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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(Mark One)
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
For the fiscal year ended June 30, 1994.
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 . For the transition period from to
.
Commission File Number 1-10441
SILICON GRAPHICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-2789662
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
2011 North Shoreline Boulevard, Mountain View, California 94043-1389
(Address of principal executive offices and zip code)
Registrant's telephone number, including area code: (415) 960-1980
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED:
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Common Stock, $0.001 par value New York Stock Exchange
Preferred Share Purchase Rights New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ X ]
The aggregate market value of the registrant's voting stock held by non-
affiliates of the registrant, based upon the closing sale price of the Common
Stock on September 2, 1994 on the New York Stock Exchange as reported in The
Wall Street Journal, was approximately $3,098 million. Shares of voting stock
held by each executive officer and director and by each person who owns 5% or
more of any class of registrant's voting stock have been excluded in that such
persons may be deemed to be affiliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.
AS OF SEPTEMBER 2, 1994, THE REGISTRANT HAD OUTSTANDING 141,104,197 SHARES OF
COMMON STOCK.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the following documents are incorporated by reference to this
Form 10-K Report: (1) Proxy Statement for registrant's Annual Meeting of
Stockholders to be held November 1, 1994 (Part III), and (2) registrant's
Annual Report to Stockholders for the fiscal year ended June 30, 1994
(Parts I, II and IV).
PART I
ITEM 1. BUSINESS
GENERAL
Silicon Graphics, Inc. (the "Company") designs and supplies a family of
workstation, server and supercomputer systems, incorporating interactive three-
dimensional ("3D") graphics, digital media and multiprocessing supercomputing
technologies. The workstation products are available in desktop and deskside
configurations, and are used primarily by technical, scientific and creative
professionals to simulate, analyze, develop and display complex 3D objects and
phenomena. The Company has, over the last ten years, been a pioneer in the 3D
graphics field, and continues to be a leader in workstation graphics technology.
The Company's marketing and development efforts have, in the past, focused
largely on the technical computing community, including engineers, scientists,
designers, simulation specialists, animators and others who deal with complex
visualization problems. In the last several years, the Company has evolved its
product offering into a range of computer systems and associated software
products designed to meet the broad scope of computing, visualization,
networking and file management requirements of its targeted customers. In
fiscal 1993, the Company introduced a comprehensive family of deskside,
scalable, single and symmetric multi-processor network resource servers.
These server products are targeted at the technical and commercial markets, for
use as print and entry-level file servers in low-end configurations, and
workgroup and enterprise transaction processing and compute servers in mid-range
and high-end configurations. In July 1994, the Company introduced its
supercomputing servers, targeted at compute-intensive technical and scientific
applications. The Company's family of advanced graphics supercomputers,
introduced in fiscal 1993, was also enhanced in July 1994 by the introduction of
new high-end models. The Company also places considerable emphasis on
two-dimensional graphics performance and digital media in its product offerings,
including in its targeted markets the pre-press, publishing, documentation, and
telecommunications industries.
During fiscal 1994, the Company has sought to extend the reach of its core
technologies by forging alliances with entertainment industry leaders and other
companies at the forefront of the developing market for interactive computing.
Among the Company's partners in these alliances are Time Warner Cable, Nintendo
Co., Ltd., Walt Disney Company, AT&T Corp. and NTT Corporation.
MIPS Technologies, Inc. ("MTI"), a wholly-owned subsidiary of the Company,
designs, develops and licenses advanced reduced instruction set computing (RISC)
processors and microprocessors. MTI was established in June 1992, following the
merger into the Company of MIPS Computer Systems, Inc. The merger was the
culmination of a long technology relationship between the two companies dating
to 1986, when the Company selected the MIPS-R- RISC architecture and
microprocessor design to be the focus for its systems development effort. The
Company, through MTI, is a leading supplier of RISC microprocessor technology
for the computer system and embedded control markets. MTI has the dual
objectives of continuing the rapid development of innovative MIPS RISC-based
microprocessor technologies and the propagation of the MIPS RISC architecture as
an industry standard. The Company and MTI are working together to ensure that
the MIPS RISC architecture remains open, accessible and competitive, and are
exploring ways to combine the MIPS RISC architecture with the Company's digital
media technology in multimedia architectures suitable for consumer electronics
products.
PRINCIPAL PRODUCTS
The Company's graphics computer systems range from the Indigo-R- family of
desktop workstations, including the Indy-TM- and Indigo(2)-TM-, to the Onyx-TM-
and POWER Onyx-TM- systems, a family of advanced graphics supercomputers. In
addition, the Company's Challenge-TM- and POWER Challenge-TM- family ranges from
entry-level single processor servers to enterprise-wide symmetric
multiprocessing supercomputers. The Company's products all use the MIPS RISC
microprocessors developed by MTI, and generally are binary-compatible, meaning
that software applications run without modification across the entire product
line. The Company's workstations include display, graphics and computational
capabilities. Server models are general purpose computers with the same
computational performance of their workstation counterparts, but without the
graphics capabilities. Depending upon their application, servers may also have
higher levels of data storage and/or communications capabilities than comparable
workstations. The high-end multiprocessor supercomputer systems are meant to
replace or augment aging mainframe computers in compute intensive engineering,
animation and scientific environments.
All the Company's workstations, servers and supercomputer systems use the
Company's IRIX-TM- operating system software. IRIX is the Company's enhanced
version of the System V Release 4 (SVR4) UNIX-R- operating system. The
Company's latest version, IRIX 5.2, includes the Indigo Magic-TM- user
environment, a complete family of tools including desktop utilities, digital
media applications and collaborative tools. Among the key benefits of Indigo
Magic are an intuitive iconic interface supporting "drag and drop" interaction,
a file manager that provides graphical navigation through the file system and
directories, on-line help, sophisticated digital media tools that can be
used to create anything from basic slides to interactive presentations with
integrated audio, video and 3D graphics, and support for InPerson-TM-, the
Company's low cost, desktop video conferencing software product.
The Company develops only a very limited set of applications software, and
obtains licenses to and markets certain utility software packages, including
database, computational, desktop publishing, modeling and rendering products.
For other requirements, customers using the Company's workstations must either
develop or license from a third party the software necessary to address their
needs. The Company believes that there currently are approximately 1,900
registered application software programs offered for use on its systems.
THE INDIGO SERIES
The Indigo family of desktop workstations, comprised of the Indy, IRIS
Indigo and Indigo(2) systems, combine key elements of workgroup collaboration,
interactive media and computing at a range of prices and performance. The
versatile desktop systems in this family can be used for tasks as diverse as
manipulating 3D models for computer-aided design (CAD), crunching numbers for
chemistry and geographic information systems applications, or functioning as a
tool for video editing, animation rendering, technical publishing and software
development.
THE INDY FAMILY The Indy desktop workstation, originally introduced in
July 1993, features advanced 3D graphics and imaging and the Indy Cam-TM-, its
own digital color video camera. The Indy was developed as a low-price, high-
performance workstation with real-time video capability, interactive and
professional quality graphics, audio and imaging capabilities. The Indy has
significant appeal in markets such as mechanical CAD, chemistry, color
publishing, film and video, software development, education and media
authoring. The Indy systems are available with either the R4600-TM- or 150mhz
R4400-TM- microprocessor and range in price from approximately $6,000 to
$28,500.(*)
THE IRIS INDIGO FAMILY The IRIS Indigo-R- workstation, originally
introduced in July 1991, was the first RISC PC with integrated digital media,
combining the power of workstations with the ease-of-use, standards and
affordability of personal computers. The IRIS Indigo workstations are
expandable and upgradable and were enhanced in January 1992 by the addition of
three models, including the high-end Indigo Elan-TM-, which provide higher
levels of graphics performance. Among the primary markets addressed by the IRIS
Indigo are the mechanical CAD and computer-aided engineering, electronic design
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* These and all other prices quoted are September 1994 list prices, which are
subject to discount based on volume and other factors.
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automation, computer-aided software engineering (CASE), geo-science, life
science, management support and publishing markets. The IRIS Indigo systems
incorporate either an R4000-R- or R4400 microprocessor at prices ranging from
approximately $14,500 to $40,000.
THE INDIGO(2) FAMILY The Indigo(2) family of high-performance desktop
workstations was originally introduced in January 1993 and is available with the
XL, XZ or Extreme graphics subsystems. The entry-level Indigo(2) XL system is
designed for use in a wide range of 2D graphics applications and supports 3D
graphics through a software Z buffer and host-based geometry calculations. The
mid-level Indigo(2) XZ system is designed for 3D solids modeling appropriate for
professional engineers and scientists. The flagship Indigo(2) Extreme-TM-
system is optimized for applications in solids modeling, mechanical CAD, 3D
visualization, animation and architectural design. The Indigo(2) XZ and
Indigo(2) Extreme systems feature two and eight Geometry Engine-R- graphics
coprocessors, respectively. In addition, the Galileo Video-TM- option board and
Cosmo Compress-TM- enhance the performance of the Indigo(2) for professional
audio and video production. Indigo(2) systems incorporate either an R4000 or
R4400 microprocessor and range in price from approximately $21,500 to $44,000.
