Document:

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                                                                   Exhibit 10.20

                                                               September 4, 2001

Mr. Michael P. Haydock
6460 Fox Path
Chanhassen, MN 55317

Re:  Offer of Employment

Dear Mike:

          On behalf of Cray Inc. (the "Company"), I am very pleased to offer you
the position of President and Chief Executive Officer. This letter clarifies and
confirms the terms of your employment with the Company. This offer is subject
only to your approval, the completion of discussions with members of the Cray
Board of Directors and reference checks.

1.  START DATE

          Unless we mutually agree otherwise, you will commence employment with
the Company as its President and Chief Executive Officer on October 1, 2001 (the
"Start Date").

2.  SALARY

          Your starting salary will be $33,333.33 per month ($400,000
annualized), payable bi-monthly in accordance with the Company's standard
payroll practice and subject to applicable withholding taxes. Because your
position is exempt from overtime pay, your salary will compensate you for all
hours worked. Your base salary will be reviewed annually by the Board of
Directors or its Compensation Committee, and any increases will be effective as
of the date determined by the Board or its Compensation Committee.

3.  BONUS

          In addition to your base salary, you will be entitled to a $300,000
signing bonus. The signing bonus will be payable in three installments:
$100,0000 payable within the first 90 days of employment, $100,000 on the first
anniversary of the Start Date, and $100,000 on the second anniversary of the
Start Date. Payment of this signing bonus is subject to the provisions set forth
under Paragraph 7 below.

          You will also be eligible for an annual bonus for achieving certain
Personal Business Objectives aligned with the financial performance of Cray Inc.
and determined by the Board. Your target bonus will be 60% of your annual
salary, up to a maximum of three times your target bonus.

4.  BENEFITS

          Cray provides a variety of benefits including health and dental care,
life insurance, a Section 125 Flexible Spending Plan, a 401(k) Plan and an
employee stock purchase plan, as well as paid holidays, vacation, and sick
leave. You will have four weeks of paid vacation during your first year of
employment, and four weeks thereafter. Health care coverage begins with
employment. Additional information regarding these benefits will be provided to
you when you start employment. Benefits are subject to periodic modification at
the Company's discretion.

5.  STOCK OPTIONS

          As we discussed, Cray takes a long-term approach to investment, and
its employees are its most important investment. Our compensation structure is
weighted towards equity ownership because we believe we will create the most
value for the Company and its shareholders over time by having employees think
and act like, and therefore be, owners. To this end, and subject to Board of
Directors' approval, you will be granted a 10-year option to

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purchase 900,000 shares of Cray Inc. common stock pursuant to our 1999 Stock
Option Plan. This option will be immediately exercisable with respect to 150,000
shares upon your Start Date; another 150,000 shares will vest at the end of the
first year of employment and the remaining shares will vest monthly over the
following 48 months. The exercise price on your stock option grant will be the
per share market value of the Cray common stock on the Start Date. The exercise
price and share amounts are subject to adjustment as provided in the Plan. Your
options will be documented by delivery to you of a stock option letter agreement
specifying the terms and conditions of the option. The first $100,000 of Cray,
Inc. stock options issued in any calendar year shall be treated by both Cray and
you as Incentive Stock Options. The balance of the stock options in any calendar
year shall be treated by both Cray and you as Non-qualified Options.

          Cray agrees to purchase within 90 days of the Start Date 706 shares of
IBM common stock, designed as a retention reward by IBM at an agreed to market
price of $75,000 and will be paid out as follows: $37,500 on the anniversary of
the Start Date in 2003 and $37,500 on the anniversary of the Start Date in 2004.
Payout will occur upon termination for any cause.

6.   TERMINATION OF EMPLOYMENT

     Your employment may be terminated at any time by you upon written notice to
the Company's Board of Directors or by the Company with or without Cause. For
purposes of this Agreement, "Cause" means a termination of employment resulting
from a good faith determination by the Board of Directors that:

     a.   you have willfully failed or refused in a material respect to follow
          reasonable policies or directives established by the Board of
          Directors or the Chairman or willfully failed to attend to material
          duties or obligations of your office (other than any such failure
          resulting from your incapacity due to physical or mental illness),
          which you have failed to correct within a reasonable period following
          written notice to you; or

     b.   there has been an act by you involving wrongful misconduct which has a
          demonstrably adverse impact on or material damage to the Company or
          its subsidiaries, or which constitutes a misappropriation of the
          assets of the Company; or

     c.   you have engaged in an unauthorized disclosure of confidential
          information; or

     d.   you, while employed by the Company, have performed services for
          another company or person which competes with the Company, without the
          prior written approval of the Chairman of the Company; or

     e.   you have materially breached your obligations hereunder.

