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Cray Inc – ‘8-K’ for 12/11/14 – EX-10.4

On:  Wednesday, 12/17/14, at 5:21pm ET   ·   For:  12/11/14   ·   Accession #:  1193125-14-445555   ·   File #:  0-26820

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

12/17/14  Cray Inc                          8-K:5,9    12/11/14    5:207K                                   RR Donnelley/FA

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                      HTML     18K 
 2: EX-10.1     Material Contract                                   HTML     47K 
 3: EX-10.2     Material Contract                                   HTML     42K 
 4: EX-10.3     Material Contract                                   HTML     34K 
 5: EX-10.4     Material Contract                                   HTML     41K 

Exhibit 10.4

CRAY INC.

2013 EQUITY INCENTIVE PLAN

NOTICE OF STOCK APPRECIATION RIGHT AWARD GRANT

Unless otherwise defined herein, the terms defined in the Cray Inc. 2013 Equity Incentive Plan (the “Plan”) will have the same meanings in the Notice of Stock Appreciation Right Award and any electronic representation of the Notice of Stock Appreciation Right Award established and maintained by Cray Inc. (“Cray”)or a third party designated by Cray (the “Notice”).

You (“Participant”) have been granted an award of Stock Appreciation Rights (“SARs”) of Cray under the Plan subject to the terms and conditions of the Plan, the Notice and the Stock Appreciation Right Award Agreement (the “SAR Agreement”), including any special terms imposed by the Committee for non U.S. jurisdictions.

Participant understands that Participant’s employment or consulting relationship or service with Cray or a Parent or Subsidiary is for an unspecified duration, can be terminated at any time (i.e., is at-will), except where otherwise prohibited by applicable law and that nothing in the Notice, the SAR Agreement or the Plan changes the nature of that relationship. Participant acknowledges and agrees that the Vesting Schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Cray policies relating to work schedules and vesting of awards. Participant acknowledges that the vesting of the SARs pursuant to the Notice is earned only by continuing service as an Employee, Director or Consultant of Cray or a Parent or Subsidiary. Participant also understands that the Notice is subject to the terms and conditions of both the SAR Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the SAR Agreement and the Plan. By accepting the SARs, Participant consents to the electronic delivery as set forth in the SAR Agreement.

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CRAY INC.

2013 EQUITY INCENTIVE PLAN

STOCK APPRECIATION RIGHT AWARD AGREEMENT

Unless otherwise defined in this Stock Appreciation Right Award Agreement (this “Agreement”), any capitalized terms used herein will have the meaning ascribed to them in the Cray Inc. (“Cray”) 2013 Equity Incentive Plan (the “Plan”).

Participant has been granted Stock Appreciation Rights (“SARs”), subject to the terms and conditions of the Plan, the Notice of Stock Appreciation Right Award (the “Notice”) and this Agreement, including any special terms imposed by the Committee for non U.S. jurisdictions.

1. Vesting Rights. Subject to the applicable provisions of the Plan and this Agreement, this SAR may be exercised, in whole or in part, in accordance with the schedule set forth in the Notice.

2. Grant of SAR. The Participant named in the Notice has been granted a SAR for the number of Shares set forth in the Notice at the exercise price per Share in U.S. dollars set forth in the Notice (the “Exercise Price”). Upon exercise and subject to the terms and conditions of the Plan and this Agreement, the Company will issue Shares or, in Cray’s sole discretion, cash, having a value equal to (a) the difference between the Fair Market Value on the date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect to which the SAR is being exercised (subject to any maximum number of Shares that may be issuable as specified in the Notice). In the event of a conflict between the terms and conditions of the Plan and the terms and conditions of this Agreement, the terms and conditions of the Plan will prevail.

3. Termination Period.

(a) General Rule. Except as provided below, and subject to the Plan, this SAR may be exercised for three months after Participant’s Termination. In no event will this SAR be exercised later than the Expiration Date set forth in the Notice.

(b) Death; Disability. Unless provided otherwise in the Notice, upon Participant’s Termination by reason of his or her death or “permanent and total disability” as described in the Plan, or if a Participant dies within three months of the Termination Date, the SAR may be exercised for twelve months after the Termination Date, provided that in no event will the SAR be exercised later than the Expiration Date set forth in the Notice. Unless provided otherwise in the Notice, upon Participant’s Termination by reason of his or her Disability (other than a “permanent and total disability”), the SAR may be exercised for twelve months after the Termination Date, provided that in no event will the SAR be exercised later than the Expiration Date set forth in the Notice.

