REVISED REOFFER PROSPECTUS DATED OCTOBER 31, 1997
A registration statement relating to these securities has been filed
with the Securities and Exchange Commission (the "Commission"). This Revised
Reoffer Prospectus ("Prospectus") shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such state.
CREE RESEARCH, INC.
This Prospectus relates to an aggregate total of 633,172 shares of
common stock, par value $0.005 per share (the "Common Stock"), of Cree Research,
Inc. (the "Company"), of which (i) 614,172 shares are issuable upon exercise of
outstanding options ("Outstanding Options") granted pursuant to the Cree
Research, Inc. Amended and Restated Equity Compensation Plan (the "Plan"), and
(ii) 19,000 shares (the "Outstanding Shares") have been issued prior to the date
of this Prospectus upon the exercise of stock options granted pursuant to the
Plan. The securities offered hereby are to be offered on account of those
security holders of the Company (the "Selling Shareholders") who are identified
as such herein. See "Selling Shareholders". The shares issued or issuable upon
the exercise of options pursuant to the Plan ("Plan Shares") may be sold
pursuant to a registration statement or an exemption from registration,
including Rule 144 promulgated under the Securities Act of 1933, as amended (the
"Securities Act"). See "Plan of Distribution". The Company will not receive any
part of the proceeds from the sale of the Plan Shares by the Selling
Shareholders but will receive payment from the Selling Shareholders upon
issuance of the Plan Shares.
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE CONSIDERED
ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. SEE
"RISK FACTORS".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION.
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<PAGE>
(Inside front cover page of Prospectus)
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Commission.
Reports, proxy statements, information statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at its Regional Offices located at Suite 1300, 7
World Trade Center, New York, New York 10048, and the Citicorp Center, Suite
1400, 500 West Madison, Chicago, Illinois 60661-2511. Copies of such material
can be obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 upon request and payment
of the prescribed fee. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission and the address of this
Web site is http://www.sec.gov.
The Company's Common Stock is quoted in The Nasdaq National Market,
Inc. and reports, proxy and information statements and other information filed
by the Company can be inspected at such exchange.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement under the Securities Act with respect to the registration
of the securities offered hereby. This Prospectus omits certain of the
information contained in the Registration Statement, of which this Prospectus is
a part. Statements contained herein concerning the provisions of any documents
are not necessarily complete and, in each instance, reference is made to the
copy of such document filed as an exhibit to the Registration Statement. Each
such statement is qualified in its entirety by such reference. Items of
information omitted from this Prospectus but contained in the Registration
Statement may be obtained from the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, upon request and payment of the prescribed
fee.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents, each of which was previously filed by the
Company with the Commission pursuant to Section 13 of the Exchange Act, are
incorporated herein by reference:
a. The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997;
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<PAGE>
b. All other reports filed by the Company pursuant to Section
13(a) or 15(d) of the Exchange Act since the end of the fiscal
year ended June 30, 1997; and
c. The description of the Common Stock contained under the
caption "Description of Registrant's Securities to be
Registered" in the Company's registration statement on Form
8-A filed pursuant to Section 12(g) of the Exchange Act.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering made hereby shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein or in any
accompanying Prospectus Supplement modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered upon written or oral
request of each such person, a copy of any documents incorporated herein by
reference, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into the documents that this Prospectus
incorporates. Requests for such copies should be directed to Cree Research,
Inc., Attention: Secretary, 2810 Meridian Parkway, Suite 144, Durham, North
Carolina 27713, (919) 361-5709.
RISK FACTORS
Cautionary Statements Identifying Important Factors That Could Cause
the Company's Actual Results to Differ From Those Projected in Forward
Looking Statements.
In connection with the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, readers of this Prospectus are advised
that the Prospectus contains both statements of historical facts and forward
looking statements. Forward looking statements are subject to various risks and
uncertainty, which could cause actual results to differ materially from those
indicated by the statements. Examples of forward looking statements include but
are not limited to (i) projections of revenues, income or loss, earnings per
share, capital expenditures, capital structure and other financial items, (ii)
statements of the plans and objectives of the Company or its management or Board
of Directors, including the introduction of new products or methodology or
predictions of actions by customers, suppliers, or
<PAGE>
competitors, (iii) statements of future economic performance, and (iv)
statements of assumptions underlying other statements and statements about the
Company and its business.
