Registration No. 33-

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                                     

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                                                    

                              CRAY RESEARCH, INC.
                (Exact name of registrant as specified in its charter)

          Delaware                                  39-1161138
(State or other jurisdiction of        (I.R.S. Employer Identification No.)
 incorporation or organization)

                              655A Lone Oak Drive
                            Eagan, Minnesota  55121
                (Address of Principal Executive Offices) (Zip Code)

                            PERFORMANCE INCENTIVE PLAN
                              (Full title of the plan)

                                   ROBERT H. EWALD
                       President and Chief Operating Officer
                                Cray Research, Inc.
                                655A Lone Oak Drive
                              Eagan, Minnesota  55121
                     (Name and address of agent for service)

                                 (612) 452-6650
            (Telephone number, including area code, of agent for service)

                                     Copy to:

                                 DEAN R. EDSTROM
                             Doherty, Rumble & Butler
                             Professional Association
                             3500 Fifth Street Towers
                             150 South Fifth Street
                         Minneapolis, Minnesota  55402-4235
                                 (612) 340-5575
                                                  

<PAGE>
                          CALCULATION OF REGISTRATION FEE

                                                                             
Title of                    Proposed Maximum      Proposed Maximum  Amount of
Securities to  Amount to    Offering Price        Aggregate         Registration
be Registere   be           Per Share             Offering Price    Fee
               Registered                                                     

Common Stock,
$1.00 par
 value (1)     500,000 shares  $18.25(2)          $9,125,000(2)       $3,147
                                                                              
(1)         With Common Share Purchase Rights attached.

(2)         Estimated solely for the purpose of computing the amount of the 
registration fee pursuant to Rule 457(h) on the basis of the average of the high
and low prices of the Registrant's shares of Common Stock on the New York Stock
Exchange as reported by The Wall Street Journal.  On March 30, 1995, the average
of the high and low prices was $18.25.



<PAGE>

                                      PART II
                    INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

        The following documents, filed by the Registrant with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act") under File No. 1-8028 prior to the date of this
Registration Statement, are, as of their respective dates, incorporated in this
Registration Statement by reference and made a part hereof:

            (a)   The Annual Report on Form 10-K of the Registrant for the
fiscal year ended December 31, 1994 filed pursuant to Section 13(a) or 15(d) of
the Exchange Act;

            (b)   All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the Annual Report referred to in (a) above; and

            (c)   The descriptions of the Registrant's Common Stock and Common
Share Purchase Rights contained in registration statements filed pursuant to the
Exchange Act, including any amendment or report filed for the purpose of
updating such descriptions.

           All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all of the shares of Common Stock offered have
been sold or which deregisters all shares of Common Stock then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be part thereof from the date of filing of such documents.

          Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or incorporated herein by reference or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.  Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

                 Not applicable.
<PAGE>
Item 5.  Interests of Named Experts and Counsel.

                 Not applicable.

Item 6.  Indemnification of Directors and Officers.
            Article VIII of the Bylaws of the Registrant provides for
indemnification of and advance of expenses to directors, officers, employees and
agents to the extent permitted by the General Corporation Law of the State of
Delaware.

            Section 145 of the Delaware General Corporation Law provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. 
Under this provision of the Delaware General Corporation Law, the termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

            The Delaware General Corporation Law further provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability, but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.  
<PAGE>

            Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock), or
(iv) for any transaction from which the director derived an improper personal
benefit.  Article Tenth of the Registrant's Certificate of Incorporation
contains such a provision.

            The Registrant maintains a directors' and officers' liability
insurance policy.

Item 7.  Exemption from Registration Claimed.

                 Not applicable.

Item 8.  Exhibits.

 4.1    -        Copy of Certificate of Incorporation of the Registrant as filed
with the Delaware Secretary of State on April 6, 1972, and amendments thereto as
filed: (i) December 22, 1975 and May 14, 1979 (incorporated by reference to
Exhibit 4 of Item 13 to the Registrant's Registration Statement on Form S-16, as
filed with the Securities and Exchange Commission on October 16, 1980,
Registration No. 2-69445); (ii) December 10, 1980 (incorporated by reference to
Exhibit 3 of Item 11 to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1980); (iii) May 21, 1985 (incorporated by reference to
Exhibit 4 of Item 6 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1985); (iv) July 9, 1987 (incorporated by reference to
Exhibit 3 of Item 6 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1987); and (v) May 29, 1990 (incorporated by reference to
Exhibit 3.1 of Item 14 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1990).

 4.2    -       Copy of the Registrant's Bylaws, as amended through December 21,
1994 (incorporated by reference to Exhibit 3.2 of Item 14 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994).

