Document:

Certificate of Designations of Series A Convertible Preferred Stock

 Exhibit 4.1 
  

ARTICLES OF AMENDMENT 
 TO THE

 ARTICLES OF INCORPORATION OF 
 VCG HOLDING CORP. 
  

  
 SERIES A CONVERTIBLE PREFERRED STOCK 
  

  
 VCG Holding Corp., a Colorado corporation (the “Corporation”), pursuant to the applicable provisions of the Colorado Business Corporation Act and to the Corporation’s Articles of Incorporation, as amended, hereby adopts the
following Articles of Amendment to the Articles of Incorporation of the Corporation. (the “Articles”). 
  
 1. The name of the Corporation is “VCG Holding Corp.” 
  

2. The text of the amended Certificate of Designations, Preferences, Limitations and Relative Rights of Series A Convertible Preferred Stock (the
“Certificate”) is set forth as Exhibit A hereto and is incorporated by reference herein. 
  
 3. The amendment was adopted on September 16, 2005. 
  
 4. The amendment was duly approved by the Board of Directors and by the holders of Series A Convertible Preferred Stock of the Corporation. 
  
 5. The amendment is effective on the date of filing of these Articles with
the Colorado Secretary of State. 
  
 IN WITNESS WHEREOF,
the undersigned Corporation causes these Articles to be executed and delivered to the Colorado Secretary of State for filing. 
  

									
	 	 	 	 	VCG HOLDING CORP.
				
	 Date: September 22, 2005
	 	 	 	By:	 	 /s/ Donald W. Prosser

	 	 	 	 	 	 	 Name:
	 	 Donald W. Prosser

	 	 	 	 	 	 	 Title:
	 	 Chief Financial Officer

	 	 	 	 	 	 	 Address:
	 	 390 Union Blvd, Suite 540

	 	 	 	 	 	 	 	 	 Lakewood, CO 80228

 Exhibit A 
  
 VCG HOLDING CORP. 
  

  
 Amended 
 DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF 
 SERIES A CONVERTIBLE PREFERRED STOCK 
  

  
 Pursuant to the authority expressly granted to and vested in the Board of
Directors of VCG Holding Corp. (the “Corporation”) under the Colorado Business Corporations Act and by Article II, Paragraph B of the Corporation’s Articles of Incorporation (the “Articles”), there is hereby created, and the
Corporation is hereby authorized to issue, a series of convertible preferred stock, $.0001 par value, which shall have, in addition to the rights, restrictions, preferences and privileges set forth in the Articles, the following terms, conditions,
rights, restrictions, preferences and privileges: 
  
 I.

  
 DESIGNATION AND AMOUNT 
  
 A series of convertible preferred stock is hereby designated as “Series
A Convertible Preferred Stock” in the amount of One Million (1,000,000) shares (the “Series A Preferred Stock”). 
  
 II. 
  
 RANK 
  
 The
Series A Preferred Stock shall be senior to the Corporation’s common stock, $.0001 par value (the “Common Stock”). 
  
 III. 
  
 DIVIDENDS 
  
 Generally. Each holder of outstanding shares of Series A Preferred Stock shall be entitled to receive out of funds of the Corporation legally available therefor, cumulative dividends at the rate of 10.0% per year, accrued daily and
payable monthly in arrears on the last day of each month (the “Series A Preferential Dividend”), and in preference to any declaration or payment of dividends with respect to the Common Stock. Such dividends shall accrue on any given share
from the day of original issuance of such share and shall accrue from day-to-day whether or not earned or declared. If at any time dividends on the outstanding Series A Preferred Stock at the rate set forth above shall not have been paid or declared
and set apart for payment with respect to all preceding periods, interest will accrue on those unpaid dividends at a default rate equal to the maximum permitted by applicable law and the amount of the deficiency shall be 

  

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fully paid or declared and set apart for payment before any distribution, whether by way of dividend or otherwise, shall be declared or paid upon or set
apart for the Common Stock of the Corporation or any other series of the Preferred Stock of the Corporation. 
  
 Any dividend payable on a dividend payment date shall be paid in cash and in United States dollars. 
  
 Nothing contained herein shall be deemed to establish or require any payment
or other charges in excess of the maximum permitted by applicable law. In the event that any payment required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Corporation, the holder and thus refunded to the Corporation. 
  
 D. Dividends Other Than Cash. Subject to the foregoing, if the Corporation shall declare a distribution payable in securities of persons or entities other than the Corporation, evidences of indebtedness issued
by the Corporation or other persons or entities, assets (excluding cash dividends) or options or rights to purchase any such securities or evidences of indebtedness, then, in each such case, the holders of Series A Preferred Stock shall be entitled
to a proportionate share of any such distribution as though the holders of Series A Preferred Stock were the holders of the number of shares of Common Stock of the Corporation into which their respective shares of Series A Preferred Stock are
convertible as of the record date fixed for the determination of the holders of Common Stock of the Corporation who are entitled to receive such distribution. 
  

