------------
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(v) "Option Exchange Program" means a program whereby outstanding
-----------------------
options are surrendered in exchange for options with a lower exercise price.
(w) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(x) "Optionee" means an Employee or Consultant who holds an
--------
outstanding Option.
(y) "Parent" means a "parent corporation", whether now or hereafter
------
existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 1994 Option Plan.
----
(aa) "Rule 16b-3" means Rule 16b-3 of the Exchange Act or any
----------
successor to Rule 16b-3, as in effect when discretion is being exercised with
respect to the Plan.
(bb) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 12 of the Plan.
(cc) "Subsidiary" means a "subsidiary corporation", whether now or
----------
hereafter existing, as defined in Section 424(f) of the Code. In the case of an
Option that is not intended to qualify as an Incentive Stock Option, the term
"Subsidiary" shall also include any other entity in which the Company, or any
Parent or Subsidiary of the Company has a significant ownership interest.
<PAGE>
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 32,000,000 Shares. The Shares may be authorized, but unissued,
or reacquired Common Stock.
If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated); provided,
--------
however, that Shares that have actually been issued under the Plan shall not be
returned to the Plan and shall not become available for future distribution
under the Plan.
4. Administration of the Plan.
--------------------------
(a) Procedure.
---------
(i) Multiple Administrative Bodies. If permitted by Rule 16b-3,
------------------------------
the Plan may be administered by different bodies with respect to Directors,
Officers who are not Directors, and Employees who are neither Directors nor
Officers.
(ii) Administration With Respect to Directors and Officers
-----------------------------------------------------
Subject to Section 16(b). With respect to Option grants made to Employees who
- ------------------------
are also Officers or Directors subject to Section 16(b) of the Exchange Act, the
Plan shall be administered by (A) the Board, if the Board may administer the
Plan in compliance with the rules governing a plan intended to qualify as a
discretionary plan under Rule 16b-3, or (B) a committee designated by the Board
to administer the Plan, which committee shall be constituted to comply with the
rules governing a plan intended to qualify as a discretionary plan under Rule
16b-3. Once appointed, such committee shall continue to serve in its designated
capacity until otherwise directed by the Board. From time to time the Board may
increase the size of the Committee and appoint additional members, remove
members (with or without cause) and substitute new members, fill vacancies
(however caused), and remove all members of the Committee and thereafter
directly administer the Plan, all to the extent permitted by the rules governing
a plan intended to qualify as a discretionary plan under Rule 16b-3.
(iii) Administration With Respect to Other Persons. With respect
--------------------------------------------
to Option grants made to Employees or Consultants who are neither Directors nor
Officers of the Company, the Plan shall be administered by (A) the Board or (B)
a committee designated by the Board, which committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Board may increase the size of the
Committee and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan, all to the
extent permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
<PAGE>
(i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(o) of the Plan;
(ii) to select the Consultants and Employees to whom Options
may be granted hereunder;
(iii) to determine whether and to what extent Options are
granted hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder. Such terms and
conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and
any restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and
awards granted pursuant to the Plan;
(ix) to prescribe, amend, and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option (subject to Section 14(c)
of the Plan), including the discretionary authority to extend the post-
termination exercisability period of Options longer than is otherwise provided
for in the Plan;
(xi) to authorize any person to execute on behalf of the
Company any instrument required to effect the grant of an Option previously
granted by the Administrator;
(xii) to institute and Option Exchange Program; and
(xiii) to make all other determinations deemed necessary or
advisable for administering the Plan.
<PAGE>
(c) Effect of Administrator's Decision. The Administrator's
----------------------------------
decisions, determinations, and interpretations shall be final and binding on all
Optionees and any other holders of Options.
5. Eligibility. Nonstatutory Stock Options may be granted to Employees
-----------
and Consultants. Incentive Stock Options may be granted only to Employees. If
otherwise eligible, an Employee or Consultant who has been granted an Option may
be granted additional Options.
6. Limitations.
-----------
(a) Each Option shall be designated in the Notice of Grant as either
an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designations, to the extent that the aggregate Fair Market
Value:
(i) of Shares subject to an Optionee's Incentive Stock Options
granted by the Company or any Parent or Subsidiary, which
(ii) become exercisable for the first time during any calendar
year (under all plans of the Company or any Parent or Subsidiary) exceeds
$100,000, such excess Options shall be treated as Nonstatutory Stock Options.
For purposes of this Section 6(a), Incentive Stock Options shall be taken into
account in the order in which they were granted, and the Fair Market Value of
the Shares shall be determined as of the time of grant.
(b) Neither the Plan nor any Option shall confer upon an Optionee any
right with respect to continuing the Optionee's employment or consulting
relationship with the Company, nor shall they interfere in any way with the
Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.
(c) The following limitations shall apply to grants of Options to
Employees:
(i) No employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 500,000 Shares.
(ii) The foregoing limitations shall be adjusted proportionately
in connection with any change in the Company's capitalization as described in
Section 12.
(iii) If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with a transaction
described in Section 12), the canceled Option will be counted against the limit
set forth in Section 6(c)(i). For this purpose, if the exercise price of an
Option is reduced, the transaction will be treated as a cancellation of the
Option and the grant of a new Option.
7. Term of Plan. Subject to Section 18 of the Plan, the Plan shall become
------------
effective upon the earlier to occur of its adoption by the Board or its approval
by the shareholders of the Company as described in Section 18 of the Plan. It
shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 14 of the Plan.
<PAGE>
8. Term of Option. The term of each Option shall be stated in the Notice
--------------
of Grant; provided, however, that in the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may
be provided in the Notice of Grant. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting power
of all classes of stock of the Company or any Parent or Subsidiary, the term of
the Incentive Stock Option shall be five (5) years from the date of grant or
such shorter term as may be provided in the Notice of Grant.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be determined by the
Administrator, subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or Parent or Subsidiary,
the per Share exercise price shall be no less than 110% of the Fair Market Value
per Share on the date of grant.
(B) granted to any Employee other than an Employee described
in paragraph (A) immediately above, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant.
(ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In doing so, the Administrator may specify that an
Option may not be exercised until the completion of a service period.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. In the case of an Incentive Stock Option, the Administrator shall
determine the acceptable form of consideration at the time of grant. Such
consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
<PAGE>
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted thereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives:
(i) written notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the stock
certificate evidencing such Shares is issued (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company), no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate, either in book entry form or in certificate form, promptly
after the Option is exercised. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
<PAGE>
(b) Termination of Employment or Consulting Relationship. Upon
----------------------------------------------------
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it as the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for 30 days following the Optionee's termination of Continuous
Status as an Employee or Consultant. In the case of an Incentive Stock Option,
such period of time shall not exceed thirty (30) days from the date of
termination. If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert
to the Plan.
(c) Disability of Optionee. In the event that an Optionee's
----------------------
Continuous Status as an Employee or Consultant terminates as a result of the
Optionee's Disability, the Optionee may exercise his or her Option at any time
within twelve (12) months from the date of such termination, but only to the
extent that the Optionee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the term of such
Option as set forth in the Notice of Grant). If, at the date of termination, the
Optionee does not exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at any time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Rule 16b-3. Options granted to individuals subject to Section 16
----------
of the Exchange Act ("Insiders") must comply with the applicable provisions of
Rule 16b-3 and shall contain such additional conditions or restrictions as may
be required thereunder to qualify for the maximum exemption from Section 16 of
the Exchange Act with respect to Plan transactions.
(f) Suspension. Any Optionee who is also a participant in the
----------
Retirement at Micron ("RAM") Section 401(k) Plan and who requests and receives a
hardship distribution from the RAM Plan, is prohibited from making, and must
suspend, his or her employee elective
<PAGE>
contributions and employee contributions including, without limitation on the
foregoing, the exercise of any Option granted from the date of receipt by that
employee of the RAM hardship distribution.
