Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Annual Report, our disclosure controls and procedures are effective in that they provide reasonable assurances that the information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods required by the SEC’s rules and forms and that such information is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes to Internal Control Over Financial Reporting
In the second quarter of fiscal 2023, we completed the initial phase of our new enterprise resource planning (ERP) system implementation and migrated our general ledger and consolidation process onto the new system. In connection with this implementation, we modified certain internal control processes and procedures. Following the implementation, these changes to our control environment were validated according to our established processes.
There have been no changes to our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the fourth quarter of fiscal 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
In the course of our ongoing preparations for making management’s report on internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act of 2002, from time to time we have identified areas in need of improvement and have taken remedial actions to strengthen the affected controls as appropriate. We make these and other changes to enhance the effectiveness of our internal controls over financial reporting, which do not have a material effect on our overall internal control.
We will continue to evaluate the effectiveness of our disclosure controls and procedures and internal control over financial reporting on an ongoing basis and will take action as appropriate.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control system was designed to provide reasonable assurance to our management and Board of Directors regarding the preparation and fair presentation of published financial statements.
Our internal control over financial reporting includes those policies and procedures that:
(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
(iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.
93
Table of Contents
In making the assessment of internal control over financial reporting, our management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework (2013 framework). Based on that assessment and those criteria, management has concluded that our internal control over financial reporting was effective as of June 25, 2023.
The effectiveness of our internal control over financial reporting as of June 25, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report in Item 8 of this Annual Report.
Item 9B. Other Information
Not applicable.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
94
Table of Contents
PART III
Certain information called for in Items 10, 11, 12, 13 and 14 is incorporated by reference from our definitive proxy statement relating to our annual meeting of shareholders, which will be filed with the SEC within 120 days after the end of fiscal 2023.
Item 10. Directors, Executive Officers and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accountant Fees and Services
95
Table of Contents
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a)(1) and (2) The financial statements and reports of independent registered public accounting firm are filed as part of this Annual Report (see “Index to Consolidated Financial Statements” at Item 8). The financial statement schedules are not included in this item as they are either not applicable or are included as part of the consolidated financial statements.
(a)(3) The following exhibits have been or are being filed herewith and are numbered in accordance with Item 601 of Regulation S-K:
Incorporated by Reference
Exhibit No. Description Filed Herewith Form Exhibit Filing Date
2.1 ^
Purchase Agreement, dated March 14, 2019, by and between Cree, Inc. and IDEAL Industries, Inc., as amended 8-K 2.1 5/16/2019
2.2 ^
Asset Purchase Agreement, dated October 18, 2020, between Cree, Inc., SMART Global Holdings, Inc. and Chili Acquisition, Inc., as amended 8-K 2.1 3/2/2021
3.1
Restated Articles of Incorporation, as amended 10-Q 3.1 10/28/2021
3.2
Amended and Restated Bylaws, dated January 23, 2023 10-Q 3.1 1/26/2023
4.1
Description of the Registered Securities 10-Q 4.1 10/28/2021
4.2
Indenture, dated as of April 21, 2020, between Cree, Inc. and U.S. Bank National Association 8-K 4.1 4/21/2020
4.3
Form of 1.75% Convertible Senior Note due 2026 (included in Exhibit 4.2) 8-K 4.2 4/21/2020
4.4
Indenture, dated as of February 3, 2022, between Wolfspeed, Inc. and U.S. Bank National Association 8-K 4.1 2/3/2022
4.5
Form of 0.25% Convertible Senior Note due 2028 (included in Exhibit 4.4) 8-K 4.2 2/3/2022
4.6
Indenture, dated as of November 21, 2022, between Wolfspeed, Inc. and U.S. Bank Trust Company, National Association 8-K 4.1 11/21/2022
4.7
Form of 1.875% Convertible Senior Note due 2029 (included in Exhibit 4.6) 8-K 4.2 11/21/2022
4.8
Form of certificate representing the Senior Secured Notes due 2030 (included as Exhibit A to Exhibit 10.27) 8-K 4.1 6/26/2023
4.9
Unsecured Customer Refundable Deposit Agreement, dated as of July 5, 2023, between Wolfspeed, Inc. and Renesas Electronics America Inc. 8-K 4.1 7/5/2023
10.1 *