This Prospectus also identifies important factors which could cause
actual results to differ materially from those indicated by the forward looking
statements. These risks and uncertainties include the Company's ability to
increase yield and to reduce product unit costs, price competition, other
actions of competitors, infringement of intellectual property rights of the
Company or others, the effects of government regulation, both foreign and
domestic, availability of U.S. government funding for research contracts,
possible delays in the introduction of new products, customer acceptance of
products or services and other factors. Other risks are discussed below.
The cautionary statements made pursuant to the Private Securities
Litigation Reform Act of 1995 above and elsewhere by the Company should not be
construed as exhaustive or as any admission regarding the adequacy of
disclosures made by the Company prior to the effective date of such Act. Forward
looking statements are beyond the ability of the Company to control and in many
cases the Company cannot predict what factors would cause actual results to
differ materially from those indicated by the forward looking statements.
An investment in the Common Stock is speculative and involves
a high degree of risk. Investors should carefully consider the
following factors, among others, before investing in the Common Stock:
Limited Relevant Operating History; Operating Losses. From its
inception in July 1987 until July 1990, the Company was a "development stage
company" as defined by generally accepted accounting principles. The Company
released its first commercial product in October 1989. The Company's prospects
must be considered in light of the risks, expenses, and difficulties frequently
encountered in establishing a new business in a highly competitive industry
characterized by rapid technological development, and the Company has a
relatively limited relevant operating history upon which an evaluation of such
prospects may be made. The Company has incurred a net loss in each fiscal year
through June 30, 1996, except for the fiscal year ended June 30, 1993. The
Company recorded net income of $3.5 million for the fiscal year ended June 30,
1997. At June 30, 1997, the Company had an accumulated deficit of approximately
$1.2 million. There can be no assurance that the Company will be able to
generate increased revenues or achieve sustained profitable operations.
Limited Product Sales; Uncertainty of Market Acceptance. Since the
Company's inception, the Company has derived a significant portion of its
revenue from U.S. Government funded research contracts. Over the same period,
the Company estimates that a substantial part of its product sales have been
made to customers for research purposes. A number of customers are still
evaluating the long term usefulness of the blue light emitting diode ("LED"),
and on-going sales of significant volumes of products cannot be assured. There
can
<PAGE>
also be no assurance that competitors will not introduce products that are
competitive with or superior to the Company's blue LED.
Dependence on Few Customers. The Company relies on a small number of
customers for the majority of its sales. At present, most of Cree's sales of the
DH-85 blue LED chip are to Siemens AG pursuant to the parties' Purchase
Agreement dated September 6, 1996, as amended April 22, 1997. This agreement
calls for shipments through December 1997, subject to certain cancellation
provisions. The cancellation of the current contract, or the failure to renew
this agreement, could have a material adverse effect on the business and
prospects of the Company. Dependence on one or a few customers may require the
Company to agree to unfavorable contract terms and conditions that could cause
contracts to be unprofitable. Likewise, a failure of the Company to diversify
its customer base could limit the prospects for the blue LED business.
Dependence on Foreign Customers. The Company has, and is expected to
continue to have, a substantial percentage of its sales to foreign companies,
primarily in Japan, Korea, Taiwan, China and Europe. There can be no assurance
that the Company's current intellectual property position will be enforceable in
foreign countries to the extent it is enforceable in the United States In
addition, the Company's international sales may be subject to government
controls and other risks, including export licenses, federal restrictions on the
export of technology, changes in demand resulting from currency fluctuations,
political instability, trade restrictions, changes in tariffs, and collecting
accounts receivable.
Manufacturing Complexity. The manufacture of silicon carbide ("SiC")
wafers and devices is highly complex and sensitive to a wide variety of factors,
including the level of contaminants in the manufacturing environment, impurities
in the materials used, and the performance of personnel and equipment. The
Company periodically has experienced lower than anticipated production yields.
Production yield problems in the future could have an adverse effect on the
Company's operations. The Company manufactures several key components used in
its crystal growth and epitaxial deposition processes and also depends,
substantially, on its custom-manufactured processing equipment and systems.
