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SILICON GRAPHICS AND COMPAQ RESTRUCTURE RELATIONSHIP

 SILICON GRAPHICS AND COMPAQ RESTRUCTURE RELATIONSHIP
 MOUNTAIN VIEW, Calif., Jan. 21 /PRNewswire/ -- Silicon Graphics Inc. (NYSE: SGI) announced today that it has reached agreement with Compaq Computer Corp. of Houston, Texas, (NYSE: CPQ) to restructure the technology development agreement signed by the two companies in April, 1991, and to repurchase Compaq's investment in Silicon Graphics' convertible preferred stock.
 Under the original technology agreement the two companies have exchanged technology and have been jointly developing specific products based on the MIPS Computer RISC architecture. With the new arrangement the requirement to pay royalties on products developed using Silicon Graphics' technology remains in place, and Compaq will make a final $3.75 million payment to Silicon Graphics. Concurrent with the establishment of the technology relationship, Compaq invested $135 million in Silicon Graphics' convertible preferred stock. Under the new agreement, Silicon Graphics has agreed to repurchase the preferred stock by July 31, 1992, for $150 million, which the company believes approximates its current market value.
 Edward R. McCracken, president and chief executive officer of Silicon Graphics said, "These changes will have no effect on our company's product development plans or our view of the opportunities at the low-end of the workstation marketplace."
 Silicon Graphics Inc. is the leading manufacturer of visual computing systems. The company delivers three-dimensional graphics, color, audio, video and real-time technologies to the technical, scientific and creative computing marketplace. Silicon Graphics Inc. has offices worldwide and headquarters in Mountain View.
 -0- 1/21/92
 /CONTACT: Marilyn Lattin, 415-335-7070; or Jill Grossman, 415-335-1516, both of Silicon Graphics Inc./
 (SGI CPQ) CO: Silicon Graphics Inc.; Compaq Computer COrp. ST: California IN: CPR SU: CON


RM -- SJ006 -- 2087 01/21/92 17:05 EST
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Publication:PR Newswire
Date:Jan 21, 1992
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