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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permittedPermitted
[X] Definitive Proxy Statement by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section (S)240.14a-11(c) or Section (S)240.14a-12
MICRON TECHNOLOGY, INC.
- --------------------------------------------------------------------------------Micron Technology, Inc.
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(Name of Registrant as Specified In Its Charter)
- ---------------------------------------------------------------------------------Enter Company Name Here-
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
[LOGO OF MICRON TECHNOLOGY, INC. APPEARS HERE]
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NOTICE OF 1998 ANNUAL MEETING OF SHAREHOLDERS
JANUARY 14,]
Notice of 1999 Annual Meeting of Shareholders
January 18, 2000
To theThe Shareholders:
Notice Is Hereby Given that the 19981999 Annual Meeting of Shareholders of
Micron Technology, Inc., a Delaware corporation (the "Company"), will be held
on January 14, 1999,18, 2000, at 9:00 a.m., Mountain Standard Time, at the BOISE CENTRE
ON THE GROVE,Boise Centre
on the Grove, 850 W. FRONT STREET, BOISE, IDAHOFront Street, Boise, Idaho 83702, for the following
purposes:
1. To elect directors to serve for the ensuing year and until their
successors are elected and qualified.
2. To approve an amendment torenew approval of the Company's Certificatecurrent Executive Bonus Plan for
purposes of Incorporation
creating a new classSection 162(m) of 32,000,000 shares of capital stock denominated
as "Class A Common Stock," having the rights and preferences more fully
described in the accompanying Proxy Statement and in the form of
amendment attached as an appendix thereto.Internal Revenue Code.
3. To approve an amendment to the Company's 1989 Employee Stock Purchase
Plan increasing the number of shares of Common Stock reserved for
issuance thereunder by 2,500,000.
4. To approve a 1998 Non-Employee Director Stock Incentive Plan with
250,000 shares of Common Stock reserved for issuance thereunder.
5. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the fiscal year ending September 2, 1999.
6.August 31, 2000.
4. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on November 16, 1998,19, 1999,
are entitled to notice of and to vote at the meeting. A complete list of the
Common Stock shareholders entitled to vote at the meeting will be open to the
examination of any shareholder, for any purpose germane to the business to be
transacted at the meeting, during ordinary business hours for the ten-day
period ending immediately preceding the date of the meeting, at the Company's
headquarters at 8000 S. Federal Way, Boise, Idaho 83716-9632.
Attendance at the Annual Meeting will be limited to shareholders and guests
of the Company. Shareholders willmay be required to furnish proof of ownership of
the Company's Common Stockstock before being admitted to the meeting. Shareholders
holding shares in the name of a broker or other nominee are requested to bring
a statement from the broker or nominee confirming their ownership in the
Company's Common Stock. Directions to the
meeting's location accompany the Proxy Statement.
To ensure your representation at the meeting, you are urged to vote, sign,
date, and return the enclosed Proxy as promptly as possible in the postage-
prepaid envelope enclosed for that purpose. Alternatively, shareholders may
vote by telephone or electronically via the internet. Please refer to the
instructions included with the Proxy for additional details. The shareholdersShareholders
attending the meeting may vote in person even if they have already submitted
their vote.
By Order of the Board of Directors
Roderic W. Lewis
Vice President of Legal Affairs,
General Counsel & Corporate
Secretary
Boise, Idaho
November 30, 1998December 10, 1999
YOUR VOTE IS IMPORTANT, PLEASE MAILSUBMIT YOUR PROXY PROMPTLY
Please indicate your voting instructions on the enclosed proxy card, date
and sign it, and return it in the envelope provided, which is addressed for
your convenience. No postage is required if mailed in the United States.PROMPTLY.
[LOGO OF MICRON TECHNOLOGY, INC. APPEARS HERE]]
8000 S. FEDERAL WAY
BOISE, IDAHOFederal Way
Boise, Idaho 83716-9632
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PROXY STATEMENT
19981999 ANNUAL MEETING OF SHAREHOLDERS
JANUARY 14, 1999January 18, 2000
----------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERALGeneral
The enclosed Proxy is solicited on behalf of the Board of Directors of
Micron Technology, Inc. (the "Company"), for use at the 19981999 Annual Meeting of
Shareholders to be held on January 14, 1999,18, 2000, at 9:00 a.m., Mountain Standard
Time, or at any adjournment thereof (the "Annual Meeting"). The purposes of
the Annual Meeting are set forth herein and in the accompanying Notice of 19981999
Annual Meeting of Shareholders. The Annual Meeting will be held at the BOISE
CENTRE ON THE GROVE,Boise
Centre on the Grove, 850 W. FRONT STREET, BOISE, IDAHOFront Street, Boise, Idaho 83702. Directions to
the Annual Meeting accompany this Proxy Statement. The Company's telephone
number is (208) 368-4000.
This Proxy Statement and enclosed Proxy are first being mailed on or about
November 30, 1998,December 10, 1999, to all shareholders entitled to vote at the meeting.
RECORD DATERecord Date
Shareholders of record at the close of business on November 16, 199819, 1999 (the
"Record Date"), are entitled to notice of and to vote at the meeting.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
ProposalsRevocability of shareholders of the Company which are intended to be presented
at the Company's 1999 Annual Meeting of Shareholders must be received by the
Company no later than June 16, 1999 and must also be in compliance with the
Company's Certificate of Incorporation and Bylaws and with applicable laws and
regulations in order to be included in the proxy statement and form of proxy
relating to that meeting.
REVOCABILITY OF PROXYProxy
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by attending the Annual Meeting and
voting in person or by delivering to the Company a written notice of
revocation or another duly executed proxy bearing a later date than the
earlier given proxy.
SOLICITATIONSolicitation
The cost of solicitation will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
materials to such beneficial owners. Proxies may be solicited by the Company's
directors, officers and employees, without additional compensation, personally
or by telephone, internet, facsimile or telegram. The Company intends to use
the services of Beacon Hill Partners, Inc., a proxy solicitation firm, in
connection with the solicitation of proxies. Although the exact cost of those
services is not known at this time, it is anticipated that the cost to the
Company will be approximately $25,000.
1$5,000.
VOTING SECURITIES AND PRINCIPAL HOLDERS
OUTSTANDING SHARESOutstanding Shares
The Company has only one classtwo classes of stock outstanding, the Company's Common Stock, $.10 par
value per share (the "Common Stock") and non-voting Class A Common Stock, $.10
par value per share ("Class A Common Stock"). At the Record Date, 247,101,073November 19,
1999, 254,037,024 shares of the Company'sCommon Stock were issued and outstanding and
15,810,277 shares of Class A Common Stock were issued and outstanding.
VOTING RIGHTSVoting Rights
Under the Delaware General Corporation Law and the Company's Certificate of
Incorporation and Bylaws, each shareholder will be entitled to one vote for
each share of the Company's Common Stock held at the Record Date for all
matters, including the election of directors, unless cumulative voting for the
election of directors is required. The Company's Class A Common Stock is not
entitled to vote at the Annual Meeting. The required quorum for the
transaction of business at the Annual Meeting is a majority of the votes
eligible to be cast by holders of shares of the Company's Common Stock issued
and outstanding on the Record Date. Shares that are voted "FOR," "AGAINST,"
"WITHHELD" or "ABSTAIN" are treated as being present at the Annual Meeting for
the purposes of establishing a quorum and are also treated as shares entitledtallied to vote atdetermine the
Annual Meetingshareholder's decision with respect to the matter voted upon (the "Votes
Cast") with respect to such matter.. Abstentions will have the same effect of voting against a proposal.
Broker non-votes will be counted for purposes of determining the presence or
absence of a quorum for the transaction of business, but such non-votes will
not be counted for purposes of determining the number of Votes Cast with
respect to the particular proposal on which a broker has expressly not voted.
Thus, a broker non-vote will not effect the outcome of the voting on a
proposal.
Cumulative voting for the election of directors shall not be required
unless at least one shareholder has given written notice to the Secretary of
the Company of its intention to cumulate votes at least 15 days prior to the
date of the meeting. If cumulative voting is requested, every shareholder
voting for the election of directors may cumulate such shareholder's votes and
give one candidate a number of votes equal to the number of directors to be
elected multiplied by the number of votes to which the shareholder's shares
are entitled, or distribute the shareholder's votes among as many candidates
as the shareholder thinks fit, provided that votes cannot be cast for more
than eightseven candidates. If cumulative voting is required, the persons
authorized to vote shares represented by proxies shall have the authority and
discretion to vote such shares cumulatively for any candidate or candidates
for whom authority to vote has not been withheld. The eightseven nominees for
director receiving the highest number of Votes Cast will be elected, whether
or not any one of them receives the vote of a majority of the shares
represented and entitled to vote at the Annual Meeting. Abstentions and broker
nonvotes as to the election of the directors will not count as Votes Cast
"FOR" or "AGAINST" any nominee.
VOTING OF PROXIESVoting of Proxies
The shares of the Company's Common Stock represented by all properly
executed proxies received in time for the meeting will be voted in accordance
with the directions given by the shareholders. IF NO INSTRUCTIONS ARE GIVEN,
THE SHARES WILL BE VOTEDIf no instructions are given,
the shares will be voted (i) FOR each of the nominees named herein as
directors, or their respective substitutes as may be appointed by the Board of
Directors, (ii) FOR the amendment to the Company's Certificaterenewal of
Incorporation, (iii) FOR the amendment to the Company's 1989 Employee Stock
Purchase Plan, (iv) FOR the approval of the 1998 Non-Employee Director Stock
IncentiveCompany's current Executive
Bonus Plan (v)for purposes of Section 162(m) of the Internal Revenue Code, (iii)
FOR ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants of the Company for fiscal 1999,2000, and (vi)(iv) in the
discretion of the proxyholders for such other matter or matters which may
properly come before the meeting or any adjournment or adjournments thereof.
2
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTSecurity Ownership of Certain Beneficial Owners and Management
The following table sets forth security ownership information as of
November 16, 1998,19, 1999, for (i) persons known by the Company to own beneficially
more than five percent (5%) of the Company's Common Stock, (ii) each director,
(iii) each Named Executive Officer listed in the "Summary Compensation Table"
set forth herein, and (iv) all directors and executive officers as a group:
AMOUNT AND NATURE OF PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS
--------------------------------------- -------------------------- --------Name and Address of Number of Right to Percent of
Beneficial Owner Shares Owned(1) Acquire(2) Total Class (3)
- ------------------- --------------- ---------- ---------- ----------
Texas Instruments
Incorporated.........Incorporated............ 28,933,092(4) 12,333,358(5) 41,266,450 (2) 15.91%15.49%
7839 Churchill Way M.S.
3999
Dallas, Texas 75251
FMR Corporation........................ 31,998,306 (3) 12.60%Corp................. 20,139,489(6) 1,729,213(7) 21,868,702 8.55%
82 Devonshire Street
Boston, Massachusetts
02109
Capital Research and
Management Company............................... 27,156,540 (4) 10.94%Company...... 22,782,800(8) 1,112,040(9) 23,894,840 9.37%
333 South Hope Street
Los Angeles, CA 90071
Intel Corporation........ -- 15,810,277(10) 15,810,277 5.86%
2200 Mission College
Boulevard
Santa Clara, California
9007195052
J.R. Simplot Company................... 16,899,000 (5) (6) 6.84%Company..... 14,936,000(11) -- 14,936,000 5.88%
999 Main Street, Suite
1300
Boise, Idaho 83707
Intel Corporation...................... 15,810,277 (7) 6.01%
2200 Mission College Boulevard
Santa Clara, California 95052
JohnSteven R. Simplot........................ 13,037,699 (8)(9) 5.28%
999 Main Street, Suite 1300
Boise, Idaho 83707
Appleton, Steven R..................... 511,239 (9)(10)Appleton....... 191,290 301,949 493,239 *
Bagley, James W........................ 16,000 (9)W. Bagley.......... -- 19,000 19,000 *
Durcan, D. Mark........................ 91,984 (9)Donald D Baldwin......... 42,431(12) -- 42,431 *
Hawkins, Jay L......................... 161,350 (9)Robert M. Donnelly....... -- 85,320 85,320 *
Kocher, Joel J......................... 148 (11)(12)J. Kocher........... 6,400(13) 148(14) 6,548 *
Lothrop, Robert A...................... 58,997 (9)(13)A. Lothrop........ 42,997(15) 19,000 61,997 *
Nicholson, Thomas T.................... 1,517,170 (9)(14)T. Nicholson...... 1,443,970(16) 19,000 1,462,970 *
Simplot, Don J......................... 165,020 (9)J. Simplot........... 149,783(17) 19,000 168,783 *
Smith, Gordon C........................ 16,750 (9)(15)C. Smith.......... 1,132(18) 9,000 10,132 *
Stover,
Wilbur G., Jr.................. 192,275 (9)(11)(16) Stover, Jr..... 21,478(19) 147,216 168,694 *
Weber, William P....................... 33,000 (9)P. Weber......... 36,763 -- 36,763 *
All directors and
executive officers as a
group (16(15 persons).................. 33,242,785 (9)(10)(12)(17) 13.38%...... 2,170,966(20) 971,217(21) 3,142,183 1.23%
- --------
* Less than 1%
(1) The numberExcludes shares that may be acquired through the exercise of outstanding
stock options.
(2) Represents shares beneficially owned is determined under the rules
promulgated by the Securities and Exchange Commission ("Commission"), and
the information is not necessarily indicative of beneficial ownership for
any other purpose. Under such rules, beneficial ownership includes any
shares as to which thethat an individual or entity has sole or shared voting or investment
power and also any shares which the individual has thea right to acquire
within 60 days afterof November 16, 1998 through19, 1999.
(3) For purposes of calculating the exercisePercent of any stock
option or other right to convert into Common Stock. Unless otherwise
indicated, eachClass, shares that the person
or entity namedhad a Right to Acquire are deemed to be outstanding to
calculate the Percent of Class of such person or entity, but are not
deemed to be outstanding for the purpose of calculating the Percent of
Class of any other person or entity.
(4) Pursuant to an agreement between Texas Instruments Incorporated ("TI")
and the Company, TI has agreed that, subject to certain conditions, it
will vote its shares of the Company's Common Stock in the table has sole votingsame proportion
(for, against and investment power (or shares such power with his or her spouse)abstain) as votes cast by the other holders of the
Company's Common Stock with respect to alleach matter submitted to the
shareholders.
(5) Represents shares of Common Stock listed as owned by such person or
entity.
(2) Includes 12,333,358 sharesissuable as a result of the assumed conversion of
$740,000,000 principle amount of 6.5% Convertible Subordinated Notes due
September 30, 2005.
(3)3
(6) Includes 28,512,31615,866,802 shares beneficially owned by Fidelity Management &
Research Company, 3,163,2903,605,737 shares beneficially owned by Fidelity
Management Trust Company, and 322,700666,950 shares beneficially owned by
Fidelity International Limited. FMR Corp. has sole dispositive power with
respect to all of the shares and sole voting power with respect to
4,288,493 shares. The number offoregoing is based upon information obtained from a
letter dated November 24, 1999, sent to the Company by FMR Corp.
(7) Includes 1,713,407 shares beneficially owned by Fidelity Management &
3
Research Company includes 6,768,916 shares as a result of the assumed conversion of $138,013,000$115,560,000
principal amount of the 7% Convertible Subordinated Debentures due July
1, 2004 ("Debentures"). In addition, the
number of and includes 15,806 shares beneficially owned by
Fidelity Management Trust Company includes 82,729 shares as a result of the assumed conversion
of $5,580,000$1,066,000 principal amount of the Debentures. The foregoing is based
upon information obtained from a letter dated July 22, 1998,November 24, 1999, sent to
the Company by FMR CorporationCorp.
(8) Capital Research and Management Company has sole dispositive power with
respect to Micron.
(4)all of the shares, but does not have shared or sole voting
power with respect to any of the shares. The number offoregoing is based upon
information obtained from a Schedule 13G filed by Capital Research and
Management Company with the Securities and Exchange Commission
("Commission") on February 11, 1999.
(9) Represents shares beneficially owned by Capital Research and Management
Company includes 1,112,040 shares as a result of the assumed conversion of $75,000,000 principal
amount of the Debentures. The foregoing is based upon information
obtained from a Schedule 13G filed by Capital Research and Management
Company with the Commission on July 9,
1998.
(5)February 11, 1999.
(10) Represents 100% of the Company's outstanding Class A Common Stock, which
is exchangeable for Common Stock, subject to certain conditions. The
Company's Class A Common Stock is not entitled to vote at the Annual
Meeting.
(11) Includes (i) 9,299,0007,336,000 shares as to which J.R. Simplot Company has both
voting and dispositive power, (ii) 5,000,000 shares as to which J.R.
Simplot Company has sole voting power but no dispositive power and (iii)
2,600,000 shares as to which J.R. Simplot Company has the power to direct
the vote but no dispositive power. Excludes 7,600,000 shares which are
subject to a pledge agreement and as to which shares J.R. Simplot Company
has no voting power and no present dispositive power, but can reclaim
possession and dispositive power at any time, subject to certain
conditions.
(6) Mr. Don Simplot may also be deemed to be the beneficial owner of shares
beneficially owned by J.R. Simplot Company. He is a shareholder, a
director and the Corporate Vice President of J.R. Simplot Company and is
a member of its Office of the Chairman.
(7) Represents stock rights held by Intel Corporation which are currently
exercisable or exchangeable for Common Stock. See "Proposal 2. Amendment
to the Company's Certificate of Incorporation."
(8)(12) Includes 7,895,1222,431 shares held by a trust of which Mr. John Simplot is
the trustee; 72,255 shares held by S-Sixteen L.P. of which Mr. John
Simplot is the general partner; 4,974,222 shares held by JRS Properties
L.P. of which Mr. John Simplot is the general partner; 22,400 shares heldhis minor children.
(13) Held in joint tenancy with his spouse; 42,500Mrs. Kocher.
(14) Represents shares held by the Simplot
Foundation; and 15,200 shares held by Mrs. Simplot. Does not include the
shares beneficially owned by J.R. Simplot Company.
(9) Includes options to purchase shares of the Common Stock exercisable
within 60 days of November 16, 1998, under the Company's stock option
plans in the following amounts: Mr. Appleton, 367,555; Mr. Durcan,
81,513; Mr. Hawkins, 143,220; Mr. Stover, 175,275; Mr. Bagley, 16,000;
Mr. Lothrop, 16,000; Mr. Nicholson, 16,000; Mr. Don Simplot, 16,000; Mr.
John Simplot, 16,000; Mr. Smith, 16,000; Mr. Weber, 13,000; and all
directors and executive officers as a group (15 persons), 1,317,653.
(10) Does not include shares of Common Stock of Micron Communications, Inc.
("MCC"), a subsidiary of the Company, held by the following individuals:
Mr. Appleton, 3,048 (held by Mesa L.P. of which Mr. Appleton is the
general partner); Mr. Stover, 2,896; and all directors and executive
officers as a group (4 persons), 10,891. The total number of shares of
MCC held directly by all directors and executive officers as a group
represents less than 1% of the total outstanding shares of MCC Common
Stock. Excludes shares held by the Company, which certain directors and
executive officers of the Company may be deemed to beneficially own.
(11) Includes 148 sharesissuable as a result of the assumed conversion of
$9,305.25 principal amount of the Debentures. (12) Does not include options to
purchase 270,000 shares of Micron Electronics, Inc. ("MEI") Common Stock
exercisable within 60 days of November 16, 1998, in the
following amounts: Mr. Kocher, 80,000 (see "Option Grants in Last Fiscal
Year") and all directors and executive officers as a group (2 persons),
99,000. The total number of shares of MEI held directly by all directors
and executive officers as a group represents less than 1% of the total
outstanding shares of MEI. Excludes shares held by the Company, which
certain directors and executive officers of the Company may be deemed to
beneficially own.
(13)19, 1999.
(15) Includes 2,988 shares held directly in the name of Mr. Lothrop, 424 shares held in the name of Mrs. Lothrop and 39,585 shares
held in joint tenancy with Mrs. Lothrop.
(14)(16) Includes 1,399,500 shares held in the name of Mr. Nicholson directly; 10,000 shares held in the name of Mountain View Equipment;Equipment
Company; 8,000 shares held in the name of Miller-Nicholson, Inc.; 7,000
shares held in the name of MN One, Inc.; 10,000 shares held in the name
of MN II, Inc.; 50,000 shares held by Blacks Creek Ltd. Partnership; and
16,670 shares held by Mrs. Nicholson.
