Sample Business Contracts

Nonqualified Stock Option Agreement - Micron Electronics Inc. and Joel J. Kocher

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                            MICRON ELECTRONICS, INC.

     This Stock Option Agreement ("Agreement") is made and entered on April 6th,
2000 to be effective as of the date of grant set forth below (the "Date of
Grant") by and between Micron Electronics, Inc., a Minnesota corporation (the
"Company"), and the participant named below ("Participant"). Capitalized terms
not defined herein shall have the meaning ascribed to them in the Company's 1995
Stock Option Plan (the "Plan").

Participant:                   Joel J. Kocher
Social Security Number:

Address:                       Micron Electronics, Inc.
                               900 E. Karcher Road
                               Nampa, Idaho 83687

Total Option Shares:           75,000
Exercise Price Per Share:      $9.0062
Date of Grant:                 January 13, 1998
Vesting Start Date:            See Section 2.1 below
Expiration Date:               January 13, 2008

     1.   Grant of Option. The Company hereby grants to Participant an option
(the "Option") to purchase the total number of shares of Common Stock, $0.01 par
value, of the Company set forth above (the "Shares") at the Exercise Price Per
Share set forth above (the "Exercise Price"), subject to all of the terms and
conditions of this Agreement. The Option is intended to be a Nonstatutory Stock

     2.   Vesting and Exercise Periods

          2.1  Vesting and Exercise Periods of Option. The Option Shares will
vest at the end of seven (7) full years of the Participant's Continuous Status
as an Employee or Consultant, subject to the provisions related to option
vesting contained in any Employment and Noncompete Agreement entered into
between the Company and the Participant. Notwithstanding the vesting described
in the previous sentence:

               A.   Twenty Five Thousand (25,000) of the Option Shares will vest
immediately if prior to such seven year period the Company: (i) achieves year
over year net revenue growth for one fiscal quarter in the Core PC Business, and
(ii) achieves positive operating income for the Core PC Business during such
fiscal quarter, in each case as determined by the Company's regularly
established accounting practices.

               B.   Fifty Thousand (50,000) of the Option Shares will vest
immediately if prior to completion of such seven year period: (i) a public
offering of the Company's Internet Services Business is completed and the
Internet Services Business subsequently achieves market capitalization averaging
not less than $1 billion over five (5) consecutive business days, or such other
lower amount as may be determined by the Compensation Committee, or (ii) the

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capitalization of the Company averages not less than $2,731,109,436 as of close
of trading over five (5) consecutive business days.

          Provided, however, that in no event shall this Option be exercised
while any portion of options granted to Participant under the Plan are vested
and exercisable. The Compensation Committee of the Company may, at any time at
its discretion, lower the financial conditions for accelerated vesting described

          The term "Core PC Business" includes the Company's personal computer,
server and related peripheral equipment business, together with any affiliated
businesses, but expressly excludes SpecTek and the Internet Services Business.
The term "Internet Services Business" shall mean Micron PC Web Services, Inc.
and its subsidiaries, currently referred to collectively as HostPro.

          2.2  Expiration. The Option shall expire on the Expiration Date set
forth above and must be exercised, if at all, on or before the Expiration Date.

          2.3  Change in Control. In the event of a Change in Control, the
unexercised portion of the Option shall become immediately exercisable. In the
event of a sale of all or substantially all of the Core PC Business not
constituting a Change in Control, the shares subject to Section 2.1.A. above
shall become immediately exercisable.

          2.4  Adjustments Upon Changes in Capitalization, Dissolution, Merger
or Assets Sale, other than a Change in Control. Subject to Section 2.3 hereof,
the provisions of Sections 11(a), (b) and (c) of the Plan shall apply to this

     3.   Termination. Upon termination of the Participant's Continuous Status
as an Employee or Consultant, the following provisions shall govern the exercise
of this Option in the event the Participant is terminated.

          3.1  Termination for Any Reason Except Death or Disability. If
Participant is terminated for any reason, except death or Disability,
notwithstanding any other provision in this Agreement to the contrary, the
Option, to the extent that it would have been exercisable by Participant on the
date of termination pursuant to this Agreement, may be exercised by Participant
no later than thirty (30) days after the date of termination, but in any event
no later than the Expiration Date.

          3.2  Termination Because of Death or Disability. If Participant is
terminated because of death or Disability of Participant, notwithstanding any
other provision in this Agreement to the contrary, the Option, to the extent
that it is exercisable by Participant on the date of termination, may be
exercised by Participant (or Participant's legal representative) no later than
twelve (12) months after the date of termination, but in any event no later than
the Expiration Date.

          3.3  No Obligation to Employ. Nothing in this Agreement shall confer
on Participant any right to continue in the employ of, or other relationship
with, the Company or any Parent or Subsidiary of the Company, or limit in any
way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant's employment or other relationship at any time, with or
without cause.

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     4.   Manner of Exercise

          4.1  Stock Option Exercise Agreement. To exercise this Option,
Participant (or in the case of exercise after Participant's death, Participant's
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise notice substantially in the form
approved by the Company (the "Exercise Notice"), which shall set forth, among
other things, Participant's election to exercise the Option and the number of
Shares being purchased. If someone other than Participant exercises the Option,
then such person must submit documentation reasonably acceptable to the Company
that such person has the right to exercise the Option.

