<PAGE>
As filed with the Securities and Exchange Commission on June 20, 1996.
Registration No. ________________
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
SILICON GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-2789662
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2011 North Shoreline Boulevard, Mountain View, California 94043-1389
(Address of principal executive offices and zip code)
---------------------------
CRAY RESEARCH, INC.
AMENDED AND RESTATED 1989 EMPLOYEE BENEFIT STOCK PLAN,
1989 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(Full title of the plans)
---------------------------
WILLIAM M. KELLY
Vice President, General Counsel and Secretary
SILICON GRAPHICS, INC.
2011 North Shoreline Boulevard
Mountain View, California 94043-1389
(415) 960-1980
(Name, address and telephone number of agent for service)
---------------------------
Calculation of Registration Fee
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Title of Securities to Amount to be Proposed maximum Proposed maximum Amount of
be registered registered offering price per unit (1) aggregate offering price registration fee
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 6,558,877 $24.8125 $162,742,135.56 $56,117.98
$0.001 par value shares
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(h) solely for the purpose of
calculating the registration fee based upon the average of the high and low
prices of the Common Stock as reported on the New York Stock Exchange as of
June 19, 1996.
<PAGE>
PART II
Item 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents and information heretofore filed by Silicon
Graphics, Inc. (the "Company") with the Securities and Exchange Commission are
hereby incorporated by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1995, filed pursuant to Section 13(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1995, December 31, 1995 and March 31, 1996 filed
pursuant to Section 13 of the Exchange Act.
(c) The Company's Current Report on Form 8-K filed on April 17, 1996
pursuant to Section 13(a) of the Exchange Act.
(d) The description of the Company's Common Stock to be offered hereby
which is contained in its Registration Statement on Form 8-B filed
March 16, 1990 pursuant to Section 12 of the Exchange Act.
(e) The description of the Company's Preferred Shares Purchase Rights
contained in the Company's Registration Statement on Form 8-A, as
amended on Form 8-A/A, filed November 1, 1995, pursuant to Section
12(b) of the Exchange Act.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be part hereof
from the date of filing such documents.
Item 4. DESCRIPTION OF SECURITIES.
Not Applicable.
Item 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
Item 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award, or a corporation's Board of Directors to grant, indemnity to directors
and officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1993, as amended (the "Securities
Act"). Further, in accordance with the Delaware General Corporation Law, the
Company's Certificate of Incorporation eliminates the liability of a director of
the Company to the Company and its stockholders for monetary damages for
breaches of such director's fiduciary duty of care in certain instances.
Article VI of the Bylaws of the Company provides for indemnification of certain
agents to the maximum extent permitted by the Delaware General Corporation Law.
Persons covered by this indemnification provision include current and
II-1
<PAGE>
former directors, officers, employees and other agents of the Company, as well
as persons who serve at the request of the Company as directors, officers,
employees or agents of another enterprise.
In addition, the Company has entered into contractual agreements with each
director and certain officers designated by the Board to indemnify such
individuals to the full extent permitted by law. These agreements also resolve
certain procedural and substantive matters that are not covered, or are covered
in less detail, in the Bylaws or by the Delaware General Corporation Law.
Item 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
Item 8. EXHIBITS.
The following Exhibits are filed as part of, or incorporated by reference
into, this Registration Statement:
4.1 Cray Research, Inc. Amended and Restated 1989 Employee Benefit Stock
Plan and standard form of stock option agreement.
4.2 Cray Research, Inc. 1989 Non-Employee Directors' Stock Option Plan and
standard form of stock option agreement.
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of Independent Auditors (see page II-6).
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-4).
Item 9. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include any
material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be
II-2
<PAGE>
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the Delaware General Corporation Law, the Company's
Certificate of Incorporation, the foregoing Bylaw provisions or the Company's
indemnification agreements, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company in a successful defense of any action, suit
or proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Company will,
unless in the opinion of its counsel the question has already been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant, Silicon Graphics, Inc., a corporation organized and existing under
the laws of the State of Delaware, certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Mountain View, State of
California, on June 19, 1996.
SILICON GRAPHICS, INC.
By: /s/ Edward R. McCracken
-------------------------------------
Edward R. McCracken, Chairman
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Edward R. McCracken, Stanley J. Meresman
and William M. Kelly jointly and severally, his or her attorneys-in-fact, each
with the power of substitution, for him or her in any and all capacities, to
sign any amendments to this Registration Statement, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
Signature Title Date
- ---------------------- ------------------------------ ----------------------
/s/ Edward R. McCracken June 19, 1996
- ---------------------- Chairman of the Board and ----------------------
Edward R. McCracken Chief Executive Officer
(Principal Executive Officer)
/s/ Thomas A. Jermoluk June 19, 1996
- ---------------------- President, Chief Operating ----------------------
Thomas A. Jermoluk Officer and Director
/s/ Robert R. Bishop June 19, 1996
- ---------------------- Chairman of the Board, Silicon ----------------------
Robert R. Bishop Graphics World Trade
Corporation and Director
/s/ Stanley J. Meresman June 19, 1996
- ---------------------- Senior Vice President, Finance ----------------------
Stanley J. Meresman and Chief Financial Officer
(Principal Financial Officer)
II-4
<PAGE>
Signature Title Date
- ---------------------- ------------------------------ ---------------------
/s/ Dennis P. McBride Vice President, Controller June 19, 1996
- ---------------------- (Principal Accounting Officer) ---------------------
Dennis P. McBride
/s/ Allen F. Jacobson June 19, 1996
- ---------------------- Director ---------------------
Allen F. Jacobson
/s/ C. Richard Kramlich June 19, 1996
- ---------------------- Director ---------------------
C. Richard Kramlich
/s/ Robert A. Lutz June 19, 1996
- ---------------------- Director ---------------------
Robert A. Lutz
/s/ James A. McDivitt June 19, 1996
- ---------------------- Director ---------------------
James A. McDivitt
/s/ Lucille Shapiro June 19, 1996
- ---------------------- Director ---------------------
Lucille Shapiro
- ---------------------- Director ---------------------
Robert B. Shapiro
/s/ James G. Treybig June 19, 1996
- ---------------------- Director ---------------------
James G. Treybig
II-5
<PAGE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
pertaining to the Cray Research, Inc. Amended and Restated 1989 Employee
Benefit Stock Plan and 1989 Non-Employee Directors' Stock Option Plan of
Silicon Graphics, Inc. of our report dated July 19, 1995 with respect to the
consolidated financial statements of Silicon Graphics, Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended June 30, 1995
and the related financial statement schedule included therein, filed with
the Securities and Exchange Commission.
