MASTER PERFORMANCE UNIT AWARD AGREEMENT TERMS AND CONDITIONS
Exhibit
10.3
TERMS
AND CONDITIONS
This
Master Performance Unit Award 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”).
This
Agreement states the terms and conditions that govern any performance units
(“Performance Units”) that the Company may from time to time grant you giving
you the right to receive shares (“Shares”) of the common stock of the Company
(“Common Stock”), cash or a combination of both. Grants of
Performance Units will be made under the Company’s 2004 Long-Term Incentive
Compensation Plan (the “Plan”). The performance period, the
performance criteria and the portion, if any, of the award to be settled
in
Shares of Common Stock applicable to each award of Performance Units will
be
stated in a Notice of Grant issued by the Company, which is incorporated
in this
Agreement by reference. A Notice of Grant, together with the terms
and conditions set forth in this Agreement and the Plan, constitute the entire
agreement between you and the Company with respect to the Performance Units
described in the Notice of Grant.
Unless
otherwise specified in a Notice of Grant or agreed to in writing by you and
the
Company, this Master Agreement will apply to all Performance Units granted
to
you on and after the effective date stated below. This Agreement is
subject to and will be construed in accordance with the Plan. As used
in this Agreement, “Company” includes Cree, Inc. and any entity that is part of
the “Company” as defined in the Plan. Unless otherwise defined in
this Agreement or the Notice of Grant, capitalized terms used in this Agreement
and defined in the Plan will have the same meaning as defined in the
Plan.
Please
indicate that you 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 Plan and Notices
of
Grant applicable to the Awards to which this Agreement applies. Upon
receipt of a signed copy of this Agreement at the Company's principal office,
this Agreement will be effective as of the first date on or after August
21,
2007 on which the Company grants you an Award.
| CREE, INC. | PARTICIPANT: | |||
| /s/ Xxxxxx X. Xxxxxx |
/s/
Xxxxxxx X. Xxxxxxx
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| Xxxxxx X. Xxxxxx | Xxxxxxx X. Xxxxxxx | |||
| Compensation Committee Chairman | ||||
Please
sign and return this Agreement to Xxxxxx Xxxxxxxxx,
the
Stock Plan Administrator in the Legal Department.
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Agreement Terms and Conditions
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2.
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Term
of Performance Units. Unless otherwise provided
in the Notice of Grant, Performance Units will expire at the close
of the
Performance Period specified in the Notice of Grant, or, if earlier,
upon
your Termination of Service.
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3.
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Settlement
of Performance Units. To the extent Performance Units
are settled in Shares, stock certificates evidencing the Shares
shall be
issued to you as soon as administratively practicable after the
close of
the Performance Period specified in the Notice of Grant, unless
otherwise
delayed pursuant to section 4 below. Your Shares will be
registered in your name (or evidenced by a book entry or similar
account)
unless you notify the Committee at least thirty (30) days prior
to a
vesting date that you desire to have your Shares registered jointly
in the
names of you and your spouse. You will receive a cash
distribution for the value of your Performance Units not settled
in
Shares.
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4.
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Responsibility
for Taxes.
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(a)
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Regardless
of any action the Company takes with respect to
Tax-Related Items, you acknowledge that the ultimate liability
for all
Tax-Related Items legally due by you is and remains your responsibility
and that the Company (1) make no representations or undertakings
regarding the treatment of any Tax-Related Items in connection
with any
aspect of Award grants, including the grant or settlement of any
Awards,
the subsequent sale of Shares acquired pursuant to Performance
Units
settled in Shares and the receipt of any dividends; and (2) does not
commit to structure the terms of the grant or any aspect of an
Award to
reduce or eliminate your liability for Tax-Related
Items.
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(b)
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Prior
to the settlement of Performance Units awarded under this Agreement,
you
agree to pay or make adequate arrangements satisfactory to the
Company to
satisfy all withholding and payment obligations of the Company
related to
the settlement of the Performance Units. If permissible under
local law, the Company shall satisfy this condition pursuant to
the
withholding of Shares consistent with the “Share Withholding” provisions
under section 13.2 of the Plan. The Company, in its discretion,
may authorize alternative arrangements, including, if permissible
under
local law, the Company’s selling or arranging to sell Shares that you
acquire under the Plan. In any event, to the extent this
condition is not otherwise satisfied, you authorize the Employer
to
withhold all applicable Tax-Related Items legally payable by you
from your
wages or other cash compensation paid to you by the
Employer.
