Consulting Agreement - Silicon Graphics Inc. and Wei Yen
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made as of the date set
forth below by and between Silicon Graphics, Inc. (the "Company") and Wei Yen
("Consultant").
RECITALS
Consultant has resigned his position as a Senior Vice President in
order to pursue other personal interests. The Company wishes to have Consultant
remain available to contribute to certain projects and activities of the
Company. Accordingly, the Company and Consultant have agreed that Consultant
will change his relationship with the Company from that of an employee to that
of a consultant on the terms set forth in this Agreement.
AGREEMENT
In consideration of the mutual promises made herein, the Company and
Consultant hereby agree as follows:
1. Separation Agreement. Consultant and Company have entered into a
letter agreement dated contemporaneously herewith (the "Separation Agreement")
governing the terms of Consultant's resignation as officer and employee of
Company as of the close of business on April 2, 1996 ( the "Effective Separation
Agreement").
2. Consulting Relationship.
(a) Commencing immediately after the Effective Separation Date
and continuing through May 13, 1996 (the "Consulting Period"), Consultant shall
serve as an independent consultant to the Company.
(b) During the Consulting Period, Consultant shall (i) brief
the President and COO and others reasonably designated by him with respect to
special projects not involving the "Consumer Space;" and (ii) provide such other
reasonable services not involving the "Consumer Space" as mutually agreed by
Consultant and the Company. Consultant will be available during the Consulting
Period for such reasonable hours on an as needed basis as are mutually agreed
upon by the parties. The Company will use reasonable efforts to make its
requests in a manner that does not interfere with consulting or employment
obligations that Consultant may have to third parties during the Consulting
Period. In no case will Consultant be required to take any action hereunder, or
to consult as to the consumer space or any other particular matter, which
Consultant determines causes him to violate his fiduciary or contractual
obligations to any third party. Except as Company and Consultant may agree in
writing with respect to services performed by Consultant during the Consulting
Period, Company will not have any rights in any concepts, inventions, or
business opportunities conceived or developed by Consultant during the
Consulting Period. Consultant shall at all times be an independent
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contractor to the Company, and nothing in this Agreement shall in any way be
construed to constitute Consultant as an agent, employee or representative of
the Company.
(c) Consultant may terminate the consulting relationship at
any time before the end of the Consulting Period, for any or no reason, upon
advance written notice to the Company. Upon any termination, the Company shall
have no obligation to pay Monthly Consulting Fees or other benefits hereunder
accruing thereafter.
3. Compensation.
(a) In consideration for your agreement to provide consulting
services during the Consulting Period as provided herein and your faithful
adherence to the terms and conditions of this Agreement, the Company shall pay
Consultant a Monthly Consulting Fee equal to one-twelfth of the annual base
salary that Consultant was earning as of the Effective Separation Date. Such
compensation shall be paid in monthly installments (prorated and adjusted in the
case of any partial month), within 10 business days after receipt of
Consultant's monthly invoice, but no earlier than the tenth business day of each
month.
(b) The attached Stock Option Personnel Summary sets forth the
details concerning outstanding options to purchase Common Stock of the Company
held by Consultant. It is understood and agreed that during the Consulting
Period, such options shall remain outstanding and continue vesting at their
normal rate.
(c) Consultant is advised that as a result of his conversion
of his status from employee to consultant, any ISO's (Incentive Stock Options)
will become non-statutory options (NSOs), to the extent they are not exercised
by July 2, 1996, and all of Consultant's options will lapse if not exercised on
or before June 13, 1996, with respect to options granted on or before April 21,
1993, and August 13, 1996, with respect to options granted thereafter. If
Consultant's consulting relationship terminates for any reason, then all vesting
shall immediately stop, and Consultant's or her estate's ability to exercise
such options shall be governed by the terms of each of the respective option
agreements therefor.
(d) During the Consulting Period, the Company shall provide to
Consultant medical, dental and vision continuation benefits through COBRA and
the Company shall pay the COBRA premiums only during the Consulting Period or
until the earlier termination of the Consulting Period as specified herein.
(e) Other than the provisions set forth herein, Consultant has
no expectation of, and shall make no other claims for payment or any other
compensation or benefits from SGI.