(15) All(17) Does not include shares arebeneficially owned by J.R. Simplot Company. Mr.
Simplot may be deemed to be the beneficial owner of shares beneficially
owned by J.R. Simplot Company. He is a shareholder, a Director and the
Corporate Vice President of J.R. Simplot Company and is a member of its
Office of the Chairman.
(18) Includes 750 shares held in joint tenancy with Mrs. Smith.
(16)(19) Includes 15,050 shares held directly in the name of Mr. Stover and 1,950 shares held by his minor children.
(17) Also includes 16,899,000(20) Does not include shares heldbeneficially owned by the J.R. Simplot Company (see
footnote (6)(17) above). Does not include shares of MEI Common Stock held by
directors and executive officers. The total number of shares of MEI held
directly by all directors and executive officers as a group represents
less than 1% of the total outstanding shares of MEI. Excludes shares of
MEI held by the Company, which certain directors and executive officers
of the Company may be deemed to beneficially own.
(21) Does not include options to purchase 310,000 shares of MEI Common Stock
exercisable within 60 days of November 19, 1999, by all directors and
executive officers as a group (2 persons).
4
BUSINESS TO BE TRANSACTED
PROPOSAL 1. ELECTION OF DIRECTORS
NOMINEESNominees
The Company's Bylaws currently provide for eightseven directors and it is
contemplated that a Board of eightseven directors will be elected at the meeting.
Unless otherwise instructed, the proxy holders will vote the proxies received
by them for management's eightseven nominees named below, all of whom are presently
directors of the Company. If any management nominee is unable or declines to
serve as a director at the time of the Annual Meeting, the proxies will be
voted for any nominee who shall be designated by the present Board of
Directors to fill the vacancy. If additional persons are nominated for
election as directors, the proxy holders intend to vote all proxies received
by them in such a manner as will ensure the election of as many of the
nominees listed below as possible. It is not expected that any nominee listed
below will be unable or will decline to serve as a director. The term of
office of each person elected as a director will continue until the next
annual meeting of shareholders or until such person's successor has been
elected and qualified, except in the case of earlier death, resignation or
removal. Officers are appointed annually by the Board of Directors and serve
until their successors are duly chosen and qualified, except in case of
earlier death, resignation or removal. The names of the eightseven nominees and
certain information about them are set forth below:
SERVED
AS A
DIRECTOR
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION SINCE
-Served as a
Name of Nominee Age Principal Occupation Director Since
--------------- --- -------------------- --------
--------------
Steven R. Appleton...... 38Appleton... 39 Chairman, of the Board of Directors, Chief Executive 1994(1)
Officer and 1994(1)
President of the Company
James W. Bagley......... 59Bagley...... 60 Chairman and Chief Executive Officer of Lam 1997
Research 1997 Corporation
Robert A. Lothrop....... 72Lothrop.... 73 Retired, former Senior Vice President of J.R. 1994(2)
Simplot 1994(2) Company
Thomas T. Nicholson..... 62Nicholson.. 63 Vice President and member of the Board of 1980
Directors of 1980
Honda of Seattle and Toyota of
Seattle and President of Mountain View
Equipment Company
Don J. Simplot.......... 63Simplot....... 64 Member of Office of the Chairman and 1982
Corporate Vice 1982 President of J.R. Simplot
Company
John R. Simplot......... 89 Retired, former Chairman of the Board of the J.R. 1980
Simplot Company
Gordon C. Smith......... 69Smith...... 70 President of Wesmar, Inc. and Secretary and 1990(3)
Treasurer 1990(3) of SSI Management Corp.
William P. Weber........ 58Weber..... 59 Retired, former Vice Chairman of Texas 1998
Instruments 1998(4) Incorporated
- --------
(1) Mr. Appleton also served as a member of the Board of Directors of the
Company between April 1991 and July 1992.
(2) Mr. Lothrop also served as a member of the Board of Directors of the
Company between August 1986 and July 1992.
(3) Mr. Smith also served as a member of the Board of Directors of the
Company between February 1982 and February 1984.
(4) Mr. Weber was appointed to the Board of Directors of the Company on July
20, 1998.
Each of the nominees has been engaged in the principal occupations set forth
below during the past five years:
Steven R. Appleton joined the Company in February 1983 and has served in
various capacities with the Company and its subsidiaries. Mr. Appleton first
became an officer of the Company in August 1989 and has 5
served in various
officer positions, including overseeing the Company's semiconductor operations
as President,
5
Chief Executive Officer and Director of Micron Semiconductor, Inc. ("MSI"),
then a wholly-owned subsidiary of the Company, from July 1992 to November
1994. From April 1991 until July 1992 and since May 1994, Mr. Appleton has
served on the Company's Board of Directors. Since September 1994, Mr. Appleton
has served as the Chief Executive Officer, President and Chairman of the Board
of Directors of the Company. Mr. Appleton also serves as a Director of Micron Electronics, Inc. ("MEI").MEI.
Mr. Appleton holds a BA in Business Management from Boise State University.
James W. Bagley became the Chairman and Chief Executive Officer of Lam
Research Inc.Corporation ("Lam"), a supplier of semiconductor manufacturing
equipment, in August 1997, upon consummation of a merger of OnTrak Systems,
Inc. ("OnTrak"), a supplier of semiconductor manufacturing equipment, into
Lam. From June 1996 to August 1997, Mr. Bagley served as the Chairman and
Chief Executive Officer of OnTrak. Prior to joining OnTrak, Mr. Bagley was
employed by Applied Materials, Inc., also a supplier of semiconductor
manufacturing equipment, for 15 years in various senior management positions,
including Chief Operating Officer and Vice Chairman of the Board. Mr. Bagley
currently is a directorDirector of three suppliers of semiconductor manufacturing
equipment: KLA-Tencor Corporation, Teradyne, Inc. and Kulicke & Soffe
Industries, Inc. He has served on the Company's Board of Directors since June
1997. Mr. Bagley holds a BS in Electrical Engineering and MS in Electrical
Engineering from Mississippi State University.
Robert A. Lothrop served as Senior Vice President of the J.R. Simplot Company,
an agribusiness, from January 1986 until his retirement in January 1991. From
August 1986 until July 1992 and since May 1994, Mr. Lothrop has served on the
Company's Board of Directors. From July 1992 until November 1994, he served as
a Director of MSI. Mr. Lothrop also serves as a Director of MEI. Mr. Lothrop
holds a BS in Engineering from the University of Idaho.
Thomas T. Nicholson has served as Vice President and a member of the Board
of Directors of Honda of Seattle and Toyota of Seattle since 1988. Mr.
Nicholson has also served since 1982 as President of Mountain View Equipment
Company and since 1962 has been a partner of CCT Land & Cattle. He has served
on the Company's Board of Directors since May 1980. Mr. Nicholson holds a BS
in Agriculture from the University of Idaho.
Don J. Simplot served as the President of Simplot Financial Corporation, a
wholly-owned subsidiary of the J.R. Simplot Company, from February 1985 until
January 1992. Since 1955, Mr. Don J. Simplot has served in various capacities with the
J.R. Simplot Company and presently serves as a Corporate Vice President. Since
April 1994, he has also served as a member of the Office of the Chairman of
the J.R. Simplot Company. He has served on the Company's Board of Directors since
February 1982. Mr. Don Simplot is also a Director of AirSensors,IMPCO Technologies, Inc.
John R. Simplot founded and served as the Chairman of the Board of Directors
of the J.R. Simplot Company prior to his retirement in April 1994, at which
time he was named Chairman Emeritus. He has served on the Company's Board of
Directors since May 1980. Mr. Simplot also serves as a Director of MEI.
Gordon C. Smith has served as President of Wesmar, Inc., a food service
company, since September 1996 and has served as Secretary and Treasurer of SSI
Management Corp., which manages food service, land, livestock and aircraft
operations, since September 1994. Mr. Smith served in various management
positions from July 1980 until January 1992 for Simplot Financial Corporation,
a wholly-owned subsidiary of the J.R. Simplot Company. From May 1988 until his
retirement in March 1994, Mr. Smith served as the President and Chief
Executive Officer of the J.R. Simplot Company. From February 1982 until February
1984 and since September 1990, he has served on the Company's Board of
Directors. Mr. Smith holds a bachelor's degreeBS in Accounting from Idaho State University.
William P. Weber served in various capacities with Texas Instruments
Incorporated, a semiconductor manufacturing company, and its subsidiaries from
1962 until April 1998. From December 1986 until December 1993 he served as the
President of Texas Instruments Incorporated's worldwide semiconductor
operations and from December 1993, until his retirement in April 1998, he
served as Vice Chairman of Texas Instruments Incorporated. He is a member of
the boardBoard of directorsDirectors of Kmart Corporation and Unigraphics Solutions, Inc. He
has served on the Company's Board of Directors since July 1998. Mr. Weber
holds a BS in Engineering from Lamar University and a MS in Engineering from
Southern Methodist University.
6
There is no family relationship between any director or executive officer of
the Company, except between John R. Simplot and Don J. Simplot, who are father
and son, respectively.
SECTIONSection 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEBeneficial Ownership Reporting Compliance
Section 16(a) of the Securities and Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own beneficially
more than ten percent (10%) of the Common Stock of the Company, to file
reports of ownership and changes of ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Copies of all filed reports are
required to be furnished to the Company pursuant to Section 16(a). Based
solely on the reports received by the Company and on written representations
from reporting persons, the Company believes that the directors, executive
officers, and greater than ten percent (10%) beneficial owners complied with
all applicable filing requirements during the fiscal year ended September 3,
1998.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 30, 1998, the Company completed an acquisition (the
"Acquisition")2,
1999, except for Mr. Kocher. Timely reports on SEC Form 4 (Statement of
substantially allChanges in Beneficial Ownership) were not filed for Mr. Kocher in connection
with a purchase of the semiconductor memory manufacturing
operations of Texas Instruments Incorporated ("TI"). The Acquisition was
consummated through the issuance of debt and equity securities. TI received
28,933,0921,000 shares of the Company's Common Stock $740 million principal amount
of convertible subordinated notes (convertible into approximately 12.3 million
shares of Common Stock) and $210 million principal amount of subordinated
notes. In addition to TI's memory assets, the Company received $550 million in
cash. The Company and TI also entered into a ten-year patent cross license
that commences on January 1,March 25,
1999, and a Securities Rightssubsequent sale of 1,000 shares of the Company's Common Stock on
April 5, 1999.
Certain Relationships and Restrictions
Agreement that gives certain registration rights to TI commencing on March 31,
1999. The Company and TI also entered into a Transition Services Agreement
requiring TI to provide services and support to the Company for specified
periods following the Acquisition. TI will invoice the Company specified
amounts for these various services.Related Transactions
During fiscal 1998, in transactions with TI unrelated to the Acquisition,1999, the Company and its subsidiaries sold equipment to, and
purchased parts for production machineryequipment from, TI and made royalty payments to TI.
On October 19, 1998, the Company issued 15,810,277 stock rights to Intel in
consideration of a $500 million investment in the Company by Intel (the
"Investment"). The stock rights are exchangeable into Class A Common Stock
(upon shareholder approval of such class of stock) or Common Stock. In
connection with the Investment, the Company agreed to make available to Intel
a certain percentage of its semiconductor memory output over a five-year
period, subject to certain limitations. Intel also has the right to designate
a nominee to the Company's Board of Directors, provided such nominee is
acceptable to the Company. See "Proposal 2. Amendment to the Company's
Certificate of Incorporation" for additional information on the Investment.Texas Instruments Incorporated.
During fiscal 1998, in transactions with Intel unrelated to the Investment,1999, the Company and its subsidiaries purchased
microprocessors, chipsets, motherboards and other products from Intel made royalty payments to Intel and sold
semiconductor memory products and personal computer systems to Intel.
Intel exclusively provides the microprocessors used in MEI personal computer
systems. In
addition, Intel shared the cost of qualifying MEI advertising and marketing
expenditures pursuant to a cooperative advertising program sponsored by Intel.
In August 1999, the Company purchased all of the shares of its subsidiary,
Micron Communications, Inc. ("MCC"), which were held by persons other than the
Company. MCC was subsequently merged into the Company. The following executive
officers of the Company received the following amounts from the Company in
exchange for their MCC shares: Mr. Appleton (through Mesa, L.P., a limited
partnership of which Mr. Appleton is the general partner), $169,500; Mr.
Baldwin, $106,300; and Mr. Stover, $154,300. In addition, Kipp A. Bedard, the
Company's Vice President of Corporate Affairs, received $117,800 from the
Company in exchange for his MCC shares.
During fiscal 1998,1999, the Company purchased semiconductor manufacturing
equipment and related services from Lam Research Corporation and sold excess
spare parts to Lam Research Corporation.
During fiscal 1998,1999, J.R. Simplot Company and its subsidiaries purchased
approximately $836,000$809,400 of computer equipment from MEI.
In March 1996, the Company, J.R. Simplot Company, the Surprise Valley
Partnership and United Water of Idaho, Inc. agreed to jointly design,
construct and operate a water pipeline and pump station near the Company's
manufacturing facilities in Boise, Idaho. During fiscal 1998, the Company
contributed1999, Honda of Seattle purchased approximately $1 million to the project$124,700 of
computer equipment from MEI.
Board Meetings and J.R. Simplot Company
contributed approximately $758,000 to the project.
7
During fiscal 1998, MEI paid $686,275 pursuant to a Severance Agreement to
Joseph M. Daltoso, who resigned as MEI's Chairman and Chief Executive Officer
on June 22, 1998. The Severance Agreement provides that during a two-year
transition period Mr. Daltoso will continue to receive all benefits
customarily provided to him while he was employed by MEI, including, but not
limited to, salary, bonuses, executive bonuses, benefits and continued vesting
of any granted stock options. The terms of the Severance Agreement are
substantially similar to those contained in the Severance Agreements entered
into by the Company with its other officers. See "Termination of Employment
Agreements and Change in Control Arrangement."
BOARD MEETINGS AND COMMITTEESCommittees
The Board of Directors of the Company held a total of eightseven meetings during
the fiscal year ended September 3, 1998.2, 1999. The Board of Directors has a standing
Audit Committee and a standing Compensation Committee.
The Audit Committee held one meetingtwo meetings during fiscal 1998.1999. Messrs. Nicholson
Smith and Jerry M. Hess, a former member of the Board of Directors of the
Company,Smith served on the Audit Committee during all of fiscal 1998.1999. On November
23, 1998, Mr. Weber was appointed to the Audit Committee and he served on the
Audit Committee for the remainder of fiscal 1999. The Audit Committee is
primarily responsible for reviewing the services performed by the Company's
independent accountants and evaluating the Company's accounting principles and
system of internal accounting controls.
The Compensation Committee held threefive meetings during fiscal 1998.1999. Mr.
Bagley, Mr. Lothrop Mr. Nicholson and Mr. John SimplotNicholson served on the Compensation Committee
during all of fiscal 1998. Mr. Bagley was appointed to the
Compensation Committee in November 1997 and served on the Compensation
Committee the remainder of fiscal 1998.1999. The Compensation Committee is primarily responsible
for reviewing and approving the compensation for the Company's officers. See
"Report of the Compensation Committee of the Board of Directors Regarding
Executive Compensation."
During fiscal 1998,1999, all incumbent directors attended 75% or more of the
total number of meetings of the Board of Directors and of the total number of
meetings of all committees of the Board on which they served.
87
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
The following table shows all compensation paid to the Company's Chief
Executive Officer and the Company's other four most highly compensated
executive officers who were serving as executive officers at the end of fiscal
19981999 for all services rendered to the Company and its subsidiaries for each of
the last three completed fiscal years:
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------Long-Term
Annual Compensation Compensation
-------------------- ------------
OPTIONS ALL OTHER
NAME AND PRINCIPAL FISCAL SALARY BONUS OTHER ANNUAL GRANTED COMPENSATION
POSITION (1) YEAR (2) (3)(4)(5) COMPENSATION (6)(7)(8)(9) (10)
------------------ ------ --------Other Annual Options All Other
Name and Principal Position Fiscal Year Salary(1) Bonus(2) Compensation Granted(3) Compensation(4)
- --------------------------- ----------- --------- ---------- ------------ ------------ ---------------------------
Steven R. Appleton.... 1998 $658,654 $ 4,246Appleton........ 1999 $605,000 $1,481,605 $ 0 0125,000 $ 3,4741,500
Chairman, CEO & 1998 658,654 4,246 0 0 3,474
President 1997 567,404 2,731,078 0 295,069295,069(5) 5,548
Donald D. Baldwin......... 1999 255,962 737,687 0 90,000 1,500
Vice President 1996 525,769 1,553,179of Sales & 1998 277,404 4,509 0 60,000 29,772
D. Mark Durcan........0 4,730
Marketing(6) 1997 232,645 1,336,409 0 124,090(5) 5,548
Robert M. Donnelly........ 1999 255,962 677,652 0 75,000 1,500
Vice President of Memory 1998 329,710 69,745277,404 1,842 0 0 3,474
CTO & Vice PresidentProducts 1997 200,346 503,539208,558 1,199,230 0 124,090129,251(5) 5,548
Joel J. Kocher............ 1999 448,077 255,768(7) 0 0(8) 3,670
Chairman and CEO of R&D 1996 161,692 200,5201998 220,769 300,362(7) 0 41,081 9,788
Jay L. Hawkins........ 1998 278,248 1,8420(8) 56,772
Micron Electronics, Inc. 1997(9) -- -- -- -- --
Wilbur G. Stover, Jr...... 1999 358,346 874,921 0 0 16,96090,000 1,500
Vice President of 1997 189,328 377,436 0 129,251 11,734
Operations 1996 162,000 124,303 0 1,572 19,493
Wilbur G. Stover,
Jr...................Finance 1998 390,289 2,547 0 0 12,359
Vice President of& CFO 1997 359,423 1,660,868 0 195,073195,073(5) 39,345
Finance 1996 330,384 844,700 0 50,000 15,111
& CFO
Joel J. Kocher........ 1998 220,769 300,362 0 0(11) 56,772
Chairman, CEO, 1997(12) -- -- -- -- --
President & 1996(12) -- -- -- -- --
COO, Micron
Electronics, Inc.
- --------
(1) Represents the Chief Executive Officer and four most highly compensated
executive officers, other than the Chief Executive Officer, in their
respective positions at the end of fiscal 1998.
(2) Includes compensation deferred by the employee under the Company's 401(k)
retirement plan.
(3)(2) In the case of Messrs. Appleton, Durcan, HawkinsBaldwin, Donnelly and Stover, includes
executive bonuses earned and paid during the fiscal year for financial
performance goals relating to previous fiscal years. See the subheading
"Company Performance Bonuses" under the "Report of the Compensation
Committee of the Board of Directors Regarding Executive Compensation."
Also includes profit sharing and bonus compensation paidbonuses for achievement
of performance milestones and the filing and issuance of
patents. (4) In the case of Mr. Kocher,Fiscal 1997 includes amounts paid under MEI's profit
sharing plans and amounts awarded under MEI's Executive Bonus Plan for
fiscal 1998.
(5) Includes amounts paid in fiscal 1997 in connection with amended Severance
Agreements and Agreements Not to Compete in the following amounts: Mr.
Appleton, $1,057,991; Mr. Durcan, $188,008; Mr. Hawkins, $180,268; and
Mr. Stover, $705,969.
(6)as part of a non-recurring
restructuring of executive severance agreements.
(3) Includes options to purchase shares of the Company's Common Stock under
the Company's 1985 Incentive Stock Option Plan and 1994 Stock Option PlanPlan.
(4) In the case of Messrs. Appleton, Baldwin, Donnelly and Stover consists of
Company contributions made on the Nonstatutory Stock Option Plan.
(7) Fiscal 1997 amounts include options granted in exchange for options
granted in fiscal 1996 which were cancelled pursuant to an option
exchange programnamed executive's behalf under the
Company implemented inCompany's 401(k) retirement plan. In the case of Mr. Stover fiscal 1997
("Exchange
Program") inamount includes $33,149 of sabbatical pay. In the following amounts:case of Mr. Appleton, 60,000; Mr. Durcan,
11,081; Mr. Hawkins, 1,572; and Mr. Stover, 50,000. Fiscal 1996 amounts
include the options cancelled in fiscal 1997 pursuant to the Exchange
Program.
