North Carolina
|
|
56-1572719
|
(State or other jurisdiction of incorporation or
organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
4600 Silicon Drive
Durham, North Carolina
|
|
27703
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large accelerated filer [X]
|
|
Accelerated filer [ ]
|
||
Non-accelerated filer [ ] (Do not check if a smaller reporting company)
|
|
Smaller reporting company [ ]
|
Description
|
Page No.
|
|
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
|
||
|
|
|
Item 1.
|
||
|
|
|
Item 1A.
|
||
|
|
|
Item 2.
|
||
|
|
|
Item 3.
|
||
|
|
|
Item 4.
|
||
|
|
|
Item 5.
|
||
|
|
|
Item 6.
|
||
|
|
|
|
September 27,
2015 |
|
June 28,
2015 |
||||
|
(In thousands, except par value)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
|
$83,369
|
|
|
|
$139,710
|
|
Short-term investments
|
548,713
|
|
|
573,481
|
|
||
Total cash, cash equivalents and short-term investments
|
632,082
|
|
|
713,191
|
|
||
Accounts receivable, net
|
193,781
|
|
|
186,157
|
|
||
Income tax receivable
|
9,481
|
|
|
—
|
|
||
Inventories
|
289,089
|
|
|
280,576
|
|
||
Deferred income taxes
|
38,572
|
|
|
39,190
|
|
||
Prepaid expenses
|
26,284
|
|
|
29,932
|
|
||
Other current assets
|
55,383
|
|
|
54,851
|
|
||
Assets held for sale
|
6,871
|
|
|
4,353
|
|
||
Total current assets
|
1,251,543
|
|
|
1,308,250
|
|
||
Property and equipment, net
|
635,763
|
|
|
635,072
|
|
||
Goodwill
|
618,842
|
|
|
616,345
|
|
||
Intangible assets, net
|
330,777
|
|
|
317,154
|
|
||
Other long-term investments
|
34,611
|
|
|
57,595
|
|
||
Other assets
|
19,596
|
|
|
19,984
|
|
||
Total assets
|
|
$2,891,132
|
|
|
|
$2,954,400
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable, trade
|
|
$158,140
|
|
|
|
$163,128
|
|
Accrued salaries and wages
|
48,014
|
|
|
45,415
|
|
||
Income taxes payable
|
—
|
|
|
2,035
|
|
||
Other current liabilities
|
45,664
|
|
|
44,208
|
|
||
Total current liabilities
|
251,818
|
|
|
254,786
|
|
||
Long-term liabilities:
|
|
|
|
||||
Long-term debt
|
207,000
|
|
|
200,000
|
|
||
Deferred income taxes
|
21,975
|
|
|
12,174
|
|
||
Other long-term liabilities
|
21,455
|
|
|
21,084
|
|
||
Total long-term liabilities
|
250,430
|
|
|
233,258
|
|
||
Commitments and contingencies (Note 12)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, par value $0.01; 3,000 shares authorized at September 27, 2015 and June 28, 2015; none issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock, par value $0.00125; 200,000 shares authorized at September 27, 2015 and June 28, 2015; 103,044 and 105,507 shares issued and outstanding at September 27, 2015 and June 28, 2015, respectively
|
128
|
|
|
131
|
|
||
Additional paid-in-capital
|
2,300,875
|
|
|
2,285,554
|
|
||
Accumulated other comprehensive income, net of taxes
|
6,231
|
|
|
5,798
|
|
||
Retained earnings
|
81,650
|
|
|
174,873
|
|
||
Total shareholders’ equity
|
2,388,884
|
|
|
2,466,356
|
|
||
Total liabilities and shareholders’ equity
|
|
$2,891,132
|
|
|
|
$2,954,400
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
(In thousands, except per share amounts)
|
||||||
Revenue, net
|
|
$425,489
|
|
|
|
$427,672
|
|
Cost of revenue, net
|
293,741
|
|
|
291,852
|
|
||
Gross profit
|
131,748
|
|
|
135,820
|
|
||
Operating expenses:
|
|
|
|
||||
Research and development
|
43,540
|
|
|
46,725
|
|
||
Sales, general and administrative
|
75,263
|
|
|
69,692
|
|
||
Amortization or impairment of acquisition-related intangibles
|
7,062
|
|
|
6,499
|
|
||
Loss on disposal or impairment of long-lived assets
|
14,573
|
|
|
1,447
|
|
||
Total operating expenses
|
140,438
|
|
|
124,363
|
|
||
Operating (loss) income
|
(8,690
|
)
|
|
11,457
|
|
||
Non-operating (loss) income, net
|
(22,806
|
)
|
|
2,904
|
|
||
(Loss) income before income taxes
|
(31,496
|
)
|
|
14,361
|
|
||
Income tax (benefit) expense
|
(7,873
|
)
|
|
3,231
|
|
||
Net (loss) income
|
|
($23,623
|
)
|
|
|
$11,130
|
|
(Loss) earnings per share:
|
|
|
|
||||
Basic
|
|
($0.23
|
)
|
|
|
$0.09
|
|
Diluted
|
|
($0.23
|
)
|
|
|
$0.09
|
|
Weighted average shares used in per share calculation:
|
|
|
|
||||
Basic
|
103,473
|
|
|
119,605
|
|
||
Diluted
|
103,473
|
|
|
121,143
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
(In thousands)
|
||||||
Net (loss) income
|
|
($23,623
|
)
|
|
|
$11,130
|
|
Other comprehensive (loss) income:
|
|
|
|
||||
Currency translation loss
|
(359
|
)
|
|
(1,167
|
)
|
||
Net unrealized gain (loss) on available-for-sale securities, net of tax (expense) benefit of ($490)
and $339
, respectively
|
792
|
|
|
(511
|
)
|
||
Other comprehensive income (loss)
|
433
|
|
|
(1,678
|
)
|
||
Comprehensive (loss) income
|
|
($23,190
|
)
|
|
|
$9,452
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) income
|
|
($23,623
|
)
|
|
|
$11,130
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
41,176
|
|
|
43,335
|
|
||
Stock-based compensation
|
15,074
|
|
|
16,759
|
|
||
Excess tax benefit from stock-based payment arrangements
|
(3
|
)
|
|
(1,448
|
)
|
||
Loss on disposal or impairment of long-lived assets
|
14,573
|
|
|
1,447
|
|
||
Amortization of premium/discount on investments
|
1,361
|
|
|
2,412
|
|
||
Loss on equity method investment
|
19,948
|
|
|
—
|
|
||
Foreign exchange loss on equity method investment
|
3,036
|
|
|
—
|
|
||
Deferred income taxes
|
1,040
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable, net
|
(6,406
|
)
|
|
(12,018
|
)
|
||
Inventories
|
(8,428
|
)
|
|
(25,674
|
)
|
||
Prepaid expenses and other assets
|
(1,502
|
)
|
|
(3,176
|
)
|
||
Accounts payable, trade
|
(472
