As filed with the Securities and Exchange Commission on November 21, 2001
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-3 Registration Statement
Under the Securities Act of 1933
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CRAY INC.
(Exact name of registrant as specified in its charter)
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WASHINGTON 93-0962605
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
411 First Avenue South
Suite 600
Seattle, WA 98104
(206) 701-2000 (telephone)
(206) 701-2500 (facsimile)
(Address, including zip code, and telephone and facsimile numbers,
including area code, of principal executive offices)
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Kenneth W. Johnson, Chief Financial Officer
Cray Inc.
411 First Avenue South
Suite 600
Seattle, WA 98104
(206) 701-2000 (telephone)
(206) 701-2500 (facsimile)
(Name, address, including zip code, and
telephone and facsimile numbers, including area code, of agent for service)
Copy to:
L. John Stevenson, Jr.
Stoel Rives LLP
One Union Square, 36th Floor
Seattle, WA 98101-3197
(206) 624-0900 (telephone)
(206) 386-7500 (facsimile)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with a dividend or
interest reinvestment plan, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Title of Each
Class of Proposed Maximum Proposed Maximum
Securities Amount to be Offering Price Aggregate Amount of
Registered Registered (1) Per Share (2) Offering Price (2) Registration Fee
------------- -------------- ---------------- ------------------ ----------------
Common Stock, 100,000 shares $2.15 $215,000.00 $54.00
$.01 par value
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(1) Pursuant to Rule 416 under the Securities Act of 1933, there are also being
registered such indeterminate number of additional shares of common stock as may
be issuable upon exercise of the stock purchase warrant described herein
pursuant to the provisions thereof regarding adjustment for stock dividends, a
split, subdivision or combination of common stock or similar event.
(2) The proposed maximum offering price per share and maximum aggregate
offering price for the shares being registered hereby are calculated in
accordance with Rule 457(c) under the Securities Act using the average of the
high and low market prices on November 15, 2001.
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said section 8(a), may determine.
PROSPECTUS, Subject to Completion, dated November 21, 2001
CRAY INC.
100,000 shares of common stock
These shares of common stock are issuable upon exercise of the stock
purchase warrant owned by the selling shareholder listed on page 3.
The selling shareholder may sell the shares from time to time at fixed
prices, market prices, prices computed with formulas based on market prices, or
at negotiated prices, and may engage a broker or dealer to sell the shares. We
will not receive any proceeds from the sale of the shares, but we will bear the
costs relating to the registration of the shares.
Our common stock is traded on the Nasdaq National Market under the
symbol "CRAY." On November 20, 2001, the closing price for our common stock was
$2.22 per share.
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THE SHARES OFFERED IN THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK.
YOU SHOULD CAREFULLY CONSIDER THE "FACTORS THAT COULD AFFECT FUTURE RESULTS"
CONTAINED IN OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDING SEPTEMBER
30, 2001, AND SIMILAR DISCLOSURES IN OUR FUTURE FILINGS MADE WITH THE SECURITIES
AND EXCHANGE COMMISSION, WHICH ARE INCORPORATED BY REFERENCE IN THIS PROSPECTUS,
IN DETERMINING WHETHER TO PURCHASE SHARES OF OUR COMMON STOCK.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THE SHARES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is ____________, 2001.
TABLE OF CONTENTS
Section Page
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Our Business................................................... 3
Selling Shareholder ........................................... 3
Plan of Distribution .......................................... 4
Legal Matters.................................................. 5
Experts ....................................................... 5
Limitation of Liability and Indemnification ................... 5
Information Incorporated by Reference ......................... 6
Available Information ......................................... 7
You should rely only on information contained or incorporated by
reference in this prospectus. See "Information Incorporated by Reference" on
page 6. Neither we nor the selling shareholder has authorized any other person
to provide you with information different from that contained in this
prospectus.
The shares of common stock are not being offered in any jurisdiction
where the offering is not permitted.
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OUR BUSINESS
We design, build, sell and service high-performance computer systems,
sometimes referred to as "supercomputers." Our executive offices are located at
Merrill Place, Suite 600, 411 First Avenue South, Seattle, WA 98104-2860, and
our telephone number is (206) 701-2000.
