Form 8-K Ultra Clean Holdings, For: Jul 07

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_______________

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

 

Date of report (Date of earliest event reported): July 7, 2016
ULTRA CLEAN HOLDINGS, INC.
(Exact Name of Registrant as Specified in Charter)
	Delaware
	(State or Other Jurisdiction of Incorporation)
000-50646		61-1430858
(Commission File Number)		(IRS Employer Identification No.)
26462 CORPORATE AVENUE HAYWARD, CA		94545
(Address of Principal Executive Offices)		(Zip Code)
Registrant’s telephone number, including area code:  (510) 576-4400
n/a
(Former Name or Former Address, if Changed Since Last Report)
_________________________

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):

 

	o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

 

On July 7, 2016, the Company announced that Casey Eichler will step down as the Company’s President and Chief Financial Officer to pursue other opportunities, effective as of July 29, 2016. Sheri Brumm, the Company’s Senior Vice President of Finance and Chief Accounting Officer, has been promoted to Chief Financial Officer and will assume the role effective July 30, 2016. Ms. Brumm will also act as the Company’s Senior Vice President of Finance, Secretary, Principal Financial Officer and Chief Accounting Officer.

 

Ms. Brumm, 46, joined the Company in April 2009 as the Senior Director of Finance and has served in progressively more senior financial roles, most recently as the Company’s Senior Vice President of Finance and Chief Accounting Officer. Prior to joining the Company, Ms. Brumm was the corporate controller, Vice President of Finance and Director of Internal Audit at Credence Systems Corporation. Ms. Brumm also served in various accounting and finance roles at Protiviti and KLA-Tencor Corporation and as a Manager of Business Process Risk Accounting at Arthur Anderson LLP. Ms. Brumm holds a B.S. in Managerial Economics from the University of California, Davis.

 

Pursuant to the offer letter filed as Exhibit 99.1 hereto, in her new position, Ms. Brumm will initially receive an annual base salary of $300,000, with an annual target bonus equal to 75% of her base salary, and receive a promotional award of restricted stock units with an approximate value of $750,000, not to exceed 150,000 shares, that will vest in three equal installments on each anniversary of the grant date, subject to the terms and conditions of the Company’s Stock Incentive Plan.

 

Ms. Brumm will be entitled to severance benefits under the Company’s Severance Benefits for Executive Officers policy (the “Severance Policy”) and has entered into a Change in Control Severance Agreement with the Company. Under the Severance Policy, if Ms. Brumm is terminated without cause prior to a change in control and she signs a release of claims, she is entitled to receive (i) 100% of her then-current base salary, (ii) 100% of her annual bonus (based on her average annual cash bonus and cash incentive compensation over the prior three years), (iii) 12 months of COBRA premiums and (iv) accelerated vesting of equity awards that would vest within 12 months. Under her Change in Control Severance Agreement, if a termination of employment occurs within 12 months after a change in control (including a resignation for good reason), Ms. Brumm’s severance benefits would be increased to 150% of the sum of her then-current base salary and annual cash bonus as determined by the Company over the prior three years, 24 months of COBRA premiums and accelerated vesting of all of her unvested and outstanding equity awards.

 

The Company and Mr. Eichler have entered into a Transition Agreement and Release of Claims (the “Transition Agreement”), pursuant to which, subject to a release of claims, Mr. Eichler will receive a lump sum cash payment equal to approximately $550,000 and receive accelerated vesting of 126,542 of his outstanding restricted stock units in connection with his resignation. At the end of the transition period, Mr. Eichler’s vested and unexercised stock options will remain exercisable until three months following the end of the transition period, in accordance with Mr. Eichler’s stock option agreement. A copy of the Transition Agreement is attached hereto as Exhibit 99.3.

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.		Exhibit Description
99.1		Offer Letter between the Company and Ms. Brumm dated July 7, 2016
99.2		Change in Control Severance Agreement between the Company and Ms. Brumm dated July 7, 2016
99.3		Transition Agreement and Release of Claims between the Company and Mr. Eichler dated July 7, 2016

 

SIGNATURES

 

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.

