<PAGE>
As filed with the Securities and Exchange Commission on February 23, 1996.
Registration No.
------------------
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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)
------------------------
1993 LONG-TERM INCENTIVE STOCK PLAN
1996 SUPPLEMENTAL NON-EXECUTIVE EQUITY INCENTIVE 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
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Title of Securities Amount to be Proposed maximum Proposed Amount of
to be registered registered (1) offering price maximum registration
per unit (2) aggregate fee
offering price
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Common Stock, 7,116,758
$0.001 par value shares $186,814,897.50 $26.25 $64,418.93
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(1) Excludes shares reserved under the 1993 Long-Term Incentive Stock Plan
which were registered previously on a Registration Statement on Form S-8 (Nos.
033-51275 and 033-58017).
(2) 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
February 20, 1996.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
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 and December 31, 1995, filed pursuant to Section 13
of the Exchange Act.
(c) 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.
(d) 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 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.
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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* 1993 Long-Term Incentive Stock Plan and form of stock option
agreement.
4.2 1996 Supplemental Non-Executive Equity Incentive 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-7).
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
--------------
* Incorporated by reference from the Company's Quarterly Report on Form
10-Q for the quarter ended September 30, 1993, filed pursuant to
Section 13 of the Exchange Act.
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 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.
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<PAGE>
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.
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<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 February 23, 1996.
SILICON GRAPHICS, INC.
By: /s/ Edward R. McCracken
--------------------------------------
Edward R. McCracken
Chairman and Chief Executive
Officer
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<PAGE>
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
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Edward R. McCracken Chairman of the Board and February 23, 1996
Chief Executive Officer
(Principal Executive Officer)
/s/ Thomas A. Jermoluk
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Thomas A. Jermoluk President, Chief Operating February 23, 1996
Officer and Director
/s/ Robert R. Bishop
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Robert R. Bishop Chairman of the Board, Silicon February 23, 1996
Graphics World Trade
Corporation and Director
/s/ Stanley J. Meresman
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Stanley J. Meresman Senior Vice President, Finance February 23, 1996
and Chief Financial Officer
(Principal Financial Officer)
/s/ Dennis P. McBride
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Dennis P. McBride Vice President, Controller February 23, 1996
(Principal Accounting Officer)
/s/ Allen F. Jacobson
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Allen F. Jacobson Director February 23, 1996
/s/ C. Richard Kramlich
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C. Richard Kramlich Director February 23, 1996
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<PAGE>
Signature Title Date
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/s/ Robert A. Lutz
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Robert A. Lutz Director February 23, 1996
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James A. McDivitt Director
/s/ Lucille Shapiro
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Lucille Shapiro Director February 23, 1996
/s/ Robert B. Shapiro
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Robert B. Shapiro Director February 23, 1996
/s/ James G. Treybig
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James G. Treybig Director February 23, 1996
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<PAGE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement
(Form S-8) pertaining to the 1993 Long-Term Incentive Stock Plan and 1996
Supplemental Non-Executive Equity Incentive 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
February 23, 1996
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<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
- ----------- -----------
4.1* 1993 Long-Term Incentive Stock Plan and form of stock option
agreement.
4.2 1996 Supplemental Non-Executive Equity Incentive 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-7)
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page (II-5)
- --------------------
* Incorporated by reference from the Registrant's Quarterly Report on Form
10-Q for the quarter ended September 30, 1993, filed pursuant to Section 13
of the Securities Exchange Act of 1934, as amended.
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<PAGE>
EXHIBIT 5.1
February 22, 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 Exchange Commission on or
about February 22, 1996 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of 7,116,758 shares
of the Company's common stock, par value $0.001 per share, to be issued pursuant
to the 1993 Long-Term Incentive Stock Plan and the 1996 Supplemental Non-
Executive Equity Incentive 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,
/s/ Sandra M. Escher
--------------------
Sandra M. Escher
Securities Counsel
<PAGE>
SILICON GRAPHICS, INC.
1996 SUPPLEMENTAL NON-EXECUTIVE EQUITY INCENTIVE PLAN
1. PURPOSE OF THE PLAN. The purpose of the Silicon Graphics, Inc. 1996
Supplemental Non-Executive Equity Incentive Plan (the "Plan") is to promote the
long-term success of Silicon Graphics, Inc. (the "Company") by providing
supplemental equity incentives to non-executives of the Company to address
special circumstances identified from time to time by the Compensation and
Human Resources Committee which could without limitation include special
retention programs addressing exceptional competitive pressures in the
market for technical personnel, special recognition programs for outstanding
performance, and other circumstances outside of the normal course.