          4.2  Limitations on Exercise. The Option may not be exercised unless
such exercise is in compliance with all applicable federal and state securities
laws, as they are in effect on the date of exercise.

          4.3  Payment. The Exercise Notice shall be accompanied by full payment
of the Exercise Price for the Shares being purchased:

               (a)  in cash;

               (b)  by check:

               (c)  delivery of a properly executed Exercise Notice together
                    with such other documentation as the Administrator and the
                    broker, if applicable, shall require to effect an exercise
                    of the Option and delivery to the Company of the sale or
                    loan proceeds required to pay the exercise price;

               (d)  any combination of the foregoing methods of payment; or

               (e)  such other consideration and method of payment for the
                    issuance of Shares to the extent permitted by Applicable
                    Laws and approved by the Administrator.

          4.4  Tax Withholding. In connection with the issuance of the Shares
upon exercise of the Option, Participant must pay or provide for any applicable
federal or state withholding obligations of the Company.

          4.5  Issuance of Shares. Upon the exercise of the Option in accordance
with this Section 4, the Company shall issue the purchased Shares registered in
the name of Participant, Participant's authorized assignee, or Participant's
legal representative, and shall deliver certificates representing the Shares
with the appropriate legends affixed thereto.

     5.   Compliance with Laws and Regulations. The exercise of the Option and
the issuance and transfer of Shares shall be subject to compliance by the
Company and Participant with all applicable requirements of federal and state
securities laws and with all applicable requirements of any stock exchange on
which the Company's Common Stock may be listed at the time of such issuance or

<PAGE>   4

     6.   Nontransferability of Option. The Option may not be transferred in any
manner other than by will or by the laws of decent and distribution and may be
exercised during the lifetime of Participant only by Participant. The terms of
the Option shall be binding upon the executors, administrators, successor and
assigns of Participant.

     7.   Tax Consequences. Set forth below is a brief summary as of the Date of
Grant of some of the federal and state tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,

          7.1  Exercise of Nonqualified Stock Option. Participant will be
treated as having received compensation income (taxable at ordinary income tax
rates) equal to the excess, if any, of the fair market value of the Shares on
the date of exercise over the Exercise Price. Prior to the delivery of the
Shares, the Company will be required to withhold from Participant's compensation
or collect from Participant and pay to the applicable taxing authorities an
amount equal to a percentage of this compensation income at the time of

          7.2  Disposition of Shares. If the Shares are held for more than
twelve (12) months after the date of the transfer of the Shares pursuant to the
exercise of the Option, any gain or loss realized on disposition of the Shares
will be treated as long term capital gain or loss for federal and state income
tax purposes.

     8.   Privileges of Stock Ownership. Participant shall not have any of the
rights of a shareholder with respect to any Shares until Participant exercises
the Option and pays the Exercise Price.

     9.   S-8 Registration. The Company shall register the Shares issuable under
this Option on a Form S-8 Registration Statement prior to the initial vesting
date hereunder and shall keep such Registration Statement in effect for the
entire period that this Option thereafter remains outstanding.

     10.  Entire Agreement. This Agreement and any Employment and Noncompete
Agreement entered into between the Company and the Participant constitute the
entire agreement of the parties and supersede all prior undertakings and
agreements with respect to the subject matter hereof. The provisions set forth
herein replace and supersede Section 4.d of the Employment Offer dated January
10, 1998 to Joel J. Kocher and any previous option agreements or notices
regarding the options described herein.

<PAGE>   5
     11.  Notices. Any notices required to be given or delivered to the Company
under the terms of this Agreement shall be in writing and addressed to the
Corporate Secretary of the Company at its principal corporate offices. Any
notice required to be given or delivered to Participant shall be in writing and
addressed to Participant at the address indicated above or to such other address
as such party may designate in writing from time to time to the Company. All
notices shall be deemed to have been given or delivered upon; personal delivery;
three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); one (1) business day after deposit
with any return receipt express courier (prepaid); or one (1) business day after
transmission by rapifax or telecopier.

     12.  Successor and Assigns. The Company may assign any of its rights under
this Agreement. This Agreement shall be binding upon and inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on
transfer set forth herein, this Agreement shall be binding upon Participant and
Participant's heirs, executors, administrators, legal representatives,
successors and assigns.

     13.  Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.

     14.  Acceptance. Participant hereby acknowledges receipt of this Agreement.
Participant has read and understands the terms and provisions thereof, and
accepts the Option subject to all the terms and conditions of this Agreement.
Participant acknowledges that there may be adverse tax consequences upon
exercise of the Option or disposition of the Shares and that Participant should
consult a tax advisor prior to such exercise or disposition.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed in duplicate by its duly authorized representative and Participant has
executed this Agreement in duplicate.

                                      /s/ Joel J. Kocher

By: /s/ Sid Ferrales                  Joel J. Kocher
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   Sid R. Ferrales, SVP, HR           Print Name

Date: 5-23-00                         Date: 5-23-00
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