THE ONYX SERIES
ONYX The Onyx family of graphics supercomputers, originally introduced in
January 1993, uses multiple microprocessors and sophisticated graphics
subsystems to handle the most demanding visual computing tasks. Graphics
subsystems available with the Onyx systems range from the Extreme through the
VTX-TM- to the Reality Engine(2)-TM- graphics subsystems. The Onyx and POWER
Onyx are well-suited for applications such as earth and environmental sciences,
visual simulation, medical imaging and chemistry, advanced design, interactive
entertainment, digital film and video production, scientific visualization,
computational chemistry, oil and gas, and other image processing applications.
The Onyx graphics supercomputers are based on the R4400 64-bit microprocessor
and range from the two-processor Onyx Extreme workstations, priced from
approximately $94,000, to the 24-processor Reality Engine(2) rack-mounted
systems, priced from approximately $644,000.
POWER ONYX The POWER Onyx, introduced in July 1994, provides researchers
and scientists with an affordable, integrated visual supercomputer. The POWER
Onyx combines supercomputing performance and high-end graphics capabilities
suited for customers in industries such as computational chemistry, oil & gas
research, molecular modeling, global weather modeling, structural dynamics,
fluid dynamics, image processing and animation. The POWER Onyx is based on the
64-bit MIPS R8000-TM- microprocessor, optimized for floating-point intensive
applications, and is available with the Company's Extreme or Reality Engine(2)
graphics subsystems. The POWER Onyx is available in configurations from one to
twelve processors, ranging in price from the uniprocessor POWER Onyx Extreme
deskside systems starting at approximately $89,000 to the twelve processor
Reality Engine(2) rack-mounted systems priced from approximately $704,000.
THE CHALLENGE SERIES
CHALLENGE The Challenge series of network resource servers originally was
introduced in January 1993 and was enhanced by the introduction of two new
systems in July 1994. The Challenge product family currently includes four
models that span a range of capabilities, each of which is optimized for a
specific distributed computing environment. The entry-level Challenge S server
is a single-processor system designed for use in small to mid-size workgroups
and is ideal for CAD, storage management, digital distribution and backbone
serving applications. The Challenge S is available at prices ranging from
$12,250 to $16,600. The Challenge DM is focused on the needs of the database,
digital media, real time and file serving markets. Challenge DM systems are
scalable to up to four R4400 microprocessors at prices ranging from $45,000 to
$75,000. At the midpoint is the Challenge L, an expandable deskside
resource server designed to connect large departments of workstation users. The
Challenge L can be configured with two to twelve R4400 microprocessors at prices
ranging from
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$79,000 to $279,000. At the high end is the Challenge XL, designed to support
enterprise-wide distributed computing environments. The Challenge XL is
configurable with from two to thirty-six R4400 microprocessors and is available
at prices ranging from $129,000 to $809,000.
POWER CHALLENGE The POWER Challenge family of supercomputing servers,
introduced in July 1994, combines low-cost, high-performance CMOS RISC
technology, advanced parallel system architecture and a simple shared-memory
programming model. The POWER Challenge can be configured with one to eighteen
R8000 microprocessors. Depending on configuration and memory requirements,
prices range from approximately $69,000 for a single processor to $309,000 for
a six-processor POWER Challenge L deskside server and from approximately
$179,000 for a two-processor to $899,000 for an eighteen-processor POWER
Challenge XL rack-mounted system.
MICROPROCESSORS
All of the Company's system products incorporate the MIPS RISC
microprocessor architecture. The designs of the Company's MIPS RISC
microprocessors incorporate a general purpose architecture and instruction set
designed for high performance over a wide range of computer applications. The
MIPS RISC microprocessor designs make efficient use of instruction "pipelining"
techniques and proprietary compilers, allowing significant performance gains to
be realized by optimizing the tradeoff between compiler and microprocessor
functions.
The Company's MIPS RISC microprocessor family currently consists of several
independent but binary-compatible chipsets, including the R3000A complementary
metal oxide semiconductor ("CMOS") chipset, comprised of the R3000A central
processing unit ("CPU") and R3010A floating point unit ("FPU"); and the R4000
CMOS single chip microprocessor, which incorporates the CPU, FPU and primary
cache RAM into a single high-density chip. The R4400 microprocessor, introduced
in November 1992, is a 64-bit, single chip microprocessor that incorporates
enhancements to, and greater speed than, the R4000. The R4200 microprocessor,
designed for the portable computer and consumer markets, and the R8000
processor, designed for supercomputer applications, were introduced in mid-1994.
Although the Company develops RISC microprocessors and related devices of
its own design, it licenses the manufacture and sale of these chips to selected
semiconductor manufacturing companies (the "Semiconductor Partners"). The
Company does not itself manufacture microprocessors. The Company's current
Semiconductor Partners are Integrated Device Technology, Inc.; LSI Logic
Corporation; NEC Corporation; NKK Corporation; Siemens AG and Toshiba
Corporation. Each Semiconductor Partner paid an initial license fee at the
beginning of the license period and has committed to pay ongoing, per unit
royalties which are based upon microprocessor net sales. Sales by the
Semiconductor Partners are principally to the computer systems and embedded
control markets, for use in such products as disk drives, laser printers and X-
terminals. Computer systems companies that have adopted the MIPS architecture
include Acer Technologies, Deskstation Technology, Pyramid Technology, Siemens
Nixdorf AG, Sony Corporation, Tandem Computers Incorporated, NEC Technologies,
Inc., NeTpower Inc. and Tektronix, Inc. The Company and its Semiconductor
Partners generally have jointly funded the development of new MIPS RISC
microprocessors, including the R4000 and the R4400 introduced in fiscal 1993 and
the R4200 and R8000 processors introduced in fiscal 1994.
NEW VENTURES
The Company has extended its reach into the developing markets for interactive
computing through new ventures, including alliances with companies like Time
Warner Cable, Nintendo, Disney and AT&T Corp. None of these ventures accounted
for significant product revenues in fiscal 1994, and each is subject to a
number of risks and uncertainties. See "Factors That May Affect Future
Results" below.
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TIME WARNER CABLE'S ORLANDO PROJECT
The Company is developing the core software technologies, including
operating system software and key applications such as video-on-demand software,
for Time Warner Cable's interactive digital cable television trial in Orlando,
Florida. Scheduled to be deployed to 4,000 homes in the Orlando area, the
technology will provide consumers with access to such services as video-on-
demand, educational resources, interactive video games and home shopping. The
"media servers" (computers from which movies and other content may be retrieved)
for the trial will be provided by the Company, and the home communications
devices will incorporate MIPS microprocessors. This project, which is the most
ambitious interactive television trial announced to date, has helped to position
the Company as a technology leader in this emerging market.
NINTENDO'S ULTRA 64 VIDEO ENTERTAINMENT SYSTEM
The Company also is developing for Nintendo Co., Ltd. the core
technological components of Ultra 64-TM-, the next generation, 64-bit
Nintendo -R- video entertainment system. These components include the central
processing unit, a media co-processor, operating system software and multimedia
libraries. This arrangement, under which Nintendo is funding the Company's
development work and will pay the Company royalties, should enable the Company
to extend its core technologies to a high volume consumer electronics market.
By licensing these technologies to Nintendo, the Company hopes to address this
market in a way that benefits from Nintendo's strengths in low-cost, high-volume
manufacturing, and mass consumer distribution and marketing. If successfully
marketed by Nintendo, the Ultra 64 system also will create high volume markets
for the MIPS microprocessors on which it will be based, again helping to promote
the preservation and expansion of the MIPS RISC architecture on which the
Company's core computer system products are based.
WALT DISNEY IMAGINEERING LABS AT EPCOT CENTER
The Company's work with the Walt Disney Company provided the technology
behind the Walt Disney Imagineering Labs, which opened in July 1994 at Epcot
Center in Orlando, Florida. In a new exhibit combining the Company's visual
computing expertise with the creative talents of the Walt Disney Imagineering
team, visitors are able to view, interact with and actually "fly" through scenes
from Disney's animated film ALADDIN. This example illustrates the avenues the
Company is exploring to take its technology into the realm of location-based
entertainment.
INTERACTIVE DIGITAL SOLUTIONS, AN AT&T AND SILICON GRAPHICS COMPANY
In June 1994, the Company and AT&T agreed to form Interactive Digital
Solutions, a new venture created to develop and deliver complete interactive
video solutions, based on the Company's video and graphics technology and AT&T's
networking and integration expertise, to telephone company networks and cable TV
systems, and eventually to large private networks. The turnkey systems that IDS
intends to provide include media servers, network operating system software,
selected applications programs and integration services. The Company brings its
core competency in media servers and growing operating system and application
software expertise to the venture, and AT&T's contributions include its advanced
switching and networking expertise, strong relationships with the target public
network operator customer base (primarily the regional Bell operating companies
and cable television multiple service operators), and its system integration and
support capabilities.
NTT CORPORATION
In June 1994, the Company entered into a letter of intent with Nippon
Telegraph and Telephone Corporation (NTT) providing for the companies to
collaborate in testing interactive digital networks. The arrangement gives the
Company the opportunity to play a key role in helping to establish the
architecture for the information superhighway in Japan and to supply media
servers for an NTT trial.
