UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 30, 2002
CREE, INC.
(Exact name of registrant as specified in its charter)
North Carolina 0-21154 56-1572719
(State or other jurisdiction (Commission File No.) I.R.S. Employer
of incorporation) Identification Number
4600 Silicon Drive, Durham, North Carolina 27703
(Address of principal executive offices)
(919) 313-5300
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On May 29, 2002, the Board of Directors of Cree, Inc., a North Carolina
corporation (the "Company"), declared a dividend distribution of one preferred
stock purchase right (a "Right") for each outstanding share of the Company's
common stock, $.00125 par value (the "Common Stock"), to shareholders of record
at the close of business on June 10, 2002 (the "Record Date"). Each Right
entitles the registered holder to purchase from the Company one one-thousandth
(1/1,000) of a share (a "Preferred Stock Fraction") of the Company's Series A
Preferred Stock, $.01 par value (the "Preferred Stock"), at a price of One
Hundred Ten Dollars ($110.00) (the "Purchase Price"), subject to adjustment in
certain circumstances. The description and terms of the Rights are set forth in
a Rights Agreement dated May 30, 2002 between the Company and American Stock
Transfer & Trust Company, as Rights Agent (as it may be amended, modified or
supplemented from time to time, the "Rights Agreement").
Initially, the Common Stock certificates representing the outstanding shares
shall be deemed to be certificates for Rights, and no separate Rights
Certificates will be distributed. Subject to certain exceptions specified in the
Rights Agreement, the Rights will separate from the Common Stock and a
"Distribution Date" will occur upon the earlier of (i) 10 business days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the right
to acquire, beneficial ownership of fifteen percent (15%) or more of the
outstanding shares of Common Stock (the date of such announcement being the
"Stock Acquisition Date"), or (ii) 10 business days (or such later date as the
Company's Board of Directors shall determine) following the commencement of a
tender offer or exchange offer that would result in a person or group becoming
an Acquiring Person.
Until the Distribution Date, (i) the Rights will be evidenced by the Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after the Record Date
will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
As soon as practicable after the Distribution Date, Rights Certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate Rights Certificates alone
will represent the Rights. Except as otherwise determined by the Board of
Directors, and except in connection with the exercise of stock options and any
other issuances of Common Stock with respect to awards under employee benefit
plans, only shares of Common Stock issued prior to the Distribution Date will be
issued with Rights.
The Rights are not exercisable until the Distribution Date and will expire at
the close of business on June 10, 2012, North Carolina time, unless extended
prior to such time by the Board of Directors, or earlier if redeemed by the
Company as described below.
Except in the circumstances described below, after the Distribution Date each
Right will be exercisable for a Preferred Stock Fraction. Each Preferred Stock
Fraction carries voting and dividend rights that are intended to produce the
equivalent of one share of Common Stock. The voting and dividend rights of the
Preferred Stock are subject to adjustment in the event of dividends,
subdivisions and combinations with respect to the Common Stock of the Company.
In lieu of issuing certificates for fractions of shares of Preferred Stock
(other than fractions which are integral multiples of Preferred Stock
Fractions), the Company may pay cash in accordance with the Rights Agreement.
In the event that any person becomes an Acquiring Person, except pursuant to an
offer for all outstanding shares of Common Stock which the independent
directors, who are not associated with an Acquiring Person, determine to be fair
and adequate to shareholders and to be otherwise in the best
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interests of the Company and its shareholders (a "Qualified Offer"), each holder
of a Right will thereafter have the right to receive, upon exercise, Common
Stock (or, in certain circumstances, cash, property or other securities of the
Company) having a value equal to two times the exercise price of the Right. In
any event, following the occurrence of the events described in this paragraph,
any Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and
void.
In the event that, at any time following the Stock Acquisition Date, (i) the
Company engages in a merger or other business combination transaction in which
the Company is not the surviving corporation, (ii) the Company engages in a
merger or other business combination transaction with another person in which
the Company is the surviving corporation, but its Common Stock is changed or
exchanged, or (iii) 50% or more of the Company's assets, earning power or cash
flow is sold or transferred (except with respect to clauses (i) and (ii), a
merger or other business combination which follows a Qualified Offer and in
which the amount and form of consideration is the same as was paid in such
offer), each holder of a Right (except Rights which previously have been voided
as set forth above) shall thereafter have the right to receive, upon exercise,
common stock of the acquiring company having a value equal to two times the
exercise price of the Right.
