<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 11, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
MICRON ELECTRONICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
--------------
<TABLE>
<S> <C>
MINNESOTA 82-0446109
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
900 EAST KARCHER ROAD
NAMPA, IDAHO 83687
(208) 893-3434
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
T. ERIK OAAS
VICE PRESIDENT, FINANCE AND CHIEF FINANCIAL OFFICER
MICRON ELECTRONICS, INC.
900 EAST KARCHER ROAD
NAMPA, IDAHO 83687
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
--------------
COPIES TO:
<TABLE>
<S> <C>
LARRY W. SONSINI WILLIAM H. HINMAN, JR.
JOHN A. FORE SHEARMAN & STERLING
WILSON, SONSINI, GOODRICH & ROSATI 555 CALIFORNIA STREET, SUITE 2000
PROFESSIONAL CORPORATION SAN FRANCISCO, CALIFORNIA 94104
650 PAGE MILL ROAD (415) 616-1100
PALO ALTO, CALIFORNIA 94304
(415) 493-9300
</TABLE>
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED MAXIMUM
AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED OFFERING PRICE(1)(2) REGISTRATION FEE
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<S> <C> <C>
Debt Securities and Common Stock, par value $0.01 per
share................................................ $325,000,000 $98,485
</TABLE>
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(1) Or (i) if any Debt Securities are issued at an original issue discount,
such greater principal amount as shall result in an aggregate initial
offering price equal to the amount to be registered or (ii) if any Debt
Securities are issued with a principal amount denominated in a foreign
currency or composite currency, such principal amount as shall result in
an aggregate initial offering price equivalent thereto in United States
dollars at the time of initial offering.
(2) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(o). Exclusive of accrued interest,
if any, on the Debt Securities.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED OCTOBER 11, 1996
PROSPECTUS $325,000,000
MICRON ELECTRONICS, INC.
[LOGO] DEBT SECURITIES AND COMMON STOCK
-----------
Micron Electronics, Inc. ("MEI" or the "Company") from time to time may offer
its debt securities consisting of debentures, notes, bonds and/or other
unsecured evidences of indebtedness in one or more series ("Debt Securities")
and shares of Common Stock, $.01 par value, of the Company ("Common Stock") and
certain shareholders of the Company (the "Selling Shareholders") may from time
to time offer shares of Common Stock, which together have an aggregate initial
public offering price of up to $325,000,000 or the equivalent thereof in one or
more foreign currencies or composite currencies, including European Currency
Units ("ECU"). The Debt Securities and the Common Stock (collectively, the
"Securities") may be offered, separately or together, in separate series, in
amounts, at prices, and on terms to be set forth in a supplement to this
Prospectus (a "Prospectus Supplement").
The Securities may be sold for U.S. Dollars, one or more foreign currencies
or composite currencies or amounts determined by reference to an index and the
principal of and any interest on the Debt Securities may likewise be payable in
U.S. Dollars, one or more foreign currencies or composite currencies or amounts
determined by reference to an index.
The specific terms of the Securities in respect of which this Prospectus is
being delivered, such as (i) in the case of Debt Securities, the specific
designation, aggregate principal amount, a purchase price, currency,
denomination, maturity, premium, rate (or manner of calculation thereof) and
time of payment of interest, terms for redemption at the option of the Company
or the Holder or for sinking fund payments, any conversion or exchange
provisions and the initial public offering price and (ii) in the case of Common
Stock, the number of shares offered for sale by the Company and the Selling
Shareholders, if any, certain information with respect to the Selling
Shareholders, if any, and the initial public offering price or method of
determining the initial public offering price, will be, where applicable, set
forth in an accompanying Prospectus Supplement. See "Description of Debt
Securities" and "Description of Capital Stock."
Any statement contained in this Prospectus will be deemed to be modified or
superseded by any inconsistent statement contained in the accompanying
Prospectus Supplement.
SEE "RISK FACTORS" ON PAGE 3 OF THIS PROSPECTUS FOR A DESCRIPTION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE
SECURITIES.
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------
The Securities may be sold through underwriting syndicates led by one or more
managing underwriters or through one or more underwriters acting alone. The
Securities may also be sold directly by the Company or the Selling Shareholders
or through agents designated from time to time. If any underwriters or agents
are involved in the sale of the Securities, their names, the principal amount
of Securities to be purchased by them and any applicable fee, commission or
discount arrangements with them will be set forth in the Prospectus Supplement.
See "Plan of Distribution."
-----------
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
THE DATE OF THIS PROSPECTUS IS OCTOBER , 1996.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, NW, Washington, D.C. 20549, and at the Commission's
Regional Offices located at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, Suite 1300, New York,
New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, NW, Washington, D.C.
20549, at prescribed rates. The Common Stock is listed on the Nasdaq National
Market under the symbol "MUEI." Reports and other information concerning the
Company may be inspected at the National Association of Securities Dealers,
Inc., 1735 K Street, Washington, D.C. 20006. The Commission maintains a World
Wide Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of the World Wide Web site is http://www.sec.gov.
The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities. This Prospectus which
constitutes part of the Registration Statement does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the rules and regulations of the Commission.
For further information, reference is made to the Registration Statement.
Statements contained in this Prospectus as to the contents of any contract
or other document are not necessarily complete, and in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference. For further information with respect to the
Company, reference is made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
August 29, 1996; and
(b) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A (No. 0-17932) filed on August 16, 1989.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Registration Statement of
which this Prospectus forms a part and prior to the termination of the
offering of the Securities offered hereby shall be deemed to be incorporated
by reference into this Prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of the Registration Statement or this Prospectus to the extent
that a statement contained herein, in a Prospectus Supplement or in any other
document subsequently filed with the Commission which also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of the Registration Statement or
this Prospectus.
The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed
to T. Erik Oaas, Vice President, Finance and Chief Financial Officer, Micron
Electronics, Inc., 900 East Karcher Road, Nampa, Idaho 83687, telephone (208)
893-3434.