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SILICON STUDIO, INC.
In July 1994, the Company announced the formation of Silicon Studio, Inc.,
a wholly-owned subsidiary created to enable applications development for
emerging interactive digital media markets. Focusing on the convergence of
computing and consumer technologies, Silicon Studio will work with third-party
developers, content creators and distributors to extend the Company's already
established role in media authoring markets, including film and video,
publishing and the expanding areas of interactive television, next-generation
video games and location-based entertainment.
MARKETING, SALES AND DISTRIBUTION
The Company sells its products principally to end users, value added
resellers ("VARs"), value added dealers ("VADs"), original equipment
manufacturers ("OEMs"), government customers, and systems integrators worldwide.
- The Company's end-user customers include large manufacturing companies
such as automotive, aerospace and pharmaceutical companies; government
contractors; consumer product companies; creative professionals in the
areas of animation, special effects, graphics arts, pre-press and
publishing; and universities and research laboratories.
- VARs are software companies that develop or customize their
proprietary software specifically for use with the special graphics
hardware of the Company's workstations. VARs purchase workstations
from the Company, incorporate their applications software and resell
the systems to end users.
- VADs are typically direct sales organizations that sell primarily into
a single vertical market and incorporate appropriate specialized
third-party software with the Company's hardware for sale to their
customers.
- OEM customers generally are computer systems vendors that customize
applications software for use on the Company's workstations and sell
turnkey systems under the OEM's product name. OEMs also provide
independent marketing, service and support programs to their
customers. The Company's principal OEMs include Tandem Computers
Incorporated and Siemens Nixdorf AG.
- Government customers use the Company's products in a variety of
application areas, including general scientific, research and visual
simulation.
- The Company also sells its products to systems integrators to be
included in systems customized for use by the federal government and
large commercial clients.
The Company sells and supports its products through its direct sales
organization in the United States and Canada, and through its direct sales force
and distributors in Europe and the Middle East, Latin America, the South Pacific
and the Far East. As of September 1994, the Company had 25 direct sales
subsidiaries, primarily serving major, more established international markets in
29 countries, and 31 distributors, primarily serving smaller or less established
international markets.
Information with respect to international operations and export sales may
be found on page 44 of the 1994 Annual Report to Stockholders, which is
incorporated herein by reference. See also "Factors That May Affect Future
Results" below. Although no customer accounted for 10% of more of the Company's
total revenues for fiscal 1994, 1993 or 1992, a significant reduction or delay
in sales to major customers could adversely affect the Company's operating
results.
CUSTOMER SERVICE AND SUPPORT
The Company believes that the quality and reliability of its system
products and the ongoing support of such products are important elements of its
competitive strategy. The Company's customer service organization includes
field service engineers, field product and applications specialists, product
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support engineers, training specialists and administrative support personnel.
In addition, the Company provides customer education through regularly scheduled
courses in system software administration, applications programming and hardware
maintenance. The Company provides local customer support from its regional
sales and service offices located in North America, Western Europe and the
Pacific Rim, with spare parts inventory stored at each location. Also, foreign
distributors provide training and support for products sold to local customers.
The Company typically provides a standard "return to factory" hardware
warranty against defects in materials and workmanship. The warranty period for
the Company's products generally is 90 days from the date of shipment, although
the Indy system has a one year warranty, and some international sales of other
products are made with warranties of up to one year.
RESEARCH AND DEVELOPMENT
The Company's research and development program is directed principally
toward maintaining and enhancing the Company's competitive position through
incorporating the latest advances in microprocessor, hardware, software and
networking technologies. This effort is focused specifically on developing and
enhancing its MIPS RISC microprocessors, graphics subsystems, VLSI technology,
compiler software, operating system hardware and software, and development
tools. Simultaneously, the Company seeks to develop new ways in which to
increase product reliability, reduce manufacturing costs and improve product
development lead times.
During fiscal 1994, 1993 and 1992, the Company spent approximately $177
million, $137 million and $128 million, respectively, on research and
development. Those amounts represented 12.0%, 12.5% and 14.8% , respectively,
of revenues.
MANUFACTURING
The Company's manufacturing operations primarily involve assembling high
level subassemblies and systems and testing major purchased subassemblies. All
products are subjected to substantial environmental stress and electronic
testing prior to shipment to customers. The Company primarily manufactures and
ships its products from its main facility in Mountain View, California. The
Company also has a European manufacturing and support center near Neuchatel,
Switzerland and a manufacturing facility in Kawasaki, Japan.
The Company continually evaluates the allocation of manufacturing
activities among the Company's own operations and those of suppliers and
subcontractors. Such allocation may be affected by fluctuations in the volume
of business, geopolitical, economic and technological developments and other
factors.
The Company attempts to utilize standard parts and components available
from multiple vendors rather than to integrate its manufacturing operations
vertically. The Company believes that there are a number of competent vendors
for most of the parts and components used in its system products. In certain
circumstances, despite the availability of multiple sources, the Company may
select a single source in order to maintain quality or price control or to
develop a more strategic relationship with the supplier.
Reliance on single source vendors involves several risks, including the
possibility of a shortage of certain key components that meet the Company's
product specifications and reduced control over delivery schedules,
manufacturing yields, quality and costs. Components for which the Company
currently does not have multiple sources include certain application-specific
integrated circuits ("ASICs"). These are currently obtained from LSI Logic
Corporation and VLSI Technology, Inc. The Company also has single sources for
certain peripherals, communications controllers and power supplies and the
plastic cabinets used across the Company's system products. The Company
believes that, in
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most of these cases, alternative sources of supply could be developed over a
period of time. However, a reduction or interruption in supply or a significant
increase in the price of one or more single or limited source components would,
at least in the short term, adversely affect the Company's operating results.
Certain components used in the Company's products, including the R4000,
R4400, R4600 and R8000 microprocessors, floating point coprocessors, and certain
memory circuits, are available only from limited sources. In particular, the
Company is dependent on a limited number of semiconductor manufacturers with
state of the art fabrication facilities. Additionally, the Company purchases
certain parts from foreign suppliers, principally Japanese. The prices of parts
have been and may be affected significantly by such factors as protectionist
measures and changes in currency exchange rates between the United States and
other countries. In addition, changes in the availability of certain integrated
circuit memory chips (DRAMs, SRAMs and VRAMs) have caused, and in the future may
cause, significant changes in their prices.
COMPETITION
The computer industry is highly competitive and is characterized by rapid
technological advances in both hardware and software development. These
advances result in frequent new product introductions, short product life cycles
and increased new product capabilities, typically representing significant
price/performance improvements. The principal competitive factors in the
Company's market are product features, price/performance, networking
capabilities, product quality and reliability, ease of use, capabilities of the
system software, availability of applications software, customer support,
product availability, corporate reputation and price. The strong competition
faced throughout the Company's product line can result in significant
discounting from list price.
The Company's principal competition is from other workstation and computer
system manufacturers and, to a lesser extent, from graphics subsystem and
terminal vendors and graphics integrated circuit manufacturers. The principal
workstation and computer manufacturers that compete in the Company's markets are
Digital Equipment Corporation ("DEC"), Hewlett Packard Company ("HP"), IBM and
Sun Microsystems, Inc. ("Sun"). In the supercomputer market, the Company faces
competition from these companies as well as Cray Research, Inc. and Convex
Computer Corporation.
The Company's MIPS RISC microprocessor architecture and technology compete
directly with microprocessor products offered by manufacturers of other
microprocessor designs, in particular those offered by IBM, DEC, HP, Intel
Corporation, Motorola, Inc. and Sun. Although the Company believes its RISC
architecture offers advantages over these other designs, many of these
architectures have a larger installed base and wider availability of application
software, which may adversely affect the adoption of the Company's RISC
architecture. In particular, DEC and a joint venture among IBM, Motorola and
Apple Computer, Inc. have in the past year devoted substantial resources to
promote the adoption of the Alpha AXP-TM- and Power PC-TM- microprocessors,
which are based on RISC architectures, and Intel continues to invest heavily in
its CISC-based X86 architecture, including the Pentium-TM- microprocessor.
FACTORS THAT MAY AFFECT FUTURE RESULTS
As is true for technology companies generally, Silicon Graphics operates in
a rapidly changing environment that involves a number of risks, some of which
are beyond the Company's control. The following discussion highlights some of
these risks.
PERIOD TO PERIOD FLUCTUATIONS
The Company has experienced substantial revenue growth in recent years, and
it plans its operating expenses, many of which are relatively fixed in the short
term, on the basis that its revenues will continue to grow. As a result it may
not be possible for management to quickly adjust expense levels
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in response to revenue shortfalls. Further, because of short delivery cycles
the Company generally does not have a large order backlog, which makes the
forecasting of revenue inherently less certain. This uncertainty is compounded
because each quarter's revenue results predominantly from orders received and
shipments made during the last month of the quarter, with a disproportionate
amount occurring in the latter half of that month. This pattern sharply limits
the Company's ability to react to revenue shortfalls within a particular
quarter. Accordingly, even relatively minor shipment disruptions, which could
result from factors such as supply constraints, delays in the availability of
new products, an unanticipated change in product mix, transit interruptions or
natural disasters, may cause a particular period's results to be substantially
below expectations.
