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Form 8-K ULTRA CLEAN HOLDINGS For: Jan 02

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January 5, 2015 5:03 PM EST
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of report (Date of earliest event reported): January 2, 2015
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ULTRA CLEAN HOLDINGS, INC.
(Exact Name of Registrant
as Specified in Charter)
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Delaware
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(State or Other Jurisdiction of Incorporation)
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000-50646
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61-1430858
(Commission File Number)
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(IRS Employer Identification No.)
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26462 CORPORATE AVENUE,
HAYWARD, CA
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94545
(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code:��(510) 576-4400
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n/a
(Former Name or Former Address, if Changed Since Last Report)
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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 (see General Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
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On January 5, 2015, Ultra Clean Holdings, Inc. (the Company) announced that James P. Scholhamer will become the Companys Chief Executive Officer, effective January 19, 2015, succeeding Clarence L. Granger, who will be retiring as the Companys Chief Executive Officer on such date but will remain as non-executive Chairman of the Board of Directors. Mr. Scholhamer will also join the Companys Board of Directors, effective as of his first day of employment with the Company.
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Mr. Scholhamer, age 48, most recently served as Corporate Vice President and General Manager of Applied Materials, Inc., leading the Equipment Products Group and Display Services Group of its Global Service Division from February 2011 to present.� Mr. Scholhamer joined Applied Materials in 2006, where, prior to his most recent position, he served as Vice President of Operations-Energy for the Environmental and Display Products Division from July 2006 to December 2008 and Corporate Vice President and General Manager of the Display Business Group from December 2008 to February 2011.� The Companys Board of Directors believes that Mr. Scholhamer brings strong engineering and operations experience to our Board of Directors and will provide the Board of Directors with a unique perspective as our chief executive and leader of our strategic planning process.
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Pursuant to the offer letter filed as Exhibit 99.1 hereto, the Company has agreed to pay Mr. Scholhamer an annual base salary of $410,000, with an annual target bonus equal to 100% of his base salary, and to grant him an initial award of 200,000 restricted stock units that will vest in four equal installments on each anniversary of the grant date, subject to the terms and conditions of the Companys Stock Incentive Plan.�
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Mr. Scholhamer will be entitled to severance benefits under the Companys Severance Benefits for Executive Officers policy (the Severance Policy) and has entered into a Change in Control Severance Agreement with the Company, effective January 19, 2015.� Under the Severance Policy and Mr. Scholhamers offer letter, if Mr. Scholhamer is terminated without cause prior to a change in control (or resigns for good reason) and he signs a release of claims, he is entitled to receive�(i) 150% of his then-current base salary, (ii) 150% of his annual bonus (based on the average annual cash bonus over the prior three years), (iii) 18 months of COBRA premiums and (iv) accelerated vesting of equity awards that would vest within 18 months.� Under his Change in Control Severance Agreement, if a termination of employment occurs 3 months prior to or within 12 months after a change in control (including a resignation for good reason), Mr. Scholhamer's severance benefits would be increased to 24 months of salary, bonus and COBRA premiums and all of his equity awards would become vested.� In connection with Mr. Scholhamers employment, we expect that Mr. Scholhamer will enter into the Companys standard Indemnification Agreement.
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The Company and Mr. Granger have entered into a Transition Agreement (the Transition Agreement), pursuant to which, subject to a release of claims, Mr. Granger will receive a lump sum cash payment equal to $2,400,000 in connection with his retirement. Mr. Granger will also continue to receive his current salary and benefits during the transition period.� At the end of the transition period, Mr. Grangers vested and unexercised stock options will remain exercisable until three months following the end of the transition period, in accordance with Mr. Grangers stock option agreement.� Mr. Granger will continue to serve as non-executive Chairman of the Board of Directors of the Company following his retirement.
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A copy of the Transition Agreement is attached hereto as Exhibit 99.2.
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Item 9.01 Financial Statements and Exhibits
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(d) Exhibits
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Exhibit
No.
