SGI Silicon Graphics International Corp

CERTAIN MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS

Section 14A of the Exchange Act, which was enacted as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, requires that we provide stockholders with the opportunity to vote to approve, on an advisory, non-binding basis, the payment of certain compensation that will or may become payable to SGI’s named executive officers by SGI in connection with the Merger, as disclosed in the section of this proxy statement captioned “ The Merger — Interests of SGI’s Directors and Executive Officers in the Merger — Golden Parachute Compensation .”

We are asking stockholders to indicate their approval of the various compensation that will or may become payable by SGI to SGI’s named executive officers in connection with the Merger. These payments are set forth in the section of this proxy statement captioned “ The Merger — Interests of SGI’s Directors and Executive Officers in the Merger — Golden Parachute Compensation ” and the accompanying footnotes. In general, the various plans and arrangements pursuant to which these compensation payments may be made have previously formed part of SGI’s overall compensation program for our named executive officers and previously have been disclosed to stockholders as part of the Compensation Discussion and Analysis and related sections of our annual proxy statements. These historical arrangements were adopted and approved by the Compensation Committee of the Board of Directors, which is composed solely of non-management directors, and are believed to be reasonable and in line with marketplace norms.

Accordingly, we are seeking approval of the following resolution at the Special Meeting:

“RESOLVED, that the stockholders of Silicon Graphics International Corp. approve, on a nonbinding, advisory basis, the compensation that will or may become payable to SGI’s named executive officers by SGI that is based on or otherwise relates to the Merger as disclosed pursuant to Item 402(t) of Regulation S-K in the section captioned “ The Merger — Interests of SGI’s Directors and Executive Officers in the Merger — Golden Parachute Compensation” in SGI’s proxy statement for the Special Meeting.”

Stockholders should note that this proposal is not a condition to completion of the Merger, and as an advisory vote, the result will not be binding on SGI, the Board of Directors or HPE. Further, the underlying plans and arrangements are contractual in nature and not, by their terms, subject to stockholder approval. Accordingly, regardless of the outcome of the advisory vote, if the Merger is consummated, our named executive officers will be eligible to receive the compensation that is based on or otherwise relates to the Merger in accordance with the terms and conditions applicable to those payments.

The Board of Directors unanimously recommends that you vote “FOR” this proposal.

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THE MERGER

This discussion of the Merger is qualified in its entirety by reference to the Merger Agreement, which is attached to this proxy statement as Annex A and incorporated into this proxy statement by reference. You should read the entire Merger Agreement carefully as it is the legal document that governs the Merger.

Parties Involved in the Merger

Silicon Graphics International Corp.

SGI is a global leader in high performance solutions for compute, data analytics and data management, that enable customers to accelerate time to discovery, innovation, and profitability. The Company is focused on helping customers solve their most demanding business and technology challenges.

SGI develops, markets and sells a broad line of low cost, mid-range and high-end scale-out and scale-up servers, enterprise-class storage, differentiating software and designed-to-order solutions for large-scale data center deployments, coupled with global support and highly experienced professional services. SGI solutions are designed to deliver high impact results with lower total cost of ownership and to achieve industry-leading speed, scale and efficiency.

SGI solutions are utilized by scientific, business and government communities to fulfill highly compute-intensive application needs in petascale and exascale environments. Delivering industry-leading computing power and fast and efficient data movement, both within the computing system and to and from large-scale data storage installations, SGI systems enable customers to access, analyze, transform, manage and visualize information in real and near real-time.

SGI’s common stock is listed on NASDAQ under the symbol “SGI”.

SGI’s principal executive office is located at 900 North McCarthy Blvd., Milpitas, California 95035, and its telephone number is (669) 900-8000.

Hewlett Packard Enterprise Company

HPE is a leading global provider of the cutting-edge technology solutions customers need to optimize their traditional Information Technology (“ IT ”) while helping them build the secure, cloud-enabled, mobile-ready future that is uniquely suited to their needs. HPE’s legacy dates back to a partnership founded in 1939 by William R. Hewlett and David Packard, and HPE strives every day to uphold and enhance that legacy through dedication to providing innovative technological solutions to its customers.

HPE believes that it offers the most comprehensive portfolio of enterprise solutions in the IT industry. With an industry-leading position in servers, storage, networking, converged systems, software and services, combined with its customized financing solutions, HPE believes that it is best equipped to deliver the right IT solutions to help drive optimal business outcomes for its customers.

HPE common stock is listed on NYSE under the symbol “HPE”.

HPE’s principal executive office is located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 687-5817.

Satellite Acquisition Sub, Inc.

Satellite Acquisition Sub, Inc. is a wholly owned direct subsidiary of HPE and was formed on August 8, 2016, solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger

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Agreement and has not engaged in any business activities other than in connection with the Merger and the other transactions contemplated by the Merger Agreement.

Satellite Acquisition Sub, Inc.’s principal executive office is located at 3000 Hanover Street, Palo Alto, California 94304, and its telephone number is (650) 687-5817.

Effect of the Merger

Upon the terms and subject to the conditions of the Merger Agreement, if the Merger is completed, Acquisition Sub will merge with and into SGI, and SGI will continue as the Surviving Corporation and as a wholly owned subsidiary of HPE. As a result of the Merger, SGI will become a wholly owned subsidiary of HPE, and our common stock will no longer be publicly traded and will be delisted from NASDAQ. In addition, our common stock will be deregistered under the Exchange Act, and we will no longer file periodic or current reports with the SEC. If the Merger is completed, you will not own any shares of the capital stock of the Surviving Corporation.

The Effective Time will occur upon the filing of a certificate of merger with the Secretary of State of the State of Delaware, or at such other time as is agreed upon in writing by HPE and SGI and specified in the certificate of merger in accordance with the DGCL.

Effect on SGI if the Merger is Not Completed

If the Merger Agreement is not adopted and the Merger and the other transactions contemplated thereby are not approved by stockholders or if the Merger is not completed for any other reason, SGI’s stockholders will not receive any payment for their shares of our common stock. Instead, SGI will remain an independent public company, our common stock will continue to be listed and traded on NASDAQ and registered under the Exchange Act and we will continue to file periodic and current reports with the SEC. In addition, if the Merger is not completed, we expect that management will operate the business in a manner similar to that in which it is being operated today and that stockholders will continue to be subject to the same risks and opportunities to which they are currently subject, including risks related to the highly competitive industry in which SGI operates and risks related to adverse economic conditions.

Furthermore, if the Merger is not completed, and depending on the circumstances that caused the Merger not to be completed, the price of our common stock may decline significantly. If that were to occur, it is uncertain when, if ever, the price of our common stock would return to the price at which it trades as of the date of this proxy statement.

Accordingly, if the Merger is not completed, there can be no assurance as to the effect of these risks and opportunities on the future value of your shares of our common stock. If the Merger is not completed, the Board of Directors will continue to evaluate and review SGI’s business operations, strategic direction and capitalization, among other things, and will make such changes as are deemed appropriate. If the Merger Agreement is not adopted and the Merger and the other transactions contemplated thereby are not approved by stockholders or if the Merger is not completed for any other reason, there can be no assurance that any other transaction acceptable to the Board of Directors will be offered or that SGI’s business, prospects or results of operation will not be adversely impacted.

In addition, SGI will be required to pay to HPE a termination fee of $12.2 million if the Merger Agreement is terminated under specified circumstances. For more information, please see the section of this proxy statement captioned “ The Merger Agreement — Termination of the Merger Agreement; Termination Fees .”

Merger Consideration

At the Effective Time, each share of our common stock issued and outstanding immediately prior to the Effective Time (including any shares resulting from the exercise of Company Options or settlement of Restricted

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Stock Units which become vested as a result of the consummation of the Merger, but excluding excluded shares and dissenting shares, each as defined below) will be cancelled and automatically converted into the right to receive $7.75 in cash, without interest, and subject to deduction for any required withholding tax. As of the Effective Time, all shares of our common stock will be cancelled and will thereafter represent only the right to receive the Merger Consideration to be paid in accordance with, and subject to, the conditions of the Merger Agreement. At the Effective Time, each share of our common stock held by SGI or its subsidiaries or owned, directly or indirectly, by HPE or Acquisition Sub, which we refer to as “ excluded shares ,” will be automatically canceled without payment of any consideration. In addition, each share of our common stock held by a stockholder who is entitled to and who properly exercises and perfects appraisal rights under the DGCL, which we refer to as “ dissenting shares ,” will not be converted into the right to receive Merger Consideration, unless and until such stockholder fails to perfect or effectively withdraws or loses such stockholder’s right to appraisal under Section 262 of the DGCL, at which time each such share of our common stock will be converted into and will be exchangeable only for the right to receive, as of the later of the Effective Time and the time that such right to appraisal is irrevocably lost, the Merger Consideration. Dissenting shares shall be treated in accordance with Section 262, as more fully described in the section of this proxy statement captioned “ The Merger — Appraisal Rights ”.

Background of the Merger

The Board of Directors regularly evaluates SGI’s strategic direction and ongoing business plan with a view toward strengthening its core business and expanding the diversity of its product options in core regions and enhancing stockholder value. As part of this evaluation, the Board of Directors has, from time to time, considered a variety of strategic alternatives for SGI, including the continuation of SGI’s business plan as a standalone enterprise, potential strategic alliances and other commercial arrangements, modifications to SGI’s strategy and product direction, prospects for strategic mergers and acquisitions and other business combinations, sales of certain product lines and technologies, and/or a possible sale of SGI.

Beginning in 2014, SGI began to focus on a strategic plan to increase market share in SGI’s core areas of technical strength: high-performance computing (“ HPC ”), high-performance data analysis (“ HPDA ”) and related services for both the scale-up and scale-out technology solutions. Over the course of the following six to twelve months, the Board of Directors and senior management came to the conclusion that SGI’s need for capital investments to grow its business was outpacing its cash flows. This culminated in the decision to enter into a new credit agreement (the “ Credit Agreement ”) with Morgan Stanley Senior Funding, Inc. in January 2015. The Credit Agreement, which provided a total of $70 million of additional working capital at an effective annual interest rate of approximately 12%, enabled the Company to address its increasing capital needs as it invested and grew in the HPC and HPDA space. During the course of the fiscal year, however, it became clear to SGI management and the Board of Directors that the Company would remain capital constrained for the foreseeable future due to the working capital requirements of large HPC deals and the operating investments required to build the HPDA business.

In light of the ongoing capital constraints, the relatively high cost of capital associated with the Credit Agreement, and the likely high cost of any new capital raised the Board of Directors expressed a willingness to consider strategic alternatives that would maximize the value of the Company’s technology for the benefit of the Company’s stockholders. These strategic alternatives included considering a sale of selected product lines, as well as a sale of SGI.

On May 14, 2015, SGI, with the consent of the Board of Directors, signed a non-disclosure agreement with DBO enabling it to assist and advise the Board of Directors in connection with its evaluation of strategic alternatives available to SGI. The Board of Directors considered DBO as a potential financial advisor candidate to assist and advise the Board of Directors based on DBO’s qualifications, expertise and reputation, its knowledge of and involvement in prior transactions in the technology hardware and systems industry, and its knowledge and understanding of SGI’s business and affairs. In addition, SGI also retained DBO to act as its financial advisor in connection with its sale of a subsidiary business, which closed in February 2016.

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In May of 2015, the Chief Executive Officer of Party B, a publicly traded technology company, expressed interest in exploring a potential acquisition of SGI to Richard Dracott, an outside consultant engaged by SGI, who relayed this inquiry to Cassio Conceicao, Executive Vice President and Chief Operating Officer of SGI. Following this conversation, Mr. Conceicao, notified Jorge Titinger, the President and Chief Executive Officer of SGI as well as members of the Board of Directors and certain other members of the SGI management team. As a result of this initial overture, Mr. Conceicao and a representative of DBO met with Party B’s Chief Executive Officer and Vice President of Development at Party B’s offices. Thereafter, on June 15, 2015, Mr. Conceicao, Mekonnen Asrat, Senior Vice President and Chief Financial Officer of SGI, and a representative of DBO met with representatives from Party B at Party B’s headquarters to discuss a potential transaction. These discussions were preliminary in nature and neither SGI nor Party B made any proposals during this meeting or otherwise discussed the specific terms of a potential strategic transaction, or any agreement to work towards a potential transaction.

Through the first half of 2015, Brian Freed, Vice President and General Manager, High Performance Data Analytics of SGI, had been in contact with representatives of Hewlett-Packard Company (“ HP Co. ”, the predecessor to HPE prior to the division of HP Co.) relating to his efforts to promote SGI’s UV Product Line in the enterprise HPDA space. On July 6, 2015, following an introduction by HP Co. board member, Mr. Titinger called Antonio Neri, then the Senior Vice President and General Manager of the HP Servers and HP Networking business units, to explore the possibility of a potential strategic transaction between SGI and HP Co., including a commercial partnership or an acquisition of SGI by HP Co. Mr. Neri introduced Mr. Titinger to Randy Meyer, Vice President & General Manager of the Mission Critical Systems segment of the HP Servers business unit.

On July 10, 2015, Mr. Meyer of HP Co. emailed Mr. Freed to inquire about negotiating an original equipment manufacturer, or OEM, arrangement relating to the UV Product Line, pursuant to which the SGI technology would be integrated into certain HP Co. products (the “ OEM Agreement ”).

On July 23, 2015, William Mannel, Vice President and General Manager of the High Performance Computing segment of the HP Servers business unit and a former employee of SGI, contacted Mr. Conceicao to express interest in the possible acquisition of SGI by HP Co. Mr. Conceicao shared this expression of interest with Jorge Titinger, the Chief Executive Officer of SGI, and other members of SGI’s executive team. This expression of interest was also communicated to the Board of Directors by Mr. Titinger. Over the course of the next week, representatives of SGI and HP Co. held additional discussions by telephone.

On August 8, 2015, SGI and HP Co. entered into a mutual non-disclosure agreement to facilitate the exploration of a potential strategic transaction (the “Non-Disclosure Agreement”).

On August 14, 2015, executives from SGI, including Messrs. Titinger and Asrat, and Robert Nikl (the then current SGI Chief Financial Officer), along with representatives of DBO met with executives from HP Co. to hold preliminary discussions about the possible acquisition of SGI by HP Co. No specific proposals were made at this meeting. Following this meeting through August 19, 2015, SGI furnished certain, non-public financial information and held multiple discussions with HP Co. relating to SGI’s business and operations.

On August 31, 2015, following up on a discussion at an industry conference in July, an executive from Party A, a publicly traded IT services corporation, contacted Gabriel Broner, Vice President and General Manager, High Performance Computing of SGI, to ask for a meeting at SGI headquarters to discuss potential partnerships and acquisitions. Mr. Broner promptly notified Messrs. Titinger, Conceicao, Nikl, Asrat and a representative of DBO. The meeting was subsequently arranged for September 11, 2015.

On September 1, 2015, SGI and DBO signed a formal engagement letter relating to DBO’s role as SGI’s financial advisor, which was engaged based upon its expertise in SGI’s industry and its knowledge of and involvement with SGI. Following the engagement of DBO, representatives of DBO and SGI management

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developed an initial list of potential strategic acquirers of SGI, which list was shared with, and endorsed by, the Board of Directors.

On September 11, 2015 Mr. Broner and a representative of DBO held a phone call with Party A to understand Party A’s intentions and learned that Party A was primarily interested in exploring the potential acquisition of SGI. At this time, Party A entered into a mutual non-disclosure agreement and the parties began exchanging non-public information.

On September 14, 2015, a corporate development executive from HP Co. contacted a representative of DBO to indicate HP Co. was not going to make a proposal at this time due, in part, to the impending division of HPE from HP Co., but still desired to pursue an OEM agreement. He further said that an executive would follow up with Mr. Titinger. DBO promptly informed SGI.

On September 17 ^, 2015, an executive from HP Co. contacted Mr. Titinger to explain that HP Co. was not in a position to continue discussions with SGI regarding a potential acquisition of SGI at that time due, in part, to HP Co.’s focus primarily being on the splitting up of its business. The parties agreed to revisit discussions regarding a potential acquisition in approximately six months. Mr. Titinger subsequently notified the Board of Directors of the pause in the discussions with HP Co.

From mid-September 2015 through October 2015, SGI and Party A continued to correspond about a possible strategic transaction, and during such time, SGI continued to provide Party A with preliminary due diligence materials pursuant to the parties’ non-disclosure agreement.

On October 23, 2015, at the Company’s request, representatives from DBO contacted representatives of Party C, Party D and Party G, each a publicly traded hardware or software company, to inquire whether each would be interested in exploring a potential acquisition of SGI.

On October 26-27, 2015, representatives of DBO spoke with representatives from Party D and Party G and provided each party with certain publicly available information regarding SGI. Shortly thereafter, a representative from Party C informed DBO that it was not interested in exploring a strategic transaction with SGI at that time.

On October 28, 2015, representatives of Party G notified representatives of DBO that Party G was not interested in pursuing an acquisition of SGI, citing a lack of interest in the HPC market at that time.

On October 29, 2015, at the Company’s request, representatives of DBO contacted Party E, a publicly traded hardware company then in the process of being acquired. Party E did not respond.

On November 5, 2015, Party D notified representatives of DBO that it was not interested in considering an acquisition of SGI, citing a lack of interest in the HPC market at that time.

On February 4, 2016, the OEM Agreement between HPE and SGI became effective.

On February 8, 2016, Mr. Titinger of SGI reinitiated contact with Mr. Neri, Executive Vice President and General Manager of the HP Enterprise Group of HPE (following the division of HP Co. having been completed on November 1, 2015), to explore whether they would discuss further a potential strategic transaction between HPE and SGI. A member of the corporate development team at HPE responded via email expressing interest in reengaging talks about a strategic transaction.

On February 10, 2016, Mr. Asrat had a call with an executive of HPE, who expressed an interest in holding a meeting and requested that the SGI team provide HPE with updated diligence materials. SGI sent the updated information to HPE on February 17, 2016.

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On March 2, 2016, Messrs. Titinger, Conceicao and Asrat and a representative of DBO met at HPE’s office with Vishal Bhagwati, Senior Vice President of Corporate Development of HPE. At this meeting the parties expressed a mutual interest to continue exploring a possible strategic transaction between the parties.