11. Non-Transferability of Options. An Option may not be sold, pledged,
------------------------------
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger, or
-------------------------------------------------------------------
Asset Sale.
- ----------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of issued shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration." Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option as to all or any part of the Optioned stock, including Shares as to which
the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company
--------------------
with or into another corporation, or the sale of substantially all of the assets
of the Company, each outstanding Option may be assumed or an equivalent option
or right may be substituted by the successor corporation or a Parent or
Subsidiary of the successor corporation. The Administrator may, in lieu of such
assumption or substitution, provide for the Optionee to have the right to
exercise the Option as to all or a portion of the Optioned Stock, including
Shares as to which it would not otherwise be exercisable. If the Administrator
makes an Option exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Administrator shall notify the Optionee that
the Option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and the Option will terminate upon the expiration of such
period. For the
<PAGE>
purposes of this paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the option or right confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of the Option, for each Share
of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
(d) Change in Control. In the event of a Change in Control, the
-----------------
unexercised portion of the Option shall become immediately exercisable, to the
extent such acceleration does not disqualify the Plan, or cause an Incentive
Stock Option to be treated as a Nonstatutory Stock Option without the consent of
the Optionee.
13. Date of Grant. The date of grant of an Option shall be, for all
-------------
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend,
-------------------------
alter, suspend, or terminate the Plan.
(b) Shareholder Approval. The Company shall obtain shareholder
--------------------
approval of any Plan amendment to the extent necessary and desirable to comply
with Rule 16b-3 or with Section 422 of the Code (or any successor rule or
statute or other applicable law, rule, or regulation, including the requirements
of any exchange or quotation system on which the Common Stock is listed or
quoted). Such shareholder approval, if required, shall be obtained in such a
manner and to such a degree as is required by the applicable law, rule, or
regulation.
(c) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension, or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of
<PAGE>
1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, Applicable Laws, and the requirements of any stock exchange or
quotation system upon which the Shares may then be listed or quoted, and shall
be further subject to the approval of counsel for the Company with respect to
such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Liability of Company.
--------------------
(a) Inability to Obtain Authority. The inability of the Company to
-----------------------------
obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company's counsel to be necessary to the lawful issuance and
sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.
(b) Grants Exceeding Allotted Shares. If the Optioned Stock covered
--------------------------------
by an Option exceeds, as of the date of grant, the number of Shares which may be
issued under the Plan without additional shareholder approval, such Option shall
be void with respect to such excess Optioned Stock, unless shareholder approval
of an amendment sufficiently increasing the number of shares subject to the Plan
is timely obtained in accordance with Section 14(b) of the Plan.
17. Reservation of Shares. The Company, during the term of this Plan,
---------------------
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be obtained
in the manner and to the degree required under applicable federal and Delaware
law.
<PAGE>
EXHIBIT 10.128
MICRON TECHNOLOGY, INC.
NONSTATUTORY STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Plan are:
--------------------
. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Nonstatutory stock options may be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall
-------------
be administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
---------------
administration of stock option plans and the issuance of stock and stock options
under federal securities laws, Delaware corporate and securities laws, the Code,
and the applicable laws of any foreign country or jurisdiction where options
will be or are being granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Change in Control" means the acquisition by any person or entity,
-----------------
directly, indirectly or beneficially, acting alone or in concert, of more than
thirty-five percent (35%) of the Common Stock of the Company outstanding at any
time.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
----
(f) "Committee" means a Committee appointed by the Board in accordance
---------
with Section 4 of the Plan.
(g) "Common Stock" means the Common Stock of the Company.
------------
(h) "Company" means Micron Technology, Inc., a Delaware corporation.
-------
(i) "Consultant" means any person, including an advisor, engaged by
----------
the Company or a parent, subsidiary or affiliate to render services. The term
"Consultant" shall not include any person who is also an Officer or Director of
the Company.
<PAGE>
(j) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any parent, subsidiary,
or affiliate, is not interrupted or terminated. Continuous Status as an
Employee or Consultant shall not be considered interrupted in the case of (i)
any leave of absence approved by the Company, (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor or (iii) change in status from either an Employee to a Consultant or a
Consultant to an Employee. A leave of absence approved by the Company shall
include sick leave, military leave, or any other personal leave approved by an
authorized representative of the Company.
(k) "Director" means a member of the Board.
--------
(l) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(m) "Employee" means any person, except Officers and Directors,
--------
employed by the Company or any parent, subsidiary or affiliate of the Company.
(n) "Fair Market Value" means, as of any date, the closing price for
-----------------
the Company's Common Stock (or the closing bid, if no sales were reported) as
quoted on any established stock exchange, including without limitation the New
York Stock Exchange ("NYSE"), or a national market system (or the exchange with
the greatest volume of trading in Common Stock) on the day of determination, as
reported by Bloomberg, L.P. or such other source as the Administrator deems
reliable.
(o) "Notice of Grant" means a written notice evidencing certain terms
---------------
and conditions of an individual Option grant. The Notice of Grant is subject to
the terms and conditions of the Option Agreement.
(p) "Officer" means a person who is an officer of the Company within
-------
the meaning of Section 16 of the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
(q) "Option" means a nonstatutory stock option granted pursuant to the
------
Plan. Such option is not intended to qualify as an incentive stock option within
the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(r) "Option Agreement" means a written agreement between the Company
----------------
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(s) "Option Exchange Program" means a program whereby outstanding
-----------------------
options are surrendered in exchange for options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option.
--------------
(u) "Optionee" means an Employee or Consultant who holds an
--------
outstanding Option.
2
<PAGE>
(v) "Plan" means this Nonstatutory Stock Option Plan.
----
(w) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 12 of the Plan.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 9,801,544. The Shares may be authorized, but, unissued, or
reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
4. Administration of the Plan.
--------------------------
(a) Procedure. The Plan shall be administered by (A) the Board or (B)
---------
a committee designated by the Board, which committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Board may increase the size of the
Committee and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan, all to the
extent permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to select the Consultants and Employees to whom Options may
be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
3
<PAGE>
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend, and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(xi) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
(xii) to institute and Option Exchange Program;
(xiii) to allow Optionees to satisfy withholding tax obligations
by electing to have the Company withhold from the Shares to be issued upon
exercise of an Option that number of Shares having a Fair Market Value equal to
the amount required to be withheld; and
(xiv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
----------------------------------
determinations, and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. Eligibility. Options may be granted to Employees and Consultants.
-----------
6. Limitations. Neither the Plan nor any Option shall confer upon an
-----------
Optionee any right with respect to continuing the Optionee's employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.
7. Term of Plan. The Plan shall become effective upon its adoption by the
------------
Board. It shall continue in effect until terminated under Section 14 of the
Plan.
8. Term of Option. The term of each Option shall be stated in the
--------------
Notice of Grant.
9. Option Exercise Price and Consideration.
---------------------------------------
4
<PAGE>
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is
---------------------------------
granted, the Administrator shall fix the period within which the Option may be
exercised and shall determine any conditions which must be satisfied before the
Option may be exercised. In doing so, the Administrator may specify that an
Option may not be exercised until either the completion of a service period or
the achievement of performance criteria with respect to the Company or the
Optionee.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) delivery of a properly executed exercise notice together
with such other documentation as the Administrator and the broker, if
applicable, shall require to effect an exercise of the Option and delivery to
the Company of the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
5
<PAGE>
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
-----------------------------------------------
granted thereunder shall be exercisable according to the terms of the Plan and
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares, promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon
----------------------------------------------------
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it as the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for 30 days following the Optionee's termination of Continuous
Status as an Employee or Consultant. If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(c) Disability of Optionee. In the event that an Optionee's Continuous
----------------------
Status as an Employee or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee does
not exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not
6
<PAGE>
exercise his or her option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at any time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Suspension. Any Optionee who is also a participant in the
----------
Retirement at Micron ("RAM") Section 401(k) Plan and who requests and receives a
hardship distribution from the RAM Plan, is prohibited from making, and must
suspend, his or her employee elective contributions and employee contributions
including, without limitation on the foregoing, the exercise of any Option
granted from the date of receipt by that employee of the RAM hardship
distribution.