 4.3    -       Copy of Common Shares Rights Agreement dated as of May 15, 1989
between the Registrant and Norwest Bank Minnesota, N.A. (incorporated by
reference to the Registrant's Registration Statement on Form 8-A dated May 24,
1989).
<PAGE>
 5      -       Opinion of Doherty, Rumble & Butler Professional Association,
with respect to the legality of the securities to be issued pursuant to the
Performance Incentive Plan.

23.1    -       Consent of KPMG Peat Marwick LLP, independent auditors.

23.2    -       Consent of Doherty, Rumble & Butler Professional Association
(included in Exhibit 5).

24      -       Power of Attorney (included on the signature pages of this
Registration Statement).

29      -       Performance Incentive Plan.

Item 9.  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 the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; (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 which
information in the registration statement; Provided, however, That paragraphs
(i) and (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 Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

             (2)  That, for the purpose of determining any liability under the
Securities Act of 1933, each such 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.

             (3)  To remove from registration by means of a post-effective
amendment any of the securities being registered which 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.
<PAGE>
                 (h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 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 Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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 Act and
will be governed by the final adjudication of such issue.
<PAGE>
                                SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Eagan, and the State of Minnesota, on this 28th day
of March, 1995.

                                                 CRAY RESEARCH, INC.


                                                 By ROBERT H. EWALD      
                                                    Robert H. Ewalf
                                                    President and Chief        
                                                    Operating Officer

          Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities, and on the dates, indicated.  Each person whose signature to the
Registration Statement appears below hereby appoints Robert H. Ewald and
Laurence L. Betterley, or either of them, as his attorney-in-fact with full
power to act alone, with full power of substitution or resubstitution, for him
and in his name, place and stead, in any and all capacities to sign on his
behalf, individually and in the capacity stated below, and to file any and all
amendments and post-effective amendments to this Registration Statement, which
amendment or amendments may make such changes and additions as such attorney-in-
fact may deem necessary or appropriate.


Signature                 Title                                  Date    



ROBERT H. EWALD           President, Chief                      March 28,1995
Robert H. Ewald           Operating Officer(Principal Executive
                          Officer) and Director



LAURENCE L. BETTERLEY     Chief Financial Officer               March 28,1995
Laurence L. Betterley     (Principal Financial
                          Officer)



STEVEN E. SNYDER          Corporate Controller                  March 28,1995
Steven E. Snyder          (Principal Accounting
                          Officer)
<PAGE>

LAWRENCE E. EATON         Director                              March 28,1995
Lawrence E. Eaton



CATHERINE M. HAPKA        Director                              March 28,1995
Catherine M. Hapka



PHILIP G. HEASLEY         Director                             March 28,1995
Philip G. Heasley



ROBERT G. POTTER          Director                             March 28,1995
Robert G. Potter



ANDREW SCOTT              Director                             March 28,1995
Andrew Scott



JAN H. SUWINSKI           Director                             March 28,1995
Jan H. Suwinski
<PAGE>
                                   EXHIBIT INDEX

                                                                     Page

 4.1  -            Copy of Certificate of Incorporation of 
     the Registrant as filed with the Delaware 
     Secretary of State on April 6, 1972, and 
     amendments thereto as filed: (i) December 
     22, 1975 and May 14, 1979 (incorporated by 
     reference to Exhibit 4 of Item 13 to the 
     Registrant's Registration Statement on 
     Form S-16, as filed with the Securities 
     and Exchange Commission on October 16, 1980, 
     Registration No. 2-69445); (ii) December 
     10, 1980 (incorporated by reference to 
     Exhibit 3 of Item 11 to the Registrant's 
     Annual Report on Form 10-K for the year 
     ended December 31, 1980); (iii) May 
     21, 1985 (incorporated by reference to 
     Exhibit 4 of Item 6 to the Registrant's 
     Quarterly Report on Form 10-Q for the 
     quarter ended June 30, 1985); (iv) 
     July 9, 1987 (incorporated by reference 
     to Exhibit 3 of Item 6 to the Registrant's 
     Quarterly Report on Form 10-Q for the 
     quarter ended June 30, 1987); and 
     May 29, 1990 (incorporated by reference 
     to Exhibit 3.1 of Item 14 to the Registrant's 
     Annual Report on Form 10-K for the year 
     ended December 31, 1990)                                          --

 4.2 -        Copy of the Registrant's Bylaws, as amended 
     through December 21, 1994 (incorporated by
     reference to Exhibit 3.2 of Item 14 to the 
     Registrant's Annual Report on Form 10-K for 
     the year ended December 31, 1994)                                 -- 

 4.3 -        Copy of Common Shares Rights Agreement dated 
     as of May 15, 1989 between the Registrant and 
     Norwest Bank Minnesota, N.A. (incorporated by 
     reference to the Registrant's Registration 
     Statement on Form 8-A, dated May 24, 1989)                         --

 5    -       Opinion of Doherty, Rumble & Butler
      Professional Association, with respect to
      the legality of the securities to be issued
      pursuant to the Performance Incentive Plan                        13