2
<PAGE>
THE COMPANY
Micron Electronics, Inc. ("MEI" or the "Company") is a leading provider of
PC systems through the direct sales channel in the United States. The
Company's PC operations develop, market, manufacture, sell and support a range
of memory-intensive, high performance desktop and notebook PC systems and
network servers under the Micron brand name. In addition to its PC operations,
the Company has contract manufacturing and component recovery operations. The
Company's wholly-owned subsidiary, Micron Custom Manufacturing Services, Inc.,
is a contract manufacturer specializing in the assembly of custom complex
printed circuit boards, memory modules and system level products. The
Company's component recovery operations recover, assemble, test, grade and
market nonstandard random access memory components not meeting full industry
specifications.
On April 7, 1995, Micron Computer, Inc. and the former Micron Custom
Manufacturing Services, Inc., then subsidiaries of the Company's parent,
Micron Technology, Inc., merged with and into ZEOS International, Ltd., and
the surviving corporation's name was changed to "Micron Electronics, Inc." The
Company is incorporated in Minnesota, its executive offices are located at 900
East Karcher Road, Nampa, Idaho, 83687, and its telephone number is (208) 893-
3434.
RISK FACTORS
Prior to making an investment decision with respect to the Securities
offered hereby, prospective investors should carefully consider the specific
factors set forth under the caption "Risk Factors" in the applicable
Prospectus Supplement pertaining thereto, together with all of the other
information appearing herein or therein or incorporated by reference herein,
in light of their particular investment objectives and financial
circumstances.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement, the net
proceeds to be received by the Company from the sale of the Securities will be
used for general corporate purposes, including capital expenditures and to
meet working capital needs. In addition, the Company from time to time
considers acquisitions of complementary businesses, assets or technologies,
and although there are no current agreements or understandings with respect to
any such acquisitions, and the Company is not currently negotiating any
potential acquisition, the Company desires to be able to respond to
opportunities as they arise. Pending such uses, the Company will invest the
net proceeds in interest-bearing securities.
The Company will not receive any of the proceeds from the sale, if any, of
shares of Common Stock by the Selling Shareholders. See "Selling
Shareholders."
RATIO OF EARNINGS TO FIXED CHARGES
Set forth below is the ratio of earnings to fixed charges for each of the
years in the five-year period ended August 29, 1996. For the purpose of
calculating such ratios, "earnings" consist of income from continuing
operations before income taxes plus fixed charges and "fixed charges" consist
of interest expense (net of capitalized portion) and capitalized interest.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------
SEPT.
SEPT. 3, SEPT. 2, 1, AUG. 31, AUG. 29,
1992 1993 1994 1995 1996
-------- -------- ------ -------- --------
<S> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges... 6.3x 39.5x 131.1x 199.8x 159.0x
</TABLE>
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following statements with respect to the Debt Securities are summaries
of, and subject to, the detailed provisions of an indenture (the "Indenture")
entered into between the Company and Norwest Bank Minnesota, N.A., as trustee
(the "Trustee"), a copy of which is filed as an exhibit to the Registration
Statement. The following summaries of certain provisions of the Indenture do
not purport to be complete and are subject to, and are qualified in their
entirety by reference to, all of the provisions of the Indenture, including
the definitions therein of certain terms. Wherever particular Sections or
defined terms of the Indenture are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein
by reference. Section and Article references used herein are references to the
Indenture.
The Debt Securities may be issued from time to time in one or more series.
The particular terms of each series of Debt Securities offered by any
Prospectus Supplement or Prospectus Supplements will be described in such
Prospectus Supplement or Prospectus Supplements relating to such series.
GENERAL
The Indenture does not limit the aggregate amount of Debt Securities which
may be issued thereunder and Debt Securities may be issued thereunder from
time to time in separate series up to the aggregate amount from time to time
authorized by the Company for each series. The Debt Securities will be
unsecured obligations of the Company.
The applicable Prospectus Supplement or Prospectus Supplements will describe
the following terms of the series of Debt Securities in respect of which this
Prospectus is being delivered: (1) the title of the Debt Securities; (2) any
limit on the aggregate principal amount of the Debt Securities; (3) the Person
to whom any interest on a Debt Security shall be payable, if other than the
person in whose name that Debt Security is registered on the Regular Record
Date; (4) the date or dates on which the principal of the Debt Securities will
be payable; (5) the rate or rates at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates are determined,
the date or dates from which such interest will accrue, the Interest Payment
Dates on which any such interest on the Debt Securities will be payable and
the Regular Record Date for any interest payable on any Interest Payment Date,
and the basis upon which interest will be calculated if other than that of a
360-day year of twelve 30-day months; (6) the place or places where the
principal of and any premium and interest on the Debt Securities will be
payable; (7) the period or periods within which, the price or prices at which,
and the terms and conditions upon which the Debt Securities may be redeemed,
in whole or in part, at the option of the Company; (8) the obligation of the
Company, if any, to redeem or repurchase the Debt Securities pursuant to any
sinking fund or analogous provisions or at the option of the Holders and the
period or periods within which, the price or prices at which and the terms and
conditions upon which such Debt Securities shall be redeemed or purchased, in
whole or in part, pursuant to such obligation, and any provisions for the
remarketing of such Debt Securities; (9) the denominations in which any Debt
Securities will be issuable, if other than denominations of $1,000 and any
integral multiple thereof; (10) the currency, currencies or currency units in
which payment of principal of and any premium and interest on any Debt
Securities shall be payable if other than United States dollars; (11) any
index, formula or other method used to determine the amount of payments of
principal of and any premium and interest on the Debt Securities; (12) if the
principal of or any premium or interest on any Debt Securities is to be
payable, at the election of the Company or the Holders, in one or more
currencies or currency units other than that or those in which such Debt
Securities are stated to be payable, the currency, currencies or currency
units in which payment of the principal of and any premium and interest on
such Debt Securities shall be payable, and the periods within which and the
terms and conditions upon which such election is to be made; (13) if other
than the principal amount thereof, the portion of the principal amount of the
Debt Securities which will be payable upon
4
<PAGE>
declaration of the acceleration of the Maturity thereof; (14) the
applicability of any provisions described under "Defeasance"; (15) whether any
of the Debt Securities are to be issuable in permanent global form and, if so,
the Depositary or Depositaries for such Global Security and the terms and
conditions, if any, upon which interests in such Debt Securities in global
form may be exchanged, in whole or in part, for the individual Debt Securities
represented thereby; (16) the Security Registrar, if other than the Trustee,
and the entity who will be the Paying Agent; (17) any Events of Default, with
respect to the Debt Securities of such series, if not otherwise set forth
under "Events of Default"; (18) the terms and conditions, if any, pursuant to
which such Debt Securities are convertible into or exchangeable for Common
Stock or other securities; and (19) any other terms of the Debt Securities not
inconsistent with the provisions of the Indenture. (Section 301)
Debt Securities may be issued as Original Issue Discount Securities to be
sold at a substantial discount from their principal amount. (Section 301)
United States Federal income tax consequences and other special considerations
applicable to any such Original Issue Discount Securities will be described in
the Prospectus Supplement relating thereto.