2. ELIGIBILITY. Stock Awards ("Rights") and nonstatutory stock options
("Options") may be granted to Eligible Employees. If otherwise eligible, an
Employee who has been granted an Option or Right may be granted additional
Options or Rights.
3. STOCK SUBJECT TO THE PLAN.
(a) Subject to Section 11 of the Plan, the maximum aggregate number
of shares of Common Stock of the Company ("shares") that may be issued pursuant
to Options and Rights granted to participants under the Plan shall be 1,500,000
shares. If shares issued pursuant to a Stock Award are forfeited or otherwise
reacquired by the Company, or if an Option or Right expires or becomes
unexercisable without having been exercised in full, the reacquired or
unpurchased shares, respectively, that were subject thereto shall become
available for future grant or sale under the Plan (unless the Plan has
terminated).
(b) Any shares issued under the Plan may consist in whole or in part
of authorized and unissued shares or of treasury shares, and no fractional
shares shall be issued under the Plan. Cash may be paid in lieu of any
fractional shares in settlement of awards under the Plan.
4. PLAN ADMINISTRATION.
(a) COMMITTEE. The Compensation and Human Resources Committee (the
"Committee") appointed by the Board of Directors of the Company (the "Board")
shall be responsible for administering the Plan. The Committee shall have full
and exclusive power to interpret the Plan and to adopt such rules, regulations
and guidelines for carrying out the Plan as it may deem necessary or proper.
This power includes, but is not limited to, selecting award recipients,
establishing all award terms and conditions and adopting modifications,
amendments and procedures, including subplans and the like as may be necessary
to comply with provisions of the laws and applicable regulatory rulings of
countries in which the Company operates in order to assure the viability of
awards granted under the Plan and to enable participants employed in such
countries to receive advantages and benefits under the Plan and such laws and
rulings.
<PAGE>
(b) EFFECT OF COMMITTEE'S DECISION. The Committee's decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options or Rights.
5. DURATION OF THE PLAN. The Plan shall remain in effect until
terminated by the Board.
6. AWARDS. The Committee shall determine the type or types of award(s)
to be made to each participant. Awards may be granted singly, in combination or
in tandem. Awards also may be made in combination or in tandem with, in
replacement of, as alternatives to, or as the payment form for grants or rights
under any other employee or compensation plan of the Company, including the plan
of any acquired entity. The types of awards that may be granted under the Plan
are Options and Stock Awards.
7. OPTIONS.
(a) OPTIONS; NUMBER OF SHARES. The Committee, in its discretion, may
grant Options to eligible participants. Each Option shall be evidenced by a
Notice of Grant that shall specify the number of shares to which it pertains and
be in such form and contain such provisions as the Committee shall from time to
time deem appropriate. Without limiting the foregoing, the Committee may at any
time authorize the Company, with the consent of the respective recipients, to
issue new Options or Rights in exchange for the surrender and cancellation of
outstanding Options or Rights. Option agreements shall contain the following
terms and conditions:
(i) EXERCISE PRICE. The per share exercise price for the
shares issuable pursuant to an Option shall be such price as is determined by
the Committee.
(ii) WAITING PERIOD AND EXERCISE DATES. 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 than 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 may be exercised, which shall not be earlier than the
end of the waiting period, if any.
(iii) FORM OF PAYMENT. 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 may consist entirely of:
(1) cash;
(2) check;
(3) promissory note;
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<PAGE>
(4) other shares that (1) in the case of shares acquired
upon exercise of an option, have been owned by the Optionee for more than six
months on the date of surrender, and (2) have a 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 to the extent permitted by Applicable Laws.
(iv) OTHER PROVISIONS. 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 Optionee's
Options will become exercisable in full if, within twenty-four (24) months after
a change in control of the Company, the Optionee's employment is terminated
without cause or the Optionee 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.
(v) BUYOUT PROVISIONS. The Committee may at any time offer to
buy out for a payment in cash, promissory note or shares, an Option previously
granted, based on such terms and conditions as the Committee shall establish and
communicate to the Optionee at the time that such offer is made.
