FORM 8-K MARCH 12 2007
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act of
1934
CREE,
INC.
(Exact
name of registrant as specified in its charter)
|
North
Carolina
|
0-21154
|
56-1572719
|
|
(State
or other jurisdiction of
incorporation)
|
(Commission
File
Number)
|
(I.R.S.
Employer
Identification
Number)
|
|
4600
Silicon Drive
|
|
|
Durham,
North Carolina
|
27703
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
(919)
313-5300
Registrant’s
telephone number, including area code
N/A
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
] Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
[
] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
|
Item
1.01
|
Entry
into a Material Definitive
Agreement
|
On
March
11, 2007, Cree, Inc., a North Carolina corporation (the “Company”) and COTCO
Holdings Limited, a Hong Kong company (“Holdings”), entered into a Share
Purchase Agreement (the “Purchase Agreement”), pursuant to which the Company
will acquire all of the outstanding share capital of COTCO Luminant Device
Ltd.,
a Hong Kong company and a wholly-owned subsidiary of Holdings (“COTCO”), in
exchange for consideration consisting of 7,604,785 shares of the Company’s
common stock and $70 million cash. The cash portion of the purchase price
will
be subject to a working capital adjustment after closing of the transaction.
Additional consideration of up to $125 million may be payable to Holdings
or its
designees in the event COTCO achieves specific EBITDA targets over the Company’s
next two fiscal years. The Company may elect to pay the additional
consideration, if any, in cash, shares of the Company’s common stock or a
combination of cash and stock, so long as the total number of shares of the
Company’s stock issued to Holdings relating to the transaction is less than
9.99% of the Company’s then outstanding common stock (taking into account the
issuance).
The
Purchase Agreement contains customary representations, warranties and covenants
by the parties. In addition, the Company covenants to file an application with
the North Carolina Secretary of State requesting a hearing upon the terms and
conditions of the Company’s proposed issuance of shares in the transaction, to
be held as soon as practicable after such filing, in order to cause the issuance
and delivery of such shares to be exempt from registration under applicable
securities laws. The Purchase Agreement provides for the shares to be issued
in
a private placement if the North Carolina Secretary of State has not issued
an
order approving the transaction (the “North Carolina Permit”) within a specified
period. Holdings covenants to provide certain financial statements for COTCO
to
the Company, including a reconciliation of certain financial statements to
United States generally accepted accounting principles (at the Company’s
expense), and not to engage in a business competing with COTCO’s business for
three years following closing.
The
obligations of the Company and Holdings to close the transaction are subject
to
customary conditions. The Company’s obligations to close the transaction are
subject to additional conditions relating to completion of certain restructuring
transactions relating to COTCO and its subsidiaries, the employment of certain
COTCO employees, receipt of evidence that COTCO and its subsidiaries have repaid
specified indebtedness and COTCO’s entry into certain agreements supporting its
business (relating to services previously provided under contracts with
Holdings).
The
Company and Holdings have agreed to indemnify each other for breaches of or
inaccuracies in representations and warranties made in the Purchase Agreement,
generally subject to a cap of $50 million. At closing, Holdings will deliver
certificates for shares of the Company’s common stock valued at $20 million into
an escrow for 18 months to be held as a source of recovery in the event the
Company must seek indemnity from Holdings.
Closing
of the transactions contemplated by the Purchase Agreement is targeted for
late
March or April 2007. Either party may terminate the Purchase Agreement if the
closing has not occurred by August 31, 2007.
At
closing, the parties intend to enter into various other agreements, including
with respect to certain services that Holdings and COTCO will provide to each
other for a transition period following closing and a long-term supply agreement
by which a subsidiary of Holdings will purchase a quarterly volume of LED lamp
products, consistent with historical purchases, from COTCO on competitive
terms.
In
connection with the Purchase Agreement, on March 11, 2007 the Company and
Holdings also entered into a Shareholders’ and Registration Rights Agreement
(the “Shareholders’ Agreement”), under which Holdings agreed that it will not
transfer any of the shares of the Company’s common stock it receives at the
closing of the transaction until one year after the closing date, at which
time
Holdings may transfer up to 50% of the shares. The contractual restrictions
on
the remaining shares issued at closing will lapse on the second anniversary
of
the closing. Under the Shareholders’ Agreement, the Company also agrees to grant
certain registration rights to Holdings relating to the shares of Company’s
common stock issued in the transaction if the North Carolina Permit is not
obtained.
This
report contains forward-looking statements involving risks and uncertainties,
both known and unknown, that may cause actual results to differ materially
from
those indicated. Actual results may differ materially due to a number of
factors, such as the ability of the parties to satisfy conditions to closing
the
transaction; the possibility that the transaction will not close; the ability
of
COTCO to achieve the targets necessary to trigger payment of the additional
consideration; and other factors discussed in the Company’s filings with the
Securities and Exchange Commission, including its report on Form 10-K for the
year ended June 25, 2006, and subsequent filings. Any forward-looking statements
included in this report are as of the date made and the Company does not intend
to update them if its views later change. These forward-looking statements
should not be relied upon as representing the Company’s views as of any date
subsequent to the date of this report.
On
March
12, 2007, the Company issued a press release announcing the execution of the
Purchase Agreement. A copy of the press release is attached to this report
as
Exhibit 99.1
|
Item
9.01
|
Financial
Statements and Exhibits
|
(c)
Exhibits
| |
Exhibit
No.
|
|
Description
of Exhibit
|
| |
|
|
|
| |
99.1
|
|
Press
release dated March 12, 2007
|
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/
John T. Kurtzweil
|
| |
|
John
T. Kurtzweil
|
| |
|
Executive
Vice President –
Finance
and
Chief Financial Officer
|
Date:
March 12, 2007
EXHIBIT
INDEX
| |
Exhibit
No.
|
|
Description
of Exhibit
|
| |
|
|
|
| |
99.1
|
|
Press
release dated March 12, 2007
|