MICRON ELECTRONICS, INC.
              MANAGEMENT & EXECUTIVE INCENTIVE PLAN

     1.   PURPOSE

     The Micron Electronics, Inc. Management & Executive
Incentive Plan (the "MEIP") is designed to attract, retain, and
reward highly qualified executive, management and key employees
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.  The MEIP was originally adopted
and approved by the shareholders as the Micron Electronics, Inc.
Executive Bonus Plan (the "Bonus Plan").

     2.   DEFINITIONS

     (a)  Bonus - The cash incentive awarded to an Executive
Officer or Key Employee pursuant to the terms and conditions of
the MEIP.

     (b)  Board - The Board of Directors of Micron Electronics,
Inc.

     (c)  Change in Control - (i) The acquisition by any person
or entity of securities of Micron Electronics, Inc. such that
such person or entity, directly, indirectly or beneficially,
acting alone or in concert, (A) owns or controls more of the
combined voting power of all classes of voting securities of
Micron Electronics, Inc. than does Micron Technology, Inc. and
(B) owns or controls more than thirty-five percent (35%) of the
combined voting power of all classes of voting securities of
Micron Electronics, Inc.; or (ii) subject to Micron Technology,
Inc. owning or controlling more than thirty-five percent (35%) of
the combined voting power of all classes of voting securities of
Micron Electronics, Inc., the acquisition by any  person or
entity, directly, indirectly or beneficially, acting alone or in
concert, of more than thirty-five percent (35%) of the common
stock of Micron Technology, Inc. outstanding at any time.

     (d)  Code - The Internal Revenue Code of 1986, as amended.

     (e)  Committee - The Compensation Committee of the Board, or
such other committees of the Board that is designated by the
Board to administer the MEIP, in compliance with requirements of
Section 162(m) of the Code.

     (f)  Company - Micron Electronics, Inc. and any other
corporation in which Micron Electronics, Inc., controls, directly
or indirectly, fifty percent (50%) or more of the combined voting
power of all classes of voting securities.

     (g)  Disability   Total and permanent disability as defined
in Section 22(e)(3) of the Code.

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     (h)  Executive - An Executive Officer or Key Employee of the
Company.

     (i)  Executive Officer - Any officer of the Company subject
to the reporting requirements of Section 16 of the Securities and
Exchange Act of 1934 (the "Exchange Act").

     (j)  Extraordinary Items - A sale of a division or
subsidiary of the Company, a merger or consolidation of the
Company, a reorganization or dissolution of the Company or such
other Extraordinary Items as determined by the Committee in its
sole discretion.

     (k)  Key Employee - Any employee of the Company as may be
designated by the Committee for this MEIP.

     (l)  Performance Period - The fiscal month, quarter, semi-
annual or annual period of time established by the Committee for
the establishment of performance goals; provided, that any
Performance Period established for an Executive Officer who is
Chief Executive Officer, President or Chief Financial Officer
shall not be less than one year.

     3.   ELIGIBILITY

     Only Executives, including Executive Officers and Key
Employees as defined above, are eligible for participation in the
MEIP.  In order to participate in the MEIP for any Performance
Period, an Executive must be designated for participation in
accordance with the MEIP and the selection procedures established
by the Committee.  All designations of Executives as participants
in the MEIP are subject to the terms of the MEIP and approval by
the Committee.  If an employee becomes an Executive mid-way
through a Performance Period, then such Executive may be eligible
for participation in the MEIP on a pro-rated basis, with a Bonus
set under the MEIP equal to the Bonus that would have been set
for the entire Performance Period multiplied by the number of
weeks of the Executive s participation over the total number of
weeks in the Performance Period.

