<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
<TABLE>
<S> <C>
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
SILICON GRAPHICS, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
September 21, 2000
DEAR SILICON GRAPHICS STOCKHOLDER:
You are cordially invited to attend the Annual Meeting of Stockholders of
Silicon Graphics, Inc. to be held on Wednesday, October 25, 2000 at 2:00 p.m. at
the Historic Del Monte Building, 100 South Murphy Avenue, Sunnyvale, California
94086.
The Notice of Annual Meeting and Proxy Statement accompany this letter and
provide an outline of the business to be conducted at the meeting. In addition
to the matters to be voted on, there will be a report on the progress of the
Company and an opportunity for stockholders to ask questions.
We hope you will be able to join us. To ensure your representation at the
meeting, we urge you to return the enclosed proxy promptly. Your vote is very
important.
Sincerely,
/s/ ROBERT R. BISHOP
ROBERT R. BISHOP
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
<PAGE>
SILICON GRAPHICS, INC.
------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 25, 2000
TO THE STOCKHOLDERS OF SILICON GRAPHICS, INC.:
The Annual Meeting of Stockholders of SILICON GRAPHICS, INC. will be held on
Wednesday, October 25, 2000, at 2:00 p.m., local time, at the Historic Del Monte
Building, 100 South Murphy Avenue, Sunnyvale, California, for the following
purposes:
1. To elect two Class II directors of the Company to serve for a three-year
term.
2. To approve an amendment to the Company's Restated Certificate of
Incorporation to eliminate classification of the Board of Directors.
3. To ratify the appointment of Ernst & Young LLP as independent auditors
of the Company for the fiscal year ending June 30, 2001.
4. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The Proxy Statement accompanying this Notice describes these matters more
fully.
The close of business on September 8, 2000 is the record date for notice and
voting.
We invite all stockholders to attend the meeting in person. Even if you plan
to attend, please sign and return the enclosed proxy as promptly as possible in
the envelope provided. Any stockholder attending the meeting may vote in person
even if he or she has returned a proxy.
Sincerely,
/s/ SANDRA M. ESCHER
Sandra M. Escher
SECRETARY
MOUNTAIN VIEW, CALIFORNIA
SEPTEMBER 21, 2000
<PAGE>
SILICON GRAPHICS, INC.
------------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
Silicon Graphics, Inc. is soliciting the enclosed proxy for use at the
Annual Meeting of Stockholders to be held on Wednesday, October 25, 2000, at
2:00 p.m., local time, or at any adjournment thereof, for the purposes set forth
herein and in the accompanying Notice of Annual Meeting of Stockholders. The
Annual Meeting will be held at the Historic Del Monte Building, 100 South Murphy
Avenue, Sunnyvale, California 94086. The Company's principal offices are located
at 1600 Amphitheatre Parkway, Mountain View, California 94043-1351 and its
telephone number at that location is 650-960-1980.
These proxy solicitation materials will be mailed on or about September 22,
2000 to all stockholders entitled to vote at the meeting.
RECORD DATE AND PRINCIPAL SHARE OWNERSHIP
At the record date, there were issued and outstanding 188,924,877 shares of
the Company's Common Stock, $0.001 par value, 17,500 shares of the Company's
Series A Preferred Stock, $0.001 par value, and one share of the Company's
Series E Preferred Stock, $0.001 par value. Each share of Common Stock is
entitled to one vote; each share of Series A Preferred Stock is entitled to 80
votes; and the outstanding share of the Company's Series E Preferred Stock is
entitled to 38,791 votes.
As of September 8, 2000, the following persons were known by the Company to
be the beneficial owners of more than 5% of any class of the Company's voting
securities:
<TABLE>
<CAPTION>
NUMBER OF
SHARES PERCENT OF
BENEFICIALLY PERCENT OF TOTAL VOTING
CLASS OF SECURITIES OWNED CLASS POWER
------------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Joseph L. Harrosh(1) ....................... Common Stock 13,191,619 6.98% 6.93%
40900 Grimmer Boulevard
Fremont, CA 94538
FMR Corporation(2) ......................... Common Stock 10,598,225 5.61% 5.57%
82 Devonshire Street
Boston, MA 02109
NKK U.S.A. Corporation ..................... Series A Preferred 17,500 100.0% *
450 Park Avenue Stock
New York, NY 10022
Montreal Trust Company ..................... Series E Preferred 1 100.0% *
of Canada, as Trustee(3) Stock
151 Front Street West, Suite 605
Toronto, Ontario M5J 2N1
</TABLE>
------------------------
* Less than 1%.
(1) As reported on a Schedule 13G dated July 13, 2000.
(2) As reported on a Schedule 13G dated February 14, 2000, these shares are
beneficially owned by Fidelity Management & Research Company, an investment
adviser owned by FMR Corporation.
(3) See "Voting and Solicitation" for a description of the Series E Preferred
Stock.
<PAGE>
REVOCABILITY OF PROXIES
Any proxy given in response to this solicitation may be revoked by the
person giving it at any time before its use by delivering to the Secretary of
the Company at its principal offices a written notice of revocation or a duly
executed proxy bearing a later date, or by attending the meeting and voting in
person.
VOTING AND SOLICITATION
The Company's certificate of incorporation provides for cumulative voting
for the election of directors. Stockholders may allocate among one or more
candidates the number of votes equal to the number of directors to be elected
multiplied by the number of shares or equivalent shares of Common Stock held.
However, no stockholder may cumulate votes unless prior to the voting the
candidate's name has been placed in nomination and a stockholder has given
notice at the meeting of the intention to cumulate votes.
On all other matters, each share of Common Stock has one vote, each share of
Series A Preferred Stock has 80 votes, and the Series E Preferred Stock has
38,791 votes. Except as otherwise required by law, the Series A and the
Series E Preferred Stock vote with the Common Stock as one class.
Montreal Trust Company of Canada holds the Series E Preferred Stock as
trustee under a voting trust for the benefit of holders of Exchangeable Shares
issued in connection with the Company's acquisition of Alias Research Inc. in
June 1995. Each holder of Exchangeable Shares (other than the Company and its
affiliates) will receive a proxy on which it can give Montreal Trust voting
instructions for a number of Series E Preferred Stock votes equal to the number
of Exchangeable Shares owned by that holder. Montreal Trust will only cast votes
for which it receives instructions.
