North Carolina
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56-1572719
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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4600 Silicon Drive
Durham, North Carolina
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27703
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer [X]
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Accelerated filer [ ]
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Non-accelerated filer [ ] (Do not check if a smaller reporting company)
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Smaller reporting company [ ]
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Description
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Page No.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Item 1.
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Item 1A.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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December 29,
2013 |
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June 30,
2013 |
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(unaudited)
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(In thousands, except par value)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$269,388
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$190,069
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Short-term investments
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915,063
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833,846
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Total cash, cash equivalents and short-term investments
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1,184,451
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1,023,915
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Accounts receivable, net
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213,536
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192,507
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Inventories
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234,455
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197,001
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Deferred income taxes
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25,912
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26,125
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Prepaid expenses and other current assets
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75,603
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76,218
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Total current assets
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1,733,957
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1,515,766
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Property and equipment, net
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569,162
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542,833
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Intangible assets, net
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348,079
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357,525
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Goodwill
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616,345
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616,345
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Other assets
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49,114
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19,941
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Total assets
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$3,316,657
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$3,052,410
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Current liabilities:
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Accounts payable, trade
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$166,740
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$121,441
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Accrued salaries and wages
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46,962
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41,407
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Income taxes payable
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10,093
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1,315
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Other current liabilities
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51,248
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43,248
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Total current liabilities
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275,043
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207,411
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Long-term liabilities:
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Deferred income taxes
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27,244
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25,504
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Other long-term liabilities
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45,409
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12,843
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Total long-term liabilities
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72,653
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38,347
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Commitments and contingencies (Note 11)
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Shareholders’ equity:
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Preferred stock, par value $0.01; 3,000 shares authorized at December 29, 2013 and June 30, 2013; none issued and outstanding
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—
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—
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Common stock, par value $0.00125; 200,000 shares authorized at December 29, 2013 and June 30, 2013; 121,613 and 119,623 shares issued and outstanding at December 29, 2013 and June 30, 2013, respectively
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151
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148
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Additional paid-in-capital
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2,128,563
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2,025,764
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Accumulated other comprehensive income, net of taxes
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10,089
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8,244
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Retained earnings
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830,158
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772,496
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Total shareholders’ equity
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2,968,961
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2,806,652
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Total liabilities and shareholders’ equity
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$3,316,657
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$3,052,410
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Three Months Ended
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Six Months Ended
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December 29,
2013 |
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December 30,
2012 |
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December 29,
2013 |
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December 30,
2012 |
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(In thousands, except per share amounts)
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||||||||||||||
Revenue, net
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$415,086
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$346,286
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$806,092
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$662,039
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Cost of revenue, net
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259,308
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212,810
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499,557
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412,514
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Gross profit
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155,778
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133,476
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306,535
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249,525
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Operating expenses:
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Research and development
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44,436
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39,941
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86,179
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77,488
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Sales, general and administrative
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67,943
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60,100
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132,221
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112,745
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Amortization of acquisition-related intangibles
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7,256
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7,719
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14,543
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15,389
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Loss on disposal or impairment of long-lived assets
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760
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624
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1,417
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1,522
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Total operating expenses
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120,395
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108,384
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234,360
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207,144
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Operating income
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35,383
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25,092
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72,175
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42,381
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Non-operating income, net
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3,403
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2,481
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6,221
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5,866
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Income before income taxes
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38,786
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27,573
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78,396
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48,247
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Income tax expense
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3,105
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7,170
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12,218
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11,721
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Net income
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$35,681
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$20,403
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$66,178
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$36,526
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Earnings per share:
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Basic
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$0.30
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$0.18
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$0.55
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$0.32
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Diluted
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$0.29
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$0.18
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$0.54
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$0.31
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Weighted average shares used in per share calculation:
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Basic
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120,932
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115,965
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120,248
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115,760
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Diluted
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123,204
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116,410
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122,821
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116,249
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Three Months Ended
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Six Months Ended
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December 29,
2013 |
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December 30,
2012 |
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December 29,
2013 |
|
December 30,
2012 |
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(In thousands)