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Exhibit Description
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99.1
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Offer Letter between the Company and Mr. Scholhamer dated January 3, 2015
99.2
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Transition Agreement between the Company and Mr. Granger, effective as of January 2, 2015
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SIGNATURES
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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.
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ULTRA CLEAN HOLDINGS, INC.
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Date:
January 5, 2015
 �
By:
/s/ Kevin C. Eichler
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Name:
Kevin C. Eichler
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Title:
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit
No.
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Exhibit Description
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99.1
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Offer Letter between the Company and Mr. Scholhamer dated January 3, 2015
99.2
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Transition Agreement between the Company and Mr. Granger, effective as of January 2, 2015
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Exhibit 99.1
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December 29, 2014
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Jim Scholhamer
8250 Regency Drive
Pleasanton, CA 94588
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Dear Jim,
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Ultra Clean Holdings, Inc. (the Company or UCT) is pleased to offer you the regular, full time position of Chief Executive Officer, reporting to the Companys Board of Directors. You will also be appointed to the Companys Board of Directors, effective as of your first day of employment with UCT, with an initial term expiring on the date of UCTs 2015 annual meeting of stockholders, or until your earlier death, resignation or removal in accordance with UCTs Bylaws.
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Your start date will be determined upon your acceptance of this offer, but UCT would expect it to be on or about January 19, 2015.��This position will be at our corporate offices currently located in Hayward, California.��If you accept our offer of employment, your compensation during your employment and terms of employment will be as follows:
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Base Salary.��You will initially be paid at the annual base rate of $410,000, payable bi-weekly in accordance with our regular payroll practices and in accordance with all applicable state and federal laws.
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Management Bonus.��You will be eligible for the management bonus plan which includes an initial target payout of 100% of your base salary on an annualized basis. The payout will be based upon performance factors determined by the Board of Directors.��In your first year of employment this bonus will be pro-rated based on your start date.
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Restricted Stock Units.��You will be eligible for an initial award of 200,000 restricted stock units of Ultra Clean Holdings, Inc., with 1/4 of the award vesting upon each anniversary of the date of the grant, subject to the terms and conditions of our Amended and Restated Stock Incentive Plan.
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Severance Benefits.��In the event your employment is terminated by the Company without Cause or by you for Good Reason, then, subject to your compliance with the terms and conditions of the Companys Severance Benefits for Executive Officers policy, as amended through the date hereof (the Severance Policy), you will be entitled to the severance benefits set forth in the Severance Policy.
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Change in Control Severance Agreement.��You and the Company will enter into a Change in Control and Severance Agreement in the form enclosed herewith.
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com
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Page�2 of 4
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Cause and Good Reason.��For purposes of the Severance Policy and the Change in Control and Severance Agreement described above, the following definitions of Cause and Good Reason shall apply.
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Cause means: (A) you are convicted of, or plead guilty or no contest to, (i) a felony or (ii) a misdemeanor involving moral turpitude; (B) you engage in any act of fraud or material dishonesty in connection with your employment; (C) you materially breach any agreement with the Company; (D) you commit any material violation of a written Company policy that has been provided to you; or (E) you willfully fail, refuse or neglect to perform the services reasonably required of your position at the Company; provided that notwithstanding the foregoing, with respect to clauses (C), (D) and (E) above, unless the condition is incapable of remedy by its nature or otherwise, your termination will not be for Cause unless the Company (x)�notifies you in writing of the existence of the condition which the Company believes constitutes Cause within 60 days of the Company becoming aware of the existence of such condition (which notice specifically identifies such condition), (y)�gives you at least 10 days following the date on which you receive such notice (and prior to termination) in which to remedy the condition, and (z)�if you do not remedy such condition within such period, actually terminates your employment within 15 days after the expiration of such remedy period (and before you remedy such condition).
