EXHIBIT 5
MTI SHAREHOLDER AGREEMENT
This Shareholder Agreement (the "AGREEMENT") is entered into as of
March 22, 2001, by and among Micron Electronics, Inc., a Minnesota corporation,
(the "COMPANY") and Micron Technology, Inc., a Delaware corporation ("MTI").
RECITALS
A. Concurrently with the execution of this Agreement, the Company,
Interland Acquisition Corporation, a Delaware corporation and a wholly owned
first-tier subsidiary of the Company ("MERGER SUB"), and Interland, Inc., a
Georgia corporation ("INTERLAND"), are entering into an Agreement and Plan of
Merger (the "MERGER AGREEMENT") that provides for the merger of Merger Sub with
and into Interland (the "MERGER"). Pursuant to the Merger, shares of common
stock of Interland, no par value per share, will be converted into shares of the
Company's Common Stock on the basis described in the Merger Agreement.
Capitalized terms used but not defined herein shall have the meanings set forth
in the Merger Agreement.
B. As a material inducement for the Company and Interland to enter
into the Merger Agreement, the Company and MTI desire to enter into this
Agreement, which, among other things, places certain restrictions on MTI
individually and on the Company's securities that MTI holds.
NOW, THEREFORE, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereby agree as follows:
1. RESTRICTIONS ON TRANSFER OF SHARES
MTI hereby agrees that it shall not sell, transfer, assign,
pledge, hypothecate or otherwise dispose of, directly or indirectly, any shares
of capital stock of the Company (the "SHARES") held by MTI during the period
beginning on the Effective Time and ending on the nine month anniversary of the
Effective Time; PROVIDED, that following the nine month anniversary of the
Effective Time, the obligations of MTI under this Section 1 shall terminate
immediately; and PROVIDED, FURTHER, that notwithstanding the foregoing, any
Shares held by MTI may be transferred (i) to the Company or to a person or
persons that the Company has approved in writing; (ii) pursuant to a Bona Fide
Public Offering (as defined below) that includes securities of the Company being
sold by MTI; (iii) in response to a Third Party tender offer or exchange offer;
(iv) in a merger or consolidation; (v) pursuant to a plan of liquidation that is
authorized by the Company's Board; (vi) from MTI to Micron Foundation; (vii)
pursuant to a pledge of any Shares made pursuant to a bona fide loan transaction
that creates a security interest; (viii) to any controlled Affiliate of MTI; or
(ix) to any other transferee; provided, however, that with respect to clauses
(vi), (vii), (viii) and (ix) of this sentence, the transferee must agree in
writing to be bound by this Section 1 with respect to any transferred Shares. As
used in this Agreement, "BONA FIDE PUBLIC OFFERING" means a public offering of
securities of
the Company registered under the Securities Act in which registration has been
declared effective by the Securities and Exchange Commission.
2. STANDSTILL PROVISIONS.
2.1 STANDSTILL. MTI hereby agrees that, until the
eighteen-month anniversary of the Effective Time, MTI will not, without the
Company's prior written consent, acquire, or enter into discussions,
negotiations, arrangements or understandings with any third party to acquire,
beneficial ownership (as defined in Rule 13d-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT")) of any securities of the
Company entitled to vote with respect to the election of any directors of the
Company ("VOTING STOCK"), any securities convertible into, exchangeable for or
exercisable for, or that may otherwise become, Voting Stock, or any other right
to acquire Voting Stock; other than (a) by way of stock dividend or other
distribution or rights or offerings made available to holders of shares of
Voting Stock generally, or (b) as a result of any exercise of stock purchase
rights pursuant to any stockholder rights plan.
For purposes of this Section 2, any Shares or options or rights to
acquire such Shares acquired by Affiliates of MTI who are also employees or
directors of the Company shall be excluded from the calculation of the number of
shares of Voting Stock held by MTI.