If any of the Debt Securities are sold for any foreign currency or currency
unit or if principal of, premium, if any, or interest, if any, on any of the
Debt Securities is payable in any foreign currency or currency unit, the
restrictions, elections, tax consequences, specific terms and other
information with respect to such Debt Securities and such foreign currency or
currency unit will be specified in the Prospectus Supplement relating thereto.
EXCHANGE, REGISTRATION, TRANSFER AND PAYMENT
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of principal, premium, if any, and interest, if any, on the Debt Securities
will be payable, and the exchange of and the transfer of Debt Securities will
be registrable, at the office or agency of the Company maintained for such
purpose and at any other office or agency maintained for such purpose.
(Sections 305 and 1002) Unless otherwise indicated in the applicable
Prospectus Supplement, the Debt Securities will be issued in denominations of
$1,000 or integral multiples thereof. (Section 302) No service charge will be
made for any registration of transfer or exchange of Debt Securities, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge imposed in connection therewith. (Section 305)
All moneys paid by the Company to a Paying Agent for the payment of
principal, premium, if any, or interest, if any, on any Debt Security which
remain unclaimed for two years after such principal, premium, or interest has
become due and payable may be repaid to the Company, and thereafter the Holder
of such Debt Security may look only to the Company for payment thereof.
(Section 1003)
In the event of any redemption, the Company shall not be required to (i)
issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of Debt Securities of that series to be
redeemed and ending at the close of business on the day of such mailing or
(ii) register the transfer of or exchange any Debt Security, or portion
thereof, called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part. (Section 305)
BOOK-ENTRY DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Securities that will be deposited with, or on
behalf of, a depositary (a "Depositary") or its nominee identified in an
applicable Prospectus Supplement. In such a case, one or more Global
Securities will
5
<PAGE>
be issued in a denomination or aggregate denominations equal to the portion of
the aggregate principal amount of Debt Securities of the series to be
represented by such Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in registered form, a Global
Security may not be registered for transfer or exchange except as a whole by
the Depositary for such Global Security to a nominee of such Depositary or by
a nominee of such Depositary to such Depositary or another nominee of such
Depositary or by such Depositary or any nominee to a successor Depositary or a
nominee of such successor Depositary and except in any other circumstances
described in an applicable Prospectus Supplement.
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Global Security will be
described in an applicable Prospectus Supplement. The Company expects that the
following provisions will apply to depositary arrangements.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Security to be deposited
with or on behalf of a Depositary will be represented by a Global Security
registered in the name of such depositary or its nominee. Upon the issuance of
such Global Security, and the deposit of such Global Security with or on
behalf of the Depositary for such Global Security, the Depositary will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Global Security to the
accounts of institutions that have accounts with such depositary or its
nominee ("Participants"). The accounts to be credited will be designated by
the underwriters or agents of such Debt Securities or by the Company, if such
Debt Securities are offered and sold directly by the Company. Ownership of
beneficial interests in such Global Securities will be limited to Participants
or Persons that may hold interests through participants. Ownership of
beneficial interests by Participants in such Global Security will be shown on,
and the transfer of that ownership interest will be effected only through,
records maintained by the Depositary or its nominee for such Global Security.
Ownership of beneficial interests in such Global Security by Persons that hold
through Participants will be shown on, and the transfer of that ownership
interest within such Participant will be effected only through, records
maintained by such Participants. The laws of some jurisdictions require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depositary or such nominee, as
the case may be, will be considered the sole owner or Holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture. Unless otherwise specified in an applicable Prospectus Supplement,
owners of beneficial interests in such Global Securities will not be entitled
to have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form, and will not
be considered the owners or Holders thereof for any purpose under the
Indenture. Accordingly, each person owning a beneficial interest in such
Global Security must rely on the procedures of the Depositary and, if such
Person is not a Participant, on the procedures of the Participant through
which such Person owns its interest, to exercise any rights of a Holder under
the Indenture. The Company understands that, under existing industry
practices, if the Company requests any action of Holders or an owner of a
beneficial interest in such Global Security desires to give any notice or take
any action a Holder is entitled to give or take under Indenture, the
Depositary would authorize the Participants to give such notice or take such
action, and participants would authorize beneficial owners owning through such
Participants to give such notice or take such action or would otherwise act
upon the instructions of beneficial owners owning through them.
Principal of and any premium and interest on a Global Security will be
payable in the manner described in an applicable Prospectus Supplement.
Payment of principal of, and any premium or interest on, Debt Securities
registered in the name of or held by a Depository or its nominee will be
6
<PAGE>
made to the Depository or its nominee, as the case may be, as the registered
owner or the holder of the Global Security representing such Debt Securities.
None of the Company, the Trustee, any Paying Agent, or the Registrar for such
Debt Securities will have any responsibility or liability for any aspect of
the records relating to or payment made on account of beneficial ownership
interests in a Global Security for such Debt Securities or for maintaining,
supervising, or reviewing any records relating to such beneficial ownership
interests.