ERNST & YOUNG LLP
Palo Alto, California
June 20, 1996
II-6
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1 Cray Research, Inc. Amended and Restated 1989 Employee Benefit
Stock Plan and form of stock option agreement
4.2 Cray Research, Inc. 1989 Non-Employee Directors' Stock Option
Plan and form of stock option agreement
5.1 Opinion of counsel as to legality of securities being registered
23.1 Consent of Independent Auditors (see page II-6)
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page (II-4)
- -------------------
II-7
<PAGE>
Exhibit 4.1
CRAY RESEARCH, INC.
AMENDED AND RESTATED
1989 EMPLOYEE BENEFIT STOCK PLAN
1. PURPOSE.
This Plan is intended to provide a means for Cray Research, Inc. (the
"Company"), by granting shares of Company stock in the form of stock grants
("Stock Grants"), grants of restricted stock ("Restricted Stock") and options to
purchase Company stock ("Options") to selected management and other key
employees, to attract and retain persons of ability and motivate them to advance
the interests of the Company. An employee eligible to participate under the
Plan is hereinafter referred to as an "Employee."
It is intended that the Plan be interpreted in accordance with Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). It
is also intended that, except as otherwise limited by paragraph 2, some or all
of the Options granted to Employees under the Plan may constitute "incentive
stock options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"), and some or all of the Options may constitute
"nonstatutory options", i.e., options not qualifying under Section 422 or other
similar provisions of the Code. Unless otherwise indicated, the terms and
conditions of the Plan shall apply equally to all Stock Grants, grants of
Restricted Stock and Options hereunder, regardless of whether Options be
incentive stock options or nonstatutory options.
2. ADDITIONAL DEFINITIONS. As used herein, the following definitions apply:
(a) "Continuous Status as an Employee" means that the relationship as an
Employee is not interrupted or terminated by the Company. Continuous
Status as an Employee shall not be considered interrupted in the case
of: (i) any leave of absence approved by the Company, including sick
leave, military leave, or any other personal leave; provided, however,
that for purposes of qualifying an Option as an incentive stock
option, in the event any such leave exceeds ninety (90) days, the
Employee's Continuous Status as an Employee will be deemed to have
terminated on the ninety-first (91st) day after the commencement of
such leave, unless re-
<PAGE>
employment upon the expiration of such leave is guaranteed by contract
(including certain Company policies) or statute; or (ii) transfers
between locations of the Company or between the Company and its
subsidiaries.
(b) "Disability" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(c) "Fair Market Value" means, as of any date, the closing price for a
share of Common Stock as reported daily in THE WALL STREET JOURNAL or
a similar readily available public source (or if no sales of shares
were made on such date, the closing price of a share as reported for
the preceding day), unless the Committee shall determine that such
method does not reflect, due to circumstances prevailing at that time,
the true fair market value of the Company's Common Stock. In that
event, the Committee shall determine fair market value through such
alternative method as it may in good faith determine to be then
appropriate.
3. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 11, a total of 7,888,000
shares of authorized but unissued or reacquired Common Stock of the Company is
authorized and reserved for issuance to Employees under the Plan in the form of
Stock Grants or grants of Restricted Stock or upon the exercise of Options;
provided, however, that no more than 7,888,000 shares shall be cumulatively
available for the grant of incentive stock options under the Plan. If any
Option expires or terminates without having been exercised in full, the
unacquired shares (including shares forfeited on the termination of any grant of
Restricted Stock) shall be available for the grant of future Stock Grants,
grants of Restricted Stock or Options under the Plan.
4. ADMINISTRATION.
The Plan shall be administered by a Committee of the Board of Directors of
the Company, consisting of at least two (2) disinterested persons not eligible
to participate under this Plan or under any other stock or option plan of the
Company or its subsidiaries except as may be permitted in accordance with Rule
16b-3 under the Exchange Act (the "Committee").
-2-
<PAGE>
5. ELIGIBILITY.
The Committee shall determine the Employees to whom, and the number of
shares for which, Stock Grants, grants of Restricted Stock and/or Options shall
be granted, taking into consideration such factors, including any
recommendations of the Chief Executive Officer of the Company, as it deems
relevant to select and motivate employees of ability to advance the interests of
the Company. Employees so selected shall be either management or other key
employees of the Company or its subsidiaries, who the Committee determines have
contributed materially to the success of the Company or are in a position to
contribute materially to the future success of the Company. Except as hereafter
limited, an Employee from time to time may be granted any combination of Stock
Grants, grants of Restricted Stock and Options (incentive or nonstatutory) as
the Committee shall determine.
An employee shall not be eligible to receive an incentive stock option if
immediately before the Option is to be granted the employee owns (directly and
through application of the constructive stock ownership attribution rules of
Section 424(d) of the Code) more than ten percent of the total combined voting
power of all classes of stock of the Company or any subsidiary. The aggregate
Fair Market Value (determined at the time an Option is granted) of shares with
respect to which incentive stock options are exercisable for the first time by
an Employee during any calendar year (under this Plan and all other plans of the
Company and its subsidiaries pursuant to Section 422 of the Code) shall not
exceed $100,000.
6. STOCK OPTIONS.
All Options granted hereunder shall be evidenced by an Option Agreement
executed as of the date of grant by the Company and the Employee, on such terms
as may be determined by the Committee, including the following:
(a) The Option Agreement shall specify whether the Option is an incentive
stock option or a nonstatutory option.