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Net income
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$35,681
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$20,403
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$66,178
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$36,526
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Other comprehensive income:
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Currency translation (loss) gain, net of tax benefit (expense) of $0, $20, $0 and ($91), respectively
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(125
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)
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(33
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)
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135
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149
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Net unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of ($283), $376, ($1,065) and $54, respectively
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447
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(617
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)
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1,710
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(83
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)
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Other comprehensive income (loss)
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322
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(650
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)
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1,845
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66
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Comprehensive income
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$36,003
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$19,753
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$68,023
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$36,592
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Six Months Ended
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December 29,
2013 |
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December 30,
2012 |
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(In thousands)
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Cash flows from operating activities:
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Net income
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$66,178
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$36,526
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Adjustments to reconcile net income to net cash provided by operating activities:
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Depreciation and amortization
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79,611
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76,395
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Stock-based compensation
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30,250
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27,029
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Excess tax benefit from share-based payment arrangements
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(14,853
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)
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(117
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)
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Loss on disposal or impairment of long-lived assets
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1,417
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1,522
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Amortization of premium/discount on investments
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5,043
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4,744
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Changes in operating assets and liabilities:
|
|
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|
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Accounts receivable
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(21,029
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)
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7,683
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Inventories
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(36,632
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)
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3,854
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|
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Prepaid expenses and other assets
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(6,148
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)
|
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(3,644
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)
|
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Accounts payable, trade
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40,501
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14,581
|
|
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Accrued salaries and wages and other liabilities
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23,649
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|
9,721
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Net cash provided by operating activities
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167,987
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178,294
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Cash flows from investing activities:
|
|
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|
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Purchases of property and equipment
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(83,450
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)
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(30,430
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)
|
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Purchases of available-for-sale investments
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(346,799
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)
|
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(364,027
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)
|
||
Proceeds from maturities of available-for-sale investments
|
251,020
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|
|
194,754
|
|
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Proceeds from sale of property and equipment
|
94
|
|
|
301
|
|
||
Proceeds from sale of available-for-sale investments
|
12,295
|
|
|
23,825
|
|
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Purchases of patent and licensing rights
|
(10,046
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)
|
|
(10,021
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)
|
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Net cash used in investing activities
|
(176,886
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)
|
|
(185,598
|
)
|
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Cash flows from financing activities:
|
|
|
|
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Net proceeds from issuance of common stock
|
73,079
|
|
|
8,177
|
|
||
Excess tax benefit from share-based payment arrangements
|
14,853
|
|
|
117
|
|
||
Repurchases of common stock
|
(107
|
)
|
|
(638
|
)
|
||
Net cash provided by financing activities
|
87,825
|
|
|
7,656
|
|
||
Effects of foreign exchange changes on cash and cash equivalents
|
393
|
|
|
371
|
|
||
Net increase in cash and cash equivalents
|
79,319
|
|
|
723
|
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
190,069
|
|
|
178,885
|
|
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End of period
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$269,388
|
|
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$179,608
|
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•
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LED Products
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•
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Lighting Products
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•
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Power and RF Products
|
|
December 29, 2013
|
|
June 30, 2013
|
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Billed trade receivables
|
|
$244,136
|
|
|
|
$220,307
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Unbilled contract receivables
|
1,282
|
|
|
1,171
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|
245,418
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|
|
221,478
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|
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Allowance for sales returns, discounts and other incentives
|
(28,849
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)
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(26,500
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)
|
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Allowance for bad debts
|
(3,033
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)
|
|
(2,471
|
)
|
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Total accounts receivable, net
|
|
$213,536
|
|
|
|
$192,507
|
|
|
December 29, 2013
|
|
June 30, 2013
|
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Raw material
|
|
$79,602
|
|
|
|
$62,253
|
|
Work-in-progress
|
71,432
|
|
|
68,146
|
|
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Finished goods
|
83,421
|
|
|
66,602
|
|
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Total inventories
|
|
$234,455
|
|
|
|
$197,001
|
|
|
December 29, 2013
|
|
June 30, 2013
|
||||
Accrued taxes
|
|
$21,533
|
|
|
|
$21,436
|
|
Accrued professional fees
|
6,340
|
|
|
4,493
|
|
||
Accrued warranty
|
5,294
|
|
|
5,259
|
|
||
Accrued other
|
18,081
|
|
|
12,060
|
|
||
Total other current liabilities
|
|
$51,248
|
|
|
|
$43,248
|
|
|
December 29, 2013
|
|
June 30, 2013
|
||||
Currency translation gain
|
|
$8,627
|
|
|
|
$8,492
|
|
Net unrealized gain (loss) on available-for-sale securities
|
1,462
|
|
|
(248
|
)
|
||
Total accumulated other comprehensive income, net of taxes
|
|
$10,089
|
|
|
|
$8,244
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 29, 2013
|
|
December 30, 2012
|
|
December 29, 2013
|
|
December 30, 2012
|
||||||||
Foreign currency gain, net
|
|
$213
|
|
|
|
$301
|
|
|
|
$477
|
|
|
|
$128
|
|
Gain on sale of investments, net
|
—
|
|
|
8
|
|
|
10
|
|
|
36
|
|
||||
Interest income, net
|
2,806
|
|
|
1,946
|
|
|
5,147
|
|
|
3,738
|
|
||||
Other, net
|
384
|
|
|
226
|
|
|
587
|
|
|
1,964
|
|
||||
Total non-operating income, net
|
|
$3,403
|
|
|
|
$2,481
|
|
|
|
$6,221
|
|
|
|
$5,866
|
|
Accumulated Other Comprehensive Income Component
|
|
Amount Reclassified from Accumulated Other Comprehensive Income
|
|
Affected Line Item in the Statement of Income
|
||||||||||||||
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
||||||||||||
|
|
December 29, 2013
|
|
December 30, 2012
|
|
December 29, 2013
|
|
December 30, 2012
|
|
|
||||||||
Net unrealized gain on available-for-sale securities, net of tax expense
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
$—
|
|
|
|
$8
|
|
|
|
$10
|
|
|
|
$36
|
|
|
Non-operating income, net
|
|
|
—
|
|
|
8
|
|
|
10
|
|
|
36
|
|
|
Income before income taxes
|
||||
|
|
—
|
|
|
2
|
|
|
2
|
|
|
9
|
|
|
Income tax expense
|
||||
|
|
|
$—
|
|
|
|
$6
|
|
|
|
$8
|
|
|
|
$27
|
|
|
Net income
|
|
|
December 29, 2013
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Municipal bonds
|
|
|
$278,331
|
|
|
|
$1,604
|
|
|
|
($151
|
)
|
|
|
$279,784
|
|
Corporate bonds
|
|
208,636
|
|
|
1,660
|
|
|
(957
|
)
|
|
209,339
|
|
||||
U.S. agency securities
|
|
31,157
|
|
|
199
|
|
|
—
|
|
|
31,356
|
|
||||
Non-U.S. certificates of deposit
|
|
386,000
|
|
|
—
|
|
|
—
|
|
|
386,000
|
|
||||
Non-U.S. government securities
|
|
8,566
|
|
|
20
|
|
|
(2
|
)
|
|
8,584
|
|
||||
Total
|
|
|
$912,690
|
|
|
|
$3,483
|
|
|
|
($1,110
|
)
|
|
|
$915,063
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
June 30, 2013
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Municipal bonds
|
|
|
$250,206
|
|
|
|
$817
|
|
|
|
($1,314
|
)
|
|
|
$249,709
|
|
Corporate bonds
|
|
192,147
|
|
|
1,678
|
|
|
(1,765
|
)
|
|
192,060
|
|
||||
U.S. agency securities
|
|
39,288
|
|
|
186
|
|
|
—
|
|
|
39,474
|
|
||||
Non-U.S. certificates of deposit
|
|
345,000
|
|
|
—
|
|
|
—
|
|
|
345,000
|
|
||||
Non-U.S. government securities
|
|
7,608
|
|
|
14
|
|
|
(19
|
)
|
|
7,603
|
|
||||
Total
|
|
|
$834,249
|
|
|
|
$2,695
|
|
|
|
($3,098
|
)
|
|
|
$833,846
|
|
|
|
December 29, 2013
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Municipal bonds
|
|
|
$46,896
|
|
|
|
($151
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$46,896
|
|
|
|
($151
|
)
|
Corporate bonds
|
|
73,821
|
|
|
(906
|
)
|
|
2,967
|
|
|
(51
|
)
|
|
76,788
|
|
|
(957
|
)
|
||||||
Non-U.S. government securities
|
|
2,034
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
2,034
|
|
|
(2
|
)
|
||||||
Total
|
|
|
$122,751
|
|
|
|
($1,059
|
)
|
|
|
$2,967
|
|
|
|
($51
|
)
|
|
|
$125,718
|
|
|
|
($1,110
|
)
|
Number of securities with an unrealized loss
|
|
|
|
61
|
|
|
|
|
2
|
|
|
|
|
63
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
June 30, 2013
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Municipal bonds
|
|
|
$126,926
|
|
|
|
($1,314
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$126,926
|
|
|
|
($1,314
|
)
|
Corporate bonds
|
|
102,010
|
|
|
(1,765
|
)
|
|
—
|
|
|
—
|
|
|
102,010
|
|
|
(1,765
|
)
|
||||||
Non-U.S. government securities
|
|
5,534
|
|
|
(19
|
)
|
|
—
|
|
|
—
|
|
|
5,534
|
|
|
(19
|
)
|
||||||
Total
|
|
|
$234,470
|
|
|
|
($3,098
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$234,470