 

			ULTRA CLEAN HOLDINGS, INC.
Date:	July 8, 2016		By:	/s/ James P. Scholhamer
				Name:	James P. Scholhamer
				Title:	Chief Executive Officer

 

EXHIBIT INDEX

 

Exhibit No.		Exhibit Description
99.1		Offer Letter between the Company and Ms. Brumm dated July 7, 2016
99.2		Change in Control Severance Agreement between the Company and Ms. Brumm dated July 7, 2016
99.3		Transition Agreement and Release of Claims between the Company and Mr. Eichler dated July 7, 2016

 

 

 

 

Exhibit 99.1

 

 

 

July 7, 2016

 

To: Sheri Brumm

Re: Promotion to SVP, CFO

 

Ultra Clean Holdings, Inc. (the "Company" or "UCT") is pleased to offer you the regular, full time position of SVP, Chief Financial Officer (CFO).

 

Base Salary. Your annual base rate will be $300,000.00, effective on July 30, 2016 and payable bi-weekly in accordance with our regular payroll practices and in accordance with all applicable state and federal laws.

 

Management Bonus. You will be eligible for the management bonus plan which includes an initial target payout of 75% of your base salary on an annualized basis. This is subject to change with new executive compensation programs approved by the Board of Directors, all payouts will be based on performance factors determined by the Board of Directors. Your bonus payout for Q3’ 2016 will be prorated; 1/3 @40% and 2/3 @75%.

 

Restricted Stock Units – Promotion. On July 29, 2016, you will be granted a promotional award of restricted stock units of Ultra Clean Holdings, Inc. (the “RSU Award”) with an approximate value of $ 750,000.00 not to exceed 150,000 shares. The vesting schedule is 3 years; 1/3 of the award will vest upon each anniversary of the date of the grant, subject to the terms and conditions of UCT’s Amended and Restated Stock Incentive Plan.

 

Employment. Employment with UCT is “at will” meaning either you or the Company may terminate the employment relationship at any time, with or without cause.

 

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 Company's Severance Benefits for Executive Officers policy, as amended from time to time (the "Severance Policy"), you will be eligible to receive the severance benefits set forth in the Executive Severance Policy (attached) .

 

Change in Control Severance Agreement.  You and the Company will enter into a Change in Control and Severance Agreement in the form enclosed herewith.

 

Please sign and date this promotion offer and return a copy to me no later than July 7, 2016 together with the signed Change in Control document.

 

We are extremely excited about your promotion, and each and every one of us is looking forward to working with you in your new role.

 

 

 

 

 

 

Sincerely,

 

/s/ Jim Scholhamer

 

Jim Scholhamer, 

CEO

 

Offer Acceptance:

 

/s/ Sheri Brumm			July 7, 2016
Sheri Brumm			Date

 

 

Exhibit 99.2

 

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

CHANGE IN CONTROL SEVERANCE AGREEMENT (“Agreement”), dated as of July 7, 2016 by and between Ultra Clean Holdings, Inc., a Delaware corporation (the “Company”), and Sheri Brumm (“Employee”).

 

WHEREAS, the Company and the Employee wish to enter into this Agreement specifying the benefits the Employee will receive in certain circumstances relating to a Change in Control of the Company in order to induce Employee to remain in the employ of the Company in the event of the possibility of a Change in Control;

 

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

 

ARTICLE 1

TERM AND NATURE OF AGREEMENT

 

Section 1.01. Term. This Agreement shall be in force until the second anniversary of the Effective Date, and thereafter renew for automatic one year terms, unless the Company shall give the Employee written notice of termination at least 30 days before the expiration of the then current term provided that no Change in Control has occurred prior to such date. Notwithstanding the foregoing, this Agreement shall terminate (i) 12 months after a Change in Control (subject to satisfaction of any obligations hereunder as a result of a termination of employment prior to such expiration) and (ii) upon any termination of employment prior to a Change in Control.

 

Section 1.02. At-Will Employment. Nothing in this Agreement shall change the at-will nature of Employee’s employment with the Company

 

ARTICLE 2

CHANGE IN CONTROL TERMINATION

 

Section 2.01. Severance Benefits.