Should the Company experience protracted problems in the production of its key
components or the operation of its proprietary manufacturing systems, its
ability to deliver its products and reduce unit costs to desired levels could be
materially impacted.
Reliance on Key Suppliers. The Company is dependent on single or
limited source suppliers for a number of raw materials and components used in
its SiC wafer products and LEDs, including certain key materials and equipment
used in its crystal growth, wafering, polishing, epitaxial deposition, device
fabrication and device test processes. The Company generally purchases these
single or limited source materials and components pursuant to purchase orders
and has no guaranteed supply arrangements with such suppliers. An interruption
in the supply of these items could cause the Company's manufacturing efforts to
be hampered significantly and result in losses or customer dissatisfaction.
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<PAGE>
Competition; Competing Technologies. The market for optoelectronic
products is highly competitive. Many potential and present competitors have far
greater financial, marketing, and other resources than the Company, and the
Company believes that such competitors will aggressively pursue the development
and sale of competing products. Furthermore, there can be no assurance that
other firms will not develop new or enhanced products that are more effective
than any that have been or may be developed by the Company. To remain
competitive, the Company must continue to invest substantial resources in
research and development. The Company's prospects for long-term success are
substantially dependent on its ability to continue to increase the performance
of its blue LED product and to increase production efficiency. The successful
introduction of the conductive buffer layer chip, which is expected to increase
yield and lower production costs, is very important to the Company achieving its
development goals. Without this implementation, the Company may not maintain or
realize growth in the LED business.
Limitations on the Protection of Intellectual Property. There can be no
assurance that any patents issued to the Company (or issued to other parties and
licensed to the Company) will provide significant commercial protection. There
can be no assurance that any such patents will be upheld by a court should the
Company seek to enforce its rights against an infringer or that the Company will
have sufficient resources to prosecute its patent and other intellectual
property rights. Furthermore, issuance of a valid patent does not prevent other
companies from independently developing noninfringing technology similar to the
Company's, and there can be no assurance that any particular aspect of the
Company's technology will not be found to infringe the claims of other existing
patents. Other companies may hold or obtain patents on inventions or may
otherwise claim proprietary rights to technology useful or necessary to the
Company's business. The extent to which the Company may be required to seek
licenses under such patents or other proprietary rights of third parties, and
the cost or availability of such licenses, cannot be predicted. In addition to
patent protection, the Company relies to a significant extent on proprietary
know-how, particularly with respect to its manufacturing processes. There can be
no assurance, however, that others will not independently develop superior
know-how or obtain access to know-how used by the Company that the Company now
considers proprietary.
Maintaining Profitability During Planned Expansion; Management of
Growth. The Company has expanded its operations rapidly and plans to continue to
further expand its level of operations in the future. The Company's operating
results will be adversely affected if net sales do not increase sufficiently to
compensate for the increase in operating expenses caused by this expansion. In
addition, the Company's planned expansion of operations may cause significant
strain on the Company's management, technical, financial, and other resources.
To manage its growth effectively, the Company must continue to improve and
expand its existing resources and management information systems and must
attract, train, and motivate qualified managers and employees. If the Company is
unable to manage growth effectively, its operating results will be adversely
affected.
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<PAGE>
Potential Fluctuations in Quarterly Results. The Company's quarterly
operating results have varied significantly as a result of a number of factors,
including the timing and market acceptance of new product introductions by the
Company, the timing of significant orders from and shipments to customers,
non-recurring license fee income, and general domestic and international
economic conditions. The Company's operating results may fluctuate in the future
as a result of these and other factors, including the Company's success in
developing, introducing and shipping new products; its product mix; and the
level of competition that it experiences.
Dependence on Government Contract Revenues. Over the last several
years, the Company has been awarded a number of contracts from agencies of the
United States government for purposes of developing SiC material and SiC-based
semiconductor devices. Government policy is constantly changing, however, and
there can be no assurance that the Company will enter into any additional
government contracts or, if such contracts are entered into, that they will be
profitable or produce contract revenues. In addition, there can be no assurance
that after any such contracts are entered into, changing government regulations
will not significantly alter the benefits of such contracts or arrangements that
can be expected to inure to the Company. Cutbacks in, or reallocations of,
federal spending, including changes which could be proposed or implemented in
the future, could have a material, adverse impact on the Company's results of
operations, as well as its ability to implement its research and development
programs.