2.2 EXCEPTIONS TO STANDSTILL. Notwithstanding the
restrictions set forth in Section 2.1 above:
(a) EXCEPTIONS. MTI may acquire Voting Stock, and
the limitations of Section 2.1 shall be (x) suspended, upon the earlier of: (i)
the date that a third party not affiliated with MTI commences a tender or
exchange offer that is made and is not withdrawn or terminated to purchase, or
to exchange for cash or other consideration, Voting Stock that, if accepted or
if otherwise successful, would result in such person or group beneficially
owning or having the right to acquire shares of Voting Stock (not counting any
shares of Voting Stock originally acquired by such third party from MTI or any
Affiliate of MTI) with aggregate Voting Power (as defined below) representing
more than 50% of the Total Voting Power (as defined below) of the Company then
in effect PROVIDED, HOWEVER, that the foregoing standstill limitation will be
reinstated if any such tender or exchange offer is withdrawn or terminated, (ii)
the public announcement by the Company that it has entered into any agreement
with respect to a merger, consolidation, reorganization or similar transaction
involving the Company in which all the shareholders of the Company before such
transaction collectively will own less than 50% of the outstanding voting stock
of the surviving or acquiring entity immediately after such transaction
PROVIDED, HOWEVER; that the foregoing standstill limitation will be reinstated
if such transaction is terminated prior to consummation thereof, or (iii) the
public announcement by the Company that it has entered into any agreement with
respect to the sale or disposition of all or substantially all of the Company's
assets; PROVIDED, HOWEVER; that the foregoing standstill limitation will be
reinstated if such transaction is terminated prior to consummation thereof, or
(y) terminated upon the percentage of Voting Stock beneficially owned MTI
falling below 5%.
(b) VOTING POWER. As used in this Section 2, (i) the
term "VOTING POWER" means the number of votes such Voting Stock is entitled to
cast with respect to the
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election of directors of the Company at any meeting of shareholders of the
Company; (ii) the term "TOTAL VOTING POWER" means the total number of votes
which may be cast in the election of directors of the Company at any meeting of
shareholders of the Company if all Voting Stock was represented and voted to the
fullest extent possible at such meeting; and (iii) the term "AFFILIATE OF MTI"
shall mean any entity or person controlling, controlled by or under common
control with MTI (except as set forth in the last paragraph of Section 2.1).
3. COMPANY'S CALL OPTION
3.1 CALL OPTION. At any time and from time to time during
the period beginning at the Effective Time and ending on the second year
anniversary of the Effective Time, the Company shall have the right to require
MTI to sell to the Company in accordance with this Section 3, for cash, that
number of shares held by MTI in excess of twenty five percent (25%) of the
outstanding shares of capital stock of the Company as of the date of the Call
Notice (as defined below) (the "CALL OPTION").
3.2 NOTICE. The Company may exercise the Call Option after a
ten day period beginning upon delivery of written notice to MTI (a "CALL
NOTICE") specifying, (i) the Company's bona fide intention to exercise the Call
Option, (ii) the number of shares that the Company shall purchase from MTI,
(iii) the number of shares expected to represent twenty five percent (25%) of
the outstanding shares of capital stock of the Company as of the expected date
of payment, (iv) the proposed closing date of the sale, which date shall be
within ten days of the delivery of such Call Notice, and (v) the purchase price
and other relevant terms of the sale; provided, however, that (A) the Company
may not deliver more than one Call Notice during any 3 month period, (B) the
Company shall purchase a minimum number of shares pursuant to such Call Notice
equal to two and one-half percent (2.5%) of the outstanding shares of capital
stock of the Company as of the expected date of closing of the sale, and (C)
each Call Notice shall be an irrevocable offer to purchase such shares on the
proposed closing date of the sale.
3.3 PAYMENT OF PURCHASE PRICE.Subject to the notice
requirement provided in Section 3.2, the Company shall deliver to MTI on the
proposed closing date of the sale, which date shall be no later than ten days
after the date of the Call Notice unless otherwise agreed by the parties, the
purchase price of the shares being purchased by the Company in same day funds
via wire transfer to the account specified by MTI and a certificate signed by an
officer of the Company that verifies the number of issued and outstanding shares
of the Company's capital stock as of the payment date. The purchase price of any
shares purchased from MTI by the Company pursuant to this Section 3 shall be the
shares are traded on a national securities exchange or the Nasdaq National
Market, the average of the closing prices of the securities on such exchange
over the 20 trading day period ending 2 days prior to the purchase of the shares
under the Call Option; provided, however, if the shares are not traded on a
national securities exchange or the Nasdaq National Market, the Company may not
exercise its option to purchase shares pursuant to this Section 3.