The Company's results have followed a seasonal pattern, with relatively
strong second and fourth fiscal quarters and weaker first and third fiscal
quarters, reflecting the buying patterns of the Company's customers. A variety
of other factors may cause period-to-period fluctuations in revenues and
profitability, including changes in the mix of high-end and low-end products,
the mix of configurations within a product line, the geographic mix of sales,
and the percentage of revenues derived from service or non-recurring engineering
revenue (NRE) during any fiscal period.
Additionally, because nearly half of the Company's revenue is derived from
sales outside the United States, and many key components for its products are
produced outside the United States, the Company's results could be negatively
affected by such factors as changes in foreign currency exchange rates, trade
protection measures, generally longer accounts receivable collection patterns,
and changes in regional or worldwide economic or political conditions. The
Company's sales to foreign customers are subject to export regulations, with
sales of some of the Company's high-end products requiring clearance and export
licenses from the U.S. Department of Commerce. The Company's export sales would
be adversely affected if such regulations were tightened, or if they are not
modified over time to reflect the increasing performance of the Company's
products.
Sales in foreign countries are generally priced in local currencies and
therefore are subject to the effects of currency exchange fluctuations. Changes
in foreign currency exchange rates can have either a positive or negative effect
on revenue and/or income in any given period. The Company attempts to reduce
the impact of currency fluctuations on net income primarily through the use of
forward exchange contracts and foreign currency options that hedge foreign
currency denominated receivables between the parent and its international
subsidiaries. The Company has generally not hedged capital expenditures,
investments in subsidiaries, inventory purchases or the anticipated sales or net
income of its international subsidiaries.
The Company's stock price, like that of other technology companies, is
subject to significant volatility. If revenues or earnings in any quarter fail
to meet expectations of the investment community, there could be an immediate
impact on the Company's stock price. In addition, the Company's stock price may
be affected by broader market trends that may be unrelated to the Company's
performance.
PRODUCT DEVELOPMENT AND INTRODUCTION
The Company has achieved revenue growth and profitability that are well
above average within the computer industry because it has been able to develop
and rapidly bring to volume production highly differentiated, technologically
complex and innovative products. The Company's future results depend on its
ability to sustain this competitive advantage. As in prior years, the Company
plans to introduce a number of new products in fiscal 1995, including products
that will replace products in the Company's current product offering. A number
of risks are inherent in this process.
The process of developing new technology and incorporating it in the
Company's products is increasingly complex and uncertain, which raises the
potential for delays in new product introduction. The introduction of a new
computer system requires close collaboration and continued technological
advancement involving multiple hardware and software design and manufacturing
teams within the
-9-
Company as well as teams at outside suppliers of key components such as
semiconductor and storage products. The failure of any one of these elements
could cause the Company's new products to fail to meet specifications or to miss
the aggressive timetables that the Company establishes. As the variety and
complexity of the Company's product offering increases, the process of planning
production and inventory levels also becomes more difficult.
The Company generally has derived a substantial portion of its revenues in
any fiscal period from its most recently introduced products. During fiscal
1994, the Company introduced new products at both the low-end and high-end of
its product line, most of which have shipped in volume. The Company's results
could be adversely affected by such factors as development or manufacturing
delays, variations in product costs, and delays in customer purchases of
existing products in anticipation of the introduction of new products.
The Company's customers require applications software that addresses their
needs. The Company develops very limited applications software, and thus relies
on the availability of key third-party applications software addressing a wide
range of customer requirements. The Company actively manages programs to
promote the development of such applications, but there can be no assurance that
all competitively important applications will be available for the Company's
systems.
DEVELOPMENT AND ACCEPTANCE OF MIPS RISC ARCHITECTURE
All of the Company's system products incorporate microprocessors based upon
the Company's MIPS RISC microprocessor architecture. The Company licenses the
manufacturing and distribution rights to these microprocessors to selected
semiconductor manufacturing companies (the "Semiconductor Partners"). The
Company and its Semiconductor Partners generally have jointly funded the
development of new MIPS RISC microprocessors, including the R4200 and R8000
processors introduced in fiscal 1994. Changes in the timing, level or
availability of such funding could adversely affect the continued development of
the MIPS RISC architecture or increase the portion of the development budget
that is borne by the Company. The Company believes that the continued
development and broad acceptance of the MIPS architecture are critical to its
future success.
NEW VENTURES
During fiscal 1993 and 1994, the Company entered into several ventures with
other companies to address new and emerging markets, including ventures with
Time-Warner, Nintendo and AT&T. While the Company believes that these new
ventures are strategically important, there are substantial uncertainties
associated with the development of new products and technologies for evolving
markets. The success of these ventures will be determined not only by the
Company's efforts, but also by those of its venture partners. Initial
timetables for the development and introduction of new technologies, products or
services may not be achieved, and price/performance targets may not prove
feasible. External factors, such as the development of competitive alternatives
or government regulation, may cause new markets to evolve in an unanticipated
direction.
COMPETITION
The computer industry is highly competitive and is characterized by rapid
technological advances in both hardware and software development, which result
in steadily improving price/performance and shortening product life cycles. As
the segments in which the Company operates continue to grow faster than the
industry as a whole, the Company is experiencing an increase in competition, and
it expects this trend to continue. Many of the Company's competitors have
substantially greater technical, marketing and financial resources than the
Company, as well as a larger installed base of customers and a wider range of
general purpose applications software available for their platforms. The strong
competition faced throughout the Company's product line can result in
significant discounting of sales prices which would decrease the Company's gross
margins.
-10-
BUSINESS DISRUPTION
The Company's corporate headquarters, including its research and
development operations and most of its manufacturing facilities, are located in
the Silicon Valley area of Northern California, a region known for seismic
activity. Operating results could be materially affected by a significant
earthquake. The Company is predominantly self-insured for losses and business
interruptions of this kind.
PROPRIETARY RIGHTS AND LICENSES
The Company has been granted numerous patents, has a number of patent
applications pending, and will continue to seek patent coverage for its
inventions in both the United States and foreign countries. The Company also
has applied for and holds various trademark registrations in the United States
and in selected foreign countries. The Company will continue to seek protection
for its inventions, trademarks, maskworks and copyrights where appropriate.
As is customary in its industry, the Company licenses from third parties a
wide range of software for its internal use and for the use of its customers.
The Company licenses the UNIX operating system on a non-exclusive basis from
Novell, Inc., and sublicenses it to its customers.
The Company's ability to compete may be affected by its ability to protect
proprietary information and to obtain necessary licenses on commercially
reasonable terms. The extent to which U.S. and international intellectual
property laws protect the Company's products, and the enforceability of end-user
license agreements, have not been fully determined, and the computer industry
has seen a substantial increase in litigation with respect to intellectual
property matters. Such litigation or changes in the interpretation of
intellectual property laws could expand or reduce the extent to which the
Company or its competitors are able to protect their intellectual property or
require changes in the design of products which could have an adverse impact on
the Company. There can be no assurance that the Company will not be made a
party to litigation regarding intellectual property matters in the future. See
"Legal Proceedings."
EMPLOYEES
As of June 30, 1994, the Company had approximately 4,400 full-time
employees. The Company's future success will depend, in part, on its ability to
continue to attract, retain and motivate highly qualified technical, marketing
and management personnel, who are in great demand. The Company has never had a
work stoppage, and no employees are represented by a labor union. The Company
believes that its employee relations are good.
-11-
ITEM 2. PROPERTIES
The Company conducts its worldwide operations using a combination of leased
and owned facilities. The Company believes that, while it currently has
sufficient facilities to conduct its operations during fiscal 1995, it will
continue to acquire both leased and owned facilities throughout the world as its
business requires. The Company's corporate offices and its primary research and
development and manufacturing operations are located in Mountain View,
California. The Company leases eleven adjacent buildings comprising a total of
approximately 702,000 square feet under written leases terminating during 2000
and 2001. The Company also leases eight other buildings near its Mountain View
headquarters, comprising approximately 304,000 square feet. The Company,
through a wholly-owned subsidiary, also owns 7.5 acres of undeveloped land near
its Mountain View headquarters, on which a general office facility of
approximately 112,000 square feet is being constructed to be leased to the
Company for occupancy in fiscal 1995.
The Company's European manufacturing and support center near Neuchatel,
Switzerland is located in a facility owned by the Company, consisting of
approximately 77,800 square feet. The Company's leased manufacturing facility
in Kawasaki, Japan consists of 9,500 square feet.
The Company also leases sales, service and administrative offices
worldwide.
ITEM 3. LEGAL PROCEEDINGS
On March 11, 1992, the Company entered into an agreement with MIPS,
pursuant to which the Company has acquired MIPS through the merger of a
subsidiary of the Company into MIPS. On March 17, 1992, a putative class action
lawsuit entitled DIANE PROVENZ AND AHIKIM EIZENBERG V. ROBERT C. MILLER, ET AL.
was filed in the United States District Court for the Northern District of
California. The plaintiffs purport to represent a class of all persons who
purchased MIPS' common stock between January 31, 1991 and October 9, 1991 (the
"Class Period"). Named as defendants are MIPS and certain executive officers of
MIPS. The Company is not a defendant, but is defending the case as a successor
in interest to MIPS. The complaint alleges that defendants violated various
federal securities laws and California statutes through material
misrepresentations and omissions during the Class Period. On June 27, 1994, the
Court granted defendant's motion for summary judgment as to all counts.
