content: <PAGE>
   
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, DC  20549
  
                                     FORM 8 - K
  
                                   CURRENT REPORT
                         Pursuant to Section 13 or 15(d) of
                        the Securities Exchange Act of 1934
  
          Date of Report (Date of Earliest Event Reported):  JULY 18, 1997
  
  
                             MICRON ELECTRONICS, INC.
  --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Its Charter)
  
  
  
          MINNESOTA                        0-17932                  41-1404301
  --------------------------------------------------------------------------------
  (State or Other Jurisdiction)    (Commission File Number)       (IRS Employer
        of Incorporation)                                      Identification No.)
  
  
  
           900 E. KARCHER ROAD, NAMPA, IDAHO                      83687
  --------------------------------------------------------------------------------
       (Address of Principal Executive Offices)                 (Zip Code)
  
  
                                     (208) 898-3434
  --------------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
  
                                    NOT APPLICABLE
  --------------------------------------------------------------------------------
           (Former Name or Former Address, if Changed Since Last Report)
  <PAGE>
   
                      INFORMATION TO BE INCLUDED IN THE REPORT
                      ----------------------------------------
  
  ITEM 2:  ACQUISITION OR DISPOSITION OF ASSETS.
  
       Merger Agreement.  On June 10, 1997, Micron Electronics, Inc., a Minnesota
       ----------------                                                          
  corporation ("Registrant" or "Micron"), and Registrant's wholly-owned
  subsidiary, Payette Acquisition Corporation, a Delaware corporation ("Sub"),
  entered into an Agreement and Plan of Merger ("Merger Agreement") with NetFRAME
  Systems Incorporated, a Delaware corporation ("NetFRAME" or the "Company").
  
       Tender Offer.  Pursuant to the Merger Agreement, on June 16, 1997, Sub
       ------------                                                          
  commenced a tender offer (the "Offer") to purchase all the issued and
  outstanding shares of Common Stock, par value $0.001 per share, of NetFRAME and
  all associated rights (the "Shares") at a price per Share of $1.00 (the "Offer
  Price"), net to the relevant selling shareholder in cash and without interest,
  subject to reduction for any applicable federal backup or other applicable
  withholding or stock transfer taxes.  The Offer expired on July 14, 1997 and the
  acquisition of the Shares tendered to Sub for payment was consummated on July
  18, 1997, at which time 8,775,554 Shares, representing approximately 62.8% of
  the outstanding Shares on such date, were purchased by Sub.
  
       Determination of Price.  The Offer Price was determined in arm's length
       ----------------------                                                 
  negotiations among Micron, Sub and NetFRAME.  In connection with Sub's and
  Micron's review of the Company and in the course of their negotiations with the
  Company, the Company provided Micron and Sub with certain business and financial
  information which Micron and Sub believe is not publicly available.
  Specifically, the Company provided Sub and Micron with information regarding its
  severe liquidity and cash needs, including the possibility that the Company may
  be forced to liquidate absent an immediate and substantial cash infusion or
  acquisition of the Company.  The Company also shared certain internal forecasts,
  assuming consummation of the Merger and based upon receiving funding from
  operating as a subsidiary of Micron, achieving certain manufacturing and
  purchasing synergies with Micron, as well as pursuing a marketing and sales
  model synergistic with Micron, and thereby reducing its operating costs.
  Projections as to the Company's financial results on a stand-alone basis were
  not utilized by Sub or Micron, as any such stand-alone projections were not
  viewed as meaningful given the serious doubt as to the Company's viability
  as a stand-alone entity and the possibility of immediate liquidation of the
  Company absent an acquisition or substantial cash infusion.
  