On March 9, 2016, the Board of Directors of SGI convened a meeting and established an ad hoc board committee, referred to as the Strategic Committee, consisting of directors Nina Richardson and Charles Boesenberg, which committee was empowered to closely review and monitor strategic initiatives involving SGI, including discussions relating to the acquisition of SGI, as well as financing matters, and to report back to the full Board of Directors as material developments should arise.

On March 24, 2016, at the direction of SGI, which had recently conducted business development meetings related to a potential reseller, or OEM relationship, of the UV Product Line with Party H, representatives of DBO called a representative from Party H to explore their potential interest in a strategic transaction between Party H and SGI. The representative from Party H expressed reservations about any potential strategic transaction, citing profitability, potential loss of HPE OEM Agreement revenue, hardware commoditization trends and regulatory concerns related to sales to agencies of the U.S. Federal government. The representative stated that Party H would reach back out if it was interested in engaging further. Neither SGI nor DBO heard from Party H again.

On March 31, 2016, Mr. Neri of HPE contacted Mr. Titinger of SGI to inform him that HPE would not be pursuing an acquisition of SGI at that time.

On April 20, 2016, in response to certain requests made by Party A and its legal counsel, who had not reviewed the initial non-disclosure agreement, SGI entered into a new non-disclosure agreement with Party A prior to proceeding with any further communications, which superseded the parties’ earlier non-disclosure agreement.

On April 25, 2016, Mr. Titinger provided a written and oral update to the Strategic Committee describing the progress of the various discussions and efforts on behalf of SGI with parties potentially interested in exploring a strategic transaction with SGI, the proposed timetable for following up with such parties, and their perceived level of interest. The committee directed Mr. Titinger to continue to explore strategic transactions.

On May 4, 2016, a representative of DBO met separately with Mr. Boesenberg to provide an additional update on the progress to date.

Also on May 4, 2016, Mr. Bhagwati of HPE contacted Mr. Asrat of SGI inquiring if SGI would be interested in exploring a transaction for only the UV Product Line and not the entire company. Mr. Asrat responded on May 5, 2016 that SGI was willing to entertain such a transaction, although the Company’s preference would be to sell the entire entity, rather than begin to split up core assets and technologies.

Representatives of HPE then sent additional diligence requests on May 11, 2016. Over May 16-17, Mr. Asrat held multiple conversations with executives from HPE to discuss the diligence process and address particular financial and operational related inquiries.

On May 18, 2016, executives from Party A called Mr. Titinger and another executive of SGI to coordinate another meeting between the parties to continue discussions regarding a possible strategic transaction.

On May 20, 2016, representatives of Party A met with Messrs. Titinger, Conceicao and Asrat and a representative of SGI, along with additional SGI executives, at SGI’s offices to discuss a potential acquisition of SGI by Party A.

On May 23, 2016, Mr. Titinger provided an update to the Strategic Committee regarding the status of discussions with parties potentially interested in a strategic transaction with SGI. Mr. Titinger noted that one concern around a sale of the UV Product Line is that such a sale would require the consent of the lender under

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the Credit Agreement, and that such consent would likely be conditioned on SGI’s prepayment of the full amount owed under the facility. As a result, an asset sale of the UV Product Line would reduce the Company’s debt, but would not be expected to generate significant working capital for the Company.

On May 31, 2016, Mr. Bhagwati of HPE delivered a non-binding proposal and exclusivity agreement for HPE to acquire certain assets of SGI relating to the UV Product Line for $70 million in cash. In response to the HPE offer, the full Board of Directors convened a meeting later in the day on May 31, 2016 with Mr. Titinger and other members of the executive team, along with representatives of DBO in attendance. Representatives of DBO discussed with the Board of Directors certain financial aspects of HPE’s proposal to purchase the UV Product Line and the potential for a sale of the remaining assets of SGI following a sale of the UV Product Line to HPE. After discussion, the Board of Directors rejected the proposal from HPE as not in the best interests of SGI and its stockholders. The Board of Directors, however, directed SGI management and its advisors to continue to explore strategic opportunities available to SGI. The Board of Directors then instructed DBO to produce a valuation of SGI taking into account SGI’s preliminary Fiscal Year 2017 Operating Plan and the long term strategic plan, which we refer to as the “ Operating Plan .”

On June 3, 2016, SGI responded to HPE’s letter dated as of May 31, 2016, rejecting the proposal to purchase the UV Product Line at the $70 million price. On this same date, Mr. Asrat of SGI and a representative of DBO contacted Mr. Bhagwati of HPE to further discuss SGI’s rejection of HPE’s proposal. Mr. Bhagwati requested that SGI consider a price for which SGI would be willing to sell the UV Product Line. Mr. Asrat informed Mr. Bhagwati that that Board of Directors would consider the question at its next meeting.

On June 7, 2016, the Board of Directors convened a telephonic meeting, with Messrs. Titinger, Asrat, Conceicao and Williams and representatives from DBO in attendance. Representatives of DBO discussed with the Board of Directors background financial information regarding SGI and potential next steps that could be undertaken in preparation for evaluating any specific acquisition proposals that SGI might receive as well as any counter offers that SGI may consider making to HPE. Representatives of DBO then led an updated discussion of viable third parties that might reasonably have the interest and capability to consider a transaction with SGI, for either all or a portion of SGI. Members of SGI management then described the recent conversations with HPE regarding the potential strategic transaction, noting that HPE had expressed continued interest in the UV Product Line. The Board of Directors then discussed with management and representatives of DBO potential valuations for the UV Product Line as well as valuations for SGI as a whole with and without the UV Product Line and the feasibility of operating SGI without the UV Product Line or finding a third party buyer for SGI without the UV Product Line. The Board of Directors and SGI management also discussed the annual operating plan and the material risks associated with being able to achieve the forecasts set forth in the plan, including, among others, the fact that much of the anticipated growth in revenue, as reflected in the annual operating plan, was based on assumptions surrounding significant growth in sales associated with the UV Product Line, almost all of which was attributable to continued development of business with HPE, as well as the added risk of larger, better financed competitors to enter the UV market and/or incorporate UV technology into their own products. The Board of Directors noted that HPE could curtail or discontinue its use of the UV Product Line in its discretion and that sales to HPE thus far were below forecasted sales. Following questions and discussion by the Board of Directors, including potential responses to HPE, members of the Board of Directors instructed DBO to reach out to a potential financial buyer well acquainted with SGI to provide insight into the viability of a financial sponsor to take SGI private in conjunction with a disposition of the UV Product Line or otherwise provide a competitive offer to such a disposition.

On June 10, 2016, as authorized by the Board of Directors, representatives of DBO contacted Party F, a private equity fund that was familiar with SGI’s business.

On June 14, 2016, the Board of Directors convened a telephonic meeting to discuss the various conversations that SGI’s executives and representatives had been having with potential acquirers, consisting of HPE, Party A and Party F. Representatives of DBO were in attendance and presented their preliminary perspectives on SGI’s valuation, including an analysis of the value of the various parts or business lines of SGI.

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The Board of Directors, with the assistance of DBO, discussed a potential counter proposal to be presented to HPE, including the price at which SGI may consider divesting the UV Product Line. Following these discussions, the Board of Directors determined that it should make a counter proposal for the sale of the UV Product Line at a price of $125 million. The Board of Directors further discussed the view that it would be best to seek a buyer for the remaining assets of the Company if the UV Product Line was sold to HPE at this price and to determine the viability of such a potential acquirer. The Board of Directors authorized its senior executives and DBO to deliver the counteroffer to HPE.

The Board of Directors also discussed a potential transaction with Party A. Outside counsel joined the meeting at this time and provided an overview of regulatory concerns that would arise in connection with a transaction with a foreign acquirer, such as Party A. Members of the Board of Directors voiced concern about the viability of such a transaction on the belief that SGI’s U.S. government business was significant enough that regulators would carefully review and scrutinize any such transaction. In light of these concerns, the Board of Directors determined that a proposed sale to Party A would bring potentially significant risks to the certainty of closing. The Board of Directors further discussed SGI’s projected capital needs and the risk that any substantial delays in closing a transaction could pose a challenge to SGI’s viability under its current operating plan. While not specifically ruling out a potential sale to Party A, the Board of Directors expressed a desire to find other potential acquirers who would have fewer obstacles to successfully close a transaction with SGI.

Also on June 14, 2016, Mr. Asrat of SGI and a representative of DBO contacted Mr. Bhagwati of HPE to inform him that SGI would entertain selling the UV Product Line to HPE at a price of $125 million, and SGI sent a letter to HPE indicating the same.

On June 15, 2016, Party F and SGI entered into a non-disclosure agreement and Party F conducted preliminary due diligence and valuation analyses.

On June 16, 2016, HPE sent SGI a non-binding proposal and exclusivity agreement to acquire the UV Product Line for $85 million.

On June 17, 2016, the Board of Directors convened a telephonic meeting to discuss HPE’s latest proposal for the UV Product Line. Representatives of DBO and senior executives of SGI were also in attendance and participated in the discussion. Following these discussions, the Board of Directors authorized DBO and SGI’s senior executives to make a counter proposal to HPE for a sale of the product line at a price of $115 million, provided that SGI would retain the flexibility to explore the sale of the remaining parts of the Company.

On June 19, 2016, SGI sent HPE a letter stating that SGI would be willing to negotiate the terms of a potential sale of the UV Product Line for $115 million, on the condition that SGI would have the freedom to simultaneously pursue a sale of the remaining parts of the Company. HPE had requested an exclusivity clause that would have prevented SGI from engaging in discussions with other third parties regarding potential sales of SGI or assets of SGI.

On June 20, 2016, Mr. Titinger had a discussion with the President of Party A’s data and security division regarding the possible strategic transaction between SGI and Party A, whether consisting of a sale of all of SGI or the remaining business of SGI following the potential divestiture of the UV Product Line. Later on that same date, the Board of Directors held a meeting in which Messrs. Asrat, Hilliard and Williams, as well a representative of DBO, were in attendance to provide an update regarding the progress that had been made to date with respect to potential strategic transactions.

On June 21, 2016, Party F informed representatives of DBO that it was not interested in pursuing a potential transaction for the whole Company or the remaining assets of the Company following the disposition of the UV Product Line citing three factors: (i) Party F’s low valuation of the Company based on limited cash flow generation; (ii) the investment would likely not be in line with Party F’s investment strategy and mandate and, in the case of a disposition, and (iii) lack of interest in SGI without the growth potential of the UV Product Line.

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On June 23, 2016, the Board of Directors convened another meeting to discuss the progress and current status of potential strategic transactions. Also in attendance were Messrs. Conceicao, Asrat, Hilliard and Williams, as well as representatives of DBO. Representatives of DBO reviewed with the Board of Directors the status of strategic discussions held with various potential acquirers and reported to the Board of Directors that Party F had declined interest in a strategic transaction with SGI. As part of that discussion, representatives of DBO reviewed with the Board of Directors the lack of interest from Party F and the low probability that any other financial sponsor would submit a competitive proposal given SGI’s limited cash flow generation, the implied valuation multiples, lack of potential synergies and the current state of the debt markets. The Board of Directors also discussed the status of the negotiations with HPE. Anticipating that Party B might have a stronger strategic interest in SGI without the UV Product Line, the Board of Directors instructed Mr. Titinger to contact Party B. Also on that date, Mr. Titinger called the CEO of Party B.

On June 27, 2016, SGI executed a non-disclosure agreement with Party B. Later that day, HPE sent SGI a revised non-binding proposal and exclusivity agreement to acquire the UV Product Line for $105 million. Between June 27 and July 3, 2016 SGI and DBO shared preliminary diligence with Party B and engaged in a series of discussions with Party B.

On June 27, 2016, a telephonic meeting of the Board was convened. Also in attendance were Messrs. Conceicao, Asrat, Hilliard and Williams, as well as representatives of SGI’s outside advisers, including representatives of DBO. The directors discussed the terms of the latest HPE proposal. Representatives of DBO provided additional updates to their background financial analysis of SGI. A representative of Gibson, Dunn & Crutcher LLP (“ Gibson ”), SGI’s outside counsel, discussed with the Board of Directors its fiduciary duties in the context of a potential sale and how a decision to approve a sale of the UV Product Line would affect SGI’s ability to consummate a subsequent transaction for the remainder of SGI, as well as the relevant fiduciary considerations raised by such transactions. Following this meeting, and given that HPE’s offer price for the UV Product Line was approaching the Board of Directors’ minimum threshold, the Board of Directors instructed the representatives of DBO to re-check acquisition interest with certain strategic buyers.

On June 28, 2016, as authorized by the Board of Directors, representatives of DBO approached representatives of Party C, Party D, and Party G. Party E was not contacted due to its pending acquisition by one of the other parties which was contacted. Party H was not contacted due to its lack of follow through from the March 24, 2016 discussion. Representatives of Party G indicated to DBO that they were not interested in a potential transaction with SGI. Representatives of Party C also indicated to DBO that they were unlikely to have any interest, and representatives of Party D did not respond to DBO’s inquiry.

On July 4, 2016, the Chief Executive Officer of Party B emailed Mr. Titinger of the Company and informed him that Party B was not going to pursue a transaction with SGI at this time.

Also on July 4, 2016, Party A sent SGI a non-binding proposal and exclusivity agreement to acquire the Company for $7.50 per share, in cash, conditioned upon Party A obtaining financing and regulatory approvals, including required review and approvals by the United States Committee on Foreign Investments in the United States, referred to in this proxy statement as CFIUS. Following the receipt of the offer, the Board of Directors convened a telephonic meeting later that day. Representatives of DBO and Gibson were also in attendance. The Board of Directors discussed the terms of the Party A proposal. A representative of Gibson reviewed the fiduciary duties of the Board in considering and responding to an acquisition proposal as well as the legal terms of the proposal and answered questions. Representatives from DBO reviewed certain financial aspects of Party A’s proposal. The Board of Directors then discussed and compared Party A’s acquisition proposal for the entire company to the HPE proposal to acquire the UV Product Line for $105 million, as well as the business prospects for the Company after divesting the UV Product Line. The Board of Directors also discussed in length concerns relating to certainty of closing a transaction with Party A, both in light of the financing conditions and obtaining necessary regulatory approvals, including CFIUS. After further discussions, the Board of Directors determined that it would be in the best interest of SGI’s stockholders to sell the entire Company at $7.50 per share, rather

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than divest the UV Product Line to HPE, as the ability to either sell the remaining assets or continue as a going concern exploiting such remaining assets with a higher value to SGI’s stockholders was speculative and viewed as unlikely. As a result, the Board of Directors determined to reject the divestiture proposal from HPE, and directed DBO to inform HPE of this decision. On the evening of July 4, 2016, DBO Partners informed Mr. Bhagwati of HPE of the Board of Directors’ decision to reject HPE’s latest proposal in favor of a sale of the entire company.

On July 5, 2016, Mr. Neri of HPE contacted Mr. Titinger and informed him that HPE intended to submit a “final” proposal to acquire all of SGI, but cautioned Mr. Titinger that HPE would not be willing to engage in a competitive bidding process beyond this proposal. Later on July 5, 2016, Mr. Bhagwati from HPE submitted to the Company a written non-binding proposal and exclusivity agreement to acquire SGI for $7.75 per share, in cash. The offer was not subject to any financing conditions and there were not expected to be any substantive regulatory approvals needed, other than customary antitrust clearances that would be needed for a transaction of this size. He noted that this was HPE’s “final” proposal. In light of the lengthy prior discussions with HPE regarding a potential acquisition of the Company or its UV product line, HPE indicated that it would not engage in a competitive bidding process and that, if the Company wished to pursue the HPE bid, HPE would do so only with an exclusivity arrangement. HPE’s proposal was to expire at the end of the day on July 5, 2016. On July 1, 2016 (the last trading day prior to the offer), the closing price of our common stock on the Nasdaq was $5.08 per share making the $7.75 per share proposal a premium of 53%.

Later in the day on July 5, 2016, the Board of Directors convened a telephonic meeting, with senior executives of SGI, representatives of DBO and representatives of Gibson in attendance. After considering the terms of the HPE proposal, the relative certainty of closing with HPE as compared with Party A due to the financing and regulatory conditions of Party A’s proposals, the superior financial terms of the HPE proposal, the lack of other strategic interests and the concern that HPE would walk away if the Board of Directors attempted to further “shop” the HPE offer, the Board of Directors approved entering into the 30-day exclusivity arrangement with HPE and the Board of Directors authorized and directed Mr. Titinger to work toward the proposed acquisition of SGI by HPE.

Prior to entering into the exclusivity arrangement with HPE on July 5, 2016, Mr. Titinger notified Party A that SGI would be pursuing an alternative transaction. Party A did not initially respond to Mr. Titinger’s notification until after SGI had entered into a contractually binding exclusivity agreement; by the time Party A responded seeking additional information regarding the competing proposal, Mr. Titinger was required by the terms of the exclusivity arrangement with HPE to discontinue discussions with Party A during the exclusivity period.

From July 6, 2016 through the signing of the Merger Agreement on August 11, 2016, HPE management engaged in detailed due diligence with SGI, including meetings between members of management of SGI and HPE, which included presentations on sales and marketing, product and technology, litigation and risk management, compliance and ethics, finance, accounting, tax and human resources.

On July 6, 2016, a representative of Party C contacted a representative from DBO to follow up on DBO’s earlier outreach, expressing a willingness to receive more information regarding the proposed sale of SGI. In light of the terms of the exclusivity arrangement with HPE, representatives of DBO indicated that they were unable to hold any follow-up conversations at that time. DBO made SGI aware of this communication from Party C.

On July 16, 2016, representatives of Sidley Austin LLP (“ Sidley ”), counsel to HPE, delivered a draft of the Merger Agreement to representatives of Gibson. Over the course of the next four weeks, counsel for the two parties, together with management and representatives from both parties, negotiated the terms of the Merger Agreement, with significant focus on deal protection measures, including the size of the termination fee potentially payable, regulatory approvals, closing certainty and other matters.