(b) The "date of grant" for any Option granted under the Plan shall be
specified in the Option Agreement.
-3-
<PAGE>
(c) The Option exercise price per share shall be specified in the Option
Agreement and shall be equal to 100% of the Fair Market Value of a
share of Company Common Stock on the date of grant.
(d) The Option exercise price shall be paid at the time of exercise. The
consideration to be paid for the shares to be issued upon exercise of
an Option, including the method of payment, shall be determined by the
Committee (and, in the case of an incentive stock option, shall be
determined at the time of grant) and may consist entirely of: (1)
cash; (2) check; (3) promissory note; (4) other shares which (i) in
the case of shares acquired upon exercise of an option, have been
owned by the Employee for more than six months on the date of
surrender and (ii) have an aggregate Fair Market Value on the date of
surrender not greater than the aggregate exercise price of the shares
as to which said Option shall be exercised; (5) delivery of a properly
executed exercise notice together with such other documentation as the
Committee 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; (6) any combination of
the foregoing methods of payment; or (7) such other consideration and
method of payment for the issuance of shares as the Committee
determines are consistent with the Plan's purpose and applicable law.
Any fractional share not required for payment of the Option exercise
price shall be paid for by the Company in cash on the basis of the
same value utilized for such exercise.
(e) At the time an Option is granted, the Committee shall determine the
terms and conditions to be satisfied before shares may be purchased,
including the dates on which shares subject to the Option may first be
purchased. The Committee may specify that an Option may not be
exercised until the completion of a service period specified at the
time of grant. (Any such period is referred to herein as the "waiting
period.") At the time an Option is granted, the Committee shall fix
the period within which the Option
-4-
<PAGE>
may be exercised, which shall not be earlier than the end of the
waiting period, if any, nor, in the case of an Incentive Stock Option,
later than ten (10) years from the date of grant.
(f) An incentive stock option hereunder shall not contain terms pursuant
to which the exercise of the Option would affect the Employee's right
to exercise a nonstatutory option hereunder, or vice versa, such that
the incentive stock option would be deemed a prohibited "tandem stock
option" within the meaning of Section 422 of the Code and the
regulations thereunder.
(g) Unless the issuance of the shares upon the exercise of an Option
hereunder is registered or exempt under federal and state securities
laws, the Employee shall be required to give an investment
representation at the time of exercise, and transfer of the shares
shall be appropriately restricted.
(h) During the lifetime of an Employee, Options held by such Employee may
be exercised only by the Employee and only while an Employee of the
Company or of a parent or a subsidiary of the Company and only if such
Employee has maintained his or her Continuous Status as an Employee
since the date such Options were granted; provided, however, that:
(1) In the event an Employee's Continuous Status as an Employee
terminates (other than upon his or her death or Disability), the
Option holder may exercise his or her Option, but only within
such period of time from the date of such termination as is
determined by the Committee, not to exceed three (3) months in
the case of an Option that is intended to qualify as an incentive
stock option, and, unless determined otherwise by the Committee,
only to the extent that the Employee was entitled to exercise it
at the date of such termination (but in no event later than the
expiration of the term of such Option as set forth in the Option
Agreement). To the extent that the Employee was not entitled to
exercise an Option at the date of such termination, and to the
extent that he or she does not
-5-
<PAGE>
exercise such Option (to the extent otherwise so entitled) within
the time specified herein, the Option shall terminate.
(2) In the event an Employee's Continuous Status as an Employee
terminates as a result of his or her Disability, the Option
holder may exercise his or her Option, but only within twelve
(12) months from the date of such termination, and, unless
determined otherwise by the Committee, only to the extent that
the Employee was entitled to exercise it at the date of such
termination (but in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). To
the extent that the Employee was not entitled to exercise an
Option at the date of such termination, and to the extent that he
or she does not exercise such Option (to the extent otherwise so
entitled) within the time specified herein, the Option shall
terminate.
(3) In the event of an Employee's death, the Employee's estate or a
person who acquired the right to exercise the deceased Employee's
Option by bequest or inheritance may exercise the Option, but
only within twelve (12) months following the date of death, and,
unless determined otherwise by the Committee, only to the extent
that the Employee was entitled to exercise it at the date of
death (but in no event later than the expiration of the term of
such Option as set forth in the Option Agreement). To the extent
that the Employee was not entitled to exercise an Option at the
date of death, and to the extent that the Employee's estate or a
person who acquired the right to exercise such Option does not
exercise such Option (to the extent otherwise so entitled) within
the time specified herein, the Option shall terminate.
(4) Except as otherwise provided, in no event shall any Option be
exercisable at any time after its expiration date.
-6-
<PAGE>
(5) On a case-by-case basis, the Committee may, in its sole
discretion, accelerate the schedule of the time or times when an
Option granted under this Plan may be exercised or extend the
period for exercise to a time after the expiration date. Unless
otherwise determined by the Committee at the time of grant, each
Option shall provide that in the event of a change in control of
the Company (as specified by the Committee), any Employee's
Options will become exercisable in full if, within twenty-four
(24) months after a change in control of the Company (as
specified by the Committee), the Employee's employment is
terminated without cause or the Employee resigns due to certain
involuntary relocations or reductions in compensation, as
specified by the Committee. Each Option granted under the Plan
may contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Committee.
(i) The Options granted hereunder may not be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Employee, only by the Employee and only
during such person's Continuous Status as an Employee, except as
provided in subparagraph (h) above.
(j) If the Employee sells, exchanges or otherwise disposes of shares
acquired upon exercise of an incentive stock option within two (2)
years of the date of grant, or one (1) year after the date of
exercise, the Employee shall be required to notify the Company
promptly in writing and disclose the amount of gain or loss resulting
from the sale, exchange or other disposition of his or her stock.