11. Non-Transferability of Options. Unless otherwise specified by the
------------------------------
Administrator in the Option Agreement, an Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger, or
-------------------------------------------------------------------
Asset Sale.
- ----------
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of issued shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been effected without receipt of
consideration. Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
7
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board may, in the exercise of its sole
discretion in such instances, declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option as to all or any part of the Optioned stock, including Shares as to which
the Option would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company with
--------------------
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option may be assumed or an equivalent option or
right may be substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation. The Administrator may, in lieu of such assumption
or substitution, provide for the Optionee to have the right to exercise the
Option as to all or a portion of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If the Administrator makes an
Option exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Administrator shall notify the Optionee that the
Option shall be fully exercisable for a period of thirty (30) days from the date
of such notice, and the Option will terminate upon the expiration of such
period. For the purposes of this paragraph, the Option shall be considered
assumed if, following the merger or sale of assets, the option or right confers
the right to purchase, for each Share of Optioned Stock subject to the Option
immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) received in the merger or sale of
assets by holders of Common Stock for each Share held on the effective date of
the transaction (and if holders were offered a choice of consideration, the type
of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the merger or sale of
assets was not solely common stock of the successor corporation or its Parent,
the Administrator may, with the consent of the successor corporation, provide
for the consideration to be received upon the exercise of the Option, for each
Share of Optioned Stock subject to the Option, to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.
(d) Change in Control. In the event of a Change in Control, the
-----------------
unexercised portion of the Option shall become immediately exercisable.
13. Date of Grant. The date of grant of an Option shall be, for all
-------------
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend, or terminate the Plan.
8
<PAGE>
(b) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension, or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all Applicable Laws and the
requirements of any stock exchange or quotation system upon which the Shares may
then be listed or quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Liability of Company. The inability of the Company to obtain authority
--------------------
from any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will
---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
9
<PAGE>
Exhibit 10.132
MICRON TECHNOLOGY, INC.
1998 NONSTATUTORY STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Plan are:
--------------------
. to attract and retain the best available personnel for positions of
substantial responsibility,
. to provide additional incentive to Employees and Consultants, and
. to promote the success of the Company's business.
Nonstatutory stock options may be granted under the Plan.
2. Definitions. As used herein, the following definitions shall apply:
-----------
(a) "Administrator" means the Board or any of its Committees as shall be
-------------
administering the Plan, in accordance with Section 4 of the Plan.
(b) "Applicable Laws" means the legal requirements relating to the
---------------
administration of stock option plans and the issuance of stock and stock options
under federal and state securities laws, Delaware corporate law, the Code, and
the applicable laws of any foreign country or jurisdiction where options will be
or are being granted under the Plan.
(c) "Board" means the Board of Directors of the Company.
-----
(d) "Change in Control" means the acquisition by any person or entity,
-----------------
directly, indirectly or beneficially, acting alone or in concert, of more than
thirty-five percent (35%) of the Common Stock of the Company outstanding at any
time.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
----
(f) "Committee" means a Committee appointed by the Board in accordance
---------
with Section 4 of the Plan.
(g) "Common Stock" means the Common Stock of the Company.
------------
(h) "Company" means Micron Technology, Inc., a Delaware corporation.
-------
(i) "Consultant" means any person, including an advisor, engaged by the
----------
Company or a parent, subsidiary or affiliate to render services. The term
"Consultant" shall not include any person who is also an Officer or Director of
the Company.
<PAGE>
(j) "Continuous Status as an Employee or Consultant" means that the
----------------------------------------------
employment or consulting relationship with the Company, any parent, subsidiary,
or affiliate, is not interrupted or terminated. Continuous Status as an Employee
or Consultant shall not be considered interrupted in the case of (i) any leave
of absence approved by the Company, (ii) transfers between locations of the
Company or between the Company, its Parent, any Subsidiary, or any successor or
(iii) change in status from either an Employee to a Consultant or a Consultant
to an Employee. A leave of absence approved by the Company shall include sick
leave, military leave, or any other personal leave approved by an authorized
representative of the Company.
(k) "Director" means a member of the Board.
--------
(l) "Disability" means total and permanent disability as defined in
----------
Section 22(e)(3) of the Code.
(m) "Employee" means any person, except Officers and Directors, employed
--------
by the Company or any parent, subsidiary or affiliate of the Company.
(n) "Fair Market Value" means, as of any date, the closing price for the
-----------------
Company's Common Stock (or the closing bid, if no sales were reported) as quoted
on any established stock exchange, including without limitation the New York
Stock Exchange ("NYSE"), or a national market system (or the exchange with the
greatest volume of trading in Common Stock) on the day of determination, as
reported by Bloomberg, L.P. or such other source as the Administrator deems
reliable.
(o) "Notice of Grant" means a written notice evidencing certain terms and
---------------
conditions of an individual Option grant. The Notice of Grant is subject to the
terms and conditions of the Option Agreement.
(p) "Officer" means a person who is an officer of the Company within the
-------
meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
(q) "Option" means a nonstatutory stock option granted pursuant to the
------
Plan. Such option is not intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated
thereunder.
(r) "Option Agreement" means a written agreement between the Company and
----------------
an Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(s) "Option Exchange Program" means a program whereby outstanding options
-----------------------
are surrendered in exchange for options with a lower exercise price.
(t) "Optioned Stock" means the Common Stock subject to an Option.
--------------
<PAGE>
(u) "Optionee" means an Employee or Consultant who holds an
--------
outstanding Option.
(v) "Plan" means this Nonstatutory Stock Option Plan.
----
(w) "Share" means a share of the Common Stock, as adjusted in
-----
accordance with Section 12 of the Plan.
3. Stock Subject to the Plan. Subject to the provisions of Section 12 of
-------------------------
the Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 875,000. The Shares may be authorized, but unissued, or
reacquired Common Stock.
If an Option expires or becomes unexercisable without having been
exercised in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
4. Administration of the Plan.
--------------------------
(a) Procedure. The Plan shall be administered by (A) the Board or (B)
---------
a committee designated by the Board, which committee shall be constituted to
satisfy Applicable Laws. Once appointed, such Board may increase the size of the
Committee and appoint additional members, remove members (with or without cause)
and substitute new members, fill vacancies (however caused), and remove all
members of the Committee and thereafter directly administer the Plan, all to the
extent permitted by Applicable Laws.
(b) Powers of the Administrator. Subject to the provisions of the
---------------------------
Plan, and in the case of a Committee, subject to the specific duties delegated
by the Board to such Committee, the Administrator shall have the authority, in
its discretion:
(i) to determine the Fair Market Value of the Common Stock;
(ii) to select the Consultants and Employees to whom Options may
be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of shares of Common Stock to be
covered by each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
<PAGE>
(vi) to determine the terms and conditions, not inconsistent with
the terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria), any
vesting acceleration or waiver of forfeiture restrictions, and any restriction
or limitation regarding any Option or the shares of Common Stock relating
thereto, based in each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vii) to reduce the exercise price of any Option to the then
current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option shall have declined since the date the Option was granted;
(viii) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan;
(ix) to prescribe, amend, and rescind rules and regulations
relating to the Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment under
foreign tax laws;
(x) to modify or amend each Option (subject to Section 14(b) of
the Plan), including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for in the
Plan;
(xi) to authorize any person to execute on behalf of the Company
any instrument required to effect the grant of an Option previously granted by
the Administrator;
(xii) to institute and Option Exchange Program;
(xiii) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld; and
(xiv) to make all other determinations deemed necessary or
advisable for administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
----------------------------------
determinations, and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. Eligibility. Options may be granted to Employees and Consultants.
