Exhibit 10.1
DIRECTOR RESTRICTED STOCK AGREEMENT
This Director Restricted Stock Agreement ("Agreement") is made effective as
of __________________, 200__, by and between Cray Inc., a Washington corporation
("Cray"), and _______________________ ("Director").
RECITALS
WHEREAS, Cray has awarded a restricted stock grant to Director pursuant to
the 2006 Long-Term Equity Compensation Plan (the "Plan"), and Director desires
to accept the grant subject to the terms and conditions of this agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and the mutual agreements
contained herein, the parties hereby agree as follows:
1. Grant of Restricted Stock. Subject to the terms and conditions of this
Agreement, Cray hereby grants to Director __________ shares of Cray common stock
(the "Restricted Shares"). The Restricted Shares are subject to forfeiture to
Cray as set forth in Section 3 below.
2. Vesting. All of the Restricted Shares initially shall be unvested.
Except as provided in this Section 2 or in Section 3, one half of the Restricted
Shares shall vest in full on _________________, and one-half shall vest in full
on ______________. If prior to the Restricted Shares vesting in full Director
ceases to be a Director of Cray as a result of death or Disability, all of the
unvested Restricted Shares shall immediately vest. If following a Change of
Control Director is removed from the Board or is not nominated to continue to
serve as a Director, then any unvested Restricted Shares shall vest immediately
upon such removal or failure to nominate. Nothing contained in this Agreement
shall confer upon Director any right to continue as a Director of Cray.
3. Forfeiture upon Leaving Board. If, while holding unvested Restricted
Shares, a Director resigns or retires from the Board, is asked to leave the
Board by the Corporate Governance Committee for Cause or is not nominated by the
Board to continue as a Director other than following a Change of Control, then
all unvested Restricted Shares automatically shall be forfeited and cancelled by
Cray, and Director shall have no further right, title or interest in or to any
of such unvested Restricted Shares, provided, however, that there shall be no
such forfeiture and cancellation if the Director resigns or retires from the
Board with the prior express approval of the Corporate Governance Committee.
4. Restriction on Transfer. Director shall not sell, assign, pledge or in
any manner transfer unvested Restricted Shares, or any right or interest in
unvested Restricted Shares, whether voluntarily or by operation of law, or by
gift, bequest or otherwise. Any sale or transfer,
or purported sale or transfer, of unvested Restricted Shares, or any right or
interest in unvested Restricted Shares, in violation of this Section 4 shall be
null and void.
5. Section 83(b) Election. Director acknowledges that any income recognized
as a result of receiving the Restricted Shares will be treated as ordinary
compensation income subject to federal, state and local income, employment and
other taxes. Director understands that if he or she makes an election under
Section 83(b) of the Internal Revenue Code of 1986, as amended (a "Section 83(b)
Election") with respect to some or all of the Restricted Shares, Director will
recognize ordinary compensation income at the time such Restricted Shares are
received, in an amount equal to the fair market value of the Restricted Shares
on that date. If Director does not make a Section 83(b) Election with respect to
some or all of the Restricted Shares, Director will recognize ordinary
compensation income at the time any portion of such Restricted Shares vest in
accordance with Section 2 of this Agreement, in an amount equal to the fair
market value of those Restricted Shares on the vesting date. DIRECTOR
UNDERSTANDS THAT TO BE VALID, A SECTION 83(b) ELECTION MUST BE FILED WITH THE
INTERNAL REVENUE SERVICE WITHIN 30 DAYS OF THE DATE THE OWNERSHIP OF THE
RESTRICTED SHARES IS TRANSFERRED TO DIRECTOR, A COPY OF THE ELECTION MUST BE
PROVIDED TO CRAY, AND A COPY OF THE ELECTION MUST BE ATTACHED TO DIRECTOR'S
FEDERAL (AND POSSIBLY STATE) INCOME TAX RETURN FOR THE YEAR OF THE ELECTION.
DIRECTOR ACKNOWLEDGES THAT IF HE OR SHE CHOOSES TO FILE A SECTION 83(b)
ELECTION, IT IS DIRECTOR'S SOLE RESPONSIBILITY, AND NOT CRAY'S, TO MAKE A VALID
AND TIMELY ELECTION. DIRECTOR IS ENCOURAGED TO CONSULT HIS OR HER TAX ADVISOR
REGARDING THE ADVISABILITY OF, AND PROCEDURE FOR, MAKING A SECTION 83(b)
ELECTION WITH RESPECT TO SOME OR ALL OF THE RESTRICTED SHARES.
6. Stock Certificate. Upon the execution and delivery of this Agreement,
the award of the Restricted Shares shall be completed and Director shall be the
owner of the Restricted Shares with all voting and other rights of a
shareholder, except as limited by this Agreement. To secure the rights of Cray
under Sections 2, 3 and 5, Cray will retain the certificate or certificates
representing the Restricted Shares. Upon any forfeiture of the Restricted Shares
covered by this Agreement, Cray shall have the right to cancel the Restricted
Shares in accordance with this Agreement without any further action by Director.
After Restricted Shares have vested, Cray shall deliver a certificate for the
vested Restricted Shares to Director.
