On February 11, 2021, Cree, Inc. (the “Company”) filed with the Securities and Exchange Commission (the “SEC”) a shelf registration statement (File No. 333-253001) (the “Shelf Registration Statement”), which became immediately effective upon filing.
On February 11, 2021, the Company also filed with the SEC a prospectus supplement dated February 11, 2021 (the “Prospectus Supplement”), pursuant to Rule 424(b) under the Securities Act of 1933, as amended, pursuant to which the Company may sell up to an aggregate of $500,000,000 of the Company’s common stock, par value $0.00125 per share (the “Shares”), from time to time in “at the market” offerings (the “Offering”). The Company may sell the Shares in amounts and at times to be determined by the Company from time to time, but has no obligation to sell any of the Shares in the Offering. Actual sales will depend on a variety of factors to be determined by the Company from time to time, including (among others) market conditions, the trading price of the Company’s common stock, capital needs and determinations by the Company of the appropriate sources of funding for the Company.
The Offering will occur pursuant to an equity distribution agreement (the “Agreement”) entered into by the Company and Wells Fargo Securities, LLC, BMO Capital Markets Corp., BofA Securities Inc., Canaccord Genuity LLC, Citigroup Global Markets Inc., Credit Suisse Securities (USA) LLC, Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC and Truist Securities, Inc., as agents and/or principals, for the offer and sale of the Shares (each, individually, a “Manager,” and collectively, the “Managers”). The Company intends to use the net proceeds from the Offering for general corporate purposes.
None of the Managers is required to sell any specific number or dollar amount of Shares, but each has agreed to use its commercially reasonable efforts to sell, on the terms and subject to the conditions of the Agreement, Shares on terms agreed upon by us and such Manager from time to time.
Sales of the Shares, if any, under the Agreement may be made (1) in “at the market” offerings (as defined in Rule 415 under the Securities Act of 1933, as amended) by means of ordinary brokers’ transactions at market prices prevailing at the time of sale, including sales made on the Nasdaq Stock Market LLC, sales made to or through market makers and sales made through other securities exchange or electronic communications networks, and (2) in such privately negotiated transactions, which may include block trades, as the Company and any Manager may agree. The Offering will terminate upon the earlier of (1) the sale of Shares having an aggregate gross sales price of $500,000,000 pursuant to the Agreement and (2) the termination of the Agreement by the Company or by the parties thereto by mutual agreement. Any Manager may also terminate the Agreement but only with respect to itself.
The Agreement provides that a Manager will be entitled to a commission equal to (except as provided below) 2.0% of the gross sales price per share of any of the Shares sold through it as Manager. Under the terms of the Agreement, the Company may also sell Shares to each of the Managers, as principal, at a price agreed upon at the time of sale. If the Company sells Shares to any Manager as principal, it will enter into a separate terms agreement with the Manager, setting forth the terms of such transaction. In any such sale to a Manager as principal, the Company may agree to pay the applicable Manager a commission or discount that may exceed 2.0% of the gross sales price per share of common stock sold to such Manager, as principal.
