As filed with the Securities and Exchange Commission on December 19, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM S-8
Registration Statement
Under the
Securities Act of 1933
Micron Electronics, Inc.
- ------------------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Minnesota 41-1404301
- ------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
900 East Karcher Road, Nampa, Idaho 83687
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(Address of Principal Executive Offices) (Zip Code)
1995 Stock Option Plan
- ------------------------------------------------------------------
(Full Title of the Plan)
Joseph M. Daltoso
Chairman of the Board and Chief Executive Officer
Micron Electronics, Inc.
900 East Karcher Road
Nampa, Idaho 83687
- ------------------------------------------------------------------
(Name and Address of Agent for Service)
(208) 898-3434
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(Telephone Number, Including Area Code, of Agent for Service)
CALCULATION OF REGISTRATION FEE
==================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered Per Share Price Fee
- ------------------------------------------------------------------
Common Stock 5,000,000(1) $9.1875(2) $45,937,500(2) $13,552(3)
$.01 par value
==================================================================
(1) Represents an increase in the number of shares reserved for
issuance under the Company's 1995 Stock Option Plan.
(2) Estimated in accordance with Rule 457(c) solely for the
purpose of calculating the filing fee on the basis of
$9.1875 per share, which is the average of the high and low
prices of the Common Stock reported on The Nasdaq Stock
Market on December 17, 1997.
(3) Fee calculated pursuant to Section 6(b) of the Securities
Act of 1933, as amended. This amount equals 0.000295
multiplied by the proposed maximum offering price.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
There are hereby incorporated by reference herein the
following documents and information heretofore filed with the
Securities and Exchange Commission:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended August 28, 1997, filed pursuant to Section 13(a) of the
Securities Exchange Act of 1934, as amended (the "1934 Act").
2. Amendment Nos. 1 and 2, dated September 8, 1997 and October
1, 1997, respectively, to the Company's Current Report on Form 8-
K filed August 4, 1997 pursuant to Section 13(a) of the 1934 Act.
3. The description of the Company's Common Stock contained
in the Company's Registration Statement on Form 8-A, filed August
16, 1989 pursuant to Section 12(g) of the 1934 Act. (File No. 0-
17932).
All documents filed by the Company pursuant to Sections 13,
14 and 15(d) of the 1934 Act after the date of this Registration
Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered have been sold or
which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference in the Registration
Statement and to be part hereof from the date of filing such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors or Officers.
Section 302A.521 of the Minnesota Business Corporation Act
authorizes a corporation's Board of Directors to grant indemnity
to directors and officers in terms sufficiently broad to permit
such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended. Article IX of the Company's
Bylaws provides for indemnification of its directors, officers,
employees and other agents to the extent permitted by the
Minnesota Business Corporation Act. The Company has entered into
indemnification agreements with its officers and directors which
provide the Company's officers and directors with further
indemnification to the maximum extent permitted by the Minnesota
Business Corporation Act.
In addition, pursuant to an underwriting agreement between the
Registrant and the underwriters of its February 1997 public
offering of Common Stock, certain officers and directors of the
Registrant are indemnified by the underwriters against certain
losses arising under the Securities Act of 1933, as amended.
Item 7. Exemption From Registration Claimed.
Not applicable.
1
<PAGE>
Item 8. Exhibits.
Exhibit
Number Description
- ------- --------------------------------------------------------
4.1 1995 Stock Option Plan of the Registrant, as amended.
4.2 Articles of Incorporation of the Registrant, as amended
(incorporated herein by reference to the Registrant's
Quarterly Report on Form 10-Q for the fiscal quarter
ended April 1, 1995).
4.3 Bylaws of the Registrant, as amended (incorporated
herein by reference to the Registrant's Annual
Report on Form 10-K for the fiscal year ended August
28, 1997).
5.1 Opinion of Fenwick & West LLP.
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Fenwick & West LLP (contained in Exhibit 5.1).