       Merger.  NetFRAME intends to convene a special meeting of the stockholders
       ------                                                                    
  of NetFRAME, currently scheduled to be held on August 27, 1997, to approve and
  adopt the Merger Agreement and the Merger.  Assuming receipt of such approval,
  at the effective time of the Merger, each outstanding Share of NetFRAME which is
  not owned by Sub, Micron or any other direct or indirect subsidiary of Micron
  (other than those Shares held in the treasury of NetFRAME and Shares held by
  stockholders who have demanded and perfected any appraisal rights they may have
  under Delaware law) will be converted into the right to receive the Offer Price
  and each outstanding stock option to purchase shares of NetFRAME Common Stock
  and each other right to acquire shares of NetFRAME capital stock (collectively,
  the "Options") will become fully exercisable and vested.  All Options that are
  outstanding immediately prior to the effective time of the Merger shall be
  canceled at such time and the holders thereof shall receive an amount of cash
  for each share subject to such Options equal to the excess, if any, of the Offer
  Price over the 
  
                                         2
  <PAGE>
   
  exercise price per share of such Option subject to any required withholding
  taxes. Sub owns a sufficient number of Shares to assure approval of the Merger
  Agreement and the Merger at the special meeting. Micron has agreed in the Merger
  Agreement to vote or cause to be voted all Shares owned by Sub or Micron in
  favor of the Merger Agreement and the Merger. Accordingly, the affirmative vote
  of the other holders of Shares is not required to approve the Merger Agreement
  and the Merger.
  
       Prior to the Merger, NetFRAME has agreed to carry on its business subject
  to certain requirements, as set forth in the Merger Agreement.  Following
  consummation of the Offer, Micron and Sub are entitled to designate a number of
  directors, representing at least a majority of the members of the NetFRAME Board
  to be appointed or elected to such Board, but neither Micron nor Sub has yet
  availed itself of such rights.
  
       Consummation of the Merger is subject to (i) the prior approval of the
  Merger Agreement and the Merger by the holders of a majority of the Shares, and
  (ii) certain other closing conditions set forth in the Merger Agreement.  There
  are no federal or state regulatory requirements which remain to be complied with
  in order to consummate the Merger (other than the filing of a certificate of
  merger with the Secretary of State of Delaware).  Micron and Sub may only
  terminate the Merger Agreement with the mutual consent of the Company.  The
  Company may terminate the Merger Agreement upon certain conditions specified in
  such agreement.
  
       Funding.  The total amount of funds required by Sub to consummate the Offer
       -------                                                                    
  and the Merger is estimated to be approximately $15.6 million, including
  approximately $1.75 million to pay related fees and expenses of Sub and Micron
  but excluding amounts payable by Sub with respect to the cashing out of Options.
  Sub will obtain such amount from Micron.  Micron will provide such funds from
  its working capital.
  
       Micron Financial Assistance to the Company.  Pursuant to the Merger
       ------------------------------------------                         
  Agreement, Micron has loaned the Company funds for working capital purposes
  pursuant to a secured loan arrangement (the "Loan Agreement") originally entered
  into in March 1997 between the Company and CIT Group/Business Credit, Inc.
  ("CIT").  CIT assigned to Micron all of its rights under the Loan Agreement with
  the Company and related security interests and other rights.  Pursuant to the
  Loan Agreement, loans are secured by substantially all of the Company's assets.
  The facility is an asset based revolving credit facility to finance eligible
  accounts receivable and production inventory, subject to certain net worth and
  other financial covenants.  Micron paid CIT a fee to assign the CIT credit
  facility to it, which fee NetFRAME would be required to reimburse in the event
  of an early termination of the Loan Agreement.  The assigned Loan Agreement
  provides for a maximum of $12.0 million of funding from Micron to the Company.
  As of July 31, 1997, $6.0 million had been loaned and was outstanding.  The
  interest rate under the loan by Micron is at the prime rate in effect at the
  principal offices of Chase Manhattan Bank, N.A. in New York City, New York plus
  0.50%, subject to certain adjustments.  In addition, the Loan Agreement provides
  for certain additional fees payable to Micron as the lender thereunder.  The
  Loan Agreement sets forth certain procedures with respect to the payment of
  amounts due thereunder including the payment of interest on a monthly basis.
  The loan becomes due on the earlier of (i) termination of the Loan Agreement,
  (ii) a breach by the Company, or termination, of the Merger Agreement or (iii)
  certain other events of default as specified in the Loan Agreement.  Micron may
  terminate the Loan Agreement upon certain conditions, including upon September
  30, 1997 and the occurrence of certain events of default under the Loan
  Agreement or Merger Agreement.  Until termination of 
  
                                         3
  <PAGE>
   
  the Merger Agreement, Micron, as a creditor of the Company, has agreed not to
  institute bankruptcy or insolvency proceedings against the Company.
  
