Exhibit 10-nnn
CONSULTING AGREEMENT
AS ADVISOR TO
CHIEF EXECUTIVE OFFICER
This Consulting Agreement ("Agreement") is made as dated below, by and
between Xx. Xxxxxx X. Xxxxxxxx ("Xx. Xxxxxxxx") and MEMC Electronic Materials,
Inc. ("MEMC"). Xx. Xxxxxxxx and MEMC have mutually agreed to end Xx. Xxxxxxxx'x
employment with MEMC, so that Xx. Xxxxxxxx may pursue other interests and become
a consulting advisor to MEMC's CEO. Xx. Xxxxxxxx has been employed as President
and Chief Operating Officer of MEMC. Xx. Xxxxxxxx also serves as a Director on
the MEMC Board of Directors. In order to resolve any and all matters arising out
of the employment relationship and its termination, and in order to insure a
smooth transition of Xx. Xxxxxxxx'x job duties and to continue to take advantage
of Xx. Xxxxxxxx'x skills and experience, the parties have entered into this
Agreement. The parties agree as follows:
1. Xx. Xxxxxxxx will voluntarily retire and resign his employment with MEMC
effective December 1, 1997 ("Termination Date"). Xx. Xxxxxxxx will receive all
regular compensation due for services rendered as an MEMC employee through
November 30, 1997 on the next regular pay date. In addition, Xx. Xxxxxxxx will
receive payment for all accrued but unused vacation time in the amount of
$47,525.60, payable on December 15, 1997. Xx. Xxxxxxxx (or his designated
beneficiary, if he should die before the scheduled payment date) also shall
receive compensation due him pursuant to the Employment Agreement dated May 1,
1995 between Xx. Xxxxxxxx and MEMC (the "Employment Agreement") in the aggregate
amount of $561,666.67, payable as follows: $28,083.33 payable on December 15,
1997; $337,000.00 payable on January 2, 1998; and $196,583.34 payable on January
4, 1999. The Employment Agreement, which is attached as Exhibit A and
incorporated by reference herein, shall be deemed to be amended by all
provisions of this Agreement that are inconsistent therewith. Capitalized terms
used herein but not defined herein shall have the meanings assigned in the
Employment Agreement. "Agreement" shall mean this Consulting Agreement unless
the context otherwise requires.
2. For a one-year period beginning with the day after Xx. Xxxxxxxx'x
Termination Date ("Consulting Period"), Xx. Xxxxxxxx agrees to make himself
reasonably available for consultation with MEMC either by phone or in person as
reasonably requested by MEMC on such matters as MEMC may reasonably request.
During the Consulting Period Xx. Xxxxxxxx shall be considered a consulting
advisor to MEMC's CEO. Xx. Xxxxxxxx shall be free to perform services for others
when not performing under this Agreement; provided, that nothing in this
Agreement will eliminate or modify in any way the confidentiality and
non-competition restrictions placed upon Xx. Xxxxxxxx by Paragraphs 5.1 and 5.2
of the Employment Agreement, which paragraphs are incorporated by reference
herein and shall be effective as of the Termination Date, except that (a) such
paragraphs shall be interpreted solely with reference to the definition of
"Competitive Work" set forth in the Confidentiality Agreement dated as of March
31, 1989 (the "Confidentiality Agreement"), which is incorporated by reference
in the Employment Agreement; and (b) the written consent of MEMC described in
the first paragraph of the section of the Confidentiality Agreement entitled
"Competitive Activity" shall not be unreasonably withheld and shall be deemed to
have been given if Xx. Xxxxxxxx has received no response from MEMC as of the
14th day after Xx. Xxxxxxxx has furnished the written evidence required
thereunder to MEMC.
3. The parties agree that during the Consulting Period, the parties'
relationship will be that of a client and an independent contractor. During this
period Xx. Xxxxxxxx will not be considered an agent or employee of MEMC and
therefore will not necessarily be entitled to any of the benefits MEMC provides
its employees, including but not limited to health, worker's compensation and
pension or profit sharing plans; except that nothing contained herein shall
deprive Xx. Xxxxxxxx of any benefits to which he is entitled under Section 3.1.1
of the Employment Agreement, under any plan providing benefits during retirement
if and when Xx. Xxxxxxxx elects to begin receiving retirement income, and any
other benefits that may be specifically provided under this Consulting
Agreement. Nothing in this Agreement shall adversely affect Xx. Xxxxxxxx'x
rights with respect to any vested profit sharing or pension monies, if any; Xx.
Xxxxxxxx'x right to begin receiving retirement income, if he is eligible under
the terms of any plan, at any time before, during, or after the Consulting
Period; or Xx. Xxxxxxxx'x rights under any other plan for which he may be
eligible or any law, including without limitation the Consolidated Omnibus
Reconciliation Act of 1986 ("COBRA").