|
|
|
|
($3,098
|
)
|
Number of securities with an unrealized loss
|
|
|
|
123
|
|
|
|
|
—
|
|
|
|
|
123
|
|
|
December 29, 2013
|
||||||||||||||||||
|
Within One
Year
|
|
After One,
Within Five
Years
|
|
After Five,
Within Ten
Years
|
|
After Ten
Years
|
|
Total
|
||||||||||
Municipal bonds
|
|
$58,779
|
|
|
|
$221,005
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$279,784
|
|
Corporate bonds
|
36,499
|
|
|
172,840
|
|
|
—
|
|
|
—
|
|
|
209,339
|
|
|||||
U.S. agency securities
|
12,110
|
|
|
19,246
|
|
|
—
|
|
|
—
|
|
|
31,356
|
|
|||||
Non-U.S. certificates of deposit
|
386,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
386,000
|
|
|||||
Non-U.S. government securities
|
5,574
|
|
|
3,010
|
|
|
—
|
|
|
—
|
|
|
8,584
|
|
|||||
Total
|
|
$498,962
|
|
|
|
$416,101
|
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$915,063
|
|
•
|
Level 1 - Valuations based on quoted prices in active markets for identical instruments that the Company is able to access. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these products does not entail a significant degree of judgment.
|
•
|
Level 2 - Valuations based on quoted prices in active markets for instruments that are similar, or quoted prices in markets that are not active for identical or similar instruments, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
|
•
|
Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.
|
|
December 29, 2013
|
|
June 30, 2013
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-U.S. certificates of deposit
|
$
|
—
|
|
|
$
|
25,063
|
|
|
$
|
—
|
|
|
$
|
25,063
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Municipal bonds
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,009
|
|
|
—
|
|
|
2,009
|
|
||||||||
Money market funds
|
34,818
|
|
|
—
|
|
|
—
|
|
|
34,818
|
|
|
12,589
|
|
|
—
|
|
|
—
|
|
|
12,589
|
|
||||||||
Total cash equivalents
|
34,818
|
|
|
25,063
|
|
|
—
|
|
|
59,881
|
|
|
12,589
|
|
|
2,009
|
|
|
—
|
|
|
14,598
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Municipal bonds
|
—
|
|
|
279,784
|
|
|
—
|
|
|
279,784
|
|
|
—
|
|
|
249,709
|
|
|
—
|
|
|
249,709
|
|
||||||||
Corporate bonds
|
—
|
|
|
209,339
|
|
|
—
|
|
|
209,339
|
|
|
—
|
|
|
192,060
|
|
|
—
|
|
|
192,060
|
|
||||||||
U.S. agency securities
|
—
|
|
|
31,356
|
|
|
—
|
|
|
31,356
|
|
|
—
|
|
|
39,474
|
|
|
—
|
|
|
39,474
|
|
||||||||
Non-U.S. certificates of deposit
|
—
|
|
|
386,000
|
|
|
—
|
|
|
386,000
|
|
|
—
|
|
|
345,000
|
|
|
—
|
|
|
345,000
|
|
||||||||
Non-U.S. government securities
|
—
|
|
|
8,584
|
|
|
—
|
|
|
8,584
|
|
|
—
|
|
|
7,603
|
|
|
—
|
|
|
7,603
|
|
||||||||
Total short-term investments
|
—
|
|
|
915,063
|
|
|
—
|
|
|
915,063
|
|
|
—
|
|
|
833,846
|
|
|
—
|
|
|
833,846
|
|
||||||||
Total assets
|
|
$34,818
|
|
|
|
$940,126
|
|
|
|
$—
|
|
|
|
$974,944
|
|
|
|
$12,589
|
|
|
|
$835,855
|
|
|
|
$—
|
|
|
|
$848,444
|
|
|
December 29, 2013
|
|
June 30, 2013
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$137,440
|
|
|
|
($63,291
|
)
|
|
|
$74,149
|
|
|
|
$137,440
|
|
|
|
($59,611
|
)
|
|
|
$77,829
|
|
Developed technology
|
162,760
|
|
|
(63,342
|
)
|
|
99,418
|
|
|
162,760
|
|
|
(53,476
|
)
|
|
109,284
|
|
||||||
Non-compete agreements
|
10,244
|
|
|
(5,017
|
)
|
|
5,227
|
|
|
10,244
|
|
|
(4,037
|
)
|
|
6,207
|
|
||||||
Trade names, finite-lived
|
520
|
|
|
(504
|
)
|
|
16
|
|
|
520
|
|
|
(493
|
)
|
|
27
|
|
||||||
Patent and license rights
|
124,865
|
|
|
(38,476
|
)
|
|
86,389
|
|
|
116,147
|
|
|
(34,849
|
)
|
|
81,298
|
|
||||||
Total intangible assets with finite lives
|
435,829
|
|
|
(170,630
|
)
|
|
265,199
|
|
|
427,111
|
|
|
(152,466
|
)
|
|
274,645
|
|
||||||
Trade names, indefinite-lived
|
82,880
|
|
|
|
|
|
82,880
|
|
|
82,880
|
|
|
|
|
|
82,880
|
|
||||||
Total intangible assets
|
|
$518,709
|
|
|
|
($170,630
|
)
|
|
|
$348,079
|
|
|
|
$509,991
|
|
|
|
($152,466
|
)
|
|
|
$357,525
|
|
Fiscal Year Ending
|
|
||
June 29, 2014 (remainder of fiscal 2014)
|
|
$18,251
|
|
June 28, 2015
|
33,829
|
|
|
June 26, 2016
|
33,545
|
|
|
June 25, 2017
|
31,566
|
|
|
June 24, 2018
|
30,400
|
|
|
Thereafter
|
117,608
|
|
|
Total
|
|
$265,199
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
December 29,
2013 |
|
December 30,
2012 |
||||||||
Net income
|
|
$35,681
|
|
|
|
$20,403
|
|
|
|
$66,178
|
|
|
|
$36,526
|
|
Weighted average common shares
|
120,932
|
|
|
115,965
|
|
|
120,248
|
|
|
115,760
|
|
||||
Basic earnings per share
|
|
$0.30
|
|
|
|
$0.18
|
|
|
|
$0.55
|
|
|
|
$0.32
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
December 29,
2013 |
|
December 30,
2012 |
||||||||
Net income
|
|
$35,681
|
|
|
|
$20,403
|
|
|
|
$66,178
|
|
|
|
$36,526
|
|
Weighted average common shares - basic
|
120,932
|
|
|
115,965
|
|
|
120,248
|
|
|
115,760
|
|
||||
Dilutive effect of stock options, nonvested shares and ESPP purchase rights
|
2,272
|
|
|
445
|
|
|
2,573
|
|
|
489
|
|
||||
Weighted average common shares - diluted
|
123,204
|
|
|
116,410
|
|
|
122,821
|
|
|
116,249
|
|
||||
Diluted earnings per share
|
|
$0.29
|
|
|
|
$0.18
|
|
|
|
$0.54
|
|
|
|
$0.31
|
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|||
Outstanding at June 30, 2013
|
8,657
|
|
|
|
$35.67
|
|
Granted
|
2,870
|
|
|
55.03
|
|
|
Exercised
|
(1,795
|
)
|
|
36.57
|
|
|
Forfeited or expired
|
(158
|
)
|
|
38.64
|
|
|
Outstanding at December 29, 2013
|
9,574
|
|
|
|
$41.26
|
|
|
Number of
RSAs/RSUs
|
|
Weighted-Average
Grant-Date Fair Value
|
|||
Nonvested at June 30, 2013
|
647
|
|
|
|
$33.80
|
|
Granted
|
516
|
|
|
54.62
|
|
|
Vested
|
(250
|
)
|
|
32.95
|
|
|
Forfeited
|
(7
|
)
|
|
35.45
|
|
|
Nonvested at December 29, 2013
|
906
|
|
|
|
$45.88
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
December 29,
2013 |
|
December 30,
2012 |
||||||||
Income Statement Classification:
|
|
|
|
|
|
|
|
||||||||
Cost of goods sold
|
|
$2,849
|
|
|
|
$2,257
|
|
|
|
$5,228
|
|
|
|
$4,541
|
|
Research and development
|
3,829
|
|
|
3,947
|
|
|
7,541
|
|
|
7,003
|
|
||||
Sales, general and administrative
|
8,994
|
|
|
8,340
|
|
|
17,481
|
|
|
15,485
|
|
||||
Total
|
|
$15,672
|
|
|
|
$14,544
|
|
|
|
$30,250
|
|
|
|
$27,029
|
|
|
Six Months Ended
|
||
|
December 29, 2013
|
||
Balance at beginning of period
|
|
$6,171
|
|
Warranties accrued in current period
|
1,249
|
|
|
Changes in estimates for pre-existing warranties
|
907
|
|
|
Expenditures
|
(2,037
|
)
|
|
Balance at end of period
|
|
$6,290
|
|
•
|
LED Products
|
•
|
Lighting Products
|
•
|
Power and RF Products
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
December 29,
2013 |
|
December 30,
2012 |
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
LED Products
|
|
$215,022
|
|
|
|
$200,962
|
|
|
|
$433,045
|
|
|
|
$388,509
|
|
Lighting Products
|
173,656
|
|
|
122,714
|
|
|
321,574
|
|
|
230,787
|
|
||||
Power and RF Products
|
26,408
|
|
|
22,610
|
|
|
51,473
|
|
|
42,743
|
|
||||
Total revenue
|
|
$415,086
|
|
|
|
$346,286
|
|
|
|
$806,092
|
|
|
|
$662,039
|
|
|
|
|
|
|
|
|
|
||||||||
Gross Profit and Gross Margin:
|
|
|
|
|
|
|
|
||||||||
LED Products gross profit
|
|
$97,644
|
|
|
|
$84,186
|
|
|
|
$199,297
|
|
|
|
$159,653
|
|
LED Products gross margin
|
45.4
|
%
|
|
41.9
|
%
|
|
46.0
|
%
|
|
41.1
|
%
|
||||
Lighting Products gross profit
|
48,426
|
|
|
41,383
|
|
|
88,244
|
|
|
75,483
|
|
||||
Lighting Products gross margin
|
27.9
|
%
|
|
33.7
|
%
|
|
27.4
|
%
|
|
32.7
|
%
|
||||
Power and RF Products gross profit
|
15,321
|
|
|
12,798
|
|
|
28,777
|
|
|
23,220
|
|
||||
Power and RF Products gross margin
|
58.0
|
%
|
|
56.6
|
%
|
|
55.9
|
%
|
|
54.3
|
%
|
||||
Total segment reporting
|
161,391
|
|
|
138,367
|
|
|
316,318
|
|
|
258,356
|
|
||||
Unallocated costs
|
(5,613
|
)
|
|
(4,891
|
)
|
|
(9,783
|
)
|
|
(8,831
|
)
|
||||
Consolidated gross profit
|
|
$155,778
|
|
|
|
$133,476
|
|
|
|
$306,535
|
|
|
|
$249,525
|
|
Consolidated gross margin
|
37.5
|
%
|
|
38.5
|
%
|
|
38.0
|
%
|
|
37.7
|
%
|
•
|
LED Products
|
•
|
Lighting Products
|
•
|
Power and RF Products
|
•
|
Overall Demand for Products and Applications using LEDs
. Our potential for growth depends significantly on the adoption of LEDs within the general lighting market and our ability to affect this rate of adoption. Although the market for LED lighting has grown in recent years, adoption of LEDs for general lighting is relatively new, still limited, and faces significant challenges before widespread adoption. Demand also fluctuates based on various market cycles, a continuously evolving LED industry supply chain, and demand dynamics in the market. These uncertainties make demand difficult to forecast for us and our customers.
|
•
|
Intense and Constantly Evolving Competitive Environment.
Competition in the LED and lighting industry is intense. Many companies have made significant investments in LED development and production equipment. Traditional lighting companies and new entrants are investing in LED-based lighting products as LED adoption has gained momentum. Traditional lighting companies have taken steps to try and limit access to their sales channels, including lighting agents and distributors. Product pricing pressures exist as market participants often undertake pricing strategies to gain or protect market share, increase the utilization of their production capacity and open new applications to LED-based solutions. To remain competitive, market participants must continuously increase product performance and reduce costs. To address these competitive pressures, we have invested in R&D activities to support new product development to deliver higher levels of performance and lower costs to differentiate our products in the market.
|
•
|
Technological Innovation and Advancement.
Innovations and advancements in LED, power and RF technologies continue to expand the potential commercial application for our products, particularly in the general illumination, power electronics and wireless markets. However, new technologies or standards could emerge, or improvements could be made in existing technologies, that could reduce or limit the demand for our products in certain markets.
|
•
|
Regulatory Actions Concerning Energy Efficiency.
Many countries have already instituted or have announced plans to institute government regulations and programs designed to encourage or mandate increased energy efficiency, even in some cases banning forms of incandescent lighting, which are advancing the adoption of more energy efficient lighting solutions such as LEDs. Government agencies are also involved in setting standards for LED lighting, which can affect market acceptance and the availability of rebates from government agencies or third parties such as utilities. While this trend is generally positive, these regulations are affected by changing political priorities and evolving technical standards which can modify or limit the effectiveness of these new regulations.
|
•
|
Intellectual Property Issues.
Market participants rely on patented and non-patented proprietary information relating to product development, manufacturing capabilities and other core competencies of their business. Protection of intellectual property is critical. Therefore, steps such as additional patent applications, confidentiality and non-disclosure agreements, as well as other security measures are generally taken. To enforce or protect intellectual property rights, litigation or threatened litigation commonly occurs.
|
•
|
Revenues increased to
$806.1 million
for the
six
months ended
December 29, 2013
from
$662.0 million
for the
six
months ended
December 30, 2012
.
|
•
|
For the
six
months ended
December 29, 2013
, gross margins improved to
38.0%
from
37.7%
for the
six
months ended
December 30, 2012
. For the
six
months ended
December 29, 2013
, gross profit increased to
$306.5 million
from
$249.5 million
for the
six
months ended
December 30, 2012
.
|
•
|
Operating income increased to
$72.2 million
for the
six
months ended
December 29, 2013
from
$42.4 million
for the
six
months ended
December 30, 2012
. Net income per diluted share increased to
$0.54
for the
six
months ended
December 29, 2013
from
$0.31
for the
six
months ended
December 30, 2012
.
|
•
|
Combined cash, cash equivalents and short-term investments increased to
$1.2 billion
at
December 29, 2013
compared to
$1.0 billion
at
June 30, 2013
. Cash provided by operating activities was
$168.0 million
for the
six
months ended
December 29, 2013
, compared to
$178.3 million
for the
six
months ended
December 30, 2012
.
|
•
|
Inventory increased to
$234.5 million
at
December 29, 2013
compared to
$197.0 million
at
June 30, 2013
.
|
•
|
Lead with innovation and drive to cost parity.
We continue to work on developing new LEDs, LED lighting systems, and Power and RF devices to deliver improved value that approaches cost parity with existing technology and solutions. We believe that as our technology approaches cost parity, the market for these products will expand significantly.
|
•
|
Build the Cree brand.
We are working to build the Cree brand in both the commercial and consumer lighting segments by expanding our product offerings and continuing to invest in marketing the value of the Cree LED bulb and LED lighting directly to the end user. The level of investment will vary from quarter to quarter to optimize new product introductions, utility rebates, channel opportunities and seasonal trends.
|
•
|
Focus on select market segments to drive LED adoption.
In addition to our broad sales strategies, we are focused on a number of market segments where we can upgrade existing lighting and drive LED adoption with a combination of new product offerings, short payback, expanded services and innovative channel approaches.
|
•
|
Translate product innovation into revenue and profit growth.
We target revenue growth from new products and increased LED adoption and profit growth from the combination of higher sales, lower cost products and operating expense leverage.
