SEPARATION AGREEMENT
Exhibit 10.02
SEPARATION AGREEMENT (“Agreement”) dated as of March 24, 2005, by and between Ultra Clean Holdings, Inc., a Delaware corporation (together with its successors, the “Company”), and Xxxxxxx Xxxxx (“Executive”).
WHEREAS, the Company and Executive entered into an Employment Agreement dated as of October 21, 2004 (the “Employment Agreement”), a Confidentiality and Non-Disclosure Agreement (the “Confidentiality Agreement”) and an Indemnification Agreement (the “Indemnification Agreement”);
WHEREAS, Executive and the Company have agreed to terminate Executive’s employment with the Company as of the Separation Date (as defined below);
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:
1. Separation. Effective as of March 24, 2005 (the “Separation Date”), Executive has resigned from his position as Senior Vice President and Chief Financial Officer of the Company, and from all other positions which Executive held with the Company, its subsidiaries or its affiliates, and the Company accepted such resignation as of the Separation Date.
2. Separation Benefits. (a) Subject to this Agreement becoming effective and Executive’s compliance with the provisions of this Agreement and of the Confidentiality Agreement, and in consideration for the release set forth in Section 3 hereof, Executive shall receive the following:
(i) The Company shall pay to Executive an amount equal to $131,250 (representing seven months of Executive’s current base salary), less applicable tax withholding, which shall be payable at the Company’s option either in periodic installments over seven months following the Separation Date in accordance with the Company’s payroll practices or in a lump sum.
(ii) The Company shall pay for Executive’s continued coverage under the Company’s health plans under COBRA at the same cost to Executive as before the Separation Date until the earlier of (x) seven months following the Separation Date or (y) the date Executive becomes eligible for group health coverage with another employer.
(b) Executive understands and agrees with the following:
(i) The Company has paid Executive all accrued compensation, including accrued vacation, through the Separation Date.
(ii) All of Executive’s options to purchase stock of the Company ceased vesting on the Separation Date in accordance with their terms.
3. Release. (a) Executive acknowledges that the following release shall extend to unknown, as well as known claims, and hereby waives the application of any provision of law, including, without limitation, Section 1542 of the California Civil Code, that purports to limit the scope of a general release. Section 1542 of the California Civil Code provides:
“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.”
(b) Executive agrees to and does fully and completely release, discharge and waive for himself and for his dependents, successors, assigns, heirs, executors and administrators (and his and their legal representatives of any kind), any and all claims, complaints, causes of action or demands of whatever kind, arising in Executive’s capacity as an employee or officer of the Company, or otherwise in any capacity whatsoever, which Executive has or may have against the Company, its subsidiaries, divisions, subsidiaries, affiliates, predecessors and successors and all their officers, directors, employees, agents, counsel and other representatives by reason of any event, matter, cause or thing which has occurred prior to the Effective Date (hereinafter “Executive Claims”). Executive understands and accepts that this Agreement specifically covers, but is not limited to, any and all Executive Claims that Executive has or may have against the Company relating in any way to his employment arrangements, or to compensation, or to his equity interests in the Company, or to any other terms, conditions or circumstances of his former employment with the Company, and to the resignation of such employment, whether for severance or based on statutory or common law claims for employment discrimination (including discrimination on the basis of sex, age, religion or disability, including specifically any claims under the Age Discrimination in Employment Act (the “ADEA”), Title VII of the Civil Rights Act of 1964, as amended or the Americans with Disabilities Act of 1990), wrongful discharge, breach of contract or any other theory, whether legal or equitable. Notwithstanding the foregoing, Executive does not waive any rights to which he may be entitled (A) to seek to enforce this Agreement, or (B) to seek indemnification with respect to liability incurred by Executive in his capacity as an officer or former employee of the Company in accordance with the bylaws of the Company and the Indemnification Agreement.
2
(c) Executive further understands and acknowledges that:
(i) The release provided for in this Section, including claims under the ADEA, is in exchange for the additional consideration provided for in this Agreement to which Executive was not heretofore entitled;
(ii) Executive has been advised by the Company to consult with legal counsel prior to executing this Agreement and the release provided for in this Section, has had an opportunity to consult with and to be advised by legal counsel of his choice, fully understands the terms of this Agreement, and enters into this Agreement freely, voluntarily and intending to be bound;
(iii) Executive has been given a period of 21 days to review and consider the terms of this Agreement and the release contained herein, and Executive may use as much of the 21-day period as Executive desires; and
(iv) Executive may, within seven days after execution, revoke this Agreement (other than Section 1) by delivering a written notice of revocation to the Chief Executive Officer of the Company. For such revocation to be effective, written notice must be actually received by the Chief Executive Officer of the Company no later than the close of business on the seventh day after Executive executes the Agreement. If Executive exercises his right to revoke this Agreement, the Company shall have no obligation to satisfy the terms or provide any payments or benefits to Executive as set forth in this Agreement.