COVENANTS OF THE COMPANY
Except as otherwise provided in the applicable Prospectus Supplement with
respect to any series of Debt Securities, the Company is not restricted by the
Indenture from incurring, assuming or becoming liable for any type of debt or
other obligations, from paying dividends or making distributions on its
capital stock or purchasing or redeeming its capital stock. The Indenture does
not require the maintenance of any financial ratios or specified levels of net
worth or liquidity. In addition, the Indenture does not contain any provision
that would require the Company to repurchase or redeem or otherwise modify the
terms of any of its Debt Securities upon a change in control or other events
involving the Company which may adversely affect the creditworthiness of the
Debt Securities.
DEFEASANCE
Unless otherwise specified in a Prospectus Supplement applicable to a
particular series of Debt Securities, the Company, at its option, (i) will be
deemed to have been discharged from its obligations with respect to the Debt
Securities of such series (except for certain obligations, including
obligations to register the transfer or exchange of Debt Securities of such
series, to replace destroyed, stolen, lost, or mutilated Debt Securities of
such series, and to maintain an office or agency in respect of the Debt
Securities and hold moneys for payment in trust) or (ii) will be released from
its obligations to comply with the covenants that are under "Covenants of the
Company" above with respect to the Debt Securities of such series, and the
occurrence of an event described in clause (d) under "Events of Default" below
with respect to any defeased covenant and clauses (c) and (f) of the "Events
of Default" below will no longer be an Event of Default if, in either case,
the Company irrevocably deposits with the Trustee, in trust, money or direct
obligations of the United States of America for the payment of which the full
faith and credit of the United States of America is pledged or obligations of
an agency or instrumentality of the United States of America the payment of
which is unconditionally guaranteed as a full faith and credit obligation by
the United States of America, which, in either case, are not callable at the
issuer's option ("U.S. Government Obligations") or certain depositary receipts
therefor that through the payment of interest thereon and principal thereof in
accordance with their terms will provide money in an amount sufficient to pay
all the principal of (and premium, if any) and any interest on the Debt
Securities of such series on the dates such payments are due in accordance
with the terms of such series on the dates such payments are due in accordance
with the terms of such Debt Securities. Such defeasance may be effected only
if, among other things, (a) no Event of Default or event which with the giving
of notice or lapse or time, or both, would become an Event of Default under
the Indenture shall have occurred and be continuing on the date of such
deposit, (b) no Event of Default described under clause (c) under "Events of
Default" below or event that with the giving of notice or lapse of time, or
both, would become an Event of Default described under such clause (d) shall
have occurred and be continuing at any time on or prior to the 90th calendar
day following such date of deposit, (c) in the event of defeasance under
clause (i) above, the Company has delivered an Opinion of Counsel, stating
that (1) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (2) since the date of the Indenture
there has been a change in applicable federal law, in either case to the
effect that, among other things, the Holders of the Debt Securities of such
series will not recognize gain or loss for United States federal income tax
purposes as a result of such deposit or defeasance and will be subject to
United States federal income tax in the same manner as if such defeasance had
not occurred, and (d) in the event
7
<PAGE>
of defeasance under clause (ii) above, the Company has delivered an Opinion of
Counsel to the effect that, among other things, the Holders of the Debt
Securities of such series will not recognize gain or loss for United States
federal income tax purposes as a result of such deposit or defeasance and will
be subject to United States federal income tax in the same manner as if such
defeasance had not occurred. In the event the Company fails to comply with its
remaining obligations under the applicable Indenture after a defeasance of
such Indenture with respect to the Debt Securities of any series as described
under clause (ii) above and the Debt Securities of such series are declared
due and payable because of the occurrence of any undefeased Event of Default,
the amount of money and U.S. Government Obligations on deposit with the
Trustee may be insufficient to pay amounts due on the Debt Securities of such
series at the time of the acceleration resulting from such Event of Default.
However, the Company will remain liable in respect of such payments.
SATISFACTION AND DISCHARGE
The Company, at its option, may satisfy and discharge the Indenture (except
for certain obligations of the Company and the Trustee, including, among
others, the obligations to apply money held in trust) when (i) either (a) all
Debt Securities previously authenticated and delivered (other than (1) Debt
Securities that were destroyed, lost, or stolen and that have been replaced or
paid and (2) Debt Securities for the payment of which money has been deposited
in trust or segregated and held in trust by the Company and thereafter repaid
to the Company or discharged from such trust) have been delivered to the
Trustee for cancellation or (b) all such Debt Securities not theretofore
delivered to the Trustee for cancellation (1) have become due and payable, (2)
will become due and payable at their Stated Maturity within one year, or (3)
are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption by the
Trustee in the name and at the expense of the Company, and the Company has
deposited or caused to be deposited with the Trustee as trust funds in trust
for such purpose an amount sufficient to pay and discharge the entire
indebtedness on such Debt Securities not previously delivered to the Trustee
for cancellation, for principal and any premium and interest to the date of
such deposit (in the case of Debt Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the case may be,
(ii) the Company has paid or caused to be paid all other sums payable under
the Indenture by the Company, and (iii) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent relating to the satisfaction and discharge of
the Indenture have been satisfied.