24.1 Power of Attorney (included on signature page).
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made of the securities registered hereby, 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;
(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 this registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities (if the total
dollar value of securities offered would not
exceed that which was registered) and any
deviation from the low or high and 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 20 percent change in the
maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in this registration statement or any
material change to such information in this
Registration Statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required
to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in this Registration
Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, 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.
(b) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report
2
<PAGE>
pursuant to Section 15(d) of the Securities Exchange Act of
1934) 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.
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, 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 that 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 actions, 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.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 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 this 19th day of December, 1997.
MICRON ELECTRONICS, INC.
By: /s/ T. Erik Oaas
-------------------------------
T. Erik Oaas
Executive Vice President,
Finance and Chief Financial
Officer
POWER OF ATTORNEY
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-8, 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 by the following
persons in the capacities and on the date indicated.
Signature Title Date
- ------------------------- ------------------------ ------------------
/s/ Steven R. Appleton Director December 18, 1997
- -------------------------
Steven R. Appleton
/s/ Joseph M. Daltoso Chairman of the Board December 18, 1997
- ------------------------- and Chief Executive
Joseph M. Daltoso Officer
/s/ Jerry M. Hess Director December 18, 1997
- -------------------------
Jerry M. Hess
Director December 18, 1997
- -------------------------
Robert A. Lothrop
/s/ T. Erik Oaas Executive Vice President, December 18, 1997
- ------------------------- Finance and Chief
T. Erik Oaas Financial Officer
(Principal Financial and
Accounting Officer) and
Director
/s/ John R. Simplot Director December 18, 1997
- -------------------------
John R. Simplot
/s/ Gregory D. Stevenson President and Chief December 18, 1997
- ------------------------- Operating Officer and
Gregory D. Stevenson Director
/s/ Robert F. Subia Chairman of the Board, December 18, 1997
- ------------------------- Chief Executive Officer
Robert F. Subia and President of Micron
Custom Manufacturing
Services, Inc. (a wholly-
owned subsidiary) and
Director
4
PROSPECTUS
Micron Electronics, Inc. (logo)
1995 STOCK OPTION PLAN
This Prospectus refers to 10,000,000 shares of Common
Stock, $.01 par value ("Common Stock"), of Micron
Electronics, Inc. (the "Company") which are offered for sale
to those employees of, and consultants to, the Company who
hold options to purchase shares of Common Stock granted
pursuant to the Company's 1995 Stock Option Plan. The terms
and conditions of the plan, including the prices of the
shares of Common Stock, are governed by the provisions and
the agreements thereunder between the Company and the
participants.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is August 2, 1995,
as amended November 24, 1997
<PAGE>
This Prospectus contains information concerning Micron
Electronics, Inc. and its 1995 Stock Option Plan, but does
not contain all the information set forth in the
Registration Statement which the Company has filed with the
Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933. The Registration Statement,
including various exhibits, may be inspected at the
Commission's office in Washington, D.C.
The Company hereby undertakes to provide without charge
to each person to whom a copy of this Prospectus is
delivered, upon written or oral request of any such person,
a copy of any and all of the information that has been or
may be incorporated by reference in this Prospectus, other
than exhibits to such documents. Requests for such copies
should be directed to T. Erik Oaas, Executive Vice
President, Finance and Chief Financial Officer, Micron
Electronics, Inc., 900 East Karcher Road, Nampa, Idaho
83687. The Company's telephone number at that location is
(208) 898-3434.
The Company is subject to the informational reporting
requirements of the Securities Exchange Act of 1934, as
amended, and in accordance therewith files reports, proxy
statements and other information with the Commission. Such
reports, proxy statements and other information can be
inspected and copied at the Public Reference Room of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's regional offices at Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois
60661; and copies of such material can be obtained from the
Public Reference Section of the Commission, Washington, D.C.
20549, at prescribed rates and can be obtained from the
Commission's World Wide Web site at http://www.sec.gov.
Information, as of particular dates, concerning directors
and officers of the Company, their remuneration, options
granted to them, the principal holders of securities of the
Company, and any material interest of such persons in
transactions with the Company has been disclosed in the
proxy statements distributed to shareholders of the Company
and filed with the Commission.