4. In consideration of Xx. Xxxxxxxx'x consulting services and other
promises herein, on January 2, 1998, MEMC will pay to Xx. Xxxxxxxx (or his
designated beneficiary, if he should die before January 2, 1998) a lump sum in
the amount of $539,751.00. In addition, Xx. Xxxxxxxx will be paid an hourly rate
of $250 for each hour and fraction thereof which he spends providing consulting
services, with a minimum of two hours for each telephone consultation and four
hours for each requested consultation in person. In addition, Xx. Xxxxxxxx will
be reimbursed for all reasonable expenses incurred as a result of his performing
consulting services. To the extent that Xx. Xxxxxxxx requires administrative
support to perform his consulting duties, these will be provided by MEMC;
provided that, it is expressly understood that MEMC will not be responsible for
providing Xx. Xxxxxxxx with office facilities at any MEMC location. Xx. Xxxxxxxx
expressly acknowledges that the monies paid hereunder are over and above
anything which MEMC may owe him for his services prior to the termination of his
employment and represents additional pay and benefits to which Xx. Xxxxxxxx
would not normally be entitled at the end of his employment.
If Xx. Xxxxxxxx is required to travel in order to provide consulting
services to MEMC, MEMC shall provide travel insurance in an amount not less than
that for which Xx. Xxxxxxxx was eligible during the month prior to the
Termination Date.
5. The parties also agree as follows:
(a) MEMC shall take or cause to be taken all actions necessary such that:
(1) all stock options previously awarded to Xx. Xxxxxxxx under any
plan of MEMC ("Options") that have not vested shall vest as of
the Termination Date;
(2) if at any time in the future MEMC issues Options to replace
Options granted as of the same date as any Options that then
remain outstanding, the effect of which is to lower the exercise
price under the Options being replaced, MEMC shall issue Options
to replace outstanding Options on the same terms as such other
Options, subject to Subsection 5(a)(3) and subject to the
execution of such documents as MEMC reasonably requires to assure
compliance with the securities laws.
(3) Xx. Xxxxxxxx shall have all rights under the Equity Incentive
Plan or Long Term Incentive Plan, as the case may be, to pay any
Option exercise price in shares of stock or through a cashless
exercise procedure, as well as the right to elect to pay in
shares of stock all or a part of any amount required to be
withheld to satisfy income tax liability in connection with the
exercise of any Option (unless such election would subject him to
liability under Section 16(b) of the Securities Exchange Act of
1934, as amended);
(4) Xx. Xxxxxxxx shall be allowed to exercise all Options (including
any replacement options) until the tenth anniversary of the date
on which each Option was granted; and
(5) all shares of restricted stock previously awarded to Xx. Xxxxxxxx
under any plan of MEMC ("Restricted Stock") that have not vested
shall vest as of the Termination Date, and all remaining
restrictions on such Restricted Stock shall lapse as of the
Termination Date.
(b) The six (6) month prior irrevocable election requirement of the
Supplemental Executive Pension Plan shall be waived. As payment in
full for all amounts due him from the Supplemental Executive Pension
Plan, Xx. Xxxxxxxx (or his designated beneficiary, if he should die
before the scheduled payment date) shall receive 120 monthly
installment payments as follows:
(1) $10,588.11 each month in 1998;
(2) $10,764.58 each month in 1999;
(3) $10,946.24 each month in 2000;
(4) $11,133.88 each month in 2001;
(5) $11,328.73 each month in 2002;
(6) $11,532.64 each month in 2003;
(7) $11,748.88 each month in 2004;
(8) $11,983.86 each month in 2005;
(9) $12,253.50 each month in 2006; and
(10) $12,621.10 each month in 2007.
(c) Xx. Xxxxxxxx (or his designated beneficiary, if he should die before
the scheduled payment date) also shall receive as retirement income in
addition to amounts due him from the Supplemental Executive Pension
Plan, 120 monthly installment payments as follows
(1) $11,644.68 each month in 1998;
(2) $11,838.76 each month in 1999;
(3) $12,038.54 each month in 2000;
(4) $12,244.91 each month in 2001;
(5) $12,459.20 each month in 2002;
(6) $12,683.47 each month in 2003;
(7) $12,921.28 each month in 2004;
(8) $13,179.71 each month in 2005;
(9) $13,476.25 each month in 2006; and
(10) $13,880.54 each month in 2007.
(d) MEMC shall advance to Xx. Xxxxxxxx as an interest free loan an amount
equal to 47.05% of the gross income realized by Xx. Xxxxxxxx for
federal income tax purposes resulting from the vesting of MEMC
Restricted Stock on December 1, 1997, which loan shall be advanced in
sufficient time to fund the required tax withholding on such income.
