Clarence L. Granger-

EMPLOYMENT AGREEMENT

1st AMENDMENT TO EMPLOYMENT AGREEMENT

2nd AMENDMENT TO EMPLOYMENT AGREEMENT

SEVERANCE POLICY

Severance Policy as Revised

Change in Control Severance Agreement

 

 

EXHIBIT 10.1

 

                              EMPLOYMENT AGREEMENT

 

      EMPLOYMENT AGREEMENT ("AGREEMENT") dated as of November 15, 2002 by and

among Ultra Clean Technology Systems and Service, Inc., a California corporation

(together with its successors, the "COMPANY"), Ultra Clean Holdings, Inc., a

Delaware corporation ("PARENT"), and Clarence L. Granger ("EXECUTIVE"), to be

effective as of the Effective Time (as defined in the Merger Agreement).

 

      WHEREAS, Executive is currently employed by the Company and has entered

into an Employment Agreement with the Company dated as of May 26, 2002 (the

"EXISTING EMPLOYMENT AGREEMENT"), and a Change of Control Agreement with the

Company dated as of June 1, 2002 (the "CHANGE OF CONTROL AGREEMENT");

 

      WHEREAS, pursuant to an Agreement and Plan of Merger dated as of October

30, 2002 (the "MERGER AGREEMENT"), among the Company, Mitsubishi Corporation

("MITSUBISHI"), Mitsubishi International Corporation, Parent, and Clean Merger

Company, the Company will become a subsidiary of Parent;

 

      WHEREAS, the Company and Parent consider it in their best interests to

foster the continued employment of Executive with the Company or one of its

affiliates from and after the Effective Time;

 

      WHEREAS, Executive is willing to continue his employment on and after the

Effective Time on the terms hereinafter set forth in this Agreement;

 

      NOW THEREFORE, in consideration of the foregoing and of the mutual

covenants and agreements of the parties set forth in this Agreement, and of

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

                           Position; Term Of Agreement

 

      Section 1.01. Position. (a) As of and following the Effective Time,

Executive shall serve as President and Chief Executive Officer of the Company

and shall report to the Board of Directors of the Company (the "BOARD").

Executive shall have such duties and authority, consistent with such position,

as shall be determined from time to time by the Board.

 

      (b) During the Employment Term (as defined below), Executive will devote

substantially all of his business time to the performance of his duties under

this Agreement and will not engage in any other business, profession or

occupation for compensation or otherwise which would conflict with the rendition

<PAGE>

of such services either directly or indirectly, without the prior written

consent of the Board.

 

      Section 1.02. Term. Executive shall be employed by the Company for a

period (the "EMPLOYMENT TERM") commencing on the Effective Time and, subject to

earlier termination or extension as provided herein, ending on the second

anniversary of the Effective Time.

 

                                   ARTICLE 2

                            Compensation And Benefits

 

      Section 2.01. Base Salary. Commencing on the Effective Time, the Company

shall pay Executive an annual base salary (the "BASE SALARY") at the annual rate

of $240,000, payable in accordance with the payroll and personnel practices of

the Company from time to time. Executive's compensation package shall be subject

to periodic review by the Board or a committee of the Board.

 

      Section 2.02. Signing Bonus. The provisions set forth in Schedule I are

incorporated herein.

 

      Section 2.03. Bonus. Executive shall be eligible to participate in an

executive bonus plan in accordance with the terms and conditions of such plan.

 

      Section 2.04. Employee Benefits. (a) During the Employment Term, Executive

shall be eligible for employee benefits (including fringe benefits, vacation and

health, accident and disability insurance, and retirement plan participation)

substantially similar to those benefits made available generally to senior

executives of the Company, and Executive shall be entitled to participate in a

deferred compensation plan and/or 401(k) plan to the extent the Company

maintains such plans.

 

      (b) During the Employment Term, the Company will provide Executive with

the use of a company-leased vehicle and will cover all related insurance and

maintenance costs, consistent with Executive's existing arrangements as of the

Effective Time.

 

      Section 2.05. Business And Travel Expenses. Reasonable travel,

entertainment and other business expenses incurred by Executive in the

performance of Executive's duties hereunder shall be reimbursed by the Company

in accordance with the Company's policies as in effect from time to time.

 

 

                                       2

<PAGE>

                                   ARTICLE 3

                          Certain Termination Benefits

 

      Section 3.01. Certain Events. (a) A "QUALIFYING EVENT" means (i) the

termination of Executive's employment by the Company without Cause (other than

by reason of Executive's death or disability) or (ii) the termination of

Executive's employment within six months after a Change of Control by Executive

with Good Reason.

 

      (b) Executive shall give the Company 30 days prior written notice of

Executive's intent to terminate Executive's employment with the Company for any

reason. The Company shall give Executive written notice of the Company's

termination of Executive's Employment with the Company.