IV. 
  
 PREFERENCE ON LIQUIDATION 
  
 A. Series A Preference. In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of the outstanding shares of Series A Preferred Stock shall
be entitled to be paid out of the assets of the Corporation available for distribution to its shareholders, whether from capital, surplus funds or earnings, and before any payment is made in respect of the shares of Common Stock, an amount equal to
$10.00 per share of Series A Preferred Stock, subject to adjustment for stock dividends, combinations, splits, recapitalizations and the like with respect to the Series A Preferred Stock, plus any and all accrued but unpaid dividends (the
“Series A Preference Price”). 
  
 B. Certain
Transactions. A consolidation or merger of the Corporation with or into any other corporation or corporations, or a sale of all or substantially all of the assets of the Corporation (other than a sale or transfer to a wholly owned subsidiary of
the Corporation), shall, at the option of the holders of the Series A Preferred, be deemed a liquidation, dissolution or winding up within the meaning of this Article IV if the shares of stock of the Corporation 

  

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outstanding immediately prior to such transaction represent immediately after such transaction less than a majority of the voting power of the surviving
corporation (or of the acquirer of the Corporation’s assets in the case of a sale of assets). Such option may be exercised by the vote or written consent of holders of a majority of the Series A Preferred at any time within thirty (30) days
after written notice (which shall be given promptly) of the essential terms of such transaction shall have been given to the holders of the Series A Preferred in the manner provided by law for the giving of notice of meetings of shareholders.

  
 V. 
  
 VOTING 
  
 The holders of Series A Preferred Stock shall not be entitled to vote on any matters submitted or required to be submitted
to a vote of the shareholders of the Corporation, except as otherwise required by law or expressly provided herein, in which case every holder of Series A Preferred Stock shall be entitled to the number of votes equal to the number of whole shares
of Common Stock into which such shares of Series A Preferred Stock are convertible pursuant to the provisions hereof, at the record date for the determination of shareholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of shareholders is solicited. In each such case, except as otherwise required by law or expressly provided herein, the holders of shares of Series A Preferred Stock and Common Stock
shall vote together and not as separate classes. 
  
 VI.

  
 CONVERSION 
  
 The holders of the outstanding shares of Series A Preferred Stock shall have
the following conversion rights (the “Conversion Rights”): 
  
 A. Right to Convert. Each share of Series A Preferred Stock shall be convertible, at the option of the holder thereof, at any time one year after the date of issuance of such shares, at the office of the Corporation into that number
of fully paid and non-assessable shares of Common Stock of the Corporation which is equal to the quotient obtained by dividing the Series A Preference Price then in effect for each share of Series A Preferred Stock by the Series A Conversion Price
(as hereinafter defined as appropriately adjusted in accordance with Article VI on the Conversion Date (as herein after defined). The “Series A Conversion Price” shall equal the greater of: (i) $2.50, or (ii) seventy five percent (75%) of
the Market Price (as hereinafter 

  

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defined) of the Common Stock on the Conversion Date (as hereinafter defined). For purposes of this Article VI, the “Market Price” as of any date,
(i) means the average of the closing bid prices for the Common Stock as reported on the OTC Bulletin Board (“OTC-BB”) by Bloomberg for the ten (10) consecutive trading days immediately preceding such date, or (ii) if the OTC-BB is not the
principal trading market for the shares of Common Stock, the average of the closing bid prices as reported by Bloomberg on the principal trading market or exchange for the Common Stock during the same period, or, if there is no sale price for such
period, the last reported bid price as reported by Bloomberg for such period, or (iii) if market value cannot be calculated as of such date on any of the foregoing bases, the Market Price shall be the fair market value for a share of Common Stock as
determined in good faith by the Board of Directors of the Corporation, which determination shall be final and binding. The manner of determining the Market Price of the Common Stock set forth in the foregoing definition shall apply with respect to
any other security in respect of which a determination as to market value must be made hereunder. 
  
 B. Mechanics of Conversion. Each holder of outstanding shares of Series A Preferred Stock who desires to convert the same into shares of Common
Stock shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation together with written notice to the Corporation stating that such holder elects to convert the same and the number of shares of Series A
Preferred Stock being converted (the “Conversion Notice”). Thereupon, the Corporation shall issue and deliver to such holder a certificate or certificates for the number of shares of Common Stock to which such holder is entitled and shall
promptly pay all declared but unpaid dividends on the shares of Series A Preferred Stock being converted. Such conversion shall be deemed to have been made on the date of such surrender of the certificate or certificates representing the shares of
Series A Preferred Stock to be converted together with the Conversion Notice (the “Conversion Date”), and the person entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the
record holder of such shares of Common Stock on the Conversion Date. 
  