       The Stock Option Agreement.  In connection with the execution of the Merger
       --------------------------                                                 
  Agreement, Micron and the Company executed a Stock Option Agreement, whereby the
  Company granted to Micron an irrevocable option exercisable in certain
  circumstances to purchase shares of the Company's Common Stock representing a
  19.9% equity stake in the Company at a per share purchase price of $1.00 (the
  "Exercise Price") or, at Micron's election, by exchanging shares of Common Stock
  of Micron at a rate, for each option share, of a number of shares of Micron
  equal to the Exercise Price divided by the closing sale price of Micron shares
  of common stock on the Nasdaq Stock Market for the trading day immediately
  preceding the date of closing of the particular option exercise.  As a result of
  the consummation of the Offer, the Stock Option Agreement has terminated.
  
       The Technology License Agreement.  The Company granted to Micron, and all
       --------------------------------                                         
  of its subsidiaries and affiliates, pursuant to a Technology License Agreement
  (the "License Agreement") entered into concurrently with the Merger Agreement, a
  nonexclusive license to all of the Company's technology associated with the
  Company's 9000 series server products and any other Company products under any
  phase of development on the effective date of the License Agreement.  In
  consideration of this grant, Micron has paid the Company a license fee of $1.5
  million.  The term of the License Agreement is perpetual.  However, Micron may
  terminate the License Agreement for any reason after 30 days from the effective
  date thereof.  Micron may also terminate the License Agreement in the event of
  breach by the Company of any material obligation under the License Agreement
  following 30 days notice and opportunity to cure.  Upon termination of the
  License Agreement, all rights and licenses granted to Micron terminate.  In the
  event that such a termination for breach by the Company occurs within five years
  of the effective date of the License Agreement, the Company has agreed to refund
  the full license fee to Micron upon such termination.
  
       Prior Relationship between NetFRAME and Micron.  Micron's wholly owned
       ----------------------------------------------                        
  subsidiary, Micron Custom Manufacturing Services, Inc. ("CMS"), has previously
  provided contract assembly services for the Company.  In 1994 and 1995, the
  Company purchased approximately $8.4 million and $10.7 million, respectively, of
  products from CMS, primarily for memory intensive custom boards.  In 1996,
  purchases were approximately $9.5 million for customized circuit boards and
  double sided memory modules.  Year to date purchases through June 30, 1997 were
  approximately $1.4 million, primarily for double sided memory modules.  As of
  July 22, 1997, outstanding trade payables owed to CMS totaled approximately
  $340,000 for products ordered by the Company but not delivered by CMS.  In
  addition, CMS currently maintains inventory of certain products specifically
  used in products manufactured on behalf of the Company.
  
       Employment Agreements.  NetFRAME has entered into change of control
       ---------------------                                              
  agreements (the "Change of Control Agreements") with the following executive
  officers of NetFRAME:  Robert Puette, Bulent Erbilgrin, Steven Huey, Vivian
  Golub, Terry Hartsfield and Dan McCammon.  Under the terms of the Change of
  Control Agreements, in the event that a change of control results in any such
  executive officer's involuntary termination without cause or constructive
  termination within 12 months following a change in control, such executive
  officer shall be entitled to the following compensation and benefits:  (i) a
  lump sum payment equal to (a) 12 months of pay at the employee's gross base
  salary rate plus (b) amounts payable under any applicable target bonus; (ii)
  
                                         4
  <PAGE>
   
  continued health care benefits, including dependent coverage, for a period of 12
  months; and (iii) the acceleration of one half of the employee's unvested
  outstanding stock options under the Company's 1992 Incentive Stock Option Plan
  (unless such acceleration would make unavailable "pooling of interests"
  accounting treatment of the change in control transaction and the purchase
  method of accounting is not acceptable to the successor entity).
  
       The Company has also entered into change of control agreements ("Additional
  Agreements") with certain key employees of the Company, with terms similar to
  the Change of Control Agreement except that salary payments and health care
  benefits cover a six month rather than a twelve month period.
  