 

      (c) "CAUSE" means the occurrence of any one or more of the following:

 

            (i) the failure, refusal or willful neglect of Executive to perform

      the services required of Executive hereunder;

 

            (ii) the Company forming a good faith belief that Executive has

      engaged in fraudulent conduct in connection with the business of the

      Company or that Executive has committed a felony;

 

            (iii) Executive's breach of any of the covenants contained in

      Section 4.01 or of the Confidentiality Agreement (as defined below); or

 

            (iv) the Company forming a good faith belief that Executive has

      committed an act of misconduct, violated the Company's anti-discrimination

      policies prohibiting discrimination or harassment on the grounds of race,

      sex, age or any other legally prohibited basis, or otherwise has caused

      material harm to the Company's reputation or goodwill.

 

      (d) "CHANGE OF CONTROL" means the occurrence of any one or more of the

following:

 

            (i) 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 Executive 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;

 

            (ii) the sale or other disposition of all or substantially all of

      the Company's assets (other than to any entity or group in which Executive

      has not less than a 5% beneficial interest); or

 

 

                                       3

<PAGE>

            (iii) any acquisition by any person or persons (other than the

      direct and indirect holders of outstanding equity of the Company

      immediately after the Effective Time and other than any entity or group in

      which Executive 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.

 

      (e) "GOOD REASON" means the occurrence of any of the following without

Executive's written consent:

 

            (i) A significant reduction in the duties, position and

      responsibilities held by the Executive immediately prior to the Change of

      Control;

 

            (ii) A material reduction by the Company of Executive's base salary

      (other than in connection with an action affecting a majority of the

      executive officers of the Company); or

 

            (iii) Any relocation of Executive's office to a location more than

      60 miles from its location immediately prior to the Change of Control;

 

provided, however, that no act or failure to act by the Company shall give rise

to Good Reason unless (A) Executive notifies the Company in writing of the

circumstances he believes constitute Good Reason hereunder within 30 days after

he acquires knowledge of such circumstances and (B) the Company has failed to

cure or remedy such circumstances within 30 days of written notice by Executive

to the Company.

 

      Section 3.02. Right To Certain Benefits. In the event of any termination

of employment during the Employment Term, Executive shall be entitled to receive

from the Company either the relevant Severance Benefits to the extent and as

described in Section 3.03 or the relevant Separation Benefits to the extent and

as described in Section 3.04, as the case may be, contingent upon Executive

signing a release of claims in a form reasonably acceptable to the Company.

 

      Section 3.03. Benefits Upon A Qualifying Event. In the event of any

termination of employment during the Employment Term upon a Qualifying

 

 

                                       4

<PAGE>

Event, Executive shall be entitled to the following benefits (the "SEVERANCE

BENEFITS"):

 

      (a) The Company shall pay Executive as soon as practicable a lump sum, in

cash, equal to Executive's earned but unpaid Base Salary and other vested but

unpaid cash entitlements for the period through and including the date of

termination of Executive's employment, including unused earned vacation pay and

unreimbursed documented business expenses (collectively, "ACCRUED

COMPENSATION"). In addition, Executive shall be entitled to any other vested

benefits earned by Executive for the period through and including the date of

termination of Executive'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").

 

      (b) The Company shall (i) continue to pay Executive's base salary for 12

months following the date of termination and (ii) pay Executive as soon as

practicable a lump sum, in cash, equal to Executive's earned but unpaid bonus as

of the date of termination; provided that if Executive obtains full-time

employment prior to the first anniversary of the date of termination, any income

earned by Executive during such 12 months shall be offset against the Company's

payment obligations under this Agreement.

 

      (c) Continuation of medical and dental benefits for Executive and his

dependents substantially similar to, and at the same cost to Executive of, those

provided immediately prior to the date of termination until the earlier to occur

of (i) the end of the 12-month period after the date of termination and (ii)

such time as Executive is covered by comparable programs of a subsequent

employer.

 

      (d) The portion of any options to purchase stock in the Company held by

Executive under the Company's employee stock option plan which would have become

vested and exercisable within the 12-month period following the date of

termination shall become fully vested and exercisable on the date of such

termination.

 

      (e) Except as set forth in this Section 3.03, Executive will be entitled

to no other payments or benefits from the Company.

 

      Section 3.04. Separation Benefits. In the event of any termination of

employment during the Employment Term other than upon a Qualifying Event,

Executive (or his estate, as the case may be) shall be entitled to the benefits

set forth below (the "SEPARATION BENEFITS"):

 

      (i) The Accrued Compensation; and

 

      (ii) The Accrued Benefits.