Plaintiffs' motion for reconsideration of the order granting summary judgment is
pending. The Company believes that it has meritorious defenses to the claims
alleged in this lawsuit and intends to continue its defense of the action
vigorously.
As is typical in the computer industry, the Company from time to time
receives communications from third parties asserting patent rights, trademarks,
copyrights or other rights covering the Company's products, designs or
processes. In some cases the Company seeks to obtain licenses from such third
parties. Although there can be no assurance that the Company will be able to
obtain these licenses or rights on commercially reasonable terms, management
believes that payment of royalties under any such license arrangements currently
under consideration would not have a material adverse effect on the Company's
financial condition.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
-12-
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Company and their ages as of September 2,
1994, are as follows:
EXECUTIVE
OFFICER
NAME AGE POSITION AND PRINCIPAL OCCUPATION SINCE
---- --- --------------------------------- -----
Edward R. McCracken 50 Chairman, Chief Executive Officer and Director 1984
Thomas A. Jermoluk 38 President, Chief Operating Officer and Director 1988
Robert R. Bishop 51 President, Silicon Graphics World Trade 1991
Corporation and Director, Silicon Graphics, Inc.
Forest Baskett 51 Senior Vice President, Research and Development 1986
and Chief Technical Officer
Kenneth L. Coleman 51 Senior Vice President, Administration 1987
Stephen Goggiano 41 Senior Vice President, Integrated Manufacturing 1989
Solutions Division
Gary L. Lauer 41 Senior Vice President, North American Field 1988
Operations
Stanley J. Meresman 47 Senior Vice President, Finance and Chief 1989
Financial Officer
Michael Ramsay 44 President, Silicon Studio, Inc. and Senior Vice 1987
President, Silicon Graphics, Inc.
Wei Yen 39 Senior Vice President, Computer Systems Group 1990
William M. Kelly 41 Vice President, Business Development, General 1994
Counsel and Secretary
Dennis P. McBride 42 Vice President, Controller 1988
Thomas J. Oswold 42 Vice President, Finance and Treasurer 1988
Tom Whiteside 41 President, MIPS Technologies, Inc. and Vice 1993
President, Silicon Graphics, Inc.
Executive officers of the Company are elected annually by the Board of
Directors and serve at the Board's discretion. Except as set forth below, all
of the officers have been associated with the Company in their present positions
for more than the past five years. There are no family relationships among any
directors or executive officers of the Company.
In 1988, Mr. Jermoluk became Vice President/General Manager, Advanced
Systems Division and, in 1991, he became Executive Vice President. He was named
Chief Operating Officer in 1992 and President in 1994.
Mr. Goggiano joined the Company in 1989 as Director of Operations, Advanced
Systems Division. In 1990, Mr. Goggiano was named Vice President/General
Manager, Operations and, in 1993 he was named Senior Vice President, Operations.
Prior to joining the Company, Mr. Goggiano was Vice President, Manufacturing for
Altos Computer Systems.
Mr. Kelly joined the Company in 1994 as Vice President, Business
Development, General Counsel and Secretary. Prior to joining the Company, Mr.
Kelly had practiced law since 1978 with the firm of Shearman & Sterling, most
recently as co-managing partner of that firm's San Francisco office.
Mr. Lauer joined the Company in 1988 as Vice President, North American
Marketing, became Vice President, North American Field Operations in 1989, and
was named Senior Vice President, North American Field Operations in 1991.
-13-
Mr. McCracken became Chairman of the Company in 1994.
Mr. Ramsay was named Vice President/General Manager, Entry Systems Division
in 1988, and became Senior Vice President/General Manager, Entry Systems
Division in 1991. In 1992, Mr. Ramsay was named Senior Vice President, Visual
Systems Group, and in 1994, became President of Silicon Studio, Inc.
Dr. Yen joined the Company in 1988 as Director of Engineering, Advanced
Systems Division. In 1990, Dr. Yen was named Vice President, Engineering,
Advanced Systems Division, and in 1992 he was named Senior Vice President,
Computer Systems Group.
Mr. Whiteside joined the Company in 1993 as the President of MIPS
Technologies, Inc. and as a Vice President of the Company. From 1988 to 1993,
Mr. Whiteside was responsible for the management of a variety of development
projects at International Business Machines Corporation, culminating in his
position as Director of RISC Microprocessor Development.
-14-
PART II
With the exception of the information specifically incorporated by
reference from the Company's 1994 Annual Report to Stockholders (the "1994
Annual Report") in Parts I, II and IV of this Form 10-K, the 1994 Annual Report
is not to be deemed filed as part of this Report.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The information required by this Item is incorporated by reference to the
first three paragraphs in the section entitled "Price Range of Common Stock" on
page 46 of the Company's 1994 Annual Report.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this Item is incorporated by reference to the
section entitled "Selected Consolidated Financial Data" on page 26 of the
Company's 1994 Annual Report.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this Item is incorporated by reference to the
section entitled "Management's Discussion and Analysis" on pages 20 through 25
of the Company's 1994 Annual Report.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this Item is incorporated by reference to the
consolidated financial statements and notes thereto and to the section entitled
"Quarterly Data" on pages 27 through 45 of the Company's 1994 Annual Report.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
-15-
PART III
Certain information required by Part III is omitted from this Report in
that the Company has filed its definitive proxy statement pursuant to Regulation
14A (the "1994 Proxy Statement") not later than 120 days after the end of the
fiscal year covered by this Report, and certain information included therein is
incorporated herein by reference.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning the Company's directors required by this Item is
incorporated by reference to pages 3 and 4 of the 1994 Proxy Statement under
the heading "Proposal No. 1 -- Election of Directors-Directors and Nominees for
Director".
The information concerning executive officers required by this Item is
incorporated by reference to the section in Part I hereof entitled "Executive
Officers of the Registrant."
The information concerning compliance with Section 16(a) of the Securities
Exchange Act of 1934, as amended, required by this Item is incorporated by
reference to page 9 of the 1994 Proxy Statement under the heading "Executive
Officer Compensation - Compliance with Section 16(a) of the Exchange Act."
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference to pages
4 and 5 under the heading "Proposal No. 1 -- Election of Directors-Director
Compensation", pages 8 and 9 under the headings "Executive Officer
Compensation - Summary Compensation Table", " - Option Grants in Fiscal 1994"
and " - Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values", pages 11 and 12 under the heading "Report of the Compensation
and Human Resources Committee of the Board of Directors", and page 13 under the
heading "Company Stock Price Performance Graph" of the 1994 Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference to page
1 of the 1994 Proxy Statement under the heading "Information Concerning
Solicitation and Voting - Record Date and Principal Share Ownership" and page 7
of the 1994 Proxy Statement under the heading "Other Information - Security
Ownership of Management".
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by reference to page
10 of the 1994 Proxy Statement under the heading "Certain Transactions".
-16-
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as a part of this Report:
1. FINANCIAL STATEMENTS. The following consolidated financial
statements and supplementary information of Silicon Graphics, Inc. and Report of
Independent Auditors are incorporated by reference to pages 27 through 45 and
page 48 of the Registrant's 1994 Annual Report:
Consolidated Statement of Operations - Years Ended June 30, 1994,
1993 and 1992
Consolidated Balance Sheet - June 30, 1994 and 1993
Consolidated Statement of Cash Flows - Years Ended June 30, 1994,
1993 and 1992
Consolidated Statement of Stockholders' Equity - Three Years
Ended June 30, 1994
Notes to Consolidated Financial Statements
Report of Independent Auditors
Supplementary Information
Quarterly Data (Unaudited)
2. FINANCIAL STATEMENT SCHEDULES. The following financial statement
schedules of Silicon Graphics, Inc. are filed as part of this Report and should
be read in conjunction with the Consolidated Financial Statements of Silicon
Graphics, Inc.
SCHEDULE DESCRIPTION PAGE
-------- ----------- ----
I Marketable Securities S-1
II Amounts Receivable from Related Parties and Underwriters, S-2
Promoters and Employees Other Than Related Parties
VIII Valuation and Qualifying Accounts S-9
X Supplementary Income Statement Information S-10
Schedules not listed above have been omitted because they are not
applicable or are not required or the information required to be set forth
therein is included in the consolidated financial statements or notes thereto.
-17-
3. EXHIBITS. The following Exhibits are filed as part of, or
incorporated by reference into, this Report:
3.1.11(9) Restated Certificate of Incorporation of the Company.
3.2.1 Bylaws of the Company, as amended.
4.4(5) Silicon Graphics, Inc. $25,000,000 8.98% Senior Notes Due
February 1, 1996, Note Agreement and Note, dated February
1, 1991.
4.5(7) Amended and Restated Preferred Shares Rights Agreement,
dated as of May 6, 1992 between the Company and The First
National Bank of Boston, including the Certificate of
Designation of Rights, Preferences and Privileges of
Series B Participating Preferred Stock, the form of
Rights Certificate and the Summary of Rights attached
thereto as Exhibits A, B, and C respectively.