9
(8)Kocher,
consists of relocation costs paid by MEI.
(5) Includes options granted at the end of fiscal 1997 as part of an incentive
compensation program for fiscal 1998 in the following amounts: Mr.
Appleton, 70,000; Mr. Durcan, 60,000;Baldwin, 55,000; Mr. Hawkins,Donnelly, 55,000; and Mr.
Stover, 60,000. (9) IncludesAlso includes options grantedawarded as part of a non-recurring
restructuring of executive severance agreements.
(6) Mr. Baldwin has announced his resignation from the Company effective
December 31, 1999.
(7) Mr. Kocher's 1999 bonus was earned in connection with amended Severance Agreementsfiscal 1999 and Agreements Not to Competepaid in the following amounts: Mr. Appleton,
45,069; Mr. Durcan, 8,009; Mr. Hawkins, 7,679;fiscal 2000.
His 1998 bonus was earned in fiscal 1998 and Mr. Stover, 30,073.
(10) In the case of Messrs. Appleton, Durcan, Hawkins and Stover consists of
(i) Company contributions made on the named executive's behalfpaid in fiscal 1999. Also
includes amounts paid under the
Company's 401(k) retirement plan and (ii) cash paid to the named
executive under the Company's time-off plan. In the case ofMEI's profit sharing plans.
(8) During fiscal 1999, Mr. Kocher consistswas granted an option to purchase 50,000
shares of $56,772 of relocation costs paid by MEI.
(11) Mr. KocherMEI Common Stock; during fiscal 1998, he was granted options to
purchase a total of 650,000 shares of MEI Common Stock during fiscal 1998. See "Option Grants in Last Fiscal
Year."Stock. Mr. Kocher does
not have any options to purchase the Company's Common Stock.
(12)(9) Mr. Kocher joined MEI in January 1998.
108
OPTION GRANTS IN LAST FISCAL YEAR
The Named Executive Officers were not grantedfollowing table provides information on options to purchase the
Company's Common Stock duringgranted to the Named Executive Officers in fiscal 1998. However,1999:
Individual Grants
--------------------------------------
Percent of Potential Realizable
Total Value at Assumed
Options Exercise Annual Rates of Stock
Granted to or Base Price Appreciation
Employees Price for Option Term(2)
Options in Fiscal Per Expiration ---------------------
Name Granted Year Share(1) Date 5% 10%
---- ------- ---------- -------- ---------- ---------- ----------
Steven R. Appleton...... 125,000 1.47% $28.037 9/21/2008 $2,204,026 $5,585,460
Donald D. Baldwin....... 90,000 1.06% 28.037 9/21/2008 1,586,898 4,021,531
Robert M. Donnelly...... 75,000 0.88% 28.037 9/21/2008 1,322,415 3,351,276
Joel J. Kocher(3)....... 0 -- -- -- -- --
Wilbur G. Stover, Jr.... 90,000 1.06% 28.037 9/21/2008 1,586,898 4,021,531
- --------
(1) All options were granted with an exercise price equal to the fair market
value of the Company's Common Stock on September 21, 1998, the date of
grant.
(2) Potential realizable value is based on an assumption that the stock price
for the Common Stock appreciates at the annual rate shown (compounded
annually) from the date of grant until the end of fiscal 1997,
options were granted as partthe option term.
Potential realizable value is shown net of an incentive compensation program for fiscal
1998 inexercise price. The numbers
are calculated based on the following amounts: Steven R. Appleton, 70,000; D. Mark Durcan,
60,000; Jay L. Hawkins, 55,000;regulations promulgated by the Commission and
Wilbur G. Stover, Jr., 60,000. Alldo not reflect the Company's estimate of future stock price growth.
(3) Mr. Kocher, the foregoing options were granted at fair market valueChairman and have an exercise price
of $45.775. Joel J. Kocher, Chairman, President, Chief Executive Officer and
Chief Operating OfficerCEO of MEI, was grantedhas not received options to
purchase a total of
650,000the Company's Common Stock. During fiscal 1999, Mr. Kocher was
granted an option to purchase 50,000 shares of MEI Common Stock during fiscal 1998. Of these 650,000
options, 500,000 were granted under MEI's 1995 Stock Option Plan and 150,000
were granted as non-plan grants outside of the MEI 1995 Stock Option Plan. A
total of 400,000 of these options vest at a rate of 20% each year for five
years from the date of grant. The remaining 250,000 options vest after
completion by Mr. Kocher of seven years of employment with MEI, subject to
immediate vesting if MEI achieves certain performance criteria relating to net
revenue, gross margin, net income and cash balance increases. Mr. Kocher's
options were granted at fair market value and have an
exercise price of $9.0062$13.275 per share.share by MEI's Board of Directors.
9
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAROPTION VALUES
The following table provides information regarding option exercises in
fiscal 19981999 by the Named Executive Officers and the value of such officers'
unexercised options and SARs at September 3, 1998:2, 1999:
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
NUMBER OPTIONS/SARS OPTIONS/SARS
OF AT FISCAL AT FISCAL
SHARES YEAR-END YEAR-END(1)
ACQUIRED ---------------------- --------------------
ON VALUE EXERCISABLEValue of
Number of Unexercised
Unexercised In-The-Money
Options at Fiscal Options at Fiscal
Number of Year-End Year-End(2)
Shares ----------------- -----------------
Acquired on Value Exercisable (E) EXERCISABLEExercisable (E)
NAME EXERCISE REALIZED UNEXERCISABLEName Exercise Realized(1) Unexercisable (U) UNEXERCISABLEUnexercisable (U)
---- -------- -------- ---------------------- ------------------------------- ----------- ----------------- -----------------
Steven R. Appleton...... 42,114 $996,754 367,555 (E) $3,891,965 (E)
140,000 (U) 143,880 (U)152,606 $8,495,999 228,949(E) $11,999,947(E)
251,000(U) 11,197,252(U)
Donald D. Mark Durcan..........Baldwin....... 69,000 3,989,681 128,191(E) 6,374,619(E)
180,800(U) 7,968,338(U)
Robert M. Donnelly...... 39,000 1,200,150 41,520(E) 1,964,585(E)
161,800(U) 7,085,743(U)
Joel J. Kocher(3)....... 0 0 81,513 (E) 440,678 (E)
99,155 (U) 8,072 (U)
Jay L. Hawkins.......... 5,000 131,925 143,220 (E) 1,177,153 (E)
98,029 (U) 86,328 (U)0 0
Wilbur G. Stover, Jr.... 0 0 175,275 (E) 1,314,681 (E)
115,400 (U) 86,328 (U)
Joel J. Kocher (2)...... 0 0 0 (E) 0 (E)
0 (U) 0 (U)Jr. .. 93,459 3,804,503 93,816(E) 4,095,626(E)
193,400(U) 8,508,875(U)
- --------
(1) The Value Realized was calculated by determining the difference between
the fair market value of the securities underlying the options and the
exercise price of the options at exercise, regardless of whether the
shares acquired on exercise were held or sold.
(2) Represents the difference between the exercise price of the options and
$24.175,$75.25, the average closing price of the Company's Common Stock for the
five business days precedingon September 3, 1998.
(2)2,
1999.
(3) Mr. Kocher does not have any options to purchase the Company's Common
Stock. At fiscal year end, Mr. Kocher hashad exercisable options to purchase
650,000180,000 shares of MEI Common Stock which had a value of $3,245,970 at fiscal year end.$111,384 and
unexercisable options to purchase 520,000 shares of MEI Common Stock
which had a value of $290,836. Mr. Kocher did not exercise any MEI
options during fiscal 1998.
COMPENSATION OF DIRECTORS1999.
Compensation of Directors
Directors who are employees of the Company receive no additional or special
remuneration for their service as directors. Directors who are not employees
of the Company are entitled to receive an annual retainer of $50,000 which is
paid monthly.$50,000. Pursuant
to the Company's 1998 Non-Employee Directors Stock Incentive Plan ("DSIP"),
non-employee directors may elect to take some or all of their annual retainer
in the form of cash, shares of Common Stock or deferred rights to receive
Common Stock upon termination as a director. The Company also reimburses
directors for travel and lodging expenses, if any, incurred in connection with
attendance at Board meetings. Directors do not receive any additional or
special remuneration for their service on any of the committees established by
the Board of Directors.
11
In June 1997, the Board of Directors amended the Company's 1994 Stock Option
Plan (the "1994 Plan") to allow directors to participate in the 1994 Plan and
approved a program whereby non-employee directors are granted (i) an initial
option to purchase 10,000 shares upon the later to occur of the date of their
appointment to the Board or June 30, 1997, the date of theon which resolutions
approving the program were passed by the Board of Directors, and (ii) an
annual subsequent option to purchase 3,000 shares of the Company's Common
Stock. The options granted to the non-employee directors are fully vested on
the date of grant and have an exercise price equal to the fair market value at
the date of grant. As of November 16, 1998,19, 1999, each of Messrs. Bagley, Lothrop,
Nicholson Donand Simplot John Simplot and
Smith had options outstanding to purchase 16,00019,000 shares at a
weighted average exercise price of $37.691$44.35 per share andshare. Mr. WeberSmith had options
outstanding to purchase 13,0009,000 shares at a weighted average exercise price of
$29.248$48.09 per share.
10
Mr. Lothrop and Mr. Weber havehas entered into agreementsan agreement with the Company pursuant to which
theirhis receipt of the director fees he earned prior to January 1999 is deferred
until the first business day of the calendar year in which theyhe no longer serveserves
as directorsa director of the Company. Deferred amounts, in the case of his termination
of service as a director, are paid in five annual installments. In the event
of death, the balance then owed is paid in a single sum as soon as practicable
following the
death of the director or former director.his death. All amounts deferred are recorded as a liability in the
records of the Company. Such amounts accrue interest monthly at a rate per
annum equal to the Company's average investment portfolio yield for such
month.
TERMINATION OF EMPLOYMENT AGREEMENTS AND CHANGE IN CONTROL ARRANGEMENTTermination of Employment Agreements and Change in Control Arrangement
Severance Agreements
The Company has entered into Severance Agreements with each of the Named
Executive Officers and certain other officers of the Company relating to
termination and compensation upon termination. The Severance Agreements allow
either the Company or the officer to terminate the officer's active employment with
the Company or the officer's status as an officer of the Company, for any
reason, voluntary or involuntary, with or without cause, by providing notice
to that effect in writing to the other party. The Severance Agreements
generally provide a six month "Transition Period" which begins upon
termination of the officer's active employment with the Company or status as an
officer of the Company. Mr. Kocher's agreement, which is between Mr. Kocher
and MEI, provides for a twelve month Transition Period. During the Transition
Period, the officer is entitled to receive all benefits customarily provided
to such officer while employed including, but not limited to, salary, bonuses,
executive bonuses, benefits and continued vesting of any granted stock
options. "Customarily provided" refers to the Company's practices and plans
with respect to the officer's benefits and compensation in effect as of the
date of the officer's date of termination of active employment or status as an
officer ("Termination Date"). However, such terminated officers are not
entitled to any new grants of interest in future executive bonus pools, any
new grants of stock options, and payment of any compensation that would be
deferred past the Transition Period due to payment criteria of an incentive
program, as those criteria existed as of the Termination Date.
Change in Control Arrangement
On October 31, 1988, the Company's Board of Directors adopted an arrangement
whereby, upon any change in control of the Company, all unvested shares and
options shall vest, and all unpaid bonuses subject to installments shall be
immediately due and payable. "Change in Control" is defined under this
arrangement to mean the acquisition by any person or entity, directly,
indirectly or beneficially, acting alone or in concert, of more than thirty-
five percent (35%) of the Common Stock of the Company then outstanding.
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN ANY OF THE COMPANY'S
PREVIOUS FILINGS UNDER THE SECURITIES ACT OFMr. Kocher is subject to the change of control provisions adopted by MEI's
Board of Directors. For MEI, a "Change of Control," for purposes other than
MEI's 1995 Stock Option Plan, means the acquisition by any person or entity of
securities of MEI which results in such person or entity owning or controlling
more of the combined voting power of MEI than does the Company and owning or
controlling more than 35% of the voting securities of MEI or, subject to the
Company owning or controlling more than 35% of the securities of MEI, the
acquisition by any person or entity of more than 35% of the common stock of
the Company.
Upon a Change of Control of MEI, a cash lump-sum payment in the amount equal
to the salary payable under the MEI officer's Severance Agreements shall be
made to each MEI officer in exchange for any further salary obligations
thereunder. In addition, the chief executive officer and certain additional
officers of MEI and its subsidiaries shall be entitled to receive two years
base salary, unless the relevant officer receives a comparable offer of
employment. MEI shall also pay any allocated MEI executive bonuses at the
maximum level established by MEI's Board of Directors as of the most recent
allocation and any bonuses that have been awarded for previous years but have
not previously been paid. In connection with such payments, MEI shall pay all
employees such amounts, if any, that are necessary to place such employees in
the same after-tax position as the employees would have been in had no excise
tax been imposed under Section 280G of the Internal Revenue Code of 1986, as
amended.
11
A Change of Control for purposes of MEI's 1995 Stock Option Plan means the
acquisition, by any person or entity, of securities of MEI which results in
such person or entity owning or controlling more of the combined voting power
of MEI than does the Company and owning or controlling more than 20% of the
voting securities of MEI or the acquisition by any person or entity of more
than 35% of the Common Stock of the Company. The MEI 1995 Stock Option Plan
provides that, in the event of a Change of Control of MEI, the unexercised
portion of any options under such plan shall be immediately exercisable.
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, AS AMENDED, OR THE
SECURITIES EXCHANGE ACT OFas amended, or the
Securities Exchange Act of 1934, AS AMENDED, THAT MIGHT INCORPORATE FUTURE
FILINGS, INCLUDING THIS PROXY STATEMENT, IN WHOLE OR IN PART, THE FOLLOWING
REPORT AND THE PERFORMANCE GRAPH SET FORTH HEREIN SHALL NOT BE INCORPORATED BY
REFERENCE INTO ANY SUCH FILINGS.
12
as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the performance graph set forth herein shall not be incorporated by
reference into any such filings.
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
REGARDING EXECUTIVE COMPENSATION
COMPENSATION COMMITTEECompensation Committee
This report has been prepared by the Compensation Committee of the Board of
Directors of the Company (the "Committee"). James W.Messrs. Bagley, Robert A.
Lothrop Thomas T.and
Nicholson and John R. Simplot serve as members of the Committee. The Committee meets at least
annually or more frequently as the Company's Board of Directors may request.
The Committee's primary responsibilities include the review of compensation,
consisting of salary, bonuses, benefits, stock option grants and other
compensation, of the Company's executive officers. Compensation for the
Company's executive officers for fiscal 1998,1999, including base salary,
performance bonuses, stock option grants, and other compensation, were
determined by the Committee and reviewed and approved by the Company's Board
of Directors. The compensation of Joel J. Kocher, Chairman Chief Executive Officer, President and Chief OperatingExecutive
Officer, of MEI, was determined by MEI's Compensation Committee and reviewed
and approved by MEI's Board of Directors.
EXECUTIVE OFFICER COMPENSATIONExecutive Officer Compensation
The executive officer compensation programs utilized by the Company are
described below for the purpose of providing a general understanding of the
various components of executive officer compensation. These executive officer
compensation programs are designed to attract, retain and reward highly
qualified executive officers who are important to the Company's success and to
provide incentives relating directly to the financial performance and long-
term growth of the Company and its subsidiaries. The various components of the
executive officer compensation programs used by the Company are, in most
cases, the same as those made available generally to employees of the Company
and its subsidiaries. The following is a summary of the executive officer
compensation programs:
Cash Compensation
Base Salary. Base salaries are established primarily upon an evaluation of
the executive officer's position and contributions to the Company, including
(i) individual performance, (ii) level of responsibility, (iii) technical
expertise, (iv) length of service, (v) Company performance and (vi) industry
compensation levels.
Company Performance Bonuses. Cash bonuses to executive officers are intended
to reward executive officers for the Company's financial performance during
the fiscal year. Accordingly, bonuses are determined based on performance
criteria established at the beginning of each fiscal year formulated primarily
as a percentage of the Company's profits at the end of the fiscal year.
Performance bonus percentages are established according to a subjective
analysis of each executive officer's contribution to the Company according to
the same criteria utilized to determine base salary. For fiscal 1994 and 1995
bonuses and profits were determined on a consolidated basis. For fiscal 1996,
1997, 1998 and 19981999 bonuses and profits, if any, were determined on an
unconsolidated basis (excluding(i.e. excluding the results of operations of MEI, Micron
Quantum Devices, Inc. and Micron Communications, Inc.). The Company did not pay anyNo performance bonuses
inwere earned for fiscal 1998 and fiscal 1999 as a result of the
12
Company's financial performance for such period.periods. Performance bonuses for
fiscal 1994, 1995, 1996 and 1997 are generally paid in installments over a
five year period.period and are subject to payment restrictions, including that the
Company be profitable in the fiscal quarter immediately prior to payment, as
described below. However, bonusesbonus installments attributable to the Company's
fiscal results in 1995 and 1996 that would have otherwise been payable in 1999
and 2000 pursuant to the performance bonuses for fiscal 1995
and 1996 were paid in fiscal 1997 in connection with Amendments to Severance
Agreements and Agreements Not to Compete. See footnote 5The performance bonuses paid in
fiscal 1999 relate to the "Summary
Compensation Table."Company's performance in fiscal 1994, 1995, 1996 and
1997 and represent amounts that would have been payable in fiscal 1998 but
were delayed until after the Company's first profitable quarter in fiscal
1999. Bonuses for fiscal 1999,2000, if any, will be paid in a lump sum payment.
Profit Sharing. The Company distributes ten percent (10%) of the Company's
quarterly after-tax profits (determined on an unconsolidated basis) to all
eligible employees of the Company. The plan provides for equal allocation
among all eligible employees of the first $500,000 of amounts eligible for
distribution. Amounts exceeding $500,000 are distributed pro rata to eligible
employees on the basis of base salary of eligible employees.
Incentive Bonuses. From time to time, incentive cash bonuses are approved
for payment to employees, including executive officers, for the achievement of
milestones, the completion of projects identified as contributing
substantially to the Company's success, and the attainment of technological
advances.
13
Equity Compensation
In order to provide incentive to the executive officers and employees of the
Company related to long-term growth in the value of the Company's Common
Stock, the Company issues incentive stock options and nonstatutory stock
options to such persons under the Company's 1994 Stock Option Plan,
Nonstatutory Stock Option Plan, 1997 Nonstatutory Stock Option Plan and 1998
Nonstatutory Stock Option Plan (collectively, the "Stock Plans"). The
determination of who receives stock options under the Stock Plans and the
number of stock options granted to each such recipient is based upon the same
criteria utilized to determine base salary.
Other Compensation
In addition to cash and equity compensation programs, the executive officers
participate in various other employee benefit plans, including, but not
limited to, a time-off plan. Under the time-off plan, all employees of the
Company, including executive officers, are allowed to accumulate a
predetermined nondiscriminatory number of hours for vacation, holiday, sick
time, emergencies and personal needs. Executive officer participation in
various professional organizations and associations may also be funded by the
Company.
Payment/Exercise Restrictions
In an effort to encourage employees and executive officers to remain
employed by the Company and to promote Company performance, many compensation
programs for employees and executive officers contain provisions which subject
the payment or realization of benefits under such programs to certain
conditions. In this regard, Company performance bonuses awarded to each
executive officer are earned and paid subject to the following conditions: (i)
the Company is profitable in the year offiscal quarter immediately prior to payment;
(ii) the individual remainsis employed by the Company or a subsidiary of the Company;Company
at the time of payment (regardless of the fiscal year results for which the
payment is attributable); and (iii) the Committee's certification that the
executive officer's goals were achieved. Likewise, stock options granted to
executive officers typically have a term of ten years and vest twentytwenty-five
percent (20%(25%) each year for a period of fivefour years from the date of grant.
CEO COMPENSATIONCompensation
Steven R. Appleton's annual base salary was set at $650,000 in July 1997 and
was based primarily on Mr. Appleton's overall and anticipated performance, the
Company's performance, and the Committee's assessment of the compensation
practices of other semiconductor manufacturing companies. Mr. Appleton did not
receiveearn any cash bonus payments pursuant to Company Performance Bonuses for
fiscal 1998 or 1999. Mr. Appleton received a cash bonus of $1,478,633 in
fiscal 1998.1999 which was related to the Company's
13
performance in fiscal 1994, 1995, 1996 and 1997. See the description of
"Company Performance Bonuses" and "Payment/Exercise Restrictions" in this
Report.
