<PAGE>
As filed with the Securities and Exchange Commission on April__, 1999.
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)
1998 EMPLOYEE STOCK PURCHASE PLAN
AMENDED AND RESTATED 1996 SUPPLEMENTAL
NON-EXECUTIVE EQUITY INCENTIVE PLAN
(Full title of the plans)
WILLIAM M. KELLY
Senior Vice President and General Counsel
SILICON GRAPHICS, INC.
2011 North Shoreline Boulevard
Mountain View, California 94043-1389
(650) 960-1980
(Name, address and telephone number of agent for service)
Calculation of Registration Fee
<TABLE>
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- ---------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
Title of Securities Amount to be Proposed maximum Proposed maximum Amount of
to be registered registered (1) offering price per unit aggregate offering registration
(2) price fee
- ---------------------------------------------------------------------------------------------------
Common Stock, 13,000,000
$0.001 par value shares $ 12.59 $ 163,670,000 $ 45,500.26
- ---------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Excludes shares reserved under the 1996 Supplemental Non-Executive Equity
Incentive Plan which were registered previously on a Registration Statement on
Form S-8 (No. 333-01211).
(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
April 12, 1999.
<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, 1998, 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, 1998 and December 31, 1998, 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
II-1
<PAGE>
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.
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 1998 Employee Stock Purchase Plan.
4.2 Amended and Restated 1996 Supplemental Non-Executive Equity
Incentive Plan.
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of Ernst & Young LLP, Independent Auditors (see page II-6).
23.2 Consent of Counsel (contained in Exhibit 5.1).
24.1 Power of Attorney (see page II-5).
---------------
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
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<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.
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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 April 13, 1999.
SILICON GRAPHICS, INC.
By: /s/ Richard E. Belluzzo
------------------------------
Richard E. Belluzzo
Chairman and Chief Executive
Officer
II-4
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Richard E. Belluzzo, Steven J. Gomo 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.
<TABLE>
<CAPTION>
Signature Title Date
------------------------ ------------------------- ---------------
<S> <C> <C>
/s/ Richard E. Belluzzo Chairman of the Board and April 13, 1999
------------------------ Chief Executive Officer
Richard E. Belluzzo (Principal Executive
Officer)
/s/ Robert R. Bishop Director April 13, 1999
------------------------
Robert R. Bishop
/s/ Steven J. Gomo Senior Vice President, and April 13, 1999
------------------------ Chief Financial Officer
Steven J. Gomo (Principal Financial
Officer)
/s/ Betsy Rafael Vice President, Corporate April 13, 1999
------------------------ Controller
Betsy Rafael (Principal Accounting
Officer)
/s/ C. Richard Kramlich Director April 13, 1999
------------------------
C. Richard Kramlich
/s/ Robert A. Lutz Director April 13, 1999
------------------------
Robert A. Lutz
/s/ James A. McDivitt Director April 13, 1999
------------------------
James A. McDivitt
/s/ Lucille Shapiro Director April 13, 1999
------------------------
Lucille Shapiro
/s/ Robert B. Shapiro Director April 13, 1999
------------------------
Robert B. Shapiro
</TABLE>
II-5
<PAGE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the 1998 Employee Stock Purchase Plan and the Amended
and Restated 1996 Supplemental Non-Executive Equity Incentive Plan of Silicon
Graphics, Inc. of our report dated July 21, 1998, 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, 1998
and the related financial statement schedule included therein, filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Palo Alto, California
April 12, 1999
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.1 1998 Employee Stock Purchase Plan.
4.2 Amended and Restated 1996 Supplemental Non-
Executive Equity Incentive Plan.
5.1 Opinion of counsel as to legality of
securities being registered.