       The term "change in control" is defined in the Change of Control Agreements
  and the Additional Agreements to occur when (x) another person becomes the
  direct or indirect beneficial owner of more than 50% of the Company's
  securities, (y) with certain exceptions, the Company is merged or consolidated
  with another company, or (z) the stockholders approve a plan of complete
  liquidation of the Company or an agreement for the sale of disposition by the
  Company of all or substantially all of the Company's assets.
  
       The consummation of the transactions contemplated by the Merger Agreement
  constitute a change in control for purposes of the Change of Control Agreements
  and the Additional Agreements.  However, Messrs. Puette, Erbilgrin, Hartsfield
  and Huey (the "Executive Officers") have each signed employment term sheets with
  Micron.  These term sheets (each an "Employment Term Sheet") provide that the
  acceptance of the position proposed therein would not constitute actual or
  constructive termination of employment under the terms of each Executive
  Officer's Change of Control Agreement.  The Change of Control Agreements will,
  however, otherwise remain in effect.
  
       The Employment Term Sheets provide for annual salary ($330,000 for Mr.
  Puette; $192,000 for Mr. Erbilgrin; $192,000 for Mr. Huey; and $175,000 for Mr.
  Hartsfield) and contemplate payment to such persons of target bonuses (up to
  $600,000 for Mr. Puette; up to $192,000 for Mr. Erbilgrin; up to $192,000 for
  Mr. Huey; and up to $175,000 for Mr. Hartsfield) based upon the Company's
  achievement of certain financial and technological milestones through June 30,
  1998, including the achievement of a significant improvement in the Company's
  financial performance.  The Employment Term Sheets further contemplate the grant
  of stock options to such persons to purchase Micron common stock, subject to a
  five year vesting schedule and with an exercise price equal to the underlying
  common stock's fair market value (75,000 for Mr. Puette; 25,000 for Mr.
  Erbilgrin; 25,000 for Mr. Huey; and 25,000 for Mr. Hartsfield).  Each such
  Employment Term Sheet is conditioned, however, upon consummation of the Offer
  and the approval by the Board of Directors of Micron of each such term sheet,
  which has been obtained.
  
       Mr. Hartsfield resigned from the Company effective July 11, 1997 and is not
  entitled to any of the benefits provided in the Change of Control Agreements, as
  described above.
  
       Available Information.  Statements made in this current report on Form 8-K
       ---------------------                                                     
  concerning the contents of any contract or other document are not necessarily
  complete.  With respect to each contract or other document filed as an exhibit
  hereto, reference is hereby made to that document for a more complete
  description of the matter involved and each such statement is hereby qualified
  in its entirety by such reference.
  
                                         5
  <PAGE>
   
  ITEM 7:  FINANCIAL STATEMENTS AND EXHIBITS.
  
  (a)  Financial Statements of Businesses Acquired.
       --------------------------------------------
  
       The audited financial statements of NetFRAME required to be filed 
  pursuant to Item 7(a) of Form 8-K will be filed on a Form 8-K/A within 60 days
  after the date this Form 8-K is required to be filed. 
  
  (b)  Pro Forma Financial Information.
       --------------------------------
  
       The Pro Forma Financial Information required to be filed pursuant to Item
  7(b) of Form 8-K will be filed on a Form 8-K/A within 60 days after the date
  this Form 8-K is required to be filed.
  
                                         6
  <PAGE>
   
  (c)  Exhibits.
       ---------
  
       The following exhibits are filed herewith:
  
       2.01  Agreement and Plan of Merger dated as of June 10, 1997 by and among
             Micron Electronics, Inc., Payette Acquisition Corporation and
             NetFrame Systems Incorporated. Incorporated by reference to Exhibit
             c(1) to the Registrant's Schedule 14D-1 and Schedule 13D (Commission
             File No. 0-17932) initially filed on June 16, 1997.
  
  
                                         7
  <PAGE>
   
                                     SIGNATURES
                                     ----------
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                                   MICRON ELECTRONICS, INC.
  