At the end ofIn fiscal 1997,1999, Mr. Appleton was granted options to purchase 70,000 shares as part of an incentive compensation program for fiscal 1998
(the "Fiscal 1998 Options").125,000 shares.
The Company granted stock options to other executive officers at thatthe same
time. The Committee did not have a plan pursuant to which a predetermined
number of the Fiscal 1998 Optionsstock options were allocated to Mr. Appleton. The actual number of
the Fiscal 1998 Optionsstock options granted to Mr. Appleton was based upon subjective and
objective factors, such as his individual performance, his position in the
Company relative to the other executive officers who received option grants on
the same date, the Company's overall performance, his length of service with
the Company, his past contributions to the success of the Company, his
expected contributions to the future success of the Company and industry
practices.
Compensation Committee of the Board of
Directors
James W. Bagley
Robert A. Lothrop
Thomas T. Nicholson
John R. Simplot
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATIONCompensation Committee Interlocks and Insider Participation
During fiscal 1998,1999, no members of the Compensation Committee were officers
or employees of the Company or any of its subsidiaries.
14
PERFORMANCE GRAPH
The following graph illustrates a five-year comparison of cumulative total
returns for the Company's Common Stock, the S&P 500 Composite Index, and the
S&P Electronics (Semiconductors) Index from August 31, 1993, through August
31, 1998. In September 1994, the Company was added to the S&P Electronics
(Semiconductors) Index. For purposepurposes of this disclosure, current companies of
S&P Electronics (Semiconductors) Index include Advanced Micro Devices, Inc.;
Intel Corporation; LSI Logic Corporation; Micron Technology, Inc.; National
Semiconductor Corporation; and Texas Instruments Incorporated.
Note: Management cautions that the stock price performance information shown
in the graph below is provided as of fiscal year-end and may not be indicative
of current stock price levels or future stock price performance.
[PERFORMANCE GRAPH OF MICRON TECHOLOGY, INC. APPEARS HERE]CHART]
The Company operates on a 52/53 week fiscal year which ends on the Thursday
closest to August 31. Accordingly, the last trading day of the Company's
fiscal year varies. For consistent presentation and comparison to the industry
indices shown herein, the Company has calculated its stock performance graph
assuming an August 31 year-end. The performance graph assumes $100 invested on
August 31, 1993,1994, in Common Stock of Micron Technology, Inc., the S&P 500
Composite Index, and the S&P Electronics (Semiconductors) Index. Any dividends
paid during the period presented are assumed to be reinvested. The performancePerformance
was plotted using the following data:
MICRON TECHNOLOGY, INC.
STOCK PERFORMANCE GRAPHMicron Technology, Inc.
Stock Performance Graph
FISCAL YEAR 1998
-----------------------------------------
1993Fiscal Year 1999
-----------------------------
1994 1995 1996 1997 1998 ------ ------ ------ ------ ------ ------1999
---- ---- ---- ---- ---- ----
Micron Technology, Inc.............. 100.00 189.24 726.02 215.66 421.84 215.66Inc............................ 100 384 114 223 114 375
S&P 500 Composite Index........................... 100 121 144 203 219 307
S&P Electronics (Semiconductors) Index.............................. 100.00 105.85 188.29 144.00 327.80 240.88
S&P 500 Composite Index............. 100.00 105.47 128.09 152.08 213.90 231.21Index............ 100 178 158 361 265 665
15
PROPOSAL 2. AMENDMENT TO THE COMPANY'S CERTIFICATERENEWAL OF INCORPORATION
GENERAL
The Company is seeking shareholder approval of an amendment to its
Certificate of Incorporation (the "Amendment") creating a new class of
32,000,000 shares of capital stock denominated as "Class A Common Stock,"
having the rights and preferences set forth in the form of the Amendment
attached hereto as Appendix A and summarized below. The Summary is qualified
in its entirety by the full text of the Amendment. If the Amendment is
approved by shareholders, the Company proposes to file it promptly with the
Secretary of State of the State of Delaware and, thereafter, the Company will
be obligated to issue shares of Class A Common Stock to Intel Corporation
("Intel") in exchange for stock rights currently held by Intel.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE APPROVAL OF THE AMENDMENT TOCOMPANY'S CURRENT EXECUTIVE BONUS
PLAN FOR PURPOSES OF SECTION 162(m) OF THE COMPANY'S CERTIFICATE OF INCORPORATION.
TRANSACTION WITH INTEL CORPORATION
On October 19, 1998,INTERNAL REVENUE CODE
At the 1994 Annual Meeting of Shareholders, the shareholders approved the
Micron Technology, Inc. Executive Bonus Plan (the "Plan") in order to enable
the Company issued to Intel 15,810,277 stock rights
("Rights") exchangeable into non-voting Class A Common Stock (upon shareholder
approval of such class of stock), or if shareholder approval is not obtained,
into Common Stockqualify payments made to executives pursuant to the Plan as
deductible for federal income tax purposes in accordance with Section 162(m)
of the Company, for a purchase priceInternal Revenue Code of $500 million. The
Rights at the time of issuance represented approximately 6% of1986, as amended. Section 162(m) limits the
Company's outstanding Common Stock. The Company agreed with Intel to seek shareholder
approvaldeduction for federal income tax purposes of the Amendment to provide for the authorizationcompensation in excess
of Class A Common
Stock. The Class A Common Stock (or Rights, if shareholder approval is not
obtained) will automatically be converted into (or exchanged for) the
Company's Common Stock upon a transfer by Intel to a holder other than one of
its 90% or more owned subsidiaries. In consideration for Intel's investment,
in addition to proceeds received, the Company has agreed to certain goals for
the development and production of direct Rambus DRAM ("RDRAM") products and to
certain related capital expenditures and to make available to Intel a portion
of its semiconductor memory output over a five-year period, subject to certain
limitations. The Company and Intel entered into a securities rights and
restrictions agreement which provides Intel with certain registration rights
and places certain restrictions on Intel's voting rights and other activities
with respect to the shares of Class A Common Stock (or Common Stock). Intel's
registration rights begin on March 31, 1999. Intel also has the right to
designate a nominee$1,000,000 paid to the Company's Board of Directors, provided such nominee
is acceptable toChief Executive Officer and its four
highest paid executives unless the Company.
TERMS OF CLASS A COMMON STOCK
Voting. The holders of shares of Class A Common Stock will have no voting
rights except as provided by the Delaware General Corporation Law. Under
Section 242(b)(2) of Delaware General Corporation law, the holders of Class A
Common Stock shall be entitled to vote as a class upon a proposed amendment to
the Class A Common Stock if the amendment would increase or decrease the
aggregate number of shares of Class A Common Stock, increase or decrease the
par value of the Class A Common Stock, or alter or change the powers,
preferences or special rights of the Class A Common Stock to adversely affect
the holders.
Conversion. The Class A Common Stock is convertible into shares of Common
Stock at a conversion ratio of one-to-one, subject to adjustment upon the
occurrence of certain events or circumstances as summarized. An amount equal
to the fair market value of one share of Common Stock, as determined in good
faith by the Board of Directors, will be paid in lieu of any fractional
shares. In the event the Class A Common Stock is transferred to a person other
than Intel or a 90% owned subsidiary of Intel, each share of Class A Common
Stock automatically converts into shares of Common Stock at the applicable
conversion ratio.
The conversion ratio is subject to adjustment in the event of any
subdivision (by stock split, stock dividend or otherwise) of the Common Stock
or any combination of the Class A Common Stock (by reverse stock split or
otherwise) or any combination of the Common Stock (by reverse stock split or
otherwise) or any subdivision of
16
the Class A Common Stock (by stock split, stock dividend or otherwise). In
addition, the conversion ratio is subject to special adjustments, in
accordance with formulas set forth in the Amendment, in the event the Company
fails to meet certain agreed upon capital expenditure goals or RDRAM
production goals and the average price of the Company's Common Stock at the
time of adjustment is lower than Intel's original purchase price. The capital
expenditure and production goals are subject to adjustmentplans under certain
circumstances. The Company may elect to pay cash in an amount equal to the
value of the additional shares issuable as a result of a special adjustment in
lieu of such special adjustment.
The special conversion rate adjustments will be limited to the extent
required to ensure (1) that the value of additional shares of Common Stock and
other securities or property and any related payments (including any cash
payments in lieu of special adjustments), together with any shares of Common
Stock and other securities or property and any related payments as a result of
the special conversion rate adjustments with respect to the Rights, does not
exceed a maximum aggregate adjustment amount of $150 million (with the value
of such additional shares, securities and property measured as set forth in
the Amendment); and (2) that the aggregate number of shares of Common Stock
issued or issuable upon conversion of Class A Common Stock (or exercise of the
Rights) does not exceed the lesser of (i) 19.9% of the shares of Common Stock
outstanding on the closing date of the issuance of the Rights and (ii)
31,620,554 shares of Common Stock. No special conversion rate adjustments will
occur if (i) the Company achieves the production and capital expenditure goals
or (ii) the average price of the Company's Common Stock is higher than $31.625
(the market price of the Company's Common Stock at the time of the investment)
for the twenty day period ending two days prior to the goal achievement date.
The conversion rights are also subject to adjustment in the event of any
reorganization, reclassification or change of shares of the Common Stock
(other than a change in par value or from par value to no par value as a
result of a subdivision or combination), or any consolidation of the Company
with one or more corporations or a merger of the Company with another
corporation (other than a consolidation or merger in which the Companycompensation was paid
meets the requirements of Section 162(m). A compensation plan which is
the
resulting or surviving corporationperformance based and which does not result in any
reclassification or change of outstanding shares of Common Stock).
Dividends. In the event any dividend or other distribution payable in cash
or other property is declared on the Common Stock (other than any dividend or
distribution that results in an adjustment to the conversion ratio) each
holder of shares of Class A Common Stock on the record date for such dividend
or distribution will be entitled to receive on the date of payment or
distribution of such dividend or other distribution the same cash or other
property which such holder would have received if on such record date such
holder was the holder of record of the number (including any cash payments for
fractional shares of Common Stock) of shares of Common Stock into which the
shares of Class A Common Stock then held by such holder are then convertible.
Sinking Fund. No sinking fund is provided for the Class A Common Stock.
Redemption. The Class A Common Stock is not redeemable.
Transfer of Class A Common Stock. No person or entity holding shares of
Class A Common Stock may transfer, sell, assign, devise or bequeath such Class
A Common Stock, and the Company and the transfer agent for the Class A Common
Stock shall not register the transfer of such shares of Class A Common Stock,
whether by sale, assignment, gift, devise, bequest, appointment or otherwise,
except to the Company, Intel or a 90% owned subsidiary of Intel, unless such
transfer results in such shares of Class A Common Stock automatically
converting into Common Stock.
Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company, the
holders of each share of Class A Common Stock will be entitled to share
ratably in any distribution of any of the assets or funds of the Company to
the holders of the Common Stock (each share of the Class A Common Stock being
treated as the number of shares of Common Stock into which it could then be
converted for such purpose).
17
VOTE REQUIRED TO APPROVE THE AMENDMENT TO THE COMPANY'S CERTIFICATE OF
INCORPORATION
Approval of the Amendment requires the affirmative vote of the holders of a
majority of the Company's outstanding Common Stock. If the Amendment is
approved upon filing of the Amendment with the Secretary of State of the
State of Delaware, the Rights will be exchangeable for and represent only the
right to receive shares of Class A Common Stock in exchange for the Rights. In
the event the Company's shareholders do not approve the Amendment, the Rights
will remain exchangeable into the Company's Common Stock.
PROPOSAL 3. AMENDMENT TO EMPLOYEE STOCK PURCHASE PLAN
GENERAL
The 1989 Employee Stock Purchase Plan (the "Purchase Plan") was adopted by
the Board of Directors in October 1988 and approved by the shareholders in
January 1989. A total of 6,750,000 shares of Common Stock have been reserved
for issuance under the Purchase Plan. As of November 16, 1998, 6,541,520
shares had been purchased pursuant to the Purchase Plan and 208,480 shares
were available for future issuance.
In July 1998, the Board of Directors approved an amendment to the Purchase
Plan to increase the number of shares reserved for issuance thereunder by an
additional 2,500,000 shares, subject to approval by the Company's shareholders at least once
every five (5) years will not be subject to the 1998deduction limit. Therefore, in
order to fully deduct future payments made under the Plan, the Board of
Directors of the Company is requesting that shareholders approve for another
five years the Executive Bonus Plan at the Annual Meeting.
AThe following is a summary of the Purchaseterms of the Executive Bonus Plan. The
Executive Bonus Plan is set forth below.
Theattached as Appendix A to this Proxy Statement, and
the following summary is qualified in its entirety by reference to it.
Purpose
The Plan is designed to attract, retain, and reward highly qualified
executives who are important to the full textCompany's success and to provide
incentives relating directly to the financial performance and long-term growth
of the Purchase Plan
which is attached hereto as Appendix B.
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" APPROVAL OF THE AMENDMENT TO
THE COMPANY'S 1989 STOCK PURCHASE PLAN.
PURPOSE
The purpose of the Purchase Plan is to provide employees of the Company and
its subsidiaries with an opportunity to purchase Common Stock of the Company
through payroll deductions. The Purchase Plan provides for one offering during
each three-month period.
ELIGIBILITY
Any personCompany.
Eligible Participants
Individuals who is employed by the Company, or any subsidiary of the Company
designated by the Company's Board of Directors, for at least twenty (20) hours
per week and five (5) months per calendar year and has been employed by the
Company for at least one month prior to the first day of each offering period
isare eligible to participate in the Purchase Plan. Due to requirements of
Italian law,Plan include the
executive officers and certain other key employees of the Company's Italian subsidiaryCompany as may participate
in the Purchase Plan even if they have not been employed for at least twenty
(20) hours per week and five (5) months per calendar year. As of October 1998,
approximately 12,300 persons were employedbe
determined by the Company and its designated
subsidiaries.
OFFERING DATES
The Purchase Plan provides for one offering during each three-month periodCompensation Committee of the Purchase Plan. Each such offering period is of three (3) months
duration. The offering periods commence on January 1, April 1, July 1, and
October 1 of each year and terminate on the last day of each three-month
offering. The Board of Directors hasDirectors.
Individuals subject to the power to alter the durationreporting requirements of Section 16 of the
offering periods without shareholder approval.
PARTICIPATION IN THE PLAN
Eligible employees become participantsSecurities Exchange Act of 1934 ("Exchange Act") are considered to be
executive officers for purposes of the Plan.
Administration
The Plan is administered by the Compensation Committee (the "Committee") of
the Board of Directors. The present members of the Committee are James W.
Bagley, Robert A. Lothrop and Thomas T. Nicholson, all of whom are deemed to
be outside directors of the Company, as defined under Section 162(m). None of
the members receive compensation from the Company in any capacity other than
as a director of the Purchase Plan by deliveringCompany.
Promptly after the beginning of the fiscal year the Committee determines (i)
the percentage or other amount related to the Company's payroll or administration office a subscription agreement
authorizing payroll deductions at least ten (10) business days prior toprofits available for
award under the applicable offering date. An employee who becomesPlan (the Company's consolidated after-tax net profits); (ii)
the executives eligible to participate in
the Purchase Plan after the commencement of an offering can elect to
participate in the Purchase Plan upon the commencement of the next offering.
PURCHASE PRICE
The purchase price per share in an offering under the Purchase Plan is the
lower of 85% of the fair market value of a share of Common Stockparticipate; (iii) each executive's bonus based on
the first
date of an offering period, or 85% of the fair market value of a
18
share of Common Stock on the last date of the offering period. The fair market
value of a share of Common Stock on a given date is based upon the average
reported closing price on the NYSECompany's profits for the five (5) business days preceding
such date as reported infiscal year; and (iv) the frequency at which
each bonus will be paid when attained.
The Wall Street Journal. The fair market valuemaximum bonus amount that can be paid to any executive with respect to
any one fiscal year results cannot exceed the greater of $2,000,000 or two
percent (2%) of the Company's stock on November 16, 1998 was $45.587.
PAYMENT OF PURCHASE PRICE; PAYROLL DEDUCTIONS
The purchase price ofconsolidated after-tax net profits. Bonuses will
be paid only when the shares is accumulated by payroll deductions overCommittee certifies in writing that the offering period. The deductions cannot exceed twenty percent (20%), or
such other rate as determined from time to time by the Board of Directors, of
a participant's compensation. Participants may discontinue their participation
at any time during an offering period but may not otherwise change their rate
of payroll deduction during an offering period. Payroll deductions commence on
the first payday following the offering date and continue at the same rate
until the end of the offering period unless sooner terminated as provided in
the Purchase Plan.
PURCHASE OF STOCK; EXERCISE OF OPTION
By executing a subscription agreement to participate in the Purchase Plan,
an employee is entitled to have shares placed under option. The maximum number
of shares placed under option to a participant in an offering is that number
arrived at by dividing the amount representing accumulated payroll deductions
which the participantprofitability
requirement has elected to have withheld for the offering period by
the lower of (i) 85% of the fair market value of a share of Common Stock on
the first date of the offering period, or (ii) 85% of the fair market value of
a share of Common Stock on the last date of the offering period, as long as
the total number of shares issued to a participant of any offering period does
not exceed a number determined by dividing $6,250 by the market value of a
share of Common Stock on the offering date. See "Purchase Price," "Payment of
Purchase Price; Payroll Deductions" for additional limitations on payroll
deductions. Unless an employee's participation is discontinued, the option for
the purchase of shares is exercised automatically at the end of the offering
period at the applicable price. See "Withdrawal."
Notwithstanding the foregoing, no employee is permitted to subscribe for
shares under the Purchase Plan if, immediately after the grant of the option,
the employee would own five percent (5%) or more of the voting stock or value
of all classes of stock of the Company or its majority-owned subsidiaries
(including stock which can be purchased through subscriptions under the
Purchase Plan or pursuant to any other option), or if the grant of the option
would permit the employee to buy pursuant to the Purchase Plan more than
$6,250 worth of stock (determined at the fair market value of the shares at
the time the option is granted) in any three-month offering period.
Furthermore, if the number of shares placed under option at the beginning of
an offering period exceeds the number of shares available under the Purchase
Plan, a pro rata allocation of the shares remaining is made in an as equitable
a manner as is practicable.
RESTRICTION ON TRANSFER OF SHARES
Shares purchased upon exercise of a participant's option may not be
transferred by the participant for a period of one (1) year from the exercise
date. This transfer restriction may be earlier terminated inbeen met. In the event of a participant's permanent disability or death, or upon the involuntary transfer
of the shares, including involuntary transfer due to divorce, judicial
declaration of insolvency or bankruptcy.
WITHDRAWAL
While each participantChange in the Purchase Plan is required to sign a
subscription agreement authorizing payroll deductions, the participant's
interest in a given offering can be terminated in whole,Control any bonuses
earned, but not yet paid under the Plan, shall be immediately payable. See
"Change in part, by
signing and delivering toControl Arrangement" set forth on page 11.
The Committee may amend, modify, suspend, or terminate the Company a notice of withdrawal from the Purchase
Plan. Such withdrawal is permitted at any time prior to the end of the
applicable offering period.
Any withdrawal by an employee of accumulated payroll deductions for a given
offering automatically terminates the employee's interest in the offering.
Unless an employee's participation is discontinued, the optionPlan for the
purchasepurpose of shares is exercised automatically at the end of the offering
period, and the maximum number
19
of full shares purchasable with the employee's accumulated payroll deductions
is purchased for the employee at the applicable price.
A participant's withdrawal from an offering does not have any effect upon
such participant's eligibility to participate in subsequent offerings under
the Purchase Plan.
TERMINATION OF EMPLOYMENT
Termination of a participant's employment for any reason, including
retirementmeeting or death, cancels the individual's participation in the Purchase
Plan immediately. In such event, the payroll deductions credited to the
participant's account are returned without interest to such participant, or,
in the case of death, to the person or persons entitled thereto as specified
by the employee in the subscription agreement.
ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event ofaddressing any changes in the capitalizationlegal requirements or for any
other purpose permitted by law. The Committee will seek shareholder approval
of the Company, such as
stock splitsany amendment determined to require shareholder approval or stock dividends, resulting in an increase or decrease in the
number of shares of Common Stock, appropriate adjustments will be made by the
Company in the shares subject to purchase and in the purchase price per share.