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During the course of the negotiations of the Merger Agreement, on July 16, 2016, a representative of Sidley informed a representative of Gibson that HPE wished to amend its existing OEM agreement with the Company to provide — in the event of a termination of the Merger Agreement — for a longer term and for expanded access to certain SGI products and technologies, including the UV Product Line, on arm’s length commercial terms. On July 16 and 17, 2016, members of SGI’s senior management team discussed this request internally and with representatives of DBO and Gibson. On July 18, 2016, representatives of Sidley again inquired about the status of this request. The matter was discussed further with representatives of the senior management team of SGI and SGI’s advisors at DBO and Gibson. Following these discussions, SGI management determined that it would not agree to this request, as it may in fact serve to preclude a potential topping bidder from expressing interest in an acquisition of SGI in a manner that would be inconsistent with the fiduciary duties of the Board of Directors. This matter was subsequently discussed with the Board of Directors, which concurred with the conclusion that the proposed amendment to the OEM agreement, as proposed by HPE, would be inconsistent with the fiduciary duties of the Board of Directors.

On July 29, 2016, representatives from Sidley reiterated the request for the amended OEM agreement. The matter was discussed again with representatives of SGI’s management and was again rejected as a potential deal protection that would potentially preclude a topping bid.

On August 5, 2016 representatives of SGI, Gibson, Sidley, HPE and DBO again discussed the request for the amended OEM Agreement. SGI again rejected the proposed amended OEM agreement.

On August 10, 2016, the Board of Directors convened a special meeting to consider the terms of the proposed Merger Agreement. Also in attendance were members of SGI’s management and representatives of Gibson and DBO. Representatives of Gibson reviewed the key terms of the Merger Agreement and described changes to the Merger Agreement from the prior version that had been presented to the Board of Directors, including the proposed deal protections and closing conditions. A discussion then ensued regarding the course of negotiations of the deal protections, including the break-up fee, the no-shop provisions in the draft definitive agreement, the prior demands for expense reimbursement on top of the break-up fee, and the prior demands for an amended OEM arrangement with HPE. The Board of Directors then discussed the perceived likelihood of a topping bid and how the various proposed deal protections would be expected to affect the ability and willingness of a topping bidder to emerge. A representative of Gibson then reviewed the fiduciary duties of the Board of Directors in the context of a sale of the Company.

Representatives of DBO reviewed with the Board of Directors its financial analyses of the consideration to be received by SGI stockholders pursuant to the Merger Agreement, and then reviewed the draft opinion of DBO regarding the fairness, from a financial point of view, of the consideration to be received by the SGI stockholders in the Merger, other than holders of excluded shares or dissenting shares. Following the presentation of DBO’s fairness analysis, the Board of Directors discussed its view that the proposed price of $7.75 per share in cash was fair to the Company’s stockholders. In light of the few remaining open points in the Merger Agreement (consisting of the break-up fee and the outside date for satisfaction of the closing conditions), the Board of Directors instructed management with the assistance of Gibson to work to finalize the Merger Agreement over the course of the remainder of the evening. The Board of Directors adjourned the meeting to August 11, 2016.

At the reconvened meeting on August 11, 2016, a representative from Gibson reported on the outcome of the negotiation of the final two points in the Merger Agreement. At this time, a representative from DBO reviewed its updated financial analysis of the proposed transaction with HPE. Then, a representative from DBO delivered to the Board of Directors DBO’s oral opinion, subsequently confirmed in writing by delivery of a written opinion dated August 11, 2016, that, as of that date and based upon and subject to the factors, assumptions, considerations, limitations and other matters set forth in its written opinion, the $7.75 per share merger consideration to be received by the holders of our common stock, other than excluded shares or dissenting shares, pursuant to the Merger Agreement was fair, from a financial point of view, to such holders. For more information about DBO’s opinion, see the section of this proxy statement below captioned “ The Merger —

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Opinion of Dean Bradley Osborne Partners LLP ”. After discussing potential reasons for and against the proposed transaction (see below under the heading “ The Merger — Recommendation of the Board of Directors and Reasons for the Merger ”), the Board of Directors unanimously (i) determined that the terms of the Merger Agreement, the Merger and the other transactions contemplated thereby were fair to and in the best interests of SGI and its stockholders, (ii) approved and declared advisable the Merger Agreement and the Merger and the other transactions contemplated thereby, (iii) directed that the Merger Agreement be submitted to the stockholders of SGI for adoption and (iv) resolved to recommend that SGI’s stockholders vote in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby.

Just after the close of the U.S. markets on the afternoon of August 11, 2016, HPE, Acquisition Sub and SGI executed the Merger Agreement. In addition, all of the directors of SGI and certain members of SGI’s management executed the separate Voting Agreement. Following the execution of the Merger Agreement on August 11, 2016, the parties issued a press release announcing the Merger.

Recommendation of the Board of Directors and Reasons for the Merger

Recommendation of the Board of Directors

The Board of Directors has unanimously: (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable and in the best interests of SGI and its stockholders; and (2) adopted and approved the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement.

The Board of Directors unanimously recommends that you vote: (1) “ FOR ” the adoption the Merger Agreement and approval of the Merger and the other transactions contemplated thereby; (2) “ FOR ” the proposal to adjourn the Special Meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby at the time of the Special Meeting; and (3) “ FOR ” the non-binding, advisory proposal to approve certain compensation that will or may become payable by SGI to its named executive officers in connection with the Merger.

Reasons for the Merger

In evaluating the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement, the Board of Directors consulted with SGI management, and representatives of its financial advisor and outside legal counsel. In recommending that stockholders vote in favor of adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby, the Board of Directors considered a number of factors, including the following (which factors are not necessarily presented in order of relative importance):

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The Board of Directors also considered a number of uncertainties and risks concerning the Merger, including the following (which factors are not necessarily presented in order of relative importance):

The foregoing discussion is not meant to be exhaustive, but summarizes many, if not all, of the material factors considered by the Board of Directors in its consideration of the Merger. After considering these and other factors, the Board of Directors concluded that the potential benefits of the Merger outweighed the uncertainties and risks. In view of the variety of factors considered by the Board of Directors and the complexity of these factors, the Board of Directors did not find it practicable to, and did not, quantify or otherwise assign relative weights to the foregoing factors in reaching its determination and recommendations. Moreover, each member of the Board of Directors applied his or her own personal business judgment to the process and may have assigned different weights to different factors. The Board of Directors unanimously adopted the Merger Agreement and approved the Merger and the other transactions contemplated by the Merger Agreement and recommends that stockholders adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby based upon the totality of the information presented to and considered by the Board of Directors.

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Opinion of Dean Bradley Osborne Partners LLC

SGI retained DBO to provide it with financial advisory services and a financial opinion in connection with the possible sale of SGI. The Board of Directors selected DBO to act as SGI’s financial advisor based on DBO’s qualifications, expertise and reputation, its knowledge of and involvement in prior transactions in the technology hardware and systems industry, and its knowledge and understanding of SGI’s business and affairs. At the meeting of the Board of Directors on August 11, 2016, DBO rendered to the Board of Directors its oral opinion, subsequently confirmed in writing, that as of August 11, 2016, and based upon and subject to the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of review undertaken, by DBO, as set forth in its written opinion, the Merger Consideration to be received by the holders of shares of our common stock (other than excluded shares and dissenting shares), pursuant to the Merger Agreement, was fair from a financial point of view to such holders of shares of our common stock.

The full text of the written opinion of DBO to the Board of Directors, dated as of August 11, 2016, which sets forth, among other things, the assumptions made, procedures followed, matters considered and qualifications and limitations on the scope of the review undertaken, by DBO in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference in this proxy statement in its entirety. The summary of the opinion of DBO in this proxy statement is qualified in its entirety by reference to the full text of the opinion. You should carefully read and consider DBO’s entire written opinion, as it contains important information. DBO’s opinion was directed to the Board of Directors, in its capacity as such, and addresses only the fairness from a financial point of view of the consideration to be received by the holders of shares of our common stock (other than excluded shares and dissenting shares), pursuant to the Merger Agreement and as of the date of the opinion, and does not address any other aspects or implications of the Merger or related transactions. DBO’s opinion was not intended to, and does not, constitute advice or a recommendation as to how our stockholders should vote at any stockholders’ meeting that may be held in connection with the Merger or whether the stockholders should take any other action in connection with the Merger. The summary of the opinion of DBO set forth below is qualified in its entirety by reference to the full text of the opinion.

For the purpose of rendering its opinion, DBO, among other things:

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In arriving at its opinion, DBO assumed and relied upon, without independent verification, the accuracy and completeness of the information that was publicly available or supplied or otherwise made available to DBO by SGI, and which formed a substantial basis for its opinion. DBO did not assume responsibility or liability for any independent verification of such information. DBO further relied upon the assurances of SGI’s management that they were not aware of any facts or circumstances that would make such information inaccurate or misleading. With respect to the financial projections for SGI, DBO assumed that they had been reasonably prepared on bases reflecting the best currently available estimates and judgments of SGI’s management of the future financial performance of SGI. In addition, DBO assumed that the Merger will be consummated in accordance with the terms set forth in the Merger Agreement without any waiver, amendment or delay of any terms or conditions and that the definitive Merger Agreement would not differ in any material respect from the draft furnished to DBO. DBO assumed that, in connection with the receipt of all the necessary governmental, regulatory or other approvals and consents required for the proposed Merger, no delays, limitations, conditions or restrictions will be imposed that would have a material adverse effect on SGI or on the contemplated benefits expected to be derived in the proposed Merger. DBO is not a legal, tax, regulatory or actuarial advisor. DBO is a financial advisor only and relied upon, without independent verification, the assessment of SGI and its legal, tax, regulatory or actuarial advisors with respect to legal, tax, regulatory or actuarial matters. For the purposes of its analysis, DBO made no assessment of the status of any outstanding litigation involving SGI and excluded the effects of any such litigation in its analysis. Moreover, DBO expressed no opinion with respect to the fairness of the amount or nature of the compensation to be paid to any of SGI’s officers, directors or employees, or any class of such persons, relative to the consideration to be received by the holders of shares of our common stock (other than excluded shares and dissenting shares) in the Merger. DBO’s opinion was limited to the fairness, from a financial point of view, of the Merger Consideration to be received by holders of the shares of our common stock (other than excluded shares and dissenting shares) pursuant to the Merger Agreement and did not address the underlying business decision of SGI to enter into the Merger Agreement. DBO did not make any independent valuation or appraisal of SGI’s assets or liabilities, nor was DBO furnished with any such valuations or appraisals. DBO’s opinion was necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to DBO as of, August 11, 2016. Events occurring after August 11, 2016 may affect DBO’s opinion and the assumptions used in preparing it, and DBO did not assume any obligation to update, revise or reaffirm its opinion.

Summary of Financial Analyses

The following is a brief summary of the material analyses performed by DBO in connection with its oral opinion and the preparation of its written opinion letter dated August 11, 2016 to the Board of Directors. The following summary is not a complete description of DBO’s opinion or the financial analyses performed and factors considered by DBO in connection with its opinion, nor does the order of analyses described represent the relative importance or weight given to those analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before August 9, 2016, the last practical date prior to the meeting of the Board of Directors to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and approve the transactions contemplated thereby, including the Merger. The various analyses summarized below were based on the closing price of $5.62 per share of our common stock as of August 9, 2016 (the last practical date prior to the meeting of the Board of Directors), and are not necessarily indicative of current market conditions. Some of these summaries of financial analyses include information presented in tabular format. In order to fully understand the financial analyses used by DBO, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. The analyses listed in the tables and described below must be considered as a whole; considering any portion of such analyses and of the factors considered, without considering all analyses and factors, could create a misleading or incomplete view of the process underlying DBO’s opinion.

In performing the financial analysis summarized below and arriving at its opinion, DBO used and relied upon the Operating Plan provided by SGI’s management received from SGI management on July 11, 2016 and

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referred to in this proxy statement as the “ Operating Plan Case ” and certain financial projections based on Wall Street research reports and referred to in this proxy statement as the “ Street Case .” For more information, please see the section of this proxy statement captioned, “ The Merger — Management Projections .”

Public Trading Comparables Analysis

DBO performed a public trading comparables analysis, which attempts to provide an implied value of a company by comparing it to similar companies that are publicly traded. DBO reviewed and compared certain financial estimates for SGI with comparable publicly available consensus equity analyst research estimates for companies, selected based on SGI’s professional judgment and experience, coupled with DBO’s knowledge of the computer hardware industry, that share similar business characteristics with SGI (we refer to these companies as the comparable companies). Although none of the comparable companies listed below are identical or directly comparable to SGI, these companies are publicly traded companies with operations and/or other criteria, such as lines of business, markets, business risks and growth prospects, that for purposes of its analysis, DBO considered similar to those of SGI. The comparable companies were considered in two categories based on relative size of the companies’ percent gross profit margins. These comparable companies were the following:

Low Gross Margin

High Gross Margin

For SGI and each other company listed above, DBO calculated and compared various financial multiples and ratios based on publicly available financial data as of August 9, 2016 in the case of the comparable companies and the Street Case and as of July 11, 2016 in the Operating Plan Case. Among other calculations, the information DBO calculated for each of the selected companies included:

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Based on its analysis of the relevant metrics for each of the comparable companies and upon the application of its professional judgment and experience, DBO selected representative ranges of the CY’16E AV/EBITDA, CY’17E AV/EBITDA and CY’17E P/E Ratio and applied these ranges of multiples to SGI’s estimated EBITDA for calendar years 2016 and 2017 and estimated earnings per share for calendar year 2017, respectively.

In addition, DBO calculated the historical next twelve months ratio of aggregate value to revenue for SGI, which is referred to below as Historical NTM AV/Revenue. DBO applied a representative range of multiples from its Historical NTM AV/Revenue analysis to SGI’s revenues.

DBO then calculated the estimated implied value per share of our common stock as of July 11, 2016 in the Operating Plan Case and as of August 9, 2016 in the Street Case as follows:

No company utilized in the public trading comparables analysis is identical to SGI. In evaluating the comparable companies, DBO made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond SGI’s control. These include, among other things, the impact of competition on SGI’s business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of SGI and the industry, and in the financial markets in general. Mathematical analysis (such as determining the average or median) is not in itself a meaningful method of using comparable company data.

Discounted Cash Flow Analysis

DBO performed a discounted cash flow analysis, which is designed to provide an implied value of a company by calculating the present value of the estimated future cash flows and terminal value of such company. DBO calculated a range of equity values per share for our common stock based on a discounted cash flow analysis to value SGI as a stand-alone entity. DBO utilized estimates from the Operating Plan Case and the Street Case for purposes of its discounted cash flow analysis, as more fully described below. With respect to the Operating Plan Case, DBO calculated that 57% of the revenue growth from 2016 to 2020 in the Operating Plan Case is derived from UV revenue which represented only 5% of 2016 revenues. DBO further noted that $199 million of the $325 million in UV revenue growth, or 61%, is forecast to come through one or more OEM partners, of which HPE is the only current OEM partner. DBO also noted risks associated with UV revenues, including entering the enterprise IT market which is relatively new to SGI, dependence on HPE and resellers, timing of revenue growth, growing the sales and marketing resources, transitioning to the next UV product generation, and potential competition from leaders in the computing industry within the time horizon covered by the Operating Plan Case. DBO also calculated that, while the Operating Plan Case forecasts $50 million more revenue than Wall Street analysts for the full fiscal year ended June 2017, the Operating Plan Case also forecasts $40 million less revenue in the first half of fiscal 2017, for which SGI has higher visibility than the full year. EBITDA and earnings in the Operating Plan Case are also forecast to be substantially lower in the first half of

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fiscal 2017 than Wall Street analyst estimates. DBO noted that a reduction in Wall Street analyst estimates often results in stock price declines.

DBO first calculated the estimated unlevered free cash flows which is defined as cash from operations less capital expenditures and stock based compensation. The Operating Plan estimates through 2020 were based on projections prepared by SGI management. The Street Case estimates through 2017 were based on publicly available Wall Street research available as of August 9, 2016. DBO calculated the present value of sum of discounted free cash flows for SGI for the six months ended June 30, 2017 through the six months ended June 30, 2020. Based on the perpetual growth rates ranging from 0.5% to 1.5%, selected based upon the application of its professional judgment and experience, DBO calculated terminal values in the year 2020. DBO also calculated that, due to the limited amounts of cash flow forecast in next several years, the present value of the terminal value in 2020 represents 77% of the total DCF aggregate value. The free cash flows and terminal values were discounted to present values as of July 11, 2016 at a discount rate of 15.5%, which discount rate was selected, upon the application of DBO’s professional judgment and experience, to reflect an estimate of SGI’s weighted average cost of capital.

DBO calculated the estimated implied value per share of our common stock as of July 11, 2016 and August 9, 2016 for the Operating Plan and Street Case, respectively, as follows:

Precedent Transactions Analysis

DBO performed a precedent transactions analysis, which is designed to imply a value of a company based on publicly available financial terms and premia of selected transactions. DBO compared publicly available statistics for transactions with computer hardware target companies, selected based on DBO’s professional judgment and experience, with an EBITDA margin less than 10% and less than 30% next twelve months revenue (“ NTM Revenue ”) NTM Revenue growth. DBO also selected certain comparable transactions due to high relevancy of certain characteristics with the Merger. The following is a list of the computer hardware transactions reviewed:

Selected Computer Hardware

Transactions (Target / Acquiror):

IBM x86 Server Business / Lenovo

Fusion-io / SanDisk

Opnext / Oclaro

Ingram Micro / Tianjin Tianhai Investment Co.

Bell Microproducts / Avnet

Brightpoint / Ingram Micro

Intermec / Honeywell International

Bull Société Anonyme / Atos SE*

Dell / Silver Lake*

Dot Hill / Seagate

Aruba Networks, Inc. / Hewlett-Packard Company (nka: HP, Inc.)