No person has been authorized to give any information
or make any representations, other than those contained in
this Prospectus, in connection with the stock option plan
described in this Prospectus, and, if given or made, such
information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does
not constitute an offering in any state in which such
offering may not lawfully be made.
<PAGE>
1995 STOCK OPTION PLAN
SUMMARY OF INFORMATION
This Prospectus relates to Common Stock, $.01 par value
("Common Stock"), of Micron Electronics, Inc. (the
"Company") reserved for issuance upon exercise of options
granted to employees or consultants under its 1995 Stock
Option Plan, as amended (the "1995 Option Plan"). The shares
of Common Stock issuable pursuant to the 1995 Option Plan
are originally issued shares and, therefore, no fees,
commissions or other charges are payable in connection with
the issuance of such shares. This Prospectus sets forth
information concerning the 1995 Stock Option Plan and will
be distributed to participating employees pursuant to the
Securities Act of 1933, as amended (the "Securities Act").
The Company's executive offices are located at 900 East
Karcher Road, Nampa, Idaho 83687, and its telephone number
at that location is (208) 898-3434.
THE 1995 STOCK OPTION PLAN
The 1995 Option Plan was adopted by the Board of Directors
in April 1995, approved by the shareholders of the Company
at the Annual Meeting of Shareholders on June 20, 1995, and
amended by the shareholders of the Company at the Annual
Meeting of Shareholders on November 24, 1997. A total of
10,000,000 shares of Common Stock have been reserved for
issuance under the 1995 Option Plan. The 1995 Option Plan
includes provisions which allow the Company the discretion
to grant options which comply with Section 162(m) of the
Internal Revenue Code of 1986 (the "Code"). Section 162(m)
places a limit of $1,000,000 on the amount of certain
compensation that may be deducted by the Company in any tax
year with respect to certain of the Company's highest paid
executives, including compensation relating to stock
options. The compensation of the highest paid executives
relating to stock options is not subject to the deduction
limit if certain requirements are met.
The 1995 Option Plan is not subject to any provisions of
the Employee Retirement Income Security Act of 1974
("ERISA").
The following is a summary of the material features of the
1995 Option Plan. The 1995 Option Plan is attached as
Appendix A to the Prospectus, and the following summary is
qualified in its entirety by reference to it.
Purpose of the 1995 Option Plan
The stock options awarded under the 1995 Option Plan are
designed to align employee and shareholder long-term
interest and to enable the Company to attract, motivate and
retain experienced and qualified personnel for positions of
substantial responsibility.
Administration
The 1995 Option Plan shall be administered by (i) the
Board of Directors if the Board may administer the 1995
Option Plan in compliance with Rule 16b-3 promulgated under
the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), or (ii) a committee appointed by the Board
and constituted so as to permit the 1995 Option Plan to
comply with the provisions of Rule 16b-3 and Section 162(m)
of the Code. If permitted by Rule 16b-3, the 1995 Option
Plan may be administered by different bodies with respect to
employees who are directors, non-director officers,
employees who are neither directors nor officers, and
consultants. For purposes of the plan description, the term
"Committee" shall mean the Compensation Committee of the
Board or, in the event that the 1995 Option Plan is
administered by the Board of Directors, the Board of
Directors. Members of the Board receive no additional
compensation for their services in connection with the
administration of the 1995 Option Plan.
The Committee has the discretion to select the employees
and/or consultants to whom options may be granted (an
"Optionee"), to determine the number of shares granted under
each option, and to make all other determinations which it
deems necessary or appropriate in the interpretation and
administration of the 1995 Option Plan. The Committee, in
its discretion, may accelerate the vesting of any option,
may reduce the exercise price of any option, and amend or
modify any option provided such amendment does not impair
the rights of any Optionee unless mutually agreed otherwise
by the Optionee and Committee. Options granted under the
1995 Option Plan will be evidenced by a written agreement
between the Company and the Optionee, containing the
specific terms and conditions of each option. The Company
anticipates that the standard form of agreement will provide
for an option term of six (6) years with the option
exercisable as to one-fifth (1/5) of the shares subject to
the option per year commencing with the first anniversary
date of the date of grant.