-----------
6. Limitations. Neither the Plan nor any Option shall confer upon an
-----------
Optionee any right with respect to continuing the Optionee's employment or
consulting relationship with the Company, nor shall they interfere in any way
with the Optionee's right or the Company's right to terminate such employment or
consulting relationship at any time, with or without cause.
<PAGE>
7. Term of Plan. The Plan shall become effective upon its adoption by the
------------
Board. It shall continue in effect until terminated under Section 14 of the
Plan.
8. Term of Option. The term of each Option shall be stated in the Notice of
--------------
Grant.
9. Option Exercise Price and Consideration.
---------------------------------------
(a) Exercise Price. The per share exercise price for the Shares to be
--------------
issued pursuant to exercise of an Option shall be determined by the
Administrator.
(b) Waiting Period and Exercise Dates. At the time an Option is granted,
---------------------------------
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised. In doing so, the Administrator may specify that an Option may not
be exercised until either the completion of a service period or the achievement
of performance criteria with respect to the Company or the Optionee.
(c) Form of Consideration. The Administrator shall determine the
---------------------
acceptable form of consideration for exercising an Option, including the method
of payment. Such consideration may consist entirely of:
(i) cash;
(ii) check;
(iii) promissory note;
(iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
(v) delivery of a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and delivery to the Company of
the sale or loan proceeds required to pay the exercise price;
(vi) a reduction in the amount of any Company liability to the
Optionee, including any liability attributable to the Optionee's participation
in any Company-sponsored deferred compensation program or arrangement;
(vii) any combination of the foregoing methods of payment; or
(viii) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws.
<PAGE>
10. Exercise of Option.
------------------
(a) Procedure for Exercise; Rights as a Shareholder. Any Option granted
-----------------------------------------------
thereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives: (i)
written notice of exercise (in accordance with the Option Agreement) from the
person entitled to exercise the Option, and (ii) full payment for the Shares
with respect to which the Option is exercised. Full payment may consist of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the Shares
are issued (as evidenced by the appropriate entry on the books of the Company or
of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a shareholder shall exist with respect to the
Optioned Stock, notwithstanding the exercise of the Option. The Company shall
issue (or cause to be issued) such Shares, promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided
in Section 12 of the Plan.
Exercising an Option in any manner shall decrease the number of
Shares thereafter available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is exercised.
(b) Termination of Employment or Consulting Relationship. Upon
----------------------------------------------------
termination of an Optionee's Continuous Status as an Employee or Consultant,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it as the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for 30 days following the Optionee's termination of Continuous
Status as an Employee or Consultant. If, at the date of termination, the
Optionee is not entitled to exercise his or her entire Option, the Shares
covered by the unexercisable portion of the Option shall revert to the Plan. If,
after termination, the Optionee does not exercise his or her Option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(c) Disability of Optionee. In the event that an Optionee's Continuous
----------------------
Status as an Employee or Consultant terminates as a result of the Optionee's
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee does
not exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If,
<PAGE>
after termination, the Optionee does not exercise his or her option within the
time specified herein, the Option shall terminate, and the Shares covered by
such Option shall revert to the Plan.
(d) Death of Optionee. In the event of the death of an Optionee, the
-----------------
Option may be exercised at any time within twelve (12) months following the date
of death (but in no event later than the expiration of the term of such Option
as set forth in the Notice of Grant), by the Optionee's estate or by a person
who acquired the right to exercise the Option by bequest or inheritance, but
only to the extent that the Optionee was entitled to exercise the Option at the
date of death. If, at any time of death, the Optionee was not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall immediately revert to the Plan. If, after death, the
Optionee's estate or a person who acquired the right to exercise the Option by
bequest or inheritance does not exercise the Option within the time specified
herein, the Option shall terminate, and the Shares covered by such Option shall
revert to the Plan.
(e) Suspension. Any Optionee who is also a participant in the
----------
Retirement at Micron ("RAM") Section 401(k) Plan and who requests and receives a
hardship distribution from the RAM Plan, is prohibited from making, and must
suspend, his or her employee elective contributions and employee contributions
including, without limitation on the foregoing, the exercise of any Option
granted from the date of receipt by that employee of the RAM hardship
distribution.
11. Non-Transferability of Options. Unless otherwise specified by the
------------------------------
Administrator in the Option Agreement, an Option may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by
will or by laws of descent or distribution and may be exercised, during the
lifetime of the Optionee, only by the Optionee.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger, or Asset
-------------------------------------------------------------------------
Sale.
- ----
(a) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of issued shares of Common Stock which
have been authorized for issuance under the Plan but as to which no Options have
yet been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been effected without receipt of
consideration. Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding, and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an Option.
<PAGE>
(b) Dissolution or Liquidation. In the event of the proposed dissolution
--------------------------
or liquidation of the Company, to the extent that an Option has not been
previously exercised, it will terminate immediately prior to the consummation of
such proposed action. The Board may, in the exercise of its sole discretion in
such instances, declare that any Option shall terminate as of a date fixed by
the Board and give each Optionee the right to exercise his or her Option as to
all or any part of the Optioned stock, including Shares as to which the Option
would not otherwise be exercisable.
(c) Merger or Asset Sale. In the event of a merger of the Company with
--------------------
or into another corporation, or the sale of substantially all of the assets of
the Company, each outstanding Option may be assumed or an equivalent option or
right may be substituted by the successor corporation or a Parent or Subsidiary
of the successor corporation. In the event that the successor corporation
refuses to assume or substitute the Option, the Optionee shall fully vest in and
have the right to exercise the Option as to all of the Optioned Stock. If an
Option becomes fully vested and exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option shall be fully exercisable for a period of
thirty (30) days from the date of such notice, and the Option will terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the option or right confers the right to purchase, for each Share of Optioned
Stock subject to the Option immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets was not solely common
stock of the successor corporation or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option, for each Share of Optioned Stock
subject to the Option, to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
(d) Change in Control. In the event of a Change in Control, the
-----------------
unexercised portion of the Option shall become immediately exercisable.
13. Date of Grant. The date of grant of an Option shall be, for all
-------------
purposes, the date on which the Administrator makes the determination granting
such Option, or such other later date as is determined by the Administrator.
Notice of the determination shall be provided to each Optionee within a
reasonable time after the date of such grant.
14. Amendment and Termination of the Plan.
-------------------------------------
(a) Amendment and Termination. The Board may at any time amend, alter,
-------------------------
suspend, or terminate the Plan.
<PAGE>
(b) Effect of Amendment or Termination. No amendment, alteration,
----------------------------------
suspension, or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares.
----------------------------------
(a) Legal Compliance. Shares shall not be issued pursuant to the
----------------
exercise of an Option unless the exercise of such Option and the issuance and
delivery of such Shares shall comply with all Applicable Laws and the
requirements of any stock exchange or quotation system upon which the Shares may
then be listed or quoted, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
(b) Investment Representations. As a condition to the exercise of an
--------------------------
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchased
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Liability of Company. The inability of the Company to obtain authority
--------------------
from any regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.
17. Reservation of Shares. The Company, during the term of this Plan, will
---------------------
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
<PAGE>
EXHIBIT 10.139
MICRON TECHNOLOGY, INC.
1989 EMPLOYEE STOCK
-------------------
PURCHASE PLAN
-------------
The following constitute the provisions of the 1989 Employee Stock Purchase
Plan of Micron Technology, Inc.:
1. Purpose. The purpose of the Plan is to provide employees of the
-------
Company and its Designated Subsidiaries with an opportunity to purchase Common
Stock of the Company through accumulated payroll deductions. It is the intention
of the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that section
of the Code.
2. Definitions.
-----------
(a) "Board" shall mean the Board of Directors of the Company.
-------
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
------
(c) "Common Stock" shall mean the Common Stock, $.10 no par value,
--------------
of the Company.