SELLING SHAREHOLDER
On March 28, 2001, Foothill Capital Corporation, the selling
shareholder, acquired a stock purchase warrant exercisable for an aggregate of
100,000 shares of our common stock at an initial exercise price of $1.76 per
share in connection with a credit agreement with us. The warrant is exercisable
until March 28, 2005. The number of shares issuable upon exercise and the
exercise price are subject to adjustment in the event of a stock dividend, a
split, subdivision or combination of our common stock or similar event. The
warrant may also be exercised by means of a cashless exercise feature in which
case we would not receive any proceeds upon exercise of the warrant.
As of November 20, 2001, Foothill did not hold any shares of our common
stock. All of the shares covered by this prospectus are being sold for the
account of Foothill. The shares covered by this prospectus include only the
shares of common stock issuable upon exercise of the warrant.
Ownership After
Shares Offering if All Shares
Owned Prior Shares Being Offered Hereby Are
Selling Shareholder to Offering Offered Sold
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Shares Percent
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Foothill Capital 100,000 (1) 100,000 (1) 0 0
Corporation
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(1) Consists of 100,000 shares of common stock issuable upon the
exercise of the warrant.
Foothill has not had any material relationship with us or any of our
affiliates within the past three years.
In recognition of the fact that Foothill may wish to be legally
permitted to sell its shares when it deems appropriate, we have agreed with
Foothill to file with the SEC, under the Securities Act of 1933, a registration
statement on Form S-3, of which this prospectus forms a part, with respect to
the resale of the shares, and we have agreed to prepare and file such amendments
and supplements to the registration statement as may be necessary to keep the
registration statement effective until the earlier of (i) a period of 120 days
or (ii) Foothill has completed the distribution described in this prospectus.
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PLAN OF DISTRIBUTION
We are registering the shares covered by this prospectus for Foothill.
Foothill or its pledgees, donees, transferees or other successors in interest
may sell the shares in the over-the-counter market or otherwise, at market
prices prevailing at the time of sale, at prices related to prevailing market
prices, or at negotiated prices. In addition, the shares may be sold by one or
more of the following methods:
- a block trade in which a broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell
a portion of the block, as principal, in order to facilitate the
transaction;
- purchases by a broker or dealer, as principal, in a market maker
capacity or otherwise and resale by the broker or dealer for its
account pursuant to their prospectus;
- ordinary brokerage transactions and transactions in which a
broker solicits purchases;
- privately negotiated transactions;
- any combination of these methods of sale; or
- any other legal method.
We will pay the costs and fees of registering the shares, but Foothill
will pay any brokerage commissions, discounts or other expenses relating to the
sale of the shares. We and Foothill each have agreed to indemnify the other
against certain liabilities, including liabilities arising under the Securities
Act, that relate to statements or omissions in the registration statement of
which this prospectus forms a part.
Regulation M under the Securities Exchange Act of 1934 provides that
during the period that any person is engaged in the distribution, as so defined
in Regulation M, of our common stock, such person generally may not purchase
shares of our common stock. Foothill is subject to applicable provisions of the
Securities Act and the Securities Exchange Act of 1934 and the rules and
regulations thereunder, including, without limitation, Regulation M, which
provisions may limit the timing of purchases and sales of shares of our common
stock by Foothill. The foregoing may affect the marketability of our common
stock.
Foothill may negotiate and pay brokers or dealers commissions, discounts
or concessions for their services. In effecting sales, brokers or dealers
engaged by Foothill may allow other brokers or dealers to participate. However,
Foothill and any brokers or dealers involved in the sale or resale of the shares
may qualify as "underwriters" within the meaning of the Section 2(a)(11) of the
Securities Act. In addition, the brokers' or dealers' commissions, discounts or
concessions may qualify as underwriters' compensation under the Securities Act.
If Foothill qualifies as an "underwriter," it will be subject to the prospectus
delivery requirements of section 5(b)(2) of the Securities Act.
In addition to selling its shares under this prospectus, Foothill may:
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- agree to indemnify any broker or dealer or agent against certain
liabilities related to the selling of the shares, including
liabilities arising under the Securities Act;
- transfer its shares in other ways not involving market makers or
established trading markets, including directly by gift,
distribution, or other transfer; or
- sell its shares under Rule 144 of the Securities Act rather than
under this prospectus, if the transaction meets the requirements
of Rule 144.
Upon notification by Foothill that any material arrangement has been
entered into with a broker or dealer for the sale of the shares through a block
trade, special offering, exchange distribution or secondary distribution or a
purchase by a broker or dealer, we will file a supplement to this prospectus, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing the
material terms of the transaction.