23.1 -        Consent of KPMG Peat Marwick LLP, independent
    auditors                                                            16
<PAGE>
23.2 -       Consent of Doherty, Rumble & Butler Professional
     Association, counsel to the Company (included
     in Exhibit 5)                                                      13

24 -  Power of Attorney (included on the signature
      pages of this Registration Statement)                              8

29 -  Performance Incentive Plan                                        18


<PAGE>
                                                                 Exhibit 5
<PAGE>






                                                   Cray Research,Inc.
                                                   April 3, 1995


                                     April 3, 1995



Cray Research, Inc.
655A Lone Oak Drive
Eagan, MN  55121

Re:  Cray Research, Inc.
     Performance Incentive Plan

Gentlemen:

                We are acting as special counsel for Cray Research, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of an aggregate of 500,000
shares of common stock, $1.00 par value (with related Common Share Purchase
Rights) (collectively, the "Common Stock"), issuable pursuant to the Company's
Performance Incentive Plan (the "Plan").  A Registration Statement on Form S-8
has been prepared for filing under the Act.

                In connection with the offering of the Common Stock, we have
examined originals or copies submitted to us that we have assumed are genuine,
accurate and complete, of all such corporate records of the Company, agreements
and other instruments, certificates of public officials, officers and
representatives of  the Company, and other documents we have deemed necessary or
appropriate to require as the basis for the opinions hereinafter expressed.  As
to various questions of fact material to this opinion, where relevant facts were
not independently established, we have relied upon statements of officers of the
Company.

               Based and relying solely upon the foregoing, it is our opinion
that when the 500,000 shares of the Common Stock, or any portion thereof, are
issued pursuant to and in accordance with the Plan, such shares will be validly
issued, fully paid and nonassessable.
<PAGE>

                                                   Cray Research, Inc.
                                                   April 3, 1995

               We hereby consent to the filing of this opinion as an exhibit to
the above-referenced Registration Statement.  Consent is also given to the
reference to this firm under the caption "Legal Opinions" in a related
prospectus as having passed upon the validity of the issuance of the Common
Stock.  In giving this consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

                                          Very truly yours,

                                          DOHERTY, RUMBLE & BUTLER
                                          PROFESSIONAL ASSOCIATION



                                          By: DEAN R. EDSTROM





<PAGE>
                                                           Exhibit 23.1

<PAGE>
                                   KPMG PEAT MARWICK LLP





                                Independent Auditors' Consent



The Board of Directors
Cray Research, Inc.:

We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the caption "Experts" in the Prospectus included in
this Registration Statement on Form S-8.


                                          KPMG PEAT MARWICK LLP


Minneapolis, Minnesota
April 3, 1995

<PAGE>
                                                         Exhibit 29


<PAGE>

                                  CRAY RESEARCH, INC.
                              PERFORMANCE INCENTIVE PLAN
                                    March 28, 1995

The purpose of the Performance Incentive Plan is to recognize and reward
employees of Cray Research, Inc. and its subsidiaries (the "Company") for
contributions to the success of the Company's annual business objectives. 
Incentive awards are based on performance results compared to annually
established plan goals.  The Plan shall be administered by the Compensation and
Development Committee of the Board of Directors.

OBJECTIVES

*      Promote strong linkages (between employee contributions and overall
business unit and Company performance) that enhance shareholder value.

*      Reward individual performance that directly supports the achievement of
the business units' and the Company's annual business objectives.

*      Reward and recognize innovation and creativity in accomplishing business
objectives.

*      Attract and retain the critical technical and leadership talent necessary
for the Company's success.

*      Provide the opportunity for significant compensation based on individual
and Company annual performance without increasing compensation fixed costs.

*      More closely align employee and officer interests with that of
shareholders.

ELIGIBILITY

All employees will be automatically eligible for participation in the plan. 
With the approval of the CEO or President, some employees may be excluded from
participation in the Plan.

Group levels are as follows:

<TABLE>
<CAPTION>
Group
 <C> 
Grades
 <C>
Group 0
Employees excluded from participation with the approval of the CEO 
or President
Group 50
Grades not specified below
Group 1
A6, A7, CS4, CS5, F5, F6, H8, H9, IN4, IN5, S7, S8, XA4, XH3
Group 2
A8, A9, CS6, CS7, F7, F8, H10, H11, IN6, IN7, S9, S10, XA5, XF4, XJ4, XJ5
Group 3
A10, A11, S11, S12, H12, H13
Group 4
A12
Group 5
A13, A14
Group 6
A15
Group 7
A16
</TABLE>

PERFORMANCE TARGETS

A Company measure will be determined and performance levels established by the
Compensation and Development Committee upon recommendation by the Chief
Executive Officer or President.  A measure for each participating business unit
will be established annually and approved by the Chief Executive Officer or
President.  Concurrently, minimum and maximum levels of performance will be
determined for use in calculating awards under the Plan.