23.1 Consent of Ernst & Young LLP, Independent
Auditors (see page II-6)
23.2 Consent of Counsel (contained in Exhibit 5.1)
24.1 Power of Attorney (see page II-5)
-------------------
</TABLE>
II-7
<PAGE>
Exhibit 4.1
SILICON GRAPHICS, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
The following constitutes the provisions of the Employee Stock
Purchase Plan (herein called the "Plan") of Silicon Graphics, Inc.
1. PURPOSE. The purpose of the Plan is to provide employees of
the Company and its Designated Subsidiaries with an opportunity to purchase
Common Stock of the Company through payroll deductions. It is the intention
of the Company that the Plan qualify as an "Employee Stock Purchase Plan"
under Section 423 of the Internal Revenue Code of 1986, as amended. The
provisions of the Plan shall, accordingly, be construed so as to extend and
limit participation in a manner consistent with the requirements of that
section of the Code.
2. DEFINITIONS.
(a) "Board" means the Board of Directors of the Company, or
to the extent authorized by the Board, a Committee of the Board.
(b) "Code" means the Internal Revenue Code of 1986, as
amended.
(c) "Common Stock" means the Common Stock, $0.001 par value,
of the Company.
(d) "Company" means Silicon Graphics, Inc. and any
Designated Subsidiary of the Company.
(e) "Compensation" means base pay, plus any amounts
attributable to overtime, shift premium, incentive compensation, bonuses and
commissions (exclusive of "spot bonuses" and any other such item specifically
directed for all Employees by the Board or its committee).
(f) "Designated Subsidiaries" means the Subsidiaries which
have been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(g) "Employee" means any individual who is an Employee of
the Company for tax purposes whose customary employment with the Company is
at least twenty (20) hours per week and more than five (5) months in a
calendar year. For purposes of the Plan, the employment relationship will be
treated as continuing intact while the individual is on sick leave or other
leave of absence approved in writing by the Company. Where the period of
leave (other than a personal leave of absence) exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship shall be deemed to have terminated on
the 91st day of such leave. In the case of a personal leave of absence, the
employment relationship shall be deemed to have terminated on the
commencement date.
<PAGE>
(h) "Enrollment Date" means the first Trading Day of each
Offering Period.
(i) "Exercise Date" means the last Trading Day of each
Purchase Period in an Offering Period.
(j) "Fair Market Value" means, as of any date, the value of
the Common Stock determined by the Board based on such factors as the Board
determines relevant, provided however, that if there is a public market for
the Common Stock the fair market value will be determined as follows:
(1) If the Common Stock is listed on any established
stock exchange or a national market system, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system for the last market trading
day on or prior to the date of such determination, as reported in THE WALL
STREET JOURNAL or such other source as the Board deems reliable; or
(2) If the Common Stock is regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean of the closing bid and asked prices for the
Common Stock on or prior to the date of such determination, as reported in
THE WALL STREET JOURNAL or such other source as the Board deems reliable.
(k) "Offering Date" means the first day of each Offering
Period of the Plan.
(l) "Offering Period" means a period of twenty-four (24)
months consisting of four six-month Exercise Periods during which options
granted pursuant to the Plan may be exercised. The duration and timing of
Offering Periods may be changed pursuant to Sections 4 and 20 of this Plan.
(m) "Purchase Period" means the approximately six-month
period commencing after one Exercise Date and ending with the next Exercise
Date, except that the first Purchase Period of any Offering Period will
commence on the Enrollment Date and end with the next Exercise Date.
(n) "Purchase Price" means 85% of the Fair Market Value of a
share of Common Stock on the Enrollment Date or on the Exercise Date,
whichever is lower; provided however, that the Purchase Price may be adjusted
by the Board pursuant to Section 20.
(o) "Reserves" means the number of shares of Common Stock
covered by each option under the Plan that has not yet been exercised and the
number of shares of
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<PAGE>
Common Stock that have been authorized for issuance under the Plan but not
yet placed under option.
(p) "Subsidiary" means any corporation, domestic or foreign,
in which the Company or a Subsidiary owns, directly or indirectly, 50% or
more of the voting shares, whether or not such corporation now exists or is
hereafter organized or acquired by the Company or a Subsidiary.