 

(a) If upon, or within 12 months following, a Change in Control, Employee is terminated by the Company without Cause or Employee resigns for Good Reason, Employee shall be entitled to the following (“Change in Control Severance Benefits”), provided that Employee executes and lets become effective a release of claims in the form attached hereto as Exhibit A (the “Release”) within 45 days following the termination of employment:

 

(i) a lump sum cash payment equal to 150% of the sum of (x) Employee’s then-existing annual base salary and (y) the average annual cash bonus as determined by the Company over the prior three years, which shall be paid as soon as administratively practicable after the date on which the Release becomes effective, and, in any event, no later than two and one-half (2 1/2) months after the end of the taxable year of the Employee in which the termination of employment occurs;

 

(ii) payment or reimbursement of health benefit continuation coverage under COBRA or otherwise from the termination date through the earlier of (A) 24 months following the termination date or (B) the date Employee becomes eligible for health benefits with another employer, which shall be paid no later than the month of such coverage, provided that if Employee is no longer eligible for COBRA continuation coverage, a lump sum payment calculated based on the monthly premiums immediately prior to the expiration of COBRA coverage; and

 

(iii) 100% of all of the Employee’s unvested and outstanding Equity Awards shall become vested.

 

(b) Definitions. For purposes of this Agreement, the following definitions shall have the following meanings:

 

(i) “Cause” shall exist if: (A) Employee is convicted of, or pleads guilty or no contest to,  a criminal offense; (B) Employee engages in any act of fraud or material dishonesty in connection with his employment; (C) Employee breaches any agreement with the Company; (D) Employee commits any material violation of a written Company policy that has been provided to Employee; or (E) Employee fails, refuses or neglects to perform the services required of Employee in his or her position at the Company; provided, however, 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, Employee’s termination will not be for Cause unless the Company (x) notifies Employee 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 Employee at least 10 days following the date on which Employee receive such notice (and prior to termination) in which to remedy the condition, and (z) if Employee does not remedy such condition within such period, actually terminates Employee’s employment within 15 days after the expiration of such remedy period (and before Employee remedies such condition).

 

(ii) “Change in Control” means the occurrence of any one or more of the following:

 

(A) the consummation of a merger or consolidation of the Company with or into any other entity (other than with any entity or group in which Employee has not less than a 5% beneficial interest) pursuant to which the holders of outstanding equity of the Company immediately prior to such merger or consolidation hold directly or indirectly 50% or less of the voting power of the equity securities of the surviving entity;

 

(B) the sale or other disposition of all or substantially all of the Company’s assets (other than to any entity or group in which Employee has not less than a 5% beneficial interest); or

 

(C) any acquisition by any person or persons (other than any entity or group in which Employee has not less than a 5% beneficial interest) of the beneficial ownership of more than 50% of the voting power of the Company’s equity securities in a single transaction or series of related transactions; provided, however, that an underwritten public offering of the Company’s securities shall not be considered a Change in Control;

 

provided, however, that a transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who directly or indirectly held the Company’s securities immediately before such transaction.

 

(iii) “Good Reason” means:

 

(A) a reduction of Employee’s then-existing annual base salary by more than 10% (other than in connection with an action affecting a majority of the executive officers of the Company); 

 

(B) relocation of the principal place of Employee’s employment to a location that is more than 50 miles from the principal place of Employee’s employment immediately prior to the date of such change; or

 

(C) a material reduction in Employee’s authority, duties or responsibilities;

 

provided, however, that notwithstanding the foregoing, Employee’s termination will not be for Good Reason unless Employee (x) notifies the Company in writing of the existence of the condition which Employee believes 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 terminates Employee’s employment within 15 days after the expiration of such remedy period (and before the Company remedies such condition);

 

(iv) “Equity Awards” means all options to purchase shares of Company common stock as well as any and all other stock-based awards granted to the Employee, including but not limited to stock bonus awards, restricted stock, restricted stock units or stock appreciation rights, except for performance stock awards which remain subject to performance criteria as of the Effective Date.