 C. Adjustment for Stock Splits and Combinations. If the Corporation at any time or from time to time after the date that the Amendment to the Articles creating the Series A Preferred Stock was filed with the Colorado Secretary of
State (the “Filing Date”) effects a division of the outstanding shares of Common Stock, the Series A Conversion Price shall be proportionately decreased and, conversely, if the Corporation at any time, or from time to time, after the
Filing Date combines the outstanding shares of Common Stock, the Series A Conversion Price shall be proportionately increased. Any adjustment under this Section C shall be effective on the close of business on the date such division or combination
becomes effective. 
  
 D. Adjustment for Certain Dividends and
Distributions. If the Corporation at any time or from time to time after the Filing Date pays or fixes a record date for the determination of holders of shares of Common Stock entitled to receive a dividend or other distribution in the form of
shares of Common Stock, or rights or options for the purchase of, or securities convertible into, Common Stock, then in each such event the Series A Conversion Price shall be decreased, as of the time of such payment or, in the event a record date
is fixed, as of the close of business on such record date, by multiplying the Series A Conversion Price by a fraction (1) the numerator of which shall be the total number of shares of Common Stock outstanding 

  

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immediately prior to the time of such payment or the close of business on such record date and (2) the denominator of which shall be (a) the total number of
shares of Common Stock outstanding immediately prior to the time of such payment or the close of business on such record date plus (b) the number of shares of Common Stock issuable in payment of such dividend or distribution or upon exercise of such
option or right of conversion; provided, however, that if a record date is fixed and such dividend is not fully paid or such other distribution is not fully made on the date fixed therefor, the Series A Conversion Price shall not be decreased as of
the close of business on such record date as hereinabove provided as to the portion not fully paid or distributed and, thereafter, the Series A Conversion Price shall be decreased pursuant to this Section D as of the date or dates of actual payment
of such dividend or distribution. 
  
 E. Adjustments for Other
Dividends and Distributions. If the Corporation at any time or from time to time after the Filing Date pays, or fixes a record date for the determination of holders of shares of Common Stock entitled to receive, a dividend or other distribution
in the form of securities of the Corporation other than (i) shares of Common Stock or (ii) rights or options for the purchase of, or securities convertible into, Common Stock, then in each such event provision shall be made so that the holders of
outstanding shares of Series A Preferred Stock shall receive upon conversion thereof, in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation that they would have received had their
respective shares of Series A Preferred Stock been converted into shares of Common Stock on the date of such event and had such holders thereafter, from the date of such event to and including the actual Conversion Date of their shares, retained
such securities, subject to all other adjustments called for during such period under this Article VI with respect to the rights of the holders of the outstanding shares of Series A Preferred Stock. 
  
 F. Adjustment for Reclassification, Exchange and Substitution. If, at
any time or from time to time after the Filing Date, the number of shares of Common Stock issuable upon conversion of the shares of Series A Preferred Stock is changed into the same or a different number of shares of any other class or classes of
stock or other securities, whether by recapitalization, reclassification or otherwise (other than a recapitalization, division or combination of shares or stock dividend or a reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Article VI), then in any such event each holder of outstanding shares of Series A Preferred Stock shall have the right thereafter to convert such shares of Series A Preferred Stock into the same kind and amount of stock and other
securities receivable upon such recapitalization, reclassification or other change, as the maximum number of shares of Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such
recapitalization, reclassification or change, all subject to further adjustment as provided in this Article VI. 
  
 G. Reorganizations, Mergers, Consolidations or Sales of Assets. If, at any time or from time to time after the Filing Date, there is a capital
reorganization of the Common Stock (other than a recapitalization, division, combination, reclassification or exchange of shares provided for elsewhere in this Article VI), a merger or consolidation of the Corporation into or with another
corporation or a sale of all or substantially all of the Corporation’s properties and assets to any other person, then, as a part of such capital reorganization, merger, consolidation or 

  

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sale, provision shall be made such that: (i) the holders of outstanding shares of Series A Preferred Stock shall thereafter receive upon conversion thereof
the number of shares of stock or other securities or property of the Corporation, or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of the number of shares of Common Stock into which their shares
of Series A Preferred Stock were convertible would have been entitled on such capital reorganization, merger, consolidation or sale; and (ii) the provisions of this Article VI (including adjustment of the Series A Conversion Price and the number of
shares into which the shares of Series A Preferred Stock may be converted) shall be applicable after that event and be as nearly equivalent to such Conversion Prices and number of shares as may be practicable. In any such case, appropriate
adjustment shall be made in accordance with the provisions of this Article VI with respect to the rights of the holders of the outstanding shares of Series A Preferred Stock after the capital reorganization, merger, consolidation, or sale.