 

 

                                       5

<PAGE>

                                   ARTICLE 4

                          Covenants and Representations

 

      Section 4.01. Nondisparagement, Nonsoliciation And Nondisclosure. (a) In

connection with the termination of Executive's employment hereunder, Executive

shall cooperate with the Company and any subsidiary or affiliate of the Company

to ensure an orderly transition, in such a manner and at such times as the

Company shall reasonably request.

 

      (b) While employed by the Company and for 24 months after the termination

of Executive's employment, Executive shall not, directly or indirectly:

 

            (i) induce or attempt to induce any employee of the Company (or any

      affiliate of the Company) to be employed or perform services elsewhere;

 

            (ii) solicit or attempt to solicit the trade of any individual or

      entity which, at the time of such solicitation, is a customer of the

      Company (or any subsidiary of the Company) or which the Company (or any

      subsidiary of the Company) is undertaking reasonable steps to procure as a

      customer at the time of or immediately preceding termination of

      employment.

 

      (c) Except as required by law, neither party will at any time (whether

during or after termination of Executive's employment with the Company)

knowingly make any statement, written or oral, or take any other action that

would disparage or otherwise harm the other party, its business or reputation

or, in the case of the Company, the reputation of any of its affiliates or the

officers and directors of any of them.

 

      (d) Executive agrees to execute the Company's standard form of

Confidentiality and Non-Disclosure Agreement, substantially in the form attached

hereto as Exhibit A (the "CONFIDENTIALITY AGREEMENT"), and agrees to be bound by

the terms of Exhibit A as of the Effective Time.

 

      Section 4.02. Material Inducement; Specific Performance. (a) If any

provision of Section 4.01 is determined by a court of competent jurisdiction not

to be enforceable in the manner set forth in this Agreement, the Company and

Executive agree that it is the intention of the parties that such provision

should be enforceable to the maximum extent possible under applicable law and

that such court shall reform such provision to make it enforceable in accordance

with the intent of the parties.

 

      (b) Executive acknowledges that a material part of the inducement for the

Company to provide the compensation provided herein is Executive's covenants set

forth in Section 4.01 and that the covenants and obligations of

 

 

                                       6

<PAGE>

Executive with respect to nondisclosure and nonsolicitation relate to special,

unique and extraordinary matters and that a violation of any of the terms of

such covenants and obligations will cause the Company irreparable injury for

which adequate remedies are not available at law. Therefore, Executive agrees

that, if Executive shall materially breach any of those covenants during or

following termination of employment, the Company shall be entitled to an

injunction, restraining order or such other equitable relief (without the

requirement to post a bond) restraining Executive from committing any violation

of the covenants and obligations contained in Section 4.01 and the Company shall

have no further obligation to pay Executive any benefits otherwise payable

hereunder. The remedies in the preceding sentence are cumulative and are in

addition to any other rights and remedies the Company may have at law or in

equity as an arbitrator (or court) shall reasonably determine.

 

      Section 4.03. Employee Representation. Executive expressly represents and

warrants to the Company that Executive is not a party to any contract or

agreement and is not otherwise obligated in any way, and is not subject to any

rules or regulations, whether governmentally imposed or otherwise, which will or

may restrict in any way Executive's ability to fully perform Executive's duties

and responsibilities under this Agreement.

 

                                   ARTICLE 5

                           Successors And Assignments

 

      Section 5.01. Assignments. Except for an assignment in the event of a

change in control or an assignment to an affiliate of the Company, this

Agreement shall not be assignable by the Company without the written consent of

Executive. This Agreement shall not be assignable by Executive.

 

      Section 5.02. Successors; Binding Agreement. This Agreement shall inure to

the benefit of and be binding upon personal or legal representatives, executors,

administrators, successors, heirs, distributees, devisees, and legatees.

 

                                   ARTICLE 6

                                  Miscellaneous

 

      Section 6.01. Notices. Any notice required to be delivered hereunder shall

be in writing and shall be addressed:

 

 

                                       7

<PAGE>

      (i)   if to the Company or Parent, to:

 

            Dipanjan Deb

            Francisco Partners

            2882 Sand Hill Road, Suite 280

            Menlo Park, CA 94025

            Fax: 650-233-2999

 

            with copies to:

 

            Jean M. McLoughlin

            Davis Polk & Wardwell

            1600 El Camino Real

            Menlo Park, CA 94025

            Tel:  650-752-2000

            Fax:  650-752-2111

 

      (ii)  if to Executive, to Executive's last known address as reflected on

            the books and records of the Company;

 

or, in each case, to such other address as such party may hereafter specify for

the purpose by written notice to the other party hereto. Any such notice shall

be deemed received on the date of receipt by the recipient thereof if received

prior to 5:00 p.m. in the place of receipt and such day is a business day in the

place of receipt. Otherwise, any such notice shall be deemed not to have been

received until the next succeeding business day in the place of receipt.

