Exhibit 10-ppp
LETTER OF AGREEMENT April 1, 1993
Xxxxx X. Xxxxxxx
PERSONAL AND CONFIDENTIAL
The MEMC International Assignment Policy ('Policy'), applies to all
international assignments. This letter of agreement will record our mutual
understanding of the current provisions of the Policy, as they apply
specifically and individually to you in your new assignment, subject to any
future modification of the Policy. This Letter of Agreement does not constitute
or create an employment contract and does not replace the basic MEMC employment
contract.
Your assignment in Novara, Italy begins on 1 May, 1993 and will be for an
indefinite period currently expected to be of 3-5 years duration.
Your initial assignment will be as Prescient, MEMC S.p.A.
While on assignment you will be included in the personnel plans of President,
MEMC, Inc. will be primarily responsible for your re-entry upon completion of
your international assignment. The terms and conditions of your primary MEMC
Employment Agreement will continue to apply and govern the terms of any
employment agreement with MEMC, S.p.A. in Italy. You will continue to be
eligible for MEMC benefit programs.
Compensation
This letter outlines the total consideration for services to be performed while
on assignment (except to the extent salary increases may be granted). You will
not be eligible for any benefits paid by your foreign employer. The base salary
is in consideration for your services in the U.S. and abroad, but the premium
and allowances are solely for services rendered in the country of assignment.
1. Base Salary
Your initial base salary will be at the rate of $13,467.00 per month.
Your base pay, less deductions, will be paid on behalf of your foreign
employer by MEMC in U.S. dollars into your personal bank account. You
acknowledge that you have completed forms authorizing these deposits.
2. Career Development Bonus
You will be provided a Career Development Bonus (CDB) consisting of
two lump sum payments. The first, paid immediately prior to your being
transferred on your international assignment, the second, immediately
after your return transfer to the U.S., or at the end of 36 months of
international assignment.
Your first lump sum award payment will be $27,000.00 and is calculated
as 15% of your current U.S. base monthly salary (capped at a maximum
salary of $10,000/month) times 18.
Your second lump sum award payment will be paid at your return
transfer to the U.S. or after 36 months of international assignment,
and will be calculated as 15% of your new U.S. base monthly salary
(capped at the then maximum salary) times the number of months at the
time of your return transfer less 18 months. Continued CDB for
international assignments extending beyond 36 months (original
assignment or subsequent back-to-back international assignments) will
be assessed at that time.
3. Cost of Living Allowance
The Policy provides for a cost of living allowance on the theory that
this allowance makes it possible for you to live in Italy at
approximately the same standard to which you have been accustomed in
the U.S. It is not designed to provide any material increases in your
living standard. Cost of living allowance, if applicable, will be paid
to you in your monthly compensation. Cost of living payments relate
directly to your services performed outside the U.S. and no cost of
living allowance is paid for services performed in the U.S.
a. The goods and services component covers differences in cost of
food, clothing, transportation, telephone, household services and
equipment, personal care and recreation. It is determined by
applying the appropriate index calculated by MEMC's present
consultant to your spendable income, which is defined as your
base salary less the average amount consumed by Federal income
taxes, assumed home country housing costs, savings, investments,
insurance, etc. Based on tables prepared by the consultant, the
goods and services component for your base salary and a family of
2 is currently determined to be $1,737.00. The index can change
by new input from the consultant. This Goods and Services
allowance component will be finalized the first month of your
assignment based on the index applicable to that month.
b. While on assignment, the Policy provides that you will be
expected to pay a share of the shelter costs. Your share will be
equal to your actual documented shelter costs based on such costs
for the immediate prior 12 months ($302.00). This amount will be
adjusted annually based on the movement of an approval CPI index
published by the U.S. Government. MEMC will pay the balance as
housing allowance provided the total shelter costs have been
approved by your Manager and the Administrator.
It is anticipated you will be able to procure housing within the
limits recommended by area management.
As defined in the Policy, shelter costs include rent, utilities (gas,
electricity, water, fuel) property taxes and insurance costs paid
separately by you as the tenant. Telephone charges or maintenance
personnel costs are not included.
Should the Goods and Services Allowance index become negative, a
reduction in your housing allowance will be determined based upon the
negative index.
Since you probably will be on an expense account basis for a short
time after your arrival in Italy, you should consult with the
Director, Human Resources as to when these cost of living allowances
will begin. It is understood that until a pattern is established on
the cost of utilities, and estimate for this component may be
necessary.