  
  
  Date:  August 4, 1997            By /s/ T. Erik Oaas
                                      ------------------------
                                      T. Erik Oaas
                                      Chief Financial Officer
  
                                         8
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text: SECURITIES AND EXCHANGE COMMISSION
                               Washington, DC  20549
  
                                     FORM 8 - K
  
                                   CURRENT REPORT
                         Pursuant to Section 13 or 15(d) of
                        the Securities Exchange Act of 1934
  
          Date of Report (Date of Earliest Event Reported):  JULY 18, 1997
  
                             MICRON ELECTRONICS, INC.
  --------------------------------------------------------------------------------
               (Exact Name of Registrant as Specified in Its Charter)
  
          MINNESOTA                        0-17932                  41-1404301
  --------------------------------------------------------------------------------
  (State or Other Jurisdiction)    (Commission File Number)       (IRS Employer
        of Incorporation)                                      Identification No.)
  
           900 E. KARCHER ROAD, NAMPA, IDAHO                      83687
  --------------------------------------------------------------------------------
       (Address of Principal Executive Offices)                 (Zip Code)
  
                                     (208) 898-3434
  --------------------------------------------------------------------------------
                (Registrant's Telephone Number, Including Area Code)
  
                                    NOT APPLICABLE
  --------------------------------------------------------------------------------
           (Former Name or Former Address, if Changed Since Last Report)
  INFORMATION TO BE INCLUDED IN THE REPORT
                      ----------------------------------------
  
  ITEM 2:  ACQUISITION OR DISPOSITION OF ASSETS.
  
       Merger Agreement.  On June 10, 1997, Micron Electronics, Inc., a Minnesota
       ----------------                                                          
  corporation ("Registrant" or "Micron"), and Registrant's wholly-owned
  subsidiary, Payette Acquisition Corporation, a Delaware corporation ("Sub"),
  entered into an Agreement and Plan of Merger ("Merger Agreement") with NetFRAME
  Systems Incorporated, a Delaware corporation ("NetFRAME" or the "Company").
  
       Tender Offer.  Pursuant to the Merger Agreement, on June 16, 1997, Sub
       ------------                                                          
  commenced a tender offer (the "Offer") to purchase all the issued and
  outstanding shares of Common Stock, par value $0.001 per share, of NetFRAME and
  all associated rights (the "Shares") at a price per Share of $1.00 (the "Offer
  Price"), net to the relevant selling shareholder in cash and without interest,
  subject to reduction for any applicable federal backup or other applicable
  withholding or stock transfer taxes.  The Offer expired on July 14, 1997 and the
  acquisition of the Shares tendered to Sub for payment was consummated on July
  18, 1997, at which time 8,775,554 Shares, representing approximately 62.8% of
  the outstanding Shares on such date, were purchased by Sub.
  
       Determination of Price.  The Offer Price was determined in arm's length
       ----------------------                                                 
  negotiations among Micron, Sub and NetFRAME.  In connection with Sub's and
  Micron's review of the Company and in the course of their negotiations with the
  Company, the Company provided Micron and Sub with certain business and financial
  information which Micron and Sub believe is not publicly available.
  Specifically, the Company provided Sub and Micron with information regarding its
  severe liquidity and cash needs, including the possibility that the Company may
  be forced to liquidate absent an immediate and substantial cash infusion or
  acquisition of the Company.  The Company also shared certain internal forecasts,
  assuming consummation of the Merger and based upon receiving funding from
  operating as a subsidiary of Micron, achieving certain manufacturing and
  purchasing synergies with Micron, as well as pursuing a marketing and sales
  model synergistic with Micron, and thereby reducing its operating costs.
  Projections as to the Company's financial results on a stand-alone basis were
  not utilized by Sub or Micron, as any such stand-alone projections were not
  viewed as meaningful given the serious doubt as to the Company's viability
  as a stand-alone entity and the possibility of immediate liquidation of the
  Company absent an acquisition or substantial cash infusion.
  
