Exhibit 10.1
FORM OF MASTER STOCK OPTION AWARD AGREEMENT
TERMS AND CONDITIONS
(For Grants of Nonqualified Stock Options to Non-Employee Directors)
This Master Stock Option Agreement (this "Master Agreement" or "Agreement") is
entered into between you (the "Participant" named below) and Cree, Inc., a
corporation formed under the laws of the State of North Carolina (the
"Company"). As used in this Agreement, "Company" includes Cree, Inc. and any
entity that is part of the "Company", as defined in the applicable Plan.
This Agreement states the terms and conditions that govern nonqualified stock
options (each an "Option") the Company may from time to time award granting you
the right to purchase shares (the "Shares") of the Common Stock of Cree, Inc.
(the "Common Stock"). The Options may include awards under the Company's Equity
Compensation Plan or any other plan previously or hereafter adopted by the
Company's Board of Directors (a "Plan" or "Plans," as applicable). The number of
Shares, vesting schedule, per share purchase price and other provisions
applicable to each Option will be stated in a Notice of Grant issued by the
Company for each Option, and each such Notice of Grant is incorporated herein by
reference. The Notice of Grant, together with the terms and conditions set forth
in this Agreement and the applicable Plan, constitute the entire agreement
between you and the Company with respect to the Option described in the Notice
of Grant.
Unless otherwise specified in the Notice of Grant or agreed to in writing by you
and the Company, this Master Agreement will apply to all Options granted to you
on and after the effective date stated below that are nonqualified stock
options. This Agreement is subject to and shall be construed in accordance with
the applicable Plan. As used in this Agreement, "Termination of Service" shall
mean the cessation of Participant's services as a member of the Board of
Directors of the Company, whether due to resignation, death, failure to be
re-elected or re-appointed or any other reason. Unless otherwise defined in this
Agreement or the Notice of Grant, capitalized terms used in this Agreement and
defined in the Plan shall have the same meaning as defined in the Plan.
Please indicate that your have read and agree to the terms and conditions of
this Agreement by signing below and returning the signed copy to the Company at
its principal offices in Durham, North Carolina. By your signature below, you
agree to be bound by the provisions of this Agreement and the Plans and Notices
of Grant applicable to the Options to which this Agreement applies. Upon receipt
of a signed copy of this Agreement at the Company's principal office, this
Agreement shall be effective as of the first date on which the Company grants
you an Option.
CREE, INC. PARTICIPANT:
By:
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[Name & Title] [Name]
To be Completed by Company:
Date of First Option Grant (Agreement Effective Date):
1. Grants of Options. Subject to the terms and conditions contained herein and
in the applicable Notice of Grant and Plan, the Company may, from time to
time in its discretion, grant you Options to purchase shares of Common
Stock.
2. Term of Options. Unless sooner terminated in accordance with the Plan or
this Agreement or as otherwise provided in the Notice of Grant, each Option
will expire and cease to be exercisable upon the first to occur of the
following:
(a) the expiration of ninety (90) calendar days following your Termination
of Service, except where the termination results from your death or
Disability or where your death occurs following the termination but
while the Option is otherwise still exercisable;
(b) the expiration of one (1) year following your Termination of Service
if the termination results from your death,
(c) the expiration of one (1) year following your Termination of Service
if the termination results from your Disability, except where your
death occurs after the termination but while the Option is otherwise
still exercisable;
(d) the expiration of one (1) year following your death if your death
occurs after your Termination of Service but while the Option is
otherwise still exercisable; or
(e) the seventh (7th) anniversary of the Grant Date of the Option, at
11:59 P.M., local time, Durham, North Carolina.
Upon expiration or termination of an Option, the Option will have no
further effect and cannot thereafter be exercised to purchase any Shares.
3. Accelerated Vesting. Each Option will become fully vested and exercisable
to purchase all Shares subject to the Option, to the extent not already
vested and exercisable, upon your death or at such time as the Company
determines you have become Disabled within the meaning of the applicable
Plan, provided you hold the office of Director of the Company at the time
of your death or when you became Disabled.
