On July 2, 1999, the U.S. Court of Appeals for the Ninth Circuit upheld the dismissal that was appealed in May 1996. The lawsuit was dismissed with prejudice by the District Court in May 1996. The Company had been named as a defendant in a putative class action lawsuit entitled DEANNA BRODY, ET. AL. V. EDWARD R. MCCRACKEN, ET. AL., which was filed on January 29, 1996 in the U.S. District Court for the Northern District of California. Certain current and former executive officers and directors of the Company were also named as defendants. The plaintiffs purported to represent a class of all persons who purchased the Company's common stock between October 19 and December 29, 1995 (the 'Class' Period'). The complaint alleged that the defendants violated various federal securities laws and California statutes through material misrepresentations and omissions during the Class Period.

According to the complaint, this is a class action on behalf of purchasers of the stock of Silicon Graphics, Inc. ("Silicon Graphics" or the "Company") between October 19, 1995 and December 29, 1995 (the "Class Period"). This action complains of a fraudulent scheme and course of business that operated as a fraud or deceit on purchasers of Silicon Graphics stock due to defendants' false and misleading statements about Silicon Graphics, while using Silicon Graphics' cash to purchase approximately one million of its shares on the open market, which enabled Silicon Graphics' insiders to sell over 400,000 shares of their stock at artificially inflated prices, pocketing over $14 million for themselves, thus profiting from their scheme.