|
)
|
|
(2,164
|
)
|
||
Accrued salaries and wages and other liabilities
|
(8,940
|
)
|
|
(17,319
|
)
|
||
Net cash provided by operating activities
|
46,834
|
|
|
13,284
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(49,883
|
)
|
|
(63,446
|
)
|
||
Purchases of patent and licensing rights
|
(4,314
|
)
|
|
(4,806
|
)
|
||
Proceeds from sale of property and equipment
|
3
|
|
|
43
|
|
||
Purchases of short-term investments
|
(121,628
|
)
|
|
(171,067
|
)
|
||
Proceeds from maturities of short-term investments
|
137,121
|
|
|
126,958
|
|
||
Proceeds from sale of short-term investments
|
8,643
|
|
|
4,667
|
|
||
Purchase of acquired business, net of cash acquired
|
(12,513
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(42,571
|
)
|
|
(107,651
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from long-term debt borrowings
|
195,000
|
|
|
60,000
|
|
||
Payments on long-term debt borrowings
|
(188,000
|
)
|
|
(15,000
|
)
|
||
Net proceeds from issuance of common stock
|
2,801
|
|
|
12,109
|
|
||
Excess tax benefit from stock-based payment arrangements
|
3
|
|
|
1,448
|
|
||
Repurchases of common stock
|
(69,604
|
)
|
|
(54,325
|
)
|
||
Net cash (used in) provided by financing activities
|
(59,800
|
)
|
|
4,232
|
|
||
Effects of foreign exchange changes on cash and cash equivalents
|
(804
|
)
|
|
(389
|
)
|
||
Net decrease in cash and cash equivalents
|
(56,341
|
)
|
|
(90,524
|
)
|
||
Cash and cash equivalents:
|
|
|
|
||||
Beginning of period
|
139,710
|
|
|
286,824
|
|
||
End of period
|
|
$83,369
|
|
|
|
$196,300
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
||||
Significant non-cash transactions:
|
|
|
|
||||
Accrued property and equipment
|
|
$17,672
|
|
|
|
$17,400
|
|
•
|
Lighting Products
|
•
|
LED Products
|
•
|
Power and RF Products
|
Cash consideration paid to shareholders
|
|
$13,797
|
|
Post-closing adjustments
|
181
|
|
|
Contingent consideration
|
4,625
|
|
|
Total purchase price
|
|
$18,603
|
|
Tangible assets:
|
|
||
Cash and cash equivalents
|
|
$1,284
|
|
Accounts receivable
|
1,006
|
|
|
Inventories
|
143
|
|
|
Property and equipment
|
1,023
|
|
|
Other assets
|
427
|
|
|
Total tangible assets
|
3,883
|
|
|
Intangible assets:
|
|
||
Patents
|
40
|
|
|
Customer relationships
|
4,500
|
|
|
Developed technology
|
11,403
|
|
|
In-process research and development
|
7,565
|
|
|
Non-compete agreements
|
231
|
|
|
Goodwill
|
2,497
|
|
|
Total intangible assets
|
26,236
|
|
|
Liabilities assumed:
|
|
||
Accounts payable
|
55
|
|
|
Accrued expenses and liabilities
|
2,056
|
|
|
Other long-term liabilities
|
9,405
|
|
|
Total liabilities assumed
|
11,516
|
|
|
Net assets acquired
|
|
$18,603
|
|
|
Asset Amount
|
|
Estimated Life in Years
|
||
Patents
|
|
$40
|
|
|
20
|
Customer relationships
|
4,500
|
|
|
4
|
|
Developed technology
|
11,403
|
|
|
10
|
|
In-process research and development
1
|
7,565
|
|
|
-
|
|
Non-compete agreements
|
231
|
|
|
3
|
|
Total identifiable intangible assets
|
|
$23,739
|
|
|
|
|
September 27, 2015
|
|
June 28, 2015
|
||||
Billed trade receivables
|
|
$252,191
|
|
|
|
$246,969
|
|
Unbilled contract receivables
|
1,662
|
|
|
2,223
|
|
||
|
253,853
|
|
|
249,192
|
|
||
Allowance for sales returns, discounts and other incentives
|
(54,430
|
)
|
|
(58,094
|
)
|
||
Allowance for bad debts
|
(5,642
|
)
|
|
(4,941
|
)
|
||
Accounts receivable, net
|
|
$193,781
|
|
|
|
$186,157
|
|
|
September 27, 2015
|
|
June 28, 2015
|
||||
Raw material
|
|
$80,759
|
|
|
|
$86,331
|
|
Work-in-progress
|
98,618
|
|
|
93,424
|
|
||
Finished goods
|
109,712
|
|
|
100,821
|
|
||
Inventories
|
|
$289,089
|
|
|
|
$280,576
|
|
|
September 27, 2015
|
|
June 28, 2015
|
||||
Accrued taxes
|
|
$15,002
|
|
|
|
$13,935
|
|
Accrued professional fees
|
10,529
|
|
|
10,180
|
|
||
Accrued warranty
|
12,669
|
|
|
13,006
|
|
||
Accrued other
|
7,464
|
|
|
7,087
|
|
||
Other current liabilities
|
|
$45,664
|
|
|
|
$44,208
|
|
|
September 27, 2015
|
|
June 28, 2015
|
||||
Currency translation gain
|
|
$4,627
|
|
|
|
$4,986
|
|
Net unrealized gain on available-for-sale securities
|
1,604
|
|
|
812
|
|
||
Accumulated other comprehensive income, net of taxes
|
|
$6,231
|
|
|
|
$5,798
|
|
|
Three Months Ended
|
||||||
|
September 27, 2015
|
|
September 28, 2014
|
||||
Foreign currency loss, net
|
|
($4,294
|
)
|
|
|
($231
|
)
|
Gain on sale of investments, net
|
2
|
|
|
2
|
|
||
Loss on equity method investment
|
(19,948
|
)
|
|
—
|
|
||
Interest income, net
|
1,297
|
|
|
3,032
|
|
||
Other, net
|
137
|
|
|
101
|
|
||
Non-operating (loss) income, net
|
|
($22,806
|
)
|
|
|
$2,904
|
|
|
|
September 27, 2015
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Municipal bonds
|
|
|
$192,470
|
|
|
|
$1,650
|
|
|
|
($91
|
)
|
|
|
$194,029
|
|
Corporate bonds
|
|
158,116
|
|
|
1,174
|
|
|
(130
|
)
|
|
159,160
|
|
||||
Non-U.S. certificates of deposit
|
|
195,524
|
|
|
—
|
|
|
—
|
|
|
195,524
|
|
||||
Total short-term investments
|
|
|
$546,110
|
|
|
|
$2,824
|
|
|
|
($221
|
)
|
|
|
$548,713
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
June 28, 2015
|
||||||||||||||
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Estimated Fair
Value
|
||||||||
Municipal bonds
|
|
|
$194,123
|
|
|
|
$988
|
|
|
|
($341
|
)
|
|
|
$194,770
|
|
Corporate bonds
|
|
152,831
|
|
|
832
|
|
|
(158
|
)
|
|
153,505
|
|
||||
Non-U.S. certificates of deposit
|
|
225,206
|
|
|
—
|
|
|
—
|
|
|
225,206
|
|
||||
Total short-term investments
|
|
|
$572,160
|
|
|
|
$1,820
|
|
|
|
($499
|
)
|
|
|
$573,481
|
|
|
|
September 27, 2015