  
 H. Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the shares of Series A Preferred Stock. If any fractional shares result from a conversion, the total number of shares of Common Stock issued upon conversion shall be rounded down to the total number of whole
shares of Common Stock issuable upon conversion. 
  
 VII.

  
 RESTRICTIONS AND LIMITATIONS 
  
 So long as any shares of Series A Preferred Stock remain outstanding, the
Corporation, without the approval by vote or written consent of the holders of a majority of the then outstanding shares of Series A Preferred Stock, voting as a separate class, shall not take any action that would: 
  
 A. Alter or change any of the rights, preferences, privileges of, or
limitations provided for herein for the benefit of any shares of the Series A Preferred Stock, or 
  
 B. Increase the authorized number of shares of the Series A Preferred Stock. 
  
 VIII. 
  
 RESERVATION OF COMMON STOCK ISSUABLE UPON CONVERSION 
  
 The Corporation shall reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A Preferred Stock, a number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred Stock.  
  

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 IX. 
  
 PAYMENT OF TAXES UPON CONVERSION 
  
 The holder of shares of Series A Preferred Stock shall pay any and all taxes, including, without limitation, issue, transfer and income taxes, and other
governmental charges that may be imposed in respect of the issue or delivery of shares of Common Stock upon conversion of such shares of Series A Preferred Stock. 
  
 X. 
  
 REDEMPTION 
  
 A. At any time after one (1) year from the date of issuance of the Series A Preferred, the holders of Series A Preferred Stock shall have the right to
cause the Corporation to redeem their Series A Preferred Stock, in whole or in part, at the Series A Preference Price. The holders so requesting redemption shall provide the Corporation with no less than ninety (90) days prior written notice of such
requested redemption, which notice may be delivered at any time prior to or after the one (1) year anniversary date of the issuance of the Series A Preferred Stock. The Corporation’s obligation to redeem shares of Series A Preferred Stock under
this Section A shall be specifically dependent and contingent upon the surrender of the original certificate(s) representing such shares. 
  
 B. At any time after one (1) year from the date of issuance of the Series A Preferred and prior to conversion pursuant to Article VI hereof, the
Corporation shall have the right to redeem the outstanding shares of Series A Preferred Stock, in whole or in part, for cash only at the Series A Preference Price; provided, however, that the Corporation shall not be entitled to redeem shares of
Series A Preferred Stock unless it has given the holder of such shares written notice of such redemption prior to the delivery of any Conversion Notice by the holder with respect to such shares pursuant to Article VI hereof. Redemption of shares of
Series A Preferred Stock by the Corporation under this Section B shall not be dependent or otherwise contingent upon the surrender of the original certificate(s) representing such shares. 
  
 C. The Corporation shall pay the redemption price to the holder of the shares of Series A Preferred Stock within thirty (30)
days of the surrender of the original certificate(s) representing the Series A Preferred Stock being redeemed. Other than as set forth herein, the Series A Preferred Stock shall not be subject to further calls or assessments by the Corporation. The
Corporation is not required to establish any sinking fund or other fund or account for the benefit of the holders of the Series A Preferred Stock. In the event that Corporation fails to pay all or any portion of the redemption price on the date it
is due, the unpaid amount shall accrue interest for the benefit of the holder of the Preferred Stock at the highest rate permitted by law in the State of Colorado. 
  
 XI. 
  
 NO RE-ISSUANCE OF SERIES A PREFERRED STOCK 
  
 No share or shares of Series A Preferred Stock acquired by the Corporation by reason of conversion, redemption, purchase or otherwise shall be reissued as
Series A Preferred Stock, and 

  

 8 

 
all such shares shall be canceled, retired and eliminated from the shares of Series A Preferred Stock that the Corporation shall be authorized to issue;
provided, however, that such shares shall be returned to the status of undesignated and unissued shares of preferred stock of the Corporation. 
  
 XII. 
  
 NOTICES 
  
 Any notice or
other communication required or permitted to be given hereunder shall be in writing and shall be effective (a) upon hand delivery or delivery by facsimile transmission (with confirmation received) at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be
received) or (b) on the second (2nd) business day following the date of mailing by express courier service, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: 
  

					
	 	  	to the Company:	  	 VCG Holding Corp.
 390 Union Boulevard, Suite
540
 Lakewood, Colorado 80228
 Attn: Troy H. Lowrie, Chairman and
CEO
 FAX (303) 922-0746

			
	 	  	to the Holder:	  	At the address set forth on the books and records of the Company or as specified in writing by Holder.

  
 Any party hereto may from time to time
change its address for notices by giving at least ten (10) days’ written notice of such changed address to the other party hereto. 
  