PERFORMANCE RESULTS

The Chief Executive Officer or President will recommend to the Compensation and
Development Committee for approval the performance on the past year's Company
performance target at the first meeting of each calendar year.  Business units'
past year's performance will be approved by the Chief Executive Officer or
President in January and reviewed by the Compensation and Development Committee.

DETERMINATION AND PAYMENT OF AWARDS

All participants will have their awards determined by Company and business unit
performance.

Employees in Groups 50, 1, 2, 3 and 4 will have a component of their awards
based on performance against individual objectives.  Performance objectives for
these participants will be based on the performance of specific job
responsibilities that support the achievement of Company and business unit
objectives.  At the beginning of the Plan year, these participants, will work
with their managers, to develop measurable objectives to be used in determining
individual performance.  
<PAGE>
Each participant and his/her manager will work throughout the year to ensure on-
going relevancy of objectives, reflecting changing business conditions.  At the
end of the Plan year, each participant's manager will assess performance against
objectives and recommend an individual award percentage which accurately
reflects the individual's performance; these recommendations are submitted to
the appropriate Vice President for review and approval.  If individual
objectives are not met, adjustment in the individual award percentage will be
made down to the minimum level of zero.  If individual objectives are exceeded,
adjustments up to the maximum level are to be made.  The full range of awards,
from minimum to maximum, is expected to be utilized by those making award
recommendations.  Executive management endorsement is also required prior to
final approval by the Chief Executive Officer or President.

Following approval of Company and business unit objectives and the satisfaction
of eligibility requirements, each participant will be notified of the manner by
which his or her award will be determined, the range of possible awards, and
other appropriate information.

The individual payout under this Plan is expressed as a percentage of eligible
wages.  For the purposes of this Plan, eligible wages for Groups 1-7 include
regular pay, overtime pay, shift differential pay, stand-by pay, short-term
disability paid by Cray Research, personal time and holiday time.  It does not
include income from commissions, quota attainment payments, annual incentive
plan payouts, the Cash Bonus Program, discretionary awards, imputed income, or
any amount included on an employee's W-2 for the grant or exercise of a stock
option.  It does not include allowances or reimbursement for expenses,
merchandise discounts or other similar remunerations.  Eligible wages for Group
50 is the same as for Groups 1-7 with the addition of commissions and quota
attainment payments.

The individual award percentage range will be established for each employee
based on his or her level of participation.  The minimum award for any
participant is 0%, the maximum award will the highest award opportunity for an
employee in a given level.

To be eligible to receive an award payment, participants in the Plan must be an
employee of the Company on the last business day of the year.  In the event of
death or disability, a prorated award will be made to the participant or the
participant's estate based on the eligible wages of the employee at the time of
death or disability, Company and business unit performance for the year, and the
individual's target.

No award payments will be made to any Plan participants if payments calculated
under the terms of the Plan would result in a loss for the fiscal year with
respect to which payments are made or the stated minimum level of Company
performance is not achieved.

Award payments will be made in cash except that employees in Groups 50, 1, 2,
and 3, may take up to 50% of the award in common stock of the Company at the
participant's election, not withstanding awards to officers who are subject to
the reporting requirements of Section 16b of the Securities Exchange Act of 1934
shall be paid only in cash.  Elections must be made prior to the end of the
current calendar year, with payments anticipated at the end of February, unless
otherwise determined by the Compensation and Development Committee.
<PAGE>

Awards paid in stock will be based on the closing market price of the stock on
the first working day of February of the new year, discounted by 15%.  In
addition, individual participants who are eligible to participate in the
Deferred Compensation Plan may defer (prior to the end of the current calendar
year) all or any portion of their bonus to be paid.  Participants will be
advised in writing of the status of the deferred account.  Awards are not
transferable.

The Compensation and Development Committee shall approve elected officer awards.

NUMBER OF SHARES RESERVED FOR ISSUANCE

A total of 500,000 shares of the Company's common stock, one dollar par value,
has been reserved for issuance to employees participating under the Plan.

ADJUSTMENT OF SHARES

In the event of a recapitalization, merger, consolidation, reorganization, stock
dividend, stock split or other change in capitalization affecting the common
stock of the Company, appropriate equitable share and price adjustments shall be
made to awards and the Plan to prevent dilution or enlargement of rights.

AMENDMENT

The Board of Directors reserves the right to amend or cancel the Plan at any
time.