4. Confidential Information. Subject to Section 2(b), Consultant shall
continue to maintain the confidentiality of all confidential and proprietary
information of
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the Company pursuant to, and shall continue to comply with all terms and
conditions of, the Proprietary Information and Invention Agreement dated
February 4, 1985 (the "Confidentiality Agreement"). Such obligations shall
survive any termination of Consultant's consulting relationship.
5. Tax Consequences. Consultant acknowledges that he is obligated to
report as income all compensation received by Consultant pursuant to this
Agreement, and Consultant acknowledges his obligation to pay all federal, state
or local income, self-employment or other taxes relating to such compensation or
any amounts realized upon exercise of Consultant's options, and any penalties or
assessments thereon. Except for the ISO to NSO stock option conversion stated in
Section 3(b), the Company gives no opinions and makes no representations with
respect to the potential or actual tax consequences or liabilities, if any,
associated with the payment of any amounts to Consultant under the terms of this
Agreement or the continued vesting of Consultant's options. Consultant assumes
sole responsibility for any tax liability that results from the payment of any
compensation described herein.
6. Term and Termination
(a) Consultant's consulting relationship may be terminated by
the Company at any time if, Consultant refuses to perform services under this
Agreement. Any such termination by the Company shall be the exclusive remedy to
which the Company may be entitled as a result of the event leading to such
termination.
(b) Notwithstanding the expiration and/or termination of this
Agreement, the provisions of Sections 4 (Confidentiality) and 7 (General) by
their terms, shall survive the expiration and/or termination of this Agreement.
7. General
(a) Entire Agreement. Except as set forth in the Separation
Agreement, this Agreement represents the entire agreement and understanding
between the Company and the Consultant concerning Consultant's consulting
relationship and the termination of Consultant's employment relationship with
the Company, and, except as specifically provided herein, supersedes and
replaces all prior agreements and understandings, written and oral, concerning
Consultant's relationship with the Company and her compensation by the Company.
Neither party has relied upon any representations or statements made by the
other party hereto which are not specifically set forth in this Agreement.
(b) Settlement of Outstanding Obligations. Consultant agrees
that this Agreement and the Separation Agreement represent settlement in full of
all outstanding obligations owed to him by the Company as a result of his
employment by the Company or his change of status, including without limitation
all obligations for current or past salary, bonus or severance payments.
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(c) Notices. Any notice or other communication required
hereunder shall be in writing and shall be delivered personally, telegraphed,
sent by facsimile transmission or sent by certified, registered or express mail,
postage prepaid. Any such notice shall be deemed given when so delivered
personally, telexed or sent by facsimile transmission to the number provided
below or, if mailed, two days after the date of deposit in the United States
mails as follows:
(i) if to the Company, to
Silicon Graphics, Inc.
2011 N. Shoreline Blvd.
Mountain View, California 94039
Attention: General Counsel
Facsimile: (415) 965-1586
(ii) if to Consultant, to:
Dr. Wei Yen
[address omitted]
Facsimile: [omitted]
(d) Waivers and Amendments. This Agreement may be amended,
terminated or extended, or the terms hereof may be waived, only by a written
instrument signed by the parties. No delay in exercising any right hereunder
shall operate as a waiver thereof, nor shall any waiver or partial exercise of a
right preclude any other or further exercise thereof or any other right.
(e) Governing Law. This Agreement is entered into and governed
by the laws of the State of California.
(f) Assignment and Assumption. This Agreement and its rights,
together with its obligations hereunder, shall be assumed by the successors in
interest of the Company in connection with any sale, transfer or other
disposition of all or substantially all of its assets or business, whether by
merger, consolidation or otherwise. Such successor or assignee to the business
or assets shall be bound by the terms and provisions of this Agreement.
8. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or on behalf
of the parties hereto. The parties acknowledge that:
(a) They have carefully read this Agreement;
(b) They have been advised and represented in the preparation,
negotiation, review and execution of this Agreement by legal counsel of their
own choice;
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(c) They understand the scope, terms, consequences and effects
of this Agreement; and
(d) They are fully aware of the legal and binding effect of
this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date set forth below.
Dated: March 5, 1996.
Dr. Wei Yen, an individual
/s/ Wei Yen
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SILICON GRAPHICS, INC.
By: /s/ Kenneth L. Coleman
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Its: Senior Vice President, Administration
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