4. Confidentiality; No Disparagement. (a) Except as otherwise required by law, Executive agrees not to cause or participate in the publication to anyone about the terms and conditions of this Agreement. This provision shall not prevent Executive from disclosing such information to his legal counsel and accountants in order to obtain professional advice or to his spouse; provided that they are advised as to and agree to observe the confidentiality of such information.
(b) Executive agrees that he shall not make negative statements or representations, or otherwise communicate negatively, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage or be damaging to the Company, its subsidiaries, affiliates, successors or their officers, directors, employees, business or reputation.
(c) The Company agrees that it shall not, and shall not authorize any officer or director of the Company to, make negative statements or representations, or otherwise communicate negatively, directly or indirectly, in writing, orally, or otherwise, concerning Executive’s performance of his duties while employed by the Company or his resignation of employment with the Company, or in connection therewith take any action which may, directly or
3
indirectly, disparage or be damaging to Executive or his business or reputation. Executive understands and acknowledges that the Company’s disclosure of this Agreement and its terms pursuant to its securities law obligations shall in no way violate this Agreement.
(d) Executive acknowledges and agrees that the Company has provided notice to Executive of, and that the Company has issued or will issue, a press release in substantially the form provided to Executive, and that nothing in such press release violates any provision of this Agreement.
5. Proprietary Information. Executive acknowledges and agrees that he will continue to be bound by the Confidentiality Agreement, including with respect to the following provisions:
(a) Executive agrees, for a period of 12 months after the Separation Date, not to solicit or attempt to solicit any employee of the Company to discontinue working for the Company or to provide service to any other company in competition with the Company without the Company’s written consent.
(b) Executive agrees, for a period of 12 months after the Separation Date, not to solicit or attempt to solicit any customer of the Company to (i) purchase goods or services from any person or entity whose goods or services could be used as substitutes for those of the Company or (ii) discontinue purchasing goods and/or services from the Company.
6. Cooperation. Executive agrees to provide assistance to and shall cooperate with the Company upon its reasonable request with respect to matters and specifically with respect to any claim, suit, demand, regulatory investigation or other matter relating to Executive’s employment or service as an officer of the Company. The Company agrees and acknowledges that it shall, to the maximum extent possible under then prevailing circumstances, coordinate (or cause an affiliate to coordinate) any such request with Executive’s other commitments and responsibilities to minimize the degree to which such request interferes with such commitments and responsibilities.
7. Arbitration and Remedies. (a) 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 Xxxxx County, California, in accordance with the rules of the American Arbitration Association then in effect. The 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.
4
(c) Executive acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Sections 4, 5 and 6 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.
(d) It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in Sections 4, 5 and 6 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction or arbitrator that any restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply to the maximum extent as such court or arbitrator determines or indicates to be enforceable. If any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.
8. Tax Withholding. Notwithstanding anything in this Agreement to the contrary, the Company shall be entitled to withhold from any amounts payable under this Agreement, and shall pay over such amounts to the appropriate government agency, all federal, state, city, or other taxes as are legally required to be withheld.
9. Entire Agreement; Amendment. This Agreement contains the entire understanding of the parties with respect to the termination of Executive’s employment and supercedes all other agreements between the Company and Executive related to Executive’s severance or termination rights (including but not limited to the Employment Agreement). Notwithstanding the foregoing, the Confidentiality Agreement and the Indemnification Agreement shall remain in effect. This Agreement may not be altered, modified or amended except by a written agreement signed by both parties hereto.
10. Effectiveness. Executive has been advised, and understands, that (i) he has 21 days to consider this Agreement (which period shall be considered waived should Executive execute this letter prior to the lapse of such 21 days), (ii) Executive can revoke this Agreement (other than Section 1 hereof) during a period of 7 days following its execution and (iii) this Agreement (other than Section 1 hereof, which is effective as of the Separation Date) will become effective and enforceable upon the expiration of such 7-day revocation period (the “Effective Date”).
11. No Waiver. The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
12. Severability. In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the
5
validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected thereby.
13. Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, representatives, successors and assigns. This Agreement shall not be assignable by Executive and shall be assignable by the Company only to a direct or indirect wholly owned subsidiary of the Company or to a successor of the Company.
14. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
15. 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.
6
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement as of the date set forth above.
| ULTRA CLEAN HOLDINGS, INC. | |
| By: /s/ Xxxxxxxx Xxxxxxx | |
| Name: Xxxxxxxx Xxxxxxx | |
| Title: Chief Executive Officer | |
| EXECUTIVE: | |
|
/s/ Xxxxxxx Xxxxx Xxxxxxx Xxxxx |
7