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
December 29,
2013 |
|
December 30,
2012 |
||||||||||||||||||||
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
||||||||||||
Revenue, net
|
|
$415,086
|
|
|
100
|
%
|
|
|
$346,286
|
|
|
100
|
%
|
|
|
$806,092
|
|
|
100
|
%
|
|
|
$662,039
|
|
|
100
|
%
|
Cost of revenue, net
|
259,308
|
|
|
62
|
%
|
|
212,810
|
|
|
61
|
%
|
|
499,557
|
|
|
62
|
%
|
|
412,514
|
|
|
62
|
%
|
||||
Gross profit
|
155,778
|
|
|
38
|
%
|
|
133,476
|
|
|
39
|
%
|
|
306,535
|
|
|
38
|
%
|
|
249,525
|
|
|
38
|
%
|
||||
Research and development
|
44,436
|
|
|
11
|
%
|
|
39,941
|
|
|
12
|
%
|
|
86,179
|
|
|
11
|
%
|
|
77,488
|
|
|
12
|
%
|
||||
Sales, general and administrative
|
67,943
|
|
|
16
|
%
|
|
60,100
|
|
|
17
|
%
|
|
132,221
|
|
|
16
|
%
|
|
112,745
|
|
|
17
|
%
|
||||
Amortization of acquisition-related intangibles
|
7,256
|
|
|
2
|
%
|
|
7,719
|
|
|
2
|
%
|
|
14,543
|
|
|
2
|
%
|
|
15,389
|
|
|
2
|
%
|
||||
Loss on disposal or impairment of long-lived assets
|
760
|
|
|
—
|
%
|
|
624
|
|
|
—
|
%
|
|
1,417
|
|
|
—
|
%
|
|
1,522
|
|
|
—
|
%
|
||||
Operating income
|
35,383
|
|
|
9
|
%
|
|
25,092
|
|
|
7
|
%
|
|
72,175
|
|
|
9
|
%
|
|
42,381
|
|
|
6
|
%
|
||||
Non-operating income, net
|
3,403
|
|
|
1
|
%
|
|
2,481
|
|
|
1
|
%
|
|
6,221
|
|
|
1
|
%
|
|
5,866
|
|
|
1
|
%
|
||||
Income before income taxes
|
38,786
|
|
|
9
|
%
|
|
27,573
|
|
|
8
|
%
|
|
78,396
|
|
|
10
|
%
|
|
48,247
|
|
|
7
|
%
|
||||
Income tax expense
|
3,105
|
|
|
1
|
%
|
|
7,170
|
|
|
2
|
%
|
|
12,218
|
|
|
2
|
%
|
|
11,721
|
|
|
2
|
%
|
||||
Net income
|
|
$35,681
|
|
|
9
|
%
|
|
|
$20,403
|
|
|
6
|
%
|
|
|
$66,178
|
|
|
8
|
%
|
|
|
$36,526
|
|
|
6
|
%
|
Basic earnings per share
|
|
$0.30
|
|
|
|
|
|
$0.18
|
|
|
|
|
|
$0.55
|
|
|
|
|
|
$0.32
|
|
|
|
||||
Diluted earnings per share
|
|
$0.29
|
|
|
|
|
|
$0.18
|
|
|
|
|
|
$0.54
|
|
|
|
|
|
$0.31
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
LED Products
|
|
$215,022
|
|
|
|
$200,962
|
|
|
|
$14,060
|
|
|
7
|
%
|
|
|
$433,045
|
|
|
|
$388,509
|
|
|
|
$44,536
|
|
|
11
|
%
|
Percent of revenue
|
52
|
%
|
|
58
|
%
|
|
|
|
|
|
54
|
%
|
|
59
|
%
|
|
|
|
|
||||||||||
Lighting Products
|
173,656
|
|
|
122,714
|
|
|
50,942
|
|
|
42
|
%
|
|
321,574
|
|
|
230,787
|
|
|
90,787
|
|
|
39
|
%
|
||||||
Percent of revenue
|
42
|
%
|
|
35
|
%
|
|
|
|
|
|
40
|
%
|
|
35
|
%
|
|
|
|
|
||||||||||
Power and RF Products
|
26,408
|
|
|
22,610
|
|
|
3,798
|
|
|
17
|
%
|
|
51,473
|
|
|
42,743
|
|
|
8,730
|
|
|
20
|
%
|
||||||
Percent of revenue
|
6
|
%
|
|
7
|
%
|
|
|
|
|
|
6
|
%
|
|
6
|
%
|
|
|
|
|
||||||||||
Total revenue
|
|
$415,086
|
|
|
|
$346,286
|
|
|
|
$68,800
|
|
|
20
|
%
|
|
|
$806,092
|
|
|
|
$662,039
|
|
|
|
$144,053
|
|
|
22
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
LED Products gross profit
|
|
$97,644
|
|
|
|
$84,186
|
|
|
|
$13,458
|
|
|
16
|
%
|
|
|
$199,297
|
|
|
|
$159,653
|
|
|
|
$39,644
|
|
|
25
|
%
|
LED Products gross margin
|
45.4
|
%
|
|
41.9
|
%
|
|
|
|
|
|
46.0
|
%
|
|
41.1
|
%
|
|
|
|
|
||||||||||
Lighting Products gross profit
|
48,426
|
|
|
41,383
|
|
|
7,043
|
|
|
17
|
%
|
|
88,244
|
|
|
75,483
|
|
|
12,761
|
|
|
17
|
%
|
||||||
Lighting Products gross margin
|
27.9
|
%
|
|
33.7
|
%
|
|
|
|
|
|
27.4
|
%
|
|
32.7
|
%
|
|
|
|
|
||||||||||
Power and RF Products gross profit
|
15,321
|
|
|
12,798
|
|
|
2,523
|
|
|
20
|
%
|
|
28,777
|
|
|
23,220
|
|
|
5,557
|
|
|
24
|
%
|
||||||
Power and RF Products gross margin
|
58.0
|
%
|
|
56.6
|
%
|
|
|
|
|
|
55.9
|
%
|
|
54.3
|
%
|
|
|
|
|
||||||||||
Unallocated costs
|
(5,613
|
)
|
|
(4,891
|
)
|
|
(722
|
)
|
|
15
|
%
|
|
(9,783
|
)
|
|
(8,831
|
)
|
|
(952
|
)
|
|
11
|
%
|
||||||
Consolidated gross profit
|
|
$155,778
|
|
|
|
$133,476
|
|
|
|
$22,302
|
|
|
17
|
%
|
|
|
$306,535
|
|
|
|
$249,525
|
|
|
|
$57,010
|
|
|
23
|
%
|
Consolidated gross margin
|
37.5
|
%
|
|
38.5
|
%
|
|
|
|
|
|
38.0
|
%
|
|
37.7
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
Research and development
|
|
$44,436
|
|
|
|
$39,941
|
|
|
|
$4,495
|
|
|
11
|
%
|
|
|
$86,179
|
|
|
|
$77,488
|
|
|
|
$8,691
|
|
|
11
|
%
|
Percent of revenues
|
11
|
%
|
|
12
|
%
|
|
|
|
|
|
11
|
%
|
|
12
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
Sales, general and administrative
|
|
$67,943
|
|
|
|
$60,100
|
|
|
|
$7,843
|
|
|
13
|
%
|
|
|
$132,221
|
|
|
|
$112,745
|
|
|
|
$19,476
|
|
|
17
|
%
|
Percent of revenues
|
16
|
%
|
|
17
|
%
|
|
|
|
|
|
16
|
%
|
|
17
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
Ruud Lighting
|
|
$5,746
|
|
|
|
$5,742
|
|
|
|
$4
|
|
|
—
|
%
|
|
|
$11,492
|
|
|
|
$11,437
|
|
|
|
$55
|
|
|
—
|
%
|
COTCO
|
753
|
|
|
1,041
|
|
|
(288
|
)
|
|
(28
|
)%
|
|
1,506
|
|
|
2,081
|
|
|
(575
|
)
|
|
(28
|
)%
|
||||||
LLF
|
749
|
|
|
750
|
|
|
(1
|
)
|
|
—
|
%
|
|
1,499
|
|
|
1,499
|
|
|
—
|
|
|
—
|
%
|
||||||
INTRINSIC
|
8
|
|
|
186
|
|
|
(178
|
)
|
|
(96
|
)%
|
|
46
|
|
|
372
|
|
|
(326
|
)
|
|
(88
|
)%
|
||||||
Total
|
|
$7,256
|
|
|
|
$7,719
|
|
|
|
($463
|
)
|
|
(6
|
)%
|
|
|
$14,543
|
|
|
|
$15,389
|
|
|
|
($846
|
)
|
|
(5
|
)%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
|
December 29,
2013 |
|
December 30,
2012 |
|
Change
|
||||||||||||||||||
Loss on disposal or impairment of long-lived assets, net
|
|
$760
|
|
|
|
$624
|
|
|
|
$136
|
|
|
22
|
%
|
|
|
$1,417
|
|
|
|
$1,522
|
|
|
|
($105
|
)
|
|
(7
|
)%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29, 2013
|
|
December 30, 2012
|
|
Change
|
|
December 29, 2013
|
|
December 30, 2012
|
|
Change
|
||||||||||||||||||
Foreign currency gain, net
|
|
$213
|
|
|
|
$301
|
|
|
|
($88
|
)
|
|
(29
|
)%
|
|
|
$477
|
|
|
|
$128
|
|
|
|
$349
|
|
|
273
|
%
|
Gain on sale of investments, net
|
—
|
|
|
8
|
|
|
(8
|
)
|
|
(100
|
)%
|
|
10
|
|
|
36
|
|
|
(26
|
)
|
|
(72
|
)%
|
||||||
Interest income, net
|
2,806
|
|
|
1,946
|
|
|
860
|
|
|
44
|
%
|
|
5,147
|
|
|
3,738
|
|
|
1,409
|
|
|
38
|
%
|
||||||
Other, net
|
384
|
|
|
226
|
|
|
158
|
|
|
70
|
%
|
|
587
|
|
|
1,964
|
|
|
(1,377
|
)
|
|
(70
|
)%
|
||||||
Total non-operating income, net
|
|
$3,403
|
|
|
|
$2,481
|
|
|
|
$922
|
|
|
37
|
%
|
|
|
$6,221
|
|
|
|
$5,866
|
|
|
|
$355
|
|
|
6
|
%
|
|
Three Months Ended
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
||||||||||||||||||
|
December 29, 2013
|
|
December 30, 2012
|
|
Change
|
|
December 29, 2013
|
|
December 30, 2012
|
|
Change
|
||||||||||||||||||
Income tax expense
|
|
$3,105
|
|
|
|
$7,170
|
|
|
|
($4,065
|
)
|
|
(57
|
)%
|
|
|
$12,218
|
|
|
|
$11,721
|
|
|
|
$497
|
|
|
4
|
%
|
Effective tax rate
|
8.0
|
%
|
|
26.0
|
%
|
|
|
|
|
|
15.6
|
%
|
|
24.3
|
%
|
|
|
|
|
a)
|
Days of sales outstanding (DSO) measures the average collection period of our receivables. DSO is based on the ending net trade receivables and the revenue for the quarter then ended. DSO is calculated by dividing ending accounts receivable, net of applicable allowances and reserves, by the average net revenue per day for the respective 90 day period.