The Company will pay the cost of soliciting proxies. The Company will pay
Georgeson Shareholder Communications Inc., a proxy solicitation firm, a fee
expected not to exceed $9,000 for its services in the solicitation of proxies
from brokers, bank nominees and other institutional owners and will reimburse
the firm for certain out-of-pocket expenses expected not to exceed an additional
$14,000. The Company may also reimburse intermediaries for their expenses in
forwarding solicitation materials to beneficial owners. The Company's directors,
officers and employees may also solicit proxies, without additional
compensation.
QUORUM; ABSTENTIONS; BROKER NON-VOTES
The quorum required for the transaction of business at the Annual Meeting is
a majority of the shares or equivalent shares of Common Stock outstanding on the
record date. All shares voted, whether "For" or "Against" or abstentions, will
count for purposes of establishing a quorum and, except as described below, for
determining the number of votes cast with respect to a matter.
In the absence of controlling precedent to the contrary, the Company intends
not to consider broker non-votes in determining whether the requisite majority
of votes cast has been obtained with respect to a particular matter.
INTERNET OR TELEPHONE VOTING
FOR SHARES DIRECTLY REGISTERED IN THE NAME OF THE STOCKHOLDER. Stockholders
with shares registered directly with Equiserve, the Company's transfer agent,
may vote by telephone by calling 877-779-8683 or may vote on the Internet at the
following address on the World Wide Web: http://www.eproxyvote.com/sgi.
2
<PAGE>
FOR SHARES REGISTERED IN THE NAME OF A BROKERAGE FIRM OR BANK. A number of
brokerage firms and banks are participating in a program for shares held in
"street name" that offers telephone and Internet voting options. This program is
different from the program provided by Equiserve for shares registered in the
name of the stockholder. If your shares are held in an account at a brokerage
firm or bank participating in this program, you may vote those shares by calling
the telephone number referenced on your voting form. If your shares are held in
an account at a brokerage firm or bank participating in the street name program,
you already have been offered the opportunity to elect to vote using the
Internet. Votes submitted via the Internet through the street name program must
be received by midnight (Eastern Time) on October 24, 2000. The giving of such a
proxy will not affect your right to vote in person should you decide to attend
the annual meeting.
The telephone and Internet voting procedures are designed to authenticate
stockholders' identities, to allow stockholders to give their voting
instructions and to confirm that stockholders' instructions have been recorded
properly. The Company has been advised by counsel that the telephone and
Internet voting procedures that have been made available through Equiserve and
the street name program are consistent with the requirements of applicable law.
Stockholders voting via the Internet through either of these programs should
understand that there may be costs associated with electronic access, such as
usage charges from Internet access providers and telephone companies, that must
be borne by the stockholder.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
Proposals of stockholders intended to be presented at the Company's 2001
Annual Meeting must be received by the Company no later than May 26, 2001, in
order to be included in the proxy materials for that meeting.
PROPOSAL NO. 1
ELECTION OF DIRECTORS
DIRECTORS AND NOMINEES FOR DIRECTOR
The Company's Board of Directors currently consists of five persons, divided
into three classes serving staggered terms of office. Dr. Lucy Shapiro, director
since 1993, resigned from the Board in July 2000 and the Board has adopted an
amendment to the bylaws to reduce the number of directors from six to five.
Unless otherwise instructed, the proxy holders will vote for the two
nominees named below. In the unexpected event that any such nominee becomes
unavailable or declines to serve, the proxy holders will vote the proxies in
their discretion for any nominee designated by the Board to fill the vacancy. If
additional persons are nominated, the proxy holders intend to cumulate their
votes if necessary to elect as many of the nominees listed below as possible,
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- -------- ----------------------------------------- --------------
<S> <C> <C> <C>
Nominees for Class II Directors
---------------------------------------
Robert A. Lutz......................... 68 Chairman, President and Chief Executive 1995
Officer, Exide Corporation
James A. McDivitt...................... 71 Former Senior Vice President, Government 1987
Operations and International, Rockwell
International Corporation
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
---- -------- ----------------------------------------- --------------
<S> <C> <C> <C>
Continuing Class III Directors
---------------------------------------
Robert R. Bishop....................... 57 Chairman and Chief Executive Officer, 1993
Silicon Graphics, Inc.
Robert B. Shapiro...................... 62 Chairman, Pharmacia Corporation 1996
Continuing Class I Directors
---------------------------------------
C. Richard Kramlich.................... 65 General Partner, New Enterprise 1984
Associates (a venture capital firm)
</TABLE>
Except as indicated below, each nominee or incumbent director has been
engaged in the principal occupation set forth above during the past five years.
There are no family relationships among directors or executive officers of the
Company.
Mr. Bishop was appointed the Chairman of the Board and Chief Executive
Officer of Silicon Graphics, Inc. in the fall of 1999. From July 1995 to
February 1999, he was the Chairman of the Board of Silicon Graphics World Trade
Corporation.
Mr. Kramlich is also a director of Chalone Inc., Com21, Inc., Juniper
Networks, Inc., Lumisys, Inc. and NetSolve, Inc.
Mr. Lutz was appointed Chairman, President and Chief Executive Officer of
Exide Corporation in December 1998. Mr. Lutz was Vice Chairman of Chrysler
Corporation from 1997 until his retirement in 1998. From 1991 to 1997, he was
President of Chrysler and also served as its Chief Operating Officer and a
member of the Office of the Chairman from 1993 to 1997. Mr. Lutz also serves as
a director of ASCOM Holdings AG and Northrop Grumman.
Mr. McDivitt was Senior Vice President, Government Operations and
International, of Rockwell International Corporation until his retirement in
April 1995.
Mr. Shapiro was named Chairman of the Board of Pharmacia Corporation in
April 2000, at the completion of Monsanto's merger with Pharmacia and
Upjohn, Inc. Prior to that, he had been the Chairman and Chief Executive Officer
of Monsanto Company since 1997, having previously served as its Chairman,
President and Chief Executive Officer since 1995 and its President and Chief
Operating Officer since 1993. In addition to serving as a director of Pharmacia
Corporation, Mr. Shapiro is a director of Rockwell International Corporation.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held twelve meetings during fiscal
2000. The Board has an Audit Committee and a Compensation and Human Resources
Committee, which also performs the functions of a nominating committee.
The Audit Committee consists of two non-employee directors. During fiscal
2000, the members of the Audit Committee were Mr. Lutz (chair) and Dr. Shapiro.
The Committee held seven meetings during fiscal 2000. It recommends engagement
of, and approves the services performed by, the Company's independent auditors.
The Committee also is responsible for reviewing and evaluating the Company's
accounting principles and its system of internal accounting controls.