NONASSIGNABILITY
No rights or accumulated payroll deductions of an employeeadvisable under
the Purchase Plan may be pledged, assigned, or transferred for any reason and any
attempt to do so may be treated by the Company as an election to withdraw from
the Purchase Plan.
REPORTS
Individual accounts are maintained for each participant in the Purchase
Plan. Each participant receives as promptly as practicable after the end of
each offering period a report of the individual's account, setting forth the
total amount of payroll deductions accumulated, the per share purchase price,
the number of shares purchased and the remaining cash balance, if any.
AMENDMENT AND TERMINATION OF THE PURCHASE PLAN
The Board of Directors has authority to amend or terminate the Purchase
Plan. With certain exceptions, termination of the Purchase Plan shall not
affect options previously granted, and an amendment shall not make any changes
in any options granted prior thereto which adversely affects the rights of any
participant. No amendment may be made to the Purchase Plan without the
approval of the holders of a majority of the shares of the Company entitled to
vote if such amendment would increase the number of shares reserved under the
Purchase Plan, materially modify the eligibility requirements, or materially
increase the benefits which may accrue to participants under the Purchase
Plan.
REGISTRATION OF SHARES
If the amendment to the Purchase Plan is approved by the Company's
shareholders, the Company intends to register the additional shares reserved
for issuance promptly after the 1998 Annual Meeting on Form S-8 Registration
Statement under the Securities Act of 1933, as amended.
TAX INFORMATION
The Purchase Plan, and the right of the participant to make purchases
thereunder, is intended to qualify under the provisions of Section 421 and 423regulations of the Internal Revenue Code. Under these provisions, no income is taxableService or other applicable laws or
regulations.
16
The amount of bonuses to a participant atbe paid in the time of grantfuture pursuant to the Plan are
dependent on the Company's future profitability and are undeterminable. The
following table shows the amounts paid pursuant to the Plan in fiscal 1999 to
all of the option or purchase of shares. Upon
disposition ofCompany's executive officers as a group and all employees,
including all current officers who are not executive officers, as a group.
Please see the shares,
20
the participant generally is subject to tax and the amount of the tax depends
upon the holding period. If the shares are held by the participant"Summary Compensation Table" for more
than two (2) years after the date of option grant, the lesser of (a) the
excess of the sales price over the option price, or (b) fifteen percent (15%)
of the fair market value of the shares at the time the option was granted,
will be treated as ordinary incomeamounts paid to the participant and any remaining gain
will be treated as a long term capital gain. IfCompany's
Named Executive Officers.
Name and Position Bonus(1)
----------------- ----------
Executive Group (9 persons)(2)................................. $4,640,491
Non-Executive Officer Employee Group (55 persons).............. 3,985,116
- --------
(1) The amounts paid in fiscal 1999 are comprised of amounts earned under the
shares are disposed of
before the expiration of this holding period, the excess of the fair market
value of the sharesPlan based on the exercise date overCompany's performance in fiscal 1994, 1995, 1996 and
1997.
(2) Mr. Kocher has not been awarded any bonuses under the option pricePlan, however, he is
treated as
ordinary income,eligible for bonuses under MEI's Management and any further gain or any loss on such disposition is a
capital gain or loss. The Company is not entitled to a deduction in Executive Incentive Plan
("the amount
of a participant's ordinary income or capital gain exceptMEI Plan"). In fiscal 1999, Mr. Kocher received $255,000 pursuant to
the extent of
ordinary income reported by participant upon disposition of shares within two
(2) years from the date of grant to the extent allowed under Section 162(m) of
the Internal Revenue Code.MEI Plan.
Required Vote
The foregoing is only a summary of the effect of federal income taxation
upon the participant and the Company with respect to the shares purchased
under the Purchase Plan.
VOTE REQUIRED TO APPROVE THE AMENDMENT TO THE PURCHASE PLAN
Approval of the amendment to the Purchase Plan will required the affirmative vote of the holders of a majority of the shares of Common Stock which are
represented in person or by proxy at the 1998 Annual Meeting. If the amendment
is approved by the shareholders, it will be effective as of its adoption by
the shareholders. If the shareholders do not approve the amendment, the
Purchase Plan will continue in effect in its current form.
PROPOSAL 4. APPROVAL OF DIRECTOR STOCK INCENTIVE PLAN
GENERAL
On November 23, 1998, the Board of Directors adopted the 1998 Non-Employee
Directors Stock Incentive Plan (the "DSIP"), subject to approval thereof by
the shareholders at the 1998 Annual Meeting. The Company has reserved 250,000
shares of Common Stock for issuance in connection with the DSIP, which may be
authorized and unissued shares or treasury shares.
A summary of the DSIP is set forth below. The summary is qualified in its
entirety by the full text of the DSIP which is attached hereto as Appendix C.
The purpose of the DSIP is to attract, retain and compensate highly-
qualified individuals who are not employees of the Company or any of its
subsidiaries or affiliates for service as members of the Board by providing
them with an ownership interest in the Common Stock of the Company. The
Company intends that the DSIP will benefit the Company and its shareholders by
allowing non-employee directors to have a personal financial stake in the
Company through an ownership interest in the Common Stock and will closely
associate the interests of non-employee directors with that of the Company's
shareholders. As of November 16, 1998, there were seven directors eligible to
participate in the DSIP.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" THE PROPOSAL
TO APPROVE THE DSIP.
ADMINISTRATION
The DSIP will be administered by the Compensation Committee or, to the
extent required by applicable law, by the Board. Subject to the provisions of
the DSIP, the Compensation Committee will be authorized to interpret the DSIP,
to establish, amend and rescind any rules and regulations relating to the
DSIP, and to make all other determinations necessary or advisable for
administering the DSIP; provided, however, that the Compensation Committee
will have no discretion with respect to the eligibility or selection of non-
employee directors to receive awards under the DSIP, the number of shares
subject to any such awards or the time at which
21
any such awards are to be granted. During any time that the Board is acting as
administrator of the DSIP, it will have all the powers of the Committee
thereunder.
SUMMARY OF PLAN TERMS
Pursuant to the DSIP, non-employee directors may elect each year to take
some or all of their annual retainer in the form of cash, shares of Common
Stock or deferred rights to receive Common Stock upon termination as a
director.
CASH PAYMENTS
That portion of the retainer to be paid in cash will be paid whenever such
fees are payable, in accordance with the policies established by the
Compensation Committee from time to time.
STOCK GRANTS
To the extent that a non-employee director has elected to receive some or
all of his or her retainer in the form of Common Stock and has not elected to
defer receipt of such shares pursuant to the DSIP, shares of Common Stock will
be automatically granted to such non-employee director on March 31, June 30,
September 30 and December 31 of each plan year (each a "Quarterly Grant
Date"). The number of shares included in each such grant will be determined by
(i) dividing the amount of retainer to be paid in stock and earned by the non-
employee director during the three-month period immediately preceding the
Quarterly Grant Date (the "Quarterly Service Period") by the fair market value
per share of Common Stock on the Quarterly Grant Date, and (ii) and
subtracting any shares that the director has elected to defer. Fractions will
be rounded to the next highest share. For purposes of the DSIP, the per share
fair market value of the
Company's Common Stock is the average closing price
for such stock on the NYSE as reported in The Wall Street Journal for the five
business days preceding the Quarterly Grant Date.
DEFERRED STOCK RIGHTS
Election to Defer. Each participant in the DSIP will have the right to
elect, prior to the commencement of each plan year (January 1 through December
31), to defer until after the participant's termination of service the grant
of the shares of Common Stock that would otherwise be granted to the
participant under the DSIP during the next ensuing plan year. The participant
will elect whether the deferred grant of shares will be (a) granted in lump
sum within 30 days after termination of service, or (b) granted in
approximately equal annual installments over a period of two to five years (as
the participant shall elect) after the termination of service. The deferral
election will be irrevocable except in case of hardship as determined in good
faith by the Board. No shares will be issued until the grant date(s) so
indicated (the "Deferred Grant Date"). The participant will have no rights as
a shareholder with respect to the deferred rights to sharesrepresented and the rights to
such shares will be unsecured.
Deferred Dividend Account. If any dividends or other rights or distributions
of any kind are distributed to holders of Common Stock during the period from
the applicable Quarterly Grant Date until the Deferred Grant Date (the
"Deferral Period") but prior to the participant's termination of service, an
amount equal to the cash value of such distributions will be credited to a
deferred dividend account for the participant as follows: the account will be
credited with the right to receive shares of Common Stock having a fair market
value as of the date of the distribution equal to the cash value of the
distribution. The Company will issue shares of Common Stock equal to the
cumulative total of rights to shares in such account within 30 days after the
participant's termination of service.
ADJUSTMENTS
In the event that the Compensation Committee determines that any
distribution, recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
22
combination, repurchase, or similar corporate transaction or event affects the
Common Stock such that an adjustment is determined by the Compensation
Committee to be appropriate in order to prevent dilution or enlargement of the
benefits intended to be made available under the DSIP or with respect to
awards thereunder, then the Compensation Committee may adjust the number and
type of shares that may be granted under the DSIP. In the event of any such
corporate transaction or event that results in shares of Common Stock being
exchanged for or converted into cash, securities or other property (including
securities of another corporation), the Compensation Committee will have the
right to terminate the DSIP as of the date of the transaction or event, in
which case all stock grants deferred under the DSIP will become the right to
receive such cash, securities or other property (including securities of
another corporation).
TERMINATION AND AMENDMENT
The DSIP will remain in effect until the tenth anniversary of the effective
date, unless terminated earlier. The Compensation Committee may terminate or
suspend the DSIP at any time, without shareholder approval. The Compensation
Committee may amend the DSIP at any time and for any reason without
shareholder approval; provided, however, that the Compensation Committee may
condition any amendment on the approval of shareholders if such approval is
necessary or deemed advisable with respect to tax, securities or other
applicable laws, policies or regulations. No termination, modification or
amendment of the DSIP may, without the consent of a participant, adversely
affect the participant's rights under a previously-granted award.
REGISTRATION OF SHARES
If the DSIP is approved by the Company's shareholders, the Company intends
to register the shares reserved for issuance thereunder promptly after the
1998 Annual Meeting on Form S-8 Registration Statement under the Securities
Act of 1933, as amended.
CERTAIN FEDERAL INCOME TAX EFFECTS
Cash Payments. A participant receiving his or her retainer in the form of
cash will recognize ordinary income in such amount at the time of receipt and
the Company will be entitled to a corresponding tax deduction at that time.
Stock Awards. A participant receiving non-deferred Common Stock in lieu of
compensation as a director will recognize ordinary income equal to the fair
market value of the stock on the date of grant and the Company will be
entitled to a corresponding tax deduction at that time.
Deferred Stock. Under present federal income tax regulations, a participant
receiving a right to receive stock in the future will not recognize income and
the Company will not be allowed a tax deduction at the time such right is
granted. When the stock is actually granted or the participant otherwise has
the right to receive such stock, the participant will recognize ordinary
income equal to the fair market value of the stock and the Company will be
entitled to a corresponding tax deduction at that time.
BENEFITS TO NON-EMPLOYEE DIRECTORS
Only non-employee directors of the Company are entitled to participate in
the DSIP (currently seven persons). The following table shows the benefits
that would accrue under the DSIP in 1998 to the non-employee directors
assuming that (a) the DSIP had been in effect throughout fiscal 1998, and (b)
each such person elected to receive 100% of his or her retainer for 1998 in
the form of shares of Common Stock.
NUMBER OF SHARES
NAME AND POSITION DOLLAR VALUE ($) OF COMMON STOCK
----------------- ---------------- ----------------
All non-employee directors, as a Group
(7 persons)............................ $350,000 10,000(1)
- --------
(1) Assumes a fair market value of $35.00 per share on each Quarterly Grant
Date.
23
VOTE REQUIRED TO APPROVE THE DSIP
Approval of the DSIP will require the affirmative vote of the holders of a
majority of the shares of Common Stock which are represented in person or by
proxy at the Annual Meeting
andis required to renew the approval of the Executive Bonus Plan for purposes of
Section 162(m). With respect to this vote, abstentions will not be counted as
voting on this proposal. If the DSIP is
approved by the shareholders, it will be effective as of its adoption by the
shareholders. If the DSIPPlan is not approved by the shareholders, it willsome
bonuses paid under Plan may not be implemented.fully deductible for federal income tax
purposes.
The Board of Directors recommends voting "FOR" the proposal to renew the
approval Company's current Executive Bonus Plan for purposes of Section
162(m).
PROPOSAL 5.3. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP ("PWC"),
independent accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending September 2, 1999.August 31, 2000. PWC and its predecessor,
Coopers and Lybrand LLP, combined
with Price Waterhouse LLP during fiscal 1998 to form PricewaterhouseCoopers
LLP. Coopers and Lybrand LLP hadhave been the Company's independent accountants since
fiscal 1985. In the event of a negative vote on the ratification of PricewaterhouseCoopers LLP,PWC, the
Board of Directors will reconsider its decision to appoint PricewaterhouseCoopers LLPPWC as the
Company's independent accountants. Representatives of PricewaterhouseCoopers LLPPWC are expected to be
present at the Annual Meeting, will have the opportunity to make a statement
if they so desire, and are expected to be available to respond to appropriate
questions.
THE BOARD OF DIRECTORS RECOMMENDS VOTINGThe Board of Directors recommends voting "FOR" THE RATIFICATION OF THE
APPOINTMENT OF PRICEWATERHOUSECOOPERSthe ratification of the
appointment of PricewaterhouseCoopers LLP.
PROPOSAL 6.4. OTHER MATTERS
The Company knows of no other matters to be submitted at the Annual Meeting.
If any other matters properly come before the meeting, the persons named in
the accompanying form of Proxy will vote, in their discretion, the shares they
represent.
17
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 2000 ANNUAL MEETING
Proposals of shareholders of the Company which are intended to be presented
at the Company's 2000 Annual Meeting of Shareholders must be received by the
Company at its principal executive offices located at 8000 S. Federal Way,
Boise, Idaho 83716-9632, no later than July 1, 2000, and must also be in
compliance with the Company's Certificate of Incorporation and Bylaws and with
applicable laws and regulations in order to be included in the proxy statement
and form of proxy relating to that meeting. Proposals which are submitted
after July 1, 2000, will be untimely and will not be considered at the
meeting.
THE BOARD OF DIRECTORS
November 30, 1998
24December 10, 1999
18
APPENDIXAppendix A
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF
MICRON TECHNOLOGY, INC.
PURSUANT TO SECTION 242 OF THE
DELAWARE GENERAL CORPORATION LAWEXECUTIVE BONUS PLAN
(As adopted and effective November 28, 1994)
1. PURPOSE
The Micron Technology, Inc., a corporation organized Executive Bonus Plan (the "Plan") is designed to
attract, retain, and existing underreward highly qualified executives who are important to
the lawsCompany's success and to provide incentives relating directly to the
financial performance and long-term growth of the StateCompany.
2. DEFINITIONS
(a) Bonus--The cash incentive awarded to an Executive Officer or Key
Employee pursuant to terms and conditions of Delaware (the "Corporation" or the "Company"), hereby
certifies that:
FIRST: At a meeting of thePlan.
(b) Board--The Board of Directors of the Corporation (the "BoardMicron Technology, Inc.
(c) Change in Control--The acquisition by any person or entity, directly,
indirectly, or beneficially, acting alone or in concert, of Directors"more than
thirty-five percent (35%) resolutions were duly adopted setting forth a proposed
amendment of the Certificate of Incorporation of the Corporation, declaring
the advisability of such amendment and calling a meeting of the stockholders
of the Corporation for consideration thereof. The Board of Directors on
, , duly adopted the following resolution, which resolution
remains in full force and effect as of the date hereof:
RESOLVED, that the Certificate of Incorporation of the Corporation be
amended by changing Article 4 thereof, to read in full as follows:
4. (a) Shares Authorized. The total number of shares of stock which the
corporation shall have the authority to issue is one billion thirty two
million (1,032,000,000), consisting of (i) one billion (1,000,000,000) shares
of Common Stock, par value $0.10 per share (the "Common Stock") and (ii)
thirty two million (32,000,000) shares of Class A Common Stock, par value
$0.10 per share (the "Class A Common Stock").
(b) Class A Common Stock.
Section 1. Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of each share of Class A Common Stock shall be entitled to share
ratably in any distribution of any of the assets or funds of the Corporation
to the holders of the Common Stock (each share of the Class A Common Stock
being treated as the number of shares of Common Stock into which it could then
be converted for such purpose).
Section 2. Transfer of Class A Common Stock. No person or entity holding
shares of Class A Common Stock may transfer, sell, assign, devise or bequeath
any of such holder's interest in his or its Class A Common Stock, and the
Corporation and the transfer agent for the Class A Common Stock shall not
register the transfer of such shares of Class A Common Stock, whether by sale,
assignment, gift, devise, bequest, appointment or otherwise, except to a
Permitted Transferee (as defined below) of such holder. For purposes of this
Section 2, the term "Permitted Transferee" with respect to any holder of Class
A Common Stock shall mean (i) the Corporation, (ii) a Qualified Subsidiary
(provided that ifMicron Technology, Inc.,
at any time such Qualified Subsidiary ceases to be a
Qualified Subsidiary such Class A Common Stock will automatically convert into
Common Stock pursuant to Section 3.b) or (iii) Intel Corporation.
Notwithstanding the foregoing, the provisions of this Section 2 do not
prohibit transfers that result in automatic conversion pursuant to Section
3.b, provided, that the transfer agent shall not register the transfer of such
shares of Class A Common Stock or the Common Stock into which they
automatically convert unless concurrently with such transfer, the certificate
representing such shares of Class A Common Stock to be so transferred shall be
surrendered and exchanged for a certificate representing the applicable number
of shares of Common Stock into which such shares of Class A Common Stock are
automatically converted by virtue of such transfer.
A-1
Section 3. Conversion of Class A Common Stock.
a. Voluntary Conversion. At any time and from time to time after the
issuance of the Class A Common Stock, any holder of Class A Common Stock may
convert any or all of the shares of Class A Common Stock held by such holder
into shares of Common Stock at the then effective conversion ratio. The
conversion ratio at which shares of Common Stock shall be deliverable upon
conversion (the "Conversion Ratio") shall initially be one-for-one. Such
initial Conversion Ratio shall be subject to adjustment, in order to adjust
the number of shares of Common Stock into which the Class A Common Stock is
convertible, as hereinafter provided.
b. Automatic Conversion. Each share of Class A Common Stock shall
automatically be converted into shares of Common Stock at the then effective
Conversion Ratio upon the transfer by any holder of Class A Common Stock to a
person or entity who is not a Permitted Transferee of such holder.
c. Mechanics of Conversion. No fractional shares of Common Stock shall be
issued upon conversion of the Class A Common Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the then fair market value of
one share of Common Stock, as determined in good faith by the Board of
Directors. Before any holder of Class A Common Stock shall be entitled to
receive certificates for the shares of Common Stock issued upon conversion,
such holder shall surrender the certificate or certificates for such Class A
Common Stock, duly endorsed, at the principal office of the Corporation and
shall state therein his name or the name, or names, of his nominees in which
he wishes the certificate or certificates for shares of Common Stock to be
issued. No voluntary conversion shall be permitted unless and until the holder
shall submit to the Corporation either (i) evidence of compliance with the
filing and waiting period requirements of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended ("HSR Act") or (ii) a certificate of an
officer of the holder that the conversion does not require any filing under
the HSR Act. The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Class A Common Stock or to such
holder's nominee or nominees, a certificate or certificates for the number of
shares of Common Stock to which such holder or such holder's nominee shall be
entitled as aforesaid, together with cash in lieu of any fraction of a share.