It is your obligation to notify us immediately when there is a change
in any of the factors under your control, such as material and
dependency status, actual cost of rent and utilities, etc., that would
have a bearing on cost of living allowances. We, of course, will make
the necessary adjustments when changes occur in your base salary,
local index percentage, etc. Once established, the cost of living
allowance remains the same until our consultant makes changes in the
index as the result of pricing surveys and/or inflationary
adjustments.
4. Income Tax Equalization
Your Taxes will be equalized within the terms specified in the Policy.
It is the intent of the Policy that your U.S. Income tax burden should
remain the same as if you had not gone on foreign assignment and that
no advantage or disadvantage shall accrue to you due to differences in
income tax rates between the U.S. and Italy. Special consideration
will be provided for the taxes from the investment of the proceeds
from the sale of your house.
Your U.S. income tax burden ("hypothetical tax") will be based on MEMC
income (exclusive of premiums and allowances), plus non-MEMC income.
An estimate will be made at the beginning of assignment (and each
subsequent year during the fourth quarter) which will become the
amount to be deducted from each paycheck for hypothetical tax. A final
reconciliation of actual hypothetical tax will be completed by a tax
service at tax preparation time. At that point, you will receive
reimbursement from MEMC if money is due you, or you will be
responsible for payment of any balance due MEMC at that time.
Tax Return Preparation
Prior to your assignment, you should have discussed your responsibilities with
Xxxxx & Young, the tax preparation firm.
You are responsible for filing tax returns and meeting tax obligations in both
the U.S. and Italy. You are responsible for providing all information necessary
to complete your tax return to Ernst & Xxxxx within (90) days of the end of the
taxable year to which the tax return relates. If you fail to provide this
information in the designated time period, and as a result, cause a late filing
of your returns, you will be liable for any penalties, fines, and interest
incurred.
As a condition of your international assignment, you agree that MEMC has the
right to inspect prior year tax returns as necessary, returns for years subject
to income tax equalization and future years until credits are exhausted.
Further, you agree to repay tax equalization due to MEMC, including "negative
gross-up" when applicable. In addition, you agree to provide to the tax
consultant copies of all returns as may be necessary to determine and reconcile
the appropriate excess tax reimbursement and will sign a release authorizing the
excess tax reimbursement calculations to be provided to MEMC.
In the event of termination of employment with MEMC, Inc. or MEMC, S.p.A., you
agree to take all necessary steps to facilitate the preparation of final tax
equalization. This includes filing tax returns in accordance with the U.S. and
Italian tax laws on a timely basis.
Travel Grants
1. Regular
You & Xxxxxx, will be entitled to receive one round trip business
class air fare allowance between Milan and St. Louis, Missouri during
each year of your assignment.
You will be eligible for your first travel grant six months from the
start of your assignment. Subsequent travel grants are provided in
each vacation year (April 1 - March 31), every twelve months
thereafter. With the exception of the first and second travel grants,
you should receive no more than one travel grant during each twelve
(12) month period.
You may use the grants any way you wish - travel to place of origin,
visits by relatives to the location of assignment or vacation travel
to a location other than the point of origin. Payment shall be limited
to the equivalent of round trip economy air fare between the two
locations. If payment is to be taken in lieu of travel to St. Louis, a
relocation expense report must be submitted.
No travel grants will be paid within six (6) months of your officially
announced reassignment to the U.S., nor will you be eligible to
receive payment in lieu of tickets during this period. In no case will
you be permitted to carry over allowances not used during the vacation
year for which they are applicable.
2. Emergency
Upon management approval, special circumstances may arise which will
require emergency travel by you and/or members of your family between
Italy and the U.S. To protect you from undue hardships because of the
expense of longer travel distances, MEMC will pay the business class
air fair cost between Milan and St. Louis for actual flights taken.
Cash-in-lieu of travel does not apply.
Vacation
Vacation during your assignment will be governed by the MEMC vacation policy,
unless laws of the country of assignment or provisions of the International
Assignment Policy dictate a more favorable policy for you. Based on your
credited service as of April 1, 1992, you are entitled to 5 weeks vacation per
vacation year.
Retirement Plan
You will continue to be covered by the MEMC Salaried Employee Pension Plan.