(q) "Trading Day" means a day on which national stock
exchanges and the Nasdaq System are open for trading.
3. ELIGIBILITY.
(a) GENERAL RULE. Any Employee who is employed by the
Company on a given Enrollment Date shall be eligible to participate in the
Plan, subject to the requirements of Section 5(a) and the limitations imposed
by Section 423(b) of the Code.
(b) EXCEPTIONS. Any provisions of the Plan to the contrary
notwithstanding, no Employee shall be granted an option under the Plan if (i)
immediately after the grant, such Employee (or any other person whose stock
ownership would be attributed to such Employee pursuant to Section 424(d) of
the Code) would own capital stock and/or hold outstanding options to purchase
shares possessing five percent (5%) or more of the total combined voting
power or value of all classes of the capital stock of the Company or of any
Subsidiary, or (ii) the rate of withholding under such option would permit
the employee's rights to purchase shares under all employee stock purchase
plans (described in Section 423 of the Code) of the Company and its
subsidiaries to accrue (i.e., become exercisable) at a rate which exceeds
Twenty-Five Thousand Dollars ($25,000) of fair market value of such shares
(determined at the time such option is granted) for each calendar year in
which such option is outstanding at any time.
4. OFFERING PERIODS. The Plan shall be implemented by
consecutive, overlapping Offering Periods with a new Offering Period
commencing on the first Trading Day on or after May 1 and November 1, each
year or on such other date as the Board shall determine, and continuing
thereafter until terminated in accordance with Section 20. The Board shall
have the power to change the duration of Offering Periods (including the
commencement dates thereof) with respect to future offerings without
stockholder approval, if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected
thereafter.
5. PARTICIPATION.
(a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement authorizing payroll deductions in
the form provided by the Company and filing it with the Company prior to the
applicable Enrollment Date, unless a later time for filing the subscription
agreement is set for all eligible Employees
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<PAGE>
with respect to such Offering Period. An eligible Employee may participate in
only one Offering Period at a time.
(b) Payroll deductions for a participant shall commence with
the first payroll following the Enrollment Date (or as soon as
administratively feasible) and shall end on the last payroll in the Offering
Period to which such authorization is applicable, unless sooner terminated by
the participant as provided in Section 10.
6. PAYROLL DEDUCTIONS.
(a) At the time a participant files his or her subscription
agreement, he or she shall elect to have payroll deductions made on each
payday during all subsequent Offering Periods at a rate not exceeding ten
percent (10%), or such other rate as may be determined from time to time by
the Board, of the Compensation which he or she would otherwise receive on
such payday without regard to deferral elections, provided that the aggregate
of such payroll deductions during any Offering Period shall not exceed ten
percent (10%), or such other percentage as may be determined from time to
time by the Board, of the aggregate Compensation which he or she would
otherwise have received during said Offering Period.
(b) All payroll deductions authorized by a participant shall
be credited to his or her account under the Plan and shall be withheld in
whole percentages only. A participant may not make any additional payments
into such account.
(c) A participant may discontinue his or her participation
in the Plan as provided in Section 10, or may change the rate of his or her
payroll deductions during an Offering Period by completing and filing with
the Company a new authorization for payroll deduction. The Board may, in its
discretion, limit the number of participation rate change in any Offering
Period. The change in rate shall be effective as soon as administratively
feasible following the Company's receipt of the new authorization. A
participant's subscription agreement shall remain in effect for successive
Offering Periods unless terminated as provided in Section 10.
(d) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) of the Plan, a
participant's payroll deductions may be automatically decreased to zero
percent (0%) at any time during a Purchase Period. Payroll deductions shall
recommence at the rate provided in such participant's subscription agreement
at the beginning of the first Purchase Period which is scheduled to end in
the following calendar year, unless terminated by the participant as provided
in Section 10.
