Micron Thwarts Intel Fine

If the chipmaker hadn't satisfied certain contractual goals, it could have been out $135 million.
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Chipmaker

Micron Technology

(MU) - Get Report

fulfilled its contract to

Intel

(INTC) - Get Report

regarding a new memory technology, and it won't be subject to penalties that could have amounted to as much as $135 million.

Intel formed an alliance with Micron in late 2003 in an effort to guarantee development and supplies of DDR2, a chip used to transfer data. As part of the deal, Intel received rights to 33.9 million shares of Micron stock, at $13.29 a share, and Intel gave Micron $450 million.

The money was to help Micron accelerate its transition to DDR2 and to expand its production capabilities of the new technology. If Micron didn't meet certain goals and its stock price was below $13.29, Micron could have been obligated to pay Intel up to $135 million in a mix of cash and stock.

Micron shares closed Tuesday at $10.19, but the Boise, Idaho-based company said late Tuesday that it met its obligations under this agreement and it doesn't expect to make any payments to Intel.

The disclosure was made in the company's quarterly report filed with the

Securities and Exchange Commission

.