EVENTS OF DEFAULT
Any one of the following events will constitute an Event of Default under
the Indenture with respect to Debt Securities of any series (unless such event
is specifically inapplicable to a particular series as described in the
Prospectus Supplement relating thereto): (a) failure to pay any interest on
any Debt Security of that series when due, continued for 30 days; (b) failure
to pay principal of or any premium on any Debt Security of that series when
due; (c) failure to deposit any sinking fund payment, when due, in respect of
any Debt Security of that series; (d) failure to perform any other covenant of
the Company in the Indenture (other than a covenant included in the Indenture
solely for the benefit of a series of Debt Securities other than that series),
continued for 90 days after written notice as provided in the Indenture; (e)
certain events in bankruptcy, insolvency or reorganization involving the
Company; and (f) any other Event of Default provided with respect to Debt
Securities of that series. (Section 501) Pursuant to the Trust Indenture Act,
the Trustee is required, within 90 calendar days after the occurrence of a
default in respect of any series of Debt Securities, to give to the Holders of
the Debt Securities of such series notice of all such uncured defaults known
to it (except that, in the case of a default in the performance of any
covenant of the character contemplated in clause (d) of the preceding
sentence, no such notice to Holders of the Debt Securities of such Series will
be given until at least 30 calendar days after the occurrence thereof), except
that, other than in the case of a default
8
<PAGE>
of the character contemplated in clause (a), (b), or (c) of the preceding
sentence, the Trustee may withhold such notice if and so long as it in good
faith determines that the withholding of such notice is in the interests of
the Holders of the Debt Securities of such series.
The Indenture provides that, subject to the duty of the Trustee thereunder
during an Event of Default to act with the required standard of care, the
Trustee is under no obligation to exercise any of its rights or powers under
the Indenture at the request or direction of any of the Holders, unless such
Holders shall have offered to the Trustee reasonable indemnity. (Sections 601
and 603) Subject to certain provisions, including those requiring security or
indemnification of the Trustee, the Holders of a majority in principal amount
of the Outstanding Debt Securities of any series have the right to direct the
time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred on the Trustee,
with respect to the Debt Securities of that series. (Section 512)
The Indenture provides that the Company will deliver to the Trustee, within
120 days after the end of each fiscal year, a brief certificate from the
principal executive, financial or accounting officer of the Company as to his
or her knowledge of the Company's compliance (without regard to any period of
grace or requirement of notice) with all conditions and covenants of the
Indenture. (Section 1004)
If an Event of Default with respect to Debt Securities of any series at the
time Outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25% in principal amount of the Outstanding Debt Securities of that
series by notice as provided in the Indenture may declare the principal amount
(or, if the Debt Securities of that series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Debt Securities of that series to be due and
payable immediately. At any time after a declaration of acceleration with
respect to Debt Securities of any series has been made, but before a judgment
or decree for payment of money has been obtained by the Trustee, the Holders
of a majority in principal amount of the Outstanding Debt Securities of that
series may, under certain circumstances, rescind and annul such acceleration.
If an Event of Default under clause (e) above occurs, then the principal of,
premium on, if any, and accrued interest on the Debt Securities of that series
will become immediately due and payable without any declaration or other act
on the part of the Trustee of any Holder of the Debt Securities of that
series. (Section 502)
No Holder of any Debt Security of any series has any right to institute any
proceeding with respect to the Indenture or for any remedy thereunder, unless
such Holder shall have previously given to the Trustee written notice of a
continuing Event of Default and unless the Holders of at least 25% in
principal amount of the Outstanding Debt Securities of that series shall have
made written request, and offered reasonable indemnity, to the Trustee to
institute such proceeding as trustee, and the Trustee shall not have received
from the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series a direction inconsistent with such request and shall
have failed to institute such proceeding within 60 days. (Section 507)
However, such limitations generally do not apply to a suit instituted by a
Holder of a Debt Security for the enforcement of payment of the principal or
interest on such Debt Security on or after the respective due dates expressed
in such Debt Security. (Section 508)
MEETINGS, MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of each series affected by
such modification or amendment; provided, however that no such modification or
amendment may, without the consent of the Holder of each Outstanding Debt
Security affected thereby, (a) change the Stated Maturity of the principal of,
or any installment of principal of or interest on, any Debt Security, (b)
reduce the principal amount of, rate of interest on or any premium
9
<PAGE>
payable upon the redemption of any Debt Security, (c) reduce the amount of
principal of an Original Issue Discount Security payable upon acceleration of
the Maturity thereof, (d) change the Place of Payment where, or the coin or
currency in which, any Debt Security or any premium or interest thereon is
payable, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security after the Stated Maturity,
Redemption Date or Repayment Date, (f) reduce the percentage in principal
amount of Outstanding Debt Securities of any series, the consent of whose
Holders is required for modification or amendment of the Indenture or for
waiver of compliance with certain provisions of the Indenture or for waiver of
certain defaults, or (g) modify any of the provisions set forth in this
paragraph except to increase any such percentage or to provide that certain
other provisions of the Indenture may not be modified or waived without the
consent of the Holder of each Outstanding Debt Security affected thereby.