Government Regulation. The Company is subject to a variety of
government regulations pertaining to discharges and other aspects of its
manufacturing process. The Company believes that it is currently in full
compliance with such regulations, however, any failure, whether intentional or
inadvertent, to comply with such regulations could have an adverse effect on the
Company's business.
Dependence on Key Personnel. The success of the Company depends to a
large extent on the efforts, abilities, and expertise of a relatively small
group of scientific, marketing, and executive personnel. The loss of the
services of any one of these key personnel could have a material adverse effect
on the Company. In addition, the Company believes that it continued success will
depend in large part on its ability to attract and retain qualified managerial,
scientific, and marketing personnel, and there can be no assurance that such
personnel can be attracted and retained.
Volatility of Market Price of Company Securities. The market price of
the Company's securities has been very volatile as a result of many factors,
some of which are outside the control of the Company, including, but not limited
to, quarterly variations in financial results, announcements by the Company, its
competitors, customers, potential customers or government agencies and
predictions by industry analysts, as well as general economic conditions. Sales
by the Company's existing stockholders, trading by short sellers and other
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<PAGE>
market factors may adversely affect the market price of the Company's
securities. Any or all of these risks could have a material adverse affect on
the market price of the securities of the Company.
Lack of Dividends. The Company has never paid dividends on its equity
securities and does not intend to pay cash dividends in the foreseeable future.
To the extent the Company has earnings in the future, the Company intends to
reinvest such earnings in the business operations of the Company.
Concentration of Share Ownership. As of September 8, 1997, the
executive officers and directors of the Company and their affiliates, as a
group, owned or controlled approximately 14.4% of the outstanding Common Stock,
giving effect to the exercise of all outstanding options and warrants
exerciseable within 60 days of said date held by such individuals. As a result,
the executive officers and directors and their affiliates may be able to control
the Company and direct its affairs and business. In addition, the Board has the
authority to issue shares of Preferred Stock and to determine the rights,
preferences, privileges, and restrictions of such shares without any further
vote or action by the shareholders. The voting power of these shareholders or
the issuance of the Preferred Stock under certain circumstances could have the
effect of delaying or preventing a change in control of the Company.
THE COMPANY
The Company was incorporated in North Carolina in July 1987. The
Company develops, manufactures and markets electronic devices using SiC
semiconductor technology. The Company was founded to continue the research and
development begun at North Carolina State University, to commercialize the
production of SiC material, and to develop SiC-based semiconductor products. The
Company, which introduced its first product in October 1989, manufacturers SiC
waters and SiC-based blue LED products.
Cree began to ship volume quantities of its initial product, the blue
LED, in fiscal 1991 and 1992. In fiscal 1995, Cree worked on the development of
a significantly improved LED, which began to ship at the end of fiscal 1995. In
parallel with commercialization of the blue LED product, Cree has maintained
research and development programs aimed at commercializing other SiC-based
semiconductor devices.
In August 1994, the Company formed a North Carolina wholly-owned
subsidiary, Real Color Displays, Inc. ("RCD") for developing and marketing full
color LED displays. RCD acquired the assets and assumed the liabilities of a
Hong-Kong based company in this line of business. Color LED products are used in
a variety of applications such as retail point of sale advertising, office
information signs, casino displays, transportation signs and market information
tickers.
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<PAGE>
OPTIONS, OPTION SHARES AND STOCK AWARDS
Options issued and issuable pursuant to the Plan ("Options") may be
incentive stock options or nonqualified stock options. All shares of Common
Stock issued or issuable upon the exercise of Options will be referred to as
"Option Shares".