DRE:79774:hl
04/03/95(1)
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Registration No. 33-

                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, D.C.  20549
                                                     

                                    FORM S-8
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                                                    

                              CRAY RESEARCH, INC.
                (Exact name of registrant as specified in its charter)

          Delaware                                  39-1161138
(State or other jurisdiction of        (I.R.S. Employer Identification No.)
 incorporation or organization)

                              655A Lone Oak Drive
                            Eagan, Minnesota  55121
                (Address of Principal Executive Offices) (Zip Code)

                            PERFORMANCE INCENTIVE PLAN
                              (Full title of the plan)

                                   ROBERT H. EWALD
                       President and Chief Operating Officer
                                Cray Research, Inc.
                                655A Lone Oak Drive
                              Eagan, Minnesota  55121
                     (Name and address of agent for service)

                                 (612) 452-6650
            (Telephone number, including area code, of agent for service)

                                     Copy to:

                                 DEAN R. EDSTROM
                             Doherty, Rumble & Butler
                             Professional Association
                             3500 Fifth Street Towers
                             150 South Fifth Street
                         Minneapolis, Minnesota  55402-4235
                                 (612) 340-5575
CALCULATION OF REGISTRATION FEE

                                                                             
Title of                    Proposed Maximum      Proposed Maximum  Amount of
Securities to  Amount to    Offering Price        Aggregate         Registration
be Registere   be           Per Share             Offering Price    Fee
               Registered                                                     

Common Stock,
$1.00 par
 value (1)     500,000 shares  $18.25(2)          $9,125,000(2)       $3,147
                                                                              
(1)         With Common Share Purchase Rights attached.

(2)         Estimated solely for the purpose of computing the amount of the 
registration fee pursuant to Rule 457(h) on the basis of the average of the high
and low prices of the Registrant's shares of Common Stock on the New York Stock
Exchange as reported by The Wall Street Journal.  On March 30, 1995, the average
of the high and low prices was $18.25.
PART II
                    INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

Item 3.  Incorporation of Documents by Reference.

        The following documents, filed by the Registrant with the Securities and
Exchange Commission (the "Commission") pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act") under File No. 1-8028 prior to the date of this
Registration Statement, are, as of their respective dates, incorporated in this
Registration Statement by reference and made a part hereof:

            (a)   The Annual Report on Form 10-K of the Registrant for the
fiscal year ended December 31, 1994 filed pursuant to Section 13(a) or 15(d) of
the Exchange Act;

            (b)   All other reports filed by the Registrant pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal year covered by
the Annual Report referred to in (a) above; and

            (c)   The descriptions of the Registrant's Common Stock and Common
Share Purchase Rights contained in registration statements filed pursuant to the
Exchange Act, including any amendment or report filed for the purpose of
updating such descriptions.

           All documents filed by the Registrant with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all of the shares of Common Stock offered have
been sold or which deregisters all shares of Common Stock then remaining unsold
shall be deemed to be incorporated by reference in this Registration Statement
and to be part thereof from the date of filing of such documents.

          Any statement contained in a document incorporated, or deemed to be
incorporated, by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or incorporated herein by reference or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement.  Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.

Item 4.  Description of Securities.

                 Not applicable.
Item 5.  Interests of Named Experts and Counsel.

                 Not applicable.

Item 6.  Indemnification of Directors and Officers.
            Article VIII of the Bylaws of the Registrant provides for
indemnification of and advance of expenses to directors, officers, employees and
agents to the extent permitted by the General Corporation Law of the State of
Delaware.

            Section 145 of the Delaware General Corporation Law provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), judgments, fines, and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. 
Under this provision of the Delaware General Corporation Law, the termination of
any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

            The Delaware General Corporation Law further provides that a
corporation shall have power to indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees), actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability, but in view of all
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 102(b)(7) of the General Corporation Law of the State of
Delaware provides that a certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director provided that such provision shall not eliminate or limit the liability
of a director (i) for any breach of the director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the Delaware General Corporation Law (relating to liability for
unauthorized acquisitions or redemptions of, or dividends on, capital stock), or
(iv) for any transaction from which the director derived an improper personal
benefit.  Article Tenth of the Registrant's Certificate of Incorporation
contains such a provision.

            The Registrant maintains a directors' and officers' liability
insurance policy.

Item 7.  Exemption from Registration Claimed.

                 Not applicable.

Item 8.  Exhibits.

 4.1    -        Copy of Certificate of Incorporation of the Registrant as filed
with the Delaware Secretary of State on April 6, 1972, and amendments thereto as
filed: (i) December 22, 1975 and May 14, 1979 (incorporated by reference to
Exhibit 4 of Item 13 to the Registrant's Registration Statement on Form S-16, as
filed with the Securities and Exchange Commission on October 16, 1980,
Registration No. 2-69445); (ii) December 10, 1980 (incorporated by reference to
Exhibit 3 of Item 11 to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 1980); (iii) May 21, 1985 (incorporated by reference to
Exhibit 4 of Item 6 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1985); (iv) July 9, 1987 (incorporated by reference to
Exhibit 3 of Item 6 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1987); and (v) May 29, 1990 (incorporated by reference to
Exhibit 3.1 of Item 14 to the Registrant's Annual Report on Form 10-K for the
year ended December 31, 1990).

