Business Context and Reporting Period
This Form 8-K Current Report was filed by Ultra Clean Holdings, Inc. on February 12, 2018, covering events occurring on February 6, 2018. The filing addresses Item 5.02 regarding the appointment and compensatory arrangements of certain officers.
Key Financial Metrics
The filing does not provide revenue, profit, cash flow, margin, debt, or liquidity metrics. It focuses exclusively on executive compensation terms.
Material Changes
On February 6, 2018, the Company entered into a Letter Agreement with Lavi A. Lev, President, Asia. This agreement extends his assignment at the Singapore facilities through June 1, 2018, subject to mutual extension.
Guidance, Outlook, and Management Commentary
The filing details specific compensatory arrangements for Mr. Lev:
- Base Salary: $311,200 annually.
- Target Bonus: 50% of base salary under the management bonus plan.
- Equity: Eligible for stock awards subject to Compensation Committee approval.
- Severance Provisions: If Mr. Lev serves through the End Date and ceases employment (voluntarily or otherwise, unless terminated for cause), he is entitled to:
- 15 months of then-current base salary.
- 3 months of salary grossed up for taxes for relocation.
- Value of unvested equity awards that would have vested between June 1, 2018, and June 2, 2019.
- Amount equal to his average annual cash bonus over the prior three fiscal years.
- 18 months of COBRA premiums.
- Value of 10,000 restricted stock units.
- Other Benefits: Housing and car allowance, and tax equalization payments during the assignment.
Definition of Cause: The agreement defines "cause" to include failure to perform services, fraudulent conduct, felony commission, breach of confidentiality, or acts of misconduct violating anti-discrimination policies or harming the Company's reputation.
Investor Verification Checklist
- Verify the total potential cash and equity payout under the severance provisions if Mr. Lev departs after June 1, 2018.
- Review the full text of the Letter Agreement filed as Exhibit 99.1 for complete legal terms.
- Confirm the status of Mr. Lev's outstanding unvested equity awards as of the End Date to calculate the specific vesting acceleration value.
- Assess the impact of the 10,000 restricted stock unit grant on future dilution.