 9Forms of Stock Option Agreement to the 1985 Stock Incentive Program

 Exhibit 10.6 
  
 Renewal Grant 
  
 SILICON GRAPHICS, INC. 
 1985 STOCK INCENTIVE
PROGRAM 
  
 INCENTIVE STOCK OPTION GRANT AGREEMENT

  
 Silicon Graphics, Inc., a Delaware corporation (the
“Company”), has granted to the Optionee named on the attached NOTICE OF GRANT OF STOCK OPTION AND GRANT AGREEMENT (the “NOTICE”) which is incorporated herein by reference, an option to purchase the total number of shares of
Common Stock and at the price determined, both as set forth on the attached NOTICE, and in all respects subject to the terms, definitions and provisions of the 1985 Stock Incentive Program (the “Program”) adopted by the Company which is
incorporated herein by reference. The terms defined in the Program shall have the same defined meanings herein. 
  
 I understand and acknowledge that I am responsible for reviewing the terms of the Plan and the related prospectus, copies of which are available on the
Silicon Graphics Employee Stock Services web site (http://www-finance.corp.sgi.com/stock) or upon request from Employee Stock Services (MS-645 or stock_support@sgi.com), and represent that I understand that this Option is subject to all of the terms
and provisions thereof. I further understand that all decisions or interpretations of the Board upon any questions arising under the Plan are binding, conclusive and final. 
  
 1. Nature of the Option. This Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of
the Internal Revenue Code of 1986, as amended (the “Code”). 
  
 2. Exercise Price. The exercise price for each share of Common Stock is as set forth in the attached NOTICE, which price is not less than the fair market value per share of the Common Stock on the date of grant. 
  
 3. Exercise of Option. This Option shall be exercisable during its
term in accordance with the provisions of Section 7 of the Program as follows: 
  
 (a) Right to Exercise. 
  
 (i) Subject to subsection 3(a)(ii) and (iii), below, this Option shall be exercisable as set forth in the attached NOTICE. 
  
 (ii) This Option may not be exercised for a fraction of a share. 
  

(iii) In the event of Optionee’s death, disability or other termination of employment, the exercisability of the Option is governed by Sections
7, 8, and 9 below. 
  
 (b) Method of Exercise. This Option
shall be exercisable by written notice signed by the Optionee and delivered to the Company’s Employee Stock Services group or by using the electronic exercise methods approved from time to time by the Employee Stock Services department. Such
notice shall be in the form on Exhibit A as published from time to time on the Employee Stock Services web site (http://finis.corp.sgi.com/stock/stock_options/exhibit_a.htm) The exercise notice shall be accompanied by payment of the exercise price.
The Option shall be deemed to be exercised upon receipt by the Company of such exercise notice accompanied by the exercise price. 
  
 No Shares will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and
the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect
to such shares. 
  
 Update: March 2002 

 4. Optionee’s Representations. In the event the shares purchasable pursuant to the exercise
of this Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form of Exhibit B, (available in Employee Stock Services) and shall read the applicable rules of the Commissioner of Corporations attached to such Investment Representation Statement. 
  
 5. Method of Payment. Payment of the exercise price shall be by any of
the following or a combination thereof, at the election of the Optionee: 
  
 (i) cash; or 
  
 (ii) check; or

  
 (iii) surrender of other Shares of Common Stock of the
Company of a value equal to the exercise price of the shares as to which the Option is being exercised which either have been owned by the Optionee for more than six (6) months on the date of surrender or were not acquired, directly or indirectly,
from the Company; or 
  
 (iv) delivery of a properly executed
exercise notice together with such other documentation as the Company and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price.

  
 6. Restrictions on Exercise. This Option may not be
exercised until such time as the Program has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the code of Federal Regulations (“Regulation G”) as promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 
  
 7. Termination of Status as an Employee or Consultant. If Optionee ceases to serve as an Employee or Consultant, he
or she may, but only within three (3) months after the date he or she ceases to be an Employee or Consultant of the Company, exercise this Option to the extent that he or she was entitled to exercise it at the date of such termination. To the extent
that he or she was not entitled to exercise this Option at the date of such termination, or if he or she does not exercise this Option within the time specified herein, the Option shall terminate. 
  
 If Optionee’s status changes from that of an Employee to that of a
Consultant, this Option will become a non-statutory option (NSO) to the extent is it not exercised within ninety (90) days after the date the Optionee ceased to be an Employee. 
  
 8. Disability of Optionee. Notwithstanding the provisions of Section 7 above, if Optionee is unable to continue his
or her employment or consulting relationship with the Company as a result of his or her total and permanent disability (as defined in Section 22 (e) (3) of the Internal Revenue Code), the Optionee may, but only within twelve (12) months from the
date of such termination, exercise this Option to the extent he or she was entitled to exercise the Option at the date of such termination. To the extent that he or she was not entitled to exercise the Option at the date of termination, or if he or
she does not exercise such Option within the time specified herein, the Option shall terminate. 
  