The Compensation and Human Resources Committee consists of three
non-employee directors. During fiscal 2000, the members of the Compensation and
Human Resources Committee were Mr. Kramlich (chair), Mr. McDivitt and
Mr. Shapiro. The Compensation and Human Resources Committee held five meetings
during fiscal 2000. The Committee's responsibilities include approving
compensation arrangements for senior executives, and recommending such
arrangements to the Board for the chief executive officer; administering the
Company's stock incentive plans; approving employee stock option grants;
identifying and evaluating candidates to fill vacancies on the Board and making
recommendations regarding the size and composition of the Board. Candidates for
director suggested
4
<PAGE>
by stockholders will be considered by the Committee. Such suggestions should
include the candidate's name and qualifications and may be submitted in writing
to the Corporate Secretary, Silicon Graphics, Inc., 1600 Amphitheatre Parkway,
Mountain View, CA 94043-1351.
No director attended fewer than 75% of the aggregate number of meetings of
the Board of Directors and meetings of the Committees of the Board on which he
or she served during fiscal 2000, except for Mr. Lutz who attended 75% of
regularly scheduled Board meetings and three of eight special Board meetings and
Mr. Shapiro who attended three of the five Compensation and Human Resources
Committee meetings.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Human Resources Committee during fiscal
2000 were Mr. Kramlich, Mr. McDivitt and Mr. Shapiro. No interlocking
relationship exists between the Company's Board of Directors or Compensation and
Human Resources Committee and the board of directors or compensation committee
of any other company, nor has any such interlocking relationship existed in the
past.
DIRECTOR COMPENSATION
Employee directors are not compensated for their service on the Board of
Directors.
Each non-employee director receives a fee of $5,000 per quarter and $1,000
for each Board and committee meeting attended. The chair of each committee
receives an additional $1,000 for each committee meeting attended.
Under the Directors' Stock Option Plan, each non-employee director is
automatically granted an option to purchase 30,000 shares of Common Stock on the
date on which he or she first becomes a director. In addition, on the date of
the annual stockholders meeting in each year, each non-employee director
receives an option to purchase an additional 10,000 shares of Common Stock. On
October 27, 1999, each of the Company's non-employee directors was automatically
granted an option to purchase 10,000 shares at an exercise price of $7.50 per
share, the fair market value on the date of grant. The exercise price of these
options was adjusted to reflect the spin-off of the Company's remaining interest
in MIPS Technologies, Inc. See Report of the Compensation and Human Resources
Committee of the Board of Directors--Executive Compensation Components.
All options under the directors' plan are granted at the fair market value
of the Common Stock on the date of grant. Options become exercisable in
installments on the first three anniversary dates following the date of grant,
so long as the optionee remains a director.
The Directors' Stock Option Plan expired in July 2000. Future option grants
to non-employee directors will be made from one of the Company's other stock
option plans.
Under the Silicon Graphics Non-Qualified Deferred Compensation Plan,
non-employee directors may elect in advance to defer all or a portion of their
cash compensation. Directors that participate in the deferral plan may direct
the investment of the assets in their deferral accounts among a variety of
mutual funds or may make an irrevocable election to credit the deferred fees to
a stock credit account based on the value of the Company's Common Stock.
Directors may elect to receive payment of their deferred compensation in a lump
sum or in annual installments not to exceed ten years, except in the case of
amounts in the stock credit account, which are distributed in a lump sum based
on the value of the Company's Common Stock at the time the director's service
terminates.
In April 1998, the Compensation and Human Resources Committee approved a
$1,000 per diem reimbursement program for non-employee directors who perform
services for the Company outside the scope of normal board duties at the
specific request of the Chief Executive Officer.
During fiscal 2000, the Company organized a subsidiary, Silicon Graphics
Federal, Inc., ("SGF") to focus on the requirements of its U.S. government
customers. Mr. McDivitt is a non-employee director
5
<PAGE>
of SGF and received $1,000 for each of the three SGF Board meetings he attended
and an additional $2,000 for other services he performed on behalf of SGF.
PROPOSAL NO. 2
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
RESTATED CERTIFICATE OF INCORPORATION
TO ELIMINATE CLASSIFICATION OF THE BOARD OF DIRECTORS
The Company's Restated Certificate of Incorporation provides for the
Directors to be divided into three classes as nearly equal in number as
possible, with each Director having a three-year term. The Company adopted a
classified board to reduce the ability of a third party to effect a sudden,
unsolicited bid for control of the Company or other unsolicited action that
might not be in the best interests of the Company and its stockholders. Because
classified directors serve extended terms and because under Delaware law
classified directors may be removed by the stockholders only for cause, a
classified board can operate to prevent the acquisition of control of a company
in a short period of time. This may have the effect of discouraging interested
parties from pursuing control of a company, whether through a proxy contest for
the election of directors or the acquisition of large blocks of stock.
At the Company's 1999 Annual Meeting of stockholders, a stockholder proposal
was adopted that requested the Board of Directors take steps to declassify the
Board. The Board undertook to consider this request prior to the 2000 Annual
Meeting. The Board has concluded that, while a classified board can enhance the
Board's ability to represent the stockholders' interests in the event of an
unsolicited bid for control of the Company, the Company has other mechanisms in
place--in particular the Second Amended and Restated Preferred Shares Rights
Agreement, dated as of May 6, 1992 and amended as of May 2, 1995--that will
generally provide adequate protection. The Board also took into consideration
the strong expression of stockholder opinions on this subject at the 1999 Annual
Meeting. Accordingly the Board has approved the following amendment to
declassify the Board of Directors.
BOARD PROPOSAL AND RECOMMENDATION
The Board Proposal would phase out the current division of the Board of
Directors into three classes, with one class elected each year for a three-year
term, and provide instead for the annual election of directors commencing with
the class of directors standing for election at the next annual meeting of
stockholders. The Board Proposal would not shorten the terms of the directors
elected or appointed prior to it becoming effective. The new procedure would,
however, apply to all directors as their terms expire. No later than the third
succeeding annual meeting of stockholders (2003), the classification of the
Board would terminate and all directors would be subject to annual election.
VOTE REQUIRED
Approval of the amendment to the Company's Restated Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of the Company's Common Stock and Series A Preferred and Series E
Preferred stock, voting together as one class.
If the Board Proposal is approved, the thirteenth article of the Company's
current Certificate of Incorporation would be deleted and replaced by the
following:
"Thirteenth: At each annual meeting of stockholders, directors of the
Corporation shall be elected to hold office until the expiration
of the term for which they are elected, and until their
successors have been duly elected and qualified; except that if
any such election shall not be so held, such election shall take
place at a stockholders meeting called and held in accordance
with the Delaware General Corporation Law.