7. STOCK GRANTS.
The Committee may, in its discretion, award a Stock Grant to an Employee in
furtherance of the Plan's purposes; provided, however, that no Employee shall be
eligible
-7-
<PAGE>
to receive a Stock Grant for more than fifty (50) shares of Company Common Stock
in any calendar year. An Employee receiving a Stock Grant shall be entitled to
all of the rights and privileges in the Common Stock awarded as of the date on
which the award is made. Unless the issuance of shares pursuant to a Stock
Grant is registered or exempt under federal or state securities laws, the
Employee shall be required to give an investment representation at the time of
grant, and transfer of the shares shall be appropriately restricted.
8. GRANTS OF RESTRICTED STOCK.
(a) The Committee may, in its discretion and in furtherance of the
purposes of the Plan, grant Restricted Stock to an Employee. With
respect to awards of Restricted Stock, the Committee shall:
(i) Select the Employees to whom grants will be made (the
"Participants");
(ii) Determine the number of shares to be awarded;
(iii) Determine the length of the restricted period, if any, and the
performance and employment conditions under which the Restricted
Stock may be forfeited to the Company, if any;
(iv) Determine the purchase price, if any, to be paid by the
Participant for such Restricted Stock; and
(v) Determine any restrictions other than those set forth in this
Section 8.
(b) The terms of each award of Restricted Stock shall be set forth in a
written award agreement (the "Award Agreement") and a certificate
representing the number of shares of Common Stock granted shall be
issued to the Participant as the registered owner. The certificate
representing such shares shall be legended as to sale, transfer,
assignment, pledge or other encumbrances during the restricted period
and shall be deposited by the Participant, together with a stock power
endorsed in blank, with the Company. Such certificates shall be held
in the custody of the Company
-8-
<PAGE>
until the restricted period expires or until all restrictions thereon
otherwise lapse.
(c) Subject to the restrictions set forth in this Section 8 or in the
Award Agreement, each Participant who receives Restricted Stock shall
have all rights as a stockholder with respect to such shares,
including the right to vote the shares and receive dividends and other
distributions.
(d) The Award Agreement may provide, or the Committee may subsequently
determine in its discretion, that, in the case of death, Disability or
other special circumstances, any or all restrictions then applicable
to a Participant's Restricted Stock be waived.
(e) The Committee may, in its sole discretion, declare the restrictions
applicable to shares of Restricted Stock to lapse in the event of a
change in control of the Company (as specified by the Committee), in
which case the Company shall remove all restrictive legends and stop-
transfer orders applicable to the Restricted Stock as of the date of
said change in control and certificates representing such shares shall
be delivered to the Participants.
(f) Except as otherwise provided in this Section 8 or in the Award
Agreement, no shares of Restricted Stock shall be sold, exchanged,
transferred, pledged or otherwise disposed of during the restricted
period.
(g) With respect to any number of shares of Restricted Stock as to which
the restrictions imposed hereunder shall have lapsed, the restrictive
legend shall be removed and a new certificate representing the shares
shall be delivered to the Participant. The Committee may, in its sole
discretion, modify or cancel the restrictions imposed on Restricted
Stock or otherwise accelerate the vesting of shares of Restricted
Stock.
9. TERMINATION.
Unless sooner terminated by action of the Board of Directors of the
Company, the Plan shall terminate ten (10) years from its effective date.
Options outstanding under the Plan at the time of termination shall remain in
effect until exercise or expiration.
-9-
<PAGE>
Restricted Stock outstanding under the Plan at the time of termination shall
remain subject to the restrictions imposed at the time of grant until the
restricted period expires or until all conditions with respect thereto otherwise
lapse or are satisfied.
10. EFFECTIVE DATE; SHAREHOLDER APPROVAL.
The Plan became effective on September 7, 1988, the date of its adoption by
the Board of Directors of the Company, and was approved by the Company's
stockholders on May 16, 1989. The effective date of each amendment to the Plan
shall be the date of adoption of such amendment by the Board of Directors of the
Company; provided, however, that in the event the shareholders of the Company
shall not approve any amendment to the Plan which is determined by the Board of
Directors to require approval by the shareholders, such amendment shall be of no
effect and no Stock Grant, grant of Restricted Stock or Option previously
granted shall be effective if the authorization of the grant thereof was
contingent on the effectiveness of such amendment or shall otherwise be
benefited or altered by such amendment. No Stock Grants or grants of Restricted
Stock shall be made under the Plan until shareholder approval of the Plan
amendments authorizing such grants is obtained.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
SALE.
(a) CHANGES IN CAPITALIZATION. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered
by each outstanding Option, and each outstanding grant of Restricted Stock,
and the number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no awards have been granted or
which have been returned to the Plan upon cancellation or expiration of an
award, as well as the exercise price per share of Common Stock covered by
each outstanding Option, shall be proportionately adjusted for any increase
or decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that
-10-
<PAGE>
conversion of any convertible securities of the Company shall not be deemed
to have been "effected without receipt of consideration." Such adjustment
shall be made by the Company's Board of Directors, whose determination in
that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to,
the number or price of shares of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution or
liquidation of the Company, to the extent that an Option has not been
previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Committee may, in the exercise
of its sole discretion in such instances, declare that any Option shall
terminate as of a date fixed by the Committee and give each holder the
right to exercise his or her Option as to all or any part of the underlying
Common Stock prior to such expiration, including shares as to which the
Option would not otherwise be exercisable.
(c) MERGER OR ASSET SALE. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option shall be assumed or an equivalent Option
substituted by the successor corporation or a parent or subsidiary of the
successor corporation. In the event that the successor corporation does
not agree to assume the Option or to substitute an equivalent option, the
Committee may, in lieu of such assumption or substitution, provide for the
Option holder to have the right to exercise the Option as to all or a
portion of the underlying Common Stock, including shares as to which it
would not otherwise be exercisable. If the Committee makes an Option
exercisable in lieu of assumption or substitution in the event of a merger
or sale of assets, the Committee shall notify the holder that the Option
shall be exercisable for such period as the Committee may designate, and
the Option will terminate upon the expiration of such period. For the
purposes of this Section 11(c), the Option shall be considered assumed if,
immediately following
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<PAGE>
the merger or sale of assets, the Option confers the right to receive, for
each share of Common Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders
of Common Stock for each share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the
type of consideration chosen by the holders of a majority of the
outstanding shares); provided, however, that if such consideration received
in the merger or sale of assets was not solely common stock of the
successor corporation or its parent, the Committee may, with the consent of
the successor corporation and the Option holder, provide for the
consideration to be received upon the exercise of the Option, for each
share of Common Stock subject to the Option, to be solely common stock of
the successor corporation or its parent equal in Fair Market Value to the
per share consideration received by holders of Common Stock in the merger
or sale of assets.