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7. Cray Shares. If, prior to vesting of Restricted Shares, the outstanding
Cray Common Stock is increased as a result of a stock dividend or stock split,
the restrictions and other provisions of this Agreement shall apply to any such
additional shares of Cray Common Stock that are issued in respect of the
Restricted Shares to the same extent as such restrictions and other provisions
apply to the Restricted Shares. If, prior to vesting of the Restricted Shares,
the outstanding Cray Common Stock is decreased by a reverse stock split, then
the Restricted Shares shall be similarly decreased, and Director hereby
authorizes Cray to replace the pre-split Restricted Shares with post-split
Restricted Shares.
8. Legend. Each certificate evidencing the Restricted Shares shall bear a
legend substantially as follows:
"The shares represented by this certificate are subject to a Restricted
Stock Agreement dated as of the original issuance date of such shares,
which restricts the transferability of the shares. A copy of the agreement
is on file at the principal executive office of the Company and will be
furnished to the holder of this certificate upon request and without
charge."
9. Definitions. As used in this Agreement, the following terms have the
indicated meanings:
"Cause" means a good faith determination by the Board of Directors that:
a. Director has willfully failed or refused in a material respect to
follow reasonable policies or directives established by the Board of
Directors, including the Corporate Governance Guidelines, or willfully
failed to attend to material duties or obligations of Director's
office (other than any such failure resulting from his incapacity due
to physical or mental illness), which Director has failed to correct
within a reasonable period following written notice to Director; or
b. there has been an act by Director involving wrongful misconduct which
has a demonstrably adverse impact on or material damage to the Company
or its subsidiaries, or which constitutes a misappropriation of the
assets of the Company; or
c. Director has engaged in an unauthorized disclosure of Company
confidential information; or
d. Director has materially breached his obligations hereunder or other
agreement with the Company.
"Change of Control" of the Company means and includes each and all of the
following:
a. The shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the total voting
power represented by the voting
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securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders of
the Company approve a plan of complete liquidation of the Company or
an agreement for the sale or disposition of all or substantially all
of the Company's assets.
b. The acquisition by any Person as Beneficial Owner, directly or
indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then outstanding
voting securities except pursuant to a negotiated agreement with the
Company and pursuant to which such securities are purchased for the
Company.
c. A majority of the Board in office at the beginning of any 36 month
period is replaced during the course of such 36 month period (other
than by voluntary resignation of individual directors in the ordinary
course of business) and such placement was not initiated by the Board
as constituted at the beginning of such 36 month period.
Any other provisions of this section notwithstanding, the term "Change
of Control" shall not include, if undertaken at the election of the
Company, either a transaction the sole purpose of which is to change
the state of the Company's incorporation, or a transaction, the result
of which is to sell all or substantially all of the assets of the
Company to another corporation (the "surviving corporation"), provided
that the surviving corporation is owned directly or indirectly by the
shareholders of the Company immediately following such transaction in
substantially the same proportions as their ownership of the Company's
Common Stock immediately preceding such transaction; and provided
further that the surviving corporation expressly assumes this
Agreement.
"Disability" means that, at the time Director's employment is terminated,
Director has been unable to perform the duties of Director's position for a
period of six consecutive months as a result of Director's incapability due
to physical or mental illness.
"Person" shall have the meaning ascribed to such term in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d) and 14(d) thereof, including
a "group" as defined in Section 13(d) of the Exchange Act but excluding the
Company and any subsidiary and any Director benefit plan sponsored or
maintained by the Company or any subsidiary (including any trustee of such
plan acting as Trustee).
10. Company's Successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform the obligations under this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. As used in this Section 10, "Company"
includes any successor to its business or assets as aforesaid which executes and
delivers this Agreement or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
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11. General Provisions.
a. Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original, but all of which together will constitute
one and the same instrument.
b. Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto and contains all of the agreements between such parties
with respect to the subject matter hereof. This Agreement supersedes any and all
other agreements, either oral or written, between such parties with respect to
the subject matter hereof. The foregoing notwithstanding, the provisions of this
Agreement are subject to the provisions to the Plan.
c. Severability. Wherever possible, each provision hereof shall be
interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision shall be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable.
d. Amendment. Except as expressly provided herein, this Agreement may
be amended only by a written agreement executed by each of the parties hereto.
e. Governing Law; Jurisdiction and Venue. This Agreement shall be
governed by and interpreted and enforced in accordance with the laws of the
State of Washington as applied to contracts made and fully performed in such
state. The parties agree that King County, Washington, shall be the exclusive
proper place of venue for any action, dispute, or controversy arising from or in
connection with this Agreement and submit to the jurisdiction of the state and
federal courts located in King County, Washington. In the event either party
institutes litigation hereunder, the prevailing party shall be entitled to
reasonable attorneys' fees to be set by the trial court and, upon any appeal,
the appellate court.
f. Waiver. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver shall be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The failure
of any party hereto to enforce at any time any provision of this Agreement shall
not be construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every provision. No waiver of any breach of this
Agreement shall be held to constitute a waiver of any other or subsequent
breach.
g. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The successors and permitted assigns hereunder shall include
without limitation, any permitted
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assignee as well as the successors in interest to such permitted assignee
(whether by merger, liquidation (including successive mergers or liquidations)
or otherwise).
h. No Third-Party Beneficiaries. Except as otherwise expressly
contemplated by this Agreement, this Agreement is entered into solely for the
benefit of the parties hereto and their respective successors and permitted
assigns, and shall not confer any rights upon any person or entity not a party
to this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first mentioned above.
CRAY INC. DIRECTOR
By
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Xxxxx X. Xxxxxx, Chief Executive
Officer and President
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