Until the third annual meeting of stockholders following
effectiveness of this Certificate of Amendment under the General
Corporation Law of the State of Delaware, the directors shall be
divided into three classes, as nearly equal in size as is
6
<PAGE>
practicable and designated Class I, Class II and Class III. Each
director elected or appointed prior to the effectiveness of this
Certificate of Amendment under the General Corporation Law of
the State of Delaware, shall serve for his or her full term,
such that the term of each Class III director shall end at the
first succeeding annual meeting of stockholders, the term for
each Class I director shall end at the second succeeding annual
meeting of stockholders, and for the term for each Class II
director shall end at the third succeeding annual meeting of
stockholders. The term of each director elected after the
effectiveness of this Certificate of Amendment under the General
Corporation Law of the State of Delaware whether at an annual
meeting or to fill a vacancy in the Board of Directors arising
for any reason, including an increase in the size of the Board
of Directors, shall end at the first annual meeting following
his or her election. Commencing with the third annual meeting of
stockholders following effectiveness of this Certificate of
Amendment under the General Corporation Law of the State of
Delaware, the foregoing classification of the Board of Directors
shall cease, and all directors shall be one class and serve for
a term ending at the annual meeting following the annual meeting
at which the director was elected.
Vacancies occurring on the Board of Directors for any reason may
be filled only by vote of a majority of the remaining members of
the Board of Directors at any meeting of the Board of Directors
even if the remaining members constitute less than a quorum. A
person so elected by the Board of Directors to fill a vacancy
shall hold office until the next succeeding annual meeting of
stockholders of the Corporation and until his or her successor
shall have been duly elected and qualified."
If the Board Proposal is approved, the By-laws of the Company will be amended by
the Board to conform with the Amended Certificate of Incorporation.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENT TO THE COMPANY'S RESTATED CERTIFICATE OF INCORPORATION TO PROVIDE FOR
THE ANNUAL ELECTION OF DIRECTORS.
PROPOSAL NO. 3
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Ernst & Young LLP, independent
auditors, to audit the consolidated financial statements of the Company for the
fiscal year ending June 30, 2001. In the event of a majority vote against
approval, the Board will reconsider its selection, and in any event is entitled
to change auditors at a later date. Ernst & Young LLP has audited the Company's
financial statements since the fiscal year ended June 30, 1982. Representatives
of Ernst & Young LLP are expected to be present at the meeting with the
opportunity to make a statement, and to be available to respond to appropriate
questions.
RECOMMENDATION
THE BOARD OF DIRECTORS RECOMMENDS VOTING "FOR" THE APPOINTMENT OF ERNST &
YOUNG LLP AS THE COMPANY'S INDEPENDENT AUDITORS FOR FISCAL YEAR 2001.
7
<PAGE>
OTHER INFORMATION
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of September 8, 2000 by each director or nominee director, by
each of the current and former executive officers named in the table under
"Executive Officer Compensation" below, and by all such persons and all current
executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF
BENEFICIALLY COMMON PERCENT OF TOTAL
NAME OWNED(1) STOCK VOTING POWER
---- ---------------- ---------- ----------------
<S> <C> <C> <C>
Robert R. Bishop..................................... 3,771,144 2% 1.98%
C. Richard Kramlich(2)............................... 105,980 * *
Robert A. Lutz....................................... 110,100 * *
James A. McDivitt.................................... 205,104 * *
Robert B. Shapiro.................................... 116,100 * *
Kurt Akeley(3)....................................... 494,553 * *
Kenneth L. Coleman................................... 625,236 * *
Warren Pratt......................................... 272,531 * *
Ron Curtola.......................................... -- * *
John R. Vrolyk....................................... 189,652 * *
All executive officers and directors as a group (13
persons)........................................... 5,979,105 3.14% 3.11%
</TABLE>
------------------------
* Less than 1%.
(1) Unless otherwise indicated, the persons named have sole voting and
investment power over the shares shown as being beneficially owned by them,
subject to community property laws, where applicable. The table includes the
following shares issuable on exercise of options that were exercisable on
September 8, 2000, or within 60 days thereafter, Mr. Bishop, 100 shares;
Mr. Kramlich, 40,100 shares; Mr. Lutz, 60,100 shares; Mr. McDivitt, 40,100
shares; Mr. R. Shapiro, 60,100 shares; Mr. Coleman, 554,615 shares;
Mr. Pratt, 237,795 shares; Mr. Akeley 460,227 shares; Mr. Vrolyk, 189,652
shares; and all directors and executive officers as a group, 1,729,230
shares.
(2) Includes 32,500 shares owned by NEA Partners VIII, Limited Partnership, of
which Mr. Kramlich is a general partner. Mr. Kramlich disclaims beneficial
ownership of such portion of the NEA Partners VIII shares in which he has no
actual pecuniary interest.
(3) Includes 2,594 shares owned and 4,950 shares issuable on exercise of options
by Mr. Akeley's wife, who is an employee of the Company and as to which he
may be deemed to have shared voting and investment power.
REPORT OF THE COMPENSATION
AND HUMAN RESOURCES COMMITTEE
OF THE BOARD OF DIRECTORS
The Compensation and Human Resources Committee of the Board of Directors
recommends, subject to the Board's approval, executive compensation and stock
option grants for the Chief Executive Officer. The Committee administers the
Company's stock incentive plans and approves stock option grants for all other
employees. The Committee is currently composed of three independent,
non-employee directors who have no interlocking relationships as defined by the
SEC.
8
<PAGE>
COMPENSATION PHILOSOPHY
The Company operates in the highly competitive and rapidly changing high
technology industry. The Committee seeks to establish compensation policies that
allow the Company flexibility to respond to changes in its business environment.
The goals of the Company's compensation program are to align compensation with
the Company's overall business objectives and performance, to foster teamwork
and to enable the Company to attract, retain and reward employees who contribute
to its long-term success.
EXECUTIVE COMPENSATION COMPONENTS
Compensation for the Company's executive officers generally consists of base
salary and annual incentive plans, combined with restricted stock and stock
option awards. The Committee assesses the past performance and anticipated
future contribution of each executive officer in establishing the total amount
and mix of each element of compensation.
SALARY. The salaries of the executive officers, including the Chief
Executive Officer, are determined annually by the Committee with reference to
several surveys of salaries paid to executives with similar responsibilities at
comparable companies, primarily in the high technology industry. The peer group
for each executive officer is composed of executives whose responsibilities are
similar in scope and content. The Company seeks to set executive compensation
levels that are competitive with the average levels of peer group compensation.