 

Section 2.02. Resignation of Corporate Offices. In connection with any termination of employment following a Change in Control, Employee will resign Employee’s office, if any, as a director, officer or trustee of the Company, its subsidiaries or affiliates and of any other corporation or trust of which Employee serves as such at the request of the Company, effective as of the date of termination of employment.

 

Section 2.03. Accrued Compensation and Benefits. In connection with any termination of employment upon or following a Change in Control (whether or not under Section 2.01 above), the Company shall pay Employee’s earned but unpaid base salary and other vested but unpaid cash entitlements for the period through and including the termination of employment, including unused earned vacation pay and unreimbursed documented business expenses incurred by Employee prior to the date of termination (collectively “Accrued Compensation and Expenses”), as required by law and the applicable Company plan or policy. In addition, Employee shall be entitled to any other vested benefits earned by Employee for the period through and including the termination date of Employee’s employment under any other employee benefit plans and arrangements maintained by the Company, in accordance with the terms of such plans and arrangements, except as modified herein (collectively “Accrued Benefits”). Any Accrued Compensation and Expenses to which the Employee is entitled shall be paid to the Employee in cash as soon as administratively practicable after the termination, and, in any event, no later than two and one-half (2-1/2) months after the end of the taxable year of the Employee in which the termination occurs. Any Accrued Benefits to which the Employee is entitled shall be paid to the Employee as provided in the relevant plans and arrangement.

 

Section 2.04. Continuing Obligations. Employee acknowledges his or her continuing obligations under the Confidential and Non-Disclosure Agreement with the Company, including but not limited to Employee’s obligations not to use or disclose, at any time, any trade secret, confidential or proprietary information of the Company.

 

Section 2.05. Limitation on Payments.

 

(a) If the Change in Control Severance Benefits together with any other payment or benefit Employee would receive pursuant to a Change in Control (collectively, “Payment”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. lf a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the following order unless Employee elects in writing a different order: reduction of cash payments; cancellation of acceleration of vesting; reduction of employee benefits. In the event that acceleration of vesting is to be reduced, it shall be cancelled in the reverse order of the date of grant of the Equity Awards unless Employee elects in writing a different order for cancellation.

 

(b) The Company may engage the accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control or another firm to perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such firm required to be made hereunder.

 

(c) The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Employee and the Company within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by Employee or the Company) or such other time as requested by Employee or the Company.

 

ARTICLE 3

MISCELLANEOUS

 

Section 3.01. Assignment; Successors and Assigns. This Agreement shall inure to the benefit of and be enforceable by Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees. If Employee should die or become subject to a permanent disability while any amount is owed but unpaid to Employee hereunder, all such amounts, unless otherwise provided herein, shall be paid to Employee’s devisee, legatee, legal guardian or other designee, or if there is no such designee, to Employee’s estate. Employee’s rights hereunder shall not otherwise be assignable. This Agreement shall be binding on the Company’s successors and assigns.

 

Section 3.02. Dispute Resolution. To ensure rapid and economical resolution of any and all disputes that might arise in connection with this Agreement, Employee and the Company agree that any and all disputes, claims, and causes of action, in law or equity, arising from or relating to this Agreement or its enforcement, performance, breach, or interpretation, will be resolved solely and exclusively by final, binding, and confidential arbitration, by a single arbitrator, in San Francisco, California, and conducted by Judicial Arbitration & Mediation Services, Inc. (“JAMS”) under its then-existing employment rules and procedures. Nothing in this section, however, is intended to prevent either party from obtaining injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Each party to an arbitration or litigation hereunder shall be responsible for the payment of its own attorneys’ fees.

 

Section 3.03. Unfunded Agreement. The obligations of the Company under this Agreement represent an unsecured, unfunded promise to pay benefits to Employee and/or Employee’s beneficiaries, and shall not entitle Employee or such beneficiaries to a preferential claim to any asset of the Company.