          In the event that you are terminated for Cause, you shall be so
          notified in writing by the Company, citing with specificity the item
          or items resulting in said termination for Cause. In the event you
          wish to contest the Company's assertion that any termination was for
          Cause, you shall within 20 days of such notification by the Company
          provide written notice to the Company through it's General Counsel or
          any member of the Board of Directors, that you dispute and contest
          that any termination was for Cause. If within 10 days after the date
          of your notice (30 days from the date of original termination notice),
          you and the Company are unable to resolve any such dispute through
          discussion, then the matter shall be arbitrated subject to the rules
          of the American Arbitration Association for commercial disputes. The
          Arbitration panel may only grant relief as follows:

               a)   It may determine that your conduct constituted rising to the
                    level of a termination for Cause as that term is defined in
                    this Paragraph 6; or

               b)   It may determine that your conduct did not constitute
                    conduct rising to the level of a termination for Cause as
                    that term is defined in this Paragraph 6, and award damages
                    to you in any amount up to the maximum level of unpaid
                    compensation and benefits as set forth in Paragraph 7 below,
                    as if said termination was without Cause.

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     Each party shall bear their own attorney's fees for such arbitration.

7.   PAYMENTS UPON TERMINATION OF EMPLOYMENT

     The payments to which you will be entitled to receive from the Company and
amounts, if any, of the signing bonus that you will be obligated to repay to the
Company upon termination of your employment will be as follows:

     a.    If before the first anniversary of the Start Date you terminate your
          employment or if the Company terminates your employment with Cause,
          the Company will not be obligated to pay you the second installment of
          the signing bonus.

     b.    If before the second anniversary of the Start Date you terminate your
          employment or if the Company terminates your employment with Cause,
          the Company will not be obligated to pay you the third installment of
          the signing bonus.

     c.    If you terminate your employment or if the Company terminates your
          employment with or without Cause, the Company will pay you any accrued
          and unpaid base salary (subject to normal withholding and other
          deductions) to the effective date of termination of your employment.

     d.    If the Company terminates your employment other than for Cause, death
          or disability, you will be entitled to receive continuing payments of
          severance pay (less applicable withholding taxes) at a rate equal to
          your Base Salary rate, as then in effect, for a period of twenty-four
          (24) months from the date of such termination, to be paid periodically
          in accordance with the Company's normal payroll policies.

     e.    If your employment with the Company terminates for Cause by the
          Company, then you will only be eligible for severance benefits in
          accordance with the Company's established severance policies as then
          in effect.

     f.    The Company has a standard retention letter agreement regarding
          compensation following a Change of Control of the Company, as that
          term is defined in that letter agreement. A copy of that letter
          agreement is enclosed. You will be a party to that agreement,
          effective the Start Date, and to the extent that letter is applicable
          its terms will supercede the foregoing provisions.

8.   BOARD OF DIRECTORS

     We expect that the Board of Directors will offer you a position on our
Board. We understand that your acceptance of the offer of employment in this
letter is conditioned upon your election to our Board of Directors at its next
meeting.

9.   OTHER DOCUMENTS

     As a condition of employment, all new employees are required to present
documentation that confirms their identity and eligibility for employment in the
United States. On your first day of employment with Cray, you will be asked to
execute an "Employment Eligibility Certification" attesting to such. Your
employment is further conditioned on executing our standard Confidentiality
Agreement, a copy of which is enclosed.

10.  ADDITIONAL PROVISIONS

     You have disclosed to the Company that while you have no written employment
agreement with your current employer, you may be subject to the provisions of a
non-compete agreement with your current employer. You have further advised the
Company that it is your judgement that your contemplated position with the
Company is not in anyway in violation of any covenant or agreement with your
current employer. Based on the foregoing, the Company agrees to reimburse to you
any legal or other costs you may incur in defending any claims by your current
employer that you have violated any covenant or agreement with your current
employer, up to the amount of $100,000.