(Section 902)
The Holders of at least a majority in principal amount of the Outstanding
Debt Securities of each series may, on behalf of the Holders of all the Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive provisions of the
Indenture. (Section 1011) The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of each series may, on behalf of all
Holders of Debt Securities of that series and any coupons appertaining
thereto, waive any past default under the Indenture with respect to Debt
Securities of that series, except a default (a) in the payment of principal of
or any premium or interest on any Debt Security of such series or (b) in
respect of a covenant or provision of the Indenture which cannot be modified
or amended without the consent of the Holder of each Outstanding Debt Security
of such series affected. (Section 513)
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given any
request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be Outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon acceleration of the Maturity thereof, (ii) the principal amount of a Debt
Security denominated in other than U.S. dollars shall be the U.S. dollar
equivalent, determined on the date of original issuance of such Debt Security,
of the principal amount of such Debt Security (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the date of original
issuance of such Debt Security of the amount determined as provided in (i)
above of such Debt Security) and (iii) Debt Securities owned by the Company or
any Affiliate of the Company shall be disregarded and deemed not to be
Outstanding. (Section 101)
CONSOLIDATION, MERGER AND SALE OF ASSETS
The Company, without the consent of the Holders of any of the Outstanding
Debt Securities under the Indenture, may consolidate with or merge into, or
transfer or lease its assets substantially as an entirety to, any Person which
is a corporation, partnership or trust organized and validly existing under
the laws of any domestic jurisdiction, provided that any successor Person
expressly assumes the Company's obligations on the Debt Securities and under
the Indenture and that, after giving effect to the transaction, no Event of
Default, and no event which, after notice or lapse of time, would become an
Event of Default, shall have occurred and be continuing, and that certain
other conditions are met. (Section 801)
NOTICES
Except as otherwise provided in the Indenture, notices to Holders of Debt
Securities will be given by mail to the addresses of such Holders as they
appear in the Debt Security Register. (Section 106)
10
<PAGE>
TITLE
Prior to due presentment of a Debt Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Debt Security is registered as the owner of such
Debt Security for the purpose of receiving payment of principal of and any
premium and any interest (other than Defaulted Interest or as otherwise
provided in the applicable Prospectus Supplement) on such Debt Security and
for all other purposes whatsoever, whether or not such Debt Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. (Section 308)
REPLACEMENT OF DEBT SECURITIES
Any mutilated Debt Security will be replaced by the Company at the expense
of the Holder upon surrender of such Debt Security to the Trustee. Debt
Securities that become destroyed, stolen or lost will be replaced by the
Company at the expense of the Holder upon delivery to the Trustee of the Debt
Security or evidence of the destruction, loss or theft thereof satisfactory to
the Company and the Trustee. In the case of a destroyed, lost or stolen Debt
Security, an indemnity satisfactory to the Trustee and the Company may be
required at the expense of the Holder of such Debt Security before a
replacement Debt Security will be issued. (Section 306)
GOVERNING LAW
The Indenture and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 112)
REGARDING THE TRUSTEE
The Indenture contains certain limitations on the right of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases or to realize for its own account on certain property received
in respect of any such claim as security or otherwise. (Section 613) The
Trustee is permitted to engage in other transactions; however, if it acquires
any conflicting interest and there is a default under the Debt Securities of
any series for which the Trustee serves as trustee, the Trustee must eliminate
such conflict or resign. (Section 608)
The Trustee currently provides certain banking and financial services to the
Company in the ordinary course of business and may provide other such services
in the future.
11
<PAGE>
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 150,000,000 shares,
$.01 par value per share ("Common Stock"). The authorized capital stock is
divisible into classes and series, has designations, voting rights and other
rights and preferences, and is subject to restrictions that the Board of
Directors may from time to time establish. Unless otherwise established by the
Board of Directors, all shares of capital stock issued by the Company are
designated as Common Stock. As of August 29, 1996, 92,473,017 shares of Common
Stock were issued and outstanding and no shares of preferred stock were
designated, issued or outstanding. The following summary is qualified in its
entirety by reference to the Company's Articles of Incorporation and Bylaws.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share on matters to be
voted upon by the shareholders and are not entitled to cumulative voting in
the election of directors. Subject to any preferences granted to holders of
any future preferred stock or any other senior equity, holders of Common Stock
are entitled to receive dividends when, as and if declared by the Board of
Directors, and to share ratably in the assets of the Company legally available
for distribution to its shareholders in the event of liquidation, dissolution
and winding up of the Company. Holders of Common Stock have no preemptive,
subscription, redemption or conversion rights with respect to Common Stock.
All outstanding shares of Common Stock are validly issued, fully paid and
nonassessable.
The rights of holders of Common Stock will be subject to, and may be
adversely affected by, the rights of holders of any preferred stock that may
be issued in the future. Any such issuance may adversely affect the interests
of holders of the Common Stock by limiting the control which such holders may
exert by exercise of their voting rights, by subordinating their rights in
liquidation to the rights of the holders of the preferred stock of the Company
and otherwise. In addition, the issuance of preferred stock of the Company
may, in some circumstances, deter or discourage takeover attempts and other
changes in control of the Company, including takeovers and changes in control
which some holders of the Common Stock may deem to be in their best interests
and in the best interests of the Company, by making it more difficult for a
person who has gained a substantial equity interest in the Company to obtain
voting control or to exercise control effectively. The Company has no current
plans or agreements with respect to the issuance of any shares of preferred
stock.
REGISTRAR AND TRANSFER AGENT
The registrar and transfer agent for the Common Stock is Norwest Bank
Minnesota, N.A.
SELLING SHAREHOLDERS
Certain shareholders of the Company (the "Selling Shareholders") may, from
time to time, offer shares of Common Stock of the Company. The only Securities
that may be offered by the Selling Shareholders are shares of Common Stock.
Each Prospectus Supplement will name each Selling Shareholder (if any)
offering shares thereby, indicate the nature of any position, office or other
material relationship which the Selling Shareholder has had within the past
three years with the Company or any of its predecessors or affiliates, and
state the number of shares of Common Stock owned by the Selling Shareholder
prior to the offering, the number of shares of Common Stock offered by the
Prospectus Supplement and the number of shares of Common Stock and the
percentage (if one percent or more) of the outstanding Common Stock owned by
the Selling Shareholder after the offering. The Selling Shareholders may
include, but are not limited to, the shareholders of the Company named below:
12
<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AS OF SEPTEMBER 27,
1996
-------------------------
PERCENT
NAME OF BENEFICIAL OWNER NUMBER OF OUTSTANDING
------------------------ ---------- --------------
<S> <C> <C>
Micron Technology (1)................................. 73,312,863 79.3%
8000 South Federal Way
Boise, Idaho 83707
Joseph M. Daltoso (2)................................. 1,075,234 1.2%
T. Erik Oaas (3)...................................... 635,357 *
Gregory D. Stevenson (4).............................. 635,357 *
Robert F. Subia (5)................................... 95,783 *
Brian C. Klene (6).................................... 1,093 *
George A. Haneke (7).................................. 166,438 *
Nelson L. Hanks (8)................................... 500 *
Dean A. Klein (9)..................................... 8,759 *
Gene P. Thomas, Jr. (10).............................. 194,438 *
Jess Asla (11)........................................ 294,090 *
</TABLE>
- --------
* Less than one percent (1%).
(1) Micron Technology, Inc. is the parent of the Company. Four directors of
the Company are currently also directors of Micron Technology, Inc.
(2) Mr. Daltoso is the Chairman of the Board, President and Chief Executive
Officer of the Company.
(3) Mr. Oaas is the Vice President, Finance, Chief Financial Officer and a
director of the Company.