(b) METHOD OF EXERCISE.
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER. Any
Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Committee and as shall be permissible under the
terms of the Plan.
An Option may not be exercised for a fraction of a share.
An Option shall be deemed to be exercised when written notice of
such exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Committee and permitted by the
Option Agreement, consist of any consideration and method of payment allowable
under subsection 7(a)(iii) of the Plan. Until the issuance (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company) of the stock certificate evidencing such shares, no right
to vote or receive dividends or any other rights as a stockholder shall exist
with respect
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<PAGE>
to the Optioned Stock, notwithstanding the exercise of the Option. No
adjustment will be made for a dividend or other right for which the record date
is prior to the date the stock certificate is issued, except as provided in
Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in
the number of shares that thereafter shall be available, both for purposes of
the Plan and for sale under the Option, by the number of shares as to which the
Option is exercised.
(ii) TERMINATION OF EMPLOYMENT RELATIONSHIP. In the event an
Optionee ceases to be an Employee (other than as a result of the Optionee's
death or Disability), the Optionee 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 and, unless determined otherwise by the Committee, only to the
extent that the Optionee 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 Optionee was
not entitled to exercise an Option at the date of such termination, and to the
extent that the Optionee does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate.
(iii) DISABILITY OF OPTIONEE. In the event an Optionee ceases
to be an Employee as a result of the Optionee's Disability, the Optionee 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 Optionee 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 Optionee was
not entitled to exercise an Option at the date of such termination, and to the
extent that the Optionee does not exercise such Option (to the extent otherwise
so entitled) within the time specified herein, the Option shall terminate.
(iv) DEATH OF OPTIONEE. In the event of an Optionee's death,
the Optionee's estate or a person who acquired the right to exercise the
deceased Optionee'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 Optionee 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 Optionee was not entitled to exercise an Option at the date of
death, and to the extent that the Optionee'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.
8. STOCK AWARDS. All or part of any Stock Award may be subject to
conditions and restrictions established by the Committee, and set forth in the
award agreement, which will include, but are not limited to, achievement of
specific business objectives and other measurements of individual, business unit
or Company performance measured over a period of not less than twelve (12)
months.
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9. DEFERRALS AND SETTLEMENTS. Payment of awards may be in the form of
cash, Common Stock, other awards or combinations thereof as the Committee shall
determine, and with such restrictions as it may impose. The Committee also may
require or permit participants to elect to defer the issuance of shares or the
settlement of awards in cash under such rules and procedures as it may establish
under the Plan. The Committee may also provide that deferred settlements
include the payment or crediting of interest on the deferral amounts.
10. NON-TRANSFERABILITY OF OPTIONS AND RIGHTS. Options and Rights 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 Optionee, only by the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER, ASSET
SALE OR CHANGE OF CONTROL.
(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 Right, and the number of shares of Common Stock that
have been authorized for issuance under the Plan but as to which no Options or
Rights have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or Right, as well as the price per share
of Common Stock covered by each such outstanding Option or Right, 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
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 Board, 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 or Right.
(b) DISSOLUTION OR LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option or Right
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 or Right shall
terminate as of a date fixed by the Committee and give each Optionee the right
to exercise his or her Option or Right as to all or any part of the Optioned
Stock, including shares as to which the Option or Right 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 and Right shall be assumed or an
equivalent Option or Right substituted by the successor corporation or a Parent
or Subsidiary of the successor corporation. In the event that the successor
corporation does not
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<PAGE>
agree to assume the Option or to substitute an equivalent option, the Committee
may, in lieu of such assumption or substitution, provide for the Optionee to
have the right to exercise the Option or Right as to all or a portion of the
Optioned Stock, including shares as to which it would not otherwise be
exercisable. If the Committee makes an Option or Right exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Committee shall notify the Optionee that the Option or Right shall be
exercisable for such period as the Committee may designate, and the Option or
Right will terminate upon the expiration of such period. For the purposes of
this Section 11(c), the Option or Right shall be considered assumed if,
immediately following the merger or sale of assets, the Option or Right confers
the right to receive, for each share of Optioned Stock subject to the Option or
Right immediately prior to the merger or sale of assets, the consideration
(either 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
Optionee, provide for the consideration to be received upon the exercise of the
Option or Right, for each share of Optioned Stock subject to the Option or
Right, 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. DATE OF GRANT. The date of grant of an Option or Right shall be, for
all purposes, the date on which the Committee makes the determination granting
such Option or Right, or such other later date as is determined by the
Committee. Notice of the determination shall be provided to each Optionee
within a reasonable time after the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may at any time amend,
alter, suspend or terminate the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Company, which
agreement must be in writing and signed by the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES.