 

      Section 6.02. Dispute Resolution. (a) Except as provided in Section 4.02,

each of Executive and the Company shall have the right and option to elect (in

lieu of litigation) to have any dispute or controversy arising under or in

connection with this Agreement settled by arbitration, conducted before a panel

of three arbitrators sitting in Santa Clara County, California, in accordance

with the rules of the American Arbitration Association then in effect.

Executive's election to arbitrate, as herein provided, and the decision of the

arbitrators in that proceeding, shall be binding on the Company and Executive.

Judgment may be entered on the award of the arbitrator in any court having

jurisdiction.

 

      (b) Each party shall pay its own expenses of such arbitration or

litigation and all common expenses of such arbitration or litigation shall be

borne by the Company. Each party to an arbitration or litigation hereunder shall

be responsible for the payment of its own attorneys' fees.

 

      Section 6.03. Unfunded Agreement. The obligations of the Company under

this Agreement represent an unsecured, unfunded promise to pay benefits to

Executive and/or Executive's beneficiaries, and shall not entitle Executive or

such beneficiaries to a preferential claim to any asset of the Company.

 

 

                                       8

<PAGE>

      Section 6.04. 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

Executive'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 Executive may qualify; provided, however, that the Severance Benefits

shall be in lieu of any severance benefits under any such plans, programs,

policies or practices. Vested benefits or other amounts which Executive 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 date of

termination of Executive's employment shall be payable in accordance with such

plan, policy, practice, or program except as expressly modified by this

Agreement.

 

      Section 6.05. Employment Status. Nothing herein contained shall interfere

with the Company's right to terminate Executive's employment with the Company at

any time, with or without Cause, subject to the Company's obligation to provide

Severance Benefits or Separation Benefits, if any. Executive shall also have the

right to terminate Executive's employment with the Company at any time without

liability, subject only to the provisions hereof and Executive's obligations

hereunder.

 

      Section 6.06. Entire Agreement. This Agreement (together with the

Confidentiality Agreement) represents the entire agreement between Executive and

the Company and its affiliates with respect to the matters referred to herein,

and supersedes all prior discussions, negotiations, and agreements concerning

such matters, including but not limited to each of the Existing Employment

Agreement and the Change of Control Agreement in its entirety; provided,

however, that any amounts payable to Executive hereunder shall be reduced by any

amounts paid to Executive as required by any applicable law in connection with

any termination of Executive's employment.

 

      Section 6.07. 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 6.08. 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 6.09. Amendment. This Agreement may not be modified, altered or

changed except upon the express written consent of both parties.

 

      Section 6.10. Severability. In the event any provision of this Agreement

shall be held illegal or invalid for any reason, the illegality or invalidity

shall not

 

 

                                       9

<PAGE>

affect the remaining parts of this Agreement, and this Agreement shall be

construed and enforced as if the illegal or invalid provision had not been

included.

 

      Section 6.11. 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 6.12. 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.

 

 

                                       10

<PAGE>

      IN WITNESS WHEREOF, the Company and Executive have executed this

Agreement, to be effective as of the day and year first written above.

 

                                          ULTRA CLEAN TECHNOLOGY

                                          SYSTEMS AND SERVICE, INC.

 

 

                                          By:__________________________

                                             Name:

                                             Title:

 

 

                                          ULTRA CLEAN HOLDINGS, INC.

 

 

                                          By:__________________________

                                             Name:

                                             Title:

 

 

                                          EXECUTIVE:

 

                                          _____________________________

                                          Clarence L. Granger

 

 

                                       11

<PAGE>

                                   SCHEDULE I

 

      (a) Subject to clause (b) below, Parent shall pay the following amounts to

Executive:

 

            (i) Parent shall pay, or cause to be paid, to Executive a lump-sum

      payment of $74,074.07 in cash (less applicable withholding tax

      obligations), payable within 60 days after the Effective Time.

 

            (ii) Parent shall pay, or cause to be paid, to Executive an

      additional amount equal to $88,231.48 in cash (less applicable withholding

      tax obligations), payable within 60 days after the Effective Time;

      provided, however, that such payment shall only be made after Executive's

      purchase of shares of common stock of Parent with an aggregate fair market

      value of not less than $47,645.00, pursuant to a purchase agreement in a

      form acceptable to Parent, which form (A) will be substantially similar to

      agreements required to be signed by other purchasers of Parent's common

      stock, (B) will contain provisions including, but not limited to, transfer

      restrictions, repurchase rights by Parent at fair market value, and

      representations by the purchaser as to financial sophistication and other

      matters, and (C) will require the purchaser to sign a securityholders'

      agreement with other securityholders of Parent, which shall contain

      provisions including, but not limited to, voting agreements by the

      purchaser and dragalong rights of Parent.