4.6(11) Indenture dated November 1, 1993 between the Company and
The First National Bank of Boston, as Trustee.
10.2(6)* 1984 Incentive Stock Option Plan, as amended, and amended
form of Incentive Stock Option Agreement.
10.3(8)* 1986 Incentive Stock Option Plan, as amended, and amended
forms of Incentive Stock Option Agreement and
Nonstatutory Stock Option Agreement.
10.17(1) Software Agreement dated as of January 4, 1986, as
supplemented June 6, 1986, and Sublicensing Agreement
dated as of June 9, 1986 between the Company and AT&T
Information Systems Inc.
10.33(4)* 1987 Stock Option Plan and form of Stock Option
Agreement.
10.35(2) Software License Agreement dated January 24, 1986,
between the Company and AT&T Information Systems Inc.
10.50(3) Stock Purchase Agreement dated March 2, 1990 among the
Company, NKK Corporation and NKK U.S.A. Corporation.
10.52(8)* Directors' Stock Option Plan and form of Stock Option
Agreement.
10.56(8) Form of Indemnification Agreement entered into between
the Company and its directors, executive officers and
certain other agents.
10.57(8) Form of Indemnification Agreement entered into between
the Company and its directors, executive officers and
certain other agents. (Revised)
-18-
10.58(8)* 1985 Stock Incentive Program.
10.59(8) Exchange Agreement dated August 14, 1992 among the
Company, NKK Corporation and NKK U.S.A. Corporation.
10.61(10) Credit Agreement dated June 15, 1993, among the Company,
Bank of America, National Trust and Savings Association,
and The First National Bank of Boston.
10.62(10) Purchase and Sale Agreement, as amended, between Richard
T. Peery, John Arrillaga and Silicon Graphics, Inc.
executed on April 30, 1993.
10.63(10) Waiver and Release Agreement between Richard T. Peery,
John Arrillaga and Silicon Graphics Real Estate, Inc.
dated May 7, 1993.
10.64(11)* 1993 Long-Term Incentive Stock Plan and form of stock
option agreement.
10.65(12)* Employee Stock Purchase Plan, as amended as of
October 21, 1993.
10.66(11)* Form of Employment Continuation Agreement entered into
between the Company and its executive officers, as
amended as of October 21, 1993.
10.67(11)* Consulting Agreement dated as of October 25, 1993 between
the Company and Mark W. Perry.
10.68* Non-Qualified Deferred Compensation Plan dated as of
September 9, 1994.
11.1 Statement of Computation of Common Shares and Common
Share Equivalents.
13.1 Excerpts from Annual Report for the year ended June 30,
1994.
21.1 List of Subsidiaries.
23.1 Consent of Independent Auditors (see page 24).
27.1 Financial Data Schedule.
- - --------------------
* This exhibit is a management contract or compensatory plan required to be
filed as an exhibit to this Form 10-K pursuant to Item 14(c).
(1) Incorporated by reference to similarly numbered exhibit to the Company's
Registration Statement on Form S-1 (No. 33-8892), which became effective
October 29, 1986.
(2) Incorporated by reference to similarly numbered exhibit to the Company's
Registration Statement on Form S-1 (No. 33-12863), which became effective
March 31, 1987.
-19-
(3) Incorporated by reference to exhibits to the Company's Current Report on
Form 8-K dated March 16, 1990.
(4) Incorporated by reference to exhibits to the Company's Post-Effective
Amendment to Registration Statement on Form S-8 (No. 33-16529), which
became effective June 18, 1990.
(5) Incorporated by reference to exhibits to the Company's Quarterly Report on
Form 10-Q for the period ended December 31, 1990.
(6) Incorporated by reference to similarly numbered exhibit to the Company's
Annual Report on Form 10-K for the year ended June 30, 1991.
(7) Incorporated by reference to exhibits to the Company's Quarterly Report on
Form 10-Q for the period ended March 31, 1992.
(8) Incorporated by reference to similarly numbered exhibits to the Company's
Annual Report on Form 10-K for the year ended June 30, 1992.
(9) Incorporated by reference to similarly numbered exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended December 31, 1992.
(10) Incorporated by reference to similarly numbered exhibits to the Company's
Annual Report on Form 10-K for the year ended June 30, 1993.
(11) Incorporated by reference to similarly numbered exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1993.
(12) Incorporated by reference to Exhibit 4.1 to the Company's Registration
Statement on Form S-8 (No. 033-50999), which became effective November 10,
1993.
(b) REPORTS ON FORM 8-K.
No Current Reports on Form 8-K were filed during the quarter ended June 30,
1994.
TRADEMARKS USED IN THIS FORM 10-K
Silicon Graphics, Indigo, IRIS Indigo, Geometry Engine and the Company's logo
are registered trademarks of Silicon Graphics, Inc. Challenge, Galileo Video,
Indigo Elan, Indigo Magic, Indigo(2), Indigo(2) Extreme, Indy, Indy Cam,
InPerson, IRIX, Onyx, POWER Challenge, POWER Onyx, Reality Engine(2) and VTX are
trademarks of Silicon Graphics, Inc. Extreme is a trademark used by Silicon
Graphics, Inc. under license. MIPS and R4000 are registered trademarks and
R3000A, R3010A, R4200, R4400 and R8000 are trademarks of MIPS Technologies, Inc.
IBM is a registered trademark of International Business Machines Corporation.
R4600 is a trademark of Integrated Device Technology, Inc. Nintendo is a
registered trademark and Ultra 64 is a trademark of Nintendo. UNIX is a
registered trademark of X Open Consortium. Alpha AXP is a trademark of Digital
Equipment Corporation. Pentium is a trademark of Intel Corporation.
-20-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SILICON GRAPHICS, INC.
By: /s/ Edward R. McCracken
-----------------------
Edward R. McCracken
Chairman of the Board and Chief
Executive Officer
Dated: September 27, 1994
-21-
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Signature Title Date
- - -------------------------- ---------------------------- ------------------
/s/ Edward R. McCracken Chairman of the Board, Chief SEPTEMBER 27, 1994
- - -------------------------- Executive Officer and Director
Edward R. McCracken (Principal Executive Officer)
/s/ Thomas A. Jermoluk President, Chief Operating SEPTEMBER 27, 1994
- - -------------------------- Officer and Director
Thomas A. Jermoluk
/s/ Stanley J. Meresman Senior Vice President, SEPTEMBER 27, 1994
- - -------------------------- Finance and Chief Financial
Stanley J. Meresman Officer (Principal Financial
Officer)
/s/ Thomas J. Oswold Vice President, Finance SEPTEMBER 27, 1994
- - --------------------------
Thomas J. Oswold
/s/ Dennis P. McBride Vice President, Controller SEPTEMBER 27, 1994
- - -------------------------- (Principal Accounting Officer)
Dennis P. McBride
/s/ Robert R. Bishop Director and President, Silicon SEPTEMBER 27, 1994
- - -------------------------- Graphics World Trade
Robert R. Bishop Corporation
/s/ Mark W. Perry Director SEPTEMBER 27, 1994
- - --------------------------
Mark W. Perry
/s/ Allen F. Jacobson Director SEPTEMBER 27, 1994
- - --------------------------
Allen F. Jacobson
/s/ C. Richard Kramlich Director SEPTEMBER 27, 1994
- - --------------------------
C. Richard Kramlich
/s/ James A. McDivitt Director SEPTEMBER 27, 1994
- - --------------------------
James A. McDivitt
/s/ Robert C. Miller Director SEPTEMBER 27, 1994
- - --------------------------
Robert C. Miller
-22-
/s/ Joseph A. Mollica Director SEPTEMBER 27, 1994
- - --------------------------
Joseph A. Mollica
/s/ Lucille Shapiro Director SEPTEMBER 27, 1994
- - --------------------------
Lucille Shapiro
/s/ James G. Treybig Director SEPTEMBER 27, 1994
- - --------------------------
James G. Treybig
-23-
Consent of Ernst & Young, LLP, Independent Auditors
We consent to the incorporation by reference in this Annual Report (Form 10-K)
of Silicon Graphics, Inc. of our report dated July 18, 1994, included in the
1994 Annual Report to Stockholders of Silicon Graphics, Inc.
Our audits also included the financial statement schedules of Silicon Graphics,
Inc. listed in item 14(a)2. These schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion based on our
audits. In our opinion, the financial statement schedules referred to above,
when considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
We also consent to incorporation by reference in the Registration Statements
(Form S-8 File Nos. 33-11703, 33-16529, 33-18717, 33-26003, 33-34919, 33-38536,
33-40879, 33-44305, 33-44333, 33-48890, 33-59098, 33-65190, 033-50999 and 033-
51275) pertaining to the Employee Stock Purchase Plan, 1987 Stock Option Plan,
1986 Incentive Stock Option Plan, 1985 Stock Incentive Program, 1984 Incentive
Stock Option Plan, 1982 Stock Option Plan, Directors' Stock Option Plan and
Subsidiary Stock Agreement, and the 1993 Long-Term Incentive Stock Plan of
Silicon Graphics, Inc., of our report dated July 18, 1994 with respect to the
consolidated financial statement and schedules of Silicon Graphics, Inc.,
incorporated by reference and included in this Annual Report (Form 10-K) for the
year ended June 30, 1994.