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Municipal bonds
|
|
|
$25,072
|
|
|
|
($91
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$25,072
|
|
|
|
($91
|
)
|
Corporate bonds
|
|
47,248
|
|
|
(117
|
)
|
|
1,795
|
|
|
(13
|
)
|
|
49,043
|
|
|
(130
|
)
|
||||||
Total
|
|
|
$72,320
|
|
|
|
($208
|
)
|
|
|
$1,795
|
|
|
|
($13
|
)
|
|
|
$74,115
|
|
|
|
($221
|
)
|
Number of securities with an unrealized loss
|
|
|
|
36
|
|
|
|
|
1
|
|
|
|
|
37
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
June 28, 2015
|
||||||||||||||||||||||
|
|
Less than 12 Months
|
|
Greater than 12 Months
|
|
Total
|
||||||||||||||||||
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
|
Fair Value
|
|
Unrealized Loss
|
||||||||||||
Municipal bonds
|
|
|
$53,204
|
|
|
|
($341
|
)
|
|
|
$—
|
|
|
|
$—
|
|
|
|
$53,204
|
|
|
|
($341
|
)
|
Corporate bonds
|
|
46,636
|
|
|
(143
|
)
|
|
1,812
|
|
|
(15
|
)
|
|
48,448
|
|
|
(158
|
)
|
||||||
Total
|
|
|
$99,840
|
|
|
|
($484
|
)
|
|
|
$1,812
|
|
|
|
($15
|
)
|
|
|
$101,652
|
|
|
|
($499
|
)
|
Number of securities with an unrealized loss
|
|
|
|
54
|
|
|
|
|
1
|
|
|
|
|
55
|
|
|
Within One
Year
|
|
After One,
Within Five
Years
|
|
After Five,
Within Ten
Years
|
|
After Ten
Years
|
|
Total
|
||||||||||
Municipal bonds
|
|
$12,772
|
|
|
|
$146,232
|
|
|
|
$35,025
|
|
|
|
$—
|
|
|
|
$194,029
|
|
Corporate bonds
|
33,732
|
|
|
92,471
|
|
|
32,957
|
|
|
—
|
|
|
159,160
|
|
|||||
Non-U.S. certificates of deposit
|
195,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
195,524
|
|
|||||
Total short-term investments
|
|
$242,028
|
|
|
|
$238,703
|
|
|
|
$67,982
|
|
|
|
$—
|
|
|
|
$548,713
|
|
•
|
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.
|
|
September 27, 2015
|
|
June 28, 2015
|
||||||||||||||||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Non-U.S. certificates of deposit
|
|
$—
|
|
|
|
$158
|
|
|
|
$—
|
|
|
|
$158
|
|
|
|
$—
|
|
|
|
$157
|
|
|
|
$—
|
|
|
|
$157
|
|
Money market funds
|
8,416
|
|
|
—
|
|
|
—
|
|
|
8,416
|
|
|
16,457
|
|
|
—
|
|
|
—
|
|
|
16,457
|
|
||||||||
Total cash equivalents
|
8,416
|
|
|
158
|
|
|
—
|
|
|
8,574
|
|
|
16,457
|
|
|
157
|
|
|
—
|
|
|
16,614
|
|
||||||||
Short-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Municipal bonds
|
—
|
|
|
194,029
|
|
|
—
|
|
|
194,029
|
|
|
—
|
|
|
194,770
|
|
|
—
|
|
|
194,770
|
|
||||||||
Corporate bonds
|
—
|
|
|
159,160
|
|
|
—
|
|
|
159,160
|
|
|
—
|
|
|
153,505
|
|
|
—
|
|
|
153,505
|
|
||||||||
Non-U.S. certificates of deposit
|
—
|
|
|
195,524
|
|
|
—
|
|
|
195,524
|
|
|
—
|
|
|
225,206
|
|
|
—
|
|
|
225,206
|
|
||||||||
Total short-term investments
|
—
|
|
|
548,713
|
|
|
—
|
|
|
548,713
|
|
|
—
|
|
|
573,481
|
|
|
—
|
|
|
573,481
|
|
||||||||
Other long-term investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Common stock of non-U.S. corporations
|
—
|
|
|
34,611
|
|
|
—
|
|
|
34,611
|
|
|
—
|
|
|
57,595
|
|
|
—
|
|
|
57,595
|
|
||||||||
Total other long-term investments
|
—
|
|
|
34,611
|
|
|
—
|
|
|
34,611
|
|
|
—
|
|
|
57,595
|
|
|
—
|
|
|
57,595
|
|
||||||||
Total assets
|
|
$8,416
|
|
|
|
$583,482
|
|
|
|
$—
|
|
|
|
$591,898
|
|
|
|
$16,457
|
|
|
|
$631,233
|
|
|
|
$—
|
|
|
|
$647,690
|
|
|
September 27, 2015
|
|
June 28, 2015
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Intangible assets with finite lives:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Customer relationships
|
|
$141,420
|
|
|
|
($73,670
|
)
|
|
|
$67,750
|
|
|
|
$136,920
|
|
|
|
($72,063
|
)
|
|
|
$64,857
|
|
Developed technology
|
174,163
|
|
|
(96,508
|
)
|
|
77,655
|
|
|
162,760
|
|
|
(91,562
|
)
|
|
71,198
|
|
||||||
Non-compete agreements
|
10,475
|
|
|
(8,467
|
)
|
|
2,008
|
|
|
10,244
|
|
|
(7,958
|
)
|
|
2,286
|
|
||||||
Trade names, finite-lived
|
520
|
|
|
(520
|
)
|
|
—
|
|
|
520
|
|
|
(520
|
)
|
|
—
|
|
||||||
Patent and licensing rights
|
148,217
|
|
|
(52,098
|
)
|
|
96,119
|
|
|
150,038
|
|
|
(50,905
|
)
|
|
99,133
|
|
||||||
Total intangible assets with finite lives
|
474,795
|
|
|
(231,263
|
)
|
|
243,532
|
|
|
460,482
|
|
|
(223,008
|
)
|
|
237,474
|
|
||||||
In-process research and development
|
7,565
|
|
|
|
|
7,565
|
|
|
—
|
|
|
|
|
—
|
|
||||||||
Trade names, indefinite-lived
|
79,680
|
|
|
|
|
79,680
|
|
|
79,680
|
|
|
|
|
79,680
|
|
||||||||
Total intangible assets
|
|
$562,040
|
|
|
|
($231,263
|
)
|
|
|
$330,777
|
|
|
|
$540,162
|
|
|
|
($223,008
|
)
|
|
|
$317,154
|
|
Fiscal Year Ending
|
|
||
June 26, 2016 (remainder of fiscal 2016)
|
|
$28,201
|
|
June 25, 2017
|
35,613
|
|
|
June 24, 2018
|
34,401
|
|
|
June 30, 2019
|
21,738
|
|
|
June 28, 2020
|
16,645
|
|
|
Thereafter
|
106,934
|
|
|
Total future amortization expense
|
|
$243,532
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
Net (loss) income
|
|
($23,623
|
)
|
|
|
$11,130
|
|
Weighted average common shares
|
103,473
|
|
|
119,605
|
|
||
Basic (loss) earnings per share
|
|
($0.23
|
)
|
|
|
$0.09
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
Net (loss) income
|
|
($23,623
|
)
|
|
|
$11,130
|
|
Weighted average common shares - basic
|
103,473
|
|
|
119,605
|
|
||
Dilutive effect of stock options, nonvested shares and Employee Stock Purchase Plan purchase rights
|
—
|
|
|
1,538
|
|
||
Weighted average common shares - diluted
|
103,473
|
|
|
121,143
|
|
||
Diluted (loss) earnings per share
|
|
($0.23
|
)
|
|
|
$0.09
|
|
|
Number of Shares
|
|
Weighted Average Exercise Price
|
|||
Outstanding at June 28, 2015
|
10,714
|
|
|
|
$43.10
|
|
Granted
|
1,778
|
|
|
|
$26.01
|
|
Exercised
|
(120
|
)
|
|
|
$22.86
|
|
Forfeited or expired