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     If you accept this offer, the terms described in this letter will be the
terms of your employment, and this letter supersedes any previous discussions or
offers. Any additions or modifications of these terms would have to be in
writing and signed by you and an officer of the Company.

     This offer and all terms of employment stated in this letter will expire if
you have not returned a signed copy to me on or prior to September 15, 2001.

     We are very excited about the possibility of your joining us. I hope that
you will accept this offer and look forward to a productive and mutually
beneficial working relationship. Please let me know if I can answer any
questions for you about any of the matters outlined in this letter.

                                            Sincerely,

                                            James E. Rottsolk
                                            Chairman and Chief Executive Officer

ACCEPTANCE

I accept employment with Cray Inc. under the terms set forth in this letter.

Michael P. Haydock

September     , 2001

                                       4<PAGE>

                                                                   EXHIBIT 10.26

                      AMENDED AND RESTATED PROMISSORY NOTE

$456,115.00                                                     Portland, Oregon
                                                                February 8, 2002

         THIS AMENDED AND RESTATED PROMISSORY NOTE AMENDS AND RESTATES THAT
PROMISSORY NOTE AND SECURITY AGREEMENT DATED AUGUST 1, 2000.

         FOR VALUE RECEIVED, MicroHelix, Inc., successor by merger to mHL
Development Co., Inc. ("Maker") promises to pay to the order of Richard G. Sass
("RGS") in lawful money of the United States of America, the principal amount of
Four Hundred Fifty-Six Thousand One Hundred Fifteen Dollars ($456,115.00)
together with interest on such amount from February 8, 2002, at the interest
rate of seven and one-half percent (7.5%) per annum (the "Interest Rate").
Interest shall be computed on the outstanding principal amount on the basis of a
365-day year and actual days elapsed.

         Maker shall pay monthly payments of interest only commencing March 1,
2002. Maker shall pay in full the aggregate unpaid principal amount of this
Note, together with all accrued and unpaid interest thereon, on or before March
31, 2003.

         This Note may be prepaid, at any time and from time to time, in whole
or in part, without penalty or premium. Any prepayment shall include accrued and
unpaid interest to the date of prepayment on the amount prepaid. All payments
shall be made directly to RGS in immediately available funds.

         In the event that RGS uses an attorney to construe, interpret, or
enforce any of the provisions of this Note or take any action in any bankruptcy,
insolvency or similar proceeding affecting creditors' rights generally
(including, without limitation, prosecution of a motion for relief from stay,
proposal of a Chapter 11 plan, objection to a disclosure statement or a Chapter
11 or 13 plan, or objection to proposed use, sale or lease of property) or in
mediation or arbitration, RGS shall be entitled to recover from Maker its
reasonable attorney fees and other costs incurred regardless of whether any
legal proceeding is commenced. If any legal action, arbitration or other
proceeding is brought, the prevailing party shall be entitled to recover its
reasonable attorney fees and other costs incurred in connection therewith, both
at trial and on any appeal therefrom or petitions for review thereof.

         All parties to this Note hereby waive presentment, dishonor, notice of
dishonor, and protest. All parties to this Note hereby consent to, and the
holder of this Note is hereby expressly authorized to make, without notice, any
and all renewals, extensions, modifications or waivers of the time for or the
terms of payment of any sum or sums due under this Note, or under any documents
or instruments relating to or securing this Note, or the performance of any
covenants, conditions or agreements hereof or thereof, or the taking or release
of collateral securing this Note. The liability of all parties on this Note
shall not be discharged by any action consented to above taken by any holder of
this Note.

Page 1 - Amended and Restated Promissory Note
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         Maker may not assign or transfer this Note without the prior written
consent of RGS. This Note is made with reference to, and is to be construed in
accordance with, the laws of the State of Oregon, exclusive of choice of law or
conflicts of law rules or principles. Time is of the essence of this Note.

         This Note is secured by a Security Agreement of even date covering the
collateral described therein.

         Maker executes this Note as of the date first above written and
acknowledges receipt of a copy of this Note.

                                        MicroHelix, Inc., successor by merger to
                                        mHL Development Co., Inc.

                                        By:
                                           -------------------------------------
                                        Name:
                                            ------------------------------------
                                        Title:
                                             -----------------------------------

                                        Richard G. Sass

                                        ----------------------------------------
                                        Name:  Richard G. Sass

Page 2 - Amended and Restated Promissory Note

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