(a) LEGAL COMPLIANCE. Shares shall not be issued pursuant to the
exercise of an Option or Right unless the exercise of such Option or Right and
the issuance and delivery of such shares shall comply with all relevant
provisions of law, including, without limitation, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder,
Applicable Laws, and the requirements of any stock exchange or quotation system
upon which the shares may then be listed or
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<PAGE>
quoted, and shall be further subject to the approval of counsel for the Company
with respect to such compliance.
(b) INVESTMENT REPRESENTATIONS. As a condition to the exercise of an
Option or Right, the Company may require the person exercising such Option or
Right to represent and warrant at the time of any such exercise that the shares
are being purchased only for investment and without any present intention to
sell or distribute such shares if, in the opinion of counsel for the Company,
such a representation is required.
15. LIABILITY OF COMPANY. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company's counsel to be necessary to the lawful issuance and sale
of any shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such shares as to which such requisite authority
shall not have been obtained.
16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of shares as shall be
sufficient to satisfy the requirements of the Plan.
17. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "APPLICABLE LAWS" means all applicable law, including without
limitation, the Code, Delaware General Corporation Law, and applicable federal
and state securities laws.
(b) "COMMON STOCK" means the Common Stock of the Company.
(c) "COMPANY" means Silicon Graphics, Inc., and any entity that is
directly or indirectly controlled by the Company, or any entity in which the
Company has a significant equity interest, as determined by the Committee.
(d) "DISABILITY" means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(e) "ELIGIBLE EMPLOYEE" means an Employee who is not a vice-president
or more senior Employee.
(f) "EMPLOYEE" means any person employed by the Company.
(g) "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. If no sales of shares were made on
such date, the closing price of a share as reported for the preceding day on
which sale of shares were made shall be used.
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(h) "NOTICE OF GRANT" means a written notice evidencing certain terms
and conditions of an individual Option or Stock Award grant. The Notice of
Grant is part of the Option Agreement and the Stock Award Agreement.
(i) "OPTION" means a stock option granted pursuant to the Plan.
(j) "OPTION AGREEMENT" means a written agreement between the Company
and an Optionee evidencing the terms and conditions of an individual Option
grant. The Option Agreement is subject to the terms and conditions of the Plan.
(k) "OPTIONED STOCK" means the Common Stock subject to an Option or
Right.
(l) "OPTIONEE" means an Employee who holds an outstanding Option or
Right.
(m) "STOCK AWARD" means an award made or denominated in shares or
equivalent in value to shares pursuant to Section 8 of the Plan.
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(RENEWAL GRANT)
SILICON GRAPHICS, INC.
1996 SUPPLEMENTAL NON-EXECUTIVE EQUITY INCENTIVE PLAN
NON-STATUTORY STOCK OPTION GRANT AGREEMENT
Silicon Graphics, 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 1996 Supplemental Non-Executive Equity
Incentive 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 a non-statutory option and is
not intended to qualify for any special tax benefits to the Optionee.
2. EXERCISE PRICE. The exercise price for each share of Common Stock is
as set forth in the attached NOTICE.
3. EXERCISE OF OPTION. This Option shall be exercisable during its term
in accordance with the provisions of Section 7 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.
(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
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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
of a value 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 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 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.
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<PAGE>
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 he or she 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 relationship 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 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. TAXATION UPON EXERCISE OF OPTION. Optionee understands that, upon
exercise of this Option, he will recognize income for tax purposes in an amount
equal to the excess of the then fair market value of the shares over the
exercise price. The Company will be required to withhold tax from Optionee's
current compensation with respect to such income; to the extent that Optionee's
current compensation is insufficient to satisfy the withholding tax liability,
the Company may require the Optionee to make a cash payment to cover such
liability as a condition of exercise of this Option. Upon a resale of such
shares by the Optionee, any difference between the sale price and the fair
market value of the shares on the date of exercise of the Option will be treated
as capital gain or loss.
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
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<PAGE>
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:
(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
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<PAGE>
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.
(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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