|
(347
|
)
|
|
|
$45.95
|
|
Outstanding at September 27, 2015
|
12,025
|
|
|
|
$40.70
|
|
|
Number of
RSAs/RSUs
|
|
Weighted Average
Grant-Date Fair Value
|
|||
Nonvested at June 28, 2015
|
926
|
|
|
|
$45.47
|
|
Granted
|
1,119
|
|
|
|
$26.06
|
|
Vested
|
(334
|
)
|
|
|
$45.03
|
|
Forfeited
|
(100
|
)
|
|
|
$44.99
|
|
Nonvested at September 27, 2015
|
1,611
|
|
|
|
$32.11
|
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
Income Statement Classification:
|
|
|
|
||||
Cost of revenue, net
|
|
$3,029
|
|
|
|
$2,905
|
|
Research and development
|
3,532
|
|
|
4,471
|
|
||
Sales, general and administrative
|
8,513
|
|
|
9,383
|
|
||
Total stock-based compensation expense
|
|
$15,074
|
|
|
|
$16,759
|
|
Balance at June 28, 2015
|
|
$13,968
|
|
Warranties accrued in current period
|
2,672
|
|
|
Recall costs accrued in current period
|
583
|
|
|
Expenditures
|
(3,604
|
)
|
|
Balance at September 27, 2015
|
|
$13,619
|
|
•
|
Lighting Products
|
•
|
LED Products
|
•
|
Power and RF Products
|
|
Three Months Ended
|
||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||
Revenue:
|
|
|
|
||||
Lighting Products revenue
|
|
$248,031
|
|
|
|
$223,086
|
|
LED Products revenue
|
148,208
|
|
|
173,590
|
|
||
Power and RF Products revenue
|
29,250
|
|
|
30,996
|
|
||
Total revenue
|
|
$425,489
|
|
|
|
$427,672
|
|
|
|
|
|
||||
Gross Profit and Gross Margin:
|
|
|
|
||||
Lighting Products gross profit
|
|
$69,081
|
|
|
|
$55,592
|
|
Lighting Products gross margin
|
27.9
|
%
|
|
24.9
|
%
|
||
LED Products gross profit
|
52,659
|
|
|
67,624
|
|
||
LED Products gross margin
|
35.5
|
%
|
|
39.0
|
%
|
||
Power and RF Products gross profit
|
14,323
|
|
|
17,857
|
|
||
Power and RF Products gross margin
|
49.0
|
%
|
|
57.6
|
%
|
||
Total segment gross profit
|
136,063
|
|
|
141,073
|
|
||
Unallocated costs
|
(4,315
|
)
|
|
(5,253
|
)
|
||
Consolidated gross profit
|
|
$131,748
|
|
|
|
$135,820
|
|
Consolidated gross margin
|
31.0
|
%
|
|
31.8
|
%
|
|
September 27,
2015 |
|
June 28,
2015 |
||||
Lighting Products
|
|
$157,715
|
|
|
|
$150,755
|
|
LED Products
|
113,537
|
|
|
114,203
|
|
||
Power and RF Products
|
12,693
|
|
|
11,536
|
|
||
Total segment inventories
|
283,945
|
|
|
276,494
|
|
||
Unallocated inventories
|
5,144
|
|
|
4,082
|
|
||
Consolidated inventories
|
|
$289,089
|
|
|
|
$280,576
|
|
Capacity and Overhead Cost Reductions
|
Estimated charges
|
|
Amounts incurred during the three months ended September 27, 2015
|
|
Cumulative amounts incurred through September 27, 2015
|
|
Affected Line Item in the Consolidated Statements of (Loss) Income
|
||||||
Loss on disposal or impairment of long-lived assets
|
|
$57,720
|
|
|
|
$13,878
|
|
|
|
$56,010
|
|
|
Loss on disposal or impairment of long-lived assets
|
Severance expense
|
2,319
|
|
|
300
|
|
|
2,319
|
|
|
Sales, general and administrative expenses
|
|||
Lease termination and facility consolidation costs
|
4,559
|
|
|
1,735
|
|
|
3,564
|
|
|
Sales, general and administrative expenses
|
|||
Increase in channel inventory reserves
|
26,479
|
|
|
—
|
|
|
26,479
|
|
|
Revenue, net
|
|||
Increase in inventory reserves
|
11,091
|
|
|
—
|
|
|
11,091
|
|
|
Cost of revenue, net
|
|||
Total restructuring charges
|
|
$102,168
|
|
|
|
$15,913
|
|
|
|
$99,463
|
|
|
|
Severance liability at June 30, 2014
|
|
$—
|
|
Severance expense
|
2,019
|
|
|
Severance payments
|
—
|
|
|
Severance liability at June 28, 2015
|
|
$2,019
|
|
Severance expense
|
300
|
|
|
Severance payments
|
(1,950
|
)
|
|
Severance liability at September 27, 2015
|
|
$369
|
|
•
|
Lighting Products
|
•
|
LED 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 still in the relatively early stages. Demand also fluctuates based on various market cycles, a continuously evolving LED industry supply chain, and evolving competitive 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
|
•
|
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 Standards Concerning Energy Efficiency.
Government agencies are involved in setting standards for energy efficient 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 is common.
|
•
|
Revenue decreased to
$425 million
for the
three
months ended
September 27, 2015
from
$428 million
for the
three
months ended
September 28, 2014
.
|
•
|
Gross profit decreased to
$132 million
for the
three
months ended
September 27, 2015
from
$136 million
for the
three
months ended
September 28, 2014
. Gross margin declined to
31%
for the
three
months ended
September 27, 2015
from
32%
for the
three
months ended
September 28, 2014
.
|
•
|
Operating loss was
$9 million
for the
three
months ended
September 27, 2015
compared to operating income of
$11 million
for the
three
months ended
September 28, 2014
. Net loss per diluted share was
$0.23
for the
three
months ended
September 27, 2015
compared to net income per diluted share of
$0.09
for the
three
months ended
September 28, 2014
.
|
•
|
Cash, cash equivalents and short-term investments decreased to
$0.6 billion
at
September 27, 2015
compared to
$0.7 billion
at
June 28, 2015
. Cash provided by operating activities was
$47 million
for the
three
months ended
September 27, 2015
compared to
$13 million
for the
three
months ended
September 28, 2014
.
|
•
|
Inventories increased to
$289 million
at
September 27, 2015
compared to
$281 million
at
June 28, 2015
.
|
•
|
Purchases of property and equipment were
$50 million
for the
three
months ended
September 27, 2015
compared to
$63 million
for the
three
months ended
September 28, 2014
.
|
•
|
Build financial momentum.