4. ACCESS TO INFORMATION; COOPERATION.
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4.1 ACCESS; COOPERATION. So long as MTI holds that holds at
least five percent (5%) of the outstanding Voting Stock, MTI shall have the
right to visit and inspect any of the properties of the Company or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the Company
or any of its subsidiaries with its officers, and to review the books and
records of the Company and such other information as is reasonably requested all
at such reasonable times and as often as may be reasonably requested; provided,
however, that all requests for information shall be reasonably related to MTI's
position as a stockholder. The Company shall cooperate with MTI with respect to
any such requests.
4.2 BASIC FINANCIAL INFORMATION. After the Effective Time,
the Company will furnish the following reports to MTI so long as it holds at
least 10% of the outstanding Voting Stock:
(a) As soon as practicable after the end of each
fiscal month, and in any event within 30 days thereafter, a consolidated balance
sheet of the Company and consolidated statement of stockholders' equity as of
the end of each such fiscal month (including the number of outstanding shares of
capital stock of the Company as of the end of such fiscal month), and a
consolidated statement of income and a consolidated statement of cash flows of
the Company for such fiscal month, prepared in accordance with generally
accepted accounting principles, with the exception that no notes need be
attached to such statements. In addition, the Company will furnish MTI, upon the
reasonable request of MTI to comply with applicable law and the rules of any
national stock exchange or national stock market.
(b) As soon as practicable after the end of the
first, second and third quarterly accounting periods in each fiscal year of the
Company, and in any event within forty-five (45) days thereafter, the Company
will furnish MTI a consolidated balance sheet of the Company and consolidated
statement of stockholders' equity as of the end of each such quarterly period,
and a consolidated statement of income and a consolidated statement of cash
flows of the Company for such period, prepared in accordance with generally
accepted accounting principles.
(c) As soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety (90) days thereafter,
the Company will furnish MTI a consolidated balance sheet of the Company and
consolidated statement of stockholders' equity, as at the end of such fiscal
year, and a consolidated statement of income and a consolidated statement of
cash flows of the Company, for such year, all prepared in accordance with
generally accepted accounting principles consistently applied. Such financial
statements shall be accompanied by a report and opinion thereon by independent
public accountants of national standing selected by the Company's Board of
Directors.
4.3 CONFIDENTIALITY. MTI shall keep confidential any
information obtained pursuant to Sections 4.2 and 4.3; provided, however, that
it may use and disclose such information in as a part of its financial,
accounting or tax reporting, or any other reports or filings with any federal,
state or local governmental authority or national stock exchange or national
stock market. The foregoing confidentiality obligations shall lapse with respect
to information which (i) is or becomes generally available to the public other
than as a result of a disclosure by MTI in violation of this Agreement; (ii) was
available to MTI on a nonconfidential basis prior to its disclosure by MTI;
(iii) becomes available to MTI on a nonconfidential basis from a person
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other than the the Company who is not otherwise known to MTI to be bound by
confidentiality obligations with the Company; or (iv) was independently
developed by the MTI without reference to or use of the confidential
information.
5. REPRESENTATIONS AND WARRANTIES OF MTI. MTI represents and
warrants to the Company that as of March 22, 2001, MTI is the sole record and
beneficial owner of 58,622,863 shares of common stock of the Company and the
Micron Foundation is the sole record and beneficial owner of 435,000 shares of
common stock of the Company, in each case, free and clear of any Encumbrances.
6. GENERAL PROVISIONS.
6.1 NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given upon delivery either personally or
by commercial delivery service, or sent via facsimile (receipt confirmed) to the
parties at the following addresses or facsimile numbers (or at such other
address or facsimile numbers for a party as shall be specified by like notice):
(a) if to the Company or Merger Sub, to:
Micron Electronics, Inc.
