Exhibit 10.2


 


SILICON GRAPHICS, INC.


AMENDED AND RESTATED


1989 EMPLOYEE BENEFIT STOCK PLAN


 


1.                                      Purpose.


 


This Plan is
intended to provide a means for Silicon Graphics, Inc. (the “Company”), by
granting shares of Company stock in the form of stock grants (“Stock Grants”),
grants of restricted stock (“Restricted Stock”) and options to purchase Company
stock (“Options”) to selected management and other key employees, to attract
and retain persons of ability and motivate them to advance the interests of the
Company.  An employee eligible to
participate under the Plan is hereinafter referred to as an “Employee.”


 


It is intended
that the Plan be interpreted in accordance with Rule 16b-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”).  It is also intended that, except as otherwise
limited by paragraph 2, some or all of the Options granted to Employees under
the Plan may constitute “incentive stock options” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”), and some or
all of the Options may constitute “nonstatutory options”, i.e., options not
qualifying under Section 422 or other similar provisions of the Code.  Unless otherwise indicated, the terms and
conditions of the Plan shall apply equally to all Stock Grants, grants of
Restricted Stock and Options hereunder, regardless of whether Options be
incentive stock options or nonstatutory options.


 


2.                                      Additional
Definitions.  As used herein, the
following definitions apply:


 


(a)                                  “Continuous
Status as an Employee” means that the relationship as an Employee is not
interrupted or terminated by the Company. 
Continuous Status as an Employee shall not be considered interrupted in
the case of:  (i) any leave of absence
approved by the Company, including sick leave, military leave, or any other
personal leave; provided, however, that for purposes of qualifying an Option as
an incentive stock option, in the event any such leave exceeds ninety (90)
days, the Employee’s Continuous Status as an Employee will be deemed to have
terminated on the 


 





















 


ninety-first (91st)
day after the commencement of such leave, unless re-employment upon the
expiration of such leave is guaranteed by contract (including certain Company
policies) or statute; or (ii) transfers between locations of the Company or
between the Company and its subsidiaries.


 


(b)                                 “Disability”
means total and permanent disability as defined in Section 22(e)(3) of the
Code.


 


(c)                                  “Fair
Market Value” means, as of any date, the closing price for a share of Common
Stock as reported daily in The Wall Street Journal
or a similar readily available public source (or if no sales of shares were
made on such date, the closing price of a share as reported for the preceding
day), unless the Committee shall determine that such method does not reflect,
due to circumstances prevailing at that time, the true fair market value of the
Company’s Common Stock.  In that event,
the Committee shall determine fair market value through such alternative method
as it may in good faith determine to be then appropriate.


 


3.                                      Shares Subject to the Plan.


 


Subject to
adjustment as provided in Section 11, a total of 7,888,000 shares of authorized
but unissued or reacquired Common Stock of the Company is authorized and
reserved for issuance to Employees under the Plan in the form of Stock Grants
or grants of Restricted Stock or upon the exercise of Options; provided,
however, that no more than 7,888,000 shares shall be cumulatively available for
the grant of incentive stock options under the Plan.  If any Option expires or terminates without
having been exercised in full, the unacquired shares (including shares
forfeited on the termination of any grant of Restricted Stock) shall be
available for the grant of future Stock Grants, grants of Restricted Stock or
Options under the Plan.


 


4.                                      Administration.


 


The Plan shall
be administered by a Committee of the Board of Directors of the Company,
consisting of at least two (2) disinterested persons not eligible to
participate under this Plan or under any other stock or option plan of the
Company or its subsidiaries


 


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except as may be permitted in
accordance with Rule 16b-3 under the Exchange Act (the “Committee”).


 


5.                                      Eligibility.


 


The Committee
shall determine the Employees to whom, and the number of shares for which,
Stock Grants, grants of Restricted Stock and/or Options shall be granted,
taking into consideration such factors, including any recommendations of the
Chief Executive Officer of the Company, as it deems relevant to select and
motivate employees of ability to advance the interests of the Company.  Employees so selected shall be either
management or other key employees of the Company or its subsidiaries, who the
Committee determines have contributed materially to the success of the Company
or are in a position to contribute materially to the future success of the
Company.  Except as hereafter limited, an
Employee from time to time may be granted any combination of Stock Grants,
grants of Restricted Stock and Options (incentive or nonstatutory) as the
Committee shall determine.


 


An employee
shall not be eligible to receive an incentive stock option if immediately
before the Option is to be granted the employee owns (directly and through
application of the constructive stock ownership attribution rules of Section
424(d) of the Code) more than ten percent of the total combined voting power of
all classes of stock of the Company or any subsidiary.  The aggregate Fair Market Value (determined
at the time an Option is granted) of shares with respect to which incentive
stock options are exercisable for the first time by an Employee during any
calendar year (under this Plan and all other plans of the Company and its
subsidiaries pursuant to Section 422 of the Code) shall not exceed $100,000.