We target overall company revenue growth of approximately 10% in fiscal 2016 with operating margins increasing for the year. The key components are:
|
•
|
grow our commercial Lighting business and improve product margins;
|
•
|
stabilize our LED business;
|
•
|
expand our Power and RF business; and
|
•
|
manage our operating expenses to improve operating leverage.
|
•
|
Innovate to continue to lead in each of our business segments.
We have established ourselves as the innovation leader in Lighting, LEDs and wide bandgap Power and RF. We are focused on continuing to develop new products that deliver fundamentally more value to drive new customer demand and build our brand.
|
•
|
Promote future growth in Power and RF
. Our Wolfspeed business filed a confidential registration statement for an initial public offering intended in fiscal 2016 to raise capital to support the business's targeted future growth. We believe that such a transaction would allow Cree shareholders to better realize the full value of both businesses.
|
|
Three Months Ended
|
||||||||||||
|
September 27,
2015 |
|
September 28,
2014 |
||||||||||
|
Dollars
|
|
% of Revenue
|
|
Dollars
|
|
% of Revenue
|
||||||
Revenue, net
|
|
$425,489
|
|
|
100
|
%
|
|
|
$427,672
|
|
|
100
|
%
|
Cost of revenue, net
|
293,741
|
|
|
69
|
%
|
|
291,852
|
|
|
68
|
%
|
||
Gross profit
|
131,748
|
|
|
31
|
%
|
|
135,820
|
|
|
32
|
%
|
||
Research and development
|
43,540
|
|
|
10
|
%
|
|
46,725
|
|
|
11
|
%
|
||
Sales, general and administrative
|
75,263
|
|
|
18
|
%
|
|
69,692
|
|
|
16
|
%
|
||
Amortization or impairment of acquisition-related intangibles
|
7,062
|
|
|
2
|
%
|
|
6,499
|
|
|
2
|
%
|
||
Loss on disposal or impairment of long-lived assets
|
14,573
|
|
|
3
|
%
|
|
1,447
|
|
|
—
|
%
|
||
Operating (loss) income
|
(8,690
|
)
|
|
(2
|
)%
|
|
11,457
|
|
|
3
|
%
|
||
Non-operating (loss) income, net
|
(22,806
|
)
|
|
(5
|
)%
|
|
2,904
|
|
|
1
|
%
|
||
(Loss) income before income taxes
|
(31,496
|
)
|
|
(7
|
)%
|
|
14,361
|
|
|
3
|
%
|
||
Income tax (benefit) expense
|
(7,873
|
)
|
|
(2
|
)%
|
|
3,231
|
|
|
1
|
%
|
||
Net (loss) income
|
|
($23,623
|
)
|
|
(6
|
)%
|
|
|
$11,130
|
|
|
3
|
%
|
Basic (loss) earnings per share
|
|
($0.23
|
)
|
|
|
|
|
$0.09
|
|
|
|
||
Diluted (loss) earnings per share
|
|
($0.23
|
)
|
|
|
|
|
$0.09
|
|
|
|
Capacity and Overhead Cost Reductions
|
Estimated charges
|
|
Amounts incurred during the three months ended September 27, 2015
|
|
Cumulative amounts incurred through September 27, 2015
|
|
Affected Line Item in the Consolidated Statements of (Loss) Income
|
||||||
Loss on disposal or impairment of long-lived assets
|
|
$57,720
|
|
|
|
$13,878
|
|
|
|
$56,010
|
|
|
Loss on disposal or impairment of long-lived assets
|
Severance expense
|
2,319
|
|
|
300
|
|
|
2,319
|
|
|
Sales, general and administrative expenses
|
|||
Lease termination and facility consolidation costs
|
4,559
|
|
|
1,735
|
|
|
3,564
|
|
|
Sales, general and administrative expenses
|
|||
Increase in channel inventory reserves
|
26,479
|
|
|
—
|
|
|
26,479
|
|
|
Revenue, net
|
|||
Increase in inventory reserves
|
11,091
|
|
|
—
|
|
|
11,091
|
|
|
Cost of revenue, net
|
|||
Total restructuring charges
|
|
$102,168
|
|
|
|
$15,913
|
|
|
|
$99,463
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Lighting Products revenue
|
|
$248,031
|
|
|
|
$223,086
|
|
|
|
$24,945
|
|
|
11
|
%
|
Percent of revenue
|
58
|
%
|
|
52
|
%
|
|
|
|
|
|||||
LED Products revenue
|
148,208
|
|
|
173,590
|
|
|
(25,382
|
)
|
|
(15
|
)%
|
|||
Percent of revenue
|
35
|
%
|
|
41
|
%
|
|
|
|
|
|||||
Power and RF Products revenue
|
29,250
|
|
|
30,996
|
|
|
(1,746
|
)
|
|
(6
|
)%
|
|||
Percent of revenue
|
7
|
%
|
|
7
|
%
|
|
|
|
|
|||||
Total revenue
|
|
$425,489
|
|
|
|
$427,672
|
|
|
|
($2,183
|
)
|
|
(1
|
)%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Lighting Products gross profit
|
|
$69,081
|
|
|
|
$55,592
|
|
|
|
$13,489
|
|
|
24
|
%
|
Lighting Products gross margin
|
27.9
|
%
|
|
24.9
|
%
|
|
|
|
|
|||||
LED Products gross profit
|
52,659
|
|
|
67,624
|
|
|
(14,965
|
)
|
|
(22
|
)%
|
|||
LED Products gross margin
|
35.5
|
%
|
|
39.0
|
%
|
|
|
|
|
|||||
Power and RF Products gross profit
|
14,323
|
|
|
17,857
|
|
|
(3,534
|
)
|
|
(20
|
)%
|
|||
Power and RF Products gross margin
|
49.0
|
%
|
|
57.6
|
%
|
|
|
|
|
|||||
Unallocated costs
|
(4,315
|
)
|
|
(5,253
|
)
|
|
938
|
|
|
(18
|
)%
|
|||
Consolidated gross profit
|
|
$131,748
|
|
|
|
$135,820
|
|
|
|
($4,072
|
)
|
|
(3
|
)%
|
Consolidated gross margin
|
31.0
|
%
|
|
31.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Research and development
|
|
$43,540
|
|
|
|
$46,725
|
|
|
|
($3,185
|
)
|
|
(7
|
)%
|
Percent of revenue
|
10
|
%
|
|
11
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Sales, general and administrative
|
|
$75,263
|
|
|
|
$69,692
|
|
|
|
$5,571
|
|
|
8
|
%
|
Percent of revenue
|
18
|
%
|
|
16
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Customer relationships
|
|
$1,607
|
|
|
|
$1,345
|
|
|
|
$262
|
|
|
19
|
%
|
Developed technology
|
4,946
|
|
|
4,660
|
|
|
286
|
|
|
6
|
%
|
|||
Non-compete agreements
|
509
|
|
|
490
|
|
|
19
|
|
|
4
|
%
|
|||
Trade names, finite-lived
|
—
|
|
|
4
|
|
|
(4
|
)
|
|
(100
|
)%
|
|||
Total amortization
|
|
$7,062
|
|
|
|
$6,499
|
|
|
|
$563
|
|
|
9
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27,
2015 |
|
September 28,
2014 |
|
Change
|
|||||||||
Loss on disposal or impairment of long-lived assets
|
|
$14,573
|
|
|
|
$1,447
|
|
|
|
$13,126
|
|
|
907
|
%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27, 2015
|
|
September 28, 2014
|
|
Change
|
|||||||||
Gain on sale of investments, net
|
|
$2
|
|
|
|
$2
|
|
|
|
$—
|
|
|
—
|
%
|
Loss on equity method investment
|
(19,948
|
)
|
|
—
|
|
|
(19,948
|
)
|
|
—
|
|
|||
Foreign currency loss, net
|
(4,294
|
)
|
|
(231
|
)
|
|
(4,063
|
)
|
|
1,759
|
%
|
|||
Interest income, net