(e) At the time the option is exercised, in whole or in
part, or at the time some or all of the Company's Common Stock issued under
the Plan is disposed of, the participant must make adequate provision for the
Company's federal, state or other tax withholding obligations, if any, which
arise on the exercise of the option or the disposition of the Common Stock.
At any time the Company may, but shall not be
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<PAGE>
obligated to, withhold from the participant's compensation the amount
necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax
deductions or benefits attributable to sale or early disposition of Common
Stock by the Employee.
7. GRANT OF OPTION.
(a) On each Enrollment Date of each Offering Period, each
eligible Employee participating in such Offering Period shall be granted an
option to purchase on each Exercise Date during such Offering Period (at the
applicable Purchase Price) a number of full shares of the Company's Common
Stock arrived at by dividing such Employee's payroll deductions to be
accumulated prior to such Exercise Date and retained in the Employee's
account as of the Exercise Date by the applicable Purchase Price; provided
that the maximum number of shares a participant may purchase during each
Offering Period shall be determined by (i) dividing $40,000 by the Fair
Market Value of a share of the Company's Common Stock on the Offering Date or
(ii) if less, by the "Maximum Cap" set for such Offering Period; and provided
further that such purchase shall be subject to the limitations set forth in
Sections 3(b) and 13. The "Maximum Cap" for each Offering Period shall be
the number of shares purchasable under the Plan during that Offering Period
with the maximum payroll deductions permitted by Section 6(d), based on the
Fair Market Value of the Common Stock at the beginning of the Offering
Period. The Board may, for future Offering Periods, increase or decrease, in
its absolute discretion, the maximum number of shares of the Company's Common
Stock an Employee may purchase during each Purchase Period of such Offering
Period. Exercise of the option shall occur as provided in Section 8 of the
Plan, unless the participant has withdrawn pursuant to Section 10. The
option shall expire on the last day of the Offering Period.
8. EXERCISE OF OPTION.
(a) Unless a participant withdraws from the Offering Period
as provided in Section 10, his or her option for the purchase of shares will
be exercised automatically at each Exercise Date, and the maximum number of
full shares subject to option will be purchased at the applicable Purchase
Price with the accumulated payroll deductions in his or her account. No
fractional shares will be purchased. The shares purchased upon exercise of
an option hereunder shall be deemed to be transferred to the participant on
the Exercise Date. During his or her lifetime, a participant's option to
purchase shares hereunder is exercisable only by the participant.
(b) If the Board determines that, on a given Exercise Date,
the number of shares with respect to which options are to be exercised may
exceed (i) the number of shares of Common Stock that were available for sale
under the Plan on the Enrollment Date of the applicable Offering Period, or
(ii) the number of shares available for sale under the Plan on such Exercise
Date, the Board may in its sole discretion provide that the Company shall
make a pro rata allocation of the shares of Common Stock available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as
uniform a
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<PAGE>
manner as shall be practicable and as it shall determine in its sole
discretion to be equitable among all participants exercising options to
purchase Common Stock on such Exercise Date, and (x) continue all Offering
Periods then in effect, or (y) terminate any or all Offering Periods then in
effect pursuant to Section 20. the Company may make pro rata allocation of
the shares available on the Enrollment Date of any applicable Offering Period
pursuant to the preceding sentence, notwithstanding any authorization of
additional shares for issuance under the Plan by the Company's stockholders
subsequent to such Enrollment Date.
9. DELIVERY. As promptly as practicable after each Exercise Date
on which a purchase of shares occurs, the Company shall arrange for the
shares purchased upon exercise of his or her option to be electronically
credited to the participant's designated brokerage account at one of the
securities brokerage firms participating in the Company's direct deposit
program from time to time. Any cash remaining to the credit of a
participant's account under the Plan after a purchase by him or her of shares
at the Exercise Date of each Offering Period which merely represents a
fractional share shall be credited to the participant's account for the next
subsequent Purchase Period or Offering Period; any additional cash shall be
returned to said participant.