2013 Long-Term Incentive Compensation Plan, as amended ("2013 LTIP") 10-Q 10.3 10/28/2021
10.2 *
Form of Restricted Stock Unit Award Agreement under the 2013 LTIP 10-Q 10.5 1/22/2014
10.3 *
Form of Master Performance Unit Award Agreement under the 2013 LTIP 8-K 10.4 8/29/2014
10.4 *
Form of Performance Share Award Agreement - Section 16 Officer under the 2013 LTIP 10-Q 10.6 10/21/2015
10.5 *
Form of Stock Unit Award Agreement (Performance-Based) under the 2013 LTIP 10-K 10.41 8/20/2018
10.6 *
Form of Stock Unit Award Agreement (Time-Based) under the 2013 LTIP 10-K 10.42 8/20/2018
10.7 *
Form of Performance Share Award Agreement for Gregg A. Lowe 8-K 10.1 9/8/2020
10.8 *
Form of Restricted Stock Unit Award Agreement under the 2013 LTIP for Gregg Lowe 10-Q 10.4 10/28/2021
10.9 *
Form of Restricted Stock Unit Award Agreement under the 2013 LTIP for Executive Officers other than Gregg Lowe 10-Q 10.5 10/28/2021
10.10 *
Form of Restricted Stock Unit Award Agreement under the 2013 LTIP for Non-Employee Directors 10-Q 10.6 10/28/2021
96
Table of Contents
10.11 *
Form of Performance Share Award Agreement under the 2013 LTIP for Gregg Lowe 10-Q 10.7 10/28/2021
10.12 *
Form of Performance Share Award Agreement under the 2013 LTIP for Executive Officers other than Gregg Lowe 10-Q 10.8 10/28/2021
10.13 *
Form of Performance Share Award Agreement under the 2013 LTIP for Gregg Lowe (fiscal 2024 award) X
10.14 *
Form of Performance Share Award Agreement under the 2013 LTIP for Executive Officers other than Gregg Lowe (fiscal 2024 award) X
10.15 *
Notice of Grant to Gregg A. Lowe, dated August 29, 2022 8-K 10.1 8/31/2022
10.16 *
Notice of Grant to Neill P. Reynolds, dated August 29, 2022 8-K 10.2 8/31/2022
10.17 *
2020 Employee Stock Purchase Plan 10-Q 10.9 10/28/2021
10.18 *
Change in Control Agreement for Chief Executive Officer between Cree, Inc. and Gregg A. Lowe, dated September 22, 2017 8-K 10.1 9/28/2017
10.19 *
First Amendment to Change in Control Agreement (for Chief Executive Officer), dated May 4, 2018 8-K 10.3 5/4/2018
10.20 *
Cree Severance Plan - Senior Leadership Team, Plan Document and Summary Plan Description, effective as of April 30, 2018 8-K 10.1 5/4/2018
10.21 *
Form of Participation Agreement Under Cree Severance Plan - Senior Leadership Team 8-K 10.2 5/4/2018
10.22 *
Schedule of Compensation of Non-Employee Directors 8-K 10.1 1/25/2023
10.23 *
Non-Employee Director Stock Compensation and Deferral Program, as amended and restated 10-Q 10.10 10/28/2021
10.24 *
Form of Cree, Inc. Indemnification Agreement for Directors and Officers 8-K 10.1 10/29/2010
10.25
Form of Confirmation of Call Option Transactions related to 0.25% Convertible Senior Notes due 2028 8-K 10.1 2/3/2022
10.26
Form of Confirmation of Call Option Transactions related to 1.875% Convertible Senior Notes due 2029 8-K 10.1 11/21/2022
10.27 ^
Indenture, dated as of June 23, 2023, by and between Wolfspeed, Inc. and U.S. Bank Trust Company, National Association, as trustee and collateral agent. 8-K 10.1 6/26/2023
21.1
Subsidiaries of the Company X
23.1
Consent of PricewaterhouseCoopers LLP X
31.1
Certification by Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
31.2
Certification by Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 X
32.1
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
32.2
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 X
101 The following materials from Wolfspeed, Inc.’s Annual Report on Form 10-K for the fiscal year ended June 25, 2023 formatted in Inline XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Comprehensive Loss; (iv) Consolidated Statements of Cash Flows; (v) Consolidated Statements of Shareholders' Equity; and (vi) Notes to Consolidated Financial Statements X
97
Table of Contents
104 The cover page from the Wolfspeed, Inc.'s Annual Report on Form 10-K for the fiscal year ended June 25, 2023 formatted in Inline XBRL (included in Exhibit 101)
* Management contract or compensatory plan or arrangement
^ Portions of this exhibit have been omitted pursuant to Rule 601(b)(2) of Regulation S-K. The omitted information is not material and is the type of information that the Company customarily and actually treats as private and confidential.
Item 16. Form 10-K Summary
None.
98
Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WOLFSPEED, INC.
Date: August 23, 2023
By: /s/ Gregg A. Lowe
Gregg A. Lowe
Chief Executive Officer and President
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ G REGG A. L OWE
Chief Executive Officer and President August 23, 2023
Gregg A. Lowe (Principal Executive Officer)
/s/ N EILL P. R EYNOLDS
Executive Vice President and Chief Financial Officer August 23, 2023
Neill P. Reynolds (Principal Financial and Principal Accounting Officer)
/s/ D ARREN R. J ACKSON
Chairman and Director August 23, 2023
Darren R. Jackson
/s/ G LENDA D ORCHAK
Director August 23, 2023
Glenda Dorchak
/s/ J OHN C. H ODGE
Director August 23, 2023
John C. Hodge
/s/ C LYDE R. H OSEIN
Director August 23, 2023
Clyde R. Hosein
/s/ D UY -L OAN T. L E
Director August 23, 2023
Duy-Loan T. Le
/s/ J OHN B. R EPLOGLE
Director August 23, 2023
John B. Replogle
/s/ M ARVIN A. R ILEY
Director August 23, 2023
Marvin A. Riley
/s/ S TACY J. S MITH
Director August 23, 2023
Stacy J. Smith
/s/ T HOMAS H. W ERNER
Director August 23, 2023
Thomas H. Werner
99