|
1,297
|
|
|
3,032
|
|
|
(1,735
|
)
|
|
(57
|
)%
|
|||
Other, net
|
137
|
|
|
101
|
|
|
36
|
|
|
36
|
%
|
|||
Non-operating (loss) income, net
|
|
($22,806
|
)
|
|
|
$2,904
|
|
|
|
($25,710
|
)
|
|
(885
|
)%
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27, 2015
|
|
September 28, 2014
|
|
Change
|
|||||||||
Income tax (benefit) expense
|
|
($7,873
|
)
|
|
|
$3,231
|
|
|
|
($11,104
|
)
|
|
(344
|
)%
|
Effective tax rate
|
25.0
|
%
|
|
22.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
|
|||
|
September 27,
2015 |
|
June 28,
2015 |
|
Change
|
|
Days of sales outstanding
(a)
|
41
|
|
44
|
|
(3
|
)
|
Days of supply in inventory
(b)
|
89
|
|
83
|
|
6
|
|
Days in accounts payable
(c)
|
(48)
|
|
(48)
|
|
—
|
|
Cash conversion cycle
|
82
|
|
79
|
|
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, net 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 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
|
|
Three Months Ended
|
|
|
|
|
|||||||||
|
September 27, 2015
|
|
September 28, 2014
|
|
Change
|
|||||||||
Net cash provided by operating activities
|
|
$46,834
|
|
|
|
$13,284
|
|
|
|
$33,550
|
|
|
253
|
%
|
Net cash used in investing activities
|
(42,571
|
)
|
|
(107,651
|
)
|
|
65,080
|
|
|
(60
|
)%
|
|||
Net cash (used in) provided by financing activities
|
(59,800
|
)
|
|
4,232
|
|
|
(64,032
|
)
|
|
(1,513
|
)%
|
|||
Effects of foreign exchange changes on cash and cash equivalents
|
(804
|
)
|
|
(389
|
)
|
|
(415
|
)
|
|
107
|
%
|
|||
Net decrease in cash and cash equivalents
|
|
($56,341
|
)
|
|
|
($90,524
|
)
|
|
|
$34,183
|
|
|
|
|
•
|
achievement of technology breakthroughs required to make commercially viable devices;
|
•
|
the accuracy of our predictions for market requirements;
|
•
|
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
|
•
|
market acceptance of our customers’ products.
|
•
|
maintain, expand and purchase adequate manufacturing facilities and equipment, as well as secure sufficient third-party manufacturing resources, to meet customer demand;
|
•
|
manage an increasingly complex supply chain that has the ability to scale to maintain a sufficient supply of raw materials and deliver on time to our manufacturing facilities or our third party manufacturing facilities;
|
•
|
expand research and development, sales and marketing, technical support, distribution capabilities, manufacturing planning and administrative functions;
|
•
|
manage organizational complexity and communication;
|
•
|
expand the capability of information systems to support a more complex business;
|
•
|
expand the skills and capabilities of our current management team;
|
•
|
add experienced senior level managers;
|
•
|
attract and retain qualified employees; and
|
•
|
adequately maintain and adjust the operational and financial controls that support our business.
|
•
|
costs associated with the removal, collection and destruction of the product;
|
•
|
payments made to replace product;
|
•
|
costs associated with repairing the product;
|
•
|
the write-down or destruction of existing inventory;
|
•
|
insurance recoveries that fail to cover the full costs associated with product recalls;
|
•
|
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, 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.
|
•
|
our stock price could fluctuate significantly in response to developments related to the proposed IPO or other actions or market speculation regarding the proposed IPO;
|
•
|
we may encounter difficulties in hiring, retaining and motivating key personnel during this process or as a result of uncertainties generated by this process or any developments or actions relating to it;
|
•
|
we will incur substantial increases in general and administrative expense associated with the need to retain and compensate third-party consultants and advisors (including legal counsel); and
|
•
|
although we have not made any determination regarding whether we will dispose of our remaining interests in Wolfspeed following the proposed IPO, to the extent that further dispositions result in our owning less than a controlling financial interest, Wolfspeed's financial results may no longer be consolidated with our financial results and we may be required to report Wolfspeed’s operating results as discontinued operations, which may materially and adversely affect our consolidated results of operations.
|
•
|
the failure of an acquired business, investee or joint venture to meet our performance expectations;
|
•
|
identification of additional liabilities relating to an acquired business;
|
•
|
loss of existing customers of our current and acquired businesses due to concerns that new product lines may be in competition with the customers’ existing product lines;
|
•
|
difficulty integrating an acquired business's operations, personnel and financial and operating systems into our current business;
|
•
|
diversion of management attention;
|
•
|
uncertainty of the financial markets or circumstances that cause conditions that are less favorable and/or different than expected;
|
•
|
difficulty separating the operations, personnel and financial and operating systems of a spin-off or divestiture from our current business; and
|
•
|
expenses incurred to complete a transaction may be significantly higher than anticipated.
|
•
|
protection of intellectual property and trade secrets;
|
•
|
tariffs, customs, trade sanctions and other barriers to importing/exporting materials and products in a cost effective and timely manner, or changes in applicable tariffs or custom rules;
|
•
|
timing and availability of export licenses;
|
•
|
rising labor costs;
|
•
|
disruptions in or inadequate infrastructure of the countries where we operate;
|
•
|
difficulties in collecting accounts receivable;
|
•
|
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 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.