(4) Mr. Stevenson is the Executive Vice President, Operations and a director
of the Company.
(5) Mr. Subia is the Chairman of the Board, President and Chief Executive
Officer of Micron Custom Manufacturing Services, Inc., a wholly-owned
subsidiary of the Company. Mr. Subia is also a director of the Company.
(6) Mr. Klene is the Executive Vice President, Sales and Marketing of the
Company.
(7) Mr. Haneke is the Vice President, Chief Information Officer of the
Company.
(8) Mr. Hanks is the Vice President, Purchasing of the Company.
(9) Mr. Klein is the Vice President, Chief Technical Officer of the Company.
(10) Mr. Thomas is the Vice President, Marketing of the Company.
(11) Mr. Asla is the Vice President, Operations of Micron Custom Manufacturing
Services, Inc., a wholly-owned subsidiary of the Company.
13
<PAGE>
PLAN OF DISTRIBUTION
The Company and the Selling Shareholders may sell the Securities separately
or together, (i) to one or more underwriters or dealers for public offering
and sale by them and (ii) to investors directly or through agents. The
distribution of the Securities may be effected from time to time in one or
more transactions at a fixed price or prices (which may be changed from time
to time), at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Each Prospectus
Supplement will describe the method of distribution of the Securities offered
thereby.
In connection with the sale of the Securities, underwriters, dealers or
agents may receive compensation from the Company and/or the Selling
Shareholders or from purchasers of the Securities for whom they may act as
agents, in the form of discounts, concessions or commissions. The
underwriters, dealers or agents which participate in the distribution of the
Securities may be deemed to be underwriters under the Securities Act and any
discounts or commissions received by them and any profit on the resale of the
Securities received by them may be deemed to be underwriting discounts and
commissions thereunder. Any such underwriter, dealer or agent will be
identified and any such compensation received from the Company or the Selling
Shareholders will be described in the Prospectus Supplement. Any initial
public offering price and any discounts or concessions allowed or reallowed or
paid to dealers may be changed from time to time.
Under agreements that may be entered into with the Company, underwriters,
dealers and agents may be entitled to indemnification by the Company and/or
the Selling Shareholders against certain civil liabilities, including
liabilities under the Securities Act, or to contribution with respect to
payments which the underwriters, dealers or agents may be required to make in
respect thereof.
The Company and/or the Selling Shareholders may grant underwriters who
participate in the distribution of Securities an option to purchase additional
Securities to cover over-allotments, if any.
All Debt Securities will be new issues of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the
Company for public offering and sale may make a market in such securities, but
such underwriters will not be obligated to do so and may discontinue any
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for any Securities.
Certain of the underwriters or agents and their associates may be customers
of, engage in transactions with or perform services for the Company or the
Selling Shareholders in the ordinary course of business.
LEGAL OPINIONS
The validity of the Securities is being passed upon for the Company by
Wilson Sonsini Goodrich & Rosati, a Professional Corporation, Palo Alto,
California.
EXPERTS
The balance sheets of Micron Electronics, Inc. as of August 29, 1996 and
August 31, 1995 and the statements of operations, shareholders' equity and
cash flows for each of the three years in the period ended August 29, 1996
incorporated herein by reference to the Annual Report on Form 10-K of Micron
Electronics, Inc. for the year ended August 29, 1996 have been so incorporated
in reliance upon the reports of Coopers & Lybrand, L.L.P., independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than any underwriting
discount and commissions, in connection with the issuance and distribution of
the Securities being registered.
<TABLE>
<CAPTION>
AMOUNT
TO BE PAID
----------
<S> <C>
Registration fee................................................. $ 98,485
Nasdaq National Market fee....................................... 17,500
Trustee's fees and expenses...................................... 15,000*
Accounting fees and expenses..................................... 100,000*
Printing and engraving........................................... 50,000*
Transfer agent and registrar fees and expenses................... 15,000*
Blue Sky and legal investment fees and expenses.................. 15,000*
Legal fees and expenses of the registrant........................ 175,000*
Miscellaneous.................................................... 14,015*
---------
Total........................................................ $ 500,000*
=========
</TABLE>
- --------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 302A.521, subd. 2, of the Minnesota Business Corporation Act (the
"Minnesota Act") requires the registrant to indemnify a person made or
threatened to be made a party to a proceeding by reason of the former or
present official capacity of the person with respect to the registrant,
against judgments, penalties, fines, including, without limitation, excise
taxes assessed against the person with respect to an employee benefit plan,
settlements, and reasonable expenses, including attorneys' fees and
disbursements, incurred by the person in connection with the proceeding, if,
with respect to the acts or omissions complained of in the proceeding, the
person: (1) has not been indemnified by another organization or employee
benefit plan for the same judgments, penalties or fines; (2) acted in good
faith; (3) received no improper personal benefit, and statutory procedure has
been followed in the case of any conflict of interest by a director; (4) in
the case of a criminal proceeding, had no reasonable cause to believe the
conduct was unlawful; and (5) in the case of acts or omissions occurring in
the person's performance in the official capacity of director or, for a person
not a director, in the official capacity of officer, board committee member or
employee, reasonably believed that the conduct was in the best interests of
the registrant or, in the case of performance by a director, officer or
employee of the registrant involving service as a director, officer, partner,
trustee, employee or agent of another organization or employee benefit plan,
reasonably believed that the conduct was not opposed to the best interest of
the registrant. In addition, Section 302A.521, subd. 3 of the Minnesota Act
requires payment by the registrant upon written request of reasonable expenses
in advance of final disposition of the proceeding in certain instances. A
decision as to required indemnification is made by a disinterested majority of
the registrant's Board of Directors present at a meeting at which a
disinterested quorum is present, or by a designated committee of the Board, by
special legal counsel, by the shareholders, or by a court.
Provisions regarding limitation of the liability of the directors of the
registrant are contained in Article 8 of the registrant's Restated Articles of
Incorporation, as amended to date, and provisions regarding indemnification of
directors and officers of the registrant are contained in Article IX of the
registrant's Bylaws. In addition, the registrant has indemnification
agreements with its directors and officers that require the registrant to
indemnify its directors and officers under certain conditions.