 

Section 3.04. Non-Exclusivity of Benefits. Unless specifically provided herein, neither the provisions of this Agreement nor the benefits provided hereunder shall reduce any amounts otherwise payable, or in any way diminish Employee’s rights as an employee of the Company, whether existing now or hereafter, under any compensation and/or benefit plans (qualified or nonqualified), programs, policies, or practices provided by the Company, for which Employee may qualify; provided that the Change in Control Severance Benefits shall not be duplicative of any severance benefits under any such plans, programs, policies or practices. Vested benefits or other amounts which Employee is otherwise entitled to receive under any plan, policy, practice, or program of the Company (i.e., including, but not limited to, vested benefits under any qualified or nonqualified retirement plan), at or subsequent to the termination date shall be payable in accordance with such plan, policy, practice, or program except as expressly modified by this Agreement.

 

Section 3.05. Mitigation. In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Employee under any of the provisions of this Agreement nor shall the amount of any payment or benefit hereunder be reduced by any compensation earned by Employee as a result of employment by another employer.

 

Section 3.06. Entire Agreement. This Agreement represents the entire agreement between Employee and the Company and its affiliates with respect to Employee’s severance rights in a Change in Control situation, and supersedes all prior and contemporaneous discussions, negotiations, and agreements concerning such rights, provided, however, that any amounts payable to Employee hereunder shall be reduced by any amounts paid to Employee as required by any applicable federal, state or local law (including without limitation the WARN Act) in connection with any termination of Employee’s employment.

 

Section 3.07. Tax Withholding. Notwithstanding anything in this Agreement to the contrary, the Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as are legally required to be withheld.

 

Section 3.08. Waiver of Rights. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach hereof.

 

Section 3.09. Severability. In the event any provision of the Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Agreement, and the Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

 

Section 3.10. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to principles of conflict of laws.

 

Section 3.11. Counterparts. This Agreement may be signed in several counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were on the same instrument.

 

Section 3.12. Code Section 409A. This Agreement and the payments and benefits hereunder are intended to qualify for the short-term deferral exception to Section 409A of the Code, and all regulations, rulings and other guidance issued thereunder, all as amended and in effect from time to time (“Section 409A”), described in Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent possible, and to the extent they do not so qualify, they are intended to qualify for the involuntary separation pay plan exception to Section 409A described in Treasury Regulation Section 1.409A-1(b)(9)(iii) to the maximum extent possible. To the extent Section 409A is applicable to this Agreement, this Agreement is intended to comply with Section 409A. Without limiting the generality of the foregoing, if on the date of termination of employment Employee is a “specified employee” within the meaning of Section 409A as determined in accordance with the Company’s procedures for making such determination, to the extent required in order to comply with Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following the termination date shall instead be paid on the first business day after the date that is six months following the termination date. All references herein to “termination date” or “termination of employment” shall mean separation from service as an employee within the meaning of Section 409A.

 

IN WITNESS WHEREOF, the Company and the Employee have executed this Agreement, to be effective as of the date and year first written above.

 

ULTRA CLEAN HOLDINGS, INC.
By:		/s/ Jim Scholhamer
Name:		Jim Scholhamer
Title:		Chief Executive Officer
EMPLOYEE:
/s/ Sheri Brumm
Dated: July 7, 2016

 

 

 

 

Exhibit A – Form of Release

 

Reference is made in this Release (the “Release”) to the terms set forth in the Change in Control Severance Agreement dated XXX, 2016, (the “Agreement”) between Ultra Clean Holdings, Inc. (together with its successors and assigns, the “Company”) and the undersigned Sheri Brumm (“Employee”).

 

1. Release. In consideration for the benefits outlined in the Agreement (the “Severance Benefits”), to which I am not otherwise entitled, I hereby generally and completely release the Company and its affiliated entities (collectively “Company Entities”) and their directors, officers, employees, shareholders, partners, agents, attorneys, predecessors, successors, parent and subsidiary entities, insurers, affiliates, and assigns from any and all claims, liabilities and obligations, both known and unknown, that arise out of or are in any way related to events, acts, conduct or omissions occurring prior to the time I sign this Release. This general release includes, but is not limited to: (1) all claims arising out of or in any way related to my employment with the Company or the termination of that employment; (2) all claims related to my compensation or benefits from the Company, including salary, bonuses, commissions, vacation pay, expense reimbursements, severance pay, fringe benefits, stock, stock options, or any other ownership interests in the Company; (3) all claims for breach of contract, wrongful termination or breach of the implied covenant of good faith and fair dealing; (4) all tort claims, including claims for fraud, defamation, emotional distress, and discharge in violation of public policy; and (5) all federal, state, and local statutory claims, including claims for discrimination, harassment, retaliation, attorneys’ fees, or other claims arising under the federal Civil Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of 1990, the federal Age Discrimination in Employment Act of 1967 (as amended) (“ADEA”), or the California Fair Employment and Housing Act (as amended). This Release does not apply to (x) claims which cannot be released as a matter of law, (y) any right I may have to enforce the Agreement or (z) my eligibility for coverage under any D&O or other similar insurance policy or indemnification in accordance with applicable laws, the charter and bylaws of the Company or any indemnification agreement I have with the company.