Subject to the foregoing, in the case of automatic conversion under Section
3.b, such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such automatic conversion and upon
surrender of the certificate representing the Class A Common Stock to be
converted in the case of a voluntary conversion pursuant to Section 3.a above
(the "Conversion Date"). The person or persons entitled to receive the shares
of Common Stock issuable upon conversion shall be treated for all purposes as
the record holder or holders of such shares of Common Stock on such date;
provided that the certificates representing the Class A Common Stock have been
duly endorsed for transfer and delivered to the Corporation or its transfer
agent.
d. Stock Splits, Mergers, etc. In case of any subdivision (by stock split,
stock dividend or otherwise) of the Common Stock or any combination of the
Class A Common Stock (by reverse stock split or otherwise), the Conversion
Ratio shall be proportionately increased, and conversely in the case of
combination of the Common Stock (by reverse stock split or otherwise) or any
subdivision of the Class A Common Stock (by stock split, stock dividend or
otherwise), the Conversion Ratio shall be proportionately decreased, with such
adjustment to the Conversion Ratio to be effective immediately after the
opening of business on the day following the day which such subdivision or
combination, as the case may be, becomes effective. In case of any
reorganization, reclassification or change of shares of the Common Stock
(other than a change in par value or from par value to no par value as a
result of a subdivision or combination), or in the case of any consolidation
of the Corporation with one or more corporations or a merger of the
Corporation with another corporation (other than a consolidation or merger in
which the Corporation is the resulting or surviving corporation and which does
not result in any reclassification or change of outstanding shares of Common
Stock), provision shall be made so that each holder of a share of Class A
Common Stock shall have the right at any time thereafter as nearly as
practicable, so long as the conversion right hereunder with respect to such
share would exist had such event not occurred, to convert such share into the
kind and amount of shares of stock and other securities and properties
(including cash) receivable upon such reorganization, reclassification,
change, consolidation or merger by a
A-2
holder of the number of shares of Common Stock into which such shares of Class
A Common Stock might have been converted immediately prior to such
reorganization, reclassification, change, consolidation or merger. In the
event of such a reorganization, reclassification, change, consolidation or
merger, effective provision shall be made in the certificate of incorporation
of the resulting or surviving corporation or otherwise for the protection of
the conversion rights of the shares of Class A Common Stock that shall be
applicable, as nearly as reasonably may be, to any such other shares of stock
and other securities and property (including cash) deliverable upon conversion
of shares of Common Stock into which Class A Common Stock might have been
converted immediately prior to such event.
e. Special Conversion Adjustments. The number of shares of Common Stock
receivable upon conversion of a share of Class A Common Stock shall be
adjusted in the event that the Corporation fails to achieve any one or more of
the Qualified Expenditures Milestone, the First Minimum Production Milestone
or the Second Minimum Production Milestone on the applicable milestone dates
in the manner described below. On or prior to twenty five (25) days after an
applicable milestone date, the Corporation shall deliver to Intel Corporation
a certificate of an executive officer of the Corporation certifying whether
the applicable milestone has been achieved, and if such milestone has not been
achieved, such additional data (including, but not limited to the amount of
Qualified Expenditures made and actual RDRAM production during the applicable
period) required to calculate the appropriate conversion adjustment. Upon
receipt of such certificate with the required information, Intel Corporation
shall have thirty (30) days in which to notify the Corporation in writing of
its irrevocable election to exercise a Special Conversion Adjustment. If Intel
Corporation has not provided an irrevocable written notice electing to
exercise a Special Conversion Adjustment within the such period, then no there
shall be no Special Conversion Adjustment with respect to the applicable
milestone. Except as specifically provided herein, the failure to exercise a
Special Conversion Adjustment with respect to one milestone shall not impair
Intel Corporation's ability to exercise a Special Conversion Adjustment with
respect to the failure to achieve a different milestone.
f. Postponement of Milestone Dates; Modification of Milestones. (i) In the
event that the Corporation's ability to achieve the Qualified Expenditure
Milestone by the Qualified Expenditures Milestone Date is significantly
impaired by events or circumstances outside of its control, such as Force
Majeure or limited availability of required equipment or materials, the
milestone date will be appropriately postponed.
(ii) In the event that any of the events specified in Section 7(f)(ii) of
the Stock Rights Agreement occur, the First Minimum Production Milestone or
the Second Minimum Production Milestone shall be either postponed or waived,
respectively, as appropriate. In addition, if on the Maximum FGI Date, the
RDRAM device finished goods inventory of the Corporation and its subsidiaries
exceeds the Maximum FGI, the Second Minimum Production Milestone will be
modified, as appropriate.
(iii) In the event of the occurrence of any of the foregoing events or
circumstances, as a result of which either a milestone date or milestone is to
be postponed, waived or modified, no Special Conversion Adjustment shall occur
as a result of the failure to achieve the applicable milestone by the
applicable milestone date, unless and until the Corporation and Intel
Corporation shall have agreed upon the appropriate postponement, waiver or
modification. Notwithstanding the above, upon such agreement, the Special
Conversion Adjustment shall be applied as of the agreed upon date,
notwithstanding that such agreement is reached after such date. If no
agreement can be reached, the dispute will be settled in accordance with
Section 8.12 of the Securities Purchase Agreement.
g. Failure to Achieve Qualified Expenditures Milestone. Subject to the
provisions hereof:
(i) If the Corporation fails to make at least the Minimum Qualified
Expenditures on or prior to the Qualified Expenditures Milestone Date, the
Conversion Ratio shall be adjusted by multiplying the current Conversion Ratio
by a fraction, the numerator of which shall be the Initial Purchase Price and
the denominator of which shall be the greater of (i) the average closing sales
price on the New York Stock Exchange for the Common Stock during the 20
trading day period ending two trading days prior to the Qualified Expenditures
Milestone Date, or (ii) 50% of the Initial Purchase Price.
A-3
(ii) If the Corporation makes Qualified Expenditures of more than the
Minimum Qualified Expenditures but less than the Required Qualified
Expenditures on or prior to the Qualified Expenditures Milestone Date, the
Conversion Ratio shall be increased. The amount of the increase in the
Conversion Ratio (expressed as a decimal) shall be determined by first (w)
dividing the Initial Purchase Price by the greater of (i) the average closing
sales price on the New York Stock Exchange for the Common Stock during the 20
trading day period ending two trading days prior to the applicable milestone
date, or (ii) 50% of the Initial Purchase Price, then (x) subtracting 1.0 from
the result, then (y) multiplying this result by a fraction, the numerator of
which shall be (A) the Required Qualified Expenditures minus (B) the amount of
Qualified Expenditures and the denominator of which shall be the Required
Qualified Expenditures, and (z) dividing the result by 2. The new Conversion
Ratio shall then be the result of the above calculation plus the prior
Conversion Ratio.
h. Failure to Achieve First Minimum Production Milestone. Subject to the
provisions hereof, if the Corporation fails to achieve the First Minimum
Production Milestone, the increase in the Conversion Ratio (expressed as a
decimal) shall be determined by first (w) dividing the Initial Purchase Price
by the greater of (i) the average closing sales price on the New York Stock
Exchange for the Common Stock during the 20 trading day period ending two
trading days prior to the applicable milestone date, or (ii) 50% of the
Initial Purchase Price, then (x) subtracting 1.0 from the result, then (y)
multiplying this result by a fraction, the numerator of which shall be the
First Minimum Production Milestone for the quarter minus the actual RDRAM
production achieved during the quarter and the denominator of which shall be
the First Minimum Production Milestone for the quarter, and (z) dividing the
result by 2. The new Conversion Ratio shall then be the result of the above
calculation plus the prior Conversion Ratio.
i. Failure to Achieve Second Minimum Production Milestone. Subject to the
provisions hereof, if the Corporation fails to achieve the Second Minimum
Production Milestone the increase in the Conversion Ratio (expressed as a
decimal) shall be determined by first (w) dividing the Initial Purchase Price
by greater of (A) the average closing sales price on the New York Stock
Exchange for the Common Stock during the 20 trading day period ending two
trading days prior to the applicable milestone date, or (ii) 50% of the
Initial Purchase Price, then (x) subtracting 1.0 from the result, then (y)
multiplying this result by a fraction, the numerator of which shall be the
Second Minimum Required Production for the quarter minus the actual RDRAM
production achieved during the quarter and the denominator of which shall be
the Second Minimum Required Production for the quarter and (z) dividing the
result by 2. The new Conversion Ratio shall then be the result of the above
calculation plus the prior Conversion Ratio.
j. Multiple Special Conversion Adjustments; Prior Adjustments. If more than
one Special Conversion Adjustment occurs hereunder (or comparable adjustments
under the Stock Rights Agreement ("Rights Special Conversion Adjustments"),
subsequent Special Conversion Adjustments shall be calculated as provided
herein, but only the number of additional shares in excess of the number
issuable using the Initial Conversion Ratio (as defined in this Section 3.j)
(appropriately adjusted to reflect the effect of any stock splits,
reclassifications, stock dividends, recapitalizations, combinations or other
similar events affecting the Common Stock occurring after the creation of the
Class A Common Stock), shall be issuable in respect of such subsequent Special
Conversion Adjustment upon conversion of the Class A Common Stock. For
purposes of this Section 3.j, the "Initial Conversion Ratio" will be one-to-
one (appropriately adjusted to reflect the effect of any stock splits,
reclassifications, stock dividends, recapitalizations, combinations or other
similar events affecting the Common Stock occurring after the creation of the
Class A Common Stock), provided, however, that in the event of the occurrence
of a Rights Special Conversion Adjustment that resulted in an adjustment to
the Exchange Ratio in accordance with the provisions of the Stock Rights
Agreement prior to the creation of the Class A Common Stock, the Initial
Conversion Ratio shall be equal to a fraction, the numerator of which shall be
one (appropriately adjusted to reflect the effect of any stock splits,
reclassifications, stock dividends, recapitalizations, combinations or other
similar events affecting the Common Stock occurring after creation of the
Class A Common Stock), and the denominator of which shall be the exchange
ratio in effect under the Stock Rights Agreement immediately prior to the
creation of the Class A Common Stock. Notwithstanding anything else to the
contrary set forth
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herein, the Conversion Ratio shall not be adjusted for any events,
circumstances or milestones for which adjustments have been made (or may be
made as a result of completion of an audit or resolution of any dispute as to
the appropriate amount of an adjustment required thereunder) pursuant to the
Stock Rights Agreement.
k. Cash Option. In lieu of all or a portion of a Special Conversion
Adjustment, the Corporation may elect to make a cash payment in respect of all
or a portion of the dollar amount of the Special Conversion Adjustment (such
election to be made within five (5) business days of Intel Corporation's
Special Conversion Adjustment election, and such amount shall be paid within
five (5) business days of the Corporation's election). The dollar amount in
respect of any Special Conversion Adjustment to be paid in cash shall be
calculated by multiplying the additional shares issuable to Intel Corporation
upon conversion of the Class A Common Stock following the Special Conversion
Adjustment by the average closing sales price on the New York Stock Exchange
for the Common Stock during the 20 trading day period ending two trading days
prior to the applicable milestone date.
l. Limitations on Special Conversion Adjustments. Anything in Sections 3.h
and 3.j to the contrary notwithstanding, no Special Conversion Adjustment will
be made for failure to achieve the First Minimum Production Milestone or
Second Minimum Production Milestone if a Special Conversion Adjustment
election pursuant to clause (i) of Section 3.g above is made by Intel
Corporation. In addition, anything in Sections 3.e through 3.j
notwithstanding, Special Conversion Adjustments will be limited, and not given
effect, to the extent required to ensure (1) that the value of additional
shares of Common Stock and other securities or property and any related
payments (including payments in lieu of adjustments pursuant to Section 3.k
hereof) issued or issuable or payable as a result of such adjustments,
together with any shares of Common Stock and other securities or property and
any related payments issued or issuable or payable as a result of the Special
Conversion Adjustments with respect to the Rights, does not exceed the Maximum
Adjustment Amount (with the value of such additional shares, securities and
property measured as of the milestone date with respect to the applicable
Special Conversion Adjustments resulting in such additional shares, securities
or property and any related payments, which, in the case of the Common Stock,
shall be based on the average closing sales price on the New York Stock
Exchange for the Common Stock during the 20 trading day period ending two
trading days prior to the milestone date corresponding to such Special
Conversion Adjustment); and (2) that the aggregate number of shares of Common
Stock issued or issuable upon exercise of Rights or upon conversion of Class A
Common Stock does not exceed the lesser of (i) the Maximum Percentage and (ii)
the Maximum Shares.
m. Existing Stock Certificates. Irrespective of any adjustments in the
number or kind of shares issuable upon the conversion of the Class A Common
Stock, certificates representing Class A Common Stock theretofore or
thereafter issued may continue to express the same number and kind of shares
as are stated in the certificates initially issuable pursuant hereto.
n. Payment of Taxes. The Corporation will pay all documentary stamp taxes
and other governmental charges (excluding all foreign, federal, state or local
income, franchise, property, net worth, capital, estate, inheritance, gift or
similar taxes) in connection with the issuance or delivery of the Class A
Common Stock, as well as all such taxes attributable to the initial issuance
or delivery of Common Stock upon the conversion of Class A Common Stock. The
Corporation shall not, however, be required to pay any tax that may be payable
in respect of any subsequent transfer of the Class A Common Stock or any
transfer involved in the issuance and delivery of Common Stock in a name other
than that in which the Class A Common Stock or Common Stock to which such
issuance relates were registered, and, if any such tax would otherwise be
payable by the Corporation, no such issuance or delivery shall be made unless
and until the person requesting such issuance has paid to the Corporation the
amount of any such tax, or it is established to the reasonable satisfaction of
the Corporation that any such tax has been paid.
o. Common Stock Reserved. The Corporation shall reserve and keep available
out of its authorized but not outstanding Common Stock such number of shares
of Common Stock as shall, from time to time be, sufficient for conversion of
the Class A Common Stock.
Section 4. No Redemption. The Class A Common Stock shall not be redeemable.
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Section 5. Voting Rights; Non-Voting Security. The holders of shares of
Class A Common Stock shall have no voting rights except as provided in the
Certificate of Incorporation or by applicable law.
Section 6. Dividend Rights. In the event any dividend or other distribution
payable in cash or other property is declared on the Common Stock (excluding
any dividend or other distribution for which adjustment to the Conversion
Ratio is provided by Section 3.d hereof), each holder of shares of Class A
Common Stock on the record date for such dividend or distribution shall be
entitled to receive on the date of payment or distribution of such dividend or
other distribution the same cash or other property which such holder would
have received if on such record date such holder was the holder of record of
the number (including for purposes of this Section 6 any fraction) of shares
of Common Stock into which the shares of Class A Common Stock then held by
such holder are then convertible.
Section 7. Certain Definitions; Interpretation.
For purposes hereof the following terms shall have the meanings set forth
below.
First Minimum Production Milestone. The First Minimum Production Milestone
shall have the meaning ascribed to such term in the Securities Purchase
Agreement.
First Minimum Required Production. First Minimum Required Production shall
have the meaning ascribed to such term in the Securities Purchase Agreement.
First Production Milestone Date. The First Production Milestone Date shall
have the meaning ascribed to such term in the Securities Purchase Agreement.
Force Majeure. Force Majeure shall mean an act of God, fire, flood,
accident, riot war, government intervention, embargoes, strikes, labor
difficulties, equipment failure, late delivery of supplies, supplier shortages
or other difficulties which are beyond the reasonable control and without the
fault or negligence of a party whose performance has been affected.
Initial Purchase Price. Initial Purchase Price means $31.625, appropriately
adjusted to reflect the effect of any stock splits, reclassifications, stock
dividends, recapitalizations, combinations or other similar events affecting
the Common Stock occurring after October 19, 1998.
Maximum Adjustment Amount. Maximum Adjustment Amount shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
Maximum FGI. Maximum FGI shall have the meaning ascribed to such term in the
Securities Purchase Agreement.
Maximum FGI Date. Maximum FGI Date shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
Maximum Percentage. Maximum Percentage shall have the meaning ascribed to
such term in the Securities Purchase Agreement.
Maximum Shares. Maximum Shares shall have the meaning ascribed to such term
in the Securities Purchase Agreement.
Minimum Qualified Expenditures. Minimum Qualified Expenditures shall have
the meaning ascribed to such term in the Securities Purchase Agreement.
Qualified Expenditures. Qualified Expenditures shall have the meaning
ascribed to such term in the Securities Purchase Agreement.
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Qualified Expenditures Milestone. The Qualified Expenditures Milestone means
the expenditure of at least the Required Qualified Expenditures on or before
the Qualified Expenditures Milestone Date.
Qualified Expenditures Milestone Date. The Qualified Expenditures Milestone
Date shall have the meaning ascribed to such term in the Securities Purchase
Agreement.
Qualified Subsidiary. Qualified Subsidiary shall have the meaning ascribed
to such term in the Rights and Restrictions Agreement.
Rambus. Rambus means Rambus, Inc. , a Delaware corporation, and any
successor to all or substantially all of Rambus Inc.'s business (by
acquisition or otherwise).
RDRAM. RDRAM shall have the meaning ascribed to such term in the Supply
Agreement.
Required Qualified Expenditures. Required Qualified Expenditures shall have
the meaning ascribed to such term in the Securities Purchase Agreement.
Rights. Rights shall have the meaning ascribed to such term in the Stock
Rights Agreement.
Rights and Restrictions Agreement. Rights and Restrictions Agreement shall
mean that certain Securities Rights and Restrictions Agreement, dated as of
October 19, 1998, as amended from time to time, by and between the Corporation
and Intel Corporation.
Second Minimum Production Milestone. The Second Minimum Production Milestone
shall have the meaning ascribed to such term in the Securities Purchase
Agreement.
Second Minimum Required Production. Second Minimum Required Production shall
have the meaning ascribed to such term in the Securities Purchase Agreement.
Second Production Milestone Date. The Second Production Milestone Date shall
have the meaning ascribed to such term in the Securities Purchase Agreement.
Securities Purchase Agreement. Securities Purchase Agreement shall mean that
certain Securities Purchase Agreement, dated October 15, 1998, as amended from
time to time, by and between the Corporation and Intel Corporation.
Special Conversion Adjustment. A Special Conversion Adjustment shall mean an
adjustment to the number of shares of Common Stock receivable upon conversion
of Class A Common Stock, as provided in Section 3 hereof.
Stock Rights Agreement. Stock Rights Agreement shall mean that certain Stock
Rights Agreement, dated as of October 19, 1998, as amended from time to time,
by and between the Corporation and Intel Corporation.
Supply Agreement. Supply Agreement shall mean that certain Supply Agreement,
dated as of October 19, 1998, as amended from time to time, by and between the
Corporation and Intel Corporation.
Volume Production. Volume Production shall have the meaning ascribed to such
term in the Securities Purchase Agreement.
SECOND: Pursuant to a resolution of the Board of Directors, a meeting of the
stockholders of the Corporation was duly called and held, at which meeting the
necessary number of shares as required by statute were voted in favor of the
amendment.
THIRD: The amendment has been duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of the State of Delaware.
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IN WITNESS WHEREOF, the corporation has caused this Certificate of Amendment
to be executed by a duly authorized officer on the day of
, 1999.
Micron Technology, Inc.
By: _________________________________
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APPENDIX B
MICRON TECHNOLOGY, INC.
1989 EMPLOYEE STOCK
PURCHASE PLAN
AMENDED AND RESTATED EFFECTIVE AS OF OCTOBER 1, 1998 (EXCEPT WITH RESPECT TO
THE ADDITION OF SHARES UNDER PARAGRAPH 13, WHICH IS EFFECTIVE UPON THE DATE OF
STOCKHOLDER APPROVAL, IF ANY).
The following constitute the provisions of the 1989 Employee Stock Purchase
Plan of Micron Technology, Inc.:
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Common Stock
of the Company through accumulated payroll deductions. It is the intention of
the Company to have the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of theoutstanding.
(d) Code--The Internal Revenue Code of 1986, as amended.
The
provisions(e) Committee--The Compensation Committee of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that
sectionBoard, or such other
committee of the Code.
2. Definitions.
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" shall mean the Common Stock, $.10 no par value, of the
Company.
(d) "Company" shall mean Micron Technology, Inc., a Delaware corporation.
(e) "Compensation" with respect to any Employee means such Employee's wages,
salaries, fees for professional services and other amounts received for
personal services actually rendered in the course of employment with the
Company or its designated subsidiaries to the extent that the amounts are
includible in gross income (including, but not limited to, commissions paid to
salesmen, compensation for services on the basis of a percentage of profits,
tips, and bonuses).