EMC / Dell

SanDisk / Western Digital

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For the transactions listed above, DBO noted the multiple of (i) the aggregate value of the transaction to revenue; (ii) the aggregate value of the transaction to the next twelve months’ EBITDA; and (iii) next twelve months price to per-share earnings. In addition, DBO noted the ranges of the following financial statistics: (1) the implied premium to the acquired company’s closing share price on the last trading day prior to announcement (or the last trading day prior to the share price being affected by acquisition rumors or similar merger-related news) (the “ One Day Premium ”); and (2) the implied premium to the acquired company’s 90-trading-day average closing share price prior to announcement (or the last 90-trading-day average closing share price prior to the share price being affected by acquisition rumors or similar merger-related news) (the “ 90 Day Premium ”). Because of the inherent differences in the business, operations, financial conditions and prospects of SGI and the companies included in the selected precedent analysis, DBO also made qualitative judgments concerning similarities and differences between the characteristics of the selected precedent transactions and the Merger.

Based on its analysis of the relevant metrics for each of the transactions listed above and upon the application of its professional judgment and experience, DBO selected representative ranges of implied premia and financial multiples of the transactions and applied these ranges of premia and financial multiples to the relevant financial statistic for SGI. The following table summarizes DBO’s analysis:

DBO noted that the consideration to be received by holders of shares of our common stock (other than excluded shares and dissenting shares) pursuant to the Merger Agreement is $7.75 per share. No company or transaction utilized in the precedent transactions analysis is identical to SGI or the Merger. In evaluating the precedent transactions, DBO made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond SGI’s control. These include, among other things, the impact of competition on SGI’s business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of SGI and the industry, and in the financial markets in general, which could affect the public trading value of the companies and the aggregate value and equity value of the transactions to which they are being compared. The fact that points in the range of implied present value per share of SGI derived from the valuation of precedent transactions were less than or greater than the consideration is not necessarily dispositive in connection with DBO’s analysis of the consideration for the Merger, but one of many factors DBO considered.

Other Information

DBO observed additional factors that were not considered part of DBO’s financial analysis with respect to its opinion, but which were noted as reference data for the Board of Directors, including the following information described under the sections titled “Stock Price Trading Range” and “Analysts’ Price Targets.”

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DBO observed that our common stock closed at $5.62 on August 9, 2016. DBO noted that the consideration per share of our common stock of $7.75 pursuant to the Merger Agreement reflected a 38% premium to the closing price of $5.62 per share of our common stock on August 9, 2016; a 44% premium to the 30-day average closing price of $5.40 per share and a 50% premium to the 90-day average closing price of $5.18 per share.

Equity Research Analysts’ Future Price Targets

DBO reviewed future public market trading price targets for our common stock prepared and published by equity research analysts prior to August 11, 2016 (the date on which DBO presented its oral opinion to the Board of Directors). These forward targets reflected each analyst’s estimate of the future public market trading price of our common stock in one year. Each of the analysts’ valuation methodologies was presented to the Board of Directors. The price targets for our common stock were $8.50, $8.00 and $6.00 based on the closing price of our common stock on July 20, 2016, June 29, 2016 and July 21, 2016, respectively.

The public market trading price targets published by equity research analysts do not necessarily reflect current market trading prices for our common stock, and these estimates are subject to uncertainties, including the future financial performance of SGI and future financial market conditions.

General

In connection with the review of the Merger by the Board of Directors, DBO performed a variety of financial and comparative analyses for purposes of rendering its opinion. The preparation of a financial opinion is a complex process and is not necessarily susceptible to a partial analysis or summary description. In arriving at its opinion, DBO considered the results of all of its analyses as a whole and did not attribute any particular weight to any analysis or factor it considered. DBO believes that selecting any portion of its analyses, without considering all analyses as a whole, would create an incomplete view of the process underlying its analyses and opinion. In addition, DBO may have given various analyses and factors more or less weight than other analyses and factors, and may have deemed various assumptions more or less probable than other assumptions. As a result, the ranges of valuations resulting from any particular analysis described above should not be taken to be DBO’s view of the actual value of SGI. In performing its analyses, DBO made numerous assumptions with respect to industry performance, general business, regulatory, economic, market and financial conditions and other matters, many of which are beyond SGI’s control. These include, among other things, the impact of competition on SGI’s business and the industry generally, industry growth, and the absence of any adverse material change in the financial condition and prospects of SGI and the industry, and in the financial markets in general. Any estimates contained in DBO’s analyses are not necessarily indicative of future results or actual values, which may be significantly more or less favorable than those suggested by such estimates.

DBO conducted the analyses described above solely as part of its analysis of the fairness from a financial point of view of the consideration to be received by the holders of shares of our common stock (other than excluded shares and dissenting shares) pursuant to the Merger Agreement and in connection with the delivery of

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its opinion, dated August 11, 2016, to the Board of Directors. These analyses do not purport to be appraisals or to reflect the prices at which shares of our common stock might actually trade.

The consideration to be received by the holders of shares of our common stock (other than excluded shares and dissenting shares) pursuant to the Merger Agreement was determined through arms-length negotiations between SGI and HPE and was unanimously approved by the Board of Directors. DBO provided advice to the Board of Directors during these negotiations but did not, however, recommend any specific consideration to SGI or the Board of Directors, nor did DBO opine that any specific consideration constituted the only appropriate consideration for the Merger. DBO’s opinion did not address the relative merits of the Merger as compared to any other alternative business transaction, or other alternatives, or whether or not such alternatives could be achieved or are available. DBO’s opinion was not intended to, and does not, constitute advice or a recommendation as to how SGI stockholders should vote at any stockholders’ meeting that may be held in connection with the Merger, or whether the stockholders should take any other action in connection with the Merger.

DBO’s opinion and its presentation to the Board of Directors was one of many factors taken into consideration by the Board of Directors in deciding to approve and adopt the Merger Agreement, declare the advisability of the Merger Agreement and the Merger and the other transactions contemplated thereby, and recommend that stockholders also adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby. Consequently, the analyses as described above should not be viewed as determinative of the opinion of the Board of Directors with respect to the consideration pursuant to the Merger Agreement or of whether the Board of Directors would have been willing to agree to different consideration. DBO’s opinion was approved by a committee of DBO investment banking and other professionals in accordance with DBO’s customary practice.

The Board of Directors retained DBO based upon DBO’s qualifications, experience and expertise. DBO provides investment banking and other services to a wide range of persons from which conflicting interests or duties may arise. DBO, its affiliates, directors, members, managers and officers may at any time hold long or short positions, finance positions, and may trade or otherwise structure and effect transactions, for their own account or the accounts of its customers, in debt or equity securities or loans of HPE, SGI, Acquisition Sub or any other company, or any currency or commodity, that may be involved in the Merger, or any related derivative instrument.

Under the terms of its engagement letter, DBO provided SGI financial advisory services and a financial opinion, described in this section and attached to this proxy statement as Annex B, in connection with the Merger, and SGI has agreed to pay DBO a fee of approximately $[5.49] million for its services, approximately $[3.99] million of which is contingent upon the closing of the Merger. SGI has also agreed to reimburse DBO for its reasonable expenses, including fees of outside counsel and other professional advisors, incurred in connection with its engagement. In addition, SGI has agreed to indemnify DBO and its affiliates, its and their respective directors, officers, agents and employees and each other person, if any, controlling DBO or any of its affiliates from and against any losses, claims, damages or liabilities related to, arising out of or in connection with DBO’s engagement.

During the two-year period prior to the date of DBO’s opinion, DBO provided financial advisory services to SGI for a sale of a subsidiary of SGI, which sale was unrelated to the Merger and for which DBO was compensated approximately $30,000, and during that period DBO and its affiliates have not otherwise been engaged on any financial advisory or financing assignments for SGI or HPE, and have not otherwise received any fees for such services from SGI, HPE or their affiliates. DBO may seek to provide financial advisory or financing services to SGI, HPE and any of their respective affiliates in the future and would expect to receive fees for the rendering of these services.

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Management Projections

SGI does not, as a matter of course, publicly disclose projections as to its future financial performance. However, in connection with the comprehensive strategic and financial review process as described in this proxy statement, management prepared a set of financial projections taken from the Operating Plan, which was provided to representatives of DBO and the representatives of HPE, which we refer to as the “ Management Projections ”. The Management Projections were the only financial forecasts with respect to SGI provided by SGI for use by its financial advisor in performing its financial analyses during the strategic and financial review process.

The Management Projections were not prepared with a view to public disclosure and are included in this proxy statement only because they were provided to the Board of Directors, representatives of DBO and representatives of HPE in the strategic and financial review process. The Management Projections were not prepared with a view to compliance with (1) GAAP, (2) the published guidelines of the SEC regarding projections and forward-looking statements; or (3) the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of prospective financial information. Deloitte & Touche LLP, our independent registered public accountant, has not examined, reviewed, compiled or otherwise applied procedures to the Management Projections and, accordingly, assumes no responsibility for, and expresses no opinion on, them. The Management Projections included in this proxy statement have been prepared by, and are the responsibility of, SGI management.

Although a summary of the Management Projections is presented with numerical specificity, they reflect numerous assumptions and estimates as to future events made by SGI management that they believed were reasonable at the time the Management Projections were prepared, taking into account the relevant information available to SGI management at the time. However, this information is not fact and should not be relied upon as being necessarily indicative of actual future results. Important factors that may affect actual results and cause the Management Projections not to be achieved include general economic conditions, SGI’s ability to achieve forecasted sales (including continued growth in sales relating to the UV Product Line), accuracy of certain accounting assumptions, changes in actual or projected cash flows, competitive pressures and changes in tax laws. In addition, the Management Projections do not take into account any circumstances or events occurring after the date that they were prepared and do not give effect to the Merger. As a result, there can be no assurance that the Management Projections will be realized, and actual results may be materially better or worse than those contained in the Management Projections. The Management Projections cover multiple years, and such information by its nature becomes less reliable with each successive year. The inclusion of the Management Projections in this proxy statement should not be regarded as an indication that the Board of Directors, SGI, DBO, HPE or any of their respective affiliates or representatives or any other recipient of this information considered, or now considers, the Management Projections to be predictive of actual future results. The summary of the Management Projections is not included in this proxy statement in order to induce any stockholder to vote in favor of the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby or any of the other proposals to be voted on at the Special Meeting. We do not intend to update or otherwise revise the Management Projections to reflect circumstances existing after the date when made or to reflect the occurrence of future events, even in the event that any or all of the assumptions underlying the Management Projections are shown to be in error or no longer appropriate. In light of the foregoing factors and the uncertainties inherent in the Management Projections, stockholders are cautioned not to place undue, if any, reliance on the projections included in this proxy statement .

The Management Projections and the accompanying tables contain certain non-GAAP financial measures, including Non-GAAP Total Revenue, Non-GAAP Margin, Non-GAAP Operating Profit, Non-GAAP Net Income and EBITDA, which SGI believes are helpful in understanding its past financial performance and future results. The non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read in conjunction with SGI’s consolidated financial statements prepared in accordance with GAAP and the reconciliation to GAAP measures presented herein. SGI’s management regularly uses SGI’s supplemental non-GAAP financial measures internally to understand and manage the business and forecast future periods.

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The Management Projections are forward-looking statements. For information on factors that may cause SGI’s future results to materially vary, see the information under the section captioned “ Forward-Looking Statements .”

As noted above, the plans and projections reflect numerous estimates and assumptions made with respect to industry performance, general business, economic, regulatory, market and financial conditions and other future events, as well as matters specific to our business, all of which are difficult to predict and many of which are beyond our control. More specifically, the Management Projections forecast revenue to potentially grow from $533 million in FY’2016 to $1,105 million in FY’2020, an increase of $572 million. The UV Product Line was forecast to contribute $325 million, or 57%, of that revenue increase. This would require the UV Product Line to grow at a 70% compound annual growth rate from its $25 million contribution in FY’2016, when it represented 5% of total revenue. OEM partners represent $200 million of the FY’2020 projection, up from $1 million in FY’2016, requiring the HPE OEM Agreement to begin a substantial ramp up, as well as the signing of new OEM partners. The non-UV Product Line revenues were forecast at an 8% compound annual growth rate to FY’2020, but just 3% in FY’2017. Management and the Board of Directors recognize substantial execution risks in achieving the revenue growth reflected in the Management Projections, generally, and the UV Product Line revenue growth, specifically.

Interests of SGI’s Directors and Executive Officers in the Merger

When considering the recommendation of the Board of Directors that you vote to approve the proposal to adopt the Merger Agreement, you should be aware that our directors and executive officers may have interests in the Merger that are different from, or in addition to, the interests of stockholders generally, as more fully described below. In (i) evaluating and negotiating the Merger Agreement; (ii) approving the Merger Agreement and the Merger; and (iii) recommending that the Merger Agreement and the Merger and the other transactions contemplated thereby be adopted and approved by stockholders, the Board of Directors was aware of and considered these interests to the extent that they existed at the time, among other matters.

Insurance and Indemnification of Directors and Executive Officers

All rights to indemnification by SGI existing in favor of those person who are directors and officers of SGI as of the date of the Merger Agreement (who we refer to as the “ Indemnified Persons ”) for their acts and omissions as directors and officers occurring prior to the Effective Time, as provided in the SGI’s certificate of incorporation or bylaws (as in effect as of the date of the Merger Agreement) and as provided in any indemnification agreements between SGI and said directors and officers (as in effect as of the date of the Merger Agreement), shall survive the Merger and shall continue in full force and effect as an obligation of the Surviving Corporation (to the fullest extent such rights to indemnification are available under and consistent with the DGCL) until the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions.

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For a period of six years after the Effective Time, the Surviving Corporation or HPE will maintain in effect, for the benefit of the Indemnified Persons with respect to their acts and omissions as directors and officers occurring prior to the Effective Time, SGI’s current directors’ and officers’ liability insurance maintained by SGI as of the date of the Merger Agreement (which we refer to as the “ Existing D&O Policy ”); provided , however , that: (i) the Surviving Corporation or HPE, as applicable, may substitute for the Existing D&O Policy a policy or policies of comparable coverage; and (ii) neither the Surviving Corporation nor HPE shall be required to pay annual premiums for the Existing D&O Policy (or any substitute policies) in excess of 250% of the annual premium paid prior to the date of this Agreement by SGI for the Existing D&O Policy, it being understood that the Surviving Corporation or HPE shall nevertheless be obligated to provide as much coverage as may be obtained for such 250% amount. HPE and the Surviving Corporation shall have the right in lieu of the foregoing to purchase a tail policy with substantially the same coverage as the Existing D&O Policy and HPE and Surviving Corporation shall maintain such tail policy in full force and effect and continue to honor their respective obligations thereunder from the Effective Time until the sixth anniversary of the Effective Time.

For more information, see the section of this proxy statement captioned “ The Merger Agreement — Directors’ and Officers’ Indemnification and Insurance ”.

Treatment of Equity-Based Awards

Treatment of Stock Options

As of August 22, 2016, there were 1,100,653 shares of our common stock subject to issuance pursuant to stock options. 379,894 of these options had exercise prices of less than $7.75 per share, of which 168,957 were held by our directors and executive officers. We have not granted stock options since 2012, and all stock options held by our directors and executive officers are fully vested and exercisable.

At the Effective Time, each option to purchase shares of our common stock (which we refer to as “ Company Option ”), granted under the Company’s 2014 Omnibus Incentive Plan, 2006 New Recruit Equity Incentive Plan, 2005 Equity Incentive Plan, 2005 Non-Employee Directors’ Stock Option Plan or 2005 Employee Stock Purchase Plan, each as amended, which we refer to collectively as the “ Company Equity Plans ”, that is outstanding immediately prior to the Effective Time and is held by a person providing services to us immediately prior to the Effective Time will be converted into and become an option, fully vested and immediately exercisable, to purchase HPE common stock (which we refer to as “ HPE Option ”), with (i) the number of shares of HPE common stock subject to such HPE Option obtained by multiplying the number of shares of our common stock subject to the Company Option by the Conversion Ratio, rounded down to the nearest whole share, and (ii) an exercise price equal to the exercise price for the Company Option divided by the Conversion Ratio and rounded up to the nearest whole cent. Each HPE Option shall otherwise be subject to the same terms and conditions of the Company Equity Plans. As used herein, “ Conversion Ratio ” means the quotient obtained by  dividing  (x) $7.75  by  (y) the average closing sale prices of one share of HPE common stock as reported on the New York Stock Exchange for each of the five consecutive trading days immediately preceding (but not including) the date on which the Merger is consummated, which we refer to as the “ Parent Closing Price ”.

Treatment of Restricted Stock Units

As of August 22, 2016, there were 2,372,175 outstanding Restricted Stock Units, of which 198,867 were PSUs and 2,173,308 were time-vesting Restricted Stock Units, and of which Restricted Stock Units 883,671 were held by our directors and executive officers, of which 188,217 were PSUs.

At the Effective Time, each award of unvested Restricted Stock Units (including PSUs) granted under any Company Equity Plans that is outstanding immediately prior to the Effective Time and is held by a person providing services to us immediately prior to the Effective Time (other than those Restricted Stock Units that will become settlable as a result of the consummation of the Merger and are settled in shares of our common stock) will be converted into and thereafter represent the right with respect to HPE common stock, and HPE will

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assume the Restricted Stock Units in accordance with the terms of the Company Equity Plans and/or restricted stock unit agreement by which each Restricted Stock Unit is evidenced, as applicable. Accordingly, from and after the Effective Time, (i) HPE’s board of directors or a committee thereof shall succeed to the authority and responsibility of the Company’s board of directors or any committee thereof with respect to each Restricted Stock Unit assumed by HPE; (ii) the Restricted Stock Units assumed by HPE will represent the right to receive shares of HPE common stock (or cash, if so provided under the terms of such Restricted Stock Units or required by applicable law) upon settlement of such Restricted Stock Units promptly after vesting (except to the extent the terms of the applicable restricted stock unit agreement provide for deferred settlement, in which case settlement will be in accordance with the specified terms); (iii) the number of shares of HPE common stock subject to each award of Restricted Stock Units will be equal to the number of shares of our common stock subject to such award immediately prior to the Effective Time (100% of the target number of shares of our common stock set forth in the applicable award agreement governing the Restricted Stock Unit as applied to any portion of the Restricted Stock Unit that remains subject to performance-based vesting criteria, in each case to the extent such portion is outstanding immediately prior to the cancellation of such Restricted Stock Unit) multiplied by the applicable Conversion Ratio, rounded down to the nearest whole share, with any remaining fractional share discarded; and (iv) the performance-based vesting requirement shall be waived in favor of time based vesting over the original vesting period.