Eligible Participants
Only persons who are officers, employees or consultants of
the Company will be eligible to participate in, and to
receive options under, the 1995 Option Plan. Neither the
members of the Committee, nor any member of the Company's
Board of Directors, who is not also an officer or employee
of or consultant to the Company, may participate in the 1995
Option Plan. An Optionee may be granted more than one
option under the 1995 Option Plan. No person shall be
granted options to purchase more than 250,000 shares during
any fiscal year; provided, however, that in the fiscal year
in which an employee commences employment with the Company,
options granted to such employee shall be limited to 500,000
shares in such fiscal year. The purchase price per share
payable by an Optionee upon exercise of each option intended
to qualify under Section 162(m) of the Code shall be equal
to the fair market value of the Company's Common Stock on
the date of grant.
Term of Options
The 1995 Option Plan provides for the grant of incentive
stock options ("ISOs") as defined in Section 422 of the
Code, or nonstatutory stock options ("NSOs"). The purchase
price per share payable by an Optionee upon exercise of each
ISO granted under the 1995 Option Plan shall be equal to the
fair market value of the Company's Common Stock on the date
of the grant. The fair market value of the Common Stock on
a given date shall be the average closing price of the
Common Stock on The Nasdaq Stock Market (or such national
securities exchange on which the Common Stock is primarily
traded) for the five (5) business days preceding such date,
as reported in The Wall Street Journal; provided, however,
that where there is no public market for the Common Stock,
the fair market value per share shall be determined by the
Board of Directors in its discretion. Options granted to
consultants shall be NSOs. The purchase price per share
payable by an Optionee upon the exercise of each NSO granted
under the 1995 Option Plan shall be determined by the
Committee.
The exercise price of an option granted under the 1995
Option Plan may be paid in cash, check, promissory note, a
reduction in the amount of any Company liability to the
Optionee or, at the discretion of the Committee, in shares
of the Company's Common Stock, or in any combination
thereof, as determined by the Committee. Another method of
payment available under the 1995 Option Plan includes the
acceptance by the Stock Administration Department and a
stock broker of documentation necessary to perform a
cashless exercise transaction.
In general, if an Optionee's employment with the Company
is terminated for any reason, options exercisable as of the
date of termination may be exercised for a period of 30 days
following such date. Unless otherwise provided, options not
yet exercisable terminate immediately upon the date of the
termination. The Committee may grant options under the 1995
Option Plan which survive the termination of an Optionee's
employment with the Company, and may accelerate the vesting
of options upon such terms and conditions as the Committee
may determine.
Options granted under the 1995 Option Plan cannot be
assigned, transferred, pledged, or otherwise encumbered in
any way, except in the event of the death of an Optionee, by
the Optionee's will, or by the applicable laws of descent or
distribution. Options granted under the 1995 Option Plan
may be exercised during an Optionee's lifetime only by the
Optionee. In the event of the death of an Optionee, the
exercisable portion of the Option at the time of death 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), by the Optionee's estate or by
a person who acquired the right to exercise the Option at
the date of death.
Adjustments upon Change in Capitalization; Corporate
Transactions
A maximum of 10,000,000 shares of the Company's Common
Stock has been reserved for issuance pursuant to the 1995
Option Plan. In the event of a change in the number of
issued shares of the Company's Common Stock by reason of a
stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, a
proportionate adjustment will be made in the number of
shares reserved for issuance under the 1995 Option Plan and
in the number and exercise price of shares subject to any
outstanding options under the 1995 Option Plan, in order to
maintain the purpose of the original grant. In addition, in
connection with any merger or sale of substantially all of
the assets of the Company, other than in a Change in Control
(as defined in the 1995 Option Plan), each outstanding
option may be assumed or an equivalent option substituted by
a successor corporation. In lieu of such assumption or
substitution, or if the successor corporation does not
assume the options or substitute substantially equivalent
options, the Board may determine in its sole discretion that
all or a portion of the options outstanding should become
exercisable. In the event of a Change in Control of the
Company other than pursuant to a merger of the Company, the
unexercised portion of outstanding options shall become
immediately exercisable, to the extent such acceleration
does not disqualify the 1995 Option Plan or cause an ISO to
be treated as a NSO without the consent of the Optionee.