 


6.                                      Stock Options.


 


All Options
granted hereunder shall be evidenced by an Option Agreement executed as of the
date of grant by the Company and the Employee, on such terms as may be
determined by the Committee, including the following:


 


(a)                                  The
Option Agreement shall specify whether the Option is an incentive stock option
or a nonstatutory option.


 


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(b)                                 The
“date of grant” for any Option granted under the Plan shall be specified in the
Option Agreement.


 


(c)                                  The
Option exercise price per share shall be specified in the Option Agreement and
shall be equal to 100% of the Fair Market Value of a share of Company Common
Stock on the date of grant.


 


(d)                                 The
Option exercise price shall be paid at the time of exercise.  The consideration to be paid for the shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Committee (and, in the case of an incentive stock option,
shall be determined at the time of grant) and may consist entirely of: (1)
cash; (2) check; (3) other shares which (i) in the case of shares acquired upon
exercise of an option, have been owned by the Employee for more than six months
on the date of surrender and (ii) have an aggregate Fair Market Value on the
date of surrender not greater than the aggregate exercise price of the shares
as to which said Option shall be exercised; (4) 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; (5) any combination of the foregoing methods of payment; or (6)
such other consideration and method of payment for the issuance of shares as
the Committee determines are consistent with the Plan’s purpose and applicable
law.  Any fractional share not required
for payment of the Option exercise price shall be paid for by the Company in
cash on the basis of the same value utilized for such exercise.


 


(e)                                  At
the time an Option is granted, the Committee shall determine the terms and
conditions to be satisfied before shares may be purchased, including the dates
on which shares subject to the Option may first be purchased.  The Committee may specify that an Option may
not be exercised until the completion of a service period specified at the time
of grant.  (Any such


 


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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, nor, in the case of an Incentive Stock
Option, later than ten (10) years from the date of grant.


 


(f)                                    An
incentive stock option hereunder shall not contain terms pursuant to which the
exercise of the Option would affect the Employee’s right to exercise a
nonstatutory option hereunder, or vice versa, such that the incentive stock
option would be deemed a prohibited “tandem stock option” within the meaning of
Section 422 of the Code and the regulations thereunder.


 


(g)                                 Unless
the issuance of the shares upon the exercise of an Option hereunder is
registered or exempt under federal and state securities laws, the Employee
shall be required to give an investment representation at the time of exercise,
and transfer of the shares shall be appropriately restricted.


 


(h)                                 During
the lifetime of an Employee, Options held by such Employee may be exercised
only by the Employee and only while an Employee of the Company or of a parent
or a subsidiary of the Company and only if such Employee has maintained his or
her Continuous Status as an Employee since the date such Options were granted;
provided, however, that:


 


(1)                                  In
the event an Employee’s Continuous Status as an Employee terminates (other than
upon his or her death or Disability), the Option holder may exercise his or her
Option, but only within such period of time from the date of such termination
as is determined by the Committee, not to exceed three (3) months in the case
of an Option that is intended to qualify as an incentive stock option, and,
unless determined otherwise by the Committee, only to the extent that the
Employee was entitled to exercise it at the date of such termination (but in no
event later than the expiration of the term of such Option as set forth in the
Option Agreement). To the extent


 


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that the Employee was not entitled to
exercise an Option at the date of such termination, and to the extent that he
or she does not exercise such Option (to the extent otherwise so entitled)
within the time specified herein, the Option shall terminate.


 


(2)                                  In
the event an Employee’s Continuous Status as an Employee terminates as a result
of his or her Disability, the Option holder may exercise his or her Option, but
only within twelve (12) months from the date of such termination, and, unless
determined otherwise by the Committee, only to the extent that the Employee was
entitled to exercise it at the date of such termination (but in no event later
than the expiration of the term of such Option as set forth in the Option
Agreement).  To the extent that the
Employee was not entitled to exercise an Option at the date of such
termination, and to the extent that he or she does not exercise such Option (to
the extent otherwise so entitled) within the time specified herein, the Option
shall terminate.


 


(3)                                  In
the event of an Employee’s death, the Employee’s estate or a person who
acquired the right to exercise the deceased Employee’s Option by bequest or
inheritance may exercise the Option, but only within twelve (12) months
following the date of death, and, unless determined otherwise by the Committee,
only to the extent that the Employee was entitled to exercise it at the date of
death (but in no event later than the expiration of the term of such Option as
set forth in the Option Agreement).  To the
extent that the Employee was not entitled to exercise an Option at the date of
death, and to the extent that the Employee’s estate or a person who acquired
the right to exercise such Option does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.