 

2. ADEA Waiver. I acknowledge that I am knowingly and voluntarily waiving and releasing any rights you have under the ADEA and that the consideration given for the waiver and release is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by this writing, as required by the ADEA, that:

 

(a) my waiver and release specified in this paragraph do not apply to any rights or claims that arise after the date I sign this Release;

 

(b) I have the right to consult with an attorney prior to signing this Release;

 

(c) I have 45 days to consider this Release (although I may choose voluntarily to sign this Release earlier);

 

(d) I have seven (7) days after I sign this Release to revoke the Release; and

 

(e) this Release will not be effective until the date on which the revocation period has expired, which will be the eighth day after I sign this Release, assuming I have returned it to the Company by such date.

 

3. Waiver of Unknown Claims. In granting the general release herein, I acknowledge that I have read and understand California Civil Code section 1542, which states:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.

 

I expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of similar effect.

 

This Release, together with the Agreement, constitutes the entire understanding of the parties on the subjects covered.

 

EMPLOYEE:

 

Exhibit 99.3

 

 

 

Transition AGREEMENT AND RELEASE OF CLAIMS

 

Kevin C. Eichler (hereafter referred to as “the Employee”) and Ultra Clean Holdings, Inc. (together with its subsidiaries hereafter referred to as “the Company”) mutually desire to define their rights and liabilities with respect to one another upon the termination of the Employee’s employment with the Company on July 29, 2016 (the “Separation Date”). Accordingly, the parties agree as follows:

 

1. Contractual nature of Agreement; interpretation. The Employee and the Company agree that this Transition Agreement and Release of Claims (hereafter referred to as “this Agreement”) is contractual in nature and not a mere recital and that this Agreement shall be interpreted as though drafted jointly by the Employee and the Company.

 

2. Release of claims by Employee. In exchange for the consideration described below, the Employee hereby releases and discharges fully the Company and its parent, subsidiary and affiliated entities, and the current and former shareholders, directors, officers, employees, agents and representatives of each, from any and all claims, liabilities, charges and causes of action of any kind whatsoever which the Employee has, had or may have against them as of the date on which he or she signs this Agreement, including, but not limited to:

 

(a)

any and all rights and claims relating to or in any manner arising from the Employee’s employment or the termination of his or her employment;

 

(b)

any and all rights and claims arising under the California Fair Employment and Housing Act (Government Code section 12900 et seq.);

 

(c)

any and all claims arising under the Civil Rights Act of 1964 (42 U.S.C. 2000, et seq.);

 

(d)

any and all claims arising under the Americans with Disabilities Act (29 U.S.C. 706 et seq.);

 

(e)

any and all claims arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.);

 

(f)

any and all claims for violation of the California Labor Code, California Wage Orders or Fair Labor Standards Act;

 

(g)

any and all claims for breach of contract, breach of the covenant of good faith and fair dealing, retaliation, discrimination, harassment, invasion of privacy, infliction of emotional distress, defamation and misrepresentation; and

 

(h)

claims relating to any letter or agreement offering Employee employment with the Company, the Change in Control Severance Agreement between the Company and Employee dated July 31, 2009 and any Company severance plan, policy or arrangement.

 

This Agreement shall not apply, however, to any rights and claims not subject to waiver by law.