 -2- 

 9. Death of Optionee. In the event of the death of Optionee during the term of this Option and
while an Employee or Consultant of the Company and having been in Continuous Status as an Employee or Consultant since the date of grant of the Option, or while still having the right to exercise the Option following termination, the Option may be
exercised, at any time within twelve (12) months following the date of death, by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had
accrued as of the date of death. 
  
 10. Non-Transferability of
Option. This Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or
her. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee. 
  
 11. Term of Option. This Option may not be exercised more than ten (10) years (five years if Optionee owns, immediately before this Option is
granted, stock representing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary) from the date of grant of this Option, and may be exercised during such term only in
accordance with the Program and the terms of this Option. 
  
 12.
Early Disposition of Stock. Optionee understands that if he or she disposes of any Shares received under this Option within two (2) years after the date of this Agreement or within one (1) year after such Shares were transferred to him or
her, the Optionee will be treated for federal income tax purposes as having received ordinary income at the time of such disposition in an amount equal to the difference between the exercise price and the lower of the fair market value of the Shares
at the date of the exercise or the amount realized from the sale or exchange, if applicable. Different rules may apply upon early disposition by an Optionee who is subject to Section 16 of the Securities Exchange Act of 1934, as amended (the
“1934 Act”). Such an Optionee should consult his or her own tax advisor prior to exercising an Option with respect to unvested Shares, or prior to any exercise of an Option. Optionee hereby agrees to notify the Company in writing within 30
days after the date of any such disposition. Optionee understands that if he or she sells or exchanges such Shares at any time after the expiration of such two-year and one-year holding periods, any gain or loss recognized on such sale will be taxed
as long-term capital gain or loss. Currently, the maximum federal tax rate on net capital gain is 28%. Changes in the Internal Revenue Code of 1986 enacted after the date hereof may result in changes to Section 12. 
  
 13. Adjustment Upon Changes in Capitalization. All references to the
number of Shares, the purchase price of the Shares and target stock prices in this Agreement shall be appropriately adjusted to reflect any stock split, reverse stock split, stock dividend, combination or reclassification, or other change in the
Shares which may be made by the Company after the date of this Agreement. 
  
 14. Acceleration Upon Change of Control. Notwithstanding provisions of Section 3 (a) with respect to option exercisability, in the event of a Change of Control of the Company, this Option shall automatically
become exercisable in full if, within twenty-four (24) months after a Change of Control Date, (i) the Optionee is involuntarily terminated by the Company or any successor company (hereinafter, the “Employer”) without Cause or (ii) the
Optionee voluntarily resigns from the Employer for Good Reason. 
  
 15. Definitions. For purposes of Section 13, the terms “Cause,” “Change of Control,” “Change of Control Date,” and “Good Reason” shall have the meanings set out below: 
  
 (a) “Cause” means the termination of employment of an Optionee
shall have taken place as a result of: 
  
 (i) an act or acts of
dishonesty undertaken by such Optionee and intended to result in gain or personal enrichment of the Optionee, or 
  

 -3- 

 (ii) persistent failure to perform the duties and obligations of such Optionee which is not remedied in
a reasonable period of time after receipt of written notice from the Employer, or 
  
 (iii) violation of confidentiality or proprietary information obligations to or agreements entered into with the Employer, or 
  
 (iv) use, sale or distribution of illegal drugs on the Employer’s premises, or 
  
 (v) threatening, intimidating, or coercing or harassing fellow employees, or 
  
 (vi) the conviction of such Optionee of a felony. 
  
 (b) “Change of Control” of the Company means: 
  
 (i) the acquisition by any Person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) as Beneficial Owner (as such term is used in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the outstanding shares of capital
stock of the Company’s then outstanding securities with respect to the election of the directors of the Board. 
  
 (ii) During any period of three (3) consecutive years individuals who, at the beginning of such period, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director of the Board subsequent to the date of this agreement whose election, or nomination for election by the Company’s
shareholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of any individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the Board, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for these purposes, considered as though such person were a
member of the Incumbent Board. 
  
 (c) “Change of Control
Date” means the effective date of the Change of Control or such date, which the Board shall, by resolution, deem to be the Change of Control Date. 
  
 (d) “Good Reason” for voluntary resignation means (i) the Employer reduces by ten percent (10%) or more the Optionee’s compensation at the
rate in effect immediately prior to the Change of Control or (ii) without the Optionee’s express written consent, the Employer requires the Optionee to change the location of his or her job or office, so that he or she will be based at a
location more then fifty (50) miles from the location of his or her job or office immediately prior to the Change of Control. For these purposes, “Compensation” includes base salary, exclusive of bonus, incentive compensation and shift
differential, paid by the Employer as consideration for the Optionee’s service. 
  