12. AMENDMENT.
The Board of Directors may amend the Plan at any time as determined to be
in the best interests of the Company. The Board of Directors shall not,
however, without shareholder approval, increase the maximum number of shares
subject to the Plan or restrict the class of management and other key employees
eligible to be awarded Stock Grants, Restricted Stock or Options under the Plan.
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<PAGE>
(RENEWAL GRANT)
CRAY RESEARCH, INC.
AMENDED AND RESTATED
1989 EMPLOYEE BENEFIT STOCK PLAN
INCENTIVE STOCK OPTION GRANT AGREEMENT
Cray Research, Inc., a Delaware corporation (the "Company"), has granted
to the Optionee named on the attached NOTICE OF GRANT OF STOCK OPTION AND GRANT
AGREEMENT (the "NOTICE") which is incorporated herein by reference, an option to
purchase the total number of shares of Common Stock and at the price determined,
both as set forth on the attached NOTICE, and in all respects subject to the
terms, definitions and provisions of the Amended and Restated 1989 Employee
Benefit Stock Plan (the "Plan") adopted by the Company which is incorporated
herein by reference. The terms defined in the Plan shall have the same defined
meanings herein.
By signing the NOTICE, Optionee acknowledges receipt of a copy of the Plan,
a copy of which is annexed hereto, and represents that he or she is familiar
with the terms and provisions thereof, and hereby accepts this Option subject to
all of the terms and provisions thereof. Optionee further agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under the Plan.
1. NATURE OF THE OPTION. This Option is intended to qualify as an
Incentive Stock Option as defined in Section 422 of the Internal Revenue Code of
1986, as amended (the "Code").
2. EXERCISE PRICE. The exercise price for each share of Common Stock is
as set forth in the attached NOTICE, which price is not less than the fair
market value per share of the Common Stock on the date of grant.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 6 of the Plan as follows:
(a) RIGHT TO EXERCISE.
(i) Subject to subsection 3(a) (ii) and (iii), below, this
Option shall be exercisable to the extent of two percent (2%) of the Shares
subject to the Option per month on each anniversary of the date of grant as set
forth in the attached NOTICE.
(ii) This Option may not be exercised for a fraction of a share.
(iii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 7, 8, and 9 below.
<PAGE>
(b) METHOD OF EXERCISE. This Option shall be exercisable by written
notice. Such notice shall be in the form attached hereto as Exhibit A. The
notice shall be signed by the Optionee and shall be delivered in person or by
certified mail to the Secretary of the Company. The written notice shall be
accompanied by payment of the exercise price. The Option shall be deemed to be
exercised upon receipt by the Company of such written notice accompanied by the
exercise price.
No Shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, the Shares shall be considered transferred to
the Optionee on the date on which the Option is exercised with respect to such
shares.
4. OPTIONEE'S REPRESENTATIONS. In the event the shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his or her Investment Representation Statement in
the form of Exhibit B, (available in Stock Administration) and shall read the
applicable rules of the Commissioner of Corporations attached to such Investment
Representation Statement.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by any of
the following, or a combination thereof, at the election of the Optionee:
(i) cash; or
(ii) check; or
(iii) surrender of other Shares of Common Stock of the Company
with a Fair Market Value on the date of surrender equal to the exercise price of
the Shares as to which the Option is being exercised which, in the case of
shares acquired previously upon exercise of an option have been owned by the
Optionee for more than six (6) months on the date of surrender; or
(iv) delivery of a properly executed exercise notice together
with such other documentation as the Company 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.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised until
such time as the Plan has been approved by the shareholders of the Company, or
if the issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a
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<PAGE>
condition to the exercise of this Option, the Company may require Optionee to
make any representation and warranty to the Company as may be required by any
applicable law or regulation.
7. TERMINATION OF STATUS AS AN EMPLOYEE. If Optionee ceases to serve as
an Employee, he or she may, but only within three (3) months after the date he
or she ceases to be an Employee of the Company, exercise this Option to the
extent that he or she was entitled to exercise it at the date of such
termination. To the extent that the Optionee was not entitled to exercise this
Option at the date of such termination, or if he or she does not exercise this
Option within the time specified herein, the Option shall terminate.
8. DISABILITY OF OPTIONEE. Notwithstanding the provisions of Section 7
above, if Optionee is unable to continue his or her employment with the Company
as a result of his or her Disability, the Optionee may, but only within twelve
(12) months from the date of such termination, exercise his or her Option to the
extent he or she was entitled to exercise the Option at the date of such
termination. To the extent that he or she was not entitled to exercise the
Option at the date of termination, or if he or she does not exercise such Option
within the time specified herein, the Option shall terminate.
9. DEATH OF OPTIONEE. In the event of the death of Optionee during the
term of this Option, the Option may be exercised, at any time within twelve (12)
months following the date of death, by Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued as of the date of death.
10. NON-TRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
assigned, hypothecated, transferred or disposed of in any manner other than by
will or by the laws of descent or distribution and may be exercised during the
lifetime of Optionee only by the Optionee. The terms of this Option shall be
binding upon the executors, administrators, heirs, successors and assigns of the
Optionee.
11. TERM OF OPTION. This Option may not be exercised more than ten (10)
years (five years if Optionee owns, immediately before this Option is granted,
stock representing more than 10 percent of the total combined voting power of
all classes of stock of the Company) from the date of grant of this Option, and
may be exercised during such term only in accordance with the Plan and the terms
of this Option.