 

            (iii) Parent shall pay, or cause to be paid, to Executive deferred

      compensation in an amount equal to $264,694.44 (the "DEFERRED

      COMPENSATION"), which shall be payable on the seventh anniversary of the

      Effective Time. Executive shall receive interest on any remaining unpaid

      Deferred Compensation at the rate of 2.70% per annum, payable on June 30

      and December 31 of each year beginning June 30, 2003. Parent may prepay,

      or cause to be prepaid, the Deferred Compensation in the discretion of the

      Board.

 

      (b) Executive shall immediately give Parent notice when he becomes aware

of the amount of any bonus or similar payments related to the Merger to be paid,

or that have been paid, to Executive by Mitsubishi or any of its affiliates (the

"MERGER PAYMENTS"). Upon such notice, Parent shall be entitled to receive 40% of

the Merger Payments in the following manner, as available: first, a reduction in

the payments due to Executive under clause (a)(i) above; second, a reduction in

any bonus otherwise payable to Executive under the UCT Management Bonus Plan for

the plan year ending December 31, 2002; and third, a reduction in the Deferred

Compensation.

 

 

                                       12

 

 

 

 
 
 
Exhibit 10.11
 
                     AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
 
      AMENDMENT dated as of March 2, 2004 (this "AMENDMENT") to the Employment
Agreement dated as of November 15, 2002 ("EMPLOYMENT AGREEMENT") by and among
Ultra Clean Technology Systems and Service, Inc., a Delaware corporation
(together with its successors, the "COMPANY"), Ultra Clean Holdings, Inc., a
Delaware corporation ("PARENT"), and Clarence L. Granger ("EXECUTIVE").
 
      WHEREAS, the Company, Parent and Executive have previously entered into
the Employment Agreement;
 
      WHEREAS, the Board and Executive desire to extend the term of Executive's
employment in the positions and on the terms and conditions set forth in this
Amendment and in the Employment Agreement;
 
      NOW THEREFORE the parties hereto agree as follows:
 
      Section 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Employment
Agreement has the meaning assigned to such term in the Employment Agreement.
Each reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Employment Agreement shall, after this Amendment
becomes effective, refer to the Employment Agreement as amended hereby
 
      Section 2. Amendment To Section 1.02. Section 1.02 of the Employment
Agreement is hereby amended in its entirety to read as follows:
 
            Section 1.02 Term. Executive shall be employed by the Company for a
      period (the "EMPLOYMENT TERM") commencing on the Effective Time and,
      subject to earlier termination or extension as provided herein, ending on
      March 1, 2006.
 
      Section 3. Amendment To Section 2.01. Executive's Base Salary from and
after the date of this Amendment shall be $300,000.
 
      Section 4. Amendment To Section 2.03. Section 2.03 of the Employment
Agreement is hereby amended in its entirety to read as follows:
 
            Section 2.03 Bonus. Executive shall be eligible to participate in an
      executive bonus plan in accordance with the terms and conditions of such
      plan. For fiscal 2004, Executive's target bonus opportunity shall be
      $150,000, subject to meeting such performance criteria (including
 
<PAGE>
 
      Company performance goals and/or individual performance goals) as shall be
      set by the Board.
 
      Section 5. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California.
 
      Section 6. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.
 
      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.
 
                                ULTRA CLEAN TECHNOLOGY SYSTEMS AND SERVICE, INC.
 
 
                                By:  _____________________
                                     Name:
                                     Title:
 
 
                                ULTRA CLEAN HOLDINGS, INC.
 
 
                                By:  _____________________
                                     Name:
                                     Title:
 
 
                                EXECUTIVE:
 
                                ___________________________________________
                                Clarence Granger
 
 
                                       2
 
 

 

 

AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT

     AMENDMENT dated as of May 9, 2005 (this “Amendment”) to the Employment Agreement dated as of November 15, 2002, as amended by Amendment No. 1 dated as of March 2, 2004 (the “Employment Agreement”), by and among Ultra Clean Technology Systems and Service, Inc., a Delaware corporation (together with its successors, the “Company”), Ultra Clean Holdings, Inc., a Delaware corporation (“Parent”), and Clarence L. Granger (“Executive”).

     WHEREAS, the Company, Parent and Executive have previously entered into the Employment Agreement;

     WHEREAS, the Board and Executive desire to extend the term of Executive’s employment in the positions and on the terms and conditions set forth in this Amendment and in the Employment Agreement;

     NOW THEREFORE the parties hereto agree as follows:

     Section 1. Defined Terms; References. Unless otherwise specifically defined herein, each term used herein which is defined in the Employment Agreement has the meaning assigned to such term in the Employment Agreement. Each reference to “hereof”, “hereunder”, “herein” and “hereby” and each other similar reference and each reference to “this Agreement” and each other similar reference contained in the Employment Agreement shall, after this Amendment becomes effective, refer to the Employment Agreement as amended hereby.