 

3. Scope of release. The Employee understands and intends that the rights, claims and causes of action released herein include all legal, contractual, statutory and equitable rights, claims and causes of action and held by him or her against the Company and its parent, subsidiary and affiliated entities and the current and former shareholders, directors, officers, employees, agents and representatives of each, regardless of whether those rights, claims, or causes of action are presently existing, known or anticipated.

 

4. Due consideration; right to rescind in part. The Employee represents and/or agrees that:

 

(a)

he or she has had the opportunity to consider this Agreement before signing it;

 

(b)

he or she has had a reasonable opportunity to consult an attorney before signing this Agreement;

 

(c)

he or she has read this Agreement in full and understands all of the terms and conditions set forth herein;

 

(d)

he or she knowingly and voluntarily agrees to all of the terms and conditions set forth herein and intends to be legally bound by them;

 

(e)

he or she may rescind this Agreement with respect to claims arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.) only for seven days after signing it; and

 

(f)

this Agreement will not become effective or enforceable with respect to claims arising under the Age Discrimination in Employment Act of 1967 (29 U.S.C. 621 et seq.) only until seven days after he or she has signed it.

 

5. New or different facts; application of release to unknown claims. The Employee acknowledges that he or she may hereafter discover facts different from or in addition to those now known or believed to be true regarding the subject matter of the Agreement, but:

 

(a)

agrees that this Agreement shall remain in full force and effect notwithstanding the existence or discovery of any such new or different facts; and

 

(b)

hereby waives all rights to which he or she may be entitled pursuant to Civil Code section 1542, which provides as follows:

 

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.

 

6. No existing claims; covenant not to file claims. The Employee represents that he or she has not filed any complaints, claims, grievances or actions against the Company, its parent, subsidiary or affiliated entities or the current or former shareholders, directors, officers, employees, agents or representatives of the Company or its parent, subsidiary or affiliated entities with any state, federal or local court or agency and covenants not to file any complaints, claims, grievances or actions (other than those not subject to waiver by law) against the parties released herein at any time hereafter based on events occurring on or before the date on which he or she signs this Agreement.

 

7. Payment of wages and benefits. On the Separation Date, in addition to any amounts due under Section 8 below, Employee will receive his 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 Employee’s stock option agreement(s), Employee’s vested and unexercised stock options will remain exercisable until the earlier of (i) three months following the Separation Date and (ii) the expiration of such stock options.

 

8. Separation Benefits. In exchange for the consideration described herein, and in lieu of any compensation or other consideration under any letter or agreement offering Employee employment with the Company, the Change in Control Severance Agreement between the Company and Employee dated July 31, 2009 and any Company severance plan, policy or arrangement or otherwise, the Company hereby agrees to pay Employee a lump sum cash payment equal to $548,639.00, less deductions required by law, in accordance with the Company’s regular payroll practices to be paid within 15 days of the date on which the Employee returns the signed original of this Agreement to the Company, which amount consists of:

 

a. $ 370,000.00 : 1x Base Salary
b $ 143,320.00 : 3 year Average Cash Incentive
c. $ 35,319.00 : True up for 1 year Cobra Payments / 23,326.80 actual.

 

Additionally, the Employee will receive accelerated vesting of 126,542 outstanding restricted stock units currently held by Employee, with such acceleration effective on the Separation Date. The Company shall withhold shares from such accelerated restricted stock award in an amount sufficient to satisfy the minimum tax withholding requirements relating to such acceleration.

 

All other outstanding restricted stock units or performance stock units held by Employee as of the Separation Date and not accelerated pursuant to the foregoing shall be forfeited and cancelled.

 

9. Non-disparagement. The Employee agrees not to defame, disparage or criticize the Company, its parent, subsidiary or affiliated entities or the current or former shareholders, directors, officers, employees, agents or representatives of the Company or its parent, subsidiary or affiliated entities at any time.

 

10. Confidentiality of Agreement. The Employee agrees to not to disclose the existence of this Agreement, the terms of the Agreement or any information relating to this Agreement to anyone other than his or her spouse, his or her attorney(s), his or her tax preparer and any party to whom disclosure is necessary in order to comply with the law.