Such loan shall be repaid in full no later than January 2, 2003. In
addition, on April 15 after each year during the period December 1,
1997 through December 31, 2002, MEMC shall pay Xx. Xxxxxxxx an amount
equal to 47.05% of the amount of imputed interest reported by MEMC to
Xx. Xxxxxxxx for federal income tax purposes for the immediately
preceding year.
(e) MEMC shall deposit $2,661,282.29 in the MEMC Electronic Materials,
Inc. Supplemental Executive Pension Plan Trust in January, 1998 to
provide a source of payment of the amounts due Xx. Xxxxxxxx under
Subsections 5(b) and 5(c) above.
6. Xx. Xxxxxxxx agrees to release MEMC and its past and present
shareholders, officers, directors, agents, employees, representatives,
attorneys, successors and assigns, and affiliated or related companies (Released
Parties), from any and all claims made, to be made, or which might have been
made as a consequence of Xx. Xxxxxxxx'x employment with MEMC or arising out of
the termination of said employment relationship other than the breach of any
provision of this Agreement by MEMC. This release specifically applies to, but
is not limited to, any and all claims for back pay, front pay, sick pay,
bonuses, or any other form of compensation or benefits not expressly preserved
herein, claims of wrongful or retaliatory discharge, and any and all other
claims arising under federal, state, or local law, known or unknown, which exist
as of the date of the execution of this Agreement, whether such claims arise
under either common law (whether sounding in tort or contract) or under
constitution, statute or ordinance, including by way of illustration Title VII
of the Civil Rights Act of 1954, as amended, 42 U.S.C. Section 2000(e), et seq.;
the Missouri Human Rights Act, as amended, and the Americans With Disabilities
Act, 42 U.S.C. Section 12101, et seq., the Age Discrimination in Employment Act
of 1967, 29 U.S.C. Section 621, et seq.
7. Xx. Xxxxxxxx agrees never to institute, directly or indirectly, any
action or proceeding of any kind against any Released Party, on account of any
matters over which he has waived his rights in this Agreement.
8. MEMC hereby releases Xx. Xxxxxxxx and his heirs, personal
representatives, successors, and assigns from any and all claims of every nature
and description, whether known or unknown, prior to the date hereof. This does
not release Xx. Xxxxxxxx from any claim which may be made as a consequence of
the future breach by Xx. Xxxxxxxx of any provision of this Agreement.
9. MEMC agrees never to institute, directly or indirectly, any action or
proceeding of any kind against Xx. Xxxxxxxx, on account of any matters over
which MEMC has waived its rights in this Agreement.
10. Within seven (7) days following Xx. Xxxxxxxx'x Termination Date, he
shall return to MEMC any and all property of MEMC which he may have in his
possession or control, if any, including, but not limited to any financial
records or reports, memoranda, and all other documents, recordings, tapes,
disks, etc., whether written or electronic, and without retaining any copies
thereof, except that he may retain copies of those documents that may be helpful
to him in preparing an updated resume. Upon completion of the Consulting Period,
he shall also return all MEMC property with which he may be provided, without
retaining copies.
11. The provisions of this Agreement governed by state law will be governed
by Missouri law, exclusive of any rules that would apply to another state's
substantive rules of law or equity, or which would in any way impair the
enforceability of the arbitration provision described in paragraph 18 below.
12. This Agreement shall be binding upon, and shall inure to the benefit of
MEMC and Xx. Xxxxxxxx and their respective heirs, executors, administrators,
legal representatives, successors and assigns; and MEMC affirmatively will
require any successor to all or any portion of the business and/or assets of
MEMC that includes the obligations to which MEMC is bound under this Agreement,
whether succession is direct or indirect and without regard to the manner by
which it is effected, including without limitation purchase, merger, and
consolidation, expressly to assume and perform this Agreement in the same manner
and to the same extent that MEMC would be required to perform it if no such
succession had taken place. As used in this Agreement, "MEMC" shall include any
such successor.
13. Xx. Xxxxxxxx agrees not to reapply for employment with MEMC at any
time.
14. The parties agree that in the event either party breaches any of the
provisions of this Agreement, either party shall be entitled to any and all
equitable remedies provided by law. Moreover, if a party prevails in any
litigation or arbitration related to a breach of this Agreement, the prevailing
party shall be entitled to the reimbursement of reasonable attorney's fees,
expenses and court costs incurred in such litigation or arbitration.
15. The parties mutually agree that the terms of this Agreement are
strictly confidential. They will not be discussed or otherwise disclosed to
third parties. However, the parties expressly understand that nothing herein
prohibits the divulging or reporting of anything related to this Agreement as
required by law, regulation, governmental authority or similar body, or as
required in the written opinion of counsel to comply with applicable laws,
including securities laws and regulations or stock exchange requirements, it
being expressly acknowledged and agreed that this Agreement and all amendments,
attachments and exhibits thereto shall be filed with the Securities and Exchange
Commission ("the SEC") and furnished to parties requesting copies of exhibits to
filings with the SEC. The parties further acknowledge that employees of MEMC may
learn of the terms of this Agreement in the ordinary course of business and that
Xx. Xxxxxxxx'x spouse, attorneys, accountants and advisors may also learn of its
terms. However, the parties will undertake to advise such persons as discussed
in the foregoing sentence that they are not to disclose or otherwise divulge the
terms of this Agreement.