 


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(4)                                  Except
as otherwise provided, in no event shall any Option be exercisable at any time
after its expiration date.


 


(5)                                  On
a case-by-case basis, the Committee may, in its sole discretion, accelerate the
schedule of the time or times when an Option granted under this Plan may be
exercised or extend the period for exercise to a time after the expiration
date.  Unless otherwise determined by the
Committee at the time of grant, each Option shall provide that in the event of
a change in control of the Company (as specified by the Committee), any
Employee’s Options will become exercisable in full if, within twenty-four (24)
months after a change in control of the Company (as specified by the
Committee), the Employee’s employment is terminated without cause or the
Employee resigns due to certain involuntary relocations or reductions in
compensation, as specified by the Committee. 
Each Option granted under the Plan may contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined
by the Committee.


 


(i)                                                                                   Unless
otherwise determined by the Committee to the contrary, Options may not be sold,
pledged, assigned, hypothecated, transferred or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Employee, only by the Employee.  The Committee may, in the manner established
by the Committee, provide for the transfer, without payment of consideration,
of an Option by the Employee to the Employee’s “immediate family”.  In such case, the Option will be exercisable
only by such transferee.  Following a
transfer, any such Options shall continue to be subject to the same terms and
conditions as were applicable immediately prior to the transfer.  For purposes of this Section 6(i), the
Employee’s “immediate family” shall include any child, stepchild, grandchild,


 


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parent,
stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the
Employee’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation
in which these persons (or the Employee) control the management of assets, and
any other entity in which these persons (or the Employee) own more than fifty
percent of the voting interests.  A
transfer under a domestic relations order in settlement of marital property
rights is not a prohibited transfer for value.


 


7.                                      Stock Grants.


 


The Committee
may, in its discretion, award a Stock Grant to an Employee in furtherance of
the Plan’s purposes; provided, however, that no Employee shall be eligible to
receive a Stock Grant for more than fifty (50) shares of Company Common Stock
in any calendar year.  An Employee receiving
a Stock Grant shall be entitled to all of the rights and privileges in the
Common Stock awarded as of the date on which the award is made.  Unless the issuance of shares pursuant to a
Stock Grant is registered or exempt under federal or state securities laws, the
Employee shall be required to give an investment representation at the time of
grant, and transfer of the shares shall be appropriately restricted.


 


8.                                      Grants of Restricted Stock.


 


(a)                                The
Committee may, in its discretion and in furtherance of the purposes of the
Plan, grant Restricted Stock to an Employee. 
With respect to awards of Restricted Stock, the Committee shall:


 


(i)                                     Select
the Employees to whom grants will be made (the “Participants”);


 


(ii)                                  Determine
the number of shares to be awarded;


 


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(iii)                             Determine
the length of the restricted period, if any, and the performance and employment
conditions under which the Restricted Stock may be forfeited to the Company, if
any;


 


(iv)                            Determine
the purchase price, if any, to be paid by the Participant for such Restricted
Stock; and


 


(v)                               Determine
any restrictions other than those set forth in this Section 8.


 


(b)                                 The
terms of each award of Restricted Stock shall be set forth in a written award
agreement (the “Award Agreement”) and a certificate representing the number of
shares of Common Stock granted shall be issued to the Participant as the
registered owner.  The certificate
representing such shares shall be legended as to sale, transfer, assignment,
pledge or other encumbrances during the restricted period and shall be
deposited by the Participant, together with a stock power endorsed in blank,
with the Company.  Such certificates
shall be held in the custody of the Company until the restricted period expires
or until all restrictions thereon otherwise lapse.


 


(c)                                  Subject
to the restrictions set forth in this Section 8 or in the Award Agreement, each
Participant who receives Restricted Stock shall have all rights as a
stockholder with respect to such shares, including the right to vote the shares
and receive dividends and other distributions.


 


(d)                                 The
Award Agreement may provide, or the Committee may subsequently determine in its
discretion, that, in the case of death, Disability or other special circumstances,
any or all restrictions then applicable to a Participant’s Restricted Stock be
waived.


 


(e)                                  The
Committee may, in its sole discretion, declare the restrictions applicable to
shares of Restricted Stock to lapse in the event of a change in control of the
Company (as specified by the Committee), in which case the Company shall remove
all restrictive legends and stop-transfer orders applicable to the Restricted
Stock as of the date of said change in control


 


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and
certificates representing such shares shall be delivered to the Participants.


 


(f)                                    Except
as otherwise provided in this Section 8 or in the Award Agreement, no shares of
Restricted Stock shall be sold, exchanged, transferred, pledged or otherwise
disposed of during the restricted period.