Amendment and Termination of the 1995 Option Plan
The 1995 Option Plan was effective upon the adoption by
the Company's Board of Directors and will terminate on April
26, 2005, unless earlier terminated by the Board of
Directors. The Company's Board of Directors may, at any
time, amend or terminate the 1995 Option Plan, provided that
such termination will not adversely affect the rights of the
Optionees under any outstanding options previously granted.
Federal Income Tax Consequences
The following discussion of the U.S. federal income tax
consequences of the 1995 Option Plan is intended to be a
summary of applicable federal law as of the date of this
Prospectus. State and local tax consequences may differ.
Because the U.S. federal income tax rules governing options
and related payment are complex and subject to frequent
change, Optionees are advised to consult their tax advisors
prior to exercise of options or dispositions of stock
acquired pursuant to option exercise.
Incentive Stock Options. No taxable income is recognized
by the Optionee upon the grant or exercise of an ISO (unless
the alternative minimum tax rules apply). If Common Stock
is issued to an Optionee pursuant to the exercise of an ISO,
and if no disqualifying disposition of the shares is made by
the Optionee within two years after the date of grant or
within one year after the issuance of such shares to the
Optionee, (i) upon the resale of such shares, any amount
realized in excess of the option exercise price will
generally be treated as a capital gain or loss (rather than
ordinary income or loss), and (ii) no deduction will be
allowed to the Company for U.S. federal income tax purposes.
If Common Stock acquired upon the exercise of an ISO is
disposed of before the expiration of either holding period
described above (a "disqualifying disposition"), generally
(i) the Optionee will recognize ordinary income in the year
of disposition in an amount equal to the excess (if any) of
the fair market value of the shares at exercise (or, if
less, the amount realized on the disposition of the shares)
over the option exercise price paid for such shares, and
(ii) the Company is entitled to a tax deduction in the same
amount. Any further gain or loss realized by the
participant will be taxed as short-term, mid-term or long-
term capital gain or loss, as the case may be, and will not
result in any deduction by the Company.
Nonstatutory Stock Options. With respect to NSOs: (i) no
income is recognized by the Optionee at the time the option
is granted; (ii) generally, at exercise, ordinary income is
recognized by the Optionee in an amount equal to the
difference between the option exercise price paid for the
shares and the fair market value of the shares on the date
of exercise, and the Company is entitled to a tax deduction
in the same amount; and (iii) upon disposition of the
shares, any gain or loss is treated as capital gain or loss.
In the case of an Optionee who is also an employee at the
time of grant, any income recognized upon exercise of an NSO
will constitute wages for which withholding will be
required.
Alternative Minimum Tax. The exercise of an ISO granted
under the 1995 Option Plan may subject the Optionee to the
alternative minimum tax ("AMT") under Section 55 of the
Code. In computing alternative minimum taxable income,
shares purchased upon exercise of an ISO are treated as if
they had been acquired by the Optionee pursuant to an NSO.
See "Nonstatutory Stock Options," above. This adjustment to
alternative minimum taxable income does not occur with
respect to shares disposed of in a disqualifying disposition
in the same calendar year as the exercise of the ISO. Under
certain circumstances, an Optionee may affect the timing and
measurement of AMT by filing an election with the Internal
Revenue Service under Section 83(b) within 30 days after the
date of exercise of an ISO. Accordingly, an Optionee should
consult his or her own tax advisor prior to exercising an
ISO concerning the advisability of filing an election under
Section 83(b) of the Code for alternative minimum tax
purposes.