     Section 2. Amendment To Section 1.02. Section 1.02 of the Employment Agreement is hereby amended in its entirety to read as follows:

     Section 1.02 Term. Executive shall be employed by the Company for a period (the “Employment Term”) commencing on the Effective Time and, subject to earlier termination or extension as provided herein, ending on March 1, 2009.

     Section 3. Amendment To Section 2.01. Executive’s Base Salary from and after the date of this Amendment shall be $350,000.

     Section 4. Amendment To Section 2.03. Section 2.03 of the Employment Agreement is hereby amended in its entirety to read as follows:

     Section 2.03 Bonus. Executive shall be eligible to participate in an executive bonus plan in accordance with the terms and conditions of such plan. For fiscal 2005, Executive’s target bonus opportunity shall be $175,000, subject to meeting such performance criteria (including

 


 

Company performance goals and/or individual performance goals) as shall be set by the Board in its discretion.

     Section 5. Governing Law. This Amendment shall be governed by and construed in accordance with the laws of the State of California.

     Section 6. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.

 

 

 

 

[Signature Page Follows]

 

 

2

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of the date first above written.

 

ULTRA CLEAN TECHNOLOGY

 

SYSTEMS AND SERVICE, INC.

 

 

 

 

 

 

 

By: 

 /s/ David ibnAle

 

 


 

 

Name: David ibnAle

 

 

Title: Director

 

 

 

 

 

 

 

ULTRA CLEAN HOLDINGS, INC.

 

 

 

 

 

 

 

By: 

 /s/ David ibnAle

 

 


 

 

Name: David ibnAle

 

 

Title: Lead Director and member of

 

 

the Compensation Committee of the

 

 

Board of Directors

 

 

 

 

 

 

 

 

 

 

EXECUTIVE:

 

 

 

 

 /s/ Clarence L. Granger

 


 

Clarence L. Granger

 

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TOP OF DOCUMENT

EX-10.17 2 f38318exv10w17.htm EXHIBIT 10.17

 

EXHIBIT 10.17

Severance Benefits for Executive Officers (as of February 14, 2008)

     Ultra Clean Holdings, Inc. (together with its subsidiary Ultra Clean Technology Systems and Service, Inc., hereafter referred to as “Ultra Clean” or “the Company”) hereby offers the severance benefits set forth below to specified Company executives upon certain events of termination of their employment. This severance policy may be amended or terminated by the Company at any time, except that following a Change of Control (as defined in the Company’s Stock Incentive Plan), the policy may not be terminated or amended to adversely affect a participant for 12 months thereafter.

     Eligible Executives. Executives may be eligible to receive severance benefits if (a) they are employed in the positions of Senior Vice President of Engineering, Senior Vice President of Sales, Chief Financial Officer, or Chief Technology Officer, so long as such position is considered an “executive officer” position of the Company, and (b) they are notified in writing by the Director of Human Resources that they are eligible to receive severance benefits pursuant to the terms and conditions of this policy.

     Involuntary Termination. An eligible executive qualifies for severance benefits pursuant to this policy if Ultra Clean terminates his or her employment without Cause (as defined below) and the executive signs and lets become effective a release of claims that he or she may hold against Ultra Clean, its affiliated entities and the directors, officers, employees, representatives and agents of Ultra Clean and its affiliated entities in a form acceptable to Ultra Clean. Executives who might otherwise be eligible for severance benefits pursuant to this policy shall not qualify for benefits if they resign their employment or are discharged for cause. For the purpose of this policy, “Cause” shall exist if (a) the executive is convicted of, or pleads guilty or no contest to, a criminal offense; (b) the executive engages in any act of fraud or dishonesty; (c) the executive breaches any agreement with Ultra Clean; (d) the executive commits any material violation of Ultra Clean policy; or (e) the executive fails to rectify deficiencies in his or her job performance within 90 days of being notified of the need to do so by the Company. Nothing in this policy changes the at-will nature of employment of each eligible executive.

     Severance Benefits. An eligible executive who qualifies for severance benefits pursuant to this policy shall receive the following severance benefits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bonus and Incentive Compensation

 

 

 

 

 

Base Salary Multiple

 

 

Multiple

 

 

Payment of COBRA Costs

 

 

75% of the executive’s then-current annual base salary

 

 

50% of the executive’s average annual cash bonus and cash incentive compensation as determined by the Company over the prior three years (i.e. [(Year 1 + Year 2 + Year 3) / 3] x 0.5)

 

 

9 months

 

 

     Payment of Benefits. The foregoing severance payments (other than the COBRA costs) shall be paid in a lump sum to the executive in cash as soon as administratively practicable after the termination date, and, in any event, no later than two and one-half (2-1/2) months after the end of the taxable year of the executive in which the termination date occurs. The COBRA costs shall be paid as incurred (by subsidizing or reimbursing the premium payments) but shall end if, prior to the end of the period of time set forth above, the executive commences alternative employment and becomes eligible for group medical coverage.