LEGAL MATTERS
For purposes of this offering, Kenneth W. Johnson, our General Counsel,
is giving an opinion on the validity of the common shares. As of the date of
this prospectus, Mr. Johnson held 40,914 shares of our common stock, options to
purchase 270,000 shares of our common stock and warrants to purchase 21,637
shares of our common stock.
EXPERTS
The financial statements incorporated in this prospectus by reference
from our Annual Report on Form 10-K/A for the year ended December 31, 2000 have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference. The statements of assets
acquired and liabilities assumed of the Cray Research business unit of Silicon
Graphics, Inc. as of March 31, 2000, and the related statements of revenue and
direct operating expenses for the years ended June 30, 1998 and 1999 and the
nine month period ended March 31, 2000 incorporated in this prospectus by
reference from Form 8-K/A of Cray Inc. filed on June 16, 2000 have been audited
by Deloitte & Touche LLP, independent auditors, as stated in their report (which
report expresses an unqualified opinion and includes an explanatory paragraph
referring to note 1 which describes the expense allocations by Silicon Graphics,
Inc), which is incorporated herein by reference. These financial statements have
been so incorporated herein by reference in reliance upon the reports of such
firm given upon their authority as experts in accounting and auditing.
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our Restated Articles of Incorporation provide that, to the fullest
extent permitted by the Washington Business Corporation Act, our directors will
not be liable for monetary damages to us or our shareholders, excluding,
however, liability for acts or omissions involving intentional misconduct or
knowing violations of law, illegal distributions or transactions from which the
director receives benefits to which the director is not legally entitled. Our
Restated Bylaws provide that we will indemnify our directors and, by action of
the Board of Directors, may indemnify our officers, employees and other agents
to the fullest
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extent permitted by applicable law, except for any legal proceeding that is
initiated by such directors, officers, employees or agents without authorization
of the Board of Directors.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to our directors, officers and controlling persons pursuant
to the foregoing provisions, or otherwise, we have been advised that, in the
opinion of the SEC, such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable.
INFORMATION INCORPORATED BY REFERENCE
The Securities and Exchange Commission allows us to incorporate by
reference our publicly-filed reports into this prospectus, which means that
information included in those reports is considered part of this prospectus.
Information that we file with the Securities and Exchange Commission after the
date of this prospectus will automatically update and supersede the information
contained in this prospectus. We incorporate by reference the following
documents filed with the Securities and Exchange Commission and any future
filings made with the Securities and Exchange Commission under sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934:
1. Our annual report on Form 10-K/A for the year ended December 31,
2000, as filed on September 17, 2001;
2. Our quarterly reports on Form 10-Q for the quarters ended March
31, 2001, June 30, 2001, and September 30, 2001;
3. Our definitive proxy statement, as filed with the Securities and
Exchange Commission on April 9, 2001;
4. Our current report on Form 8-K for the event of October 1, 2001
as filed on October 10, 2001;
5. Our current report on Form 8-K for the event of May 10, 2001, as
filed on May 14, 2001;
6. Our current report on Form 8-K for the event of April 3, 2001,
as filed on April 13, 2001;
7. Our current report on Form 8-K for the event of February 7,
2001, as filed on February 15, 2001;
8. Our current report on Form 8-K/A for the event of December 15,
2000, as filed on July 27, 2001;
9. Our current report on Form 8-K for the event of April 3, 2000,
as filed on April 5, 2000 and amended on June 16, 2000; and
10. The description of our common stock as described in our
registration statement on Form SB-2, registration no.
33-95460-LA, including any amendment or report
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filed for the purpose of updating the description, as
incorporated by reference in our registration statement on Form
8-A, registration no. 0-26820, including the amendment on Form
8-A/A.
We will furnish without charge to you, on written or oral request, a
copy, excluding exhibits, of any or all of the documents incorporated by
reference. You should direct any requests for documents to Investor Relations,
Cray Inc., 411 First Avenue South, Suite 600, Seattle, Washington 98104,
telephone (206) 701-2000.
The information relating to us contained in this prospectus is not
comprehensive and should be read with the information contained in the
incorporated documents.
AVAILABLE INFORMATION
This prospectus is part of a registration statement on Form S-3 that we
filed with the SEC. Certain information in the registration statement has been
omitted from this prospectus in accordance with SEC rules.