ANNUAL INCENTIVE. The Committee annually reviews and approves an executive
incentive plan. A target, expressed as a percentage of salary, is established
for each executive, based on the scope of his or her responsibility. The actual
payment amount is computed as a percentage of that target, based on the
Company's performance in achieving specified objectives. For fiscal 2000, these
objectives included the achievement by the Company of certain revenue growth and
operating profit goals. For fiscal year 2000, no executive officer received a
bonus under this plan.
An additional bonus may be awarded in the discretion of the Chief Executive
Officer to recognize the contributions and efforts of individual executive
officers. Messrs. Akeley, Coleman and Vrolyk each received such a bonus to
reflect their respective contributions during fiscal year 2000.
STOCK OPTIONS AND RESTRICTED STOCK AWARDS. Stock options and restricted
stock awards are designed to align the interests of executives with the
long-term interests of the stockholders. The Committee approves option grants
subject to vesting periods to retain executives and encourage sustained
contributions. The exercise price of most options is the market price on the
date of grant. Restricted stock awards are also subject to vesting, based
generally on the passage of time and in some instances subject to accelerated
vesting if certain stock price appreciation targets are attained. The exercise
prices of all our outstanding stock options were adjusted in connection with the
June 20, 2000 spin-off to the Company's stockholders of our remaining interest
in MIPS Technologies, Inc. The adjustments were made within the accounting
literature criteria for changes to stock option plans as a result of equity
restructuring so that no compensation expense resulted from the adjustment.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
Robert R. Bishop joined the Company in August 1999 as Chairman and Chief
Executive Officer at an initial annual base salary of $800,000 and his salary
has remained unchanged. Mr. Bishop has elected to defer all of his compensation
for fiscal year 2000. Mr. Bishop did not receive a bonus for fiscal year 2000.
Mr. Bishop participates in the fiscal 2001 executive incentive program with a
target of 185% of base salary if the Company achieves its specified financial
objectives.
In connection with Mr. Bishop's appointment, the Company will grant
Mr. Bishop 1,750,000 options in fiscal 2001 at an exercise price of $5.99 and
with monthly vesting through October 2003.
9
<PAGE>
SECTION 162(M)
The Company is subject to SECTION 162(M) of the U.S. Internal Revenue Code,
adopted in 1993, which limits the deductibility of certain compensation payments
to its executive officers. The Company does not have a policy requiring the
Committee to qualify all compensation for deductibility under this provision.
The Committee's current view is that any non-deductible amounts will be
immaterial to the Company's financial or tax position, and that the Company
derives substantial benefits from the flexibility provided by the current
system, in which the selection and quantification of performance targets are
modified from year to year to reflect changing conditions. However, the
Committee considers the net cost to the Company in making all compensation
decisions and will continue to evaluate the impact of this provision on its
compensation programs. The Company believes that compensation expense incurred
in connection with the exercise of stock options granted under its 1993
Long-Term Incentive Stock Plan, including the grant to Mr. Bishop described
above, will continue to be deductible as performance-based compensation.
COMPENSATION AND HUMAN RESOURCES COMMITTEE
C. Richard Kramlich, CHAIRMAN
Robert B. Shapiro
James A. McDivitt
EXECUTIVE OFFICER COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and equity compensation for the
three fiscal years ended June 30, 2000 for Robert R. Bishop, Chief Executive
Officer through fiscal 2000, each of the four other most highly compensated
executive officers of the Company (determined at the end of fiscal 2000) and one
additional executive officer who was not serving as an executive officer on June
30, 2000.
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
PAID OR ACCRUED (1) AWARDS
-------------------------------------- --------------------------
OTHER ANNUAL
FISCAL COMPENSATION RESTRICTED
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($) (2) OPTIONS (#) STOCK ($)(3)
--------------------------- -------- ---------- --------- ------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Bishop(4)................... 2000 $692,308 -- -- -- --
Chairman and Chief 1999 251,212 -- $26,374 -- --
Executive Officer 1998 296,532 -- 38,561 -- --
Warren Pratt(5)....................... 2000 $361,738 $634,100 $60,480 350,000 $157,787
Executive Vice President 1999 322,152 -- 86,194 60,000 --
Engineering and Manufacturing 1998 321,657 7,250 55,838 40,000 243,740
Operations
Kenneth L. Coleman.................... 2000 $449,423 $ 75,000 $25,944 285,000 $164,985
Executive Vice President, 1999 400,000 50,000 39,489 110,000 --
Global Sales, Service and Marketing 1998 400,000 -- 48,124 80,000 487,480
Kurt Akeley........................... 2000 $349,423 $ 58,333 $10,137 240,000 $ 54,995
Senior Vice President and 1999 287,307 6,279 10,690 60,000 --
Chief Technology Officer 1998 285,000 58,333 9,307 40,000 --
Ron Curtola, Jr....................... 2000 $205,361 $107,500 $ 4,201 45,000 --
Vice President and 1999 182,308 17,500 1,979 4,000 --
Corporate Controller 1998 171,650 15,000 1,925 4,000 --
John R. Vrolyk........................ 2000 $315,325 $ 74,167 $53,178 280,000 $164,985
Senior Vice President 1999 352,116 50,000 24,538 195,000 --
1998 290,192 103,250 8,816 40,000 --
</TABLE>
------------------------
10
<PAGE>
(1) The Company has no pension, retirement, annuity or similar benefit plan.
Other compensation generally includes relocation assistance and executive
perquisites.
(2) This number includes $45,625 in severance payments during the year made to
Mr. Vrolyk in connection with his departure from the Company in February
2000. In connection with Mr. Kelly's departure from the Company as Senior
Vice President in December 1999, the Company entered into severance
arrangements with Mr. Kelly as described in Certain Transactions.
(3) Values based on the closing market price of the Common Stock on the date of
grant. The aggregate number of shares of restricted stock held at June 30,
2000 and the value of those shares based on the June 30, 2000 closing price
of $3.75 per share were: Mr. Pratt, 35,000 shares, $131,215; Mr. Coleman,
20,000 shares, $74,980. The restricted stock awards granted in August 1999
vested on January 15, 2000. Mr. Pratt's restricted stock award granted in
May 2000 vests in five annual installments. In July 1997, Messrs. Pratt and
Coleman were granted restricted stock awards that vest in July 2000 or in
earlier installments on the attainment of stock price appreciation targets.