DESCRIPTION OF SECURITIES TO BE REGISTERED
This Prospectus relates to 633,172 shares of Common Stock of the
Company, of which (i) 614,172 shares are issuable upon exercise of outstanding
options ("Outstanding Options") granted pursuant to the Plan, and (ii) 19,000
shares (the "Outstanding Shares") have been issued prior to the date of this
Prospectus upon the exercise of stock options granted pursuant to the Plan. The
Company will not receive any proceeds from the sale of Shares by the Selling
Shareholders but will receive payment from the Selling Shareholders upon the
issuance of the Option Shares. See "Plan of Distribution" and "Selling
Shareholders".
As of October 31, 1997, the Company's authorized capital stock
consisted of 14,500,000 shares of Common Stock, par value $0.005 per share,
1,250,000 shares of Class A Voting Preferred Stock, par value $0.01 per share,
and 1,500,000 shares of Class B Non-Voting Preferred Stock, par value $0.01 per
share (collectively, "Preferred Stock"). The Board of Directors is authorized,
subject to any limitations prescribed by law, without further shareholder
approval, to issue from time to time such shares of Preferred Stock.
The Common Stock is quoted in The Nasdaq National Market System under
the symbol "CREE". On October 31, 1997, the closing price of the Common Stock as
reported by The Nasdaq National Market System was $25 1/8 per share.
USE OF PROCEEDS
If all of the Outstanding Options are exercised, the total amount of
proceeds obtained by the Company would be approximately $6,180,687. The proceeds
to be received by the Company from the exercise of Options, if any, will be used
for general corporate purposes. There can be no assurance that any of the
Options will be exercised. If none of the Options are exercised prior to their
redemption or expiration, there would be no proceeds to the Company. The Company
will not receive any proceeds from the sale of the Option Shares by the Selling
Shareholders.
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<PAGE>
SELLING SHAREHOLDERS
The following table sets forth the Selling Shareholders, the number of
Option Shares issuable upon exercise of Outstanding Options held by such Selling
Shareholders at the date of this Prospectus, and the number of Outstanding
Shares held by such Selling Shareholders at the date of this Prospectus. The
Outstanding Shares are eligible for resale pursuant to this Prospectus, and the
Option Shares, if and when issued, will be eligible for resale pursuant to this
Prospectus.
Name of Selling Shareholder No. of Option Shares No. of Outstanding Shares
- ---------------------------- ----------------------- --------------------------
Calvin H. Carter, Jr. 86,786 0
James E. Dykes 12,000 19,000
Michael W. Haley 38,000 0
F. Neal Hunter 145,786 0
John W. Palmour 81,000 0
Walter L. Robb 62,000 0
Alan J. Robertson 46,600 0
Charles M. Swoboda 78,000 0
Dolph W. von Arx 64,000 0
Set forth below is a list and description of each Selling Shareholder
identified above, together with the number of shares of Common Stock
beneficially owned, the number of shares of Common Stock being offered, the
number of shares of Common Stock and the percent of the class to be owned after
completion of the offering. As of October 31, 1997, there were 12,784,320 shares
of Common Stock outstanding.
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<TABLE>
<CAPTION>
Percent Common
Material Stock Owned
Relationship Had Securities Securities After
With the Company Beneficially Beneficially Completion of
Within Past Three Owned Prior to Securities Owned After Offering
Name of Selling Shareholder Years Date of Offered Completion of
Prospectus (1) Hereby Offering (1)(2)
- ---------------------------- -------------------- ------------------ -------------- ------------------- ----------------
<S> <C> <C> <C> <C> <C>
Calvin H. Carter, Jr. Director and 255,096 86,786 202,310 1.58%
Executive Vice
President
James E. Dykes Director 49,000 31,000 18,000 *
Michael Haley Director 288,914 38,000 250,914 1.96%
F. Neal Hunter Director, 230,786 145,786 145,000 1.13%
President and CEO
John W. Palmour Director and 284,000 81,000 237,000 1.85%
Employee
Walter L. Robb Director 219,000 62,000 157,000 1.23%
Alan J. Robertson CFO, Secretary and 15,000 46,600 0 *
Treasurer
Charles M. Swoboda Vice President and 35,000 78,000 200 *
COO
Dolph W. von Arx Director 313,160 64,000 249,160 1.95%
</TABLE>
* Less than 1%.
(1) Includes Common Stock as to which the holder has sole or
shared voting or investment power and Common Stock issuable
pursuant to options and/or warrants exerciseable within 60
days from the date of this Prospectus.