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Good Reason means:��(i) a reduction of your then-existing annual base salary (other than in connection with an action affecting a majority of the executive officers of the Company not to exceed 25%);��(ii) relocation of the principal place of your employment to a location that is more than 50 miles from the principal place of your employment immediately prior to the date of such change;��or (iii) a material reduction in the your authority, duties or responsibilities; provided that notwithstanding the foregoing, your termination will not be for Good Reason unless you (x)�notify the Company in writing of the existence of the condition which you believe constitutes Good Reason within 60 days of the initial existence of such condition (which notice specifically identifies such condition), (y)�gives the Company at least 10 days following the date on which the Company receives such notice (and prior to termination) in which to remedy the condition, and (z)�if the Company does not remedy such condition within such period, actually terminate employment within 15 days after the expiration of such remedy period (and before the Company remedies such condition).
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Other Benefits.��As a regular employee working at least thirty hours per week, you will be eligible to participate in our group medical, dental, and vision plans starting the first of the month following your date of hire.��You are also eligible for coverage under our life, short and long term disability plans, also starting the first of the month following your date of hire.��You will be eligible to elect participation in our 401(k) Plan the first of the month following completion of ninety days of continuous employment. Additionally, you will be eligible to participate in our Employee Stock Purchase and Flexible Spending Account plans as per the terms and conditions of each of these plans.
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400 Fax: (510) 576-4401; www.uct.com
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Page�3 of 4
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Your compensation as CEO will be reviewed annually and on an interim basis from time to time by the Compensation Committee of the Companys Board of Directors, and any changes to your compensation will be recommended to the Board of Directors by this committee.
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Employment at UCT is at will meaning either you or the Company may terminate the employment relationship at any time, with or without cause, and with or without notice.��Ultra Clean will employ you on an at will basis and apply to you the same policies and procedures applicable to all its employees.
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Except for the Chief Executive Officer, no manager, supervisor, or other representative of UCT has the authority to agree on behalf of the Company to employ any employee for any specified period of time, or to employ any employee on other than an at will basis.��Any agreement to employ any employee for a specified period of time or on other than an at will basis is effective only if the agreement is signed by the Chief Executive Officer.
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Enclosed is a copy of our Non-Disclosure and Confidentiality Agreement for your review and signature. Employees of the Company work with and/or develop information for the Companys benefit that is considered confidential in nature.��As a result, the Company requires employees to agree not to use or disclose any such confidential information for the benefit of anyone or any entity other than the Company.��By signing this agreement, you agree to keep confidential any and all information about the Company.
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Although we do not anticipate that any disputes will arise concerning your employment, the Company wishes to resolve any dispute that might arise in a fair and efficient manner.��With this in mind, the Company requires employees to resolve any disputes that may arise with the Company through binding arbitration.��Disputes subject to resolution through arbitration include, but are not limited to, those concerning employment with the Company, the termination of ones employment with the Company, compensation or benefits, and the violation of any applicable laws.��Arbitration shall be conducted pursuant to the rules of Judicial Arbitration and Mediation Services (JAMS) and the arbitrator shall be selected from a list of neutral arbitrators provided by JAMS in accordance with its rules.
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Arbitration shall be the exclusive means through which you or the Company may seek relief in connection with a dispute, except that either party may seek interim equitable relief from a court in connection with a dispute concerning unfair competition or the misappropriation of trade secrets.
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This offer of employment is contingent upon your ability to present proof of your eligibility to work in the United States within three working days of your first day of work. This offer of employment is also contingent upon your successful completion of a pre-employment background screening and pre-employment drug test.
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400 Fax: (510) 576-4401; www.uct.com
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Please sign and date this offer of employment and return a copy to me no later than January 2, 2015 together with the signed original of the Change in Control Agreement and the Confidentiality and Non-Disclosure Agreement.
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Please feel free to contact me at (650) 400-7869 or via email at [email protected] with any questions you may have.��We are extremely excited about having you join the UCT team, and each and every one of us is looking forward to working with you.