Treatment of Purchase Rights under the ESPP

Our Employee Stock Purchase Plan (“ ESPP ”) was terminated prior to the execution of the Merger Agreement and all payroll withholdings were refunded with interest. Thus, no new offering period will commence and no further shares will be purchased pursuant to the ESPP in connection with the Merger or otherwise.

Payments Upon Termination Following Change-in-Control

All Executive Officers

We are parties to employment letter agreements with each of our executive officers. These agreements provide for specified payments in the event their employment is terminated without “cause” or they resign for “good reason” in various scenarios, including in connection with a change in control. These agreements do not include a “gross-up” of any golden parachute excise tax imposed on the executive pursuant to Section 4999 of the Internal Revenue. Rather, payments would be reduced to an amount equal to the greatest dollar amount that would not subject the named executive officer to the imposition of the excise tax.

Pursuant to Mr. Titinger’s, Mr. Conceicao’s, Mr. Asrat’s, Mr. Hilliard’s and Mr. Williams’ employment arrangements, if within twelve months following a change in control their employment is terminated without cause or if they resign for good reason, and if they sign and do not revoke a release of all claims, then all of their unvested stock options and restricted stock units will accelerate and become fully vested. In addition, they will be entitled to severance benefits equal to twelve months of base salary, the full amount of their annual performance bonuses at target, the prorated amount of their annual performance bonuses at target for the year in which the termination occurred and twelve months of continued medical benefits for them and for their covered dependents. The cash portion of these payments will be paid in a lump sum. Their entitlement to continued medical benefits will cease if they become eligible for group health insurance coverage through a new employer. In addition, their entitlement to these severance benefits will cease if they materially breach the obligations in their non-disclosure agreements, the releases of claims or any other obligations they may owe to us following termination.

The Merger will constitute a “change in control” for purposes of these agreements. “Cause” and “good reason” are defined as follows in the employment agreements:

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Two of our named executive officers, have terminated employment and are not entitled to any payments in connection with the Merger. Jennifer Pileggi voluntarily resigned her employment with us on May 22, 2015 and Robert Nikl terminated his employment with us on January 4, 2016.

Non-Employee Directors

Pursuant to our 2014 Omnibus Equity Incentive Plan, all equity awards held by our non-employee directors will vest upon closing of the Merger because their service as directors will cease.

Golden Parachute Compensation

In accordance with Item 402(t) of Regulation S-K, the table below sets forth the compensation that is based on or otherwise relates to the Merger that will or may become payable to each of our named executive officers in connection with the Merger. Please see the previous portions of this section for further information regarding this compensation.

The amounts indicated in the table below are estimates of the amounts that would be payable assuming, solely for purposes of this table, that the Merger is consummated on November 1, 2016, and that the employment of each of the named executive officers was subject to an involuntary termination on the date described in the footnotes below, as applicable. Our executive officers will not receive pension, non-qualified deferred compensation, tax reimbursement or other benefits in connection with the Merger.

Some of the amounts set forth in the table would be payable solely by virtue of the consummation of the Merger. In addition to the assumptions regarding the consummation date of the Merger and the termination of

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employment, these estimates are based on certain other assumptions that are described in the footnotes accompanying the table below. Accordingly, the ultimate values to be received by a named executive officer in connection with the Merger may differ from the amounts set forth below. The values in the table below payable by HPE are not subject to the non-binding, advisory proposal to approve certain compensation that will or may become payable to our named executive officers in connection with the Merger.

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Equity Interests of SGI’s Executive Officers and Non-Employee Directors

The following table sets forth the number of shares of our common stock and the number of shares of our common stock underlying Company equity awards that are in-the-money and are currently held by each of our executive officers and non-employee directors, in each case that either are currently vested or that will vest in connection with the Merger, assuming that the Effective Time occurs on November 1, 2016. The table also sets forth the values of these shares and equity awards based on the $7.75 per share Merger Consideration (minus the applicable exercise price for the in-the-money options). No new shares of our common stock or equity awards were granted to any executive officer or non-employee director in contemplation of the Merger, other than normal course grants that were in August 2016. For purposes of this table, any shares subject to Company equity awards held by our executives and non-employee directors that vest between the date hereof and November 1, 2016 are considered outstanding shares of our common stock held by the applicable executive or non-employee director. We also have assumed that service of each non-employee director will terminate in connection with the Merger giving rise to full vesting acceleration of such non-employee director’s equity awards.

Closing and Effective Time of the Merger

The closing of the Merger will take place no later than the second business day following the satisfaction or waiver in accordance with the Merger Agreement of all of the conditions to closing of the Merger (as described in the section of this proxy captioned “ The Merger Agreement — Conditions to the Merger ”), other than conditions that by their terms are to be satisfied at the closing, but subject to the satisfaction or waiver of such conditions.

Appraisal Rights

If the Merger is completed, stockholders who have complied exactly with the procedures set forth in Section 262 of the DGCL, including stockholders who: (i) do not vote in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby; (ii) continuously hold their shares of our common stock through the Effective Time; and (iii) properly demand appraisal of their shares of our common stock in compliance with the requirements of Section 262 are entitled to exercise appraisal rights in connection with the Merger under Section 262.

The following discussion is not a complete statement of the law pertaining to appraisal rights under Section 262 and is qualified in its entirety by the full text of Section 262, which is attached to this proxy statement as Annex C and incorporated herein by reference. The following summary does not constitute any legal or other advice and does not constitute a recommendation that stockholders exercise their appraisal rights under

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Section 262. Only a holder of record of shares of our common stock is entitled to demand appraisal rights for the shares registered in such holder’s name. A person having a beneficial interest in shares of our common stock held of record in the name of another person, such as a bank, broker or other nominee, must act promptly to cause the record holder to follow the steps summarized below properly and in a timely manner to perfect appraisal rights. If you hold your shares of our common stock through a bank, broker or other nominee and you wish to exercise appraisal rights, you should consult with your bank, broker or the other nominee.

Under Section 262, holders of shares of our common stock who: (i) do not vote in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby; (ii) continuously hold their shares of our common stock through the Effective Time; and (iii) otherwise follow exactly the procedures set forth in Section 262, will be entitled to have their shares appraised by the Delaware Court of Chancery and to receive payment in cash of the “fair value” of the shares of our common stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest to be paid on the amount determined to be fair value, if any, as determined by the Delaware Court of Chancery. Unless the Delaware Court of Chancery, in its discretion, determines otherwise for good cause shown, interest on an appraisal award will accrue and compound quarterly from the Effective Time through the date the judgment is paid at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during such period.

Under Section 262, where a merger agreement is to be submitted for adoption at a meeting of stockholders, the corporation, not less than 20 days prior to the meeting, must notify each of its stockholders entitled to exercise appraisal rights that appraisal rights are available and include in the notice a copy of Section 262. This proxy statement constitutes SGI’s notice to stockholders that appraisal rights are available in connection with the Merger, and the full text of Section 262 is attached to this proxy statement as Annex C. In connection with the Merger, any holder of shares of our common stock who wishes to exercise appraisal rights or who wishes to preserve such holder’s right to do so should review Annex C carefully.

Failure to comply exactly with the requirements of Section 262 in a timely and proper manner will result in the loss of appraisal rights under the DGCL.

A stockholder who loses his, her or its appraisal rights will be entitled to receive the Merger Consideration described in the Merger Agreement. Moreover, because of the complexity of the procedures for exercising the right to seek appraisal of shares of our common stock, SGI believes that if a stockholder considers exercising such rights, such stockholder should seek the advice of legal counsel.

Stockholders wishing to exercise the right to seek an appraisal of their shares of our common stock must, among other requirements, do ALL of the following:

The stockholder or the Surviving Corporation must also file a petition in the Delaware Court of Chancery requesting a determination of the fair value of the shares of our common stock within 120 days after the Effective Time. The Surviving Corporation is under no obligation to file any petition and has no intention of doing so.

Because a proxy that does not contain voting instructions will, unless revoked, be voted in favor of the Merger Agreement, a stockholder who votes by proxy and who wishes to exercise appraisal rights must vote against the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby, abstain or not vote its shares.

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Filing Written Demand

Any holder of shares of our common stock wishing to exercise appraisal rights must deliver to SGI, before the vote on the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby, at the Special Meeting at which the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby will be submitted to the stockholders, a written demand for the appraisal of the stockholder’s shares, and that stockholder must not vote or submit a proxy in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby. A holder of shares of our common stock exercising appraisal rights must hold of record the shares on the date the written demand for appraisal is made, and must continue to hold the shares of record through the Effective Time. A proxy that is submitted and does not contain voting instructions will, unless revoked, be voted in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby and it will constitute a waiver of the stockholder’s right of appraisal and will nullify any previously delivered written demand for appraisal. Therefore, a stockholder who submits a proxy and who wishes to exercise appraisal rights must submit a proxy containing instructions to vote against the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby or abstain from voting on the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby. Neither voting against the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby, nor abstaining from voting or failing to vote on the proposal to adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby will, in and of itself, constitute a written demand for appraisal satisfying the requirements of Section 262. The written demand for appraisal must be in addition to and separate from any proxy or vote on the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby. A stockholder’s failure to make the written demand prior to the taking of the vote on the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby at the Special Meeting will result in a loss of appraisal rights under the DGCL.

Only a holder of record of shares of our common stock is entitled to demand appraisal rights for the shares registered in such holder’s name. A demand for appraisal in respect of shares of our common stock should be executed by or on behalf of the holder of record and must reasonably inform SGI of the identity of the holder and state that the person intends thereby to demand appraisal of the holder’s shares of our common stock in connection with the Merger. If the shares of our common stock are owned of record in a fiduciary capacity, such as by a trustee, guardian or custodian, such demand must be executed by or on behalf of the record owner, and if the shares are owned of record by more than one person, as in a joint tenancy and tenancy in common, the demand should be executed by or on behalf of all joint owners. An authorized agent, including an authorized agent for two or more joint owners, may execute a demand for appraisal on behalf of a holder of record; however, the agent must identify the record owner or owners and expressly disclose that, in executing the demand, the agent is acting as agent for the record owner or owners.

STOCKHOLDERS WHO HOLD THEIR SHARES OF OUR COMMON STOCK IN BROKERAGE OR BANK ACCOUNTS OR OTHER NOMINEE FORMS AND WHO WISH TO EXERCISE APPRAISAL RIGHTS SHOULD CONSULT WITH THEIR BANK, BROKER OR OTHER NOMINEES, AS APPLICABLE, TO DETERMINE THE APPROPRIATE PROCEDURES FOR THE BANK, BROKER OR OTHER NOMINEE TO MAKE A DEMAND FOR APPRAISAL OF THOSE SHARES OF OUR COMMON STOCK. A PERSON HAVING A BENEFICIAL INTEREST IN SHARES OF OUR COMMON STOCK HELD OF RECORD IN THE NAME OF ANOTHER PERSON, SUCH AS A BANK, BROKER OR OTHER NOMINEE, MUST ACT PROMPTLY TO CAUSE THE RECORD HOLDER TO FOLLOW PROPERLY AND IN A TIMELY MANNER THE STEPS NECESSARY TO PERFECT APPRAISAL RIGHTS.

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All written demands for appraisal pursuant to Section 262 should be delivered to:

Silicon Graphics International Corp.

Attn: Corporate Secretary

900 North McCarthy Blvd.

Milpitas, California 95035

Any holder of shares of our common stock may withdraw his, her or its demand for appraisal and accept the consideration offered pursuant to the Merger Agreement by delivering to SGI a written withdrawal of the demand for appraisal. However, any such attempt to withdraw the demand made more than 60 days after the Effective Time will require written approval of the Surviving Corporation.

No appraisal proceeding in the Delaware Court of Chancery will be dismissed without the approval of the Delaware Court of Chancery, and such approval may be conditioned upon such terms as the Delaware Court of Chancery deems just; provided , however , that such dismissal will not affect the right of any stockholder who has not commenced an appraisal proceeding or joined that proceeding as a named party to withdraw such stockholder’s demand for appraisal and to accept the terms offered upon the Merger within 60 days after the Effective Time.

Notice by the Surviving Corporation

If the Merger is completed, within ten days after the Effective Time, the Surviving Corporation will notify each holder of shares of our common stock who has made a written demand for appraisal pursuant to Section 262 and who has not voted in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby that the Merger has become effective and the effective date thereof, and include a copy in such notice of Section 262.

Filing a Petition for Appraisal

Within 120 days after the Effective Time, the Surviving Corporation or any holder of shares of our common stock who has complied with Section 262 and is entitled to exercise appraisal rights under Section 262 may commence an appraisal proceeding by filing a petition in the Delaware Court of Chancery, with a copy served on the Surviving Corporation in the case of a petition filed by a stockholder, demanding a determination of the fair value of the shares held by all stockholders entitled to appraisal. The Surviving Corporation is under no obligation, and has no present intention, to file a petition, and holders should not assume that the Surviving Corporation will file a petition or initiate any negotiations with respect to the fair value of the shares of our common stock. Accordingly, any holders of shares of our common stock who desire to have their shares appraised should initiate all necessary action to perfect their appraisal rights in respect of their shares of our common stock within the time and in the manner prescribed by Section 262. The failure of a holder of shares of our common stock to file such a petition within the period specified in Section 262 will nullify the stockholder’s previous written demand for appraisal.

Within 120 days after the Effective Time, any holder of shares of our common stock who has complied with the requirements for exercise of appraisal rights will be entitled, upon written request, to receive from the Surviving Corporation a statement setting forth the aggregate number of shares not voted in favor of the adoption of the Merger Agreement and approval of the Merger and the other transactions contemplated thereby with respect to which SGI has received demands for appraisal, and the aggregate number of holders of such shares. The Surviving Corporation must mail this statement to the requesting stockholder within ten days after receipt of the written request for such a statement or within ten days after the expiration of the period for delivery of demands for appraisal, whichever is later. A beneficial owner of shares held either in a voting trust or by a nominee on behalf of such person may, in such person’s own name, file a petition seeking appraisal or request from the Surviving Corporation the foregoing statements. As noted above, however, the demand for appraisal can only be made by a stockholder of record.

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If a petition for an appraisal is duly filed by a holder of shares of our common stock and a copy thereof is served upon the Surviving Corporation, the Surviving Corporation will then be obligated within 20 days after such service to file with the Delaware Register in Chancery a duly verified list containing the names and addresses of all stockholders who have demanded payment for their shares and with whom agreements as to the value of their shares have not been reached. After notice to the stockholders as required by the court, the Delaware Court of Chancery is empowered to conduct a hearing on the petition to determine those stockholders who have complied with Section 262 and who have become entitled to exercise appraisal rights thereunder. The Delaware Court of Chancery may require stockholders demanding appraisal of their shares to submit their stock certificates to the Register in Chancery for notation thereon of the pendency of the appraisal proceedings, and if any stockholder fails to comply with that direction, the Delaware Court of Chancery may dismiss the proceedings as to such stockholder.

Determination of Fair Value

After determining the holders of our common stock entitled to appraisal, the Delaware Court of Chancery will appraise the “fair value” of the shares of our common stock, exclusive of any element of value arising from the accomplishment or expectation of the Merger, together with interest, if any, to be paid upon the amount determined to be the fair value. In determining fair value, the Delaware Court of Chancery will take into account all relevant factors. Unless the court in its discretion determines otherwise for good cause shown, interest from the Effective Time through the date of payment of the judgment will be compounded quarterly and will accrue at 5% over the Federal Reserve discount rate (including any surcharge) as established from time to time during the period between the Effective Time and the date of payment of the judgment. In Weinberger v. UOP, Inc. , the Supreme Court of Delaware discussed the factors that could be considered in determining fair value in an appraisal proceeding, stating that “proof of value by any techniques or methods which are generally considered acceptable in the financial community and otherwise admissible in court” should be considered, and that “[f]air price obviously requires consideration of all relevant factors involving the value of a company.” The Delaware Supreme Court stated that, in making this determination of fair value, the court must consider market value, asset value, dividends, earnings prospects, the nature of the enterprise and any other facts that could be ascertained as of the date of the merger that throw any light on future prospects of the merged corporation. Section 262 provides that fair value is to be “exclusive of any element of value arising from the accomplishment or expectation of the merger.” In Cede & Co. v. Technicolor, Inc. , the Delaware Supreme Court stated that such exclusion is a “narrow exclusion [that] does not encompass known elements of value,” but which rather applies only to the speculative elements of value arising from such accomplishment or expectation. In Weinberger , the Supreme Court of Delaware also stated that “elements of future value, including the nature of the enterprise, which are known or susceptible of proof as of the date of the merger and not the product of speculation, may be considered.”

Stockholders considering seeking appraisal should be aware that the fair value of their shares as so determined by the Delaware Court of Chancery could be more than, the same as or less than the consideration they would receive pursuant to the Merger if they did not seek appraisal of their shares and that an opinion of an investment banking firm as to the fairness from a financial point of view of the consideration payable in a Merger is not an opinion as to, and does not in any manner address, fair value under Section 262. Although SGI believes that the Merger Consideration is fair, no representation is made as to the outcome of the appraisal of fair value as determined by the Delaware Court of Chancery, and stockholders should recognize that such an appraisal could result in a determination of a value higher or lower than, or the same as, the Merger Consideration . Neither SGI nor HPE anticipates offering more than the Merger Consideration to any stockholder exercising appraisal rights, and each of SGI and HPE reserves the right to assert, in any appraisal proceeding, that for purposes of Section 262, the “fair value” of a share of our common stock is less than the Merger Consideration. If a petition for appraisal is not timely filed, then the right to an appraisal will cease. The costs of the appraisal proceedings (which do not include attorneys’ fees or the fees and expenses of experts) may be determined by the Delaware Court of Chancery and taxed upon the parties as the Delaware Court of Chancery deems equitable under the circumstances. Upon application of a stockholder, the Delaware Court of Chancery may also order that all or a portion of the expenses incurred by a stockholder in connection with an appraisal,

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including, without limitation, reasonable attorneys’ fees and the fees and expenses of experts, be charged pro rata against the value of all the shares entitled to be appraised.