(4) The cash compensation for Mr. Bishop during fiscal 1998 and 1999 is
determined in Swiss Francs. The dollar amounts shown are based on the
exchange rates at the time these amounts were paid or accrued.
(5) Other Annual Compensation includes relocation assistance in fiscal 1999 and
fiscal 2000 in the amount of $47,207 and $38,333, respectively, but does not
include tax equalization payments for fiscal 1999 and 2000 in the amount of
$401,020 and $317,079, respectively, in connection with Mr. Pratt's
assignment to the Company's Alias/Wavefront subsidiary in Toronto, Ontario.
OPTION GRANTS IN FISCAL 2000
The following table provides details regarding all stock options granted to
the named executive officers in fiscal 2000.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS(1) VALUE AT ASSUMED
----------------------------------------------------------- ANNUAL RATES OF STOCK
NUMBER OF % OF TOTAL OPTION PRICE APPRECIATION FOR
SECURITIES OPTIONS GRANTED EXERCISE DATE OPTION TERM (3)
UNDERLYING TO EMPLOYEES IN PRICE MARKET EXPIRATION -----------------------
NAME OPTIONS GRANTED FISCAL YEAR ($/SHARE)(2) VALUE DATE 0% 5% 10%
---- --------------- --------------- ------------ -------- ---------- -------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Robert R.
Bishop(4).......... -- -- -- -- -- -- -- --
Warren Pratt......... 50,000 * $11.00 -- 8/25/09 -- $ 345,892 $ 876,558
250,000 1.8% 6.313 -- 5/10/10 -- 992,474 2,515,125
50,000 * 3.156 $6.312 5/10/10 $157,810 356,305 660,835
Kenneth L. Coleman... 85,000 * 5.50 11.00 8/25/09 467,500 1,055,516 1,957,649
100,000 * 11.00 -- 8/25/09 -- 691,784 1,753,117
100,000 * 15.00 -- 8/25/09 -- 291,784 1,353,117
Kurt Akeley.......... 40,000 * 5.50 11.00 8/25/09 220,000 496,714 921,247
100,000 * 11.00 -- 8/25/09 -- 665,752 1,753,117
100,000 * 15.00 -- 8/25/09 -- 291,784 1,353,117
Ron Curtola, Jr...... 5,000 * 10.75 -- 9/28/09 -- 33,803 85,664
40,000 * 9.938 -- 1/26/10 -- 249,986 633,513
John Vrolyk.......... 80,000 * 5.50 11.00 8/25/09 440,000 993,427 1,842,493
100,000 * 11.00 -- 8/25/09 -- 691,784 1,753,117
100,000 * 15.00 -- 8/25/09 -- 291,784 1,353,117
</TABLE>
------------------------
* Less than 1%.
(1) The options in this table were granted under the 1993 Long-Term Incentive
Stock Plan or the 1985 Stock Incentive Program. The options become
exercisable at a rate of 2% per month over a period
11
<PAGE>
of fifty months or 4% per month over a period of 25 months and expire ten
years from the date of grant.
(2) The information in the table above does not reflect an adjustment to the
exercise price of all outstanding options made in connection with the June
20, 2000 spin-off to the Company's stockholders of our remaining interest in
MIPS Technologies, Inc. For options with an exercise price of $7.50 and
above, the exercise price was reduced by $5.01 and for options with an
exercise price below $7.50, the exercise price was multiplied by 0.332. See
Report of the Compensation and Human Resources Committee of the Board of
Directors--Executive Compensation Components.
(3) Potential realizable value assumes that the stock price increases from the
date of grant until the end of the option term (10 years) at the annual rate
specified (5% and 10%). The 5% and 10% assumed annual rates of appreciation
are mandated by SEC rules and do not represent the Company's estimate or
projection of the future Common Stock price. The Company believes that this
method does not accurately illustrate the potential value of a stock option.
(4) See Report of the Compensation and Human Resources Committee of the Board of
Directors--Compensation of the Chief Executive Officer for information about
options granted to Mr. Bishop in fiscal 2001.
OPTION EXERCISES IN FISCAL 2000 AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT JUNE 30, 2000 AT JUNE 30, 2000 (1)
ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert R. Bishop................... -- -- 96 4 $ -- $ --
Warren Pratt....................... -- -- 184,735 393,250 10,973 537,682
Kenneth L. Coleman................. 18,000 $56,250 514,759 380,341 244,710 92,771
Kurt Akeley........................ 20,000 120,000 421,491 302,198 177,692 43,657
Ron Curtola, Jr.................... -- -- -- -- -- --
John Vrolyk........................ 24,145 113,376 156,851 359,004 20,150 87,315
</TABLE>
------------------------
(1) The amounts in this column reflect the difference between the closing market
price of the Common Stock on June 30, 2000, which was $3.75 and the option
exercise price. The actual value of unexercised options fluctuates with the
market price of the Common Stock.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's officers and
directors, and persons who own more than ten percent of a registered class of
the Company's equity securities, to file reports of ownership on Form 3 and
changes in ownership on Forms 4 or 5 with the SEC and the New York Stock
Exchange, and to give the Company copies of these filings. Based on the written
representations of its directors and officers and a review of the copies of such
forms furnished to the Company during the fiscal year ended June 30, 2000, the
Company believes that its officers, directors and ten percent stockholders
complied with all Section 16(a) filing requirements, with the exception of one
late filing of a Form 4 by each of Mr. Akeley, Mr. Coleman and Ms. Escher
reflecting the surrender of stock to satisfy a tax withholding obligation on
vesting of restricted stock.
CERTAIN TRANSACTIONS
NKK U.S.A. Corporation, a wholly-owned subsidiary of NKK Corporation, holds
all of the Company's outstanding Series A Preferred Stock, which it purchased in
1990. The Series A Preferred Stock carries a 3% cumulative annual dividend and
an aggregate liquidation preference of $17,500,000, and is convertible into
Common Stock. NKK is a distributor and value-added reseller of the Company's
12
<PAGE>
products in Japan. The Company believes that the terms of its transactions with
NKK are no more favorable to either party than would be available from an
unaffiliated party.
ARRANGEMENTS WITH EXECUTIVE OFFICERS
EMPLOYMENT CONTINUATION AGREEMENTS. The Company has entered into employment
continuation agreements with its executive officers with the goal of encouraging
the continued employment of key executives in the event of a potential change in
control of the Company. Under the agreements, each executive officer (i) is
entitled to a termination payment equal to two years of his or her compensation
if employment with the Company is terminated within twenty-four months after
such a change in control, and (ii) is granted full vesting of options and
restricted stock effective after such a change in control.
