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


 


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5.             Eligibility.


 


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


 


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


 


6.             Stock Options.


 


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


 


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


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


 


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


(d)                                 The
Option exercise price shall be paid at the time of exercise.  The consideration to be paid for the shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Committee (and, in the case of an incentive stock option,
shall be determined at the time of grant) and may consist entirely of: (1)
cash; (2) check; (3) promissory note; (4) other shares which (i) in the case of
shares acquired upon exercise of an option, have been owned by the Employee for
more than six months on the date of surrender and (ii) have an aggregate Fair
Market Value on the date of surrender not greater than the aggregate exercise
price of the shares as to which said Option shall be exercised; (5) delivery of
a properly executed exercise notice together with such other documentation as
the Committee and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price; (6) any combination of the foregoing
methods of payment; or (7) such other consideration and method of payment for
the issuance of shares as the Committee determines are consistent with the Plan’s
purpose and applicable law.  Any
fractional share not required for payment of the Option exercise price shall be
paid for by the Company in cash on the basis of the same value utilized for
such exercise.


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


 


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may be exercised, which shall not be earlier than the
end of the waiting period, if any, nor, in the case of an Incentive Stock
Option, later than ten (10) years from the date of grant.


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


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


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


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


 


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exercise such Option (to the extent otherwise so
entitled) within the time specified herein, the Option shall terminate.


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


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


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


 


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(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,
parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-


 


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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;


(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;


 


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


 


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


 


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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 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,


 


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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.


 


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


 


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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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