4. Exercise of Option. To exercise an Option, you must complete, execute and
deliver to the Company of a notice of exercise in the form supplied by the
Company and pay to the Company the purchase price for the number of Shares
specified in the notice together with all taxes or other amounts the
Company is required to withhold or collect pursuant to this Agreement.
Exercise of the Option will be effective only when the notice and required
payments are actually received by the Company. If the exercise is
facilitated through a "broker-assisted exercise" or "cashless exercise"
transaction by a brokerage firm you have designated, you agree that the
brokerage firm is acting as your agent in the transaction and that the
Company may rely upon notices, instructions and information given by such
firm in connection with the exercise, as if the same were given by you. The
Company will deliver a certificate or certificates for the purchased Shares
to you, or to such other person as you designate in writing, or make the
Shares available for electronic delivery in the U.S. to an account you
designate in writing, within three (3) business days after the Company
receives the notice of exercise and required payments.
5. Withholding Taxes. The Company's obligation to issue Shares upon exercise
of an Option is subject to the condition that you pay to the Company, in
addition to the purchase price of the Shares purchased, all taxes and any
other amounts the Company is required by law or regulation of any
governmental authority, whether federal, state or local, domestic or
foreign, to withhold or collect in connection with the Option exercise, if
any, as determined by the Committee.
6. Transfer of Option. Neither an Option nor any rights under an Option may be
assigned, pledged as collateral or otherwise transferred, except as
permitted by the applicable Plan, nor is any Option or such rights subject
to attachment, execution or other judicial process. In the event of any
attempt to assign, pledge or otherwise dispose of an Option or any right
under an Option, except as permitted by the applicable Plan, or in the
event of the levy of any attachment, execution or similar judicial process
upon the rights or interests conferred by an Option, the Committee may in
its discretion terminate an Option by notice to you.
7. Rights Prior to Exercise. You will have no rights as a shareholder with
respect to any Shares until such Shares have been duly issued by the
Company or its transfer agent pursuant to exercise of an Option.
8. Provisions of the Plan. The provisions of the applicable Plan are
incorporated by reference herein 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 shall
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.
9. Cancellation and Rescission. The Committee may cancel, terminate, rescind,
suspend, withhold or otherwise limit or restrict exercise of the
unexercised portion of an Option if you engage in any "Detrimental
Activity" as defined below or otherwise violate any applicable provision of
this Agreement or the Plan. Upon each exercise of an Option, you must
certify in a manner acceptable to the Company that you are in compliance
with all applicable provisions of this Agreement and the Plan, including
the provisions of this section regarding Detrimental Activity. If you
engage in any Detrimental Activity prior to or within one (1) year after
any exercise of an Option, the exercise may be rescinded pursuant to this
section within two (2) years after such exercise. In the event of such
rescission, you will be obligated to pay to the Company the amount of any
gain realized as a result of the rescinded exercise, in such manner and on
such terms and conditions as the Company may require, and the Company will
be entitled to set-off against the amount of any such gain any amount the
Company owes to you. For purposes of this section, "Detrimental Activity"
means:
(a) the rendering of services for any organization or engaging directly or
indirectly in any business which is or becomes competitive with the
Company, or which organization or business, or the rendering of
services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the Company,
provided that such organization or business is engaged in the
development, manufacture, marketing, distribution or sale of, or
research directed to: (i) silicon carbide or AIII nitride materials
for electronic applications, or for any other applications for which
the Company is selling such materials at such time; (ii) devices
fabricated on or from silicon carbide or AIII nitride materials; or
(iii) Si LDMOS power devices, 10 ▇▇▇▇▇ and above, for RF applications;
(b) the disclosure to anyone outside the Company, or the use in other than
the Company's business, without prior written authorization from the
Company, of any confidential information or material relating to the
business of the Company, acquired by you either during or after
service to the Company;
(c) any attempt to induce any employee of the Company to leave employment
with the Company to perform services elsewhere or any attempt to
solicit the trade or business of any current or prospective customer,
supplier or partner of the Company;
(d) any breach by you of any confidentiality, noncompetition,
nonsolicitation or nondisparagement obligations undertaken by you in
any written agreement between you and the Company; or
(e) any act of fraud, misappropriation, embezzlement, or tortious or
criminal behavior that adversely impacts the Company.