MANAGEMENT RETENTION AGREEMENTS. In November 1997, in connection with
management transitions, the Company entered into retention agreements with
certain senior executives, including Mr. Coleman, Mr. Kelly and Mr. Vrolyk.
Under the agreements, each executive officer is entitled to (i) a severance
payment equal to two years of his or her compensation if employment with the
Company is involuntarily terminated on or prior to December 31, 1998 or one year
if terminated between December 31, 1998 and December 31, 1999, and
(ii) continued vesting of options and restricted stock for one year following
such termination. These agreements also include an agreement not to solicit the
Company's employees to leave their employment for one year following the
termination of his or her employment for any reason. The agreements terminated
in December 1999.
OTHER ARRANGEMENTS. On July 26, 2000, the Company entered into an
employment agreement with Mr. Harold Covert as Executive Vice President, Chief
Administration Officer and Chief Financial Officer. Mr. Covert is guaranteed 25%
of the annual incentive bonus payable under the Corporate Executive Annual
Incentive Program and also received a one-time employment bonus of $50,000
subject to the completion of a full year of service with the Company. The
Company also loaned Mr. Covert $2,000,000 at no interest to be forgiven over two
years. In connection with his relocation to the San Francisco Bay Area, the
Company purchased Mr. Covert's former residence for $400,000.
In April 2000, the Company entered into an employment agreement with
Mr. Pratt which provides that he may be entitled to receive a supplemental
payment in May 2005 if the proceeds from his sales during the period of
restricted stock and stock received upon exercise of stock options, plus the
value at that time of unsold restricted stock and unexercised options, is less
than $5,000,000. If Mr. Pratt's employment terminates without cause or for good
reason prior to May 2005, he is entitled to a prorated supplemental payment
based on the duration of his service. To facilitate Mr. Pratt's relocation to
the San Francisco Bay Area, the Company also loaned Mr. Pratt $250,000 at an
interest rate of 6.75% annually on September 15, 2000 and $500,000 to be
forgiven over five years. In fiscal 1999 and 2000, Mr. Pratt served as President
of the Company's Alias--Wavefront subsidiary in Toronto, Ontario. During this
period he also received additional tax equalization payments in the amount of
$718,099.
Mr. Kelly, Senior Vice President, entered into Separation and Consulting
Agreements with the Company in connection with his departure from the Company
effective December 1999. As provided by the November 1997 retention agreement
described above, Mr. Kelly will receive consulting fees equal to $38,083 per
month for a one year period from the date of his departure, and his outstanding
stock options and restricted stock awards will continue to be outstanding and
vest according to their terms through December 2000. The Company also forgave a
loan of $400,000, plus accrued interest.
Mr. Baskett, Senior Vice President, entered into Separation and Consulting
Agreements with the Company in connection with his departure from the Company
effective September 1999. Mr. Baskett received consulting fees equal to $34,167
per month and outstanding stock options and restricted stock continued to vest
according to their terms through December 1999. A loan made by the Company in
the amount of $500,000 was paid in full upon Mr. Baskett's termination.
13
<PAGE>
Mr. Vrolyk entered into Separation and Consulting Agreements with the
Company in connection with his departure from the Company effective
February 2000. Mr. Vrolyk will receive consulting fees equal to $37,083 per
month for a one year period from the date of his termination, and his
outstanding stock options and restricted stock awards will continue to be
outstanding and vest according to their terms through February 11, 2001.
The Company loaned Mr. Coleman $104,745 at an interest rate of 6.51%
annually in April 2000 to facilitate the exercise of Company stock options that
were expiring during a Company imposed quiet period. The loan is due in December
2000 and the largest amount of indebtedness outstanding on this loan during
fiscal 2000 was $106,108.
14
<PAGE>
COMPANY STOCK PRICE PERFORMANCE GRAPH
In accordance with SEC rules, the Company is required to present a table
showing a line-graph presentation comparing cumulative five-year returns on an
indexed basis with a broad equity market index and either a nationally
recognized industry standard or an index of peer companies selected by the
Company. The Company has selected the S&P 500 Index for the broad equity index
and the S&P Computer Hardware Index as an industry standard for the five fiscal
year period commencing June 30, 1995 and ending June 30, 2000. In past years,
the Company has used the Hambrecht & Quist ("H&Q") Technology Index as the
industry Standard but believes the S&P Computer Hardware Index will provide a
better stock comparison. The stock price performance shown on the graph below is
not necessarily indicative of future price performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
JUN-95 JUN-96 JUN-97 JUN-98 JUN-99 JUN-00
<S> <C> <C> <C> <C> <C> <C>
SILICON GRAPHICS INC. $100 $60 $38 $30 $41 $21
S&P 500 (REGISTERED TRADEMARK) $100 $126 $170 $221 $271 $291
S&P COMPUTER HARDWARE $100 $112 $172 $241 $433 $562
H&Q TECHNOLOGY INDEX $100 $119 $174 $221 $351 $614
</TABLE>
------------------------
* Assumes $100 invested on June 30, 1995 in the Company's Common Stock, the
S&P 500 Stock Index, the S&P Computer Hardware Index and the H&Q Technology
Index, with reinvestment of dividends.
OTHER MATTERS
The Company knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
persons named in the enclosed form of proxy to vote the shares they represent as
the Company or Management may recommend.
<TABLE>
<S> <C>
BY ORDER OF THE BOARD OF DIRECTORS
/s/ SANDRA M. ESCHER
Sandra M. Escher
SECRETARY
Dated: September 21, 2000
</TABLE>
15
<PAGE>
To Our Stockholders:
Recently, many of you elected to access our Annual Report on Form 10-K and Proxy
Statement in an electronic format on the World Wide Web instead of receiving the
traditional paper copies.
The 2000 Silicon Graphics Annual Report on Form 10-K and Proxy Statement are now
available on our web site at http://www.sgi.com/company_info/investors/
annual.html.
The PDF files on our web site can be viewed and printed using Adobe-Registered
Trademark- Acrobat-Registered Trademark- Reader software. If you do not have
this software, it is available for free download at http://www.adobe.com. There
may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies. These costs must be borne by
the stockholder. Please call EquiServe at 800-730-6001 if you elected to receive
the electronic version but have decided that you would like a paper copy mailed
to you.
Please sign and return the proxy card below to ensure your representation at our
annual meeting of stockholders to be held on October 25, 2000.
Thank you for your continued support.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SILICON GRAPHICS, INC.