If an Optionee pays AMT in excess of his or her regular
tax liability, the amount of such AMT relating to ISOs may
be carried forward as a credit against any subsequent years'
regular tax in excess of the AMT.
Restrictions on Resale
Certain officers and directors of the Company may be
deemed to be "affiliates" of the Company as that term is
defined under the Securities Act. Common Stock acquired
under the 1995 Option Plan by an affiliate may only be
reoffered or resold pursuant to an effective registration
statement or pursuant to Rule 144 under the Securities Act
or another exemption from the registration requirements of
the Securities Act. Such reoffers or resales may not be
made pursuant to this Prospectus.
<PAGE>
Appendix A
MICRON ELECTRONICS, INC.
1995 STOCK OPTION PLAN
1. Purposes of the Plan. The purposes of this Stock
Option Plan are:
* to attract, motivate and retain experienced and
qualified 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 Minnesota corporate and securities laws and the
Code.
(c) "Board" means the Board of Directors of the
Company.
(d) "Change in Control" means (i) the
acquisition by any person or entity of securities of Micron
Electronics, Inc. such that such person or entity, directly,
indirectly or beneficially, acting alone or in concert, (A)
owns or controls more of the combined voting power of all
classes of voting securities of Micron Electronics, Inc.
than does Micron Technology, Inc. and (B) owns or controls
more than twenty percent (20%) of the combined voting power
of all classes of voting securities of Micron Electronics,
Inc.; or (ii) 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 Micron Technology, Inc. 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 Electronics, Inc., a
Minnesota 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 not include Directors who are
paid only a director's fee by the Company or who are not
compensated by the Company for their services as Directors.
(j) "Continuous Status as an 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
181st 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 or a national market system
including without limitation the Nasdaq National Market of
the National Association of Securities Dealers, Inc.
Automated Quotation ("Nasdaq") System, the Fair Market Value
of a Share of Common Stock shall be the average closing
sales 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 the Common
Stock) for the five (5) business days preceding the day of
determination, as reported in The Wall Street Journal 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 last market trading day prior to
the day of determination, as reported in The Wall Street
Journal 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.
(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 1995 Stock 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 11 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.
3. Stock Subject to the Plan. Subject to the
provisions of Section 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and sold under the
Plan is 10,000,000 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 (i) Directors, (ii)
Officers who are not Directors, and (iii) Employees who are
neither Directors nor Officers.
(ii) Administration With Respect to Employees
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:
(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 an Option Exchange
Program; and
(xiii) 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. 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 of Shares subject to an Optionee's Incentive Stock
Options granted by the Company or any Parent or Subsidiary,
which 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
250,000 Shares; provided, however, that in the fiscal year
in which an employee commences employment with the Company,
options granted to such employee shall be limited to 500,000
Shares in such fiscal year. The purchase price per Share
payable by an Optionee upon exercise of each Option intended
to qualify under Section 162(m) of the Code shall be equal
to the fair market value of the Company's Common Stock on
the date of grant.
(ii) The foregoing limitations shall be
adjusted proportionately in connection with any change in
the Company's capitalization as described in Section 11.
(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 11), 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 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.
8. 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. The per Share exercise price of
Nonstatutory Stock Options intended to qualify under Section
162(m) of the Code shall be no less than 100% of the Fair
Market Value per Share on the date of grant.
(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;
(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.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a
Shareholder. Any Option granted hereunder 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 11 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 exercise his or her
Option with respect to the shares covered by the exercisable
portion of the 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 the 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 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 or Micron
Electronics Retirement at Micron Section 401(k) Plan (each a
"RAM Plan" and together the "RAM Plans") and who requests
and receives a hardship distribution from any RAM Plan, is
prohibited from making, and must suspend, for a period of
twelve (12) months thereafter, his or her elective
contributions and employee contributions including, without
limitation to the foregoing, the exercise of any Option
granted from the date of receipt by that employee of the
hardship distribution from any RAM Plan.
10. 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.