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(c)
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You
agree to pay to the Company any amount of Tax-Related Items that
the
Company may be required to withhold as a result of your participation
in
the Plan that cannot be satisfied by the means previously
described.
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(d)
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The
Company may refuse to deliver Shares to you pursuant to the settlement
of
Performance Units under any Awards if you fail to comply with your
obligations in connection with the Tax-Related Items as described
in this
section.
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5.
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Transfer
of Performance Units. A
Performance Unit and any rights under any Performance Unit may
not be
assigned, pledged as collateral or otherwise transferred, except
as
permitted by the Plan, nor may they be subject to attachment, execution
or
other judicial process. In the event of any attempt to assign,
pledge or otherwise dispose of a Performance Unit or any rights
under a
Performance Unit, except as permitted by the Plan, or in the event
of the
levy of any attachment, execution or similar judicial process upon
the
rights or interests conferred by a Performance Unit, the Committee
may in
its discretion terminate a Performance Unit by notice to
you.
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6.
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Rights
Prior to Issuance of Shares. You will have no
rights as a shareholder with respect to any Shares, including,
but not
limited to, voting rights or rights to dividends or dividend equivalents,
until such Shares have been duly issued by the Company or its transfer
agent pursuant to the settlement of a Performance
Unit.
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7.
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Definitions. The
following definitions apply under this
Agreement:
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(a)
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“Tax-Related
Items” means any or all income tax, social insurance, payroll tax, payment
on account or other tax-related withholding that may be applicable
to
Awards under this Agreement by law or regulation of any governmental
authority, whether federal, state or local, domestic or
foreign.
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(b)
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“Termination
of Service” means the discontinuance of your relationship with an Employer
as an employee of the Employer or as a non-employee member of the
board of
directors of any entity constituting the Employer. Except as
determined otherwise by the Committee, you will not be deemed to
have
incurred a Termination of Service if the capacity in which you
provide
services to the Employer changes (for example, you change from
being a
non-employee director to being an employee) or if you transfer
among the
various entities constituting the Employer, so long as there is
no
interruption in your provision of services to the Employer as an
employee
or non-employee member of the Board. The Committee, in its
discretion, will determine whether you have incurred a Termination
of
Service. Except as may be provided in an agreement between you
and the Company, you will not be deemed to have incurred a Termination
of
Service during a period for which you are on military leave, sick
leave,
or other leave of absence approved by the
Employer.
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8.
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Provisions
of the Plan. The provisions of
the Plan are incorporated by reference in this Agreement 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 will 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.
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9.
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Section
409A. At all times, this Agreement and any
related Notice(s) of Grant shall be interpreted and operated so
that each
Performance Unit shall either be exempt from or comply with the
provisions
of section 409A of the Internal Revenue Code of 1986, as amended
(the
"Code") and the treasury regulations relating thereto so as not
to subject
you to the payment of interest and/or any tax penalty that may
be imposed
under section 409A of the Code with respect to the Performance
Unit. In all cases, the provisions of this paragraph shall
apply notwithstanding any contrary provision in this Agreement
or any
Notice of Grant.
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10.
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Data
Privacy. By signing this Agreement, you
explicitly and unambiguously consent to the collection, use and
transfer,
in electronic or other form, of your personal data as described
in this
Agreement by and among, as applicable, the Employer, and the Company
and
its subsidiaries and affiliates for the exclusive purpose of implementing,
administering and managing your participation in the
Plan.