10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.
(a) A participant may withdraw all, but not less than all,
the payroll deductions credited to his or her account and not yet used to
exercise his or her option under the Plan at any time by giving written
notice to the Company on a form provided for such purpose. All of the
participant's payroll deductions credited to his or her account will be paid
to the participant as soon as practicable after receipt of the notice of
withdrawal, his or her option for the current Offering Period will be
automatically canceled, and no further payroll deductions for the purchase of
shares will be made during such Offering Period. If a participant withdraws
from an Offering Period, payroll deductions will not resume at the beginning
of the succeeding Offering Period unless the participant delivers to the
Company a new subscription agreement.
(b) Upon a participant's ceasing to be an Employee for any
reason, including retirement or death, he or she will be deemed to have
elected to withdraw from the Plan and the payroll deductions accumulated in
his or her account during the Offering Period but not yet used to exercise
the option will be returned to him or her as soon as practicable after such
termination or, in the case of death, to the person or persons entitled
thereto under Section 14, and his or her option will be automatically
canceled. The preceding sentence notwithstanding, a participant who receives
payment in lieu of notice of termination of employment shall be treated as
continuing to be an Employee for the participant's customary number of hours
per week of employment during the period in which the participant is subject
to such payment in lieu of notice.
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<PAGE>
(c) A participant's withdrawal from an Offering Period will
not have any effect upon his or her eligibility to participate in a
succeeding Offering Period or in any similar plan which may hereafter be
adopted by the Company.
11. AUTOMATIC TRANSFER TO LOW PRICE OFFERING PERIOD. To the extent
permitted by any applicable laws, regulations or stock exchange rules, if the
Fair Market Value of the Common Stock on any Exercise Date in an Offering
Period is lower than the Fair Market Value of the Common Stock on the
Enrollment Date of such Offering Period, then all participants in such
Offering Period will be automatically withdrawn from such Offering period
immediately after the exercise of their option on such Exercise Date and
automatically reenrolled in the immediately following Offering Period as of
the first day thereof.
12. INTEREST. No interest shall accrue on the payroll deductions
of a participant in the Plan.
13. STOCK.
(a) Subject to adjustment upon changes in capitalization of
the Company as provided in Section 19, the maximum number of shares of the
Company's Common Stock which shall be reserved for sale under the Plan shall
be 4,000,000 shares, plus (i) an amount equal to any shares available for
issuance under the Company's existing employee stock purchase plan at the
date of its termination and (ii) an annual increase to be added on the first
day of each fiscal year through fiscal 2002 in an amount equal to two percent
(2%) of the Issued Shares (as defined below) on such date or a lesser amount
determined by the Board, up to an aggregate of 24,000,000 shares. "Issued
Shares" shall mean the number of shares of Common Stock of the Company
outstanding on such date plus any shares reacquired by the Company during the
fiscal year that ends on such date. The shares to be sold to participants in
the Plan may be, at the election of the Company, either treasury shares or
shares authorized but unissued. If the total number of shares which would
otherwise be subject to options granted pursuant to Section 7(a) hereof on
the Offering Date of an Offering Period exceeds the number of shares then
available under the Plan (after deduction of all shares for which options
have been exercised or are then outstanding), the Company shall make a pro
rata allocation of the shares remaining available for option grant in as
uniform and equitable a manner as is practicable. In such event, the Company
shall give written notice of such reduction of the number of shares subject
to the option to each participant affected thereby and shall similarly reduce
the rate of payroll deductions if necessary and return any excess funds
accumulated in each participant's account as soon as practicable after the
affected Exercise Date of such Offering Period.
(b) The participant will have no interest or voting rights
in shares covered by his or her option until such option has been exercised.