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Sincerely,
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David ibnAle,
Member of the Board of Directors and duly authorized signatory

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Offer Acceptance:
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/s/�James P. Scholhamer
 � � January 3, 2015 �
James P. Scholhamer
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Date
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���������������������������������������������������������������
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com

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Exhibit 99.2
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December 29, 2014
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Clarence Granger
c/o UCT; Ultra Clean Holdings, Inc.

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Re:�����������Transition Agreement
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Dear Clarence:
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As you know, we have discussed your potential retirement from Ultra Clean Holdings, Inc. (the Company) and that you have agreed to remain as the Companys Chief Executive Officer until the Company has put a new Chief Executive Officer in place.��This letter agreement (this Agreement) sets forth the arrangement between you and the Company regarding your transition from the Company.
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1.�����������Transition Period.��You have agreed to remain employed by the Company following the date hereof until January 19, 2015 (the Transition Period).��During the Transition Period, you shall continue to receive your current salary and benefits.
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Your last day of employment with the Company is referred to herein as the Separation Date.��At the end of the Transition Period, in addition to any amounts due under Section�2 below, you will receive your accrued and unpaid wages (salary and paid time off) through the Separation Date as required by applicable law, unreimbursed business expenses (in accordance with usual Company policies and practice), to the extent not theretofore paid, vested benefits under the Company's 401(k) plan as applicable, and, as set forth in your stock option agreement, your vested stock options will remain exercisable until the earlier of (i) three months following the Separation Date and (ii) the expiration of such stock options.
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Both you and the Company understand and acknowledge that (A) your employment during the Transition Period is and shall continue to be at-will, meaning that either you or the Company may terminate such employment at any time for any reason or no reason, without further obligation or liability, except as set forth in Section�2 below and (B) you will remain on the Companys board of directors through your current term as a director, subject to your earlier resignation, removal in accordance with applicable law and the Companys certificate of incorporation and by-laws, or death. The Companys board of directors will also consider whether to nominate you for reelection to the Board at the Companys 2015 annual meeting of stockholders in accordance with its normal board nomination process.
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2.�����������Separation Benefits.��If on or within 21 calendar days following your Separation Date, you sign, and do not revoke, the release of claims in the form set forth on Exhibit A hereto (the Release), you will receive a lump sum cash payment equal to $2,400,000. Such payment will be made within 3 business days following the effective date of the Release.��All amounts referenced in this Section�2 and elsewhere in this Agreement shall be subject to any required tax
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com
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withholding by the Company.��All references herein to Separation Date or termination of employment shall mean separation from service as an employee within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code and the regulations thereunder. The effective date of the Release shall be the date upon which the Release is no longer revocable as set forth in Exhibit A.
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3.�����������Mutual Non-Disparagement.��You and the Company each agree to refrain from any defamation, libel or slander of the other.��However, nothing in this Agreement shall prohibit you, the Company or any director, officer, or agent of the Company from complying with any lawful subpoena or court order. You acknowledge and agree that the Company will be required to disclose this Agreement in its public SEC filings.
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4.�����������Entire Agreement:��This Agreement, together with the Non-Disclosure and Confidentiality Agreement between you and the Company, Indemnification Agreement between you and the Company, the award agreements and plan concerning your Company stock based equity awards, and the terms of any health or medical plans in which you participate as of the Separation Date constitute the entire agreement between the parties with respect to the subject matter hereof and thereof and supersede all prior negotiations and agreements, whether written or oral, with respect to the termination of your employment and any separation or termination benefits.
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5.�����������Miscellaneous.��This Agreement will be governed by the laws of California, without regard to its conflict of laws provisions.��This Agreement may not be modified or amended except by a written agreement, signed by you and an authorized officer of the Company.��This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which shall together constitute one and the same instrument.
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com
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Very truly yours,
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ULTRA CLEAN HOLDINGS, INC.
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� By:
�/s/ David ibnAle
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� Name:
David ibnAle
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� Title:
Member of the Board of Directors and duly authorized signatory
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ACCEPTED AND AGREED:
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I have read and understand this Transition Agreement, and I hereby agree to the terms and conditions set forth herein.