     Section 409A. The payments and benefits under this policy are intended to qualify for the short-term deferral exception to Section 409A of the Internal Revenue Code described in Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent possible and, to the extent they do not so qualify, 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 policy, notwithstanding any other provision of this policy to the contrary, if an eligible executive is a “specified employee” within the meaning of Section 409A on the date of termination of employment, to the extent required in order to comply with Section 409A, amounts that would otherwise be payable under this policy 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.

     Miscellaneous. This policy shall be governed by and construed in accordance with the laws of the state of California, without reference to principles of conflict of laws. All amounts due hereunder shall be subject to applicable tax withholding. The severance benefits paid under this policy shall be in lieu of any severance benefits under any other Company plans, programs, policies, agreements or practices and shall be reduced by any severance or notice period required by any applicable federal, state or local law (including without limitation the WARN Act) in connection with any termination of an executive’s employment. To the extent required by law, the Company shall furnish to participants a summary plan description containing additional information. This policy shall be assumed by any successors or assigns of the Company.

 

 

EX-10.16 3 f51808exv10w16.htm EX-10.16

Exhibit 10.16

(ULTRA CLEAN TECHNOLOGY LOGO)

Severance Benefits for Executive Officers (as of July 24, 2008)

     Ultra Clean Holdings, Inc. (together with its subsidiary Ultra Clean Technology Systems and Service, Inc., hereafter referred to as “Ultra Clean” or “the Company”) hereby offers the severance benefits set forth below to specified Company executives upon certain events of termination of their employment. This severance policy may be amended or terminated by the Company at any time, except that following a Change of Control (as defined in the Company’s Stock Incentive Plan), the policy may not be terminated or amended to adversely affect a participant for 12 months thereafter.

     Eligible Executives. Executives may be eligible to receive severance benefits if (a)(i) they are employed in the role of an “executive officer” (as defined in Rule 3b-7 under the Securities Exchange Act of 1934) of the Company as determined by the Board of Directors or the Compensation Committee thereof from time to time (such positions currently consisting of the Chief Executive Officer, Chief Financial Officer, Chief Operating Officer, Senior Vice President of Engineering and Senior Vice President of Sales), or (ii) they are employed in such other key position determined by the Board of Directors or the Compensation Committee thereof from time to time as eligible to receive severance benefits pursuant to this policy, and (b) they are notified in writing by the Director of Human Resources that they are eligible to receive severance benefits pursuant to the terms and conditions of this policy.

     Involuntary Termination. An eligible executive qualifies for severance benefits pursuant to this policy if Ultra Clean terminates his or her employment without Cause (as defined below) and the executive signs and lets become effective a release of claims that he or she may hold against Ultra Clean, its affiliated entities and the directors, officers, employees, representatives and agents of Ultra Clean and its affiliated entities (collectively, “Ultra Clean and its Affiliates”), in a form acceptable to Ultra Clean, including a provision that the executive will not make any statement or take any action that would disparage or harm Ultra Clean and its Affiliates. Executives who might otherwise be eligible for severance benefits pursuant to this policy shall not qualify for benefits if they resign their employment or are discharged for cause. For the purpose of this policy, “Cause” shall exist if (a) the executive is convicted of, or pleads guilty or no contest to, a criminal offense; (b) the executive engages in any act of fraud or dishonesty; (c) the executive breaches any agreement with Ultra Clean; (d) the executive commits any material violation of Ultra Clean policy; or (e) executive fails, refuses or neglects to perform the services required of the executive in his position at the Company. Nothing in this policy changes the at-will nature of employment of each eligible executive.

     Severance Benefits. (a) An eligible executive in the position of Chief Executive Officer who qualifies for severance benefits pursuant to this policy shall receive the following severance benefits:

 


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bonus and Incentive

 

Payment of

 

 

Base Salary Multiple

 

Compensation Multiple

 

COBRA Costs

 

Equity Acceleration

150% of the executive’s then-current annual base salary

 

150% of the executive’s average annual cash bonus and cash incentive compensation as determined by the Company over the prior three years (i.e. [(Year 1 + Year 2 + Year 3) / 3] x 1.5)

 

18 months

 

Immediate vesting of unvested and outstanding Equity Awards that would vest within 18 months

     (b) An eligible executive in the position of Chief Financial Officer or Chief Operating Officer who qualifies for severance benefits pursuant to this policy shall receive the following severance benefits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bonus and Incentive

 

Payment of

 

 

Base Salary Multiple

 

Compensation Multiple

 

COBRA Costs

 

Equity Acceleration

100% of the executive’s then-current annual base salary

 

100% of the executive’s average annual cash bonus and cash incentive compensation as determined by the Company over the prior three years (i.e. [(Year 1 + Year 2 + Year 3) / 3])

 

12 months

 

Immediate vesting of unvested and outstanding Equity Awards that would vest within 12 months

For the purpose of clause (a) and (b) of this paragraph, “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 executive, 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 executive’s termination date.