000 X. Xxxxxxx Xxxx
Xxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Fenwick & West LLP
Xxx Xxxx Xxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. XxXxxxxx
Facsimile No.: 000-000-0000
(b) if to MTI, to:
Micron Technology, Inc.
0000 X. Xxxxxxx Xxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
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Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx,
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxx
Facsimile No.: 000-000-0000
6.2 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and shall become effective when one or more counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
all parties need not sign the same counterpart.
6.3 ENTIRE AGREEMENT; THIRD PARTY BENEFICIARIES. This
Agreement and its Exhibits (a) constitute the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof; and (b) are not intended to confer upon any other person
any rights or remedies hereunder.
6.4 SEVERABILITY. In the event that any provision of this
Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the remainder of
this Agreement will continue in full force and effect and the application of
such provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto. The parties further agree
to replace such void or unenforceable provision of this Agreement with a valid
and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such void or unenforceable provision.
6.5 OTHER REMEDIES; SPECIFIC PERFORMANCE. Except as
otherwise provided herein, any and all remedies herein expressly conferred upon
a party will be deemed cumulative with and not exclusive of any other remedy
conferred hereby, or by law or equity upon such party, and the exercise by a
party of any one remedy will not preclude the exercise of any other remedy. The
parties hereto agree that irreparable damage would occur in the event that any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to seek an injunction or injunctions to prevent
breaches of this Agreement and to enforce specifically the terms and provisions
hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.
6.6 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law thereof.
6.7 RULES OF CONSTRUCTION. The parties hereto agree that
they have been represented by counsel during the negotiation and execution of
this Agreement and, therefore, waive the application of any law, regulation,
holding or rule of construction providing that ambiguities in an agreement or
other document will be construed against the party drafting such agreement or
document.
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6.8 BINDING EFFECT AND ASSIGNMENT. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but,
except as otherwise specifically provided herein, neither this Agreement nor any
of the rights, interests or obligations of the parties hereto may be assigned by
any of the parties without prior written consent of the other parties. Any
purported assignment in violation of this Section shall be void.
6.9 WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT
HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE PARTIES TO THIS AGREEMENT IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF.
6.10 COSTS AND ATTORNEYS' FEES. In the event that any action,
suit or other proceeding is instituted concerning or arising out of this
Agreement or any transaction contemplated hereunder, the prevailing party shall
recover all of such party's costs and attorneys' fees incurred in each such
action, suit or other proceeding, including any and all appeals or petitions
therefrom.
6.11 TITLES AND HEADINGS. The titles, captions and headings
of this Agreement are included for ease of reference only and will be
disregarded in interpreting or construing this Agreement. Unless otherwise
specifically stated, all references herein to "sections" and "exhibits" will
mean "sections" and "exhibits" to this Agreement.
6.12 AMENDMENT AND WAIVERS. This Agreement may be amended
only by a written agreement executed by each of the parties hereto; provided,
however, that any amendment to this Agreement must be approved on the part of
the Company by the board of directors of the Company, including the affirmative
vote of at least one director that is not affiliated with MTI. No amendment of
or waiver of, or modification of any obligation under this Agreement will be
enforceable unless set forth in a writing signed by the party against which
enforcement is sought. Any amendment effected in accordance with this section
will be binding upon all parties hereto and each of their respective successors
and assigns. No delay or failure to require performance of any provision of this
Agreement shall constitute a waiver of that provision as to that or any other
instance. No waiver granted under this Agreement as to any one provision herein
shall constitute a subsequent waiver of such provision or of any other provision
herein, nor shall it constitute the waiver of any performance other than the
actual performance specifically waived.
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IN WITNESS WHEREOF, the parties have executed this Shareholder
Agreement on the date and year first written above.
MICRON ELECTRONICS, INC.:
Name: /s/ XXXX X. XXXXXX
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By: XXXX X. XXXXXX
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Title: Chairman and Chief Executive Officer
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MICRON TECHNOLOGY, INC.:
Name: /s/ XXXXXX X. XXXXXX, XX.
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By: XXXXXX X. XXXXXX, XX.
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Title: Chief Financial Officer and
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Vice President of Finance
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[SIGNATURE PAGE TO MTI SHAREHOLDER AGREEMENT]