Reference is made to the form of Underwriting Agreement filed as Exhibit 1.1
to this Registration Statement for certain provisions regarding
indemnification of officers and directors of the registrant by the several
Underwriters.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<C> <S>
1.1 Form of Underwriting Agreement*
4.1 Form of Indenture*
4.2 Form of Debt Security*
5.1 Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation*
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation
(included in Exhibit 5.1)*
24.1 Powers of Attorney of certain directors and officers of the Company
(contained on
Page II-4)
25.1 Form T-1 Statement of Eligibility and Qualification under the Trust
Indenture Act of 1939 of Norwest Bank Minnesota, N.A.*
</TABLE>
- --------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS
1. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that the undertakings set forth in clauses (i) and (ii)
above shall not apply if the information required to be included in a post-
effective amendment by these clauses is contained in periodic reports filed
by the registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-2
<PAGE>
2. The undersigned registrant hereby undertakes, that, for purposes of
determining any liability under the Act, each filing of the registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
3. Insofar as indemnification of liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
4. The undersigned registrant hereby undertakes that:
(a) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT,
MICRON ELECTRONICS, INC., A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS
OF MINNESOTA, CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT
MEETS ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF NAMPA, STATE OF IDAHO, ON THE 11TH
DAY OF OCTOBER, 1996.
Micron Electronics, Inc.
/s/ T. Erik Oaas
By
----------------------------------
T. ERIK OAAS
VICE PRESIDENT OF FINANCE
AND CHIEF FINANCIAL OFFICER
KNOW ALL PERSONS BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS JOSEPH M. DALTOSO AND T. ERIK OAAS, JOINTLY AND
SEVERALLY, HIS ATTORNEYS-IN-FACT, EACH WITH THE POWER OF SUBSTITUTION, FOR HIM
IN ANY AND ALL CAPACITIES, TO SIGN ANY AMENDMENTS TO THIS REGISTRATION
STATEMENT ON FORM S-3, AND TO FILE THE SAME, WITH EXHIBITS THERETO AND OTHER
DOCUMENTS IN CONNECTION THEREWITH, WITH THE SECURITIES AND EXCHANGE
COMMISSION, HEREBY RATIFYING AND CONFIRMING ALL THAT EACH OF SAID ATTORNEYS-
IN-FACT, OR HIS SUBSTITUTE OR SUBSTITUTES, MAY DO OR CAUSE TO BE DONE BY
VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
SIGNATURES TITLE DATE
---------- ----- ----
/s/ Joseph M. Daltoso Chairman of the October 11,
- ------------------------------------- Board, Chief 1996
JOSEPH M. DALTOSO Executive Officer
and President
/s/ T. Erik Oaas Vice President of October 11,
- ------------------------------------- Finance, Chief 1996
T. ERIK OAAS Financial Officer
and Director
(Principal
Financial and
Accounting Officer)
/s/ Gregory D. Stevenson Executive Vice October 11,
- ------------------------------------- President, 1996
GREGORY D. STEVENSON Operations,
Director
/s/ Robert F. Subia Director; Chairman, October 11,
- ------------------------------------- President and Chief 1996
ROBERT F. SUBIA Executive Officer
of Micron Custom
Manufacturing
Services, Inc.
II-4
<PAGE>
/s/ Steven R. Appleton Director October 11,
- ------------------------------------- 1996
STEVEN R. APPLETON
/s/ Jerry M. Hess Director October 11,
- ------------------------------------- 1996
JERRY M. HESS
/s/ Robert A. Lothrop Director October 11,
- ------------------------------------- 1996
ROBERT A. LOTHROP
/s/ John R. Simplot Director October 11,
- ------------------------------------- 1996
JOHN R. SIMPLOT
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT TABLE NUMBER
------- ------------- ------
<C> <S> <C>
1.1 Form of Underwriting Agreement*
4.1 Form of Indenture*
4.2 Form of Debt Security*
Opinion of Wilson Sonsini Goodrich & Rosati, Professional
5.1 Corporation*
12.1 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Wilson Sonsini Goodrich & Rosati, Professional
Corporation (included in Exhibit 5.1)*
24.1 Powers of Attorney of certain directors and officers of the
Company (contained on Page II-4)
25.1 Form of T-1 Statement of Eligibility and Qualification under
Trust Indenture Act of 1939 of Norwest Bank Minnesota, N.A.*
</TABLE>
- --------
* To be filed by amendment.
<PAGE>
EXHIBIT 12.1
MICRON ELECTRONICS, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS EXCEPT RATIO AMOUNTS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
-----------------------------------------------
SEPT. 3, SEPT. 2, SEPT. 1, AUG. 31, AUG. 29,
1992 1993 1994 1995 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income before income taxes.... $3,435 $21,594 $60,397 $108,476 $79,637
Adjustments to income before
income taxes:
Interest expense............ 647 548 430 426 176
------ ------- ------- -------- -------
Adjusted income before income
taxes........................ $4,082 $22,142 $60,827 $108,902 $79,813
====== ======= ======= ======== =======
Fixed charges:
Interest expense............ $ 647 $ 548 $ 430 $ 426 $ 176
Adjustments to interest
expense:
Capitalized interest...... -- 12 34 119 326
------ ------- ------- -------- -------
Adjusted interest expense... $ 647 $ 560 $ 464 $ 545 $ 502
====== ======= ======= ======== =======
Ratio of earnings to fixed
charges...................... 6.3x 39.5x 131.1x 199.8x 159.0x
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement
of Micron Electronics, Inc. on this Form S-3 of our report, dated September
19, 1996, on our audits of the financial statements and financial statement
schedule of Micron Electronics, Inc., as of August 29, 1996 and August 31,
1995 and for each of the three years in the period ended August 29, 1996. We
also consent to the reference in this registration statement to our firm under
the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
Boise, Idaho
October 11, 1996