 

11. Non-solicitation of employees and contractors. During the term of the Employee’s employment with the Company and for one year thereafter, the Employee shall not solicit any employee or contractor of the Company to discontinue working for the Company or to provide service to any other person or entity in competition with the Company or its parent, subsidiary or affiliated entities without the Company’s written consent.

 

12. Non-solicitation of customers. During the Employee’s employment with the Company and at all times thereafter, the Employee shall not utilize any confidential information of the Company to solicit any customer of the Company to (a) purchase goods or services from any person or entity whose goods or services could be used as substitutes for those of the Company or (b) discontinue purchasing goods and/or services from the Company. As used in this Agreement, the term “confidential information” shall mean information that (a) derives economic value from not being known to the general public or others who can obtain economic value from its disclosure or use and (b) is the subject of reasonable efforts on the part of the Company to maintain its secrecy.

 

13. Preservation of confidential information. During and after the Employee’s employment with the Company, the Employee shall not use any of the Company’s confidential information for any purpose other than to fulfill his or his her duties to the Company and shall not disclose any such information to any third party without the express written consent of the Company.

 

14. Return of Company property. The Employee shall return to the Company on the date on which his or her employment terminates, or at such other time as the Company may request, all property of the Company or its parent, subsidiary or affiliated entities in the Employee’s possession, custody or control. Notwithstanding any other provisions in this Agreement, the Company shall not be required to provide the Employee with the consideration described in section 8 of this Agreement until the Employee has returned to the Company all property of the Company in his or her possession, custody or control.

 

15. Resignation. Employee hereby resigns as a director and/or officer of Ultra Clean Holdings, Inc. and each of its subsidiaries.

 

16. Immunity under Defend Trade Secrets Act. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in confidence to a Federal, State, or local government official or to an attorney solely for the purpose of reporting or investigating a suspected violation of law. An individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.

 

17. Successors and assigns. Each party represents that it has not transferred to any person or entity any of the rights released or transferred through this Agreement. The parties agree that this Agreement shall be binding upon the future successors and assignees of the Company, if any. The Employee may not delegate or assign any of his or obligations pursuant to this Agreement.

 

18. Severability. If a court of competent jurisdiction declares or determines that any provision of this Agreement is invalid, illegal or unenforceable, the invalid, illegal or unenforceable provision(s) shall be deemed not a part of the Agreement, but the remaining provisions shall continue in full force and effect. If a court declares or determines that any of the release provisions set forth in section 2 above are invalid, illegal or unenforceable, however, the Company shall have the option of declaring this Agreement null and void and, in such event, the Employee shall return to the Company all consideration provided to the Employee to date pursuant to this Agreement.

 

19. Further Assurances. The Employee agrees to perform such actions, and to execute such additional documents, if any, as may be necessary or appropriate to effectuate the intent of this Agreement.

 

20. Costs and fees. Each party shall bear any costs and fees it may incur in connection with this Agreement and neither shall be entitled to recover such costs or fees from the other.

 

21. Remedy for breach. Each party, upon breach of this agreement by the other, shall have the right to seek all necessary and proper relief, including, but not limited to, specific performance, from a court of competent jurisdiction and the party prevailing in such a suit shall be entitled to recover reasonable costs and attorney fees.

 

22. Governing law. The laws of the State of California shall govern the construction and enforcement of this Agreement, except that the Agreement shall be interpreted as through drafted jointly by the Employee and the Company.

 

23. Entire agreement; modification. This Agreement sets forth the entire agreement between the parties and supersedes all prior agreements or understandings, both written and oral, between the parties regarding the subject matter of this Agreement. The parties may modify this Agreement only through a writing signed by each.

 

24. No reliance on representations by other party or other party’s representatives. The parties agree and represent that they have not relied and do not rely upon any representation or statement regarding the subject matter or effect of this Agreement made by any other party to this Agreement or any party’s agents, attorneys or representatives.

 

 

 

Date:	7/7/2016		By:	/s/ Kevin Casey Eichler
				Kevin Casey Eichler
Date:	7/7/2016		By:	/s/ Jim Scholhamer
				Jim Scholhamer, CEO
				Ultra Clean Holdings, Inc.

 

 

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