Silicon Graphics employee incentive plan approved

By Caroline Salls

Pittsburgh, July 27 - Silicon Graphics, Inc. obtained court approval to implement an employee incentive plan, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

The incentive plan will provide a total of $3 million in bonus payments to 49 employees of middle-management status.

The plan includes three groups, with 23 managers/directors categorized as group one; 19 key employees of below-director status, excluding engineers, as group two; and seven engineers as group three.

The key employees are eligible to receive bonuses for their continued commitment and service to the company from Aug. 1 through July 31, 2007.

Retention bonuses are payable in three installments, with the first installment, equal to 25% of an individual's bonus, to be paid on Sept. 30.

The second installment, also equal to 25% of an individual's bonus, will be paid on Jan. 1, and the third installment, equal to 50% of an individual's bonus, will be paid on July 31, 2007.

The employees in group one and group two will receive bonuses of 32% of their annual salary and employees in group three will receive bonuses of 35% of their annual salary.

In addition to the retention bonuses for groups one through three, the plan provides for the creation of a $539,573 discretionary bonus pool, from which individual bonus payments may be awarded in the company's sole discretion and after approval by the chief executive officer and the compensation committee of the board of directors.

The discretionary pool will allow Silicon Graphics flexibility to reward employees, whether or not they are current participants in the plan, as necessary to deal with isolated issues that are not accounted for in the more structured retention program designed for participants in groups one through three.

Silicon Graphics, a Mountain View, Calif., technology provider, filed for bankruptcy on May 29. The company's Chapter 11 case number is 06-10977.

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