10. General.
(a) 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.
(b) Notices under this Agreement must be in writing and sent either by
hand delivery or by certified 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
Company's records.
(c) This Agreement is governed by and construed in accordance with the
laws of the State of North Carolina, without reference under conflicts
of laws principles.
(d) No amendment or modification of this Agreement shall be valid unless
the same is in writing and signed by you and by an authorized officer
of Cree, Inc. The provisions of this Agreement are severable. 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 therefor.
(e) This Agreement and the applicable Notice of Grant and Plan set forth
all of the promises, agreements and understandings between you and
Company relating to each Option evidenced by this Agreement. This
Agreement supersedes any and all prior agreements or understandings,
whether oral or written, with respect to each Option evidenced by this
Agreement unless otherwise specified in the Notice of Grant.
(f) Shares issued upon exercise of an Option 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.
(g) You agree that each Option evidenced by this Agreement serves as
additional, valuable consideration for your obligations, if any,
undertaken in any existing agreement between you and the Company
regarding confidential information, noncompetition, nonsolicitation or
similar covenants.
(h) 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 U.S. Securities and Exchange Commission and in the
Company's current prospectus relating to the applicable Plan: (i) you
have not relied and will not rely upon the Committee, the Company, or
any employee or agent of the Company in determining whether to accept
or exercise an Option, or in connection with any disposition of Shares
purchased upon exercise of an Option, or with respect to any tax
consequences related to the grant or exercise of an Option or the
disposition of Shares purchased pursuant to exercise of an Option; and
(ii) you will seek from your own professional advisors such
investment, tax and other advice as you believe necessary.
(i) You acknowledge that you may incur a substantial tax liability as a
result of exercise of an Option. You assume full responsibility for
all such consequences and the filing of all tax returns and elections
you may be required or find desirable to file in connection therewith.
If you are required to make any valuation of an Option or Shares
purchased pursuant to exercise of the Option under any federal, state
or other applicable tax law, and if the valuation affects any tax
return or election of the Company or 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.
FORM OF NOTICE OF GRANT - NON-EMPLOYEE DIRECTOR
[CREE LOGO] NOTICE OF GRANT
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Company: Participant:
Cree, Inc. Option Number:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇: Equity Compensation Plan
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Option Type:
Tax I.D. ▇▇-▇▇▇▇▇▇▇ Grant Date:
Number Shares:
Exercise Price:
Vesting Schedule:
Expiration Date:
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Dear [name]:
I am pleased to inform you that you have been awarded an option to purchase
[number of shares] shares of the common stock of Cree, Inc., at a purchase price
of $[price] per share, effective as of [grant date], the Grant Date of the
award. Please note that the option is subject to and governed by the Cree, Inc.
Equity Compensation Plan (the "Plan") and the terms of the applicable Master
Stock Option Agreement between you and Cree, Inc.
You may exercise the option to purchase up to the number of Shares for which it
has vested unless the option has earlier terminated or expired. Upon your
Termination of Service or employment, the option will be forfeited as to all
Shares not then vested. Provided that you are serving as a member of the Board
of Directors of Cree, Inc., or as an employee of the Company (as defined in the
Plan, which includes being employed by a wholly-owned subsidiary of Cree, Inc.),
on the indicated vesting date, the option will vest and may thereafter be
exercised to purchase Shares as set forth below, except that all options not
then vested shall vest and may thereafter be exercised on the date of the [year]
Annual Meeting of Shareholders of Cree, Inc.:
[number of shares] Shares on [vest date];
[number of shares] additional Shares on [vest date];
[number of shares] additional Shares on [vest date]; and
[number of shares] additional Shares on [vest date].
Notwithstanding the foregoing, the Option shall become fully vested and
exercisable, to the extent not already fully vested and exercisable, immediately
prior to any Change in Control (as defined in the Plan), provided you are
serving as a member of the Board of Directors of Cree, Inc. on the date of the
Change in Control, except that the Option shall not become exercisable if and to
the extent it is cashed out upon the Change in Control pursuant to the terms of
the Plan.
Date:
For CREE, INC. Accepted and agreed to:
By:
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[Name & Title] [Name]