16. Xx. Xxxxxxxx expressly acknowledges that he has been advised to consult
with an attorney of his choice regarding his execution of this document, that he
has been told that he has twenty-one (21) days from his date of receipt of the
final version of this Agreement to either accept or reject its terms, and that
if he executes this Agreement, he shall have the right to revoke his acceptance
by notifying MEMC, in writing, within seven (7) days of his execution, of his
revocation.
17. Xx. Xxxxxxxx shall remain a member of the Board as a non-employee
Director of MEMC, until such time as he is removed or is reappointed, provided
that he shall resign from the Board forty-five (45) days prior to the 1998
annual meeting unless requested in writing not to do so. Xx. Xxxxxxxx shall
receive fees and other compensation, if any, as a non-employee Director of MEMC
at the same level as determined for MEMC's other non-employee Directors, payable
during such time as Xx. Xxxxxxxx continues to serve as a member of the Board.
18. Any disputes between the parties to this Agreement shall be settled by
arbitration in St. Louis, Missouri, before a single arbitrator in accordance
with the Commercial Arbitration Rules under the American Arbitration
Association, provided that discovery shall be permitted in accordance with the
Federal Rules of Civil Procedure. The decision of such arbitration shall be
final and conclusive on the parties, and judgment upon such decision may be
entered in any court having jurisdiction thereof.
19. If a court of competent jurisdiction determines that any provision
contained in this Agreement, or any part thereof, cannot for any reason be
enforced, the parties agree that such determination shall not affect or
invalidate the remainder of this Agreement.
20. MEMC makes no representations and is not responsible with respect to
the income tax and securities law consequences to Xx. Xxxxxxxx resulting from
this Agreement and the compensation and benefits payable pursuant thereto. All
amounts payable pursuant to this Agreement are subject to federal and state tax
withholding as required by applicable law from time to time.
21. Xx. Xxxxxxxx may designate a beneficiary or beneficiaries
(contingently, consecutively, or successively) of a death benefit, if any,
payable under this Agreement and, from time to time, may change his designated
beneficiary. A beneficiary may be a trust. A beneficiary designation shall be
made in writing and delivered to MEMC while Xx. Xxxxxxxx is alive. If there is
no designated beneficiary surviving at the death of Xx. Xxxxxxxx, payment of any
death benefit shall be made to his surviving spouse, and if he has no surviving
spouse, to his estate.
22. Xxxxxxxx hereby agrees now and at any time in the future to refrain
from making any comments or statements to the press, the employees of MEMC or
any individual or entity with whom MEMC has a business relationship or others,
(i) which would be likely to adversely affect the conduct of the business of
MEMC or any of its affiliates, or any of their plans or prospects, or their
business reputations, or the business reputations of any of their
representatives or members of their respective boards of directors, or (ii)
which would disparage in any way or cast in a negative light MEMC or any of its
affiliates, or any of their respective directors, officers, agents or employees.
MEMC hereby agrees now and at any time in the future to refrain from making any
comments or statements to the press or any individual or entity with whom
Xxxxxxxx has a business relationship or others, (i) which would be likely to
adversely affect the business reputation of Xxxxxxxx, or (ii) which would
disparage in any way or cast in a negative light Xxxxxxxx.
23. The parties acknowledge that each has read this Agreement consisting of
9 pages, 23 sections, and the attached exhibits and fully understand same. Xx.
Xxxxxxxx also acknowledges that he agrees to all of the terms and conditions of
this Agreement and that he does so of his own free will and without coercion and
that he has had an opportunity to review this document with an attorney of his
choice. MEMC represents that it has the corporate authority to enter this
Agreement and has taken or will take all steps necessary to carry out its terms
and conditions. The parties agree that no representation or promise inconsistent
with or additional to the terms of this Agreement have been made, that this
Agreement includes all referenced Exhibits and is the full and complete
agreement of the parties, and that this Agreement may not be modified, changed,
or added to except in writing signed by all parties.
THE PARTIES ACKNOWLEDGE THAT THE INSTANT AGREEMENT CONTAINS A BINDING AND
ENFORCEABLE ARBITRATION PROVISION.
SO AGREED: MEMC ELECTRONIC MATERIALS, INC.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Viefhues
------------------------- ------------------------
Xxxxxx X. Xxxxxxxx, Ph.D. Title: CEO
Date: December 1, 1997 Date: December 1, 1997
------------------ -----------------------