       Merger.  NetFRAME intends to convene a special meeting of the stockholders
       ------                                                                    
  of NetFRAME, currently scheduled to be held on August 27, 1997, to approve and
  adopt the Merger Agreement and the Merger.  Assuming receipt of such approval,
  at the effective time of the Merger, each outstanding Share of NetFRAME which is
  not owned by Sub, Micron or any other direct or indirect subsidiary of Micron
  (other than those Shares held in the treasury of NetFRAME and Shares held by
  stockholders who have demanded and perfected any appraisal rights they may have
  under Delaware law) will be converted into the right to receive the Offer Price
  and each outstanding stock option to purchase shares of NetFRAME Common Stock
  and each other right to acquire shares of NetFRAME capital stock (collectively,
  the "Options") will become fully exercisable and vested.  All Options that are
  outstanding immediately prior to the effective time of the Merger shall be
  canceled at such time and the holders thereof shall receive an amount of cash
  for each share subject to such Options equal to the excess, if any, of the Offer
  Price over the 
  
                                         2
  exercise price per share of such Option subject to any required withholding
  taxes. Sub owns a sufficient number of Shares to assure approval of the Merger
  Agreement and the Merger at the special meeting. Micron has agreed in the Merger
  Agreement to vote or cause to be voted all Shares owned by Sub or Micron in
  favor of the Merger Agreement and the Merger. Accordingly, the affirmative vote
  of the other holders of Shares is not required to approve the Merger Agreement
  and the Merger.
  
       Prior to the Merger, NetFRAME has agreed to carry on its business subject
  to certain requirements, as set forth in the Merger Agreement.  Following
  consummation of the Offer, Micron and Sub are entitled to designate a number of
  directors, representing at least a majority of the members of the NetFRAME Board
  to be appointed or elected to such Board, but neither Micron nor Sub has yet
  availed itself of such rights.
  
       Consummation of the Merger is subject to (i) the prior approval of the
  Merger Agreement and the Merger by the holders of a majority of the Shares, and
  (ii) certain other closing conditions set forth in the Merger Agreement.  There
  are no federal or state regulatory requirements which remain to be complied with
  in order to consummate the Merger (other than the filing of a certificate of
  merger with the Secretary of State of Delaware).  Micron and Sub may only
  terminate the Merger Agreement with the mutual consent of the Company.  The
  Company may terminate the Merger Agreement upon certain conditions specified in
  such agreement.
  
       Funding.  The total amount of funds required by Sub to consummate the Offer
       -------                                                                    
  and the Merger is estimated to be approximately $15.6 million, including
  approximately $1.75 million to pay related fees and expenses of Sub and Micron
  but excluding amounts payable by Sub with respect to the cashing out of Options.
  Sub will obtain such amount from Micron.  Micron will provide such funds from
  its working capital.
  
       Micron Financial Assistance to the Company.  Pursuant to the Merger
       ------------------------------------------                         
  Agreement, Micron has loaned the Company funds for working capital purposes
  pursuant to a secured loan arrangement (the "Loan Agreement") originally entered
  into in March 1997 between the Company and CIT Group/Business Credit, Inc.
  ("CIT").  CIT assigned to Micron all of its rights under the Loan Agreement with
  the Company and related security interests and other rights.  Pursuant to the
  Loan Agreement, loans are secured by substantially all of the Company's assets.
  The facility is an asset based revolving credit facility to finance eligible
  accounts receivable and production inventory, subject to certain net worth and
  other financial covenants.  Micron paid CIT a fee to assign the CIT credit
  facility to it, which fee NetFRAME would be required to reimburse in the event
  of an early termination of the Loan Agreement.  The assigned Loan Agreement
  provides for a maximum of $12.0 million of funding from Micron to the Company.
  As of July 31, 1997, $6.0 million had been loaned and was outstanding.  The
  interest rate under the loan by Micron is at the prime rate in effect at the
  principal offices of Chase Manhattan Bank, N.A. in New York City, New York plus
  0.50%, subject to certain adjustments.  In addition, the Loan Agreement provides
  for certain additional fees payable to Micron as the lender thereunder.  The
  Loan Agreement sets forth certain procedures with respect to the payment of
  amounts due thereunder including the payment of interest on a monthly basis.
  The loan becomes due on the earlier of (i) termination of the Loan Agreement,
  (ii) a breach by the Company, or termination, of the Merger Agreement or (iii)
  certain other events of default as specified in the Loan Agreement.  Micron may
  terminate the Loan Agreement upon certain conditions, including upon September
  30, 1997 and the occurrence of certain events of default under the Loan
  Agreement or Merger Agreement.  Until termination of 
  
                                         3
  the Merger Agreement, Micron, as a creditor of the Company, has agreed not to
  institute bankruptcy or insolvency proceedings against the Company.
  