 4.2    -       Copy of the Registrant's Bylaws, as amended through December 21,
1994 (incorporated by reference to Exhibit 3.2 of Item 14 to the Registrant's
Annual Report on Form 10-K for the year ended December 31, 1994).

 4.3    -       Copy of Common Shares Rights Agreement dated as of May 15, 1989
between the Registrant and Norwest Bank Minnesota, N.A. (incorporated by
reference to the Registrant's Registration Statement on Form 8-A dated May 24,
1989).
5      -       Opinion of Doherty, Rumble & Butler Professional Association,
with respect to the legality of the securities to be issued pursuant to the
Performance Incentive Plan.

23.1    -       Consent of KPMG Peat Marwick LLP, independent auditors.

23.2    -       Consent of Doherty, Rumble & Butler Professional Association
(included in Exhibit 5).

24      -       Power of Attorney (included on the signature pages of this
Registration Statement).

29      -       Performance Incentive Plan.

Item 9.  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 the registration statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental change
in the information set forth in the registration statement; (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 which
information in the registration statement; Provided, however, That paragraphs
(i) and (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 Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.

             (2)  That, for the purpose of determining any liability under the
Securities Act of 1933, each such 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.

             (3)  To remove from registration by means of a post-effective
amendment any of the securities being registered which 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.
(h) Insofar as indemnification for liabilities arising under
the Securities Act of 1933 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 Securities
and Exchange Commission such indemnification is against public policy as
expressed in the 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 Act and
will be governed by the final adjudication of such issue.
SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Eagan, and the State of Minnesota, on this 28th day
of March, 1995.

                                                 CRAY RESEARCH, INC.

                                                 By ROBERT H. EWALD      
                                                    Robert H. Ewalf
                                                    President and Chief        
                                                    Operating Officer

          Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities, and on the dates, indicated.  Each person whose signature to the
Registration Statement appears below hereby appoints Robert H. Ewald and
Laurence L. Betterley, or either of them, as his attorney-in-fact with full
power to act alone, with full power of substitution or resubstitution, for him
and in his name, place and stead, in any and all capacities to sign on his
behalf, individually and in the capacity stated below, and to file any and all
amendments and post-effective amendments to this Registration Statement, which
amendment or amendments may make such changes and additions as such attorney-in-
fact may deem necessary or appropriate.

Signature                 Title                                  Date    

ROBERT H. EWALD           President, Chief                      March 28,1995
Robert H. Ewald           Operating Officer(Principal Executive
                          Officer) and Director

LAURENCE L. BETTERLEY     Chief Financial Officer               March 28,1995
Laurence L. Betterley     (Principal Financial
                          Officer)

STEVEN E. SNYDER          Corporate Controller                  March 28,1995
Steven E. Snyder          (Principal Accounting
                          Officer)
LAWRENCE E. EATON         Director                              March 28,1995
Lawrence E. Eaton

CATHERINE M. HAPKA        Director                              March 28,1995
Catherine M. Hapka

PHILIP G. HEASLEY         Director                             March 28,1995
Philip G. Heasley

ROBERT G. POTTER          Director                             March 28,1995
Robert G. Potter

ANDREW SCOTT              Director                             March 28,1995
Andrew Scott

JAN H. SUWINSKI           Director                             March 28,1995
Jan H. Suwinski
EXHIBIT INDEX

                                                                     Page

 4.1  -            Copy of Certificate of Incorporation of 
     the Registrant as filed with the Delaware 
     Secretary of State on April 6, 1972, and 
     amendments thereto as filed: (i) December 
     22, 1975 and May 14, 1979 (incorporated by 
     reference to Exhibit 4 of Item 13 to the 
     Registrant's Registration Statement on 
     Form S-16, as filed with the Securities 
     and Exchange Commission on October 16, 1980, 
     Registration No. 2-69445); (ii) December 
     10, 1980 (incorporated by reference to 
     Exhibit 3 of Item 11 to the Registrant's 
     Annual Report on Form 10-K for the year 
     ended December 31, 1980); (iii) May 
     21, 1985 (incorporated by reference to 
     Exhibit 4 of Item 6 to the Registrant's 
     Quarterly Report on Form 10-Q for the 
     quarter ended June 30, 1985); (iv) 
     July 9, 1987 (incorporated by reference 
     to Exhibit 3 of Item 6 to the Registrant's 
     Quarterly Report on Form 10-Q for the 
     quarter ended June 30, 1987); and 
     May 29, 1990 (incorporated by reference 
     to Exhibit 3.1 of Item 14 to the Registrant's 
     Annual Report on Form 10-K for the year 
     ended December 31, 1990)                                          --

 4.2 -        Copy of the Registrant's Bylaws, as amended 
     through December 21, 1994 (incorporated by
     reference to Exhibit 3.2 of Item 14 to the 
     Registrant's Annual Report on Form 10-K for 
     the year ended December 31, 1994)                                 -- 