(c) Cause. Upon Participant’s Termination for Cause (as defined in the Plan), the SAR will expire on such date of Participant’s Termination Date.

(d) Termination. For purposes of these SARs, Participant’s service will be considered terminated as of the date Participant is no longer providing services to Cray, its Parent or one of its Subsidiaries (regardless of the reason for such termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any) (the “Termination Date”). The Committee shall have the exclusive discretion to determine when Participant is no longer actively providing services for purposes of the SARs (including whether Participant may still be considered to be providing services while on an approved leave of absence). Unless otherwise provided in this Agreement or determined by Cray, Participant’s right to vest in the SARs under the Plan, if any, will terminate as of the Termination Date and will not be extended by any notice period (e.g.,

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Participant’s period of services would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any). Following the Termination Date, Participant may exercise the SARs only as set forth in the Notice and this Section, provided that the period (if any) during which Participant may exercise the SARs after the Termination Date, if any, will commence on the date Participant ceases to provide services and will not be extended by any notice period mandated under employment laws in the jurisdiction where Participant is employed or terms of Participant’s employment agreement, if any. If Participant does not exercise the SARs within the termination periods set forth in this Section, the SARs shall terminate in its entirety. In no event, may the SARs be exercised after the Expiration Date of the SARs as set forth in the Notice.

4. Exercise of SAR.

(a) Right to Exercise. This SAR is exercisable during its term in accordance with the Vesting Schedule set forth in the Notice and the applicable provisions of the Plan and this Agreement. In the event of Participant’s death, Disability, Termination for Cause or other Termination, the exercisability of the SAR is governed by the applicable provisions of the Plan, the Notice and this Agreement.

(b) Method of Exercise. This SAR is exercisable by delivery of an exercise notice (the “Exercise Notice”), which will state the election to exercise the SAR, the number of Shares in respect of which the SAR is being exercised (the “Exercised SARs”), and such other representations and agreements as may be required by Cray pursuant to the provisions of the Plan. The Exercise Notice will be delivered in person, by mail, via electronic mail or facsimile or by other authorized method to Cray or other person designated by Cray. The Exercise Notice will be accompanied by payment of the aggregate Exercise Price as to all the Exercised Shares together with any Tax-Related Items (as defined in Section 7(a) below). The SAR will be deemed to be exercised upon receipt by Cray of such fully executed Exercise Notice accompanied by such aggregate Exercise Price and payment of any Tax-Related Items.

(c) No Shares or cash, where settlement is in cash, will be issued pursuant to the exercise of the SAR unless such issuance and exercise complies with all relevant provisions of law and the requirements of any stock exchange or quotation service upon which the Shares are then listed. Assuming such compliance, for income tax purposes the Exercised SARs will be considered transferred to Participant on the date the SAR is exercised with respect to such Exercised SARs.

5. Non-Transferability of SAR. This SAR may not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of other than by will or by the laws of descent or distribution or court order and may be exercised during the lifetime of Participant only by Participant or unless otherwise permitted by the Committee on a case-by-case basis. The terms of the Plan and this Agreement will be binding upon the executors, administrators, heirs, successors and assigns of Participant.

6. Term of SAR. This SAR will in any event expire on the expiration date set forth in the Notice, which date is 10 years after the Date of Grant.

7. Tax Consequences.

(a) Exercising the SAR. Participant acknowledges that, regardless of any action taken by Cray or a Parent or Subsidiary employing or retaining Participant (the “Employer”), the ultimate liability for all income tax, social insurance, payroll tax, fringe benefits tax, payment on account or other tax related items related to Participant’s participation in the Plan and legally applicable to Participant (“Tax-Related Items”) is and remains Participant’s responsibility and may exceed the amount actually withheld by Cray or the Employer. Participant further acknowledges that Cray and/or the Employer (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the SAR, including, but not limited to, the grant, vesting or exercise of the SAR, the subsequent sale of Shares acquired pursuant to such

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exercise and the receipt of any dividends; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the SAR to reduce or eliminate Participant’s liability for Tax-Related Items or achieve any particular tax result. Further, if Participant is subject to Tax-Related Items in more than one jurisdiction between the Date of Grant and the date of any relevant taxable or tax withholding event, as applicable, Participant acknowledges that Cray and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.