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<PAGE>
(c) Shares to be delivered to a participant under the Plan
will be credited electronically to a brokerage account in the name of the
participant at one of the brokerage firms participating from time to time in
the Company's direct deposit program.
14. ADMINISTRATION. The Plan shall be administered by the Board or
a committee of members of the Board appointed by the Board. The Board or its
committee shall have full and exclusive discretionary authority to construe,
interpret and apply the terms of the Plan, to determine eligibility and to
adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Board or its committee shall, to the full
extent permitted by law, be final and binding upon all parties.
15. DESIGNATION OF BENEFICIARY.
(a) A participant may file a written designation of a
beneficiary who is to receive shares and/or cash, if any, from the
participant's account under the Plan in the event of such participant's death
at a time when cash or shares are held for his or her account. If a
participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(b) Such designation of beneficiary may be changed by the
participant at any time by written notice. In the event of the death of a
participant in the absence of a valid designation of a beneficiary who is
living at the time of such participant's death, the Company shall deliver
such shares and/or cash to the executor or administrator of the estate of the
participant; or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such shares and/or cash to the spouse or to any one or more dependents or
relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may reasonably
designate.
16. TRANSFERABILITY. Neither payroll deductions credited to a
participant's account nor any rights with regard to the exercise of an option
or to receive shares under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 15 hereof) by the participant. Any
such attempt at assignment, transfer, pledge or other disposition shall be
without effect, except that the Company may treat such act as an election to
withdraw funds in accordance with Section 10.
17. USE OF FUNDS. All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.
18. REPORTS. Individual accounts will be maintained for each
participant in the Plan. Statements of account will be given to
participating Employees at least annually, and will set forth the amounts of
payroll deductions, the Purchase Price, the number of shares purchased and
the remaining cash balance, if any.
-8-
<PAGE>
19. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the stockholders of the Company, the Reserves, the maximum
number of shares each participant may purchase each Purchase Period (under
Section 7), as well as the price per share and the number of shares of Common
Stock covered by each option under the Plan that has not yet been exercised,
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 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 option.
In the event of the proposed dissolution or liquidation of the
Company, the Offering Period will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the Board.
In the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation,
each option under the Plan shall be assumed or an equivalent option shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the Board determines, in the exercise of its
sole discretion and in lieu of such assumption or substitution, that the
participant shall have the right to exercise the option as to all of the
optioned stock, including shares as to which the option would not otherwise
be exercisable. If the Board makes an option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Company will notify the participant that the option will be fully exercisable
and will terminate upon the expiration of such period.
The Board may, if it so determines in the exercise of its sole
discretion, also make provision for adjusting the Reserves, as well as the
price per share of Common Stock covered by each outstanding option, in the
event that the Company effects one or more reorganizations,
recapitalizations, rights offerings or other increases or reductions of
shares of its outstanding Common Stock, and in the event of the Company being
consolidated with or merged into any other corporation.
20. AMENDMENT OR TERMINATION.
(a) The Board of Directors of the Company may at any time
and for any reason terminate or amend the Plan. Except as provided in
Section 19, no such termination will affect options previously granted,
provided that an Offering Period may be terminated by the Board on any
Exercise Date if the Board determines that the termination of the Offering
Period or the Plan is in the best interests of the Company and its
stockholders. Except as provided in Section 19 and this Section 20, no
amendment
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<PAGE>
may make any change in any option theretofore granted which adversely affects
the rights of any participant. In addition, to the extent necessary to
comply with Section 423 of the Code (or any successor rule or provision or
any other applicable law, regulation or stock exchange rule), the Company
shall obtain stockholder approval in such a manner and to such a degree as
required.