       The Stock Option Agreement.  In connection with the execution of the Merger
       --------------------------                                                 
  Agreement, Micron and the Company executed a Stock Option Agreement, whereby the
  Company granted to Micron an irrevocable option exercisable in certain
  circumstances to purchase shares of the Company's Common Stock representing a
  19.9% equity stake in the Company at a per share purchase price of $1.00 (the
  "Exercise Price") or, at Micron's election, by exchanging shares of Common Stock
  of Micron at a rate, for each option share, of a number of shares of Micron
  equal to the Exercise Price divided by the closing sale price of Micron shares
  of common stock on the Nasdaq Stock Market for the trading day immediately
  preceding the date of closing of the particular option exercise.  As a result of
  the consummation of the Offer, the Stock Option Agreement has terminated.
  
       The Technology License Agreement.  The Company granted to Micron, and all
       --------------------------------                                         
  of its subsidiaries and affiliates, pursuant to a Technology License Agreement
  (the "License Agreement") entered into concurrently with the Merger Agreement, a
  nonexclusive license to all of the Company's technology associated with the
  Company's 9000 series server products and any other Company products under any
  phase of development on the effective date of the License Agreement.  In
  consideration of this grant, Micron has paid the Company a license fee of $1.5
  million.  The term of the License Agreement is perpetual.  However, Micron may
  terminate the License Agreement for any reason after 30 days from the effective
  date thereof.  Micron may also terminate the License Agreement in the event of
  breach by the Company of any material obligation under the License Agreement
  following 30 days notice and opportunity to cure.  Upon termination of the
  License Agreement, all rights and licenses granted to Micron terminate.  In the
  event that such a termination for breach by the Company occurs within five years
  of the effective date of the License Agreement, the Company has agreed to refund
  the full license fee to Micron upon such termination.
  
       Prior Relationship between NetFRAME and Micron.  Micron's wholly owned
       ----------------------------------------------                        
  subsidiary, Micron Custom Manufacturing Services, Inc. ("CMS"), has previously
  provided contract assembly services for the Company.  In 1994 and 1995, the
  Company purchased approximately $8.4 million and $10.7 million, respectively, of
  products from CMS, primarily for memory intensive custom boards.  In 1996,
  purchases were approximately $9.5 million for customized circuit boards and
  double sided memory modules.  Year to date purchases through June 30, 1997 were
  approximately $1.4 million, primarily for double sided memory modules.  As of
  July 22, 1997, outstanding trade payables owed to CMS totaled approximately
  $340,000 for products ordered by the Company but not delivered by CMS.  In
  addition, CMS currently maintains inventory of certain products specifically
  used in products manufactured on behalf of the Company.
  
       Employment Agreements.  NetFRAME has entered into change of control
       ---------------------                                              
  agreements (the "Change of Control Agreements") with the following executive
  officers of NetFRAME:  Robert Puette, Bulent Erbilgrin, Steven Huey, Vivian
  Golub, Terry Hartsfield and Dan McCammon.  Under the terms of the Change of
  Control Agreements, in the event that a change of control results in any such
  executive officer's involuntary termination without cause or constructive
  termination within 12 months following a change in control, such executive
  officer shall be entitled to the following compensation and benefits:  (i) a
  lump sum payment equal to (a) 12 months of pay at the employee's gross base
  salary rate plus (b) amounts payable under any applicable target bonus; (ii)
  
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  continued health care benefits, including dependent coverage, for a period of 12
  months; and (iii) the acceleration of one half of the employee's unvested
  outstanding stock options under the Company's 1992 Incentive Stock Option Plan
  (unless such acceleration would make unavailable "pooling of interests"
  accounting treatment of the change in control transaction and the purchase
  method of accounting is not acceptable to the successor entity).
  
       The Company has also entered into change of control agreements ("Additional
  Agreements") with certain key employees of the Company, with terms similar to
  the Change of Control Agreement except that salary payments and health care
  benefits cover a six month rather than a twelve month period.
  