Prior to the relevant taxable or tax withholding event, as applicable, Participant agrees to make adequate arrangements satisfactory to Cray and/or the Employer to satisfy all Tax-Related Items. In this regard, Participant authorizes Cray and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following:

Depending on the withholding method, Cray may withhold or account for Tax-Related Items by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Participant will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, Participant is deemed to have been issued the full number of Shares issued upon exercise of the SARs; notwithstanding that a number of the Shares are held back solely for the purpose of paying Tax-Related Items. The Fair Market Value of these Shares, determined as of the effective date of the SAR exercise, will be applied as a credit against Tax-Related Items withholding.

Finally, Participant agrees to pay to Cray or the Employer any amount of Tax-Related Items that Cray or the Employer may be required to withhold or account for as a result of Participant’s participation in the Plan that cannot be satisfied by the means previously described. Cray may refuse to issue or deliver the Shares, cash, if settlement of the SAR is in cash, or the proceeds of the sale of Shares, if Participant fails to comply with his or her obligations in connection with Tax-Related Items.

8. Nature of Grant. By accepting the SAR, Participant acknowledges, understands and agrees that:

(a) the Plan is established voluntarily by Cray, it is discretionary in nature, and may be amended, suspended or terminated by Cray at any time, to the extent permitted by the Plan;

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(b) the grant of the SAR is voluntary and occasional and does not create any contractual or other right to receive future grants of equity, or benefits in lieu of equity, even if equity has been granted in the past;

(c) all decisions with respect to future SAR or other grants, if any, will be at the sole discretion of Cray;

(d) the SAR grant and Participant’s participation in the Plan will not create a right to employment or be interpreted as forming an employment or service contract with Cray, the Employer or any Parent or Subsidiary;

(e) Participant is voluntarily participating in the Plan;

(f) the SAR and any Shares or cash, where settlement of the SAR is in cash, acquired under the Plan are not intended to replace any pension rights or compensation;

(g) the SAR and any Shares or cash, where settlement of the SAR is in cash, acquired under the Plan and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;

(h) the future value of the Shares underlying the SAR is unknown, indeterminable, and cannot be predicted with certainty;

(i) if the underlying Shares do not increase in value, the SAR will have no value;

(j) if Participant exercises the SAR and acquires Shares, the value of such Shares may increase or decrease in value, even below the Exercise Price;

(k) no claim or entitlement to compensation or damages will arise from forfeiture of the SAR resulting from Participant’s Termination, and in consideration of the grant of the SAR to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against Cray, any Parent or Subsidiary or the Employer, waives his or her ability, if any, to bring any such claim, and releases Cray, any Parent or Subsidiary and the Employer from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Participant will be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;

(l) unless otherwise provided in the Plan or by Cray in its discretion, the SAR and the benefits evidenced by this Agreement do not create any entitlement to have the SAR or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and

(m) the following provisions apply only if Participant is providing services outside the United States:

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9. No Advice Regarding Grant. Cray is not providing any tax, legal or financial advice, nor is Cray making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying Shares or the payment of cash, where settlement of the SAR is in cash. Participant is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.

10. Data Privacy. Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other SAR grant materials by and among, as applicable, the Employer, Cray and any Parent or Subsidiary of for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.

Participant understands that Cray and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in Cray, details of all SARs or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.

Participant understands that Data will be transferred to Fidelity Stock Plan Services, LLC or its affiliates or such other stock plan service provider as may be selected by Cray in the future, which is assisting Cray with the implementation, administration and management of the Plan. Participant understands that the recipients of Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than Participant’s country. Participant understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of Data by contacting his or her local human resources representative. Participant authorizes Cray, Fidelity Stock Plan Services, LLC and its affiliates, and any other possible recipients which may assist Cray (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer Data, in electronic or other form, for the sole purposes of implementing, administering and managing Participant’s participation in the Plan. Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan. Participant understands that if he or she resides outside the United States, he or she may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing his or her local human resources representative. Further, Participant understands that he or she is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke his or her consent, his or her employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that Cray would not be able to grant Participant stock appreciation rights or other equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or withdrawing his or her consent may affect Participant’s ability to participate in the Plan. For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that he or she may contact his or her local human resources representative.