If any stockholder who demands appraisal of his, her or its shares of our common stock under Section 262 fails to perfect, or loses or successfully withdraws, such holder’s right to appraisal, such stockholder’s shares of our common stock will be deemed to have been converted at the Effective Time into the right to receive the Merger Consideration. A stockholder will fail to perfect, or effectively lose or withdraw, the holder’s right to appraisal if no petition for appraisal is filed within 120 days after the Effective Time or if the stockholder delivers to the Surviving Corporation a written withdrawal of the holder’s demand for appraisal and an acceptance of the Merger Consideration in accordance with Section 262.

From and after the Effective Time, no stockholder who has demanded appraisal rights will be entitled to vote such shares of our common stock for any purpose or to receive payment of dividends or other distributions on our common stock, except dividends or other distributions on the holder’s shares of our common stock, if any, payable to stockholders as of a time prior to the Effective Time. If no petition for an appraisal is filed, or if the stockholder delivers to the Surviving Corporation a written withdrawal of the demand for an appraisal and an acceptance of the Merger, either within 60 days after the Effective Time or thereafter with the written approval of the Surviving Corporation, then the right of such stockholder to an appraisal will cease. Once a petition for appraisal is filed with the Delaware Court of Chancery, however, the appraisal proceeding may not be dismissed as to any stockholder who commenced the proceeding or joined that proceeding as a named party without the approval of the court.

Failure to comply exactly with all of the procedures set forth in Section 262 will result in the loss of a stockholder’s statutory appraisal rights. Consequently, any stockholder wishing to exercise appraisal rights is encouraged to consult legal counsel before attempting to exercise those rights.

Accounting Treatment

The Merger will be accounted for as a “purchase transaction” for financial accounting purposes.

Material U.S. Federal Income Tax Consequences of the Merger

The following discussion is a summary of certain material U.S. federal income tax consequences of the Merger that may be relevant to certain U.S. Holders and Non-U.S. Holders (each as defined below) of shares of our common stock whose shares are converted into the right to receive cash pursuant to the Merger. This discussion is based upon the Internal Revenue Code of 1986, as amended, which we refer to as the “ Code ,” Treasury Regulations promulgated under the Code, court decisions, published positions of the Internal Revenue Service, which we refer to as the “ IRS ,” and other applicable authorities, all as in effect on the date of this proxy statement and all of which are subject to change or differing interpretations, possibly with retroactive effect. This discussion is limited to holders who hold their shares of our common stock as “capital assets” within the meaning of Section 1221 of the Code (generally, property held for investment purposes).

This discussion is for general information only and does not address all of the tax consequences that may be relevant to holders in light of their particular circumstances. For example, this discussion does not address:

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If a partnership (including an entity or arrangement, domestic or foreign, treated as a partnership for U.S. federal income tax purposes) is a beneficial owner of shares of our common stock, then the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partner and the partnership. Partnerships holding shares of our common stock and partners (or persons treated as partners for U.S. federal income tax purposes) therein should consult their tax advisors regarding the tax consequences of the Merger.

No ruling from the IRS and no opinion of counsel has been or will be obtained regarding the U.S. federal income tax consequences of the Merger described below. No assurance can be given that the IRS will agree with the views expressed in this summary. If the IRS contests a conclusion set forth herein, no assurance can be given that a holder would ultimately prevail in a final determination by a court.

THIS DISCUSSION IS PROVIDED FOR GENERAL INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE TO ANY HOLDER. A HOLDER SHOULD CONSULT SUCH HOLDER’S OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL INCOME TAX CONSEQUENCES RELATING TO THE MERGER IN LIGHT OF ITS PARTICULAR CIRCUMSTANCES AND ANY CONSEQUENCES ARISING UNDER U.S. FEDERAL NON-INCOME TAX LAWS OR THE LAWS OF ANY STATE, LOCAL, OR FOREIGN TAXING JURISDICTION, INCLUDING POSSIBLE CHANGES IN SUCH LAWS.

U.S. Holders

For purposes of this discussion, a “ U.S. Holder ” is a beneficial owner of shares of our common stock that is for U.S. federal income tax purposes:

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The receipt of cash by a U.S. Holder in exchange for shares of our common stock pursuant to the Merger will be a taxable transaction for U.S. federal income tax purposes. In general, such U.S. Holder’s gain or loss will be equal to the difference, if any, between the amount of cash received and the U.S. Holder’s adjusted tax basis in the shares surrendered pursuant to the Merger. A U.S. Holder’s adjusted tax basis generally will equal the amount that such U.S. Holder paid for the shares. Such gain or loss will be capital gain or loss and will be long-term capital gain or loss if such U.S. Holder’s holding period in such shares is more than one year at the time of the completion of the Merger. A reduced tax rate on capital gain generally will apply to long-term capital gain of a non-corporate U.S. Holder (including individuals). The deductibility of capital losses is subject to limitations. Gain or loss realized generally must be calculated separately for each block of shares ( i.e. , shares acquired at the same cost in a single transaction) surrendered pursuant to the Merger.

Additionally, a 3.8% tax generally is imposed on all or a portion of the “net investment income” (within the meaning of the Code) of certain individuals and on the undistributed net investment income of certain estates and trusts. For individuals, the additional 3.8% tax generally is imposed on all or a portion of the net investment income of individuals with a modified adjusted gross income of over $200,000 ($250,000 in the case of joint filers). For these purposes, “net investment income” generally will include any gain recognized on the receipt of cash in exchange for shares of our common stock pursuant to the Merger.

Non-U.S. Holders

For purposes of this discussion, the term “ Non-U.S. Holder ” means a beneficial owner of shares of our common stock that is neither a U.S. Holder nor a partnership for U.S. federal income tax purposes.

Non-U.S. Holders should consult their own tax advisors to determine the U.S. federal, state, local, and foreign tax consequences that may be relevant to them in light of their particular circumstances. Any gain realized by a Non-U.S. Holder pursuant to the Merger generally will not be subject to U.S. federal income tax unless:

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Information Reporting and Backup Withholding

Information reporting and backup withholding (at a current rate of 28%) may apply to the proceeds received by a holder pursuant to the Merger. Backup withholding generally will not apply to (i) a U.S. Holder that furnishes a correct taxpayer identification number and certifies that such holder is not subject to backup withholding on a properly completed IRS Form W-9 (or a substitute or successor form) or (ii) a Non-U.S. Holder that (A) provides a certification of such holder’s foreign status on a properly completed appropriate series of IRS Form W-8 (or a substitute or successor form) or (B) otherwise establishes an exemption from backup withholding. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the IRS.

THE FOREGOING SUMMARY DOES NOT DISCUSS ALL ASPECTS OF U.S. FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO PARTICULAR HOLDERS OF SHARES OF OUR COMMON STOCK. HOLDERS OF SHARES ARE URGED TO CONSULT THEIR TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES TO THEM OF THE RECEIPT OF CASH FOR THEIR SHARES PURSUANT TO THE MERGER UNDER ANY U.S. FEDERAL, STATE, LOCAL, FOREIGN OR OTHER TAX LAWS, INCLUDING POSSIBLE CHANGES IN SUCH LAWS.

Regulatory Approvals Required for the Merger

HPE and SGI have generally agreed to use their reasonable best efforts to obtain all necessary actions or approvals from governmental entities to consummate the Merger and the other transactions contemplated by the Merger Agreement. These approvals (i) include that the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, which we refer to as the “ HSR Act ,” has expired or been terminated; and (ii) may include the approval or clearance of the Merger pursuant to antitrust laws of Japan and potentially other jurisdictions, which we refer to collectively as the “ foreign jurisdictions ,” as required.

HSR Act and U.S. Antitrust Matters

Under the HSR Act and the rules promulgated thereunder, the Merger cannot be completed until HPE and SGI file a notification and report form with the Federal Trade Commission, which we refer to as the “ FTC ,” and the Antitrust Division of the Department of Justice, which we refer to as the “ DOJ ,” under the HSR Act and the applicable waiting period has expired or been terminated. A transaction notifiable under the HSR Act may not be completed until the expiration of waiting period following the parties’ filing of their respective HSR Act notification forms (typically a 30-day period) or the early termination of that waiting period.

At any time before or after consummation of the Merger, notwithstanding the termination of the waiting period under the HSR Act, the FTC or the DOJ could take such action under the antitrust laws as it deems necessary under the applicable statutes, including seeking to enjoin the completion of the Merger, seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. At any time before or after the completion of the Merger, and notwithstanding the termination of the waiting period under the HSR Act, any state could take such action under the antitrust laws as it deems necessary. Such action could include seeking to enjoin the completion of the Merger or seeking divestiture of substantial assets of the parties, or requiring the parties to license, or hold separate, assets or terminate existing relationships and contractual rights. Private parties may also seek to take legal action under the antitrust laws under certain circumstances.

Foreign Competition Laws

Under the competition laws of the foreign jurisdictions noted above, certain competition law filings may be necessary. HPE and SGI have not yet made the necessary filings as dictated by the competition laws of the foreign jurisdictions.

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Other Regulatory Approvals

One or more governmental agencies may impose a condition, restriction, qualification, requirement or limitation when it grants the necessary approvals and consents. Third parties may also seek to intervene in the regulatory process or litigate to enjoin or overturn regulatory approvals, any of which actions could significantly impede or even preclude obtaining required regulatory approvals. There is currently no way to predict how long it will take to obtain all of the required regulatory approvals or whether such approvals will ultimately be obtained and there may be a substantial period of time between the approval by stockholders and the completion of the Merger.

Although we expect that all required regulatory clearances and approvals will be obtained, we cannot assure you that these regulatory clearances and approvals will be timely obtained, obtained at all or that the granting of these regulatory clearances and approvals will not involve the imposition of additional conditions on the completion of the Merger, including the requirement to divest assets, or require changes to the terms of the Merger Agreement. These conditions or changes could result in the conditions to the Merger not being satisfied.

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THE MERGER AGREEMENT

Explanatory Note Regarding the Merger Agreement

The following summary describes the material provisions of the Merger Agreement. The descriptions of the Merger Agreement in this summary and elsewhere in this proxy statement are not complete and are qualified in their entirety by reference to the Merger Agreement, a copy of which is attached to this proxy statement as Annex A and is incorporated into this proxy statement by reference. We encourage you to read the Merger Agreement carefully and in its entirety because this summary may not contain all the information about the Merger Agreement that is important to you. The rights and obligations of the parties are governed by the express terms of the Merger Agreement and not by this summary or any other information contained in this proxy statement. Capitalized terms in this section but not defined in this proxy statement have the meaning ascribed to such terms in the Merger Agreement .

The representations, warranties, covenants and agreements described in this section and included in the Merger Agreement: (1) were made only for purposes of the Merger Agreement and as of specific dates; (2) were made solely for the benefit of the parties to the Merger Agreement; and (3) may be subject to important qualifications, limitations and supplemental information agreed to by HPE, SGI and Acquisition Sub in connection with negotiating the terms of the Merger Agreement. The representations and warranties may also be subject to a contractual standard of materiality different from those generally applicable to reports and documents filed with the SEC and, in some cases, were qualified by matters disclosed to HPE and Acquisition Sub by SGI in the disclosure letter to the Merger Agreement. In addition, the representations and warranties may have been included in the Merger Agreement for the purposes of allocating contractual risk between the parties to the Merger Agreement, rather than to establish matters as facts, and may be subject to standards of materiality applicable to such parties that differ from those applicable to investors. Stockholders are not third-party beneficiaries under the Merger Agreement and should not rely on the representations, warranties, covenants and agreements or any descriptions thereof as characterizations of the actual state of facts or condition of SGI, HPE or Acquisition Sub or any of their respective affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may have changed after the date of the Merger Agreement and do not purport to be accurate as of the date of this proxy statement and, accordingly, you should not rely on such representations and warranties as characterizations of the actual state of facts at the time they were made or as of the date of this proxy statement. In addition, you should not rely on the covenants in the Merger Agreement as actual limitations on the respective businesses of SGI, HPE and Acquisition Sub because the parties may take certain actions that are either expressly permitted in the disclosure letter delivered by SGI in connection with the execution of the Merger Agreement or as otherwise consented to by the appropriate party, which consent may be given without prior notice to the public. The Merger Agreement is described below, and included as Annex A, only to provide you with information regarding its terms and conditions, and not to provide you with any other factual information regarding SGI, HPE, Acquisition Sub or their respective businesses or affiliates. Accordingly, the representations, warranties, covenants and other agreements in the Merger Agreement should not be read alone and you should read the information provided elsewhere in this document and in our filings with the SEC regarding SGI and our business.

Form and Effects of the Merger; Directors and Officers; Certificate of Incorporation and Bylaws

Upon the terms and subject to the conditions of the Merger Agreement and in accordance with the DGCL, at the Effective Time, Acquisition Sub, a wholly owned subsidiary of HPE created solely for the purpose of engaging in the Merger and the other transactions contemplated by the Merger Agreement, will merge with and into SGI. The separate corporate existence of Acquisition Sub will cease, and SGI will continue as the Surviving Corporation and will become a wholly owned subsidiary of HPE.

From and after the Effective Time, the Surviving Corporation will possess all properties, rights, privileges, powers and franchises of SGI and Acquisition Sub, and all of the debts, liabilities and duties of SGI and Acquisition Sub will become the debts, liabilities and duties of the Surviving Corporation.

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At or immediately after the Effective Time, the certificate of incorporation and the bylaws of the Surviving Corporation will be amended and restated in their entirety to conform to the certificate of incorporation and the bylaws of Acquisition Sub as in effect immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be “Silicon Graphics International Corp.” until thereafter changed or amended in accordance with the provisions thereof and as provided by applicable law.

From and after the Effective Time, the directors of Acquisition Sub immediately prior to the Effective Time will be the initial directors of the Surviving Corporation. The officers of Acquisition Sub immediately prior to the Effective Time will be the initial officers of the Surviving Corporation. The directors and officers will serve in accordance with the articles of incorporation and bylaws of the Surviving Corporation until the earlier of their resignation or removal or until their respective successors are duly elected and qualified, as the case may be.

Closing and Effective Time of the Merger

Unless otherwise mutually agreed by HPE and SGI, the closing of the Merger is expected to occur at 10:00 a.m. Pacific Time on a date to be specified by HPE and SGI, which date shall be as soon as practicable and in no event later than the second business day after the conditions to the Merger set forth in the Merger Agreement and described in the section of this proxy statement captioned “ The Merger Agreement — Conditions to the Merger ” have been satisfied or, to the extent permitted by applicable law, waived (other than the conditions that by their terms are to be satisfied at the closing of the Merger, but subject to the satisfaction or, to the extent permitted by applicable law, waiver of those conditions).

The Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed upon by HPE and SGI and specified in the certificate of merger in accordance with the DGCL. As of the date of this proxy statement, we expect to complete the Merger in the first half of fiscal 2017 (occurring sometime prior to December 31, 2016); however, consummation of the Merger is subject to the satisfaction or (to the extent permitted by applicable law) waiver of the conditions to the completion of the Merger more fully described in the section of this proxy statement captioned “ The Merger Agreement — Conditions to the Merger ” and we cannot specify when, or assure you that, SGI and HPE will satisfy or waive all or any conditions to the Merger. There may be a substantial amount of time between the date of the Special Meeting and the consummation of the Merger and it is possible that factors outside the control of SGI or HPE could delay the consummation of the Merger, or prevent the Merger from being consummated; however, we expect to consummate the Merger promptly following the satisfaction or (to the extent permitted by applicable law) waiver of the conditions more fully described below in the section of this proxy statement captioned “ The Merger Agreement — Conditions to the Merger ”.

Merger Consideration

Effect of the Merger on SGI’s Capital Stock

At the Effective Time, each share of our common stock issued and outstanding immediately prior to the Effective Time (including any shares resulting from the settlement of Restricted Stock Units which become settlable as a result of the consummation of the Merger and any shares issued upon the exercise of Company Options, but excluding excluded shares and dissenting shares, each as defined below) will be cancelled and automatically converted into the right to receive $7.75 in cash, without interest, and subject to deduction for any required withholding tax. As of the Effective Time, all shares of our common stock will be cancelled and will thereafter represent only the right to receive the Merger Consideration to be paid in accordance with and subject to the conditions of the Merger Agreement. At the Effective Time, each share of our common stock held by SGI or its subsidiaries or owned, directly or indirectly, by HPE or Acquisition Sub, which we refer to as “ excluded shares ,” will be automatically canceled and retired without payment of any consideration. In addition, each share of our common stock held by stockholders who are entitled to and who properly exercise and perfect appraisal rights under the DGCL, which we refer to as “ dissenting shares ,” will not be converted into the right to receive Merger Consideration, unless and until such stockholder fails to perfect or effectively withdraws or loses such

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stockholder’s right to appraisal under the DGCL, at which time each such share of our common stock will be converted into and exchangeable only for the right to receive, as of the later of the Effective Time and the time that such right to appraisal is irrevocably lost, the Merger Consideration. Dissenting shares shall be treated in accordance with Section 262, as more fully described in the section of this proxy statement captioned “ The Merger — Appraisal Rights ”.

Treatment of SGI Equity-Based Awards

Outstanding Equity Awards

The Merger Agreement provides that the Company’s equity awards that are outstanding immediately prior to the Effective Time will be subject to the following treatment at the Effective Time:

Options

At the Effective Time, each Company Option that is outstanding immediately prior to the Effective Time and is held by a person providing services to us immediately prior to the Effective Time will be converted into and become an HPE Option, vested and immediately exercisable, to purchase HPE common stock with (i) the number of shares of HPE common stock subject to such HPE Option obtained by multiplying the number of shares of our common stock subject to the Company Option by the Conversion Ratio, rounded down to the nearest whole share, and (ii) an exercise price equal to the exercise price for the Company Option divided by the Conversion Ratio and rounded up to the nearest whole cent. Each HPE Option shall otherwise be subject to the same terms and conditions of the Company Equity Plans. “ Conversion Ratio ” means the quotient obtained by  dividing  (x) $7.75  by  (y) the average closing sale price of one share of HPE common stock as reported on the New York Stock Exchange for the five consecutive trading days immediately preceding (but not including) the date on which the Merger is consummated, which we refer to as the “ Parent Closing Price ”.