(b) Without stockholder consent and without regard to
whether any participant rights may be considered to have been "adversely
affected," the Board (or its committee) shall be entitled to change the
Offering Periods, limit the frequency and/or number of changes in the amount
withheld during an Offering Period, establish the exchange ratio applicable
to amounts withheld in a currency other than U.S. dollars, permit payroll
withholding in excess of the amount designated by a participant in order to
adjust for delays or mistakes in the Company's processing of properly
completed withholding elections, establish reasonable waiting and adjustment
periods and/or accounting and crediting procedures to ensure that amounts
applied toward the purchase of Common Stock for each participant properly
correspond with amounts withheld from the participant's Compensation and
establish such other limitations or procedures as the Board or its committee
determines in its sole discretion advisable which are consistent with the
Plan.
(c) In the event the Board determines that the ongoing
operation of the Plan may result in unfavorable financial accounting
consequences, the Board may, in its discretion and, to the extent necessary
or desirable, modify or amend the Plan to reduce or eliminate such accounting
consequence including, but not limited to:
(i) altering the Purchase Price for any Offering
Period including an Offering Period underway at the time of the change in
Purchase Price;
(ii) shortening any Offering Period so that Offering
Period ends on a new Exercise Date, including an Offering Period underway at
the time of the Board action; and
(iii) allocating shares.
Such modifications or amendments shall not require stockholder
approval or the consent of any Plan participants.
21. NOTICES. All notices or other communications by a participant
to the Company in connection with the Plan shall be deemed to have been duly
given when received in the form specified by the Company at the location, or
by the person, designated by the Company for the receipt thereof. Notices
given by means of the Company's OnLine HR or similar system will be deemed to
be written notices under the Plan.
22. STOCKHOLDER APPROVAL. Continuance of the Plan shall be subject
to approval by the stockholders of the Company within twelve months before or
after the
-10-
<PAGE>
date the Plan is adopted. Such stockholder approval shall be obtained in the
manner and degree required under the Delaware General Corporate Law.
23. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the shares may then be listed,
and shall be further subject to the approval of counsel for the Company with
respect to such compliance.
As a condition to the exercise of an option, if required by applicable
securities laws, the Company may require the participant for whose account
the option is being exercised to represent and warrant at the time of 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 by any of the
aforementioned applicable provisions of law.
24. TERM OF PLAN. The Plan shall become effective upon the earlier
to occur of its adoption by the Board of Directors or its approval by the
stockholders of the Company as described in Section 22. It shall continue in
effect for a term of twenty (20) years unless sooner terminated under Section
20.
-11-
<PAGE>
SILICON GRAPHICS, INC.
AMENDED AND RESTATED 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 10,500,000 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,
* The number of shares authorized for issuance was increased by 9,000,000
shares through an amendment approved by the Board of Directors in October
1998.
<PAGE>
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.
(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
<PAGE>
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;
(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.
<PAGE>
<PAGE>
(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 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
<PAGE>
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.
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. TRANSFERABILITY OF OPTIONS AND RIGHTS. Unless otherwise
determined by the Committee to the contrary, 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. The
Committee may, in the manner established by the Committee, provide for the
transfer, without payment of consideration, of an Option or Right by the
Optionee to any member of the Optionee's immediate family or to a trust or
partnership whose beneficiaries are members of the Optionee's immediate
family. In such case, the Option or Right will be exercisable only by such
transferee. Following transfer, any such Options or Rights shall continue to
be subject to the same terms and conditions as were applicable immediately
prior to the
<PAGE>
transfer. For purposes of this Section, an Optionee's "immediate family"
shall mean the Optionee's spouse, children and grandchildren.
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 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
<PAGE>
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 quoted, and
shall be further subject to the approval of counsel for the Company with
respect to such compliance.
<PAGE>
(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.
<PAGE>
(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.
<PAGE>
EXHIBIT 5.1
April 13, 1999
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 April 14, 1999 (the "Registration Statement"), in connection with the
registration under the Securities Act of 1933, as amended, of 13,000,000
shares of the Company's common stock, par value $0.001 per share, to be
issued pursuant to the 1998 Employee Stock Purchase Plan and the Amended and
Restated 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
Director of Corporate Legal Services