 4.3 -        Copy of Common Shares Rights Agreement dated 
     as of May 15, 1989 between the Registrant and 
     Norwest Bank Minnesota, N.A. (incorporated by 
     reference to the Registrant's Registration 
     Statement on Form 8-A, dated May 24, 1989)                         --

 5    -       Opinion of Doherty, Rumble & Butler
      Professional Association, with respect to
      the legality of the securities to be issued
      pursuant to the Performance Incentive Plan                        13

23.1 -        Consent of KPMG Peat Marwick LLP, independent
    auditors                                                            16
23.2 -       Consent of Doherty, Rumble & Butler Professional
     Association, counsel to the Company (included
     in Exhibit 5)                                                      13

24 -  Power of Attorney (included on the signature
      pages of this Registration Statement)                              8

29 -  Performance Incentive Plan                                        18
Exhibit 5
Cray Research,Inc.
                                                   April 3, 1995

                                     April 3, 1995

Cray Research, Inc.
655A Lone Oak Drive
Eagan, MN  55121

Re:  Cray Research, Inc.
     Performance Incentive Plan

Gentlemen:

                We are acting as special counsel for Cray Research, Inc., a
Delaware corporation (the "Company"), in connection with the registration under
the Securities Act of 1933, as amended (the "Act"), of an aggregate of 500,000
shares of common stock, $1.00 par value (with related Common Share Purchase
Rights) (collectively, the "Common Stock"), issuable pursuant to the Company's
Performance Incentive Plan (the "Plan").  A Registration Statement on Form S-8
has been prepared for filing under the Act.

                In connection with the offering of the Common Stock, we have
examined originals or copies submitted to us that we have assumed are genuine,
accurate and complete, of all such corporate records of the Company, agreements
and other instruments, certificates of public officials, officers and
representatives of  the Company, and other documents we have deemed necessary or
appropriate to require as the basis for the opinions hereinafter expressed.  As
to various questions of fact material to this opinion, where relevant facts were
not independently established, we have relied upon statements of officers of the
Company.

               Based and relying solely upon the foregoing, it is our opinion
that when the 500,000 shares of the Common Stock, or any portion thereof, are
issued pursuant to and in accordance with the Plan, such shares will be validly
issued, fully paid and nonassessable.
Cray Research, Inc.
                                                   April 3, 1995

               We hereby consent to the filing of this opinion as an exhibit to
the above-referenced Registration Statement.  Consent is also given to the
reference to this firm under the caption "Legal Opinions" in a related
prospectus as having passed upon the validity of the issuance of the Common
Stock.  In giving this consent, we do not hereby admit that we come within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Securities and Exchange Commission promulgated
thereunder.

                                          Very truly yours,

                                          DOHERTY, RUMBLE & BUTLER
                                          PROFESSIONAL ASSOCIATION

                                          By: DEAN R. EDSTROM
Exhibit 23.1
KPMG PEAT MARWICK LLP

                                Independent Auditors' Consent

The Board of Directors
Cray Research, Inc.:

We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the caption "Experts" in the Prospectus included in
this Registration Statement on Form S-8.

                                          KPMG PEAT MARWICK LLP

Minneapolis, Minnesota
April 3, 1995
Exhibit 29
CRAY RESEARCH, INC.
                              PERFORMANCE INCENTIVE PLAN
                                    March 28, 1995

The purpose of the Performance Incentive Plan is to recognize and reward
employees of Cray Research, Inc. and its subsidiaries (the "Company") for
contributions to the success of the Company's annual business objectives. 
Incentive awards are based on performance results compared to annually
established plan goals.  The Plan shall be administered by the Compensation and
Development Committee of the Board of Directors.

OBJECTIVES

*      Promote strong linkages (between employee contributions and overall
business unit and Company performance) that enhance shareholder value.

*      Reward individual performance that directly supports the achievement of
the business units' and the Company's annual business objectives.

*      Reward and recognize innovation and creativity in accomplishing business
objectives.

*      Attract and retain the critical technical and leadership talent necessary
for the Company's success.

*      Provide the opportunity for significant compensation based on individual
and Company annual performance without increasing compensation fixed costs.

*      More closely align employee and officer interests with that of
shareholders.

ELIGIBILITY

All employees will be automatically eligible for participation in the plan. 
With the approval of the CEO or President, some employees may be excluded from
participation in the Plan.