We file annual, quarterly and special reports and other information with
the SEC. You may read and copy the registration statement and any other document
that we file at the SEC's public reference rooms located at Room 1024, Judiciary
Plaza, 450 Fifth Street N.W., Washington, D.C. 20549; 233 Broadway, New York,
New York 10048; and Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
you free of charge at the SEC's web site at http://www.sec.gov.
Statements contained in this prospectus as to the contents of any
contract or other document referred to are not necessarily complete. You should
refer to the copy of such contract or other document filed as an exhibit to the
registration statement.
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PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
We will pay all expenses in connection with the issuance and
distribution of the securities being registered.. The following is an itemized
statement of these expenses (all amounts are estimated except for the SEC fees):
SEC Registration fee............................... $ 54
Legal fees......................................... $10,000
Accountant's Fees.................................. $ 3,000
Miscellaneous...................................... $ 1,946
Total.............................................. $15,000
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Item 15. Indemnification of Officers and Directors.
Article XII of our Restated Articles of Incorporation and Section 11 of
our Restated Bylaws require indemnification of our directors, officers,
employees and agents to the fullest extent permitted by the Washington Business
Corporation Act (the "Act"). Sections 23B.08.500 through 23B.08.600 of the Act
authorize a court to award, or a corporation's board of directors to grant,
indemnification to directors and officers on terms sufficiently broad to permit
indemnification under certain circumstances for liabilities arising under the
Securities Act.
Section 23B.08.320 of the Act authorizes a corporation to limit a
director's liability to the corporation or its shareholders for monetary damages
for acts or omissions as a director, except in certain circumstances involving
intentional misconduct, self-dealing or illegal corporate loans or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Article XI of our Restated Articles of Incorporation contains
provisions implementing, to the fullest extent permitted by Washington law, such
limitations on a director's liability to us and our shareholders.
Item 16. Exhibits.
4 Warrant to Purchase Shares of Common Stock issued to Foothill
Capital Corporation
5 Opinion on Legality
23 Consent of Deloitte & Touche LLP
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24 Power of Attorney (included on signature page hereof)
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) that,
individually or in the aggregate, represent a
fundamental change in the information set forth
in this Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and
(a)(1)(ii) do not apply if the information required to
be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with
or furnished to the Commission by the registrant
pursuant to Section 13 or Section 15(d) of the Exchange
Act that are incorporated by reference in the
registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each post-effective amendment shall
be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that
remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933,
each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
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(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that
in the opinion of the Commission such indemnification is against
public policy as expressed in the Securities Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question, whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Seattle, State of Washington, on November 21,
2001.
CRAY INC.
By: /S/
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Michael P. Haydock
President and Chief Executive Officer
Each of the undersigned hereby constitutes and appoints James E.
Rottsolk, Michael P. Haydock and Kenneth W. Johnson, and each of them, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution, for the undersigned and in his or her name, place and stead, in
any and all capacities, to sign any or all amendments or post-effective
amendments to this Registration Statement, and any other instruments or
documents that said attorneys-in-fact and agents may deem necessary or
advisable, to enable Cray Inc. to comply with the Securities Act of 1933, as
amended, and any requirements of the Securities and Exchange Commission in
respect thereof, and to file the same, with all exhibits thereto, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents and each of them full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as the undersigned might or could do in person, hereby ratifying
and confirming all that each such attorney-in-fact and agent, or his substitute,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated below on the 21st day of November, 2001:
Signature and Title
/S/ /S/
-------------------------------- --------------------------------
James E. Rottsolk, Chairman of Daniel J. Evans, Director
the Board of Directors
/S/ /S/
-------------------------------- --------------------------------
Burton J. Smith, Director Stephen C. Kiely, Director
/S/ /S/
-------------------------------- --------------------------------
Terren S. Peizer, Director Kenneth W. Kennedy, Director
/S/ /S/
-------------------------------- --------------------------------
David N. Cutler, Director William A. Owens, Director
/S/ /S/
-------------------------------- --------------------------------
Dean D. Thornton, Director Kenneth W. Johnson
Chief Financial Officer
/S/ /S/
-------------------------------- --------------------------------
Douglas C. Ralphs, Chief Michael P. Haydock, President,
Accounting Officer Chief Executive Officer and
Director