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You
understand that the Employer holds certain personal information
about you,
including, but not limited to, your name, home address and telephone
number, date of birth, social insurance number or other identification
number, salary, nationality, job title, any shares of stock or
directorships held in the Company, details of all Awards or any
other
entitlement to Shares of stock awarded, canceled, exercised, vested,
unvested or outstanding in your favor, for the purpose of implementing,
administering and managing the Plan (“Data”). You understand
that Data may be transferred to any third parties assisting in
the
implementation, administration and management of the Plan, that
these
recipients may be located in you country or elsewhere, and that
the
recipient’s country may have different data privacy laws and protections
than your country. You understand that you may request a list
with the names and addresses of any potential recipients of the
Data by
contacting your local human resources representative. You
authorize the recipients to receive, possess, use, retain and transfer
the
Data, in electronic or other form, for the purposes of implementing,
administering and managing your participation in the Plan, including
any
requisite transfer of such Data as may be required to a broker
or other
third party with whom you may elect to deposit any Shares of stock
acquired pursuant to this Agreement. You understand that Data
will be held only as long as is necessary to implement, administer
and
manage your participation in the Plan. You understand that you
may, at any time, view Data, request additional information about
the
storage and processing of Data, require any necessary amendments
to Data
or refuse or withdraw the consents above, in any case without cost,
by
contacting in writing your local human resources
representative. You understand, however, that refusing or
withdrawing your consent may affect your ability to participate
in the
Plan. For more information on the consequences of your refusal
to consent or withdrawal of consent, you understand that you may
contact
your local human resources
representative.
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11.
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Electronic
Delivery. The Company may, in its sole
discretion, decide to deliver any documents related to the Performance
Units granted under this Agreement by electronic means or to request
your
consent to participate in the Plan by electronic means. By
signing this Agreement, you consent to receive such documents by
electronic delivery and, if requested, to agree to participate
in the Plan
through an on-line or electronic system established and maintained
by the
Company or another third party designated by
Company.
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12.
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General.
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(a)
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Nothing
in this Agreement will be construed as constituting a commitment,
agreement or understanding of any kind that the Employer will continue
your service relationship nor to limit or restrict either party’s right to
terminate the service relationship.
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(b)
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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.
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(c)
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Notices
under this Agreement must be in writing and delivered either by
hand or by
certified or registered 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 Employer’s
records.
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(d)
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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.
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(e)
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No
amendment or modification of this Agreement shall be valid unless
the same
is in writing and signed by you and by an authorized executive
officer of
Cree, Inc. 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
in
its place.
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(f)
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This
Agreement, the applicable Notice(s) of Grant and the Plan set forth
all of
the promises, agreements and understandings between you and Company
relating to each Award evidenced by this Agreement. This
Agreement supersedes any and all prior agreements or understandings,
whether oral or written, with respect to each Award evidenced by
this
Agreement unless otherwise specified in the Notice of
Grant.
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(g)
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Shares
issued upon settlement of Performance Units 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.
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(h)
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You
agree that each Performance Unit evidenced by this Agreement serves
as
additional, valuable consideration for your obligations, if any,
undertaken in any existing agreement between you and the Employer
regarding confidential information, noncompetition, nonsolicitation
or
similar covenants.
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(i)
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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 Securities and Exchange Commission and in the Company’s current
prospectus relating to the Plan: (i) you have not relied and will
not rely
upon the Committee, the Company, an Employer or any employee or
agent of
the Company or an Employer in determining whether to accept Performance
Units, or in connection with any disposition of Shares obtained
pursuant
to settlement of Performance Units, or with respect to any tax
consequences related to the grant of Performance Units or the disposition
of Shares obtained pursuant to settlement of Performance Units;
and (ii)
you will seek from your own professional advisors such investment,
tax and
other advice as you believe
necessary.
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(j)
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You
acknowledge that you may incur a substantial tax liability as a
result of
Performance Units. You assume full responsibility for all such
consequences and the filing of all tax returns and related elections
you
may be required or find desirable to file. If you are required
to make any valuation of Performance Units or Shares obtained pursuant
to
settlement of Performance Units under any federal, state or other
applicable tax law, and if the valuation affects any tax return
or
election of the Company or the Employer 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.
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13.
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Severability. The
provisions of this Agreement are severable and if any one of more
provisions are determined to be illegal or otherwise unenforceable,
in
whole or in part, the remaining provisions shall nevertheless be
binding
and enforceable.
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