Group levels are as follows:
Group
Grades
Group 0
Employees excluded from participation with the approval of the CEO 
or President
Group 50
Grades not specified below
Group 1
A6, A7, CS4, CS5, F5, F6, H8, H9, IN4, IN5, S7, S8, XA4, XH3
Group 2
A8, A9, CS6, CS7, F7, F8, H10, H11, IN6, IN7, S9, S10, XA5, XF4, XJ4, XJ5
Group 3
A10, A11, S11, S12, H12, H13
Group 4
A12
Group 5
A13, A14
Group 6
A15
Group 7
A16
PERFORMANCE TARGETS

A Company measure will be determined and performance levels established by the
Compensation and Development Committee upon recommendation by the Chief
Executive Officer or President.  A measure for each participating business unit
will be established annually and approved by the Chief Executive Officer or
President.  Concurrently, minimum and maximum levels of performance will be
determined for use in calculating awards under the Plan.

PERFORMANCE RESULTS

The Chief Executive Officer or President will recommend to the Compensation and
Development Committee for approval the performance on the past year's Company
performance target at the first meeting of each calendar year.  Business units'
past year's performance will be approved by the Chief Executive Officer or
President in January and reviewed by the Compensation and Development Committee.

DETERMINATION AND PAYMENT OF AWARDS

All participants will have their awards determined by Company and business unit
performance.

Employees in Groups 50, 1, 2, 3 and 4 will have a component of their awards
based on performance against individual objectives.  Performance objectives for
these participants will be based on the performance of specific job
responsibilities that support the achievement of Company and business unit
objectives.  At the beginning of the Plan year, these participants, will work
with their managers, to develop measurable objectives to be used in determining
individual performance.
Each participant and his/her manager will work throughout the year to ensure on-
going relevancy of objectives, reflecting changing business conditions.  At the
end of the Plan year, each participant's manager will assess performance against
objectives and recommend an individual award percentage which accurately
reflects the individual's performance; these recommendations are submitted to
the appropriate Vice President for review and approval.  If individual
objectives are not met, adjustment in the individual award percentage will be
made down to the minimum level of zero.  If individual objectives are exceeded,
adjustments up to the maximum level are to be made.  The full range of awards,
from minimum to maximum, is expected to be utilized by those making award
recommendations.  Executive management endorsement is also required prior to
final approval by the Chief Executive Officer or President.

Following approval of Company and business unit objectives and the satisfaction
of eligibility requirements, each participant will be notified of the manner by
which his or her award will be determined, the range of possible awards, and
other appropriate information.

The individual payout under this Plan is expressed as a percentage of eligible
wages.  For the purposes of this Plan, eligible wages for Groups 1-7 include
regular pay, overtime pay, shift differential pay, stand-by pay, short-term
disability paid by Cray Research, personal time and holiday time.  It does not
include income from commissions, quota attainment payments, annual incentive
plan payouts, the Cash Bonus Program, discretionary awards, imputed income, or
any amount included on an employee's W-2 for the grant or exercise of a stock
option.  It does not include allowances or reimbursement for expenses,
merchandise discounts or other similar remunerations.  Eligible wages for Group
50 is the same as for Groups 1-7 with the addition of commissions and quota
attainment payments.

The individual award percentage range will be established for each employee
based on his or her level of participation.  The minimum award for any
participant is 0%, the maximum award will the highest award opportunity for an
employee in a given level.

To be eligible to receive an award payment, participants in the Plan must be an
employee of the Company on the last business day of the year.  In the event of
death or disability, a prorated award will be made to the participant or the
participant's estate based on the eligible wages of the employee at the time of
death or disability, Company and business unit performance for the year, and the
individual's target.

No award payments will be made to any Plan participants if payments calculated
under the terms of the Plan would result in a loss for the fiscal year with
respect to which payments are made or the stated minimum level of Company
performance is not achieved.

Award payments will be made in cash except that employees in Groups 50, 1, 2,
and 3, may take up to 50% of the award in common stock of the Company at the
participant's election, not withstanding awards to officers who are subject to
the reporting requirements of Section 16b of the Securities Exchange Act of 1934
shall be paid only in cash.  Elections must be made prior to the end of the
current calendar year, with payments anticipated at the end of February, unless
otherwise determined by the Compensation and Development Committee.
Awards paid in stock will be based on the closing market price of the stock on
the first working day of February of the new year, discounted by 15%.  In
addition, individual participants who are eligible to participate in the
Deferred Compensation Plan may defer (prior to the end of the current calendar
year) all or any portion of their bonus to be paid.  Participants will be
advised in writing of the status of the deferred account.  Awards are not
transferable.

The Compensation and Development Committee shall approve elected officer awards.

NUMBER OF SHARES RESERVED FOR ISSUANCE

A total of 500,000 shares of the Company's common stock, one dollar par value,
has been reserved for issuance to employees participating under the Plan.

ADJUSTMENT OF SHARES

In the event of a recapitalization, merger, consolidation, reorganization, stock
dividend, stock split or other change in capitalization affecting the common
stock of the Company, appropriate equitable share and price adjustments shall be
made to awards and the Plan to prevent dilution or enlargement of rights.

AMENDMENT

The Board of Directors reserves the right to amend or cancel the Plan at any
time.

DRE:79774:hl
04/03/95(1)