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SILICON GRAPHICS AND MIPS COMPUTER SYSTEMS ANNOUNCE DEFINITIVE MERGER AGREEMENT

 SILICON GRAPHICS AND MIPS COMPUTER SYSTEMS
 ANNOUNCE DEFINITIVE MERGER AGREEMENT
 Silicon Graphics Plans to Establish MIPS Technologies, Inc.
 to Deliver Open Technologies to the Industry
 MOUNTAIN VIEW, Calif., March 12 /PRNewswire/ -- Silicon Graphics, Inc. (NYSE: SGI) and MIPS Computer Systems, Inc. (NASDAQ: MIPS) today announced that they have entered into a definitive merger agreement. Completion of the transaction is subject to customary conditions, including approval of each company's stockholders, required governmental approvals and the delivery of opinions. The transaction is expected to be completed by the end of June 1992. The annual revenue for the combined companies approaches $1 billion.
 "By joining with MIPS, we will pool the world's most talented computer scientists to continue delivering the industry's best RISC architectures," said Edward R. McCracken, president and CEO, Silicon Graphics. "This is a unique opportunity to bring together two of the industry's leading technology providers to create a major force for the 1990s. This concentration of engineering talent will enable us to deliver new generations of computing, based on visualization and a single, scalable architecture that spans from PCs to supercomputers."
 MIPS Technologies, Inc. will be established to focus exclusively on leading-edge RISC technologies and enhance the strength of the ACE initiative. MIPS Technologies, Inc. will be led by Robert C. Miller, chairman, president and CEO, MIPS Computer Systems, Inc. With the industry's highest volume RISC processor, the MIPS Technologies' focus will be to continue to deliver innovative CPU technologies to the market quickly.
 "The combination of RISC microprocessor and compiler technology with system design and graphics expertise creates a powerful company capable of driving industry standards in the open systems market," said Miller. "The role of MIPS Technologies, Inc. will be to maintain a level playing field for the computer industry, ensuring open and equal access to the industry's most advanced technology."
 Under the terms of the agreement, which was approved by the boards of directors of both companies, MIPS stockholders will receive 0.61 shares of Silicon Graphics' common stock for each share of MIPS' common stock owned. On Wednesday, March 11, 1992, Silicon Graphics' stock price closed at $26.63 and MIPS closed at $11. MIPS has approximately 25 million shares outstanding. Three seats will be added to Silicon Graphics' board of directors for MIPS representation, one of which will be occupied by Miller.
 Silicon Graphics intends to account for the merger using the pooling of interest method. As a result of its recent repurchase of convertible preferred stock from Compaq Computer Corporation, Silicon Graphics will be required to re-issue between 3.9 and 5.4 million common shares or equivalent convertible securities prior to the closing of the merger to qualify for pooling treatment.
 Morgan Stanley & Co. Incorporated and Unterberg Harris are acting as financial advisors to Silicon Graphics, and Donaldson Lufkin & Jenrette and On Point Developments, Inc. are financial advisors to MIPS in connection with the transaction.
 MIPS Computer Systems, Inc. is a leading supplier of RISC technology for the computer system and embedded control markets. The company licenses its RISC architecture to its semiconductor and system partners worldwide. MIPS also manufactures and markets a family of high- performance computer systems that range from desktop computers to deskside and data center servers to OEMs, VARs and system integrators worldwide.
 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.
 Silicon Graphics and the Silicon Graphics logo are registered trademarks of Silicon Graphics, Inc.
 -0- 3/12/92
 /NOTE: The companies will hold a news conference on Thursday, March 12, at 11:30 a.m. PST at the Hyatt Union Square, San Francisco.
 CONTACT: Marilyn Lattin (financial), 415-335-7070, or Jill Grossman (media), 415-335-1516, both of Silicon Graphics, Inc.; or Caroline Hughes (financial), 408-524-7295, or Joanne Hasegawa (media), 408-524-7164, both of MIPS/
 (SGI MIPS) CO: Silicon Graphics, Inc.; MIPS Computer Systems, Inc. ST: California IN: CPR SU: TNM


ML -- NYON1 -- 7623 03/12/92 08:02 EST
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Date:Mar 12, 1992
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