|
b)
|
Days of supply in inventory (DSI) measures the average number of days from procurement to sale of our product. DSI is based on ending inventory and cost of revenue, net sold for the quarter then ended. DSI is calculated by dividing ending inventory by average cost of revenue, net per day for the respective 90 day period.
|
c)
|
Days in accounts payable (DPO) measures the average number of days our payables remain outstanding before payment. DPO is based on ending accounts payable and cost of revenue, net for the quarter then ended. DPO is calculated by dividing ending accounts payable by the average cost of revenue, net per day for the respective 90 day period.
|
|
Six Months Ended
|
|
|
|
|
|||||||||
|
December 29, 2013
|
|
December 30, 2012
|
|
Change
|
|||||||||
Cash provided by operating activities
|
|
$167,987
|
|
|
|
$178,294
|
|
|
|
($10,307
|
)
|
|
(6
|
)%
|
Cash used in investing activities
|
(176,886
|
)
|
|
(185,598
|
)
|
|
8,712
|
|
|
(5
|
)%
|
|||
Cash provided by financing activities
|
87,825
|
|
|
7,656
|
|
|
80,169
|
|
|
1,047
|
%
|
|||
Effects of foreign exchange changes
|
393
|
|
|
371
|
|
|
22
|
|
|
6
|
%
|
|||
Net increase in cash and cash equivalents
|
|
$79,319
|
|
|
|
$723
|
|
|
|
$78,596
|
|
|
10,871
|
%
|
•
|
achievement of technology breakthroughs required to make commercially viable devices;
|
•
|
the accuracy of our predictions for market requirements beyond near term visibility;
|
•
|
our ability to predict, influence, and/or react to evolving standards;
|
•
|
acceptance of our new product designs;
|
•
|
acceptance of new technology in certain markets;
|
•
|
the availability of qualified research and development personnel;
|
•
|
our timely completion of product designs and development;
|
•
|
our ability to develop repeatable processes to manufacture new products in sufficient quantities, with the desired specifications and at competitive costs;
|
•
|
our ability to effectively transfer products and technology from development to manufacturing;
|
•
|
our customers' ability to develop competitive products incorporating our products; and
|
•
|
acceptance of our customers' products by the market.
|
•
|
maintain, expand and purchase adequate manufacturing facilities and equipment to meet customer demand;
|
•
|
maintain a sufficient supply of raw materials to support our growth;
|
•
|
expand research and development, sales and marketing, technical support, distribution capabilities and administrative functions;
|
•
|
manage organizational complexity and communication;
|
•
|
expand the skills and capabilities of our current management team;
|
•
|
add experienced senior level managers; and
|
•
|
attract and retain qualified employees.
|
•
|
costs associated with the removal, collection and destruction of the product recalled;
|
•
|
payments made to replace recalled product;
|
•
|
the write down or destruction of existing inventory subject to the recall;
|
•
|
lost sales due to the unavailability of product for a period of time;
|
•
|
delays, cancellations or rescheduling of orders for our products; or
|
•
|
increased product returns.
|
•
|
variability in our process repeatability and control;
|
•
|
contamination of the manufacturing environment;
|
•
|
equipment failure, power outages, information or other system failures or variations in the manufacturing process;
|
•
|
lack of consistency and adequate quality and quantity of piece parts and other raw materials, and other bill of materials items;
|
•
|
inventory shrinkage or human errors;
|
•
|
defects in production processes (including system assembly) either within our facilities or at our suppliers; and
|
•
|
any transitions or changes in our production process, planned or unplanned.
|
•
|
protection of intellectual property and trade secrets;
|
•
|
tariffs, customs and other barriers to importing/exporting materials and products in a cost effective and timely manner;
|
•
|
timing and availability of export licenses;
|
•
|
rising labor costs;
|
•
|
disruptions in or inadequate infrastructure of the countries where we operate;
|
•
|
difficulties in accounts receivable collections;
|
•
|
difficulties in staffing and managing international operations;
|
•
|
the burden of complying with foreign and international laws and treaties; and
|
•
|
the burden of complying with and changes in international taxation policies.
|
•
|
pay substantial damages;
|
•
|
indemnify our customers;
|
•
|
stop the manufacture, use and sale of products found to be infringing;
|
•
|
incur asset impairment charges;
|
•
|
discontinue the use of processes found to be infringing;
|
•
|
expend significant resources to develop non-infringing products or processes; or
|
•
|
obtain a license to use third party technology.
|
•
|
the jurisdiction in which profits are determined to be earned and taxed;
|
•
|
changes in government administrations, such as the Presidency and Congress of the U.S. as well as in the states and countries in which we operate;
|
•
|
changes in tax laws or interpretation of such tax laws and changes in generally accepted accounting principles;
|
•
|
the resolution of issues arising from tax audits with various authorities;
|
•
|
changes in the valuation of our deferred tax assets and liabilities;
|
•
|
adjustments to estimated taxes upon finalization of various tax returns;
|
•
|
increases in expenses not deductible for tax purposes, including write-offs of acquired in-process research and development and impairment of goodwill in connection with acquisitions;
|
•
|
changes in available tax credits;
|
•
|
the recognition and measurement of uncertain tax positions;
|
•
|
the lack of sufficient excess tax benefits (credits) in our additional paid in capital pool in situations where our realized tax deductions for certain stock-based compensation awards (such as non-qualified stock options and restricted stock) are less than those originally anticipated; and
|
•
|
the repatriation of non-U.S. earnings for which we have not previously provided for U.S. taxes, or any changes in legislation that may result in these earnings being taxed within the U.S., regardless of our decision regarding repatriation of funds.
|
•
|
regulatory penalties, fines, legal liabilities, and the forfeiture of certain tax benefits;
|
•
|
suspension of production;
|
•
|
alteration of our fabrication, assembly and test processes; and
|
•
|
curtailment of our operations or sales.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as a Part of Publicly Announced Program
|
|
Maximum Dollar Value of Shares that May Yet be Purchased Under the Program
3
|
||||||
Shares repurchased outside our Stock Repurchase Program in connection with our indemnification rights
1
|
|
|
|
|
|
|
|
|
||||||
September 30, 2013 to October 27, 2013
|
|
—
|
|
|
|
$—
|
|
|
—
|
|
|
|
$200,000
|
|
October 28, 2013 to November 24, 2013
|
|
3
|
|
|
40.85
|
|
|
—
|
|
|
200,000
|
|
||
November 25, 2013 to December 29, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
||
Total
|
|
3
|
|
|
|
$40.85
|
|
|
—
|
|
|
|
$200,000
|
|
|
|
|
|
|
|
|
|
|
||||||
Shares repurchased outside our Stock Repurchase Program to satisfy tax withholding obligations
2
|
|
|
|
|
|
|
|
|
||||||
September 30, 2013 to October 27, 2013
|
|
17
|
|
|
|
$74.32
|
|
|
—
|
|
|
|
$200,000
|
|
October 28, 2013 to November 24, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
||
November 25, 2013 to December 29, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
200,000
|
|
||
Total
|
|
17
|
|
|
|
$74.32
|
|
|
—
|
|
|
|
$200,000
|
|
Exhibit No.
|
|
Description
|
|
10.1
|
|
|
2013 Long-Term Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated October 29, 2013, filed with the Securities and Exchange Commission on October 29, 2013)
|
10.2
|
|
|
Cree, Inc. Severance Plan for Section 16 Officers, as amended (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated October 28, 2013, filed with the Securities and Exchange Commission on October 31, 2013)
|
10.3
|
|
|
Schedule of Compensation for Non-Employee Directors (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated November 25, 2013, filed with the Securities and Exchange Commission on December 2, 2013)
|
10.4
|
|
|
Form of Non-Qualified Stock Option Award Agreement for 2013 Long-Term Incentive Compensation Plan
|
10.5
|
|
|
Form of Restricted Stock Unit Award Agreement for 2013 Long-Term Incentive Compensation Plan (Time-Based)
|
31.1
|
|
|
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
|
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
|
|
The following materials from Cree Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements
|
|
CREE, INC.
|
|
|
January 22, 2014
|
|
|
|
|
/s/ MICHAEL E. MCDEVITT
|
|
Michael E. McDevitt
|
|
Executive Vice President and Chief Financial Officer
|
|
(Authorized Officer and Principal Financial and Chief Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
10.1
|
|
|
2013 Long-Term Incentive Compensation Plan (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated October 29, 2013, filed with the Securities and Exchange Commission on October 29, 2013)
|
10.2
|
|
|
Cree, Inc. Severance Plan for Section 16 Officers, as amended (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated October 28, 2013, filed with the Securities and Exchange Commission on October 31, 2013)
|
10.3
|
|
|
Schedule of Compensation for Non-Employee Directors (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated November 25, 2013, filed with the Securities and Exchange Commission on December 2, 2013)
|
10.4
|
|
|
Form of Non-Qualified Stock Option Award Agreement for 2013 Long-Term Incentive Compensation Plan
|
10.5
|
|
|
Form of Restricted Stock Unit Award Agreement for 2013 Long-Term Incentive Compensation Plan (Time-Based)
|
31.1
|
|
|
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
31.2
|
|
|
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
32.1
|
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
101
|
|
|
The following materials from Cree Inc.’s Quarterly Report on Form 10-Q for the fiscal quarter ended December 29, 2013 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Cash Flows; and (v) Notes to Consolidated Financial Statements
|
|
NONQUALIFIED STOCK OPTION
AWARD AGREEMENT
|
|
|
Participant:
|
|
Award Number:
|
|
Plan:
|
2013 Long-Term Incentive Compensation Plan
|
Award Type:
|
Nonqualified Stock Option
|
Grant Date:
|
|
Number Shares:
|
|
Exercise Price:
|
|
Expiration Date:
|
11:59 p.m. local time in Durham, NC on the 7
th
anniversary of the Grant Date
|
/s/ CHARLES M. SWOBODA
|
|
|
Charles M. Swoboda, Chairman, President
and Chief Executive Officer
|
|
|
1.
|
Grant of Option.