Ernst & Young, LLP
Palo Alto, California
September 26, 1994
-24-
Schedule I
SILICON GRAPHICS, INC.
MARKETABLE SECURITIES AND LONG-TERM FINANCIAL INSTRUMENTS
AS OF JUNE 30, 1994
(in thousands)
Amount Carried
Par Value on Balance Sheet
--------- ----------------
Short-Term Investments (1):
Government
U.S. Treasury Notes $69,627 $68,831
U.S. Government Agency Obligations 10,235 10,117
Corporate Bonds/Notes
Floating Rate Notes 11,200 11,200
-------- --------
Total Short-Term Investments $91,062 $90,147
-------- --------
-------- --------
Long-Term Financial Instruments (1):
Government
U.S. Treasury Notes $128,500 $128,419
U.S. Government Agency Obligations 2,400 2,400
Corporate Bonds/Notes
AT&T 2,000 2,000
Ford Motor Company 4,800 4,815
Nations Bank 2,500 2,500
WMX 1,800 1,813
Merrill Lynch 5,000 4,999
Pepsico 1,000 1,003
Bankers Trust 2,500 2,498
International Lease Finance 5,000 4,988
Associates Corp 7,500 7,491
National Bank 6,000 5,994
Floating Rate Notes 17,900 17,916
-------- --------
Total Long-Term Financial Instruments $186,900 $186,836
-------- --------
-------- --------
- - ---------------
(1) Stated at cost that approximates market value at June 30, 1994.
S-1
Schedule II
AMOUNTS RECEIVABLE FROM RELATED PARTIES
AND UNDERWRITERS, PROMOTERS AND EMPLOYEES
OTHER THAN RELATED PARTIES
(in thousands)
FOR THE YEAR ENDED JUNE 30, 1994:
Balance at Balance at
Beginning Amounts End of
Name of Debtor of Period Additions Collected Period
-------------- ---------- --------- --------- ----------
Richard Bahr (1):
8.5% Note Receivable $118 $0 $0 $118
---------- --------- --------- ----------
---------- --------- --------- ----------
Jack Cuthbert (2):
8% Note Receivable $238 $0 $0 $238
6.73% Forgivable
Note Receivable $7 $0 $7 $0
Interest Free Note Receivable $156 $0 $156 $0
---------- --------- --------- ----------
$401 $0 $163 $238
---------- --------- --------- ----------
---------- --------- --------- ----------
Tom Furlong (3):
7.91% Note Receivable $129 $0 $63 $66
---------- --------- --------- ----------
---------- --------- --------- ----------
Mark Jacobson (4):
7.04% Note Receivable $175 $0 $0 $175
Interest Free Forgivable
Note Receivable $32 $0 $11 $21
---------- --------- --------- ----------
$207 $0 $11 $196
---------- --------- --------- ----------
---------- --------- --------- ----------
Peter Kenyon (5):
8.62% Note Receivable $75 $0 $75 $0
6.22% Note Receivable $200 $0 $171 $29
6.22% Note Receivable $100 $0 $100 $0
---------- --------- --------- ----------
$375 $0 $346 $29
---------- --------- --------- ----------
---------- --------- --------- ----------
Robert Mansfield (6):
Interest Free Forgivable
Note Receivable $0 $100 $0 $100
Interest Free Note Receivable $0 $134 $0 $134
---------- --------- --------- ----------
$0 $234 $0 $234
---------- --------- --------- ----------
---------- --------- --------- ----------
Michael Nielsen (7):
6.6% Forgivable
Note Receivable $112 $0 $50 $62
---------- --------- --------- ----------
---------- --------- --------- ----------
S-2
Balance at Balance at
Beginning Amounts End of
Name of Debtor of Period Additions Collected Period
-------------- ---------- --------- --------- ----------
Harry Pforzheimer (8):
8.48% Note Receivable $170 $0 $0 $170
Interest Free Forgivable
Note Receivable $16 $0 $12 $4
---------- --------- --------- ----------
$186 $0 $12 $174
---------- --------- --------- ----------
---------- --------- --------- ----------
Warren Pratt (9):
6.69% Note Receivable $150 $0 $0 $150
---------- --------- --------- ----------
---------- --------- --------- ----------
Tom Whiteside (10):
Interest Free Note Receivable $0 $125 $125 $0
Interest Free Forgivable
Note Receivable $0 $250 $38 $212
---------- --------- --------- ----------
$0 $375 $163 $212
---------- --------- --------- ----------
---------- --------- --------- ----------
Fred Welz (11):
8.56% Note Receivable $200 $0 $0 $200
---------- --------- --------- ----------
---------- --------- --------- ----------
- - ---------------
(1) This Note is in connection with a relocation and is secured by a deed of
trust.
(2) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $1,000 per month;
no collections are made.
(3) This Note is in connection with a relocation and is to be repaid in four
annual installments.
(4) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $885 per month;
no collections are made.
(5) The 8.62% Note Receivable is to repay former employer relocation
obligations and is secured by a deed of trust. The 6.22% Note Receivable
in the principal amount of $200,000 is also secured by a deed of trust.
(6) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $1,000 per month,
no collections are made.
(7) This note is in connection with the employee's acceptance of employment
with the Company and is to be repaid in four annual installments.
(8) These notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $1,000 per month;
no collections are made.
(9) This Note is in connection with a relocation and is secured by a deed of
trust.
(10) These Notes are in connection with a relocation and are secured by a deed
of trust. The interest free note receivable was repaid in December 1993.
The forgivable loan is forgiven at the rate of $4,166.67 per month; no
collections are made.
(11) This Note is in connection with a relocation and is secured by a deed of
trust.
S-3
Schedule II
AMOUNTS RECEIVABLE FROM RELATED PARTIES
AND UNDERWRITERS, PROMOTERS AND EMPLOYEES
OTHER THAN RELATED PARTIES
(in thousands)
FOR THE YEAR ENDED JUNE 30, 1993:
Balance at Balance at
Beginning Amounts End of
Name of Debtor of Period Additions Collected Period
-------------- ---------- --------- --------- ----------
Richard Bahr (1):
8.5% Note Receivable $118 $0 $0 $118
---------- --------- --------- ----------
---------- --------- --------- ----------
Jack Cuthbert (2):
8% Note Receivable $238 $0 $0 $238
6.73% Forgivable Note
Receivable $19 $0 $12 $7
Interest Free Note Receivable $462 $0 $306 $156
---------- --------- --------- ----------
$719 $0 $318 $401
---------- --------- --------- ----------
---------- --------- --------- ----------
Tom Furlong (3):
7.91% Note Receivable $250 $0 $121 $129
---------- --------- --------- ----------
---------- --------- --------- ----------
Mark Jacobson (4):
7.04% Note Receivable $175 $0 $0 $175
Interest Free Forgivable
Note Receivable $43 $0 $11 $32
Interest Free Note Receivable $68 $0 $68 $0
---------- --------- --------- ----------
$286 $0 $79 $207
---------- --------- --------- ----------
---------- --------- --------- ----------
Peter Kenyon (5):
8.62% Note Receivable $75 $0 $0 $75
6.22% Note Receivable $0 $200 $0 $200
6.22% Note Receivable $0 $100 $0 $100
---------- --------- --------- ----------
$75 $300 $0 $375
---------- --------- --------- ----------
---------- --------- --------- ----------
Michael Nielsen (6):
6.6% Forgivable Note
Receivable $200 $0 $88 $112
---------- --------- --------- ----------
---------- --------- --------- ----------
Harry Pforzheimer (7):
8.48% Note Receivable $170 $0 $0 $170
Interest Free Forgivable
Note Receivable $28 $0 $12 $16
---------- --------- --------- ----------
$198 $0 $12 $186
---------- --------- --------- ----------
---------- --------- --------- ----------
S-4
Balance at Balance at
Beginning Amounts End of
Name of Debtor of Period Additions Collected Period
-------------- ---------- --------- --------- ----------
Warren Pratt (8):
6.69% Note Receivable $150 $0 $0 $150
Interest Free Forgivable
Note Receivable $19 $0 $19 $0
---------- --------- --------- ----------
$169 $0 $19 $150
---------- --------- --------- ----------
---------- --------- --------- ----------
Chester Silvestri (9):
5.13% Note Receivable $120 $0 $120 $0
---------- --------- --------- ----------
---------- --------- --------- ----------
Fred Welz (10):
8.56% Note Receivable $200 $0 $0 $200
Interest Free Forgivable
Note Receivable $6 $0 $6 $0
---------- --------- --------- ----------
$206 $0 $6 $200
---------- --------- --------- ----------
---------- --------- --------- ----------
- - ---------------
(1) This Note is in connection with a relocation and is secured by a deed of
trust.
(2) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $1,000 per month;
no collections are made.
(3) This Note is in connection with a relocation and is to be repaid in four
annual installments.
(4) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $885 per month;
no collections are made. The Interest Free Note Receivable was repaid in
August 1992.