11. 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,
other than in either such case, a Change in Control, 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 lieu
of such assumption or substitution, or in the event the
successor corporation does not assume the Option or
substitute an equivalent option or right, the Administrator
may 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, 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.
12. 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.
13. 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 from the effective date unless terminated earlier
under Section 14 of the Plan.
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 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 Minnesota law.
Rev. 11/97
Exhibit 5.1
December 19, 1997
Micron Electronics, Inc.
900 E. Karcher Rd.
Nampa, ID 83687
Ladies & Gentlemen:
At your request, we have examined the Registration Statement
on Form S-8 (the "Registration Statement") to be filed by Micron
Electronics, Inc., a Minnesota corporation (the "Company"), with
the Securities and Exchange Commission (the "Commission") on or
about December 19, 1997 in connection with the registration under
the Securities Act of 1933, as amended, of an aggregate of
5,000,000 additional shares of your Common Stock (the "Common
Stock") subject to issuance by you pursuant to your 1995 Stock
Option Plan, as amended through November 24, 1997 (the "Plan").
In rendering this opinion, we have examined the following:
(1) your Registration Statement on Form 8-A (File No. 0-
17932) filed with the Commission on August 16, 1989 and
declared effective on September 25, 1989;
(2) the Registration Statement, together with the Exhibits
to be filed as a part thereof, including without
limitation, the Plan and the forms of stock option
agreements;
(3) the Prospectus originally prepared in connection with
the Plan and with the Registration Statement, as
amended to take into account the amendment of the Plan
on November 24, 1997 increasing by 5,000,000 shares the
number of shares of Common Stock subject thereto;
(4) the minutes of meetings and actions by written consent
of your stockholders and Board of Directors relating to
the Plan that are contained in your minute books that
are in our possession;
(5) The Articles of Incorporation and Bylaws of the
Company, as amended to date; and
(6) a Management Certificate addressed to us and dated of
even date herewith executed by the Company containing
certain factual and other representations.
In our examination of documents for purposes of this
opinion, we have assumed, and express no opinion as to, the
genuineness of all signatures on original documents, the
authenticity of all documents submitted to us as originals, the
legal capacity of all natural persons executing the same, the
conformity to originals of all documents submitted to us as
copies, the lack of any undisclosed terminations, modifications,
waivers or amendments to any documents reviewed by us and the due
execution and delivery of all documents where due execution and
delivery are prerequisites to the effectiveness thereof.
As to matters of fact relevant to this opinion, we have
relied solely upon our examination of the documents referred to
above and have assumed the current accuracy and completeness of
the information and records included in the documents referred to
above. We have made no independent investigation or other
attempt to verify the accuracy of any of such information or to
determine the existence or non-existence of any other factual
matters; however, we are not aware of any facts that would lead
us to believe that the opinion expressed herein is not accurate.
Our opinion below is given on the assumption that shares of
Common Stock may not be issued and sold by you in accordance with
the Plan unless and until such shares, at the time in question,
are explicitly reserved and available for issuance under the
Plan.
Based upon the foregoing, it is our opinion that the
5,000,000 additional shares of Common Stock that may be issued
and sold by you pursuant to the Plan, when issued and sold in
accordance with the Plan and stock option or purchase agreements
to be entered into thereunder and in the manner referred to in
the Prospectus associated with the Plan and the Registration
Statement, will be validly issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to all references to
us, if any, in the Registration Statement, the Prospectus
constituting a part thereof and any amendments thereto.
This opinion speaks only as of its date and is intended
solely for the your use as an exhibit to the Registration
Statement for the purpose of the above sale of the Common Stock
and is not to be relied upon for any other purpose.
Very truly yours,
FENWICK & WEST LLP
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on
Form S-8 to be filed on or about December 19, 1997 of our report
dated September 22, 1997, on our audits of the financial
statements and financial statement schedule of Micron
Electronics, Inc., as of August 28, 1997 and August 29, 1996, and
for each of the three years in the period ended August 28, 1997.
/s/ Coopers & Lybrand L.L.P.
Boise, Idaho
December 19, 1997