 -4- 

 Renewal Grant 
  
 SILICON GRAPHICS, INC. 
 1985 STOCK INCENTIVE
PROGRAM 
  
 NON STATUTORY STOCK OPTION GRANT AGREEMENT

  
 Silicon Graphics, Inc., a Delaware corporation (the
“Company”), has granted to the Optionee named on the attached NOTICE OF GRANT OF STOCK OPTION AND GRANT AGREEMENT (the “NOTICE”) which is incorporated herein by reference, an option to purchase the total number of shares of
Common Stock and at the price determined, both as set forth on the attached NOTICE, and in all respects subject to the terms, definitions and provisions of the 1985 Stock Incentive Program (the “Program”) adopted by the Company which is
incorporated herein by reference. The terms defined in the Program shall have the same defined meanings herein. 
  
 I understand and acknowledge that I am responsible for reviewing the terms of the Plan and the related prospectus, copies of which are available on the
Silicon Graphics Employee Stock Services web site (http://www-finance.corp.sgi.com/stock) or upon request from Employee Stock Services (MS-645 or stock_support@sgi.com), and represent that I understand that this Option is subject to all of the terms
and provisions thereof. I further understand that all decisions or interpretations of the Board upon any questions arising under the Plan are binding, conclusive and final. 
  
 1. Nature of the Option. This Option is a non-statutory option and is not intended to qualify for any special tax
benefits to the Optionee. 
  
 2. Exercise Price. The
exercise price for each share of Common Stock is as set forth in the attached NOTICE. 
  
 3. Exercise of Option. This Option shall be exercisable during its term in accordance with the provisions of Section 8 of the Program as follows: 
  
 (a) Right to Exercise. 
  
 (i) Subject to subsection 3(a)(ii) and (iii), below, this Option shall be exercisable as set forth in the attached NOTICE. 
  
 (ii) This Option may not be exercised for a fraction of a share. 

 
 (iii) In the event of Optionee’s death, disability or other
termination of employment, the exercisability of the Option is governed by Sections 7, 8, and 9 below. 
  
 (b) Method of Exercise. This Option shall be exercisable by written notice signed by the Optionee and delivered to the Company’s Employee
Stock Services group or by using the electronic exercise methods approved from time to time by the Employee Stock Services department. Such notice shall be in the form on Exhibit A as published from time to time on the Employee Stock Services web
site (http://finis.corp.sgi.com/stock/stock_options/exhibit_a.htm) The exercise notice shall be accompanied by payment of the exercise price. The Option shall be deemed to be exercised upon receipt by the Company of such exercise notice accompanied
by the exercise price. 
  
 No Shares will be issued pursuant to
the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes
the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such shares. 
  
 Update: March 2002 

 4. Optionee’s Representations. In the event the shares purchasable pursuant to the exercise
of this Option have not been registered under the Securities Act of 1933, as amended, at the time this Option is exercised, Optionee shall, concurrently with the exercise of all or any portion of this Option, deliver to the Company his or her
Investment Representation Statement in the form of Exhibit B, (available in Employee Stock Services) and shall read the applicable rules of the Commissioner of Corporations attached to such Investment Representation Statement. 
  
 5. Method of Payment. Payment of the exercise price shall be by any of
the following or a combination thereof, at the election of the Optionee: 
  
 (i) cash; or 
  
 (ii) check; or

  
 (iii) surrender of other Shares of Common Stock of the
Company of a value equal to the exercise price of the shares as to which the Option is being exercised which either have been owned by the Optionee for more than six (6) months on the date of surrender or were not acquired, directly or indirectly,
from the Company; or 
  
 (iv) delivery of a properly executed
exercise notice together with such other documentation as the Company and the broker, if applicable, shall require to effect an exercise of the Option and delivery to the Company of the sale or loan proceeds required to pay the exercise price.

  
 6. Restrictions on Exercise. This Option may not be
exercised until such time as the Program has been approved by the shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any
applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the code of Federal Regulations (“Regulation G”) as promulgated by the Federal Reserve Board. As a condition to the
exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation. 
  
 7. Termination of Status as an Employee or Consultant. If Optionee ceases to serve as an Employee or Consultant, he
or she may, but only within three (3) months after the date he or she ceases to be an Employee or Consultant of the Company, exercise this Option to the extent that he or she was entitled to exercise it at the date of such termination. To the extent
that he or she was not entitled to exercise this Option at the date of such termination, or if he or she does not exercise this Option within the time specified herein, the Option shall terminate. 
  