12. EARLY DISPOSITION OF STOCK. Optionee understands that if he or she
disposes of any Shares received under this Option within two (2) years after the
date of this Agreement or within one (1) year after such Shares were transferred
to him or her, the Optionee will be treated for federal income tax purposes as
having received ordinary income at the time of such disposition in an amount
equal to the difference between the exercise price and the lower of the fair
market value of the Shares at the date of the exercise or the amount realized
from the sale or exchange, if applicable. Different rules may apply upon early
disposition by an Optionee who is subject to Section 16 of the
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<PAGE>
Securities Exchange Act of 1934, as amended (the "1934 Act"). Such an Optionee
should consult his or her own tax advisor prior to exercising an Option with
respect to unvested Shares, or prior to any exercise of an Option. Optionee
hereby agrees to notify the Company in writing within 30 days after the date of
any such disposition. Optionee understands that if he or she sells or exchanges
such Shares at any time after the expiration of such two-year and one-year
holding periods, any gain or loss recognized on such sale will be taxed as long-
term capital gain or loss. Currently, the maximum federal tax rate on net
capital gain is 28%. Changes in the Internal Revenue Code of 1986 enacted after
the date hereof may result in changes to Section 12.
13. ACCELERATION UPON CHANGE OF CONTROL. Notwithstanding provisions of
Section 3(a) with respect to option exercisability, in the event of a Change of
Control of the Company, this Option shall automatically become exercisable in
full if, within twenty-four (24) months after a Change of Control Date, (i) the
Optionee is involuntarily terminated by the Company or any successor company
(hereinafter, the "Employer") without Cause or (ii) the Optionee voluntarily
resigns from the Employer for Good Reason.
14. DEFINITIONS. For purposes of Section 13, the terms "Cause," "Change
of Control," "Change of Control Date," and "Good Reason" shall have the meanings
set out below:
(a) "Cause" means the termination of employment of an Optionee shall
have taken place as a result of:
(i) an act or acts of dishonesty undertaken by such Optionee and
intended to result in gain or personal enrichment of the Optionee, or
(ii) persistent failure to perform the duties and obligations of
such Optionee which is not remedied in a reasonable period of time after receipt
of written notice from the Employer, or
(iii) violation of confidentiality or proprietary information
obligations to or agreements entered into with the Employer, or
(iv) use, sale or distribution of illegal drugs on the Employer's
premises, or
(v) threatening, intimidating, or coercing or harassing fellow
employees, or
(vi) the conviction of such Optionee of a felony.
(b) "Change of Control" of the Company means:
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<PAGE>
(i) the acquisition by any Person (as such term is used in
Sections 13(d) and 14(d) of the 1934 Act) as Beneficial Owner (as such term is
used in Rule 13d-3 promulgated under the 1934 Act), directly or indirectly, of
fifty percent (50%) or more of the combined voting power of the outstanding
shares of capital stock of the Company's then outstanding securities with
respect to the election of the directors of the Board.
(ii) During any period of three (3) consecutive years individuals
who, at the beginning of such period, constitute the Board (the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a Director of the Board subsequent to the date
of this Agreement whose election, or nomination for election by the Company's
shareholders, was approved by the vote of at least a majority of the directors
then comprising the Incumbent Board (other than an election or nomination of any
individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the
Board, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the 1934 Act) shall be, for these purposes, considered as though such person
were a member of the Incumbent Board.
Notwithstanding the foregoing, neither the merger of Cray Research,
Inc. and C Acquisition Corporation or any other transaction contemplated by the
Agreement and Plan of Reorganization and Merger dated as of February 26, 1996 by
and among Silicon Graphics, C Acquisition Corporation and Cray Research, Inc.
(the "Merger Agreement"), shall constitute a "Change of Control" as defined
herein.
(c) "Change of Control Date" means the effective date of the Change
of Control or such date which the Board shall, by resolution, deem to be the
Change of Control Date.
(d) "Good Reason" for voluntary resignation means (i) the Employer
reduces by ten percent (10%) or more the Optionee's compensation at the rate in
effect immediately prior to the Change of Control or (ii) without the Optionee's
express written consent, the Employer requires the Optionee to change the
location of his or her job or office, so that he or she will be based at a
location more then fifty (50) miles from the location of his or her job or
office immediately prior to the Change of Control. For these purposes,
"Compensation" includes base salary, exclusive of bonus, incentive compensation
and shift differential, paid by the Employer as consideration for the Optionee's
service.
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<PAGE>
CRAY RESEARCH, INC.
1989 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
1. PURPOSE
This 1989 Non-Employee Directors' Stock Option Plan (the "Plan") is
intended to provide means for Cray Research, Inc. (the "Company") to attract and
retain the services of experienced and knowledgeable independent directors of
the Company and to provide additional incentives for such Directors to continue
to work for the best interests of the Company and the stockholders through
continuing ownership of common stock in the Company.
It is intended that the Plan be interpreted to comply with Rule 16b-3 under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
2. SHARES SUBJECT TO THE PLAN
A total of 200,000 shares of authorized but unissued or reacquired Common
Stock of the Company is reserved for issuance to Directors under the Plan. If
any option expires or terminates without having been exercised in full, the
unacquired shares shall be available for the grant of future stock options under
the Plan.
3. ADMINISTRATION
This Plan is administered by a committee consisting of the Directors of the
Company who are also employees of the Company (the "Committee"). The Committee
shall have the authority for carrying out all terms of the Plan. However, it
has no discretion either to determine which Directors will receive option awards
or set the number of shares subject to such option awards.
<PAGE>
4. ELIGIBILITY
Directors of the Company who are not employees of the Company or any
subsidiary of the Company ("Non-Employee Directors") are automatically
participants in the Plan. No other persons are eligible to participate in the
Plan.
5. STOCK OPTIONS
All options granted under the Plan shall be nonstatutory options not
entitled to special tax treatment under Section 422 of the Internal Revenue Code
of 1986, as amended (the "Code").