     If an employee ceases to be an Executive as a result of the
Executive's death, Disability or retirement with the Company
during a Performance Period, then such Executive shall be
eligible for participation in the MEIP on a pro-rated basis. In
such event, and subject to a determination with respect to
satisfactory achievement of the Executive's performance goals and
final approval by the Committee, the Executive may earn a Bonus
under the MEIP equal to the Bonus that would have been paid for
the entire Performance Period multiplied by the number of weeks
of the Executive's participation over the total number of weeks
in the Performance Period.  If an employee ceases to be an
Executive or an employee of the Company for any other reason
during a Performance Period, no Bonus shall be paid to that
employee for that Performance Period, unless governed by the
Change in Control provisions below.
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     4.   ADMINISTRATION

     Awards of bonuses under the MEIP shall be based on one or
more of the following performance goals:  (i) net income,
(ii) earnings per share, (iii) return on equity, (iv) gross
margin, (v) return on assets, (vi) net sales, (vii) new products,
(viii) expansion of facilities, (ix) customer satisfaction,
(x) asset management or (xi) debt management.  Performance goals
may be set by the Committee on an individual, area of
responsibility, business segment or Company-wide basis, or any
combination thereof.  Unless otherwise specifically approved by
the Committee, the methods for calculating performance goals
shall exclude Extraordinary Items.

     The Committee shall administer the MEIP and shall have full
power and authority to construe, interpret, and administer the
MEIP necessary to comply with the requirements of Section 162(m)
of the Code.  The Committee's decisions shall be final,
conclusive, and binding upon all persons.  The Committee shall
certify in writing prior to commencement of payment of the Bonus
that the performance goal or goals under which the bonus is to be
paid has or have been achieved.  The Committee in its sole
discretion has the authority to reduce the amount of a Bonus
otherwise allocated to an Executive upon attainment of the
performance goal established for any Performance Period provided
that a reduction in the amount of one Executive's Bonus does not
result in an increase in the amount of any other Executive's
Bonus.

     Promptly after the beginning of a Performance Period, the
Committee shall:  (i) determine the performance criteria;
(ii) determine the Executives eligible to participate in the MEIP
for the applicable Performance Period; and (iii) determine the
method for computing the amount of Bonus payable to each
Executive if the performance goal is achieved.  The Committee in
its sole discretion has the authority to increase the amount of a
Bonus otherwise allocated to an Executive.

     The maximum Bonus amount that can be paid to any Executive
with respect to any one fiscal year cannot exceed the greater of
$2,000,000 or two percent (2%) of the Company's consolidated
after-tax net profits.  Bonus amounts shall be paid within 90
days after the close of the applicable Performance Period, unless
the Committee elects to defer the payout of the Bonus or any
portion thereof over a period of time not to exceed five (5)
years.  Payout of a Bonus or any portion thereof over an extended
period may, at the discretion of the Committee, be subject to and
conditioned upon the continuation of an Executive's employment
with the Company, a determination of satisfactory job performance
with respect to the Executive, and the profitability of the
Company in the year paid.  Unpaid Bonuses can be canceled at the
discretion of the Committee.

     Upon a Change in Control, the Company shall pay to each
eligible Executive (i) any Bonuses allocated, if any, under the
MEIP for all Performance Periods during the current fiscal year
at the maximum level established by the Board or Committee as of
the most recent allocation, unless otherwise agreed between the
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Company and the Executive, and (ii) any Bonuses that have been
awarded for previous years under the MEIP (or Bonus Plan) but not
previously paid, in either case immediately before such Change in
Control.  To determine the amount of the Bonus for all
Performance Periods during the current fiscal year, the bonus
pool shall be annualized if the Change in Control occurs after
the end of the second fiscal quarter.  If the Change in Control
occurs prior to the end of the second fiscal quarter, the bonus
pool shall be calculated as of the fiscal month end immediately
prior to the Change in Control. The Committee may amend, modify,
suspend, or terminate the MEIP 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 require shareholder
approval or advisable under the regulations of the Internal
Revenue Service or other applicable law or regulation.

     5.   NONASSIGNABILITY

     No Bonus or any other benefit under the MEIP shall be
assignable or transferable by the participant during the
participant's lifetime except as otherwise approved by the
Committee.

     6.   NO RIGHT TO CONTINUED EMPLOYMENT

     Nothing in the MEIP shall confer upon any employee any right
to continue in the employ of the Company or shall interfere with
or restrict in any way the right of the Company to discharge an
employee at any time for any reason whatsoever, with or without
good cause.

     7.   EFFECTIVE DATE

     The original effective date of the MEIP is April 7, 1995.
The effective date of the MEIP as amended is September 4, 1998.