UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 2006
CRAY INC.
(Exact name of registrant as specified in its charter)
| |
|
|
|
|
| Washington
|
|
0-26820
|
|
93-0962605 |
| (State or other jurisdiction of
|
|
(Commission
|
|
(I.R.S. Employer |
| incorporation or organization)
|
|
File Number)
|
|
Identification No.) |
411 First Avenue South, Suite 600
Seattle, WA 98104-2860
(Address of principal executive offices)
| |
|
|
| Registrant’s telephone number, including area code:
|
|
(206) 701-2000 |
| Registrant’s facsimile number, including area code:
|
|
(206) 701-2500 |
None
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
Item 1.01 Entry into a Material Definitive Agreement
On April 29, 2006, the Board of Directors approved the 2006 Bonus Plan, which is a modification of
similar plans for previous years. The 2006 Plan, as it pertains to officers and executives, is
based on adjusted results from operations (75%) and on achievement of personal goals (25%). In
determining results from operations (before taxes, interest and foreign currency effects), any
charges due to SFAS 123(R) stock compensation, restructuring, 401(k), variable pay, bonus and
retention incentives, are excluded. To the extent there are other unplanned significant
transactions or charges, then the Compensation Committee would determine what adjustments, if any,
are appropriate in determining the results from operations for purposes of determining the bonuses.
No bonus will be paid unless results from operations, as so adjusted, reach a pre-determined
minimum level. In addition, no bonus will be paid unless 2006 bookings exceed a defined
threshold level.
Each participant in the Cray 2006 Bonus Plan is assigned a percentage of the participant’s base
salary as his/her target bonus. Bonus would be payable at 25% of target bonus once results from
operations reach the minimum level and increase up to 150% of the target bonus as specified levels
of results from operations established by the Board are reached. Bonuses cannot exceed more than
100% of target bonus unless 2006 bookings are at least at a pre-determined level (higher than the
threshold level). Any bonus higher than 150% of target bonus is at the Board’s discretion. The
Chief Executive Officer, subject to the approval of the Compensation Committee, retains the right
to adjust the formula bonus (from 0% to 125%) for each officer. The Board approves the final bonus
for the Chief Executive Officer.
A copy of the 2006 Bonus Plan is attached as an exhibit to this Form 8-K.
Separately, the Board of Directors also then approved the annual base salary and the target bonus
percentages for purposes of the 2006 Bonus Plan for Peter J. Ungaro, as Chief Executive Officer and
President. and other executive officers. There were no changes to annual base salaries for
executive officers. While Mr. Ungaro’s target bonus percentage increased from 75% in 2005 to 150%
for 2006, in 2005 he also had an override bonus based on gross margin that was not carried over to
2006. The target bonus percentages for each of the other highly-compensated executive officers were generally increased by
10%, as follows: Brian C. Henry, Executive Vice President and Chief
Financial Officer – 60%,
Margaret A. Williams, Senior Vice President – 60%, Steven L. Scott, Chief Technology Officer and
Senior Vice President – 50%; Jan C. Silverman, Senior Vice President – 50%, and Kenneth W. Johnson,
Senior Vice President and General Counsel – 50%.
Item 9.01 Financial Statements and Exhibits.
| |
|
|
|
|
(d)
|
|
Exhibits |
|
|
|
|
|
|
|
|
|
10.1
|
|
Cray 2006 Bonus Plan |
2