Subject to the terms of the Plan and this Agreement, the Company hereby grants you an Option as set forth on the first page of this Agreement.
|
2.
|
Term of Option.
Unless sooner terminated in accordance with the Plan or this Agreement, the Option will expire and cease to be exercisable upon the first to occur of the following:
|
(a)
|
the expiration of ninety (90) calendar days following your Termination of Service, except where the termination results from your death or where your death occurs following the termination but while the Option is otherwise still exercisable;
|
(b)
|
the expiration of one (1) year following your Termination of Service if the termination results from your death;
|
(c)
|
the expiration of one (1) year following your death if your death occurs after your Termination of Service but while the Option is otherwise still exercisable;
|
(
d)
|
the expiration of one (1) year following the effective date of the determination of your Disability (within the meaning of Section 3 below); or
|
(e)
|
the seventh (7th) anniversary of the Grant Date of the Option, at 11:59 P.M., local time, Durham, North Carolina.
|
3.
|
Vesting.
The Option will vest and become exercisable in accordance with the installment vesting schedule set out on the first page of this Agreement and will become fully vested and exercisable to purchase all Shares subject to the Option, to the extent not already vested and exercisable, upon your death or on the effective date of the determination of your Disability (as defined below) by the Employee Benefits Committee of the Company (the “EBC”) or such other committee as may be designated by the Board of Directors of the Company or a committee thereof, unless otherwise provided in this Agreement or the Plan. For purposes of this Agreement, “Disability” means a medically determinable physical or mental impairment resulting in your inability to perform your position or any substantially similar position, where such impairment has lasted or can be expected to last for a continuous period of not less than six months. The determination of whether or not you have a Disability will be made by the EBC in good faith in its sole discretion, and such determination shall be conclusive, final and binding upon all parties. The effective date of your Disability will be the later of the date on which the EBC makes such determination or the date specified by the EBC for this purpose. The effective date of your Disability must occur under the previous sentence (if at all) prior to the date on which the Option would otherwise cease to be exercisable in order to be recognized under this Agreement. The above definition of Disability applies in lieu of the definition set out in the Plan.
|
4.
|
Forfeiture upon Termination of Service.
Except as otherwise provided in this Agreement or the Plan, upon your Termination of Service, you will forfeit the Option with respect to any Shares as to which the Option has not vested as of the date of your Termination of Service.
|
5.
|
Exercise of Option.
To exercise the Option, you must complete, execute and deliver to the Company a notice of exercise in a form approved by the Company and pay to the Company the purchase price for the number of Shares specified in the notice together with all Tax-Related Items (as defined in Section 6 below) the Company is required to withhold, collect, or account for pursuant to this Agreement. Exercise of the Option will be effective only when the notice and required payments are actually received by the Company or upon your execution of a “broker-assisted exercise” or “cashless exercise” transaction with a broker approved by the Company. Furthermore, if the exercise is facilitated through a “broker-assisted exercise” or “cashless exercise” transaction by a brokerage firm you have designated, you agree that the brokerage firm is acting as your agent in the transaction and that the Company may rely upon notices, instructions and information given by such firm in connection with the exercise, as if the same were given by you. The Company will make the Shares available for electronic delivery in the U.S., and where allowed by applicable law outside the U.S., to an account you designate in writing, within three (3) business days after the Company receives the notice of exercise and required payments. In situations where electronic delivery is not
|
6.
|
Responsibility for Taxes.
|
(a)
|
For purposes of this Agreement, “Tax-Related Items” means any or all income tax, social insurance tax, payroll tax, payment on account or other tax-related items that may be applicable this Award by law or regulation of any governmental authority, whether federal, state or local, domestic or foreign. Regardless of any action the Company
takes with respect to withholding Tax-Related Items, you acknowledge that you are ultimately responsible for all Tax-Related Items and that such Tax-Related Items may exceed the amount actually withheld by the Company or the Employer. You further acknowledge that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, without limitation, the grant, vesting or exercise of the Option, the subsequent sale of Shares acquired pursuant to such exercise and the receipt of any dividends or dividend equivalents pursuant to Shares; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability for Tax-Related Items or to achieve any particular tax result. Furthermore, if you have become subject to tax in more than one jurisdiction between the Grant Date and the date of any relevant taxable event, you acknowledge that the Company and/or the Employer (or former Employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
(b)
|
Prior to any relevant taxable or tax withholding event, as applicable, you will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, you authorize the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items by one or a combination of the following: (1) withholding from your wages or other cash compensation paid to you by the Company and/or the Employer; or (2) withholding from proceeds of the sale of Shares acquired upon exercise of the Option; or (3) withholding in Shares to be issued upon exercise of the Option.
|
(c)
|
Depending upon the withholding method, the Company or the Employer may withhold or account for Tax-Related Items by considering applicable minimum or maximum statutory withholding amounts or other applicable withholding rates. In the event Tax-Related Items are over-withheld, you will receive a refund in cash for any over-withheld amounts and will have no entitlement to the Shares equivalent. If the obligation for Tax-Related Items is satisfied by withholding of Shares, you shall be deemed, for tax purposes, to have been issued the full number of Shares subject to the exercised Option, notwithstanding that a number of Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of your participation in the Plan.
|
(d)
|
You shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of your participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to honor the exercise of the Option and refuse to deliver the Shares if you fail to comply with your obligations in connection with the Tax-Related Items.
|
7.
|
Transfer of Option.
Neither the Option nor any rights under the Option may be assigned, pledged as collateral or otherwise transferred, except as permitted by the Plan, nor may the Option or such rights be subject to attachment, execution or other judicial process. In the event of any attempt to assign, pledge or otherwise dispose of the Option or any rights under the Option, except as permitted by the Plan, or in the event of the levy of any attachment, execution or similar judicial process upon the rights or interests conferred by the Option, the Committee may in its discretion terminate the Option upon notice to you.
|
8.
|
Rights Prior to Exercise.
|
(
a)
|
You will have no rights as a shareholder with respect to any Shares until such Shares have been duly issued by the Company or its transfer agent pursuant to exercise of the Option.
|
(b)
|
In the event of a change in capitalization within the meaning of Section 4.4 of the Plan, the number and class of Shares or other securities that you are entitled to pursuant to this Agreement, as well as the Exercise Price, shall be appropriately adjusted or changed as determined by the Committee to reflect the change
|
9.
|
Termination of Service.
|
(a)
|
Unless otherwise provided in this Agreement or the Plan, for purposes of this Agreement “Termination of Service” means the discontinuance of your relationship with the Company as an employee of the Company or the Employer or any subsidiary or affiliate of the Company under the Plan or as a member of the Board of Directors of Cree, Inc. Except as determined otherwise by the Committee, you will not be deemed to have incurred a Termination of Service if the capacity in which you provide services to the Company changes (for example, you change from being a non-employee director to being an employee) or if you transfer employment among the various subsidiaries or affiliates of the Company constituting the Employer, so long as there is no interruption in your provision of services to the Company or other Employer as an employee or as a non-employee member of the Board of Directors of Cree, Inc. The Committee, in its discretion, will determine whether you have incurred a Termination of Service. You will not be deemed to have incurred a Termination of Service during a period for which you are on military leave, sick leave, or other leave of absence approved by the Employer.
|
(b)
|
If you are deemed to have incurred a Termination of Service other than a Termination of Service on account of your death, your right to vest in the Option under this Agreement or the Plan, if any, will terminate and any post-termination exercise period will commence effective as of the date that you are no longer actively providing services to the Company or one of its subsidiaries or affiliates (regardless of the reason for the termination and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and will not be extended by any notice period mandated under local law (
e.g.
, active employment would not include a period of “garden leave” or similar period mandated under the employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any); the Committee, in its discretion, will determine when you are no longer actively providing services for purposes of the Option grant (including whether you may still be considered to be providing services while on a leave of absence).
|
10.
|
Provisions of the Plan.
The provisions of the Plan are incorporated by reference in this Agreement as if set out in full in this Agreement. To the extent that any conflict may exist between any other provision of this Agreement and a provision of the Plan, the Plan provision will control. All decisions of the Committee with respect to the interpretation, construction and application of the Plan or this Agreement shall be final, conclusive and binding upon you and the Company.
|
11.
|
Detrimental Activity.
The Committee in its sole discretion may cancel, terminate, suspend or otherwise limit or restrict exercise of the unexercised portion of the Option if you engage in any “Detrimental Activity” (as defined below). In addition, if you engage in any Detrimental Activity prior to or within one (1) year after your Termination of Service, the Committee in its sole discretion may require you to pay to the Company the amount of all gain you realized from any exercise of the Option beginning six (6) months prior to your Termination of Service, provided that the Committee gives you notice of such requirement within one (1) year after your Termination of Service. In that event, the Company will be entitled to set off such amount against any amount the Company owes to you, in addition to any other rights the Company may have. For purposes of this section:
|
(1)
|
the performance of services for any Competing Business (as defined below), whether as an employee, officer, director, consultant, agent, contractor or in any other capacity, except to the extent expressly permitted by any written agreement between you and the Company;
|
(2)
|
the unauthorized disclosure or use of any trade secrets or other confidential information of the Company;
|
(3)
|
any attempt to induce an employee to leave employment with the Company to perform services elsewhere, or any attempt to cause a customer or supplier of the Company to curtail or cancel its business with the Company;
|
(4)
|
breach of any confidentiality, noncompetition, nonsolicitation or nondisparagement obligations, or any obligations relating to the disclosure, assignment or protection of inventions, undertaken by you in any written agreement between you and the Company; or
|
(5)
|
any act of fraud, misappropriation, embezzlement, or tortious or criminal behavior that adversely impacts the Company.
|
(c)
|
“Competing Business” means any corporation, partnership, university, government agency or other entity or person (other than the Company) that is conducting research directed to, developing, manufacturing, marketing, distributing, or selling any product, service, or technology that is competitive with any part of the Company’s Business (as defined below). "Company's Business" means the development, manufacture, marketing, distribution, or sale of, or the conduct of research directed to, any product, service, or technology that the Company is developing, manufacturing, marketing, distributing, selling, or conducting research directed to, at any time during your employment or other relationship with the Company, except that following your Termination of Service the Company’s Business will be determined as of the time of such termination. As of the effective date of this Agreement, the Company’s Business includes but is not limited to the conduct of research directed to, development, manufacture, marketing, distribution, and/or sale of the following products, services, and technologies: (1) silicon carbide (SiC) materials for electronic applications; (2) SiC materials for gemstone applications; (3) A
III
nitride materials for electronic applications; (4) light-emitting diode (LED) devices and components; (5) power semiconductor devices made using SiC and/or A
III
nitride materials and components incorporating such devices; (6) radio frequency (RF) and microwave devices made using SiC and/or A
III
nitride materials and components and modules incorporating such devices; (7) LED backlights for liquid crystal displays (LCDs); (8) lighting products, modules, fixtures or devices incorporating any of the above materials or technology; and (9) other semiconductor devices made using SiC and/or A
III
nitride materials and components incorporating such devices. You acknowledge that during your employment or other relationship with the Company the Company’s Business may expand or change and you agree that any such expansions and changes shall expand or contract the definition of the Company’s Business accordingly.
|
12.
|
Data Privacy.