11. Language. If Participant has received this Agreement, or any other document related to the SAR and/or the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control. Notwithstanding any provisions in this Agreement, the SAR will be subject to any special terms and conditions imposed by the Committee for non U.S. jurisdictions.

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12. Imposition of Other Requirements. Cray reserves the right to impose other requirements on Participant’s participation in the Plan, on the SAR and on any Shares purchased upon exercise of the SAR, to the extent Cray determines it is necessary or advisable for legal or administrative reasons, and to require Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

13. Acknowledgement. Cray and Participant agree that the SAR is granted under and governed by the Notice, this Agreement and by the provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of the Plan and the Plan prospectus, (ii) represents that Participant has carefully read and is familiar with their provisions, and (iii) hereby accepts the SAR subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice.

14. Entire Agreement; Enforcement of Rights. This Agreement, the Plan and the Notice constitute the entire agreement and understanding of the parties relating to the subject matter herein and supersede all prior discussions between them. Any prior agreements, commitments or negotiations concerning the settlement of SARS hereunder are superseded. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing and signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement will not be construed as a waiver of any rights of such party.

15. Compliance with Laws and Regulations. The issuance of Shares and any restriction on the sale of Shares and the payment of cash, where settlement is in cash, will be subject to and conditioned upon compliance by Cray and Participant with all applicable state, federal and local laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which Cray’s Shares may be listed or quoted at the time of such issuance or transfer.

16. Severability. If one or more provisions of this Agreement are held to be unenforceable, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision will be excluded from this Agreement, (ii) the balance of this Agreement will be interpreted as if such provision were so excluded and (iii) the balance of this Agreement will be enforceable in accordance with its terms.

17. Governing Law and Venue. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto will be governed, construed and interpreted in accordance with the laws of the State of Washington, without giving effect to principles of conflicts of law.

Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Plan or this Agreement, will be brought and heard exclusively in the United States District Court for the Western District of Washington or the Washington Superior Court, King County. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.

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18. No Rights as Employee, Director or Consultant. Nothing in this Agreement will affect in any manner whatsoever the right or power of Cray, or a Parent or Subsidiary, to terminate Participant’s service, for any reason, with or without Cause.

19. Consent to Electronic Delivery of all Plan Documents and Disclosures. By Participant’s signature and the signature of Cray’s representative on the Notice, Participant and Cray agree that the SAR is granted under and governed by the terms and conditions of the Plan, the Notice and this Agreement. Participant has reviewed the Plan, the Notice and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Notice, and fully understands all provisions of the Plan, the Notice and this Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions relating to the Plan, the Notice and this Agreement. Participant further agrees to notify Cray upon any change in the residence address indicated on the Notice. By acceptance of the SAR, Participant agrees to participate in the Plan through an on-line or electronic system established and maintained by Cray or a third party designated by Cray and consents to the electronic delivery of the Notice, this Agreement, the Plan, account statements, Plan prospectuses required by the U.S. Securities and Exchange Commission, U.S. financial reports of Cray, and all other documents that Cray is required to deliver to its security holders (including, without limitation, annual reports and proxy statements) or other communications or information related to the SAR and current or future participation in the Plan. Electronic delivery may include the delivery of a link to Cray intranet or the internet site of a third party involved in administering the Plan, the delivery of the document via e-mail or such other delivery determined at Cray’s discretion. Participant acknowledges that Participant may receive from Cray a paper copy of any documents delivered electronically at no cost if Participant contacts Cray by telephone, through a postal service at 901 Fifth Avenue, Suite 1000, Seattle, Washington, 98164 or electronic mail or other electronic medium. Participant further acknowledges that Participant will be provided with a paper copy of any documents delivered electronically if electronic delivery fails; similarly, Participant understands that Participant must provide on request to Cray or any designated third party a paper copy of any documents delivered electronically if electronic delivery fails. Also, Participant understands that Participant’s consent may be revoked or changed, including any change in the electronic mail address to which documents are delivered (if Participant has provided an electronic mail address), at any time by notifying Cray of such revised or revoked consent by telephone, postal service at 901 Fifth Avenue, Suite 1000, Seattle, Washington, 98164 or electronic mail or other electronic medium. Finally, Participant understands that Participant is not required to consent to electronic delivery.

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Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘8-K’ Filing		Date		Other Filings
Filed on:		12/17/14		None on these Dates
For Period End:		12/11/14
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Filing Submission 0001193125-14-445555   –   Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

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