Restricted Stock Units

At the Effective Time, each award of unvested Restricted Stock Units (including PSUs) granted under any Company Equity Plan that is outstanding immediately prior to the Effective Time and is held by a person providing services to us immediately prior to the Effective Time (other than those Restricted Stock Units that will become settlable as a result of the consummation of the Merger and are settled in shares of our common stock) will be converted into and thereafter represent the right with respect to HPE common stock, and HPE will assume the Restricted Stock Units in accordance with the terms of the Company Equity Plans and/or restricted stock unit agreement by which each Restricted Stock Unit is evidenced, as applicable. Accordingly, from and after the Effective Time, (i) HPE’s board of directors or a committee thereof shall succeed to the authority and responsibility of the Company’s board of directors or any committee thereof with respect to each Restricted Stock Unit assumed by HPE; (ii) the Restricted Stock Units assumed by HPE will represent the right to receive shares of HPE common stock (or cash, if so provided under the terms of such Restricted Stock Units or as required by applicable law) upon settlement of such Restricted Stock Units promptly after vesting (except to the extent the terms of the applicable restricted stock unit agreement provide for deferred settlement, in which case settlement will be in accordance with the specified terms); (iii) the number of shares of HPE common stock subject to each award of Restricted Stock Units will be equal to the number of shares of our common stock subject to such award immediately prior to the Effective Time (100% of the target number of shares of our common stock set forth in the applicable award agreement governing the Restricted Stock Unit as applied to any portion of the Restricted Stock Unit that remains subject to performance-based vesting criteria, in each case to the extent such portion is outstanding immediately prior to the cancellation of such Restricted Stock Unit) multiplied by the Conversion Ratio, rounded down to the nearest whole share, with any remaining fractional share discarded (except that in no event shall any vesting restrictions applicable to a Restricted Stock Unit be accelerated unless so provided under the terms of such Restricted Stock Unit or other Company Equity Plan); and (iv) the performance-based vesting requirement in any outstanding PSUs shall be waived in favor of time-based vesting.

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ESPP

As of the date of the Merger Agreement, the Company took all such action as was necessary to: (i) terminate any ongoing offering periods under the ESPP and refund all participant contributions with respect to any terminated offering period under the ESPP; and (ii) provide that no further offering period or purchase period shall commence under the ESPP after the date of the Merger Agreement.

Exchange and Payment Procedures

Promptly after the Effective Time, HPE will deposit or cause to be deposited with a bank or trust company designated by HPE, which we refer to as the “ paying agent ,” cash sufficient to pay the aggregate Merger Consideration payable to stockholders pursuant to the terms of the Merger Agreement, which we refer to as the “ payment fund ”. In the event that the payment fund becomes insufficient to make such payments, from time to time following the Effective Time, HPE shall deposit or cause to be deposited with the paying agent additional cash in any amount necessary to enable the paying agent to pay any and all Merger Consideration payable pursuant to the Merger Agreement.

As soon as reasonably practicable after the Effective Time, HPE will instruct the paying agent to mail to each person who, immediately prior to the Effective Time, was a holder of record of certificate(s) (which we refer to as a “ certificate ”) representing outstanding shares of our common stock or non-certificated shares of our common stock represented by book-entry (which we refer to as “ book-entry shares ”) that were converted into the right to receive the Merger Consideration, (1) a letter of transmittal and (2) instructions advising stockholders how to surrender certificates or book-entry shares in exchange for the Merger Consideration payable in respect thereof.

Upon surrender to the paying agent of a certificate or book-entry share along with a duly completed and validly executed letter of transmittal and such other documents as may be required by the paying agent, the holder of such certificate or book-entry share will be entitled to receive the Merger Consideration for each share formerly represented by such certificate or book-entry share (other than with respect to dissenting shares and excluded shares), subject to deduction for any required withholding tax and without interest.

Certificates should not be surrendered by stockholders prior to the Effective Time and should be sent only pursuant to instructions set forth in the letters of transmittal to be mailed to stockholders as soon as reasonably practicable following the Effective Time. In all cases, the Merger Consideration will be provided only in accordance with the procedures set forth in such letters of transmittal.

The letter of transmittal will include instructions of the procedures to be taken by a holder of a certificate if such holder has lost a certificate or if such certificate has been stolen or destroyed. In the event any certificate has been lost, stolen or destroyed, HPE may, in its discretion and as a condition to the payment of any Merger Consideration, require the owner of such lost, stolen or destroyed certificate to provide an appropriate affidavit and to deliver a bond (in such sum as HPE may reasonably direct) as indemnity against any claim that may be made against the paying agent, HPE or the Surviving Corporation with respect to such certificate.

If any Merger Consideration is to be paid to a person other than the person in whose name the surrendered certificate is registered, then, as a condition of payment of the Merger Consideration, the surrendered certificate is properly endorsed or is otherwise in proper form for transfer and the person requesting such payment shall have paid any fiduciary or surety bonds or any transfer or other similar taxes or establish to the reasonable satisfaction of HPE that such tax has been paid or is not applicable.

Payment of the Merger Consideration with respect to book-entry shares shall only be made to a person or entity in whose name such book-entry shares are registered. Until surrendered as contemplated by the Merger Agreement, each certificate or book-entry share will be deemed, from and after the Effective Time, to represent

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only the right to receive the Merger Consideration pursuant to the terms of the Merger Agreement. Any Merger Consideration paid upon the surrender of any certificate or in respect of book-entry shares will be deemed to have been paid in full satisfaction of all rights pertaining to that certificate or such book-entry shares and the shares formerly represented by such certificate or book-entry shares. The stock transfer books of SGI will be closed at the Effective Time with respect to all shares of our common stock outstanding immediately prior to the Effective Time and no further transfer of any such shares of our common stock shall be made on such stock transfer books after the Effective Time. If, after the Effective Time, valid certificates are presented to the Surviving Corporation, HPE or the paying agent, such certificate or book-entry shares will be cancelled and exchanged for Merger Consideration pursuant to the Merger Agreement, subject to applicable law in the case of any dissenting shares.

Any portion of the payment fund (including any interest or other income earned on such cash) that is not distributed to holders of certificates or book-entry shares twelve months following the Effective Time will be delivered to HPE upon demand, and any remaining holders of certificates or book-entry shares will thereafter look only to HPE as general creditors for payment of the Merger Consideration (subject to applicable law and without interest). None of HPE, Acquisition Sub, SGI, the Surviving Corporation and the paying agent will be liable to any holder or former holder of our common stock or to any other person or entity with respect to any cash amounts delivered to any public official pursuant to any applicable abandoned property law, escheat law or similar laws.

If your shares are held in “street name” by your broker, bank, or other nominee, you will receive instructions from your broker, bank or other nominee as to how to effect the surrender of your shares held in “street name”.

Withholding

Parent, the surviving corporation, SGI, Acquisition Sub and the paying agent will be entitled to deduct and withhold from the consideration otherwise payable to any holder of shares of SGI’s common stock, stock options or restricted stock units such amounts for taxes that it is required to deduct and withhold with respect to making such payment under all applicable tax laws.

Representations and Warranties

The Merger Agreement contains representations and warranties of SGI, HPE and Acquisition Sub.

Some of the representations and warranties in the Merger Agreement made by SGI are qualified as to “materiality” or “Company Material Adverse Effect.” For purposes of the Merger Agreement, “Company Material Adverse Effect” means, with respect to SGI, any effect, change, development, event or circumstance that, considered together with all other effects, changes, developments, events or circumstances, is or would reasonably be expected to have a material adverse effect on: (a) the business, condition (financial or otherwise) or results of operations of SGI and its subsidiaries, taken as a whole; or (b) the ability of SGI to consummate the Merger or any of the other transactions contemplated by the Merger Agreement or to perform any of its obligations under the Merger Agreement; provided, however , that with respect to clause “(a)” above, a change shall not be deemed to constitute a Company Material Adverse Effect (and shall not be taken into account in determining whether a Company Material Adverse Effect has occurred or is reasonably expected to occur) if such change results from:

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In the Merger Agreement, SGI has made representations and warranties to HPE and Acquisition Sub that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. These representations and warranties relate to, among other things:

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In the Merger Agreement, HPE and Acquisition Sub have made customary representations and warranties to SGI that are subject, in some cases, to specified exceptions and qualifications contained in the Merger Agreement. Some of the representations and warranties in the Merger Agreement made by HPE and Acquisition Sub are qualified as to “Parent Material Adverse Effect,” which, for purposes of the Merger Agreement, means any event, change, circumstance, occurrence, effect or state of facts that materially impairs Acquisition Sub’s ability to consummate, or prevents or materially delays, the Merger or any other transactions contemplated by the Merger Agreement. These representations and warranties relate to, among other things:

The representations and warranties contained in the Merger Agreement will not survive the consummation of the Merger.

Conduct of Business Pending the Merger

SGI has agreed to certain covenants in the Merger Agreement restricting the conduct of its business between the date of the Merger Agreement and the Effective Time. In general, SGI has agreed that it will, and will cause its subsidiaries to, carry on its business and operations in the ordinary course and substantially in accordance with past practices and use commercially reasonable efforts to ensure that each of SGI and its subsidiaries (i) preserves intact its current business organization, (ii) keeps available the services of its current officers, employees and consultants, and (iv) maintains its goodwill and its relations with all suppliers, customers, producers, strategic partners, landlords, creditors, licensors, licensees, employees and other persons having material business relationships with SGI or any of its subsidiaries (collectively, the “ Acquired Corporations ”).

In addition, without limiting the generality of the foregoing, SGI has agreed that until the Effective Time, subject to certain exceptions identified in the disclosure schedule provided to HPE in connection with the

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execution of the Merger Agreement or as specifically required by the Merger Agreement or applicable law, that it will not, and will not permit any of its subsidiaries to, without HPE’s prior written consent (not to be unreasonably withheld or delayed):

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Other Covenants under the Merger Agreement

Acquisition Proposals; Change in the Recommendation of SGI’s Board of Directors

SGI has agreed that it will not, nor will it permit or authorize any of its subsidiaries or any of its representatives, directly or indirectly, to:

Any violation of the restrictions, procedures and agreements set forth in the non-solicitation provisions of the Merger Agreement by any representative of SGI or any of its subsidiaries, whether or not such person is purporting to act on behalf of SGI or any of its subsidiaries, or otherwise, will be deemed to be a breach of the non-solicitation provisions of the Merger Agreement by SGI.

Notwithstanding the restrictions described above, these covenants will not prohibit SGI or its representatives, at any time prior to obtaining the adoption of the Merger Agreement by its stockholders, from furnishing information (including non-public information) regarding SGI and its subsidiaries to participate in discussions and negotiations with a person making an unsolicited, bona fide, written Acquisition Proposal if:

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Prior to furnishing any such non-public information to, or entering into discussions or negotiations with, such person, SGI shall: (i) give HPE written notice of the identity of such person and of SGI’s intention to furnish non-public information to, or enter into discussions or negotiations with, such person; and (ii) receive from such person, and deliver to HPE a copy of, an executed acceptable confidentiality agreement containing customary limitations on the use and disclosure of all non-public written and oral information furnished to such person by or on behalf of the Acquired Corporations and containing other provisions no less favorable to SGI than the provisions of the confidentiality agreement entered into by and between HPE and SGI in connection with the Merger (an “ Acceptable Confidentiality Agreement ”).

In the event that SGI, any other Acquired Corporation or any of their directors, officers or financial advisors receives an Acquisition Proposal or Acquisition Inquiry at any time during the period before the closing of the Merger, SGI is required, pursuant to the terms of the Merger Agreement, to promptly (and in no event later than 24 hours after receipt of such Acquisition Proposal or Acquisition Inquiry) notify HPE of such Acquisition Proposal or Acquisition Inquiry (including the identity of the person making or submitting such Acquisition Proposal or Acquisition Inquiry, the material terms and conditions thereof, and, if available, a copy of any written documentation received by such Acquired Corporation setting forth such terms and conditions). SGI has agreed to promptly (and in no event later than 24 hours) respond to reasonable requests from HPE with respect to the status of any such Acquisition Proposal or Acquisition Inquiry.

SGI has further agreed to promptly request each person or entity that has executed a confidentiality agreement or similar agreement in connection with its consideration of a possible Acquisition Proposal or investment in any Acquired Corporation to return or destroy all confidential information heretofore furnished to such person or entity by or on behalf of any of the Acquired Corporations and discontinue the access of any third party that, as of the date of the Merger Agreement, had access to any physical or electronic data rooms relating to a possible Acquisition Proposal.

In addition to the obligations set forth above, SGI has also agreed that it will not, and shall ensure that each other Acquired Corporation will not in connection with an Acquisition Proposal:

As described in this proxy statement, “ Acquisition Inquiry ” shall mean an inquiry, indication of interest or request for information (other than an inquiry, indication of interest or request for information made or submitted by HPE or any of its Affiliates) that would reasonably be expected to lead to an Acquisition Proposal. “ Acquisition Proposal ” means any offer, proposal, inquiry or indication of interest (other than an offer, proposal, inquiry or indication of interest made or submitted by HPE or any of its Affiliates) contemplating or otherwise relating to any Acquisition Transaction. “ Acquisition Transaction ” shall mean any transaction or series of transactions (other than the Contemplated Transactions) involving: (a) any merger, consolidation, amalgamation, share exchange, business combination, joint venture, issuance of securities, acquisition of securities, recapitalization, tender offer, exchange offer or other similar transaction: (i) in which any of the Acquired Corporations is a constituent corporation; (ii) in which a person or entity or “group” (as defined in the Exchange Act and the rules thereunder) of person or entities directly or indirectly acquires beneficial or record ownership of securities representing 15% or more of the outstanding securities of any A-3 class of voting securities (or instruments convertible into or exercisable or exchangeable for 15% or more of any such class) of the Company or the surviving entity in a merger or the resulting direct or indirect parent of the Company or surviving entity; or (iii) in which the Company issues securities representing 15% or more of the outstanding securities of any class of voting securities of the Company (or instruments convertible into or exercisable or exchangeable for 15% or

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more of any such class); (b) any sale, lease, exchange, transfer, license, acquisition or disposition of any business or businesses or assets that constitute or account for 15% or more of the consolidated net revenues, net income or assets of the Company and its subsidiaries, taken as a whole (for the 12-month period ending on the last day of the Company’s most recently completed fiscal quarter); or (c) any liquidation or dissolution of any of the Acquired Corporations whose business constitutes 15% or more of the consolidated net revenues, net income or assets of the Company and its subsidiaries, taken as a whole (for the 12-month period ending on the last day of the Company’s most recently completed fiscal quarter).

As described in this proxy statement, “ Superior Offer ” shall mean an unsolicited, bona fide written Acquisition Proposal, which the board of directors of SGI determines in good faith, after taking into account the advice of DBO or another independent financial advisor of nationally recognized reputation and SGI’s outside legal counsel, is: (i) more favorable to SGI’s stockholders from a financial point of view than the terms of the Merger, taking into account all financial, legal, regulatory and other aspects of such proposal and the person making the proposal (including any changes to the terms of the Merger Agreement proposed by HPE to SGI in response to such proposal or otherwise, and any fees payable by SGI hereunder); and (ii) is reasonably likely to be consummated on the terms proposed; provided, that for purposes of this definition of “ Superior Offer ” and the definition of “ Acquisition Proposal ” as used in this definition, the references to 15% in the definition of Acquisition Transaction shall be deemed to be references to 50%.

Change in the Recommendation of SGI’s Board of Directors

Under the terms of the Merger Agreement, the Board of Directors has agreed that neither it, nor any of its committees, will: (i) withdraw or modify in a manner adverse to HPE or Acquisition Sub, permit the withdrawal or modification in a manner adverse to HPE or Acquisition Sub, or publicly propose to withdraw or modify in a manner adverse to HPE or Acquisition Sub, the Board Recommendation (any of the foregoing actions being referred to as an “ Adverse Recommendation Change ”); or (ii) approve, endorse, accept or recommend, or publicly propose to approve, endorse, accept or recommend, any Acquisition Proposal, or cause or permit SGI or any of its subsidiaries to execute or enter into, any letter of intent, memorandum of understanding, agreement in principle, merger agreement, acquisition agreement, option agreement, joint venture agreement, partnership agreement or other similar document or contract constituting or relating to, or that is intended to, contemplates or is reasonably likely to result in, an Acquisition Transaction, other than an Acceptable Confidentiality Agreement.

Pursuant to the Merger Agreement, SGI is permitted to: (i) take and disclose to its stockholders a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the Exchange Act or (ii) make any disclosure to its stockholders if the Board of Directors determines in good faith, after having taken into account the advice of SGI’s outside legal counsel, that failure to do so would be inconsistent with the Board of Directors’ exercise of its fiduciary obligations to SGI’s stockholders under applicable law; provided , however , that neither of the foregoing shall be deemed to permit the Board of Directors to make an Adverse Recommendation Change or accept any alternate Acquisition Proposal, except to the extent permitted by the Merger Agreement.

Notwithstanding the foregoing, at any time prior to obtaining approval of the Merger Agreement by SGI stockholders, if the Board of Directors determines in good faith (after consultation with DBO or another independent financial advisor of nationally recognized reputation and outside legal counsel) that the failure to make an Adverse Recommendation Change, in light of a Superior Offer or Intervening Event, as applicable, would result in a breach of its fiduciary duties to stockholders of SGI under applicable law, taking into account all adjustments to the terms of the Merger Agreement that may be offered by HPE, the Board of Directors may: (i) make an Adverse Recommendation Change in response to either a Superior Offer or an Intervening Event; and (ii) solely in response to a Superior Offer received after the date of the Merger Agreement that was unsolicited, bona fide and in written form and did not otherwise result from a breach of the non-solicitation provisions of the Merger Agreement, cause SGI to terminate the Merger Agreement and enter into a Specified Definitive Acquisition Agreement with respect to such Superior Offer.

