Exhibit 10.4

As approved August 17, 2009

SCHEDULE OF COMPENSATION FOR

NON-EMPLOYEE DIRECTORS

This schedule describes the compensation payable by Cree, Inc. (the “Company”)
to individuals who are not employed by the Company but serve as members of the
Company’s Board of Directors. The compensation consists of cash and equity
compensation components as described below. In addition, the Company will pay or
reimburse directors for reasonable expenses incurred in performing the duties of
the director in accordance with the Company’s business expense reimbursement
policy and procedures. This schedule is not intended to create any contractual
obligation with any director and may be amended by the Company at any time.

Cash Compensation

Quarterly retainer for indicated role:

 

Member of the Board of Directors

   $ 8,750

Lead Independent Director

   $ 1,250

Chair of the Audit Committee

   $ 5,000

Chair of the Compensation Committee

   $ 2,500

Chair of the Governance & Nominations Committee

   $ 1,250

Member of the Audit Committee

   $ 5,000

Member of the Compensation Committee

   $ 2,500

Member of the Governance & Nominations Committee

   $ 1,250

 

  1. Each non-employee director will be paid the retainer listed above for
membership on the Board of Directors and for each other role in which the
director serves. Committee Chairs will receive the retainer for service as
chairman or chairwoman in addition to the retainer for committee membership. The
retainer will be earned on the first day of the fiscal quarter on which the
director serves in the indicated role. If a director is elected or appointed to
the role after the first day of the fiscal quarter, a portion of the retainer,
prorated based on the number of days remaining in the quarter, will be earned on
the day on which the director’s election or appointment is effective. No
adjustment will be made nor any repayment due in the event that a director does
not serve in the indicated role for the remainder of the quarter.

 

  2. Retainers are in lieu of meeting fees except as provided in this paragraph.
In the event that a non-employee director is appointed to serve on a Board
committee not listed above, the director will earn a fee of $1,000 for each
meeting of the committee attended, or $2,000 for each meeting attended if
serving as Chair or acting Chair of the committee.

 

  3. Retainers and any meeting fees earned will be paid promptly following the
first day of each fiscal quarter. Non-employee directors may elect to receive
Company stock in lieu of retainers and meeting fees, and to defer all or a
portion of retainers and meeting fees earned, pursuant to the Non-Employee
Director Stock Compensation and Deferral Program while such plan is in effect.

Equity Compensation

 

  1. Each non-employee director then serving on the Board who has been nominated
for re-election at the next annual meeting of shareholders will be granted an
option to purchase 5,000 shares of

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       the Company’s common stock on the first business day of September. The
option will be granted pursuant to the Company’s 2004 Long-Term Incentive
Compensation Plan with an exercise price equal to the closing market price on
the grant date. The option vests and becomes exercisable on a quarterly basis,
at the rate of 25% of the number of shares awarded, on the earlier of (a) the
last day of each calendar quarter, with the first vesting date being December 31
following the annual meeting of shareholders in the year the option is awarded;
and (b) the date of the annual meeting of shareholders held the next year after
the option is awarded; provided that the director is serving as a member of the
Board of Directors or as an employee of the Company or other Employer under the
Plan on the date of vesting.

 

  2. Each non-employee director then serving on the Board who has been nominated
for re-election at the next annual meeting of shareholders will also be granted
a restricted stock award of 5,000 shares of the Company’s common stock on the
first business day of September. The restricted stock award will be granted
pursuant to the Company’s 2004 Long-Term Incentive Compensation Plan. The
restricted stock vests in full on the first anniversary of the grant date,
provided that the director is then serving as a member of the Board of Directors
or as an employee of the Company or other Employer under the Plan.

 

  3. If a non-employee director is first elected to the Board after the first
business day of September, the director will be granted a option to purchase
shares, and a restricted stock award, as provided above except that the number
of shares subject to the option and the restricted stock award will be prorated
based upon the number of whole calendar quarters remaining through the following
September 30. The option and restricted stock awards will vest on the same dates
as the vesting schedules of the awards granted to non-employee directors the
preceding September, provided that the director is then serving as a member of
the Board of Directors or as an employee of the Company or other Employer under
the Plan.

 

  4. The option and restricted stock awards described above will be awarded only
if recommended by the Compensation Committee and approved by the Governance and
Nominations Committee on or before the grant date. Awards under this schedule
will be made pursuant to the applicable form of master award agreement and
notice of grant as approved by the Compensation Committee from time to time.

 

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