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Clarence Granger
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/s/ Clarence Granger����������������
Signature
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Dated: January 2, 2015
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com
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EXHIBIT A Release of Claims
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1.�����������Full Release:��This Release (this Release) is signed in exchange for the benefits described in Section�2 of the Transition Agreement, dated January 2, 2015��(the Transition Agreement), between Clarence Granger (Executive) and Ultra Clean Holdings, Inc. (the Company) (the Parties).��Executive and his successors and assigns release and absolutely discharge the Company and its subsidiaries and other affiliated entities, and each of their respective shareholders, directors, employees, agents, attorneys, legal successors and assigns of and from any and all claims, actions and causes of action, whether now known or unknown, which Executive now has, or at any other time had, or shall or may have, against those released parties arising out of or relating to any matter, cause, fact, thing, act or omission whatsoever occurring or existing at any time to and including the date of execution of this Release by Executive, including, but not limited to:
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(a)�����������claims relating to any letter or agreement offering Executive employment with the Company, the Change in Control Severance Agreement between the Company and Executive dated July 28, 2008, any Company severance plan, policy or arrangement, the parties employment relationship, the termination of that relationship, and any claims for breach of contract, infliction of emotional distress, fraud, defamation, personal injury, wrongful discharge or age, sex, race, national origin, physical or mental disability, medical condition, sexual orientation or other discrimination, harassment or retaliation, claims under the federal Americans with Disabilities Act, Title VII of the federal Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981, the federal Fair Labor Standards Act, the California Fair Employment and Housing Act, the federal Executive Retirement Income Security Act, the federal Worker Adjustment and Retraining Notification Act, the federal Family and Medical Leave Act, the National Labor Relations Act, and applicable state statutes preventing employment discrimination,
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(b)�����������the Age Discrimination in Employment Act (subject to Section�3 below); or
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(c)�����������any other federal, state or local law, all as they have been or may be amended, and all claims for attorneys fees and/or costs, to the full extent that such claims may be released.
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This Release does not apply to (i)�claims which cannot be released as a matter of law, (ii)�any right or obligation arising under the Transition Agreement, or (iii)�Executives eligibility for indemnification in accordance with the indemnification agreement between Executive and the Company, the Companys D&O insurance coverage, or the certificate of incorporation and by-laws of the Company and/or its subsidiaries.
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2.�����������All Claims Waived:��Executive acknowledges that this Release shall extend to unknown as well as known claims, and Executive hereby expressly waives the application of any provision of law, including, without limitation, Section 1542 of the California Civil Code, that purports to limit the scope of a general release.��Section 1542 of the California Civil Code provides:
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A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com
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3.�����������Older Workers Benefit Protection Act:��In accordance with the Older Workers Benefit Protection Act, Executive understands and acknowledges that he has been advised to consult an attorney before signing this Release.��Executive further understands and acknowledges that he has at least 21 days to sign this Release by dating and signing a copy of this Release and returning it to the Company, although it may be accepted before the end of such period.��Executive further understands that, once having signed this Release, Executive will have an additional 7 days within which to revoke the Release, by delivering written notice of revocation of the Release to the Companys General Counsel.��If Executive revokes such Release during such 7-day period, Executive will not be eligible for any of the payments and benefits under Section�2 of the Transition Agreement.
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EXECUTIVE UNDERSTANDS THAT HE IS ENTITLED TO CONSULT WITH, AND HAS CONSULTED WITH, AN ATTORNEY PRIOR TO SIGNING THIS RELEASE AND THAT HE IS GIVING UP ANY LEGAL CLAIMS HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS RELEASE.��EXECUTIVE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN EXCHANGE FOR THE BENEFITS DESCRIBED IN THE TRANSITION AGREEMENT.
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� � Date: � �
Clarence Granger
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UCT
26462 Corporate Avenue, Hayward, CA 94545
Tel: (510) 576-4400��Fax: (510) 576-4401; www.uct.com

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