Compensation shall exclude (a)(1) contributions made by the employer to a
plan of deferred compensation to the extent that, the contributions are not
includible in the gross income of the Employee for the taxable year in which
contributed, (2) employer contributions made on behalf of an Employee to a
simplified employee pension plan described in Code Section 408(k) to the
extent such contributions are excludable from the Employee's gross income,
(3) any distributions from a plan of deferred compensation; (b) amounts
realized from the exercise of a non-qualified stock option, or when restricted
stock (or property) held by an Employee either becomes freely transferable or
is no longer subject to substantial risk of forfeiture; (c) amounts realized
from the sale, exchange or other disposition of stock acquired under a
qualified stock option; (d) other amounts which receive special tax benefits,
such as premiums for group-term life insurance (but only to the extent that
the premiums are not includible in the gross income of the employee), or
contributions made by the employer (whether or not under a salary reduction
agreement) towards the purchase of any annuity contract described in Code
Section 403(b) (whether or not the contributions are actually excludable from
the Employee's gross income); (e) reimbursements or other expense allowances;
(f) fringe benefits (cash and noncash); (g) moving expenses; and (h) welfare
benefits.
(f) "Continuous Status as an Employee" shall mean the absence of any
interruption or termination of service as an Employee. Continuous Status as an
Employee shall not be considered interrupted in the case of a leave of absence
agreed to in writing by the Company, provided that such leave is for a period
of not more than 90 days or reemployment upon the expiration of such leave is
guaranteed by contract or statute.
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(g) "Designated Subsidiaries" shall mean the Subsidiaries which have been designated by the Board from time to timeadminister the
Plan, in its sole discretion as eligible
to participate in the Plan.
(h) "Employee" shall mean any person, including an officer, who is
continuously employed for at least twenty (20) hours per week and more than
five (5) months in a calendar year by the Company or onecompliance with requirements of its Designated
Subsidiaries; provided, however, that all employees of an Italian Designated
SubsidiarySection 162(m) of the Company shall be considered "Employees" under the Plan,
without regard as to whether they are continuously employed for at least
twenty (20) hours per week or more than five (5) months in a calendar year by
an Italian Designated Subsidiary of the Company.
(i) "Enrollment Date" shall mean the first day of each Offering Period.
(j) "Exercise Date" shall mean the last day of each Offering Period of the
Plan.
(k) "Offering Period" shall mean a period of three (3) months during which
an option granted pursuant to the Plan may be exercised.
(l) "Plan" shall mean this Employee Stock Purchase Plan.
(m) "Subsidiary" shall mean a corporation, domestic or foreign, of which not
less than 50% of the voting shares are held by the Company or a Subsidiary,
whether or not such corporation now exists or is hereafter organized or
acquired by the Company or a Subsidiary.
3. Eligibility.
(a) Any Employee as defined in paragraph 2 who has been continuously
employed by the Company or any subsidiary of the Company for at least one (1)
consecutive monthCode.
(f) Company--Micron Technology, Inc., and who shall be employed by the Company on a given
Enrollment Date shall be eligible to participate in the Plan.
(b) Any provisions of the Plan to the contrary notwithstanding, no Employee
shall be granted an option under the Plan (i) if, immediately after the grant,
such Employee (or any other person whose stock would be attributed to such
Employee pursuant to Section 424(d) of the Code) would own stock and/corporation in which
Micron Technology, Inc., controls, directly or hold
outstanding options to purchase stock possessing fiveindirectly, fifty percent
(5%(50%) or more of the total combined voting power or value of all classes of stockvoting
securities.
(g) Executive--An Executive Officer or Key Employee of the Company.
(h) Executive Officer--Any officer of the Company orsubject to the
reporting requirements of any subsidiarySection 16 of the Securities and Exchange Act of
1934 ("Exchange Act").
(i) Key Employee--Any employee of the Company or (ii) which permits his rights
to purchase stock under all employee stock purchase plans (described in
Section 423 of the Code) of the Company and its subsidiaries to accrue at a
rate which exceeds Twenty-Five Thousand Dollars ($25,000) of fair market value
of such stock (determined at the time such option is granted) for each
calendar year in which such option is outstanding at any time.
4. Offering Periods. The Plan shallas may be implemented by consecutive Offering
Periods with a new Offering Period commencing on or about January 1, April 1,
July 1, and October 1 of each year commencing on or about January 1, 1989 or,
in the discretion of the committee, April 1, 1989, and continuing thereafter
until terminated in accordance with paragraph 20 hereof. Subject to the
shareholder approval requirements of paragraph 20, the Board of Directors of
the Company shall have the power to change the duration of offering periods
with respect to future offerings if such change is announced at least fifteen
(15) days prior to the scheduled beginning of the first offering period to be
affected.
5. Participation.
(a) An eligible Employee may become a participant in the Plan by completing
a subscription agreement authorizing payroll deductions in the form of Exhibit
A to this Plan and filing it with the Company's payroll or administrative
office at least ten (10) business days prior to the applicable Enrollment
Date, unless a different time for filing the subscription agreement is setdesignated by the
BoardCommittee.
(j) Plan--The Micron Technology, Inc., Executive Bonus Plan.
3. ELIGIBILITY
Only Executives are eligible for all eligible Employees with respect to a given Offering Period.
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(b) Payroll deductions for a participant shall commence on the first payroll
following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in paragraph 11.
6. Payroll Deductions.
(a) At the time a participant files his subscription agreement, he or she
shall elect to have payroll deductions made on each payday during the Offering
Period in an amount not less than one percent (1%) and not greater than twenty
percent (20%) of the Compensation which he or she received on the payday
immediately preceding the Enrollment Date, and the aggregate of such payroll
deductions during the Offering Period shall not exceed twenty percent (20%) of
his or her aggregate Compensation during said Offering Period.
(b) All payroll deductions made by a participant shall be credited to his or
her account under the Plan. A participant may not make any additional payments
into such account.
(c) A participant may discontinue his or her participation in the Plan as
provided in paragraph 11, but may not otherwise change, their rate of payroll
deductions during the Offering Period. A participant's subscription agreement
shall remain in effect for successive Offering Periods unless revised as
provided herein or terminated as provided in paragraph 11.
(d) Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and paragraph 3(b) herein, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year that the
aggregate of all payroll deductions accumulated with respect to such Offering
Period and any other Offering Period ending within the same calendar year
equal $21,250. Payroll deductions shall recommence at the rate provided in
such participant's subscription agreement at the beginning of the first
Offering Period which is scheduled to end in the following calendar year,
unless terminated by the participant as provided in paragraph 11.
7. Grant of Option.
(a) On the Enrollment Date of each Offering Period, each eligible Employee
participating in such Offering Period shall be granted an option to purchase
on each Exercise Date during such Offering Period up to a number of shares of
the Company's Common Stock determined by dividing such Employee's payroll
deductions accumulated prior to such Exercise Date and retained in the
Participant's account as of the Exercise Date by the lower of (i) eighty-five
percent (85%) of the fair market value of a share of the Company's Common
Stock on the Enrollment Date or (ii) eighty-five percent (85%) of the fair
market value of a share of the Company's Common Stock on the Exercise Date;
provided that in no event shall an Employee be permitted to purchase during
each Offering Period more than a number of shares determined by dividing
$6,250 by the fair market value of a share of the Company's Common Stock on
the Enrollment Date, and provided further that such purchase shall be subject
to the limitations set forth in Section 3(b) and 13 hereof. Exercise of the
option shall occur as provided in Section 8, unless the participant has
withdrawn pursuant to Section 11, and shall expire on the last day of the
Offering Period. Fair market value or a share of the Company's Common Stock
shall be determined as provided in Section 7(b) herein.
(b)Plan.
4. ADMINISTRATION
The option price per share of the shares offered in a given Offering
Period shall be the lower of: (i) 85% of the fair market value of a share of
the Common Stock of the Company on the Enrollment Date; or (ii) 85% of the
fair market value of a share of the Common Stock of the Company on the
Exercise Date. The fair market value of the Company's Common Stock on a given
date shall be determined by the Board in its discretion; provided, however,
that where there is a public market for the Common Stock the fair market value
per share shall be the average closing price for the preceding five (5)
business days on the New York Stock Exchange (NYSE) on such date, as reported
in The Wall Street Journal.
8. Exercise of Option. Unless a participant withdraws from the Plan as
provided in paragraph 11, his or her option for the purchase of shares will be
exercised automatically on the Exercise Date of the Offering Period,
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and the maximum number of full shares subject to option will be purchased for
him or her at the applicable option price with the accumulated payroll
deductions in his account. The shares purchased upon exercise of an option
hereunder shall be deemed to be transferred to the participant on the Exercise
Date. During his or her lifetime, a participant's option to purchase shares
hereunder is exercisable only by such participant.
9. Restriction on Transfer of Shares. Effective April 1, 1993, shares
purchased upon exercise of a participant's option may not be transferred by
the participant for a period of one (1) year from the Exercise Date. This
transfer restriction shall be earlier terminated in the event of a
participant's permanent disability or death, or upon the involuntary transfer
of the shares due to divorce, judicial declaration of insolvency or bankruptcy
or other form of involuntary transfer.
10. Delivery. Prior to April 1, 1993, as promptly as practicable after the
Exercise Date of each Offering Period, the Company shall arrange the delivery
to each participant of a certificate representing the full shares purchased
upon exercise of the participant's option. Subsequent to April 1, 1993,
immediately following the Exercise Date of each Offering Period, unless a
participant requests the issuance of a certificate representing the
participant's shares, the Company shall promptly record the participant's full
shares in book entry form. Upon request from a participant, or upon the
involuntary transfer of a participant's shares, the Company shall arrange for
the delivery to the participant of a certificate representing the full shares
purchased. Certificates issued upon a participant's request which are subject
to the transfer restriction referred to in paragraph 9 shall bear a legend in
a conspicuous place referencing the restriction. Any cash remaining to the
credit of a participant's account under the Plan after a purchase by the
participant of shares at the termination of each Offering Period, which is
insufficient to purchase a full share of Common Stock of the Company, shall be
returned to said participant or retained in the participant's account for the
subsequent Offering Period, as determined by the Company as to all
participants for a given Offering Period.
11. Withdrawal; Termination of Employment.
(a) A participant may withdraw all but not less than all the payroll
deductions credited to such participant's account under the Plan at any time
prior to the Exercise Date of the Offering Period by giving written notice to
the Company in the form of Exhibit B to this Plan. All of the participant's
payroll deductions credited to his or her account will be paid to him or her
promptly after receipt of the notice of withdrawal and the participant's
option for the current Offering Period will be automatically terminated, and
no further payroll deductions for the purchase of shares will be made during
the Offering Period. If a participant withdraws from an Offering Period,
payroll deductions will not resume at the beginning of the succeeding Offering
Period unless the participant delivers to the Company a new subscription
agreement as described in Section 5(a).
(b) Upon termination of the participant's Continuous Status as an Employee
prior to the Exercise Date of the Offering Period for any reason, including
retirement or death, the payroll deductions credited to such participant's
account will be returned to him or her or, in the case of his or her death, to
the person or persons entitled thereto under paragraph 15, and such
participant's option will be automatically terminated.
(c) In the event an Employee fails to remain in Continuous Status as an
Employee of the Company for at least twenty (20) hours per week during the
Offering Period in which the Employee is a participant, he or she will be
deemed to have elected to withdraw from the Plan and the payroll deductions
credited to his or her account will be returned to him or her and the option
terminated.
(d) A participant's withdrawal from an Offering Period will not have any
effect upon his or her eligibility to participate in a succeeding Offering
Period or in any similar plan which may hereafter be adopted by the Company.
12. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
13. Stock.
(a) The maximum number of shares of the Company's Common Stock which shall
be made available for saleawards under the Plan shall be 9,250,000 shares, subject
to adjustment upon changes in capitalization of the
B-4
Company as provided in paragraph 19. If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) hereofbased on the Enrollment Date of an Offering Period exceeds the number of shares then
available under the Plan (after deduction of all shares for which options have
been exercised or are then outstanding), the Company shall make a pro rata
allocation of the shares remaining available for option grant in as uniform a
manner as shall be practicable and as it shall determine to be equitable. In
such event, the Company shall give written notice of such reduction of the
number of shares subject to the option to each participant affected thereby
and shall similarly reduce the rate of payroll deductions, if necessary.
(b) The participant will have no interest or voting right in shares covered
by his or her option until such option has been exercised.
(c) Shares to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant
and his or her spouse.
14. Administration. The Plan shall be administered by the Boardprofits of the Company or a committeeas
determined by the Company's consolidated after-tax net profits. The Committee
shall administer the Plan and shall have full power and authority to construe,
interpret, and administer the Plan necessary to comply with the requirements
of membersSection 162(m) of the Board appointed by the Board.Code. The administration, interpretation or application of the Plan by the Board or its
committeeCommittee's decisions shall be final,
conclusive, and binding upon all participants.
Memberspersons. The Committee shall certify in
writing prior to commencement of payment of the Board who are eligible Employees are permittedbonus that the performance
goal or goals under which the bonus is to participatebe paid has or have been achieved.
The Committee in its sole discretion has the Plan, provided that:
(a) Membersauthority to reduce the amount of
a bonus otherwise payable to Executives upon attainment of the Board who areperformance
goal established for a fiscal year. At the beginning of each fiscal year
consistent with the requirements of Section 162(m), the Committee shall: (i)
determine the percentage or other amount related to the Company's profits
available for award under the Plan; (ii) determine the Executive Officers and
Key Employees
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eligible to participate in the Plan may
not votefor the fiscal year; and (iii) determine
each Executive's bonus based on the Company's profits for the fiscal year; and
(iv) determine the frequency at which each bonus will be paid when attained.
The maximum bonus amount that can be paid to any matter affecting the administration of the Plan or the
grant of any option pursuant to the Plan.
(b) If a Committee is established to administer the Plan, no member of
the Board who is eligible to participate in the Plan may be a member of the
Committee.
15. Designation of Beneficiary.
(a) A participant may file a written designation of a beneficiary who is to
receive any shares and cash, if any, from the participant's account under the
Plan in the event of such participant's death subsequent to the end of the
Offering Period but prior to delivery to him of such shares and cash. In
addition, a participant may file a written designation of a beneficiary who is
to receive any cash from the participant's account under the Plan in the event
of such participant's death prior to the Exercise Date of the Offering Period.
(b) Such designation of beneficiary may be changed by the participant at any
time by written notice. In the event of the death of a participant and in the
absence of a beneficiary validly designated under the Plan who is living at
the time of such participant's death, the Company shall deliver such shares
and/or cash to the executor or administrator of the estate of the participant,
or if no such executor or administrator has been appointed (to the knowledge
of the Company), the Company, in its discretion, may deliver such shares
and/or cash to the spouse orexecutive with respect to
any one fiscal year results cannot exceed the greater of $2,000,000 or more dependents or relativestwo
percent (2%) of the participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate.
16. Transferability of Rights. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in paragraph 15 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with paragraph 11.
17. Use of Funds. All payroll deductions received or held by the Company
under the Plan may be used by the Company for any corporate purpose, and the
Company shall not be obligated to segregate such payroll deductions.
18. Reports. Individual accounts will be maintained for each participant in
the Plan. Statements of account will be given to participating Employees; on
no less than an annual basis, promptly following the Exercise Date,
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which statements will set forth the amounts of payroll deductions, the per
share purchase price, the number of shares purchased and the remaining cash
balance, if any.
19. Adjustments Upon Changes in Capitalization. Subject to any required
action by the shareholders of the Company, the number of shares of Common
Stock covered by each option under the Plan which has not yet been exercised
and the number of shares of Common Stock which have been authorized for
issuance under the Plan but have not yet been placed under option
(collectively, the "Reserves"), as well as the price per share of Common Stock
covered by each option under the Plan which has not yet been exercised, shall
be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however,
that conversion of any convertible securities of the Company shall not be
deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect
shall be final, binding and conclusive. Except as expressly provided herein,
no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an option.
In the event of the proposed dissolution or liquidation of the Company, the
Offering Period will terminate immediately prior to the consummation of such
proposed action, unless otherwise provided by the Board.Company's consolidated after-tax net profits.
In the event of a proposed sale of all or substantially all of the assets of the Company, or the
merger of the Company with or into another corporation, each optionChange in Control, any bonuses earned but not yet paid
under the Plan shall be assumedimmediately payable. If the Executive ceases to be
employed by the Company or an equivalent optionby any of its subsidiaries, any unpaid bonuses
shall be substitutedpaid in accordance with the Executive's termination agreement, and as
otherwise determined by such
successor corporation or a parent or subsidiary of such successor corporation,
unless the Board determines, inCommittee. Unpaid bonuses may also be canceled at
the exercise of its sole discretion and in
lieu of such assumption or substitution, that the participant shall have the
right to exercise the option as to all of the optioned stock, including shares
asCommittee.
The Committee may amend, modify, suspend, or terminate the Plan for the
purpose of meeting or addressing any changes in legal requirements or for any
other purpose permitted by law. The Committee will seek shareholder approval
of any amendment determined to whichrequire shareholder approval or advisable under
the option would not otherwise be exercisable. Ifregulations of the Board makes
an option fully exercisable in lieu of assumption or substitution in the event
of a merger or sale of assets, the Board shall notify the participant that the
option shall be fully exercisable for a period of thirty (30) days from the
date of such notice, and the option will terminate upon the expiration of such
period.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves, as well as the price per share
of Common Stock covered by each outstanding option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights
offeringsInternal Revenue Service or other increasesapplicable law or
reductions of shares of its outstanding Common
Stock, and in the event of the Company being consolidated withregulation.
5. NONASSIGNABILITY
No Bonus or merged into any other corporation.
20. Amendment or Termination. The Board of Directors of the Company may at
any time terminate or amend the Plan. Except as provided in paragraph 19, no
such termination can affect options previously granted, nor may an amendment
make any change in any option theretofore granted which adversely affects the
rights of any participant, nor may an amendment be made without prior approval
of the shareholders of the Company (obtained in the manner described in
paragraph 22) if such amendment would:
(a) Increase the number of shares that may be issuedbenefit under the Plan;
(b) Change the designation of the employees (or class of employees)
eligible for participation in the Plan; or
(c) Materially increase the benefits which may accrue to participants
under the Plan.
(d) In the event that the Board determines that the ongoing operation of
the Plan may result in unfavorable financial accounting consequences, the
Board may, in its discretion and, to the extent necessary or desirable,
modify or amend the Plan by means of the following to reduce or eliminate
such unfavorable accounting consequence including, but not limited to:
(i) altering the option price per share for any Offering Period,
including an Offering Period underway at the time of the change in
Purchase Price including an alteration of the option price under
B-6
paragraph 7(b) to 85% of the fair market value of a share of the Common
Stock of the Company on the Exercise Date (without a lookback to the
fair market value on the Enrollment Date); and
(ii) shortening any Offering Period so that Offering Period ends on a
new Exercise Date, including an Offering Period underway at the time of
the Board action.
Such modifications or amendments shall not require stockholder approval or
the consent of any Plan participants.
21. Notices. All notices or other communications by a participant to the
Company under or in connection with the Plan shall be deemed to have been duly
given when received in the form specifiedassignable or
transferable by the Company atparticipant during the location, or
by the person, designated by the Company for the receipt thereof.
22. Shareholder Approval. Continuance ofparticipant's lifetime.
6. NO RIGHT TO CONTINUED EMPLOYMENT
Nothing in the Plan shall be subjectconfer upon any employee any right to approval bycontinue in
the shareholders of the Company within twelve months before or
after the date the Plan is adopted. If such shareholder approval is obtained
at a duly held shareholders' meeting, it may be obtained by the affirmative
vote of the holders of a majority of the shares of the Company present or
represented and entitled to vote thereon, which approval shall be:
(a) (1) solicited substantially in accordance with Section 14(a) of the
Securities Act of 1934, as amended (the "Act") and the rules and
regulations promulgated thereunder, or (2) solicited after the Company has
furnished in writing to the holders entitled to vote substantially the same
information concerning the Plan as that which would be required by the
rules and regulations in effect under Section 14(a) of the Act at the time
such information is furnished; and
(b) obtained at or prior to the first annual meeting of shareholders held
subsequent to the first registration of Common Stock under Section 12 of
the Act.
In the case of approval by written consent, it must be obtained by the
unanimous written consent of all shareholdersemploy of the Company or by written
consent of a smaller percentage of shareholders but only ifshall interfere with or restrict in any way the
Board
determines, on the basis of adviceright of the Company's legal counsel, that the
written consent of such a smaller percentage of shareholders will complyCompany to discharge an employee at any time for any reason
whatsoever, with all applicable laws and will not adversely affect the qualifications of the
Plan under Section 423 of the Code.