 8. Disability of Optionee. Notwithstanding the provisions of Section 7
above, if Optionee is unable to continue his or her employment or consulting relationship with the Company as a result of his or her total and permanent disability (as defined in Section 22 (e) (3) of the Internal Revenue Code), the Optionee may,
but only within twelve (12) months from the date of such termination, exercise this Option to the extent he or she was entitled to exercise the Option at the date of such termination. To the extent that he or she was not entitled to exercise the
Option at the date of termination, or if he or she does not exercise such Option within the time specified herein, the Option shall terminate. 
  
 9. Death of Optionee. In the event of the death of Optionee during the term of this Option and while an Employee or Consultant of the Company and
having been in Continuous Status as an Employee or Consultant since the date of grant of the Option, or while still having the right to exercise the Option following termination, the Option may be exercised, at any time within twelve (12) months
following the date of death, by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise that had accrued as of the date of death. 
  

 -2- 

 10. Non-Transferability of Option. This Option may not be sold, pledged, assigned, hypothecated,
transferred or disposed of in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee. 
  
 11. Term of Option. This Option may not be exercised more than ten (10) years (five years if Optionee owns, immediately before this Option is granted, stock representing more than 10 percent of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary) from the date of grant of this Option, and may be exercised during such term only in accordance with the Program and the terms of this Option. 
  
 12. Taxation Upon Exercise of Option. Optionee understands that, upon
exercise of this Option, he or she will recognize income for tax purposes in an amount equal to the excess of the then fair market value of the shares over the exercise price. The Company will be required to withhold tax from Optionee’s current
compensation with respect to such income; to the extent that Optionee’s current compensation is insufficient to satisfy the withholding tax liability, the Company may require the Optionee to make a cash payment to cover such liability as a
condition of exercise of this Option. Upon a resale of such shares by the Optionee, any difference between the sale price and the fair market value of the shares on the date of exercise of the Option will be treated as capital gain or loss.

  
 13. Adjustment Upon Changes in Capitalization. All
references to the number of Shares, the purchase price of the Shares and target stock prices in this Agreement shall be appropriately adjusted to reflect any stock split, reverse stock split, stock dividend, combination or reclassification, or other
change in the Shares which may be made by the Company after the date of this Agreement. 
  
 14. Acceleration Upon Change of Control. Notwithstanding provisions of Section 3 (a) with respect to option exercisability, in the event of a Change of Control of the Company, this Option shall automatically
become exercisable in full if, within twenty-four (24) months after a Change of Control Date, (i) the Optionee is involuntarily terminated by the Company or any successor company (hereinafter, the “Employer”) without Cause or (ii) the
Optionee voluntarily resigns from the Employer for Good Reason. 
  
 15. Definitions. For purposes of Section 13, the terms “Cause,” “Change of Control,” “Change of Control Date,” and “Good Reason” shall have the meanings set out below: 
  
 (a) “Cause” means the termination of employment of an Optionee
shall have taken place as a result of: 
  
 (i) an act or acts of
dishonesty undertaken by such Optionee and intended to result in gain or personal enrichment of the Optionee, or 
  
 (ii) persistent failure to perform the duties and obligations of such Optionee which is not remedied in a reasonable period of time after receipt of
written notice from the Employer, or 
  
 (iii) violation of
confidentiality or proprietary information obligations to or agreements entered into with the Employer, or 
  
 (iv) use, sale or distribution of illegal drugs on the Employer’s premises, or 
  
 (v) threatening, intimidating, or coercing or harassing fellow employees, or 
  
 (vi) the conviction of such Optionee of a felony. 
  

 -3- 

 (b) “Change of Control” of the Company means: 
  
 (i) the acquisition by any Person (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) as Beneficial Owner (as such term is used in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly, of fifty percent (50%) or more of the combined voting power of the outstanding shares of capital
stock of the Company’s then outstanding securities with respect to the election of the directors of the Board. 
  
 (ii) During any period of three (3) consecutive years individuals who, at the beginning of such period, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a Director of the Board subsequent to the date of this agreement whose election, or nomination for election by the Company’s
shareholders, was approved by the vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of any individual whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the directors of the Board, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for these purposes, considered as though such person were a
member of the Incumbent Board. 
  
 (c) “Change of Control
Date” means the effective date of the Change of Control or such date, which the Board shall, by resolution, deem to be the Change of Control Date. 
  
 (d) “Good Reason” for voluntary resignation means (i) the Employer reduces by ten percent (10%) or more the Optionee’s compensation at the
rate in effect immediately prior to the Change of Control or (ii) without the Optionee’s express written consent, the Employer requires the Optionee to change the location of his or her job or office, so that he or she will be based at a
location more then fifty (50) miles from the location of his or her job or office immediately prior to the Change of Control. For these purposes, “Compensation” includes base salary, exclusive of bonus, incentive compensation and shift
differential, paid by the Employer as consideration for the Optionee’s service. 
  

 -4-

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