(2) Assumes all Plan Shares being registered will be sold.
However, to the best of the Company's knowledge, the holders
of such securities have no commitment to anyone to sell all or
part of the securities being registered.
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<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders may from time to time effect the sale of their
Plan Shares in one or more transactions in the over-the-counter market, at
prices and at terms then prevailing or at prices related to the then-current
market price, or in negotiated transactions or otherwise. The Plan Shares may be
sold pursuant to this Registration Statement, another registration statement or
pursuant to an exemption from registration, including Rule 144. If all or a
portion of such Plan Shares are sold in such transactions, they may be sold by
means of: (a) a block trade in which the broker or dealer so engaged will
attempt to sell the shares as agent but may position and resell a portion of the
block as principal to facilitate the transactions; (b) purchases by a broker as
principal and resale by such broker for its account pursuant to this Prospectus;
(c) an exchange distribution in accordance with the rules of such exchange; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; or (e) a combination of the foregoing methods. In effecting sales,
brokers or dealers engaged by the Selling Shareholders may arrange for other
brokers or dealers to participate. The brokers or dealers engaged by the Selling
Shareholders may receive commissions or discounts from the Selling Shareholders
in amounts to be negotiated prior to the sale. Such brokers or dealers and any
other participating brokers or dealers, as well as the Selling Shareholders, may
be deemed to be "underwriters" within the meaning of the Securities Act in
connection with such sales. To the best knowledge of the Company, there are
currently no plans, arrangements or understandings between any Selling
Shareholders and any underwriter regarding the sale of Plan Shares by the
Selling Shareholders.
The Company may decide not to seek, or may not be able to obtain,
qualification of the Plan Shares in all states. In that case, it may not be
possible to sell the Plan Shares to residents of those states unless exemptions
in the blue sky laws of certain states permit transfer of the Plan Shares
notwithstanding that this offering of the Plan Shares has not been qualified in
those states.
EXPERTS
The financial statements of the Company appearing in the Annual Report
on Form 10-K for the fiscal year ended June 30, 1997, have been audited by
Coopers & Lybrand L.L.P., independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing.
LEGAL MATTERS
Legal matters in connection with the issuance of the Common Stock
offered hereby will be passed upon for the Company by Kilpatrick Stockton LLP,
Raleigh, North Carolina. As of
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<PAGE>
October 31, 1997, attorneys at Kilpatrick Stockton LLP owned less than 1% of the
issued and outstanding shares of Common Stock of the Company.
INDEMNIFICATION
The Bylaws of the Company provide that the Company shall indemnify the
directors and officers of the Company against liability (and expenses related
thereto) arising out of their status as directors and officers to the extent
permitted by law. Certain mandatory indemnification rights are also available
under the North Carolina Business Corporation Act to officers and directors who
are wholly successful in the defense of any proceeding to which such person was
a party by virtue of his position as a director or officer. Additionally, the
Plan provides for indemnification for certain of the Company's directors for
liabilities arising in connection with their actions taken as members of the
Committee administering the Plan.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to contractual provisions or otherwise, the Company has been
advised that in the opinion of the Commission, such indemnification is against
public policy as expressed in the Securities Act and is therefore unenforceable.
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PROSPECTUS
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CREE RESEARCH, INC.
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OCTOBER 31, 1997
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TABLE OF CONTENTS
Page
Available Information.....................................................2
Incorporation of Certain Information by Reference.........................2
Risk Factors..............................................................3
The Company...............................................................8
Options and Option Shares.................................................9
Description of Securities to be Registered................................9
Use of Proceeds...........................................................9
Selling Shareholders.....................................................10
Plan of Distribution.....................................................12
Experts..................................................................12
Legal Matters............................................................12
Indemnification..........................................................13
------------------------------
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus in connection with
this offering, and, if given or made, such information or representations must
not be relied upon as having been authorized by the Company. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, any
securities other than the registered securities to which it relates, or an offer
to or solicitation of any person in any jurisdiction in which such offer or
solicitation would be unlawful. The delivery of this Prospectus at any time does
not imply that information herein is correct as of any time subsequent to its
date.
<PAGE>