     (c) An eligible executive in the position of Senior Vice President of Engineering, or Senior Vice President of Sales, any other eligible “executive officer” of the Company not eligible for benefits under paragraphs (a) and (b) above, or any other key employee determined by the Board of Directors or the Compensation Committee thereof as eligible to receive severance benefits pursuant to this policy, shall receive the following severance benefits:

 

 

 

 

 

 

 

Bonus and Incentive

 

 

Base Salary Multiple

 

Compensation Multiple

 

Payment of COBRA Costs

75% of the executive’s then-current annual base salary

 

50% of the executive’s average annual cash bonus and cash incentive compensation as determined by the Company over the prior three years (i.e. [(Year 1 + Year 2 + Year 3) / 3] x 0.5)

 

9 months

 


 

     Payment of Benefits. The foregoing severance payments (other than the COBRA costs) shall be paid in a lump sum to the executive in cash as soon as administratively practicable after the termination date, and, in any event, no later than two and one-half (2-1/2) months after the end of the taxable year of the executive in which the termination date occurs. The COBRA costs shall be paid as incurred (by subsidizing or reimbursing the premium payments) but shall end if, prior to the end of the period of time set forth above, the executive commences alternative employment and becomes eligible for group medical coverage.

     Section 409A. The payments and benefits under this policy are intended to qualify for the short-term deferral exception to Section 409A of the Internal Revenue Code described in Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent possible and, to the extent they do not so qualify, 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 policy, notwithstanding any other provision of this policy to the contrary, if an eligible executive is a “specified employee” within the meaning of Section 409A on the date of termination of employment, to the extent required in order to comply with Section 409A, amounts that would otherwise be payable under this policy 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.

     Miscellaneous. This policy shall be governed by and construed in accordance with the laws of the state of California, without reference to principles of conflict of laws. All amounts due hereunder shall be subject to applicable tax withholding. The severance benefits paid under this policy shall be in lieu of any severance benefits under any other Company plans, programs, policies, agreements or practices and shall be reduced by any severance or notice period required by any applicable federal, state or local law (including without limitation the WARN Act) in connection with any termination of an executive’s employment. To the extent required by law, the Company shall furnish to participants a summary plan description containing additional information. This policy shall be assumed by any successors or assigns of the Company.

 

EX-10.19 4 f51808exv10w19.htm EX-10.19

Exhibit 10.19

CHANGE IN CONTROL SEVERANCE AGREEMENT

     CHANGE IN CONTROL SEVERANCE AGREEMENT (“Agreement”), dated as of July 28, 2008 (the “Effective Date”) by and between Ultra Clean Holdings, Inc., a Delaware corporation (the “Company”), and Clarence L. Granger (“Employee”).

     WHEREAS, the Company and the Employee are parties to that certain Employment Agreement, dated as of November 15, 2002, and Amendment No. 1 to Employment Agreement, dated as of March 2, 2004 and Amendment No. 2 to Employment Agreement, dated as of May 9, 2005 (collectively, the “Employment Agreement”) and wish to terminate the Employment Agreement and 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 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 of 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; Termination of Employment Agreement

     Section 1.01. Termination of Employment Agreement. The Employment Agreement is terminated, effective as of the Effective Date; provided, however, that nothing in this section shall affect the survival of Section (a)(iii) of Schedule I of the Employment Agreement in accordance with the terms and conditions specified therein.

     Section 1.02. 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 on any termination of employment prior to a Change in Control.

     Section 1.03. 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 200% 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 dishonesty; (C) Employee breaches any agreement with the Company; (D) Employee commits any material violation of Company policy; or (E) Employee fails, refuses or neglects to perform the services required of Employee in his position at the Company.

     (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 Executive has not less than a 5% beneficial interest) pursuant to which the holders of outstanding equity of the Company

2


 

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 Executive 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 Executive 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 the Change in Control; or

     (C) a material reduction in the Employee’s authority, duties or responsibilities after the Change in Control when compared to Employee’s authority, duties and responsibilities prior to the Change in Control;

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

3


 

     (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

4


 

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

5


 

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

6


 

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 HOLIDNGS, INC.
 

 

 

By:  

 

 

 

 

Name:  

 

 

 

 

Title:  

 

 

 

 

EMPLOYEE:
 

 

 

 

 

 

 

 

 

 

 

7


 

 

 

 

 

 

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                           , 2008 (the “Agreement”) between Ultra Clean Holdings, Inc. (together with its successors and assigns, the “Company”) and the undersigned                                          (“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 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);

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     (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:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

 

Dated:

 

 

 

 

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