23. Conditions Upon Issuance of Shares. Shares shall not be issued with
respect to an option unless the exercise of such option and the issuance and
delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company may require the
person exercising such option to represent and warrant at the time of any such
exercise that the shares are being purchased only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
24. Term of Plan.good cause.
7. EFFECTIVE DATE
The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors or its approval by the shareholders
of the Company as described in paragraph 22. It shall continue in effect for a
term of twenty (20) years unless sooner terminated under paragraph 20.
B-7
APPENDIX C
MICRON TECHNOLOGY, INC.
1998 NON-EMPLOYEE DIRECTORS STOCK INCENTIVE PLAN
1. Purpose. The purpose of the Micron Technology, Inc. 1998 Non-Employee
Directors Stock Incentive Plan is to attract, retain and compensate highly-
qualified individuals who are not employees of Micron Technology, Inc. or any
of its subsidiaries or affiliates for service as members of the Board by
providing them with an ownership interest in the Common Stock of the Company.
The Company intends that the Plan will benefit the Company and its
stockholders by allowing Non-Employee Directors to have a personal financial
stake in the Company through an ownership interest in the Common Stock and
will closely associate the interests of Non-Employee Directors with that of
the Company's stockholders.
2. Defined Terms. Unless the context clearly indicates otherwise, the
following terms shall have the following meanings:
"Board" means the Board of Directors of the Company.
"Company" means Micron Technology, Inc.
"Committee" has the meaning assigned such term in Section 3.
"Common Stock" means the common stock, par value $0.10 per share, of the
Company.
"Deferral Period" has the meaning set forth in Section 6(e) of the Plan.
"Deferred Stock Rights" means the right to receive shares of Common Stock
upon termination as a director of the Company, as described in Section 6(e)
of the Plan.
"Distributions" has the meaning set forth in Section 6(e) of the Plan.
"Election Form" means a form approved by the Committee pursuant to which
a Non-Employee Director elects a form of payment of his or her Retainer, as
provided in Section 6(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Market Value," on any date, means (i) if the Common Stock is listed
on any established stock exchange, including without limitation the New
York Stock Exchange ("NYSE") or a national market system, the Fair Market
Value of a Share of Common Stock shall be the average closing price for
such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system (or the exchange with the greatest volume of
trading in Common Stock) for the five business days preceding the day of
determination, as reported in The Wall Street Journal or such other source
as the Committee deems reliable; or (ii) in the absence of an established
market for the Common Stock, the Fair Market Value shall be determined in
good faith by the Committee.
"Hardship" has the meaning set forth in Section 6(f) of the Plan.
"Non-Employee Director" means a director of the Company who is not an
employee of the Company or of any of its subsidiaries or affiliates.
"Participant" means any Non-Employee Director who is participating in the
Plan.
"Plan" means the Micron Technology, Inc. 1998 Non-Employee Directors
Stock Incentive Plan, as amended from time to time.
"Plan Administrator" means the person or persons designated by the
Committee to administer the Plan in accordance with Section 3 of the Plan.
If no such administrator is designated, the Plan Administrator shall be the
Committee or the Board, as the case may be, administering the Plan pursuant
to Section 3.
"Plan Year" means the twelve-month period ending on December 31 of each
year which, for purposes of the Plan, is the period for which Retainer is
earned.
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"Quarterly Grant Date" has the meaning set forth in Section 6(c) of the
Plan.
"Quarterly Service Period" has the meaning set forth in Section 6(c) of
the Plan.
"Retainer" means the compensation payable by the Company to a Non-
Employee Director for service as a director (and, if applicable, as the
member of a committee of the Board) of the Company, as such amount may be
changed from time to time.
"Rule 16b-3" means Rule 16b-3, as amended from time to time, of the
Securities and Exchange Commission as promulgated under the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means shares of Common Stock.
"Stock Equivalent Amount" means the portion (in 25% increments) of a Non-
Employee Director's Retainer for a Plan Year that he or she has elected to
receive in the form of Common Stock or Deferred Stock Rights.
3. Administration. The Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Committee"). Subject to the
provisions of the Plan, the Committee shall be authorized to interpret the
Plan, to establish, amend and rescind any rules and regulations relating to
the Plan, and to make all other determinations necessary or advisable for the
administration of the Plan; provided, however, that the Committee shall have
no discretion with respect to the eligibility or selection of Non-Employee
Directors to receive awards under the Plan, the number of Shares subject to
any such awards or the time at which any such awards are to be granted. The
Committee's interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding upon all parties concerned
including the Company, its stockholders and persons granted awards under the
Plan. The Committee may appoint a plan administrator to carry out the
ministerial functions of the Plan, but the administrator shall have no other
authority or powers of the Committee. Notwithstanding the foregoing, the Board
shall exercise any and all rights, duties and powers of the Committee under
the Plan to the extent required by the applicable exemptive conditions of Rule
16b-3, as determined by the Board its sole discretion.
4. Shares Subject to Plan. The Shares issued under the Plan shall not exceed
in the aggregate 250,000 shares of Common Stock. Such Shares may be authorized
and unissued shares or treasury shares.
5. Participants. All active Non-Employee Directors shall be eligible to
participate in the Plan.
6. Form of Payment of Retainer.
(a) Annual Elections. On or before November 30 of each year (December 31,
1998 in the case of the first Plan Year), each Non-Employee Director shall
file with the Plan Administrator an election form in substantially the form
attached hereto as Exhibit A, or such other form as the Plan Administrator
shall prescribe (the "Election Form"), in which such Non-Employee Director
shall indicate his or her preference to receive some or all of his or her
Retainer for the following Plan Year in the form of (i) cash, (ii) Common
Stock, or (iii) Deferred Stock Rights. Such elections shall be made in
increments of 25% of the Retainer. Individuals who are nominated to become
Non-Employee Directors may make such election after such nomination but
prior to the time they are elected to the Board. If a Non-Employee Director
fails to timely file an Election Form for a Plan Year, then 100% of his or
her Retainer for such Plan Year will be paid in cash.
(b) Cash Payments. That portion of the Retainer to be paid in cash will
be paid whenever such fees are payable, in accordance with the policies
established by the Committee from time to time.
(c) Grant Dates and Formula for Stock Grants. To the extent that a Non-
Employee Director has elected to receive some or all of his or her Retainer
in the form of Common Stock and has not elected to defer receipt of such
shares pursuant to Section 6(e), shares of Common Stock shall be
automatically
C-2
granted to such Non-Employee Director on March 31, June 30, September 30
and December 31 of each Plan Year (each such date is hereinafter referred
to as a "Quarterly Grant Date"). The total number of Shares included in
each grant under this Section 6(c) shall be determined by (i) dividing the
Stock Equivalent Amount earned by the Non-Employee Director during the
three-month period immediately preceding the Quarterly Grant Date (the
"Quarterly Service Period") by the Fair Market Value per Share on the
Quarterly Grant Date, and (ii) and subtracting any Shares to be deferred
pursuant to Section 6(e). Fractions will be rounded to the next highest
Share.
(d) Termination of Service During Quarterly Service Period. In the event
of termination of service on the Board by any Participant during a
Quarterly Service Period, such Participant's award for the Quarterly
Service Period shall be determined in accordance with Sections 6(b) based
upon the Stock Equivalent Amount earned during such Quarterly Service
Period through the date of termination of service, provided, that the grant
date shall be the date of termination of service unless the grant has been
deferred pursuant to Section 6(e).
(e) Deferred Stock Rights.
(i) Election to Defer. Each Participant will have the right to elect,
in his or her Election Form delivered to the Plan Administrator prior
to the commencement of each Plan Year, to defer until after the
Participant's termination of service the grant of the Shares that would
otherwise be granted to the Participant during the next ensuing Plan
Year ("Deferred Stock Rights"). Pursuant to this Election Form, the
Participant will elect whether all of the deferred grant will be (a)
granted within 30 days after termination of service or (b) granted in
approximately equal annual installments of Shares over a period of two
to five years (as the Participant may elect) after the termination of
service, each such annual grant to be made within 30 days after the
anniversary of the termination of service. The deferral Election Form
signed by the Participant prior to the Plan Year will be irrevocable
except in case of Hardship (as defined in Section 6(f)) as determined
in good faith by the Board pursuant to Section 6(f). No Shares will be
issued until the grant date(s) so deferred (the "Deferred Grant Date")
at which time the Company agrees to issue the Shares to the
Participant. The Participant will have no rights as a stockholder with
respect to the Deferred Stock Rights, and the Deferred Stock Rights
will be unsecured.
(ii) Deferred Dividend Account. If any dividends or other rights or
distributions of any kind ("Distributions") are distributed to holders
of Common Stock during the period from the applicable Quarterly Grant
Date until the Deferred Grant Date (the "Deferral Period") but prior to
the Participant's termination of service, an amount equal to the cash
value of such Distributions on their distribution date, as such value
is determined by the Committee, will be credited to a deferred dividend
account for the Participant as follows: the account will be credited
with the right to receive Shares having a Fair Market Value as of the
date of the Distribution equal to the cash value of the Distribution.
The Company will issue Shares equal to the cumulative total of rights
to Shares in such account within 30 days after the Participant's
termination of service.
If a Distribution is distributed to holders of Common Stock after the
Participant's termination of service but prior to the issuance in full of
the deferred Shares, an amount equal to the cash value of such
Distributions pertaining to any Shares still deferred shall be converted
into Shares equivalent in value to the Distribution (based on the Fair
Market Value as of the date of Distribution) and such Shares will be issued
to the Participant as soon as practical after the date of the Distribution.
No right or interest in the Deferred Stock Rights or in the deferred
dividend account shall be subject to liability for the debts, contracts or
engagements of the Participant or shall be subject to disposition by
transfer, alienation, anticipation, pledge, encumbrance, assignment or any
other means whether such disposition be voluntary or involuntary or by
operation of law by judgment, levy, attachment, garnishment or any other
legal or equitable proceedings (including bankruptcy), and any attempted
disposition thereof shall be null and void and of no effect; provided,
however, that nothing in this Section 6(e) shall prevent transfers by will
or by the applicable laws of descent and distribution. The Committee will
have the right to adopt other regulations and procedures to govern deferral
of grants of Shares.
C-3
(f) Hardship. The Board may accelerate the distribution of all or a
portion of a Participant's deferred grants of Shares on account of his or
her Hardship, subject to the following requirements: (i) the value of such
accelerated distribution shall not exceed the amount necessary to satisfy
the Hardship, less the amount which can be satisfied from other resources
which are reasonably available to the Participant, (ii) the denial of the
Participant's request for a Hardship acceleration would result in severe
financial hardship to the Participant, and (iii) the Participant has not
received an accelerated distribution on account of Hardship within the 12-
month period preceding the acceleration.
For purposes of this Plan, "Hardship" of a Participant, as determined by
the Board in its discretion on the basis of all relevant facts and
circumstances and in accordance with the following nondiscriminatory and
objective standards uniformly interpreted and consistently applied, shall
mean a severe financial hardship to the Participant resulting from a sudden
and unexpected illness or accident of the Participant or of his or her
dependent, loss of the Participant's property due to casualty, or other
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant. A financial need shall not
constitute a Hardship unless it is for at least $1,000,000 or the entire
value of the principal amount of the Participant's deferred grants.
7. Prorated Grants. If on any Quarterly Grant Date, shares of Common Stock
are not available under the Plan to grant to Non-Employee Directors the full
amount of a grant contemplated by the Plan, then each such director shall
receive an award equal to the number of shares of Common Stock then available
under the Plan divided by the number of Non-Employee Directors entitled to a
grant of shares on such date. Fractional shares shall be ignored and not
granted. Any shortfall resulting from such proration shall be paid in the form
of cash.
8. Withholding. Whenever the Company issues Shares under the Plan, the
Company shall have the right to withhold from sums due the recipient, or to
require the recipient to remit to the Company, any amount sufficient to
satisfy any federal, state and/or local withholding tax requirements prior to
the delivery of any certificate for such Shares.
9. Adjustments.
(a) In the event that the Committee determines that any Distribution
(whether in the form of cash, Common Stock, other securities, or other
property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase, or exchange of Common Stock or other securities of
the Company, issuance of warrants or other rights to purchase Common Stock
or other securities of the Company, or other similar corporate transaction
or event, in the Committee's sole discretion, affects the Common Stock such
that an adjustment is determined by the Committee to be appropriate in
order to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under the Plan or with respect to an
award or awards hereunder, then the Committee shall, in such manner as it
may deem equitable, adjust the number and type of Shares (or other
securities or property) which may be granted under the Plan (including, but
not limited to, adjustments of the maximum number and kind of securities
which may be issued); provided, however, that to the extent required by the
applicable exemptive conditions of Rule 16b-3, any such adjustment shall be
subject to approval by the Board.
(b) In the event of any corporate transaction or event described in
paragraph (a) which results in Shares being exchanged for or converted into
cash, securities or other property (including securities of another
corporation), the Committee will have the right to terminate this Plan as
of the date of the transaction or event, in which case all stock grants
deferred under Section 6(e) shall become the right to receive such cash,
securities or other property.
(c) The number of Shares finally granted under this Plan shall always be
rounded to the next highest whole Share.
(d) Any decision of the Committee pursuant to the terms of this Section 9
shall be final, binding and conclusive upon the Participants, the Company
and all other interested parties; provided, however, that to
C-4
the extent required by the applicable exemptive conditions of Rule 16b-3,
any such decision shall be subject to approval by the Board.
10. Amendment.28, 1994. The Committee may
terminate or suspend the Plan at any time,
without stockholder approval. The Committee may amend the Plan at any time and
for any reason without stockholder approval; provided, however, that the
Committee may condition any amendment on the approval of stockholders of the
Company if such approval is necessary or deemed advisable with respect to tax,
securities or other applicable laws, policies or regulations. No termination,
modification or amendment of the Plan may, without the consent of a
Participant, adversely affect a Participant's rights under an award granted
prior thereto.
11. Indemnification. Each person who is or has been a member of the
Committee or who otherwise participates in the administration or operation of
this Plan shall be indemnified by the Company against, and held harmless from,
any loss, cost, liability or expense that may be imposed upon or incurred by
him or her in connection with or resulting from any claim, action, suit or
proceeding in which such person may be involved by reason of any action taken
or failure to act under the Plan and shall be fully reimbursed by the Company
for any and all amounts paid by such person in satisfaction of judgment
against him or her in any such action, suit or proceeding, provided he or she
will give the Company an opportunity, by written notice to the Committee, to
defend the same at the Company's own expense before he or she undertakes to
defend it on his or her own behalf. This right of indemnification shall not be
exclusive of any other rights of indemnification.
The Committee and the Board may rely upon any information furnished by the
Company, its public accountants and other experts. No individual will have
personal liability by reason of anything done or omitted to be done by the
Company, the Committee or the Board in connection with the Plan.
12. Duration of the Plan. The Plan shall remain in effect until ten years
from the Effective Date, unless terminated earlier by the Committee.
13. Expenses of the Plan. The expenses of administering the Plan shall be
borne by the Company.
14. Effective Date. The Plan was originally adopted by the Board on November
23, 1998, and became effective upon the approval thereof by the stockholders
of the Company on , 199 (the "Effective Date").
C-5time.
A-2
[MAP TO MICRON APPEARS HERE]OF DIRECTIONS TO THE
19981999 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD AT
THE
BOISE CENTRE
ON THE GROVE
THURSDAY, 9:00
A.M.
JANUARY 14, 1999SHAREHOLDERS]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORSThis Proxy is solicited on behalf of the Board of Directors
[LOGO OF MICRON TECHNOLOGY, INC.]
19981999 ANNUAL MEETING OF SHAREHOLDERS
JANUARY 14, 199918, 2000
The undersigned shareholder(s) of Micron Technology, Inc., a Delaware
corporation, hereby acknowledge(s) receipt of the Notice of 19981999 Annual Meeting
of Shareholders and Proxy Statement, each dated November 30, 1998,December 10, 1999, and hereby
appoints Steven R. Appleton and Wilbur G. Stover, Jr., and each of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 19981999 Annual
Meeting of Shareholders of Micron Technology, Inc., to be held January 14, 1999,18, 2000,
at 9:00 a.m., Mountain Standard Time, at the BOISE CENTRE ON THE GROVE,Boise Centre on the Grove, 850 W.
FRONT STREET, BOISE, IDAHOFront Street, Boise, Idaho 83702, and at any adjournment or adjournments
thereof, and to vote (including cumulatively, if required) all shares of Common
Stock which the undersigned would be entitled to vote if then and there
personally present, on the matters set forth on the reverse side:
(continued, and to be signed and dated on reverse side)
COMPANY #____________
CONTROL #____________
THERE ARE THREE WAYS TO VOTE YOUR PROXY
VOTE BY PHONE
1-800-240-6326
Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week.
Have your proxy card in hand when you call. You will be prompted to enter your
3-digit company number and a 7-digit control number, which are located above,
and then follow the simple instructions.
VOTE VIA INTERNET
http://www.eproxy.com/mu/
Use the Internet to vote your proxy 24 hours a day, 7 days a week. Have your
proxy card in hand when you access the web site. You will be prompted to enter
your 3-digit company number and a 7-digit control number, which are located
above, to create an electronic ballot.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we have provided.
Please detach here
Your telephone or Internet vote authorizes the named proxies to vote your shares
in the same manner as if you marked, signed and returned the proxy card. The
deadline for telephone or Internet voting is noon MST, on January 13, 1999.below:
THE DIRECTORS RECOMMEND A VOTE "FOR" ITEMS 1 THROUGH 5
---
1. Election of directorsELECTION OF DIRECTORS: [_] FOR all nominees listed below [_] WITHHOLD authority to vote for all
(except as indicated) nominees listed below
(Instruction: To withhold authority to vote for any individual nominee, write
the number(s) in the box provided to the right.) [______________]
01 Steven R. Appleton 02 James W. Bagley 03 Robert A. Lothrop 04 Thomas T. Nicholson
05 Don J. Simplot 06 John R. Simplot 07 Gordon C. Smith 08 William P. Weber.all
(except as indicated) nominees listed below
If you wish to withhold authority to vote for any individual nominee, strike a
line through that nominee's name in the list below: Steven R. Appleton; James
W. Bagley; Robert A. Lothrop; Thomas T. Nicholson; Don J. Simplot; Gordon C.
Smith; William P. Weber
(to be signed on reverse side)
(continued from other side)
2. Proposal by the Company to approve an amendment to the Company's Certificate
of IncorporationPROPOSAL BY THE COMPANY TO RENEW APPROVAL OF THE COMPANY'S CURRENT EXECUTIVE
BONUS PLAN FOR PURPOSES OF SECTION 162(m) OF THE INTERNAL REVENUE CODE
[_] FOR [_] AGAINST [_] ABSTAIN
3. Proposal by the Company to approve an amendment to the Company's 1989
Employee Stock Purchase Plan
[_]PROPOSAL BY THE COMPANY TO RATIFY THE APPOINTMENT OF PRICEWATERHOUSECOOPERS
LLP AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR [_] AGAINST [_] ABSTAIN
4. Proposal by the Company to approve the 1998 Non-Employee Director Stock
Incentive Plan
[_] FOR [_] AGAINST [_] ABSTAIN
5. Proposal by the Company to ratify the appointment of PricewaterhouseCoopers
LLP as the Company's independent accountants for fiscal 1999FISCAL 2000
[_] FOR [_] AGAINST [_] ABSTAIN
and in their discretion, upon such other matter or matters which may properly
come before the meeting or any adjournment or adjournments thereof.
The shares represented by this proxy when properly executed will be voted in the
manner directed herein by the undersigned shareholder(s). IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTEDIf no direction is
made, this proxy will be voted FOR ITEMSitems 1, 2 3, 4 AND 5.and 3. If any other matters
properly come before the meeting, or if cumulative voting is required, the
persons named in this proxy will vote, in their discretion, provided that they
will not vote in the election of directors for persons for whom authority to
vote has been withheld.
Dated_______________________________________________
____________________________________________________
____________________________________________________
Signature(s) of Shareholder(s) in Box
PLEASE SIGNDated___________________________
________________________________
Signature
________________________________
Signature
(This proxy should be voted, signed, and dated by the shareholder(s) exactly as
his or her name appears at left. Joint
owners should each sign. Executors, administrators,
trustees, etc.hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate when signing.indicate. If signer is a corporation, please sign full nameshares are held
by duly
authorized officer.
Address change? Mark box [_] Indicate change at leftjoint tenants or as community property, both should sign.)