       The term "change in control" is defined in the Change of Control Agreements
  and the Additional Agreements to occur when (x) another person becomes the
  direct or indirect beneficial owner of more than 50% of the Company's
  securities, (y) with certain exceptions, the Company is merged or consolidated
  with another company, or (z) the stockholders approve a plan of complete
  liquidation of the Company or an agreement for the sale of disposition by the
  Company of all or substantially all of the Company's assets.
  
       The consummation of the transactions contemplated by the Merger Agreement
  constitute a change in control for purposes of the Change of Control Agreements
  and the Additional Agreements.  However, Messrs. Puette, Erbilgrin, Hartsfield
  and Huey (the "Executive Officers") have each signed employment term sheets with
  Micron.  These term sheets (each an "Employment Term Sheet") provide that the
  acceptance of the position proposed therein would not constitute actual or
  constructive termination of employment under the terms of each Executive
  Officer's Change of Control Agreement.  The Change of Control Agreements will,
  however, otherwise remain in effect.
  
       The Employment Term Sheets provide for annual salary ($330,000 for Mr.
  Puette; $192,000 for Mr. Erbilgrin; $192,000 for Mr. Huey; and $175,000 for Mr.
  Hartsfield) and contemplate payment to such persons of target bonuses (up to
  $600,000 for Mr. Puette; up to $192,000 for Mr. Erbilgrin; up to $192,000 for
  Mr. Huey; and up to $175,000 for Mr. Hartsfield) based upon the Company's
  achievement of certain financial and technological milestones through June 30,
  1998, including the achievement of a significant improvement in the Company's
  financial performance.  The Employment Term Sheets further contemplate the grant
  of stock options to such persons to purchase Micron common stock, subject to a
  five year vesting schedule and with an exercise price equal to the underlying
  common stock's fair market value (75,000 for Mr. Puette; 25,000 for Mr.
  Erbilgrin; 25,000 for Mr. Huey; and 25,000 for Mr. Hartsfield).  Each such
  Employment Term Sheet is conditioned, however, upon consummation of the Offer
  and the approval by the Board of Directors of Micron of each such term sheet,
  which has been obtained.
  
       Mr. Hartsfield resigned from the Company effective July 11, 1997 and is not
  entitled to any of the benefits provided in the Change of Control Agreements, as
  described above.
  
       Available Information.  Statements made in this current report on Form 8-K
       ---------------------                                                     
  concerning the contents of any contract or other document are not necessarily
  complete.  With respect to each contract or other document filed as an exhibit
  hereto, reference is hereby made to that document for a more complete
  description of the matter involved and each such statement is hereby qualified
  in its entirety by such reference.
  
                                         5
  ITEM 7:  FINANCIAL STATEMENTS AND EXHIBITS.
  
  (a)  Financial Statements of Businesses Acquired.
       --------------------------------------------
  
       The audited financial statements of NetFRAME required to be filed 
  pursuant to Item 7(a) of Form 8-K will be filed on a Form 8-K/A within 60 days
  after the date this Form 8-K is required to be filed. 
  
  (b)  Pro Forma Financial Information.
       --------------------------------
  
       The Pro Forma Financial Information required to be filed pursuant to Item
  7(b) of Form 8-K will be filed on a Form 8-K/A within 60 days after the date
  this Form 8-K is required to be filed.
  
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  (c)  Exhibits.
       ---------
  
       The following exhibits are filed herewith:
  
       2.01  Agreement and Plan of Merger dated as of June 10, 1997 by and among
             Micron Electronics, Inc., Payette Acquisition Corporation and
             NetFrame Systems Incorporated. Incorporated by reference to Exhibit
             c(1) to the Registrant's Schedule 14D-1 and Schedule 13D (Commission
             File No. 0-17932) initially filed on June 16, 1997.
  
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  SIGNATURES
                                     ----------
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
  Registrant has duly caused this report to be signed on its behalf by the
  undersigned hereunto duly authorized.
  
                                   MICRON ELECTRONICS, INC.
  
  Date:  August 4, 1997            By /s/ T. Erik Oaas
                                      ------------------------
                                      T. Erik Oaas
                                      Chief Financial Officer
  
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