You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other grant materials (“Data”) by and among, as applicable, your Employer, the Company and its subsidiaries and affiliates, for the exclusive purpose of implementing, administering and managing your participation in the Plan.
|
13.
|
Language.
If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version differs in meaning from the English version, the English version will control.
|
14.
|
Electronic Delivery.
The Company may, in its sole discretion, deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. Signed documents delivered to either party via facsimile or in portable document format will have the same effect as an original, unless otherwise required by applicable law.
|
15.
|
General.
|
(a)
|
Nothing in this Agreement will be construed as: (1) constituting a commitment, agreement or understanding of any kind that the Company or any other Employer will continue your employment or other relationship with the Company; or (2) limiting or restricting either party’s right to terminate your employment or other relationship.
|
(b)
|
This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. You may not assign any rights under this Agreement without the written consent of the Company, which it may withhold in its sole discretion; any such attempted assignment without the Company’s written consent shall be void. The Company may assign its rights under this Agreement at any time upon notice to you.
|
(c)
|
Notices under this Agreement must be in writing and delivered personally, by electronic transmission or by a reputable domestic or international carrier (postage prepaid and return receipt or proof of delivery requested), and, in the case of notices to the Company, unless otherwise provided herein, addressed to its principal executive offices to the attention of the Stock Plan Administrator, and, in your case, addressed to your address as shown on the Employer’s records.
|
(d)
|
This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina, without regard to the conflict of law provisions thereof, as if made and to be performed wholly within such State. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by the Option or this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of North Carolina, agree that such litigation shall be conducted in the courts of Durham County, North Carolina, or the federal courts for the United States for the Middle District of North Carolina, and no other courts, where the Option grant is made and/or to be performed.
|
(e)
|
If any provision of this Agreement is held to be invalid or unenforceable, such determination shall not affect the other provisions of the Agreement and the Agreement shall be construed as if the invalid or unenforceable provision were omitted and a valid and enforceable provision, as nearly comparable as possible, substituted in its place.
|
(f)
|
Notwithstanding any prior option award agreement between you and the Company under which options may have been awarded, this Agreement and the Plan set forth all of the promises, agreements and understandings between you and Company relating to the Option granted pursuant to this Agreement, constitute the complete agreement between the parties regarding the Option, and replace any prior oral or written communications regarding the same.
|
(g)
|
Shares issued upon exercise of the Option may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under applicable law or the rules and regulations of the U.S. Securities and Exchange Commission or any stock exchange or trading system upon which the common stock of the Company is listed, and the Committee may cause a legend or legends to be placed on any such certificates or the stock records of the Company to make appropriate reference to such restrictions.
|
(h)
|
You agree that the Option, even if later forfeited, serves as additional, valuable consideration for your obligations, if any, undertaken in any existing agreement between you and the Company and/or other Employer regarding confidential information, noncompetition, nonsolicitation or similar covenants.
|
(i)
|
You acknowledge, represent and warrant to the Company, and agree with the Company, that (i) except for information provided in the Company’s filings with the U.S. Securities and Exchange Commission and in the Company’s current prospectus relating to the Plan, you have not relied and will not rely upon the Committee, the Company, an Employer or any employee or agent of the Company or an Employer in determining whether to accept or exercise the Option, or in connection with any disposition of Shares purchased upon exercise of the Option, or with respect to any tax consequences related to the grant or exercise of the Option or the disposition of Shares purchased pursuant to exercise of the Option, and (ii) you will seek from your own professional advisors such investment, tax and other advice as you believe necessary.
|
(j)
|
You acknowledge that you may incur a substantial tax liability as a result of exercise of the Option. You assume full responsibility for all such consequences and the filing of all tax returns and related elections you may be required or find desirable to file. If you are required to make any valuation of the Option or Shares purchased pursuant to exercise of the Option under any federal, state or other applicable tax law, and if the valuation affects any tax return or election of the Company or the Employer or affects the Company’s financial statement reporting, you agree that the Company may determine the value and that you will observe any determination so made by the Company in all tax returns and elections filed by you.
|
(k)
|
You acknowledge that copies of the Plan and Plan prospectus are available upon written or telephonic request to the Company’s Stock Plan Administrator.
|
16.
|
Severability.
The provisions of this Agreement are severable and if any one or more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Nature of Grant.
In accepting this grant, you acknowledge, understand and agree that:
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, unless expressly provided otherwise in the Plan or the Agreement;
|
(b)
|
the grant of the Option is voluntary and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted repeatedly in the past;
|
(c)
|
all decisions with respect to future option grants, if any, will be at the sole discretion of the Company;
|
(d)
|
your participation in the Plan is voluntary;
|
(e)
|
your participation in the Plan will not create a right to employment with the Company or the Employer and will not interfere with the ability of the Company, the Employer or any subsidiary or affiliate to terminate your employment or service relationship at any time;
|
(f)
|
if you are employed by a non-U.S. entity and provide services outside the U.S., the Option and the Shares subject to the Option are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to your Employer, and they are outside the scope of your employment or service contract, if any, with your Employer;
|
(g)
|
the Option and the Shares subject to the Option are not intended to replace any pension rights or compensation;
|
(h)
|
the Option and the Shares subject to the Option are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
|
(i)
|
the Option grant and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company, the Employer or any subsidiary or affiliate of the Company;
|
(j)
|
the future value of the Shares is unknown and cannot be predicted with certainty;
|
(k)
|
if the Shares do not increase in value, the Option will have no value;
|
(l)
|
if you exercise the Option and obtain Shares, the value of those Shares acquired upon exercise may increase or decrease in value, even below the Share purchase price;
|
(m)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from termination of your employment or service relationship by the Company or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and, in consideration of the grant of the Option, to which you otherwise are not entitled, you irrevocably agree (i) never to institute any such claim against the Company, the Employer, or any subsidiary or affiliate of the Company, (ii) to waive your ability, if any, to bring any such claim, and (iii) to release the Company and the Employer and any subsidiary or affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims;
|
(n)
|
the Option and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, takeover, or transfer of liability;
|
(o)
|
neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the Option or of any payments due to you pursuant to settlement of the Option or the subsequent sale of any Shares acquired upon settlement; and
|
(p)
|
this award and any other award(s) granted under the Plan on the Grant Date are intended to fulfill any and all agreements, obligations or promises, whether legally binding or not, previously made by the Company or another Employer under the Plan to grant you options or other rights to common stock of the Company. By signing this Agreement, you accept such awards
, along with all prior awards received by you, in full satisfaction of any such agreement, obligation or promise.
|
18.
|
No Advice Regarding Grant.
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding your participation in the Plan, or your acquisition or sale of the underlying Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
|
19.
|
Compliance with Law.
Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the shares of Common Stock, the Company shall not be required to deliver any shares issuable upon purchase of shares under the Plan prior to the completion of any registration or qualification of the shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company is under no obligation to register or qualify the shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the shares. Further, you agree that the Company shall have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.
|
20.
|
Waiver.
You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant
.
|
21.
|
Appendix.
Notwithstanding any provisions in this Agreement, the Option grant shall be subject to any special terms and conditions set forth in the Appendix to this Agreement for your country to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. Moreover, if you relocate to or from one of the countries included in the Appendix, the special terms and conditions for the country you are moving from and/or the country you are moving to will apply to you to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. The Appendix is incorporated in and constitutes part of this Agreement.
|
22.
|
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on your participation in the Plan, on the Option and on any Shares acquired under the Plan, to the extent that the Company determines it is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(a)
|
the expiration of ninety (90) calendar days following your Termination of Service, except where the termination results from your death or Disability or where your death occurs following the termination but while the Option is otherwise still exercisable;
|
(b)
|
the expiration of six (6) months following your Termination of Service if the termination results from your death;
|
(c)
|
the expiration of six (6) months following your death if your death occurs after your Termination of Service but while the Option is otherwise still exercisable;
|
(d)
|
the expiration of six (6) months following the effective date of your Disability (within the meaning of Section 3 below); or
|
(e)
|
the seventh (7th) anniversary of the Grant Date of the Option, at 11:59 P.M., local time, Durham, North Carolina.
|
|
|
RESTRICTED STOCK UNIT
AWARD AGREEMENT
|
||
|
|
|
|
|
Participant:
|
|
|
|
|
Award Number:
|
|
|
|
|
Plan:
|
|
2013 Long-Term Incentive Compensation Plan
|
||
Award Type:
|
|
Restricted Stock Unit
|
||
Grant Date:
|
|
|
|
|
Number Units:
|
|
|
|
|
Purchase Price:
|
|
|
|
|
Restriction Period:
|
|
Grant Date through
|
|
|
|
|
|
|
|
Dated:
|
|
|
|
|
|
FOR CREE, INC.:
|
|
ACCEPTED AND AGREED:
|
/s/ CHARLES M. SWOBODA
|
|
|
Charles M. Swoboda, Chairman, President
and Chief Executive Officer
|
|
|
1.
|
Grant of RSUs.