(d) "Company" shall mean Micron Technology, Inc., a Delaware
---------
corporation.
(e) "Compensation" with respect to any Employee means such Employee's
--------------
wages, salaries, fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the Company
or its designated subsidiaries to the extent that the amounts are includible in
gross income (including, but not limited to, commissions paid to salesmen,
compensation for services on the basis of a percentage of profits, tips, and
bonuses).
Compensation shall exclude (a)(1) contributions made by the employer to a
plan of deferred compensation to the extent that, the contributions are not
includible in the gross income of the Employee for the taxable year in which
contributed, (2) employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the extent
such contributions are excludable from the Employee's gross income, (3) any
distributions from a plan of deferred compensation; (b) amounts realized from
the exercise of a non-qualified stock option, or when restricted stock (or
property) held by an Employee either becomes freely transferable or is no longer
subject to substantial risk of forfeiture; (c) amounts realized from the sale,
exchange or other disposition of stock acquired under a qualified stock option;
(d) other amounts which receive special tax benefits, such as premiums for
group-term life insurance (but only to the extent that the premiums are not
includible in the gross income of
<PAGE>
the employee), or contributions made by the employer (whether or not under a
salary reduction agreement) towards the purchase of any annuity contract
described in Code Section 403(b) (whether or not the contributions are actually
excludable from the Employee's gross income); (e) reimbursements or other
expense allowances; (f) fringe benefits (cash and noncash); (g) moving expenses;
and (h) welfare benefits.
(f) "Continuous Status as an Employee" shall mean the absence of any
----------------------------------
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period of
not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
(g) "Designated Subsidiaries" shall mean the Subsidiaries which have
-------------------------
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(h) "Employee" shall mean any person, including an officer, who is
----------
continuously employed for at least twenty (20) hours per week and more than five
(5) months in a calendar year by the Company or one of its Designated
Subsidiaries; provided, however, that all employees of an Italian Designated
Subsidiary of the Company shall be considered "Employees" under the Plan,
without regard as to whether they are continuously employed for at least twenty
(20) hours per week or more than five (5) months in a calendar year by an
Italian Designated Subsidiary of the Company.
(i) "Enrollment Date" shall mean the first day of each Offering
-----------------
Period.
(j) "Exercise Date" shall mean the last day of each Offering Period
---------------
of the Plan.
(k) "Offering Period" shall mean a period of three (3) months during
-----------------
which an option granted pursuant to the Plan may be exercised.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
------
(m) "Subsidiary" shall mean a corporation, domestic or foreign, of
------------
which not less than 50% of the voting shares are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
3. Eligibility.
-----------
(a) Any Employee as defined in paragraph 2 who has been continuously
employed by the Company or any subsidiary of the Company for at least one (1)
consecutive month and who shall be employed by the Company on a given Enrollment
Date shall be eligible to participate in the Plan.
<PAGE>
(b) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) if, immediately after the
grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own stock and/or
hold outstanding options to purchase stock possessing five percent (5%) or more
of the total combined voting power or value of all classes of stock of the
Company or of any subsidiary of the Company, or (ii) which permits his rights to
purchase stock under all employee stock purchase plans (described in Section 423
of the Code) of the Company and its subsidiaries to accrue at a rate which
exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value of such
stock (determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive
----------------
Offering Periods with a new Offering Period commencing on or about January 1,
April 1, July 1, and October 1 of each year commencing on or about January 1,
1989 or, in the discretion of the committee, April 1, 1989, and continuing
thereafter until terminated in accordance with paragraph 20 hereof. Subject to
the shareholder approval requirements of paragraph 20, the Board of Directors of
the Company shall have the power to change the duration of offering periods with
respect to future offerings if such change is announced at least fifteen (15)
days prior to the scheduled beginning of the first offering period to be
affected.
5. Participation.
-------------
(a) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's payroll or
administrative office at least ten (10) business days prior to the applicable
Enrollment Date, unless a different time for filing the subscription agreement
is set by the Board for all eligible Employees with respect to a given Offering
Period.
(b) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in paragraph 11.
6. Payroll Deductions.
------------------
(a) At the time a participant files his subscription agreement, he or
she shall elect to have payroll deductions made on each payday during the
Offering Period in an amount not less than one percent (1%) and not greater than
twenty percent (20%) of the Compensation which he or she received on the payday
immediately preceding the Enrollment Date, and the aggregate of such payroll
deductions during the Offering Period shall not exceed twenty percent (20%) of
his or her aggregate Compensation during said Offering Period.
(b) All payroll deductions made by a participant shall be credited to
his or her account under the Plan. A participant may not make any additional
payments into such account.
<PAGE>
(c) A participant may discontinue his or her participation in the Plan
as provided in paragraph 11, but may not otherwise change, their rate of payroll
deductions during the Offering Period. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless revised as
provided herein or terminated as provided in paragraph 11.
(d) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Offering
Period and any other Offering Period ending within the same calendar year equal
$21,250. Payroll deductions shall recommence at the rate provided in such
participant's subscription agreement at the beginning of the first Offering
Period which is scheduled to end in the following calendar year, unless
terminated by the participant as provided in paragraph 11.
7. Grant of Option.
---------------
(a) On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to
purchase on each Exercise Date during such Offering Period up to a number of
shares of the Company's Common Stock determined by dividing such Employee's
payroll deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common Stock
on the Enrollment Date or (ii) eighty-five percent (85%) of the fair market
value of a share of the Company's Common Stock on the Exercise Date; provided
that in no event shall an Employee be permitted to purchase during each Offering
Period more than a number of shares determined by dividing $6,250 by the fair
market value of a share of the Company's Common Stock on the Enrollment Date,
and provided further that such purchase shall be subject to the limitations set
forth in Section 3(b) and 13 hereof. Exercise of the option shall occur as
provided in Section 8, unless the participant has withdrawn pursuant to Section
11, and shall expire on the last day of the Offering Period. Fair market value
or a share of the Company's Common Stock shall be determined as provided in
Section 7(b) herein.
(b) The option price per share of the shares offered in a given
Offering Period shall be the lower of: (i) 85% of the fair market value of a
share of the Common Stock of the Company on the Enrollment Date; or (ii) 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however that
where there is a public market for the Common Stock, the fair market value per
share shall be the closing price for the Company's Common Stock (or the closing
bid, if no sales were reported) as quoted on any established stock exchange,
including without limitation the New York Stock Exchange ("NYSE"), or a national
market system (or the exchange with the greatest volume of trading in Common
Stock) on the day of determination, as reported by Bloomberg, L.P. or such other
source as the Administrator deems reliable.
8. Exercise of Option. Unless a participant withdraws from the Plan as
------------------
provided in paragraph 11, his or her option for the purchase of shares will be
exercised automatically on the
<PAGE>
Exercise Date of the Offering Period, and the maximum number of full shares
subject to option will be purchased for him or her at the applicable option
price with the accumulated payroll deductions in his account. The shares
purchased upon exercise of an option hereunder shall be deemed to be transferred
to the participant on the Exercise Date. During his or her lifetime, a
participant's option to purchase shares hereunder is exercisable only by such
participant.
9. Restriction on Transfer of Shares. Effective April 1, 1993, shares
----------------------------------
purchased upon exercise of a participant's option may not be transferred by the
participant for a period of one (1) year from the Exercise Date. This transfer
restriction shall be earlier terminated in the event of a participant's
permanent disability or death, or upon the involuntary transfer of the shares
due to divorce, judicial declaration of insolvency or bankruptcy or other form
of involuntary transfer.