2000 ANNUAL MEETING OF STOCKHOLDERS
The undersigned stockholder of Silicon Graphics, Inc., a Delaware
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement, each dated September 22, 2000, and hereby
appoints Robert R. Bishop and Sandra M. Escher, or either of them, proxies and
attorneys-in-fact, with full power to each of substitution, on behalf and in the
name of the undersigned, to represent the undersigned at the 2000 Annual Meeting
of Stockholders of Silicon Graphics, Inc. to be held on October 25, 2000 at 2:00
p.m. local time at the Historic Del Monte Building, 100 South Murphy Avenue,
Sunnyvale, California, and at any adjournment(s) thereof, and to vote all shares
of Common Stock which the undersigned would be entitled to vote if then and
there personally present, on the matters set forth below.
This proxy will be voted as directed, or, if no contrary direction is
indicated, will be voted FOR the election of directors, FOR the approval of the
amendment to the Company's Restated Certificate of Incorporation, FOR
ratification of the appointment of Ernst & Young LLP as independent auditors,
and as said proxies deem advisable on such other matters as may properly come
before the meeting.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
/X/ Please mark votes as in this example.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE
APPROVAL OF PROPOSAL 2 SET FORTH BELOW, FOR THE APPROVAL OF PROPOSAL 3
SET FORTH BELOW, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
1. ELECTION OF DIRECTORS
Nominees for Class II Directors: Robert A. Lutz and James A. McDivitt
FOR WITHHELD
/__/ /__/
/__/ _________________________________________________
For all nominees except as noted above
2. PROPOSAL TO APPROVE THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION
FOR AGAINST ABSTAIN
/__/ /__/ /__/
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 2001
FOR AGAINST ABSTAIN
/__/ /__/ /__/
In their discretion, the proxies are authorized to vote upon such other
matter or matters which may properly come before the meeting and any
adjournment(s) thereof.
Signature: _____________________________ Date: _______________
Signature: _____________________________ Date: _______________
(This Proxy should be marked, dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed envelope.
Persons signing in a fiduciary capacity should so indicate. If shares are held
by joint tenants or as community property, both should sign.)
/__/ MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
<PAGE>
To Our Stockholders:
Recently, many of you elected to access our Annual Report on Form 10-K and Proxy
Statement in an electronic format on the World Wide Web instead of receiving the
traditional paper copies.
The 2000 Silicon Graphics Annual Report on Form 10-K and Proxy Statement are now
available on our web site at http://www.sgi.com/company_info/investors/
annual.html.
The PDF files on our web site can be viewed and printed using Adobe-Registered
Trademark- Acrobat-Registered Trademark- Reader software. If you do not have
this software, it is available for free download at http://www.adobe.com. There
may be costs associated with electronic access, such as usage charges from
Internet access providers and telephone companies. These costs must be borne by
the stockholder. Please call EquiServe at 800-730-6001 if you elected to receive
the electronic version but have decided that you would like a paper copy mailed
to you.
Please sign and return the proxy card below to ensure your representation at our
annual meeting of stockholders to be held on October 25, 2000.
Thank you for your continued support.
INSTRUCTION TO TRUSTEE
SILICON GRAPHICS, INC. ANNUAL MEETING
TO: MONTREAL TRUST COMPANY OF CANADA, AS TRUSTEE, C/O BOSTON EQUISERVE
The undersigned holder of Exchangeable Non-Voting Shares of Silicon
Graphics Limited hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and Proxy Statement dated September 22, 2000 of Silicon Graphics,
Inc. ("SGI"). I hereby direct you, as Trustee under the Voting Trust and
Exchange Agreement relating to the Exchangeable Shares, to cast as I have
indicated on the reverse side the number of Series E Preferred Stock votes (the
"Directed Votes") that I am entitled as a holder of Exchangeable Shares to
direct you to vote at the SGI 2000 Annual Meeting of Stockholders to be held on
October 25, 2000 at 2:00 p.m. local time at the Historic Del Monte Building, 100
South Murphy Avenue, Sunnyvale, California, and at any adjournment(s) thereof.
You may cast my Directed Votes in person or by proxy unless I have requested on
the reverse side that you deliver a proxy for such votes to me or my specified
representative. Unless I have so requested a proxy for my Directed Votes, you
may vote according to your discretion (or that of your proxy holder) on any
other matter that may properly come before the meeting.
This proxy will be voted as directed, or, if no contrary direction is
indicated, will be voted FOR the election of directors, FOR the approval of the
amendment to the Company's Restated Certificate of Incorporation, FOR
ratification of the appointment of Ernst & Young LLP as independent auditors,
and as said proxies deem advisable on such other matters as may properly come
before the meeting.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
<PAGE>
/X/ Please mark votes as in this example.
THIS PROXY WILL BE VOTED AS DIRECTED, OR, IF NO CONTRARY DIRECTION IS
INDICATED, WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE
APPROVAL OF PROPOSAL 2 SET FORTH BELOW, FOR THE APPROVAL OF PROPOSAL 3
SET FORTH BELOW, AND AS SAID PROXIES DEEM ADVISABLE ON SUCH OTHER
MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
1. ELECTION OF DIRECTORS
Nominees for Class II Directors: Robert A. Lutz and James A. McDivitt
FOR WITHHELD
/__/ /__/
/__/ ________________________________________________
For all nominees except as noted above
2. PROPOSAL TO APPROVE THE AMENDMENT TO THE CERTIFICATE OF INCORPORATION
FOR AGAINST ABSTAIN
/__/ /__/ /__/
3. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP AS THE INDEPENDENT
AUDITORS OF THE COMPANY FOR FISCAL YEAR 2001
FOR AGAINST ABSTAIN
/__/ /__/ /__/
In their discretion, the proxies are authorized to vote upon such other
matter or matters which may properly come before the meeting and any
adjournment(s) thereof.
/__/ MARK HERE FOR ADDRESS CHANGE AND NOTE BELOW
/__/ Mark this box only to request a proxy for your Directed Votes. A proxy is
necessary only if you wish to appear at the meeting in person to cast your
Directed Votes or if you want to authorize a specific person other than the
Trustee (or its proxy) to cast your Directed Votes. You must provide the
name, mailing address and phone number of the person to be authorized to
cast your Directed Votes, even if you are requesting the proxy for your own
use. ______________________________________________________________________
(This Instruction to Trustee should be marked, dated and signed by the
stockholder or his attorney authorized in writing, or, if the stockholder is a
corporation, by any officer or attorney thereof duly authorized, and the
corporate seal affixed.)
Signature: _______________________________________ Date: __________________
Signature: _______________________________________ Date: __________________