Subject to the terms of the Plan and this Agreement, the Company hereby grants you the RSUs as set forth on the first page of this Agreement. Each RSU represents the right to receive one Share on the date the RSU vests (subject to adjustment for a change in capitalization within the meaning of Section 4.4 of the Plan).
|
2.
|
Vesting
. The RSUs will vest in accordance with the installment vesting schedule set out on the first page of this Agreement and will become fully vested, to the extent not already vested, upon your death or on the effective date of the determination of your Disability (as defined below) by the Employee Benefits Committee of the Company (the “EBC”) or such other committee as may be designated by the Board of Directors of the Company or a committee thereof, unless otherwise provided in this Agreement or the Plan. For purposes of this Agreement, “Disability” means a medically determinable physical or mental impairment resulting in your inability to perform your position or any substantially similar position, where such impairment has lasted or can be expected to last for a continuous period of not less than six months. The determination of whether or not you have a Disability will be made by the EBC in good faith in its sole discretion, and such determination shall be conclusive, final and binding upon all parties. The above definition of Disability applies in lieu of the definition set out in the Plan.
|
3.
|
Forfeiture of RSUs upon Termination of Service
. Except as otherwise provided in this Agreement or the Plan, upon your Termination of Service, you will forfeit all of the RSUs that are not vested as of the date of your Termination of Service.
|
4.
|
Forfeiture of RSUs for Awards Not Timely Accepted
. This Award is conditioned upon and subject to your accepting the Award by signing and delivering to the Company this Agreement, or otherwise electronically accepting the Award, no later than the first date the RSUs are scheduled to vest pursuant to the Award. In the event of your death or incapacitation prior to accepting the Award, the Company will deem the Award as being accepted. If you fail to accept the Award within the time described above, you will forfeit the RSUs.
|
5.
|
Settlement of RSUs
. Subject to the terms of the Plan and this Agreement, any RSUs that vest and become nonforfeitable pursuant to Section 2 above shall be released and settled in whole Shares within thirty (30) days after the applicable vesting date. Upon settlement, the Company shall deliver to you (or, in the event of your death, to your estate or, if the Committee establishes a beneficiary designation procedure pursuant to Section 12 of the Plan, to any beneficiary that you have designated pursuant to such procedure) one or more certificates for the vested Shares or in the Company's discretion may cause the vested Shares to be deposited in an account maintained by a broker designated by the Company.
|
6.
|
Responsibility for Taxes.
|
7.
|
Transfer of RSUs.
The RSUs and any rights under this Agreement may not be assigned, pledged as collateral or otherwise transferred, except as permitted by the Plan, nor may the RSUs or such rights be subject to attachment, execution or other judicial process until the RSUs become vested pursuant to Section 2 above. In the event of any attempt to assign, pledge or otherwise dispose of RSUs which are not then vested, or any rights under this Agreement, except as permitted by the Plan, or in the event of the levy of any attachment, execution or similar judicial process upon the rights or interests with respect to the RSUs which are not then vested, the Committee may in its discretion, upon notice to you, cause you to forfeit such RSUs.
|
8.
|
Rights Prior to Vesting of RSUs.
|
9.
|
Termination of Service.
|
10.
|
Provisions of the Plan
.
The provisions of the Plan are incorporated by reference in this Agreement as if set out in full in this Agreement. To the extent that any conflict may exist between any other provision of this Agreement and a provision of the Plan, the Plan provision will control. All decisions of the Committee with respect to the interpretation, construction and application of the Plan or this Agreement shall be final, conclusive and binding upon you and the Company.
|
11.
|
Detrimental Activity.
The Committee in its sole discretion may cancel and cause to be forfeited any RSUs not previously vested or released under this Agreement if you engage in any "Detrimental Activity” (as defined below). In addition, if you engage in any Detrimental Activity prior to or within one (1) year after your Termination of Service, the Committee in its sole discretion may require you to pay to the Company the amount of all gain you realized from any vesting of the RSUs beginning six (6) months prior to your Termination of Service, provided that the Committee gives you notice of such requirement within one (1) year after your Termination of Service. In that event, the Company will be entitled to set off such amount against any amount the Company owes to you, in addition to any other rights the Company may have. For purposes of this section:
|
12.
|
Data Privacy. You hereby explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement and any other grant materials (“Data”) by and among, as applicable, your Employer, the Company and its subsidiaries and affiliates, for the exclusive purpose of implementing, administering and managing your participation in the Plan.
|
13.
|
Language.
If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the translated version differs in meaning from the English version, the English version will control.
|
14.
|
Electronic Delivery.
The Company may, in its sole discretion, deliver any documents related to current or future participation in the Plan by electronic means. You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company. Signed documents delivered to either party via facsimile or in portable document format will have the same effect as an original, unless otherwise required by applicable law.
|
15.
|
General.
|
16.
|
Severability
. The provisions of this Agreement are severable and if any one or more provisions is determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
17.
|
Nature of Grant.
In accepting this grant, you acknowledge, understand and agree that:
|
(a)
|
the Plan is established voluntarily by the Company, is discretionary in nature and may be modified, amended, suspended or terminated by the Company at any time, unless expressly provided otherwise in the Plan or the Agreement;
|
(b)
|
the grant of the RSUs is voluntary and does not create any contractual or other right to receive future grants of RSUs, or benefits in lieu of RSUs, even if RSUs have been granted repeatedly in the past;
|
(c)
|
all decisions with respect to future grants of RSUs, if any, will be at the sole discretion of the Company;
|
(d)
|
your participation in the Plan is voluntary;
|
(e)
|
your participation in the Plan will not create a right to employment with the Company or the Employer and will not interfere with the ability of the Company, the Employer or any subsidiary or affiliate to terminate your employment or service relationship at any time;
|
(f)
|
if you are employed by a non-U.S. entity and provide services outside the U.S., the RSUs are an extraordinary item that does not constitute compensation of any kind for services of any kind rendered to your Employer, and they are outside the scope of your employment or service contract, if any, with your Employer;
|
(g)
|
the grant of the RSUs is not intended to replace any pension rights or compensation;
|
(h)
|
the grant of the RSUs is not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
|
(i)
|
the grant of the RSUs and your participation in the Plan will not be interpreted to form an employment or service contract or relationship with the Company, the Employer or any subsidiary or affiliate of the Company;
|
(j)
|
the future value of the Shares is unknown and cannot be predicted with certainty;
|
(k)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the RSUs resulting from termination of your employment or service relationship by the Company or the Employer (for any reason whatsoever and whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or the terms of your employment agreement, if any), and, in consideration of the grant of the RSUs, to which you otherwise are not entitled, you irrevocably agree (i) never to institute any such claim against the Company, the Employer, or any subsidiary or affiliate of the Company, (ii) to waive your ability, if any, to bring any such claim, and (iii) to release the Company and the Employer and any subsidiary or affiliate from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to execute any and all documents necessary to request dismissal or withdrawal of such claims;
|
(l)
|
the grant of the RSUs and the benefits under the Plan, if any, will not automatically transfer to another company in the case of a merger, takeover, or transfer of liability;
|
(m)
|
neither the Company, the Employer nor any subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the RSUs or of any payments due to you pursuant to the subsequent sale of any Shares acquired upon the vesting of the RSUs; and
|
(n)
|
this award and any other award(s) granted under the Plan on the Grant Date are intended to fulfill any and all agreements, obligations or promises, whether legally binding or not, previously made by the Company or another Employer under the Plan to grant you the RSUs or other rights to common stock of the Company. By signing this Agreement, you accept such awards, along with all prior awards received by you, in full satisfaction of any such agreement, obligation or promise.
|
18.
|
No Advice Regarding Grant.
The Company is not providing any tax, legal, or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or sale of Shares. You are hereby advised to consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan.
|
19.
|
Compliance with Law
.
Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the RSUs, the Company shall not be required to deliver the RSUs or any of the underlying Shares prior to the completion of any registration or qualification of the Shares under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. You understand that the Company is under no obligation to register or qualify the RSUs or any of the underlying Shares with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance of the RSUs and Shares. Further, you agree that the Company shall have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of shares.
|
20.
|
Waiver
.
You acknowledge that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by you or any other participant
.
|
21.
|
Appendix.
Notwithstanding any provisions in this Agreement, this Award shall be subject to any special terms and conditions set forth in the Appendix to this Agreement for your country to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. Moreover, if you relocate to or from one of the countries included in the Appendix, the special terms and conditions for the country you are moving from and/or the country you are moving to will apply to you to the extent that the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan. The Appendix is incorporated in and constitutes part of this Agreement.
|
22.
|
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on your participation in the Plan, on the RSUs and on any Shares acquired under the Plan, to the extent that the Company determines it is necessary or advisable in order to comply with local law or to facilitate the administration of the Plan, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
23.
|
Code Section 409A.
The Award is intended to qualify for the “short-term deferral” exemption from Section 409A of the Code, and the provisions of this Agreement will be interpreted, operated and administered in a manner consistent with these intentions. The right to payment triggered by each installment vesting date or vesting event pursuant to Section 2 above is intended to be a right to a separate payment for purposes of Section 409A. The Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, without your consent, to unilaterally amend or modify the Plan and/or this Agreement to ensure that the RSUs qualify for exemption from or comply with Section 409A of the Code; provided, however, that the Company makes no representations that the RSUs will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to these RSUs. The Company will have no liability to you or to any other party if the Award, the vesting of the Award, delivery of Shares upon settlement of the Award or any other event hereunder that is intended to be exempt from or compliant with Section 409A of the Code, is not so exempt or compliant, or for any action taken by the Company with respect thereto.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cree, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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/s/ CHARLES M. SWOBODA
|
Charles M. Swoboda
|
Chairman, Chief Executive Officer and President
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cree, Inc.;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ MICHAEL E. MCDEVITT
|
Michael E. McDevitt
|
Executive Vice President and Chief Financial Officer
|
|
1
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ CHARLES M. SWOBODA
|
Charles M. Swoboda
|
Chairman, Chief Executive Officer and President
|
|
January 22, 2014
|
|
1
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
|
2
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ MICHAEL E. MCDEVITT
|
Michael E. McDevitt
|
Executive Vice President and Chief Financial Officer
|
|
January 22, 2014
|