10. Delivery. Prior to April 1, 1993, as promptly as practicable after
--------
the Exercise Date of each Offering Period, the Company shall arrange the
delivery to each participant of a certificate representing the full shares
purchased upon exercise of the participant's option. Subsequent to April 1,
1993, immediately following the Exercise Date of each Offering Period, unless a
participant requests the issuance of a certificate representing the
participant's shares, the Company shall promptly record the participant's full
shares in book entry form. Upon request from a participant, or upon the
involuntary transfer of a participant's shares, the Company shall arrange for
the delivery to the participant of a certificate representing the full shares
purchased. Certificates issued upon a participant's request which are subject to
the transfer restriction referred to in paragraph 9 shall bear a legend in a
conspicuous place referencing the restriction. Any cash remaining to the credit
of a participant's account under the Plan after a purchase by the participant of
shares at the termination of each Offering Period, which is insufficient to
purchase a full share of Common Stock of the Company, shall be returned to said
participant or retained in the participant's account for the subsequent Offering
Period, as determined by the Company as to all participants for a given Offering
Period.
11. Withdrawal; Termination of Employment.
-------------------------------------
(a) A participant may withdraw all but not less than all the payroll
deductions credited to such participant's account under the Plan at any time
prior to the Exercise Date of the Offering Period by giving written notice to
the Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account will be paid to him or her
promptly after receipt of the notice of withdrawal and the participant's option
for the current Offering Period will be automatically terminated, and no further
payroll deductions for the purchase of shares will be made during the Offering
Period. If a participant withdraws from an Offering Period, payroll deductions
will not resume at the beginning of the succeeding Offering Period unless the
participant delivers to the Company a new subscription agreement as described in
Section 5(a).
(b) Upon termination of the participant's Continuous Status as an
Employee prior to the Exercise Date of the Offering Period for any reason,
including retirement or death, the payroll deductions credited to such
participant's account will be returned to him or her or, in the case of his or
her death, to the person or persons entitled thereto under paragraph 15, and
such participant's option will be automatically terminated.
<PAGE>
(c) In the event an Employee fails to remain in Continuous Status as
an Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the Employee is a participant, he or she will be deemed
to have elected to withdraw from the Plan and the payroll deductions credited to
his or her account will be returned to him or her and the option terminated.
(d) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in a succeeding Offering
Period or in any similar plan which may hereafter be adopted by the Company.
12. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
13. Stock.
-----
(a) The maximum number of shares of the Company's Common Stock which
shall be made available for sale under the Plan shall be 9,250,000 shares,
subject to adjustment upon changes in capitalization of the Company as provided
in paragraph 19. If the total number of shares which would otherwise be subject
to options granted pursuant to Section 7(a) hereof on the Enrollment Date of an
Offering Period exceeds the number of shares then available under the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available for option grant in as uniform a manner as shall be
practicable and as it shall determine to be equitable. In such event, the
Company shall give written notice of such reduction of the number of shares
subject to the option to each participant affected thereby and shall similarly
reduce the rate of payroll deductions, if necessary.
(b) The participant will have no interest or voting right in shares
covered by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse.
14. Administration. The Plan shall be administered by the Board of the
--------------
Company or a committee of members of the Board appointed by the Board. The
administration, interpretation or application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all participants. Members
of the Board who are eligible Employees are permitted to participate in the
Plan, provided that:
(a) Members of the Board who are eligible to participate in the Plan
may not vote on any matter affecting the administration of the Plan or the grant
of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan, no member of
the Board who is eligible to participate in the Plan may be a member of the
Committee.
<PAGE>
15. Designation of Beneficiary.
--------------------------
(a) A participant may file a written designation of a beneficiary who
is to receive any shares and cash, if any, from the participant's account under
the Plan in the event of such participant's death subsequent to the end of the
Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Exercise Date of the Offering Period.
(b) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and in
the absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its discretion, may deliver such shares and/or
cash to the spouse or to any one or more dependents or relatives of the
participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability of Rights. Neither payroll deductions credited to a
-------------------------
participant's account nor any rights with regard to the exercise of an option or
to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 15 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds in accordance with paragraph 11.
17. Use of Funds. All payroll deductions received or held by the Company
------------
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts will be maintained for each participant
-------
in the Plan. Statements of account will be given to participating Employees; on
no less than an annual basis, promptly following the Exercise Date, which
statements will set forth the amounts of payroll deductions, the per share
purchase price, the number of shares purchased and the remaining cash balance,
if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required
------------------------------------------
action by the shareholders of the Company, the number of shares of Common Stock
covered by each option under the Plan which has not yet been exercised and the
number of shares of Common Stock which have been authorized for issuance under
the Plan but have not yet been placed under option (collectively, the
"Reserves"), as well as the price per share of Common Stock covered by each
option under the Plan which has not yet been exercised, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common
<PAGE>
Stock, or any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment shall
be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issue by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of shares of Common Stock subject
to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board. In the event of a
proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each option under the
Plan shall be assumed or an equivalent option shall be substituted by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the participant shall have the right to
exercise the option as to all of the optioned stock, including shares as to
which the option would not otherwise be exercisable. If the Board makes an
option fully exercisable in lieu of assumption or substitution in the event of a
merger or sale of assets, the Board shall notify the participant that the option
shall be fully exercisable for a period of thirty (30) days from the date of
such notice, and the option will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other increases or reductions of shares of its outstanding Common Stock, and
in the event of the Company being consolidated with or merged into any other
corporation.
20. Amendment or Termination. The Board of Directors of the Company may
------------------------
at any time terminate or amend the Plan. Except as provided in paragraph 19, no
such termination can affect options previously granted, nor may an amendment
make any change in any option theretofore granted which adversely affects the
rights of any participant, nor may an amendment be made without prior approval
of the shareholders of the Company (obtained in the manner described in
paragraph 22) if such amendment would:
(a) Increase the number of shares that may be issued under the Plan;
(b) Change the designation of the employees (or class of employees)
eligible for participation in the Plan; or
(c) Materially increase the benefits which may accrue to participants
under the Plan.
<PAGE>
(d) In the event that the Board determines that the ongoing operation
of the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable, modify
or amend the Plan by means of the following to reduce or eliminate such
unfavorable accounting consequence including, but not limited to:
(i) altering the option price per share for any Offering Period,
including an Offering Period underway at the time of the change in Purchase
Price including an alteration of the option price under paragraph 7(b) to 85% of
the fair market value of a share of the Common Stock of the Company on the
Exercise Date (without a lookback to the fair market value on the Enrollment
Date); and
(ii) shortening any Offering Period so that Offering Period ends
on a new Exercise Date, including an Offering Period underway at the time of the
Board action.
Such modifications or amendments shall not require stockholder approval or
the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
-------
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or by
the person, designated by the Company for the receipt thereof.
22. Shareholder Approval. Continuance of the Plan shall be subject to
--------------------
approval by the shareholders of the Company within twelve months before or after
the date the Plan is adopted. If such shareholder approval is obtained at a duly
held shareholders' meeting, it may be obtained by the affirmative vote of the
holders of a majority of the shares of the Company present or represented and
entitled to vote thereon, which approval shall be:
(a) (1) solicited substantially in accordance with Section 14(a) of
the Securities Act of 1934, as amended (the "Act") and the rules and regulations
promulgated thereunder, or (2) solicited after the Company has furnished in
writing to the holders entitled to vote substantially the same information
concerning the Plan as that which would be required by the rules and regulations
in effect under Section 14(a) of the Act at the time such information is
furnished; and
(b) obtained at or prior to the first annual meeting of shareholders
held subsequent to the first registration of Common Stock under Section 12 of
the Act.
In the case of approval by written consent, it must be obtained by the
unanimous written consent of all shareholders of the Company, or by written
consent of a smaller percentage of shareholders but only if the Board
determines, on the basis of advice of the Company's legal counsel, that the
written consent of such a smaller percentage of shareholders will comply with
all applicable laws and will not adversely affect the qualifications of the Plan
under Section 423 of the Code.