|
•
|
increasing our vulnerability to downturns in our business, to competitive pressures and to adverse general economic and industry conditions;
|
•
|
requiring the dedication of an increased portion of our expected cash flows from operations to service our indebtedness, thereby reducing the amount of expected cash flow available for other purposes, including capital expenditures, research and development and stock repurchases;
|
•
|
limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;
|
•
|
placing us at a competitive disadvantage compared to our peers that may have less indebtedness than we have by limiting our ability to borrow additional funds needed to operate and grow our business; and
|
•
|
increasing our interest expense if interest rates increase.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
1
|
|
Approximate Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs
1
|
||||||
Shares repurchased under our Stock Repurchase Program
|
|
|
|
|
|
|
|
|
||||||
June 29, 2015 to July 26, 2015
|
|
1,976
|
|
|
|
$25.29
|
|
|
1,976
|
|
|
|
$450,013
|
|
July 27, 2015 to August 23, 2015
|
|
243
|
|
|
|
$27.21
|
|
|
2,219
|
|
|
|
$443,412
|
|
August 24, 2015 to September 27, 2015
|
|
504
|
|
|
|
$25.91
|
|
|
2,723
|
|
|
|
$430,341
|
|
Total
|
|
2,723
|
|
|
|
$25.58
|
|
|
|
|
|
(1)
|
On June 18, 2015, our Board of Directors approved an increase in the amount of our stock repurchase program, authorizing us to repurchase shares of our common stock having an aggregate purchase price not exceeding $500 million for all purchases from June 29, 2015 through the expiration of the program on June 26, 2016.
|
Exhibit No.
|
|
Description
|
|
10.1
|
|
|
Notice of Grant to Charles M. Swoboda, dated August 24, 2015 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.2
|
|
|
Notice of Grant to Michael E. McDevitt, dated August 24, 2015 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.3
|
|
|
Notice of Grant to Norbert W. G. Hiller, dated August 24, 2015 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.4
|
|
|
Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.5
|
|
|
Schedule of Compensation for Non-Employee Directors
|
10.6
|
|
|
Form of Performance Share Award Agreement - Section 16 Officer
|
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 September 27, 2015 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.
|
|
|
October 21, 2015
|
|
|
|
|
/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
|
|
|
Notice of Grant to Charles M. Swoboda, dated August 24, 2015 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.2
|
|
|
Notice of Grant to Michael E. McDevitt, dated August 24, 2015 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.3
|
|
|
Notice of Grant to Norbert W. G. Hiller, dated August 24, 2015 (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.4
|
|
|
Management Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 of the Company’s Current Report on Form 8-K, dated August 24, 2015, filed with the Securities and Exchange Commission on August 27, 2015)
|
10.5
|
|
|
Schedule of Compensation for Non-Employee Directors
|
10.6
|
|
|
Form of Performance Share Award Agreement - Section 16 Officer
|
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 September 27, 2015 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
|
Member of the Board of Directors
|
$
|
15,000
|
|
Lead Independent Director
|
$
|
5,000
|
|
Chair of the Audit Committee
|
$
|
7,500
|
|
Chair of the Compensation Committee
|
$
|
5,000
|
|
Chair of the Governance & Nominations Committee
|
$
|
2,500
|
|
Member of the Audit Committee
|
$
|
3,750
|
|
Member of the Compensation Committee
|
$
|
2,500
|
|
Member of the Governance & Nominations Committee
|
$
|
1,250
|
|
1.
|
Each non-employee director will be paid the retainer listed above for membership on the Board of Directors and for each other role in which the director serves. The retainer will be earned on the first day of the fiscal quarter on which the director serves in the indicated role. If a director is elected or appointed to the role after the first day of the fiscal quarter, a portion of the retainer, prorated based on the number of days remaining in the quarter, will be earned on the day on which the director's election or appointment is effective. No adjustment will be made nor any repayment due in the event that a director does not serve in the indicated role for the remainder of the quarter.
|
2.
|
Retainers are in lieu of meeting fees except as provided in this paragraph. Unless another compensation arrangement is put in place at the time of special committee formation, in the event that a non-employee director is appointed to serve on a Board committee not listed above, the director will earn a fee of $1,000 for each meeting of the committee attended, or $2,000 for each meeting attended if serving as Chair or acting Chair of the committee.
|
3.
|
Retainers and any meeting fees earned will be paid promptly following the first day of each fiscal quarter. Non-employee directors may elect to receive Company stock in lieu of retainers and meeting fees, and to defer all or a portion of retainers and meeting fees earned, pursuant to the Non-Employee Director Stock Compensation and Deferral Program while such plan is in effect.
|
1.
|
Each non-employee director then serving on the Board who has been nominated for re-election at the next annual meeting of shareholders will be granted on the first business day of September restricted stock units to acquire shares of the Company's common stock. The number of restricted stock units to be granted will be determined by dividing $170,000 by the 30-day average closing stock price of the Company’s common stock ending one trading day prior to the August meeting of the Compensation Committee. The restricted stock units will be granted pursuant to the Company's 2013 Long-Term Incentive Compensation Plan. The restricted stock units vest in full on the first anniversary of the grant date, provided that the director is then serving as a member of the Board of Directors or as an employee of the Company or other Employer under the Plan.
|
2.
|
If a non-employee director is first elected to the Board after the first business day of September, the director will be granted restricted stock units as provided above, except that the restricted stock units will vest in three equal installments on each of the first, second and third anniversaries of the grant date, provided that the director is then serving as a member of the Board of Directors or as an employee of the Company or other Employer under the Plan.
|
3.
|
The restricted stock unit awards described above will be awarded only if recommended by the Compensation Committee and approved by the Governance and Nominations Committee on or before the grant date. Awards under
|
|
PERFORMANCE SHARE AWARD AGREEMENT
|
|
Participant:
|
[ ]
|
|
Award Number:
|
|
|
Plan:
|
2013 Long-Term Incentive Compensation Plan
|
|
Award Type:
|
Performance Shares
|
|
Grant Date:
|
[ ]
|
|
Performance Period:
|
[ ]
|
|
CREE, INC.:
|
|
ACCEPTED AND AGREED TO:
|
1.
|
Forfeiture of Performance Shares for Awards Not Timely Accepted.
The grant of the Performance Shares is conditioned upon and subject to your accepting the Performance Shares by signing and delivering to the Company this Agreement, or otherwise electronically accepting the Performance Shares, no later than the first date the Performance Shares are scheduled to vest pursuant to this Agreement. In the event of your death or incapacitation prior to accepting the Performance Shares, the Company will deem the Performance Shares as being accepted. If you fail to accept the Performance Shares within the time described above, you will forfeit the Performance Shares.
|
2.
|
Payment.
Subject to the terms of the Plan and this Agreement, within 30 days after each of the following dates (except as provided otherwise in Section 18 below), the Company shall make payment to you of the vested
|
(a)
|
[ ];
|
(b)
|
the date of your death;
|
(c)
|
the date of your LTD Disability;
|
(d)
|
the date of your termination of employment; and
|
(e)
|
the effective date of a Change in Control.
|
3.
|
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 to the Performance Shares 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 Performance Shares, including, without limitation, the grant, vesting or payment with respect to the Performance Shares, the subsequent sale of Shares and the receipt of any dividends or dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Performance Shares 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. If permissible under local law and at your election, the Company will satisfy this condition pursuant to the withholding of Shares consistent with the “Share Withholding” provisions under Section [ ] of the Plan. The Company, in its discretion, may authorize alternative arrangements, including, if permissible under local law, the Company's selling or arranging to sell Shares that you acquire under the Plan. In any event, to the extent this condition is not otherwise satisfied, you authorize the Employer to withhold all applicable Tax-Related Items legally payable by you from your wages or other cash compensation paid to you by the Employer.
|
(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, 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 make payment with respect to the Performance Shares if you fail to comply with your obligations in connection with the Tax-Related Items.
|
4.
|
Transfer of Performance Shares.
