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North
Carolina
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0-21154
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56-1572719
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(State or other jurisdiction
of
incorporation)
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(Commission File
Number)
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(I.R.S.
Employer
Identification
Number)
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4600 Silicon
Drive
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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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Item
5.02
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Departure of Directors
or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers
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| · |
Mr.
Kelley will be paid an annual base salary of $350,000 and a sign-on bonus
of $90,000 (plus certain tax gross-up
amounts on the bonus). The sign-on bonus is subject to
repayment, less a pro rata amount for each full month worked, if he
resigns or his employment is terminated for cause within 12
months.
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| · |
Mr.
Kelley will be eligible to
participate in the Company’s Management Incentive Compensation Plan
with an annual target award level equal to 60% of his base
salary. The actual amount of the incentive payment will depend
on meeting objectives tied to quarterly (weighted at 40%) and annual
(weighted at 60%) performance goals set in accordance with the plan
document. For the first two fiscal quarters in which he
participates, his performance measurement against the individual component
of his quarterly goals will be deemed to be 100% without regard to actual
results.
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| · | Mr. Kelley will be granted an option to purchase 80,000 shares of the Company’s common stock and an award of 20,000 shares of restricted stock under the Company’s 2004 Long-Term Incentive Compensation Plan (the “Plan”). Both awards will be made on the first business day of the calendar month following the first day of his employment. The option will vest and become exercisable over a three-year period in equal installments on the anniversary of the grant date, subject to the condition that Mr. Kelley remain employed by the Company or a related “Employer” as defined in the Plan. If not sooner terminated, the option will expire seven years after the grant date. The exercise price of the option will be the last sales price reported for the regular trading session on the Nasdaq Stock Market on the grant date. The restricted stock award will vest over a five-year period in equal installments, beginning on September 1, 2009, subject to the |
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condition
that Mr. Kelley remain employed by the Company or a related
Employer. The Company filed a copy of the Plan as amended with
the Commission on November 7, 2007 as Exhibit 10.1 to the Company’s Current Report on Form 8-K. The Company
filed forms of the Master Stock Option Award Agreement for Grants of
Nonqualified Stock Options and Master Restricted Stock Award Agreement
with the Commission on November 2, 2006 as Exhibits 10.4 and 10.5,
respectively, to the Company’s Quarterly Report on Form 10-Q for the
quarter ended September 24,
2006.
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| · |
The
Company will pay for certain costs in connection with Mr. Kelley’s
relocation from Plano, Texas to North Carolina. The Company
will provide Mr. Kelley with temporary housing in North Carolina for up to
one year and will also pay or reimburse other costs in accordance with the
Company’s relocation policy for new hires. In addition, the Company has agreed to
reimburse Mr. Kelley for seller brokerage fees, seller paid closing costs,
and/or any loss on sale in connection with the sale of his primary
residence in Texas and reasonable and customary closing costs on the
purchase of a primary residence in the vicinity of Research Triangle Park,
North Carolina, up to a maximum amount of $75,000, and for travel costs
for biweekly trips between Plano, Texas and North Carolina until the
earlier of August 18, 2009, or the move of his family’s residence to North
Carolina. Mr. Kelley will receive
certain tax gross-up payments with respect to the taxable relocation
payments described above, and the relocation payments are subject to
repayment, consistent with the terms of the Company’s relocation policy,
if Mr. Kelley resigns or he is terminated for cause within 12 months after
payment of such amount by the
Company.
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| · |
Mr.
Kelley will be an at-will employee, meaning that he or the Company can
terminate his employment at any time. However, as soon as
possible after his commencement date, he and the Company will enter into a
Change in Control Agreement. Such agreement will provide that
if, within 12 months after a change in control, the Company terminates his
employment without cause or he resigns for good reason, he will receive
(i) continued payment of his base salary for 12 months following his
termination, (ii) accelerated vesting of all unvested stock options and
time-vested restricted stock awards, and (iii) a lump sum payment equal to
12 multiplied by the COBRA premium for him and his eligible
dependents. As a condition
to the receipt of these severance benefits, Mr. Kelley must (i) sign and
not revoke a separation agreement and release of claims and (ii) sign and
continue to comply with noncompete, nonsolicitation, and nondisparagement
obligations during the 12 months following termination of his
employment.
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| · |
Mr.
Kelley will participate in the Company’s Severance Plan for officers who
are subject to the reporting requirements of Section 16 of the Securities
Exchange Act of 1934, as amended (a “Section 16 Officer”). The
Severance Plan provides that if the Company terminates the employment of a
Section 16 Officer without cause or the Section 16 Officer resigns for
good reason (other than in connection with a change of control), the
Section 16 Officer will receive (i) continued payment of his/her base
salary for 12 months following such
termination, and (ii) a lump sum payment equal to 12 multiplied by the COBRA premium for
him and his eligible dependents. As a condition to the receipt of these severance
benefits, Mr. Kelley must (i) sign and not revoke a separation agreement
and release of claims and (ii) sign and continue to comply with
noncompete,
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nonsolicitation,
and nondisparagement obligations during the 12 months following
termination of his employment.
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| · |
Mr.
Kelley has executed the Company's standard form of employee agreement
regarding confidential information, intellectual property and
noncompetition. This agreement includes an undertaking by the
employee not to perform the same or similar services in any capacity for,
or own an equity interest in, a business that competes with the Company's
business for a period of one year following any termination of
employment.
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Item
9.01
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Financial Statements and
Exhibits
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Exhibit
No.
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Description of
Exhibit
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||
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10.1
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Offer
Letter Agreement, executed August 8, 2008, between Cree, Inc.
and Steve Kelley
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99.1
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Press
Release, dated August 19, 2008
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CREE,
INC.
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By:
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/s/ Charles M. Swoboda | ||
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Charles
M. Swoboda
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Chairman,
Chief Executive Officer and
President
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|||
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Exhibit
No.
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Description of
Exhibit
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||
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10.1
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Offer
Letter Agreement, executed August 8, 2008, between Cree, Inc.
and Steve Kelley
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||
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99.1
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Press
Release, dated August 19, 2008
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