<PAGE>
23. Conditions Upon Issuance of Shares. Shares shall not be issued with
----------------------------------
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require
the person exercising such option to represent and warrant at the time of any
such exercise that the shares are being purchased only for investment and
without any present intention to sell or distribute such shares if, in the
opinion of counsel for the Company, such a representation is required by any of
the aforementioned applicable provisions of law.
24. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company as described in paragraph 22. It shall continue in
effect for a term of twenty (20) years unless sooner terminated under paragraph
20.
<PAGE>
EXHIBIT 10.140
MICRON TECHNOLOGY, INC.
1998 NON-EMPLOYEE DIRECTOR STOCK INCENTIVE PLAN
1. Purpose. The purpose of the Micron Technology, Inc. 1998 Non-Employee
Director Stock Incentive Plan is to attract, retain and compensate highly-
qualified individuals who are not employees of Micron Technology, Inc. or any of
its subsidiaries or affiliates for service as members of the Board by providing
them with an ownership interest in the Common Stock of the Company. The Company
intends that the Plan will benefit the Company and its stockholders by allowing
Non-Employee Directors to have a personal financial stake in the Company through
an ownership interest in the Common Stock and will closely associate the
interests of Non-Employee Directors with that of the Company's stockholders.
2. Defined Terms. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
"Board" means the Board of Directors of the Company.
"Company" means Micron Technology, Inc.
"Committee" has the meaning assigned such term in Section 3.
"Common Stock" means the common stock, par value $0.10 per share, of the
Company.
"Deferral Period" has the meaning set forth in Section 6(e) of the Plan.
"Deferred Stock Rights" means the right to receive shares of Common Stock
upon termination as a director of the Company, as described in Section 6(e) of
the Plan.
"Distributions" has the meaning set forth in Section 6(e) of the Plan.
"Election Form" means a form approved by the Committee pursuant to which a
Non-Employee Director elects a form of payment of his or her Retainer, as
provided in Section 6(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value," on any date, means (i) if the Common Stock is listed
on any established stock exchange, including without limitation the New York
Stock Exchange ("NYSE") or a national market system, the Fair Market Value of a
Share of Common Stock shall be the average closing price for such stock (or the
closing bid, if no sales were
<PAGE>
reported) as quoted on such exchange or system (or the exchange with the
greatest volume of trading in Common Stock) on the day of determination, as
reported by Bloomberg, L.P. or such other source as the Administrator deems
reliable; or (ii) in the absence of an established market for the Common Stock,
the Fair Market Value shall be determined in good faith by the Committee.
"Hardship" has the meaning set forth in Section 6(f) of the Plan.
"Non-Employee Director" means a director of the Company who is not an
employee of the Company or of any of its subsidiaries or affiliates.
"Participant" means any Non-Employee Director who is participating in the
Plan.
"Plan" means the Micron Technology, Inc. 1998 Non-Employee Director Stock
Incentive Plan, as amended from time to time.
"Plan Administrator" means the person or persons designated by the
Committee to administer the Plan in accordance with Section 3 of the Plan. If
no such administrator is designated, the Plan Administrator shall be the
Committee or the Board, as the case may be, administering the Plan pursuant to
Section 3.
"Plan Year" means the twelve-month period ending on December 31 of each
year which, for purposes of the Plan, is the period for which Retainer is
earned.
"Quarterly Grant Date" has the meaning set forth in Section 6(c) of the
Plan.
"Quarterly Service Period" has the meaning set forth in Section 6(c) of the
Plan.
"Retainer" means the compensation payable by the Company to a Non-Employee
Director for service as a director (and, if applicable, as the member of a
committee of the Board) of the Company, as such amount may be changed from time
to time.
"Rule 16b-3" means Rule 16b-3, as amended from time to time, of the
Securities and Exchange Commission as promulgated under the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of Common Stock.
"Stock Equivalent Amount" means the portion (in 25% increments) of a Non-
Employee Director's Retainer for a Plan Year that he or she has elected to
receive in the form of Common Stock or Deferred Stock Rights.
3. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Committee"). Subject to the provisions
of the
-2-
<PAGE>
Plan, the Committee shall be authorized to interpret the Plan, to establish,
amend and rescind any rules and regulations relating to the Plan, and to make
all other determinations necessary or advisable for the administration of the
Plan; provided, however, that the Committee shall have no discretion with
respect to the eligibility or selection of Non-Employee Directors to receive
awards under the Plan, the number of Shares subject to any such awards or the
time at which any such awards are to be granted. The Committee's interpretation
of the Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder, shall be conclusive and binding
upon all parties concerned including the Company, its stockholders and persons
granted awards under the Plan. The Committee may appoint a plan administrator to
carry out the ministerial functions of the Plan, but the administrator shall
have no other authority or powers of the Committee. Notwithstanding the
foregoing, the Board shall exercise any and all rights, duties and powers of the
Committee under the Plan to the extent required by the applicable exemptive
conditions of Rule 16b-3, as determined by the Board its sole discretion.
4. Shares Subject to Plan. The Shares issued under the Plan shall not
exceed in the aggregate 250,000 shares of Common Stock. Such Shares may be
authorized and unissued shares or treasury shares.
5. Participants. All active Non-Employee Directors shall be eligible to
participate in the Plan.
6. Form of Payment of Retainer.
(a) Annual Elections. On or before November 30 of each year (December
31, 1998 in the case of the first Plan Year), each Non-Employee Director
shall file with the Plan Administrator an election form in substantially
the form attached hereto as Exhibit A, or such other form as the Plan
Administrator shall prescribe (the "Election Form"), in which such Non-
Employee Director shall indicate his or her preference to receive some or
all of his or her Retainer for the following Plan Year in the form of (i)
cash, (ii) Common Stock, or (iii) Deferred Stock Rights. Such elections
shall be made in increments of 25% of the Retainer. Individuals who are
nominated to become Non-Employee Directors may make such election after
such nomination but prior to the time they are elected to the Board. If a
Non-Employee Director fails to timely file an Election Form for a Plan
Year, then 100% of his or her Retainer for such Plan Year will be paid in
cash.
(b) Cash Payments. That portion of the Retainer to be paid in cash
will be paid whenever such fees are payable, in accordance with the
policies established by the Committee from time to time.
(c) Grant Dates and Formula for Stock Grants. To the extent that a
Non-Employee Director has elected to receive some or all of his or her
Retainer in
-3-
<PAGE>
the form of Common Stock and has not elected to defer receipt of such
shares pursuant to Section 6(e), shares of Common Stock shall be
automatically granted to such Non-Employee Director on March 31, June 30,
September 30 and December 31 of each Plan Year (each such date is
hereinafter referred to as a "Quarterly Grant Date"). The total number of
Shares included in each grant under this Section 6(c) shall be determined
by (i) dividing the Stock Equivalent Amount earned by the Non-Employee
Director during the three-month period immediately preceding the Quarterly
Grant Date (the "Quarterly Service Period") by the Fair Market Value per
Share on the Quarterly Grant Date, and (ii) and subtracting any Shares to
be deferred pursuant to Section 6(e). Fractions will be rounded to the next
highest Share.
(d) Termination of Service During Quarterly Service Period. In the
event of termination of service on the Board by any Participant during a
Quarterly Service Period, such Participant's award for the Quarterly
Service Period shall be determined in accordance with Sections 6(b) based
upon the Stock Equivalent Amount earned during such Quarterly Service
Period through the date of termination of service, provided, that the grant
date shall be the date of termination of service unless the grant has been
deferred pursuant to Section 6(e).
(e) Deferred Stock Rights.