(5) The 8.62% Note Receivable is to repay former employer relocation
obligations and is secured by a deed of trust. The 6.22% Note Receivable
in the principal amount of $200,000 is also secured by a deed of trust.
(6) This note is in connection with the employee's acceptance of employment
with the Company and is to be repaid in four annual installments.
(7) These notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $1,000 per month;
no collections are made.
(8) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan is forgiven at the rate of $2,000 per month;
no collections are made.
(9) This Note was repaid in March 1993.
(10) These Notes are in connection with a relocation and are secured by a deed
of trust. The forgivable loan was forgiven at the rate of $1,000 per
month; no collections were made.
S-5
Schedule II
AMOUNTS RECEIVABLE FROM RELATED PARTIES
AND UNDERWRITERS, PROMOTERS AND EMPLOYEES
OTHER THAN RELATED PARTIES
(in thousands)
FOR THE YEAR ENDED JUNE 30, 1992:
Balance at Balance at
Beginning End of
Name of Debtor of Period Additions Collections Period
-------------- ---------- --------- ----------- ----------
Peter Kenyon (1):
8.62% Note Receivable $75 $0 $0 $75
Interest Free Forgivable Note
Receivable $14 $0 $14 $0
---------- --------- --------- ----------
$89 $0 $14 $75
---------- --------- --------- ----------
---------- --------- --------- ----------
Evan Ellis (2):
Interest Free Note Receivable $361 $0 $361 $0
Harry Pforzheimer (3):
8.48% Note Receivable $170 $0 $0 $170
Interest Free Forgivable Note
Receivable $40 $0 $12 $28
---------- --------- --------- ----------
$210 $0 $12 $198
---------- --------- --------- ----------
---------- --------- --------- ----------
Fred Welz (4):
8.56% Note Receivable $200 $0 $0 $200
Interest Free Forgivable Note
Receivable $18 $0 $12 $6
Interest Free Note Receivable $6 $0 $6 $0
---------- --------- --------- ----------
$224 $0 $18 $206
---------- --------- --------- ----------
---------- --------- --------- ----------
Richard Bahr (5):
8.5% Note Receivable $0 $118 $0 $118
---------- --------- --------- ----------
---------- --------- --------- ----------
David Orton (6):
Interest Free Note Receivable $0 $225 $225 $0
---------- --------- --------- ----------
---------- --------- --------- ----------
Jack Cuthbert (7):
8% Note Receivable $0 $238 $0 $238
6.73% Forgivable Note
Receivable $0 $25 $6 $19
Interest Free Note Receivable $0 $462 $0 $462
---------- --------- --------- ----------
$0 $725 $6 $719
---------- --------- --------- ----------
---------- --------- --------- ----------
S-6
Balance at Balance at
Beginning End of
Name of Debtor of Period Additions Collections Period
-------------- ---------- --------- ----------- ----------
Warren Pratt (8):
6.69% Note Receivable $0 $150 $0 $150
Interest Free Forgivable Note
Receivable $0 $25 $6 $19
Interest Free Note Receivable $0 $110 $110 $0
---------- --------- --------- ----------
$0 $285 $116 $169
---------- --------- --------- ----------
---------- --------- --------- ----------
Mark Jacobson (9):
7.04% Note Receivable $0 $175 $0 $175
Interest Free Forgivable Note
Receivable $0 $43 $0 $43
Interest Free Note Receivable $0 $68 $0 $68
---------- --------- --------- ----------
$0 $286 $0 $286
---------- --------- --------- ----------
---------- --------- --------- ----------
Robert Miller (10):
Interest Free Note Receivable $299 $0 $299 $0
---------- --------- --------- ----------
---------- --------- --------- ----------
Charles Boesenberg (11):
Interest Free Note Receivable $172 $0 $172 $0
---------- --------- --------- ----------
---------- --------- --------- ----------
Tom Furlong (12):
7.91% Note Receivable $250 $0 $0 $250
---------- --------- --------- ----------
---------- --------- --------- ----------
Michael Nielsen (13):
6.6% Forgivable Note
Receivable $0 $200 $0 $200
---------- --------- --------- ----------
---------- --------- --------- ----------
Chester Silvestri (14):
5.13% Note Receivable $0 $120 $0 $120
---------- --------- --------- ----------
---------- --------- --------- ----------
- - ---------------
(1) These Notes are to repay former employer relocation obligations and are secured by a deed of trust. The loan is forgiven at
the rate of $1,250 per month; no collections are made.
(2) This Note is in connection with a relocation and is secured by a deed of trust.
(3) These Notes are in connection with a relocation and are secured by a deed of trust. The forgivable loan is forgiven at the
rate of $1,000 per month; no collections are made.
(4) These Notes are in connection with a relocation and are secured by a deed of trust. The forgivable loan is forgiven at the
rate of $1,000 per month; no collections are made. The interest free note receivable was repaid July 1991.
(5) This Note is in connection with a relocation and is secured by a deed of trust.
(6) This Note is in connection with a relocation and is secured by a deed of trust. The Note was repaid in October 1991.
(7) These Notes are in connection with a relocation and are secured by a deed of trust. The forgivable loan is forgiven at the
rate of $1,000 per month; no collections are made.
S-7
(8) These Notes are in connection with a relocation and are secured by a deed of trust. The forgivable loan is forgiven at the
rate of $2,000 per month; no collections are made. The interest free note receivable was repaid in April 1992.
(9) These Notes are in connection with a relocation and are secured by a deed of trust. The forgivable loan is forgiven at the
rate of $885 per month; no collections are made.
(10) This Note is in connection with a relocation and is forgiven at the rate of $20,833 per month for the first six months and
$14,520 per month for the last six months of fiscal 1992. In addition, pursuant to the loan agreement, the remaining balance
of $87,000 was forgiven at June 29, 1992 upon the completion of the merger between MIPS Computer Systems, Inc. and Silicon
Graphics, Inc.
(11) This Note is in connection with the employee's acceptance of employment with the Company and is secured by a deed of trust.
The interest free loan was repaid in full in February 1992 upon the employee's termination of employment with the Company.
This former MIPS executive officer resigned from MIPS in February 1992.
(12) This Note is in connection with a relocation and is to be repaid in four annual installments.
(13) This Note is in connection with the employee's acceptance of employment with the Company and is to be repaid in four annual
installments.
(14) This Note is to be repaid in April 1993, one year from the date of the Note. This former officer of MIPS resigned from the
Company in July 1992.
S-8
Schedule VIII
SILICON GRAPHICS, INC.
VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
Balance at Charged to Balance at
Beginning Costs and Deductions End of
Description of Period Expenses Write-offs Period
- - -------------- ---------- ---------- ---------- ----------
Year Ended June 30, 1992:
Accounts receivable allowances $5,373 $1,447 $1,488 $5,332
Year Ended June 30, 1993:
Accounts receivable allowances $5,332 $3,618 $2,233 $6,717
Year Ended June 30, 1994:
Accounts receivable allowances $6,717 $3,095 $1,514 $8,298
S-9
Schedule X
SILICON GRAPHICS, INC.
SUPPLEMENTARY INCOME STATEMENT INFORMATION
(in thousands)
Charged to Costs and Expenses in the Years Ended:
-------------------------------------------------
June 30, 1994 June 30, 1993 June 30, 1992
------------- ------------- -------------
Depreciation and Amortization
of Intangible Assets $18,200 $12,871 $13,518
Taxes other than payroll
or income taxes $10,790 $10,294 $9,273
Amounts for royalties, repairs and maintenance and advertising costs are not
presented as such amounts are less than one percent of total revenues for each
of the years ended June 30, 1994, 1993 and 1992.
S-10
EXHIBIT INDEX
3.2.1 Bylaws of the Company, as amended.
10.68* Non-Qualified Deferred Compensation Plan dated as of
September 9, 1994
11.1 Statement of Computation of Common Shares and Common
Share Equivalents.
13.1 Excerpts from Annual Report for the year ended June 30,
1994.
21.1 List of Subsidiaries.
23.1 Consent of Independent Auditors (see page 24).
27.1 Financial Data Schedule.
(3) Incorporated by reference to exhibits to the Company's Current Report on
Form 8-K dated March 16, 1990.
(4) Incorporated by reference to exhibits to the Company's Post-Effective
Amendment to Registration Statement on Form S-8 (No. 33-16529), which
became effective June 18, 1990.
(5) Incorporated by reference to exhibits to the Company's Quarterly Report on
Form 10-Q for the period ended December 31, 1990.
(6) Incorporated by reference to similarly numbered exhibit to the Company's
Annual Report on Form 10-K for the year ended June 30, 1991.
(7) Incorporated by reference to exhibits to the Company's Quarterly Report on
Form 10-Q for the period ended March 31, 1992.
(8) Incorporated by reference to similarly numbered exhibits to the Company's
Annual Report on Form 10-K for the year ended June 30, 1992.
(9) Incorporated by reference to similarly numbered exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended December 31, 1992.
(10) Incorporated by reference to similarly numbered exhibits to the Company's
Annual Report on Form 10-K for the year ended June 30, 1993.
(11) Incorporated by reference to similarly numbered exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1993.