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In the case of each of (i) and (ii) above, the Board of Directors may only make an Adverse Recommendation Change in response to a Superior Offer and terminate the Merger Agreement in order to enter into a Specified Definitive Acquisition Agreement if:

In the case of (i) above, the Board of Directors may only make an Adverse Recommendation Change in response to an Intervening Event if:

SGI has agreed that, notwithstanding anything to the contrary contained in the Merger Agreement, neither SGI or any of its subsidiaries will enter into a Specified Definitive Acquisition Agreement (except an Acceptable Confidentiality Agreement) unless the Merger Agreement has been terminated in accordance with its terms (including payment of any applicable termination fee, as more fully described in the section of this proxy statement captioned “ The Merger Agreement — Termination of the Merger Agreement; Termination Fees ”).

Board Obligation to Call a Stockholders’ Meeting

SGI has agreed under the Merger Agreement to duly call, give notice of, convene and hold a special meeting of its stockholders as promptly as practicable after this proxy statement is cleared by the SEC for mailing to

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SGI’s stockholders (but in any event no later than 35 calendar days after (i) the tenth calendar day after the filing of the preliminary proxy statement with the SEC if, by such date, the SEC has not informed SGI that it intends to review the proxy statement or (ii) if the SEC has, by the tenth calendar day after the preliminary proxy statement therefor has been filed with the SEC, informed SGI that it intends to review the proxy statement, the date on which the SEC confirms that it has no further comments on the proxy statement) solely for the purposes of obtaining the Company Stockholder Approval and, if applicable, the advisory vote required by Rule 14a-21(c) under the Exchange Act in connection therewith. Subject to compliance with the section of this proxy statement captioned “— The Merger Agreement — Acquisition Proposals; Change in the Recommendation of SGI’s Board of Directors ,” SGI, through the Board of Directors, will recommend to SGI’s stockholders that they adopt the Merger Agreement and approve the Merger and the other transactions contemplated thereby, include such recommendation in the proxy statement and use its reasonable best efforts to solicit proxies to obtain the Company Stockholder Approval.

SGI may postpone or adjourn the stockholders’ meeting without HPE’s consent solely if: (i) there is an absence of a quorum; (ii) whether or not a quorum is present, SGI has not received proxies representing a sufficient number of shares of our common stock for the Company Stockholder Approval to solicit additional proxies (provided, that, in the case of each of (i) and (ii), SGI may only postpone or adjourn the stockholders’ meeting two times); or (iii) the Board of Directors has determined in good faith (after consultation with outside legal counsel) that a reasonable additional time for the filing and mailing of any supplemental or amended disclosure is necessary under applicable law and for such supplemental or amended disclosure to be disseminated and reviewed by the SGI’s stockholders prior to the stockholders’ meeting.

To the extent permitted by law, at the request of HPE, SGI has agreed that it will adjourn the stockholders’ meeting one time to a date specified by HPE for the absence of a quorum or if insufficient proxies to constitute the Company Stockholder Approval have been received by SGI. Such adjournment cannot be required to be for a period exceeding ten business days or for any period that would require SGI to select a different record date for the stockholders’ meeting and, further, HPE cannot exercise the foregoing right to adjournment if SGI has already adjourned the stockholders’ meeting pursuant to clauses (i) and (ii) in the preceding paragraph.

Access and Investigation

Until the Effective Time or the termination of the Merger Agreement in accordance with its terms, subject to certain express exceptions, SGI will, and will cause its subsidiaries and their respective representatives to, provide to HPE and its representatives reasonable access during normal business hours upon reasonable notice and in a manner as shall not unreasonably interfere with the business or operations of SGI or any of its subsidiaries to SGI’s and its subsidiaries’ representatives, personnel and assets and to all existing books, records, tax returns, work papers and other documents and information relating to the Acquired Corporations (subject to the Acquired Corporations’ reasonable security measures), and provide HPE and HPE’s representatives with such copies of the existing books, records, tax returns, work papers and other documents and information relating to the Acquired Corporations, and with such additional financial, operating and other data and information regarding the Acquired Corporations, as Parent may reasonably request.

Required Efforts to Consummate the Merger

Subject to certain exceptions described below and the terms and conditions of the Merger Agreement, SGI and HPE have agreed to use reasonable efforts to take, or cause to be taken, all actions that are necessary to consummate the Merger and make effective the other transactions contemplated by the Merger Agreement. Without limiting the generality of the foregoing, but subject to certain exceptions described below, HPE, Acquisition Sub and SGI (i) shall make all filings (if any) and give all notices (if any) required to be made and given by such party in connection with the Merger and the other transactions contemplated by the Merger Agreement, (ii) shall use reasonable best efforts to obtain each consent (if any) required to be obtained (pursuant to any applicable law or contract, or otherwise) by such party in connection with the Merger or any of the other

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transactions contemplated by the Merger Agreement, and (iii) shall use reasonable best efforts to lift any restraint, injunction or other legal bar to the Merger.

Notwithstanding anything in the Merger Agreement to the contrary, the parties have agreed that neither HPE nor Acquisition Sub shall have any obligation under the Merger Agreement to divest or agree to divest (or cause any of its subsidiaries, SGI or any of SGI’s subsidiaries to divest or agree to divest) any of its respective business, product lines or assets, or take or to agree to take (or cause any of its subsidiaries, SGI or any of SGI’s subsidiaries to take or agree to take) any other action with respect to any of its respective business, product lines or assets of HPE, its subsidiaries or SGI or any of SGI’s subsidiaries or agree (or cause any of its subsidiaries, SGI or any of SGI’s subsidiaries to agree) to any limitation or restriction on any of its respective business, product lines or assets.

Anti-Takeover Statutes

HPE, Acquisition Sub and SGI have agreed to use all reasonable efforts to take all action necessary so that no takeover statute is or becomes applicable to restrict or prohibit the Merger and the other transaction contemplated by the Merger Agreement. If any anti-takeover law or similar law is or becomes applicable to the Merger Agreement, the Merger, or the other transactions contemplated by the Merger Agreement, HPE, Acquisition Sub and SGI have agreed to take all actions necessary so that the Merger and the other transactions contemplated by the Merger Agreement may be consummated as promptly as practicable on the terms and conditions set forth in the Merger Agreement and otherwise act to eliminate or minimize (to the greatest extent practicable) the effects of such anti-takeover law on the transactions contemplated by the Merger Agreement.

Directors’ and Officers’ Indemnification and Insurance

All rights to indemnification by SGI existing in favor of those person who are directors and officers of SGI as of the date of the Merger Agreement (who we refer to as the “ Indemnified Persons ” for their acts and omissions as directors and officers occurring prior to the Effective Time, as provided in the SGI’s certificate of incorporation or bylaws (as in effect as of the date of the Merger Agreement) and as provided in any indemnification agreements between SGI and said directors and officers (as in effect as of the date of the Merger Agreement), shall survive the Merger and shall continue in full force and effect as an obligation of the Surviving Corporation (to the fullest extent such rights to indemnification are available under and consistent with the DGCL) until the expiration of the applicable statute of limitations with respect to any claims against such directors or officers arising out of such acts or omissions.

For a period of six years after the Effective Time, the Surviving Corporation or HPE will maintain in effect, for the benefit of the Indemnified Persons with respect to their acts and omissions as directors and officers occurring prior to the Effective Time, SGI’s current directors’ and officers’ liability insurance maintained by SGI as of the date of the Merger Agreement (which we refer to as the “ Existing D&O Policy ”); provided , however , that: (i) the Surviving Corporation or HPE, as applicable, may substitute for the Existing D&O Policy a policy or policies of comparable coverage; and (ii) neither the Surviving Corporation nor HPE shall be required to pay annual premiums for the Existing D&O Policy (or any substitute policies) in excess of 250% of the annual premium paid prior to the date of this Agreement by SGI for the Existing D&O Policy, it being understood that the Surviving Corporation or HPE shall nevertheless be obligated to provide as much coverage as may be obtained for such 250% amount. HPE and the Surviving Corporation shall have the right in lieu of the foregoing to purchase a tail policy with substantially the same coverage as the Existing D&O Policy and HPE and Surviving Corporation shall maintain such tail policy in full force and effect and continue to honor their respective obligations thereunder from the Effective Time until the sixth anniversary of the Effective Time.

Litigation Related to the Merger

SGI has agreed to give HPE the opportunity to participate in the defense or settlement of any stockholder litigation against SGI and/or its officers or directors relating to the Merger or any of the other transactions

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contemplated by the Merger Agreement. SGI must obtain HPE’s prior written consent (such consent not to be unreasonably withheld, conditioned or delayed) prior to entering into any settlement agreement related to such litigation.

Employee Benefits

If so directed by HPE, SGI will terminate, effective immediately prior to the Effective Time (prior to the date of the Effective Time for any 401(k) plan), any and all benefit plans maintained by SGI or any of its subsidiaries.

Subject to a transition period, and subject to the terms of the HPE plans, contracts and policies and legal requirements, SGI employees who continue in employment with HPE or a subsidiary of HPE following the Effective Time shall (a) be eligible to participate in benefit plans to substantially the same extent as similarly situated HPE employees, (b) receive service credit for their SGI service to the extent credited under an SGI plan, (c) have pre-existing condition and eligibility limitations waived and (d) receive credit for prior payments toward deductibles and out-of-pocket maximums in the year of the transaction.

For twelve months following the Effective Time, SGI employees who continue in employment with HPE or a subsidiary of HPE following the Effective Time shall during their continued employment receive base pay and target bonus and commission opportunities that are reasonably comparable in the aggregate to those provided to similarly situated employees of HPE and its affiliates.

HPE reserves the right at all times to amend or terminate benefit plans and to terminate employees.

Other Covenants

The Merger Agreement contains other covenants, including those relating to stock exchange delisting and deregistration, notices of certain events, the resignation of officers and directors of SGI, public announcements and matters related to reporting requirements of Section 16(a) of the Exchange Act.

Conditions to the Merger

Each party’s obligation to consummate the Merger is subject to the satisfaction or waiver of the following conditions at or prior to the Effective Time:

In addition, the obligations of HPE and Acquisition Sub to effect the Merger are subject to the satisfaction or waiver of the following conditions:

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In addition, SGI’s obligations to effect the Merger are subject to the satisfaction or waiver of the following conditions:

Termination of the Merger Agreement; Termination Fees

SGI and HPE may terminate the Merger Agreement at any time prior to the Effective Time by mutual consent. In addition, either SGI or HPE may terminate the Merger Agreement at any time prior to the Effective Time if:

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HPE may also terminate the Merger Agreement if a Triggering Event shall have occurred.

SGI may also, subject to complying with the obligations described above under the caption “ No Solicitation of Other Offers ”, terminate the Merger Agreement at any time prior to obtaining the Company Stockholder Approval in order to accept a Superior Offer and enter into a binding, written, definitive agreement providing for the consummation of the transaction contemplated by such Superior Offer (which we refer to as the “ Specified Definitive Acquisition Agreement ”): (i) the Board of Directors authorizes SGI, subject to complying with the terms of the Merger Agreement, to enter into a Specified Definitive Acquisition Agreement; (ii) immediately prior to or substantially concurrently with the termination of the Merger Agreement, SGI enters into the Specified Definitive Acquisition Agreement with respect to such Superior Offer; and (iii) SGI, immediately prior to or concurrently with such termination, pays the termination fee required by the Merger Agreement (as more fully described below).

Termination Fee

Except in specified circumstances, whether or not the Merger is completed, SGI, on the one hand, and HPE and Acquisition Sub, on the other hand, are each responsible for all of their own respective costs and expenses incurred in connection with the Merger and the other transactions contemplated by the Merger Agreement.

Notwithstanding the foregoing, SGI has agreed to pay HPE a termination fee of $12.2 million if:

provided, that (i) at or prior to the time of the Company Stockholder Meeting an Acquisition Proposal shall have been publicly disclosed, announced, commenced, submitted or made; and (ii) within 12 months after the date of any such termination, an Acquisition Transaction (whether not relating to such Acquisition Proposal) is consummated or a definitive agreement contemplating an Acquisition Transaction (whether or not relating to such Acquisition Proposal) is executed; provided, however, that for purposes of clause “(ii)” above, all references to “15%” in the definition of Acquisition Transaction shall be deemed to be references to “50%.”

SGI shall also pay HPE the termination fee of $12.2 million if the Merger Agreement is (i) terminated by HPE due to the occurrence of a Triggering Event; or (ii) terminated by SGI prior to closing in order to accept a Superior Offer and enter into a Specified Definitive Acquisition Agreement, subject to SGI’s compliance with certain provisions of the Merger Agreement.

Amendment and Waiver

The Merger Agreement may be amended by SGI, HPE and Acquisition Sub by action taken by or on behalf of their respective boards of directors at any time prior to the Effective Time. Any amendment to the Merger Agreement must be made by a written instrument signed by SGI, HPE and Acquisition Sub.

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The parties may at any time prior to the Effective Time (such action to be set forth in a written instrument duly executed and delivered on behalf of such party), (a) extend the time for the performance of any of the obligations or other acts of the other parties; (b) waive any inaccuracies in the representations and warranties of the other parties or (c) waive compliance with any of the agreements or conditions of the other parties; provided, that after the approval of SGI’s stockholders has been obtained, no waiver may be made that, pursuant to applicable law, would require further approval or adoption by the SGI stockholders.

Governing Law

The Merger Agreement is governed by Delaware law, without regard to the laws of any other jurisdiction that might be applied because of the conflicts of laws principles of the State of Delaware.

Specific Performance

HPE, Acquisition Sub and we have agreed that irreparable damage would occur if any provision of the Merger Agreement is not performed in accordance with its specific terms or is otherwise breached. The parties acknowledge and agree that in the event of any breach or threatened breach of any covenant or obligation contained in the Merger Agreement, the non-breaching party shall be entitled to obtain, without proof of actual damages (and the parties hereby waive any requirement for the securing or posting of any bond in connection with such remedy): (a) a decree or order of specific performance to enforce the observance and performance of such covenant or obligation; and (b) an injunction restraining such breach or threatened breach; this being in addition to any other remedy to which the non-breaching party is entitled at law or in equity.

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THE VOTING AGREEMENT

The following is a summary of selected material terms and provisions of the Voting Agreement. This summary does not purport to be complete and may not contain all of the information about the Voting Agreement that may be important to you. You are encouraged to read the Voting Agreement carefully and in its entirety. This summary is qualified in its entirety by reference to the complete text of the Voting Agreement, a copy of which is attached hereto as Annex D, and which is incorporated by reference into this proxy statement.

Concurrently with the execution of the Merger Agreement, the directors and officers of SGI entered into a voting agreement with HPE. As of August 9, 2016, this group of directors and officers collectively held approximately 2.6% of the outstanding shares of our common stock on an as-converted basis. Capitalized terms used in this section but not defined in this proxy statement have the meaning ascribed to such terms in the Voting Agreement.

Voting Provisions

Pursuant to the Voting Agreement, the directors and officers have agreed, subject to the terms and conditions contained in the Voting Agreement, to vote all of their shares of our common stock or other voting securities of the Company which they acquire beneficial ownership of after the date of the Voting Agreement, which we refer to collectively as the “ Covered Shares ,” including without limitation, by purchase, at any time prior to the termination of the applicable Voting Agreement, in the following manner:

Notwithstanding the foregoing, nothing in the Voting Agreement requires any director or officer to vote or otherwise consent to any amendment to the Merger Agreement or the taking of any action that could result in the amendment, modification or waiver of a provision therein, in any such case, in a manner that decreases the amount or changes the form of the Merger Consideration. Except as expressly set forth in this section captioned “ Voting Provisions ,” the Voting Agreement does not restrict any director or officer that is a party from voting in favor of, against or abstaining with respect to any other matter presented to the stockholders of the Company.

Pursuant to the Voting Agreement, the directors and officers have agreed to waive appraisal rights and have provided an irrevocable proxy to HPE.

Restrictions on Transfer; Other Actions

Under the Voting Agreement, the directors and officers have covenanted and agreed that, except as contemplated by the Voting Agreement, each will not:

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Non-Solicitation

Pursuant to the Voting Agreement, each of the directors and officers (severally and not jointly) has also covenanted and agreed as follows:

Termination

The Voting Agreement terminates upon the earliest of (a) the Effective Time of the Merger, (b) the termination of the Merger Agreement in accordance with its terms and (c) written notice of termination of the Voting Agreement by HPE to the directors and officers.

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MARKET PRICES AND DIVIDEND DATA

Our common stock is listed on NASDAQ under the symbol “SGI.” As of August 22, 2016, there were 36,516,417 shares of our common stock outstanding, held by approximately 145 stockholders of record. We have never declared or paid any cash dividends on our common stock.

The following table presents the high and low intra-day sale prices of our common stock on NASDAQ during the fiscal quarters indicated:

On August 25, 2016, the latest practicable trading day before the printing of this proxy statement, the closing price for our common stock on NASDAQ was $7.69 per share. You are encouraged to obtain current market quotations for our common stock.

Following the Merger, there will be no further market for our common stock and it will be delisted from NASDAQ and deregistered under the Exchange Act. As a result, following the Merger we will no longer file periodic reports with the SEC.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock, as of August 22, 2016, of each person or entity who we know to beneficially own 5% or more of the outstanding shares of our common stock and all of our current directors and executive officers as a group.

Beneficial ownership is determined in accordance with the rules of the SEC. In computing the number of shares beneficially owned by a person, and the percentage ownership of that person, shares of our common stock subject to stock options held by that person that are currently exercisable, or exercisable within 60 days of August 22, 2016, are deemed outstanding. Such shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated below, the address of each beneficial owner listed in the table is c/o Silicon Graphics International Corp., 900 North McCarthy Blvd., Milpitas, California 95035.

The percentages in the table below are based on 36,516,417 shares of our common stock outstanding as of August 22, 2016. Except as indicated in the footnotes to this table and pursuant to applicable community property laws, to our knowledge, each stockholder named in the table has sole voting and investment power with respect

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to the shares set forth opposite such stockholder’s name. The information provided in this table is based on our records and information filed with the SEC, unless otherwise noted.

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