(i) Election to Defer. Each Participant will have the right to
elect, in his or her Election Form delivered to the Plan Administrator
prior to the commencement of each Plan Year, to defer until after the
Participant's termination of service the grant of the Shares that would
otherwise be granted to the Participant during the next ensuing Plan Year
("Deferred Stock Rights"). Pursuant to this Election Form, the Participant
will elect whether all of the deferred grant will be (a) granted within 30
days after termination of service or (b) granted in approximately equal
annual installments of Shares over a period of two to five years (as the
Participant may elect) after the termination of service, each such annual
grant to be made within 30 days after the anniversary of the termination of
service. The deferral Election Form signed by the Participant prior to the
Plan Year will be irrevocable except in case of Hardship (as defined in
Section 6(f)) as determined in good faith by the Board pursuant to Section
6(f). No Shares will be issued until the grant date(s) so deferred (the
"Deferred Grant Date") at which time the Company agrees to issue the Shares
to the Participant. The Participant will have no rights as a stockholder
with respect to the Deferred Stock Rights, and the Deferred Stock Rights
will be unsecured.
(ii) Deferred Dividend Account. If any dividends or other rights
or distributions of any kind ("Distributions") are distributed to holders
of Common Stock during the period from the applicable Quarterly Grant Date
until the Deferred Grant Date (the "Deferral Period") but prior to the
Participant's termination of service, an amount equal to the cash value of
such Distributions on
-4-
<PAGE>
their distribution date, as such value is determined by the Committee, will
be credited to a deferred dividend account for the Participant as follows:
the account will be credited with the right to receive Shares having a Fair
Market Value as of the date of the Distribution equal to the cash value of
the Distribution. The Company will issue Shares equal to the cumulative
total of rights to Shares in such account within 30 days after the
Participant's termination of service.
If a Distribution is distributed to holders of Common Stock after the
Participant's termination of service but prior to the issuance in full of
the deferred Shares, an amount equal to the cash value of such
Distributions pertaining to any Shares still deferred shall be converted
into Shares equivalent in value to the Distribution (based on the Fair
Market Value as of the date of Distribution) and such Shares will be issued
to the Participant as soon as practical after the date of the Distribution.
No right or interest in the Deferred Stock Rights or in the deferred
dividend account shall be subject to liability for the debts, contracts or
engagements of the Participant or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other
legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 6(e) shall prevent transfers by will
or by the applicable laws of descent and distribution. The Committee will
have the right to adopt other regulations and procedures to govern deferral
of grants of Shares.
(f) Hardship. The Board may accelerate the distribution of all or a
portion of a Participant's deferred grants of Shares on account of his or
her Hardship, subject to the following requirements: (i) the value of such
accelerated distribution shall not exceed the amount necessary to satisfy
the Hardship, less the amount which can be satisfied from other resources
which are reasonably available to the Participant, (ii) the denial of the
Participant's request for a Hardship acceleration would result in severe
financial hardship to the Participant, and (iii) the Participant has not
received an accelerated distribution on account of Hardship within the 12-
month period preceding the acceleration.
For purposes of this Plan, "Hardship" of a Participant, as determined
by the Board in its discretion on the basis of all relevant facts and
circumstances and in accordance with the following nondiscriminatory and
objective standards uniformly interpreted and consistently applied, shall
mean a severe financial hardship to the Participant resulting from a sudden
and unexpected illness or accident of the Participant or of his or her
dependent, loss of the Participant's property due to casualty, or other
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. A financial
-5-
<PAGE>
need shall not constitute a Hardship unless it is for at least $1,000,000
or the entire value of the principal amount of the Participant's deferred
grants.
7. Prorated Grants. If on any Quarterly Grant Date, shares of Common
Stock are not available under the Plan to grant to Non-Employee Directors the
full amount of a grant contemplated by the Plan, then each such director shall
receive an award equal to the number of shares of Common Stock then available
under the Plan divided by the number of Non-Employee Directors entitled to a
grant of shares on such date. Fractional shares shall be ignored and not
granted. Any shortfall resulting from such proration shall be paid in the form
of cash.
8. Withholding. Whenever the Company issues Shares under the Plan, the
Company shall have the right to withhold from sums due the recipient, or to
require the recipient to remit to the Company, any amount sufficient to satisfy
any federal, state and/or local withholding tax requirements prior to the
delivery of any certificate for such Shares.
9. Adjustments.
(a) In the event that the Committee determines that any Distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of
the Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate transaction
or event, in the Committee's sole discretion, affects the Common Stock such
that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to an
award or awards hereunder, then the Committee shall, in such manner as it
may deem equitable, adjust the number and type of Shares (or other
securities or property) which may be granted under the Plan (including, but
not limited to, adjustments of the maximum number and kind of securities
which may be issued); provided, however, that to the extent required by the
applicable exemptive conditions of Rule 16b-3, any such adjustment shall be
subject to approval by the Board.
(b) In the event of any corporate transaction or event described in
paragraph (a) which results in Shares being exchanged for or converted into
cash, securities or other property (including securities of another
corporation), the Committee will have the right to terminate this Plan as
of the date of the transaction or event, in which case all stock grants
deferred under Section 6(e) shall become the right to receive such cash,
securities or other property.
(c) The number of Shares finally granted under this Plan shall always
be rounded to the next highest whole Share.
-6-
<PAGE>
(d) Any decision of the Committee pursuant to the terms of this
Section 9 shall be final, binding and conclusive upon the Participants, the
Company and all other interested parties; provided, however, that to the
extent required by the applicable exemptive conditions of Rule 16b-3, any
such decision shall be subject to approval by the Board.
10. Amendment. The Committee may terminate or suspend the Plan at any
time, without stockholder approval. The Committee may amend the Plan at any time
and for any reason without stockholder approval; provided, however, that the
Committee may condition any amendment on the approval of stockholders of the
Company if such approval is necessary or deemed advisable with respect to tax,
securities or other applicable laws, policies or regulations. No termination,
modification or amendment of the Plan may, without the consent of a Participant,
adversely affect a Participant's rights under an award granted prior thereto.
11. Indemnification. Each person who is or has been a member of the
Committee or who otherwise participates in the administration or operation of
this Plan shall be indemnified by the Company against, and held harmless from,
any loss, cost, liability or expense that may be imposed upon or incurred by him
or her in connection with or resulting from any claim, action, suit or
proceeding in which such person may be involved by reason of any action taken or
failure to act under the Plan and shall be fully reimbursed by the Company for
any and all amounts paid by such person in satisfaction of judgment against him
or her in any such action, suit or proceeding, provided he or she will give the
Company an opportunity, by written notice to the Committee, to defend the same
at the Company's own expense before he or she undertakes to defend it on his or
her own behalf. This right of indemnification shall not be exclusive of any
other rights of indemnification.
The Committee and the Board may rely upon any information furnished by the
Company, its public accountants and other experts. No individual will have
personal liability by reason of anything done or omitted to be done by the
Company, the Committee or the Board in connection with the Plan.
12. Duration of the Plan. The Plan shall remain in effect until ten years
from the Effective Date, unless terminated earlier by the Committee.
13. Expenses of the Plan. The expenses of administering the Plan shall be
borne by the Company.
14. Effective Date. The Plan was originally adopted by the Board on
November 23, 1998, and became effective upon the approval thereof by the
stockholders of the Company on January 14, 1999 (the "Effective Date").
-7-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
ACCOMPANYING FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-02-1999
<PERIOD-START> SEP-04-1998
<PERIOD-END> JUN-03-1999
<CASH> 351
<SECURITIES> 1,310
<RECEIVABLES> 593
<ALLOWANCES> (32)
<INVENTORY> 442
<CURRENT-ASSETS> 2,755
<PP&E> 5,748
<DEPRECIATION> (2,104)
<TOTAL-ASSETS> 6,786
<CURRENT-LIABILITIES> 797
<BONDS> 0
0
0
<COMMON> 27
<OTHER-SE> 3,899
<TOTAL-LIABILITY-AND-EQUITY> 6,786
<SALES> 2,683
<TOTAL-REVENUES> 2,683
<CGS> 2,098
<TOTAL-COSTS> 2,722
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (34)
<INCOME-PRETAX> (80)
<INCOME-TAX> 29
<INCOME-CONTINUING> 0
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (51)
<EPS-BASIC> (0.20)
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