Each Non-Employee Director who was elected to office on May 16, 1989 shall
be granted an initial option of 10,000 shares on such date as is specified by
the Committee. A person who first becomes a Non-Employee Director after May 16,
1989 shall be granted an option of 10,000 shares on the date he or she becomes a
Non-Employee Director.
Each Non-Employee Director who is reelected to office at an annual
stockholders' meeting of any year after 1989 shall automatically be granted an
option of 1,000 shares as of the date of each such stockholders' meeting.
The preceding two paragraphs may not be amended more frequently than once
in any 6 month period.
All options granted hereunder shall be evidenced by an Option Agreement
executed as of the date of grant by the Company and the Non-Employee Director:
(a) The Option Agreement shall specify that the option is a
nonstatutory option.
(b) The date of grant for any option granted under the Plan shall be
specified in the Option Agreement.
(c) The option exercise price per share shall be specified in the
Option Agreement and shall be equal to 100% of the "fair market value" of a
share of Company Common Stock on the date of grant. Fair market value
shall be equal to the closing market price for a share of Common Stock on
the New York Stock
<PAGE>
Exchange as reported in The Wall Street Journal on the date of grant, or
the last business day on which there were sales on the New York Stock
Exchange on or before the day on which the option is granted if the option
was not granted on a business day. The preceding price provisions may not
be amended more than once every six months.
(d) The option price shall be paid at the time of exercise and, at
the election of the Non-Employee Director, may be paid (i) in cash and/or
(ii) by delivery of certificate(s) duly endorsed for transfer, in shares of
the Company's Common Stock already owned by the Non-Employee Director
and/or (iii) by delivery of a notice of exercise of options and
simultaneous sale of the shares of Common Stock thereby acquired pursuant
to a brokerage or similar arrangement approved in advance by an appropriate
officer of the Company, using the proceeds from such sale as payment of the
exercise price, or by such other means as the Committee determines are
consistent with the Plan's purposes and applicable law. Any shares
endorsed and delivered to the Company in payment of the option price shall
be valued at the closing market price on the New York Stock Exchange on the
last business day on which there were sales preceding the exercise date as
reported in The Wall Street Journal. Any fractional share not required for
payment of the option price shall be paid for by the Company in cash on the
basis of the same value utilized for such exercise.
(e) Except as otherwise provided in this subparagraph and in
subparagraph (g) below, the Non-Employee Director may exercise the option
at any time after one year from the date of grant of the option and prior
to ten (10) years from that date, in whole or in part with respect to the
following:
(i) 25% of the shares one year after the date of the option;
(ii) An additional 25% of the shares two years after that date;
(iii) An additional 25% of the shares three years after that date;
and
(iv) An additional 25% of the shares four years after that date.
(f) Unless the issuance of the shares upon the exercise of an option
hereunder is registered or exempt under federal and state securities laws,
the Non-
<PAGE>
Employee Director shall be required to give an investment representation at
the time of exercise and transfer of the shares shall be appropriately
restricted.
(g) If a Non-Employee Director ceases to be a member of the Board by
reason of death, any option granted to such Non-Employee Director may be
exercised, to the extent not previously exercised and without regard to the
percentage limitations of subparagraph (e) above, by the Non-Employee
Director's estate at any time prior to expiration of the option. In the
event of the Non-Employee Director's retirement from the Board at or after
the age of 55, all options held by such Non-Employee Director on the last
date of service as a Director shall become immediately exercisable without
regard to the limitations of subparagraph (e) above, and shall remain
exercisable for a period of two years from such date; provided, however,
that an option must be exercised prior to the expiration of the option
term. In the event the Non-Employee Director ceases to be a member of the
Board for any other reason, any option granted to such Non-Employee
Director may be exercised, with respect to the vested portion of the option
(at the time the Non-Employee Director ceases to be a director), for a
period of two years after the date the Non-Employee Director ceases to be a
Director; provided, however, that the option must be exercised prior to the
expiration of the option term. In no event shall any option be exercisable
at any time after its expiration date.
(h) The options hereunder shall not be transferable by the Non-
Director, except by will or the laws of descent and distribution. During the
Non-Employee Directors' life, the options shall be exercisable only by the
Director.
6. TERMINATION
Unless sooner terminated by action of the Board of Directors of the
Company, the Plan shall terminate ten (10) years from the effective date.
Options outstanding under the Plan at the time of termination shall remain in
effect until exercise or expiration.
<PAGE>
7. ADJUSTMENT OF SHARES
In the event of a recapitilization, merger, consolidation, reorganization,
stock dividend, stock split or other change in capitalization affecting the
Common Stock of the Company, the number of shares of stock authorized for the
Plan shall be automatically adjusted and appropriate equitable share and per
share option price adjustments in outstanding options shall be made by the
Committee to prevent dilution or enlargement of rights.
8. AMENDMENT
Except as otherwise limited in the Plan, the Board of Directors may amend
the Plan at any time as determined to be in the best interests of the Company.
The Board of Directors shall not, however, without shareholder approval,
increase the maximum number of shares subject to the Plan or in any manner which
would cause the Plan to fail to comply with Rule 16b-3 under the Exchange Act.
9. EFFECTIVE DATE: STOCKHOLDER APPROVAL
The effective date of the Plan shall be July 24, 1989 the date of adoption
by the Board of Directors of the Company. Options under the Plan may be granted
at any time thereafter; provided, however, that all options granted hereunder
shall not be exercisable until, and shall be subject to, approval of the Plan by
the stockholders of the Company at a meeting duly called and held for such
purpose not later that the Annual Meeting of Stockholders in 1990. The
effective date of each amendment to the Plan shall be the date of adoption of
such amendment by the Board of Directors of the Company; provided, however, that
in the event the stockholders of the Company shall not approve any amendment to
the Plan which is determined by the Board of Directors to require approval by
the stockholders, such amendment shall be of no effect and no option previously
granted or amended shall be benefited or altered by such amendment.