The Performance Shares and any rights under any Performance Share may not be assigned, pledged as collateral or otherwise transferred, except as permitted by the Plan, nor may they be subject to attachment, execution or other judicial process. In the event of any attempt to assign, pledge or otherwise dispose of a Performance Share or any rights under a Performance Share, 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 a Performance Share, the Committee may in its discretion terminate a Performance Share by notice to you.
|
5.
|
Rights Prior to Vesting of Shares.
|
(a)
|
You will have no rights as a shareholder with respect to any Shares issuable under the Performance Shares, including but not limited to voting rights or rights to dividends or dividend equivalents, until such Shares have been duly issued by the Company or its transfer agent pursuant to the vesting and payment of the Performance Shares.
|
(b)
|
In the event of a change in capitalization within the meaning of Section [ ] of the Plan, the number and class of Shares or other securities that you are entitled to pursuant to this Agreement shall be appropriately adjusted or changed as determined by the Committee to reflect the change in capitalization, provided that any such additional Shares or additional or different shares of securities shall remain subject to the restrictions in this Agreement.
|
6.
|
Termination of Service:
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 the Company. 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 the Company. 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.
|
7.
|
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.
|
8
|
Data Privacy.
By signing this Agreement, you explicitly and unambiguously consent to the collection, use and transfer, in electronic or other form, of your personal data as described in this Agreement by and among, as applicable, the Employer, and the Company and its subsidiaries and affiliates for the exclusive purpose of implementing, administering and managing your participation in the Plan.
|
9.
|
Electronic Delivery.
The Company may, in its sole discretion, decide to deliver any documents related to the Performance Shares granted under this Agreement by electronic means or to request your consent to participate in the Plan by electronic means. By signing this Agreement, you consent to receive such documents by electronic delivery and, if requested, to 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 Company.
|
10.
|
General.
|
(a)
|
Nothing in this Agreement will be construed as constituting a commitment, agreement or understanding of any kind that the Employer will continue your service relationship nor to limit or restrict either party's right to terminate the service relationship.
|
(b)
|
This Agreement shall be binding upon and inure to the benefit of you and the Company and upon our respective heirs, executors, administrators, representatives, successors and permitted assigns.
|
(c)
|
Notices under this Agreement must be in writing and delivered either by hand or by certified or registered mail (return receipt requested and first-class postage prepaid), in the case of the Company, addressed to its principal executive offices to the attention of the Stock Plan Administrator, and, in your case, 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 Performance Shares 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 award of the Performance Shares is made and/or to be performed.
|
(e)
|
No amendment or modification of this Agreement shall be valid unless the same is in writing and signed by you and by an authorized executive officer of the Company. 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)
|
This Agreement and the Plan set forth all of the promises, agreements and understandings between you and Company relating to the Performance Shares evidenced by this Agreement. This Agreement supersedes
|
(g)
|
Shares issued upon settlement of the Performance Shares may be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or trading system upon which the Common Stock is listed or traded, and any applicable federal or state laws, and the Committee may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions.
|
(h)
|
You agree that each Performance Share evidenced by this Agreement serves as additional, valuable consideration for your obligations, if any, undertaken in any existing agreement between you and the Employer regarding confidential information, noncompetition, nonsolicitation or similar covenants.
|
(i)
|
You acknowledge, represent and warrant to the Company, and agree with the Company, that, except for information provided in the Company's filings with the Securities and Exchange Commission and in the Company's current prospectus relating to the Plan: (i) 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 the Performance Shares, or in connection with any disposition of Shares obtained pursuant to settlement of the Performance Shares, or with respect to any tax consequences related to the grant of the Performance Shares or the disposition of Shares obtained pursuant to settlement of the Performance Shares; 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 the Performance Shares. 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 Performance Shares or Shares obtained pursuant to settlement of Performance Shares 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.
|
11.
|
Severability.
The provisions of this Agreement are severable and if any one of more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
|
12.
|
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 Performance Shares is voluntary and does not create any contractual or other right to receive future grants of Performance Shares, or benefits in lieu of Performance Shares, even if Performance Shares have been granted repeatedly in the past;
|
(c)
|
all decisions with respect to future grants of Performance Shares, 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 Performance Shares 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 Performance Shares is not intended to replace any pension rights or compensation;
|
(h)
|
the grant of the Performance Shares 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 Performance Shares 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 Performance Shares is unknown and cannot be predicted with certainty;
|
(k)
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Performance Shares 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 Performance Shares, 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 Performance Shares 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 Performance Shares or of any payments due to you pursuant to the subsequent sale of any Shares acquired upon the vesting of the Performance Shares; 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 Performance Shares 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.
|
13.
|
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.
|
14.
|
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 Performance Shares or Shares, as applicable, the Company shall not be required to deliver the Performance Shares 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 Performance Shares 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 Performance Shares 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.
|
15.
|
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.
|
16.
|
Appendix.
Notwithstanding any provisions in this Agreement, the Performance Shares shall be subject to any special terms and conditions set forth in any Appendix attached 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 any such 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. If included, any such Appendix is incorporated in and constitutes part of this Agreement.
|
17.
|
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on your participation in the Plan, on the Performance Shares 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.
|
18.
|
Section
409A.
The Performance Shares are is intended to qualify for the “short-term deferral” exemption from Section 409A of the Code, and the provisions of this Agreement between you and the Company 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 this Agreement is intended to be a right to a separate payment for purposes of Section 409A of the Code. 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 Performance Shares qualify for exemption from or comply with Section 409A of the Code; provided, however, that the Company makes no representations that the Performance Shares will be exempt from Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the Performance Shares. With respect to any amounts payable under this Agreement that are subject to Section 409A of the Code, (i) it is intended, and this Agreement will be so construed, that such amounts and the Company’s and your exercise of authority or discretion hereunder shall comply with the provisions of Section 409A of the Code so as not to subject you to the payment of interest and additional tax that may be imposed under Section 409A of the Code; (ii) any provisions of this Agreement that provide for payment of compensation triggered by your termination of employment other than on account of your death shall be deemed to provide for payment that is triggered only by your “separation from service” within the meaning of Treasury Regulation Section §1.409A-1(h) (a “Section 409A Separation from Service”), (iii) if you are a “specified employee” within the meaning of Treasury Regulation Section §1.409A-1(i) on the date of your Section 409A Separation from Service (with such status determined by the Company in accordance with rules established by the Company in writing in advance of the “specified employee identification date” that relates to the date of
|
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
|
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/ 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.;
|
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
|
|
October 21, 2015
|
|
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
|
|
October 21, 2015
|