Business Context and Reporting Period
This Form 8-K filing by Ultra Clean Holdings, Inc. reports on corporate governance changes effective July 2016. The report date is July 7, 2016, covering the departure of the President and Chief Financial Officer and the appointment of a successor.
Key Financial Metrics
This filing does not contain operational financial metrics such as revenue, profit, cash flow, margins, debt, or liquidity. The document focuses exclusively on executive compensation and severance arrangements.
Material Changes
- Executive Departure: Casey Eichler stepped down as President and Chief Financial Officer, effective July 29, 2016.
- Executive Appointment: Sheri Brumm was promoted to Chief Financial Officer, effective July 30, 2016. She will also serve as Senior Vice President of Finance, Secretary, Principal Financial Officer, and Chief Accounting Officer.
Compensation, Risks, and Unusual Items
Compensation for New CFO (Sheri Brumm)
- Base Salary: $300,000 annually.
- Target Bonus: 75% of base salary.
- Equity Award: Restricted stock units (RSUs) valued at approximately $750,000 (not to exceed 150,000 shares), vesting in three equal annual installments.
- Severance (Without Cause): 100% of base salary, 100% of annual bonus, 12 months of COBRA, and accelerated vesting of equity awards vesting within 12 months.
- Severance (Change in Control): 150% of base salary plus annual bonus, 24 months of COBRA, and accelerated vesting of all unvested equity awards.
Compensation for Departing CFO (Casey Eichler)
- Severance Payment: Lump sum cash payment of approximately $550,000.
- Equity Acceleration: Accelerated vesting of 126,542 outstanding RSUs.
- Options: Vested and unexercised stock options remain exercisable for three months following the end of the transition period.
Investor Verification Checklist
- Verify the exact vesting schedule and performance conditions for Ms. Brumm's $750,000 RSU award in the attached Exhibit 99.1.
- Confirm the total number of shares outstanding and the impact of the 126,542 accelerated RSUs for Mr. Eichler on dilution.
- Review the "Transition Agreement" (Exhibit 99.3) for any non-compete or non-solicitation clauses that may affect future operations.
- Assess the potential cash outflow impact of the $550,000 severance payment to Mr. Eichler against current liquidity.