The Purchase Price payable, and the number of Preferred Stock Fractions or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on the Preferred Stock or other capital stock, or a subdivision,
combination or reclassification of the Preferred Stock, (ii) if the holders of
the Preferred Stock are granted certain rights or warrants to subscribe for
Preferred Stock or securities convertible into Preferred Stock at less than the
current market price of the Preferred Stock, or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets (excluding
regular quarterly cash dividends or dividends payable in Preferred Stock) or of
subscription rights or warrants (other than those referred to above).
At any time after a person or group of affiliated or associated persons becomes
an Acquiring Person and prior to the acquisition by such person or group of 50%
or more of the outstanding Common Stock, the Board of Directors may exchange the
Rights (other than Rights owned by such person or its affiliates and associates,
which have become void), in whole or in part, at an exchange ratio of one share
of Common Stock, or one one-thousandth of a share of Preferred Stock (or of a
share of a series of the Company's preferred stock having equivalent
preferences, limitations and relative rights), per Right (subject to
adjustment).
In general, at any time until the later of the Distribution Date and the Stock
Acquisition Date, the Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to redeem the
Rights will require the concurrence of a majority of the Continuing Directors
(as defined below). Immediately upon the action of the Board of Directors of the
Company ordering redemption of the Rights (with, where required, the concurrence
of the Continuing Directors), the Rights will terminate and the only right of
the holders of Rights will be to receive the $.001 redemption price.
The term "Continuing Director", as that term is defined in the Rights Agreement,
means any member of the Board of Directors of the Company who was a member of
the Board of Directors prior to the date of the Rights Agreement, and any person
who is subsequently elected to the Board if such person is recommended or
approved by a majority of the Continuing Directors, but shall not include an
Acquiring Person or an affiliate or associate of an Acquiring Person, or any
representative of any of such entities.
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Until a Right is exercised, the holder thereof, as such, will have no rights as
a shareholder of the Company, including, without limitation, the right to vote
or to receive dividends. While the distribution of the Rights is not includable
in a shareholder's taxable income for federal income tax purposes under U.S.
law, shareholders may, depending upon the circumstances, recognize taxable
income in the event that the Rights become exercisable for Common Stock (or
other consideration) of the Company, or for common stock of the acquiring
company or in the event of the redemption of the Rights as set forth above.
Prior to the Distribution Date, any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company. After the Distribution
Date, the provisions of the Rights Agreement may be amended by the Board (in
certain circumstances, with the concurrence of the Continuing Directors) in
order to cure any ambiguity, to correct or supplement any defective or
inconsistent provision, to make changes which do not adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring Person
or affiliate or associate of such Acquiring Person), or to shorten or lengthen
any time period under the Rights Agreement; provided that no amendment may be
made at such time as the Rights are not redeemable.
A copy of the Rights Agreement, which includes as Exhibits the Articles of
Amendment of Articles of Incorporation of the Company (setting forth the terms
of the Preferred Stock), the form of Rights Certificate, and the form of Summary
of Rights to Purchase Preferred Stock, has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
4.01(1) Rights Agreement dated as of May 30, 2002
between Cree, Inc. and American Stock Transfer
& Trust Company, including the form of Articles
of Amendment of Articles of Incorporation of
the Company, the form of Rights Certificate and
the Summary of Rights to Purchase Preferred
Stock, attached thereto as Exhibits A, B and C,
respectively.
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(1) Exhibit to the Company's Registration Statement on Form 8-A
filed with the Securities and Exchange Commission on May 30,
2002 and incorporated herein by reference.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CREE, INC.
By: /s/ Charles M. Swoboda
-----------------------------------
Dated: May 30, 2002 Charles M. Swoboda
Chief Executive Officer and President
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
4.01(1) Rights Agreement dated as of May 30, 2002 between Cree, Inc. and
American Stock Transfer & Trust Company, including the form of
Articles of Amendment of Articles of Incorporation of the Company,
the form of Rights Certificate and the Summary of Rights to
Purchase Preferred Stock, attached thereto as Exhibits A, B and C,
respectively.
- ------------------
(1) Exhibit to the Company's Registration Statement on Form 8-A filed with
the Securities and Exchange Commission on May 30, 2002 and incorporated
herein by reference.
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