<PAGE>
CRAY RESEARCH, INC.
1989 NONSTATUTORY OPTION AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
CRAY RESEARCH, INC., a Delaware corporation (the Company), pursuant to the
1989 Non-Employee Directors' Stock Option Plan previously adopted by the Board
of Directors of the Company (the Plan), and in consideration of services to be
rendered to the Company by NAME (the Non-Employee Director), grants to the Non-
Employee Director a nonstatutory option to purchase SHARES of the Company's
Common Stock (the Shares) at a price of SHARE PRICE per share (the Purchase
Price), all on the following terms and conditions.
1. The Non-Employee Director may exercise this nonstatutory option on a
cumulative basis at any time after DATE OF GRANT + 1 YR. LESS 1 DAY (one year
after the date of grant) and prior to DATE OF GRANT + 10 YEARS, (ten years after
the date of the grant), subject to prior termination or modification as herein
provided, in whole or in part with respect to the following:
(a) 25% of the Shares one year after the date of grant;
(b) An additional 25% of the Shares two years after the date of the
grant;
(c) An additional 25% of the Shares three years after the date of
grant; and
(d) The remaining 25% of the Shares four years after the date of
grant.
2. This nonstatutory option shall not be transferable by the Non-Employee
Director, except by will or the laws of descent and distribution and, during the
Non-Employee Director's life, shall be exercisable only by the Non-Employee
Director.
3. This nonstatutory option may be exercised in whole or in part, from
time-to time, by delivery to the Company of a written notice specifying the
number of Shares desired to be purchased and accompanied by full payment to the
Company of the Purchase Price, at the election of the Non-Employee Director, in
cash and/or by delivery of certificate(s) duly endorsed for transfer, in shares
of the Company's Common Stock already owned by the Non-Employee Director, or by
delivery of a notice of exercise of option and simultaneous sale of the shares
of Common Stock thereby acquired pursuant
<PAGE>
to a brokerage or similar arrangement approved in advance by the Company, using
the proceeds from such sale as payment of the Purchase Price. Any shares
endorsed and delivered to the Company in payment of the Purchase Price shall be
valued at the closing price for the Common Stock on the New York Stock Exchange
on the last business day preceding such exercise date on which there were sales
as reported in The Wall Street Journal. Any fractional share not required for
payment of the Purchase Price shall be paid for by the Company in cash on the
basis of the same value utilized for such exercise.
4. If the Non-Employee Director ceases to be a member of the Board of
Directors by reason of death, this nonstatutory stock option, to the extent not
previously exercised, shall become immediately exercisable in full, without
regard to the percentage limitations set forth in Section 1(a) through (d)
above, at any time by the Non-Employee Director's estate prior to expiration of
the term of the option specified in Section 1. In the event of the Non-Employee
Director's retirement from the Board of Directors at or after age 55, this
option shall become immediately exercisable without regard to the percentage
limitations of Section 1(a) through (d) above, and shall remain exercisable for
a period of two years from such date; provided that this option must be
exercised prior to expiration of the option term. If the Non-Employee Director
ceases to be a member of the Board for any reason other than death or retirement
at or after age 55, the unexercised portion of this nonstatutory stock option
may be exercised, with respect to the vested portion of the option (at the time
the Non-Employee Director ceases to be a director), for a period of two years
after the date such Non-Employee Director ceases to be a Director, provided,
however, that the option must be exercised prior to the expiration of the option
term.
5. Unless the issuance of the Shares purchased upon the exercise of this
nonstatutory option is registered under federal and state securities laws, or is
determined by counsel for the Company to be exempt from such registration, the
Non-Employee Director shall be required to give an investment representation in
connection with such exercise and purchase, and transfer of the Shares received
shall be appropriately restricted and requisite legends place upon certificate
for the Shares.
6. If prior to the expiration of this nonstatutory option, the Shares
then subject to this nonstatutory option shall be affected by any
recapitalization, merger, consolidation,
<PAGE>
reorganization, stock dividend, stock split, or other change in capitalization
affecting the present Common Stock of the Company, then the number and kind of
shares covered by this Agreement, and the Purchase Price per share, shall be
appropriately adjusted by a committee of the Directors who are also employees of
the Company to prevent dilution or enlargement of rights which might otherwise
result.
7. It is intended that the Plan and this nonstatutory option comply and
be interpreted in accordance with Rule 16b-3 under the Securities Exchange Act
of 1934, as amended. The provisions of the Plan, to the extent not set forth in
this Agreement, are incorporated by reference.
IN WITNESS WHEREOF, this Nonstatutory Stock Option Agreement is hereby
executed as of DATE OF GRANT.
CRAY RESEARCH, INC.
By
-------------------------------------
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Non-Employee Director
<PAGE>
EXHIBIT 5.1
June 19, 1996
Silicon Graphics, Inc.
2011 North Shoreline Boulevard
Mountain View, CA 94043-1389
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
I have examined the Registration Statement on Form S-8 to be filed by Silicon
Graphics, Inc. (the "Company") with the Securities and Exchange Commission on or
about June 20, 1996 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of 6,558,877 shares
of the Company's common stock, par value $0.001 per share, to be issued pursuant
to the Cray Research, Inc. 1989 Employee Benefit Stock Plan and 1989 Non-
Employee Directors' Stock Option Plan (the "Plan Shares"). I have examined the
proceedings taken and proposed to be taken in connection with the issuance and
sale of the Plan Shares to be issued under such Plans.
It is my opinion that, upon completion of the proceedings being taken or
contemplated to be taken prior to the issuance of the Plan Shares pursuant to
the Plans, and upon completion of the proceedings being taken in order to permit
such transactions to be carried out in accordance with the securities laws of
the various states where required, the Plan Shares will be legally and validly
issued, fully-paid and non-assessable.
I consent to the use of this opinion as an exhibit to the Registration
Statement, and further consent to the use of my name wherever appearing in the
Registration Statement and any amendments thereto.
Sincerely,
Sandra M. Escher
Senior Counsel