 


(g)                                 With
respect to any number of shares of Restricted Stock as to which the
restrictions imposed hereunder shall have lapsed, the restrictive legend shall
be removed and a new certificate representing the shares shall be delivered to
the Participant.  The Committee may, in
its sole discretion, modify or cancel the restrictions imposed on Restricted
Stock or otherwise accelerate the vesting of shares of Restricted Stock.


 


9.                                      Termination.


 


Unless sooner
terminated by action of the Board of Directors of the Company, the Plan shall
terminate ten (10) years from its effective date.  Options outstanding under the Plan at the
time of termination shall remain in effect until exercise or expiration.  Restricted Stock outstanding under the Plan
at the time of termination shall remain subject to the restrictions imposed at
the time of grant until the restricted period expires or until all conditions
with respect thereto otherwise lapse or are satisfied.


 


10.                               Effective Date; Shareholder Approval.


 


The Plan
became effective on September 7, 1988, the date of its adoption by the Board of
Directors of the Company, and was approved by the Company’s stockholders on May
16, 1989.  The effective date of each
amendment to the Plan shall be the date of adoption of such amendment by the
Board of Directors of the Company; provided, however, that in the event the
shareholders of the Company shall not approve any amendment to the Plan which
is determined by the Board of Directors to require approval by the
shareholders, such amendment shall be of no effect and no Stock Grant, grant of
Restricted Stock or Option previously granted shall be effective if the
authorization of the grant thereof was contingent on the effectiveness of such
amendment or shall otherwise be benefited or altered by such amendment.  No Stock Grants or grants of Restricted


 


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Stock shall be made under the
Plan until shareholder approval of the Plan amendments authorizing such grants
is obtained.


 


11.                               Adjustments Upon Changes in Capitalization, Dissolution, Merger or
Asset Sale.


 


(a)                                  Changes in Capitalization. 
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock covered by each outstanding Option, and each
outstanding grant of Restricted Stock, and the number of shares of Common Stock
which have been authorized for issuance under the Plan but as to which no
awards have been granted or which have been returned to the Plan upon
cancellation or expiration of an award, as well as the exercise price per share
of Common Stock covered by each outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or
decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of
any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.”  Such
adjustment shall be made by the Company’s Board of Directors, whose
determination in that respect shall be final, binding and conclusive.  Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
of Common Stock subject to an Option.


 


(b)                                 Dissolution or Liquidation. 
In the event of the proposed dissolution or liquidation of the Company,
to the extent that an Option has not been previously exercised, it will
terminate immediately prior to the consummation of such proposed action.  The Committee may, in the exercise of its
sole discretion in such instances, declare that any Option shall terminate as
of a date fixed by the Committee and give each holder the right to exercise his
or her Option as to all or any part of the


 


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underlying Common Stock prior to such
expiration, including shares as to which the Option would not otherwise be
exercisable.


 


(c)                                  Merger
or Asset Sale.  In the event of a
merger of the Company with or into another corporation, or the sale of
substantially all of the assets of the Company, each outstanding Option shall
be assumed or an equivalent Option substituted by the successor corporation or
a parent or subsidiary of the successor corporation.  In the event that the successor corporation
does not agree to assume the Option or to substitute an equivalent option, the
Committee may, in lieu of such assumption or substitution, provide for the
Option holder to have the right to exercise the Option as to all or a portion
of the underlying Common Stock, including shares as to which it would not
otherwise be exercisable.  If the
Committee makes an Option exercisable in lieu of assumption or substitution in
the event of a merger or sale of assets, the Committee shall notify the holder
that the Option shall be exercisable for such period as the Committee may
designate, and the Option will terminate upon the expiration of such period.  For the purposes of this Section 11(c),
the Option shall be considered assumed if, immediately following the merger or
sale of assets, the Option confers the right to receive, for each share of
Common Stock subject to the Option immediately prior to the merger or sale of
assets, the consideration (whether stock, cash, or other securities or
property) received in the merger or sale of assets by holders of Common Stock
for each share held on the effective date of the transaction (and if holders
were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding shares); provided, however, that if
such consideration received in the merger or sale of assets was not solely
common stock of the successor corporation or its parent, the Committee may,
with the consent of the successor corporation and the Option holder, provide
for the consideration to be received upon the exercise of the Option, for each
share of Common Stock subject to the Option, to be solely common stock of the
successor corporation or its parent equal in Fair Market Value to the per share
consideration received by holders of Common Stock in the merger or sale of
assets.


 


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12.                               Amendment.


 


The Board of
Directors may amend the Plan at any time as determined to be in the best
interests of the Company.  The Board of
Directors shall not, however, without shareholder approval, increase the
maximum number of shares subject to the Plan or restrict the class of
management and other key employees eligible to be awarded Stock Grants,
Restricted Stock or Options under the Plan.


 


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