Medical Benefits
You will continue to be covered under the MEMC Medical Benefit Program provided
you are enrolled in the plan and making appropriate contributions. If you incur
medical or hospital expenses which are covered by the plan while in Italy, you
should pay the bills and send receipted bills, itemized as completely as
possible, with complete explanation, translation and conversion into U.S.
dollars to Xxxxxx Xxxx, Benefits Rep, St. Xxxxxx site. Reimbursement will either
be made directly to you or be deposited into your U.S. account. You acknowledge
you have previously received instructions and a supply of claim forms.
Other MEMC Benefits
During your assignment, you will continue to be covered by the MEMC Life
Insurance Policy, Travel Accident Insurance Policy, Disability Leave Policy,
Dental Assistance Plan, and you will also be eligible to participate in the
Retirement Savings Plan.
Transfer Expenses
Personal travel, business class air fare, for you from St. Louis to Milan will
be paid by MEMC.
You have elected to move part of your major household effects, including
furniture and major appliances, to Italy. Packing, shipping clearance, duty,
customs and insurance charges will be paid by MEMC. Shipment will usually be via
surface. However, if appropriate you can ship via air freight, items immediately
needed upon arrival at the location of assignment such as clothing, bedding,
linens, silver and china, kitchenware, necessary books and other small personal
items. In your case, this air shipment will be limited to 3,000 pounds. Where an
air shipment is provided, no excess baggage costs are expected to be incurred.
The remainder of your household effects will be packed, moved, stored and
insured at MEMC expense during your assignment, and also be moved to your new
residence following reassignment to the U.S.
Additionally, you will be permitted to purchase furniture and appliances to
supplement your requirements in Italy. An amount, approved by management at the
location of assignment, will be provided for these purchases. You will be
reimbursed upon presentation of evidence of expenditure, up to the amount
approved by management at the location of assignment. It is understood that all
items so purchased become the property of MEMC and will be disposed of at the
termination of your assignment in the manner MEMC deems appropriate. Should you
decide to purchase some of the furniture, it is agreed that you will be
permitted to ship via surface, at MEMC expense, up to 3,000 pounds over the
weight of your original air plus surface shipments. You will need to prepare a
list of all items purchased, together with costs and invoices, and forward such
to Xxx Xxxx. Reimbursement will be made only on items purchased within twelve
(12) months of your assignment date. It is assumed you will exercise judgment as
to the quality and quantity of effects purchased, keeping in mind the length of
your assignment.
MEMC will make a lump sum payment to cover miscellaneous moving expenses not
specifically covered under the Employee Relocation Policy without regard to
actual expenditures. In your case this payment will be $13,467.00.
Repatriation Moving Expenses
The moving expenses which are associated with your return to the United Sates
after completion of your assignment will be paid by MEMC as a result of your
acceptance of foreign assignment and according to your status as an employee of
MEMC.
Automobile Expenses
You will not take your automobiles to your new location. To protect you against
loss, through forced sale, you will be paid an allowance equal to the difference
between the retail and trade-in values as recorded in the NADA, Official Used
Car Guide, which is effective at the time of sale. Payment of the allowance will
be made coincident with the effective date of your assignment or sale of car, if
subsequent to this date, and deposited to your U.S. bank account.
You will be provided an automobile for business use while in Italy. In addition,
MEMC will provide 50% of the purchase price for a family automobile. You & MEMC
will share 50/50 in the proceeds from the sale of this automobile at the end of
your assignment.
Medical Examination
Prior to your departure, you are required to arrange for a medical examination
through the MEMC's medical facilities. Additionally, you should arrange through
your family physician for a medical examination, at MEMC's expense, for you (and
your family). Contact St. Xxxxxx'x Medical Department which will specify the
type of examination required.
All necessary inoculations for you should be arranged through the St. Xxxxxx
Medical Department and through your family physician for your family members.
While in Italy, you should arrange for an annual medical examination, specified
by MEMC's Medical Department, for yourself, at MEMC's expense.
Language Training
Italian language instructions will be provided for you and Xxxxxx at MEMC
expense prior to your departure if such can be arranged, and following your
arrival at your international assignment location.
Country of Origin House
You have elected to sell your current house prior to going on international
assignment. In the sale of your house, you will be covered by the MEMC
Relocation Policy.
Unless required by MEMC to remain on your assignment beyond four years, you are
responsible for payment of capital gains tax, and interest, associated with the
sale of the house if you should not roll over any gains into a new residence
purchase prior to four years from the date of sale.
Employment Restrictions
It is understood that in accepting this assignment, you agree that you will not
engage in any employment or business enterprise that would in any way conflict
with your service to the interests to the Company.
Please do not hesitate to contact us if you have any questions regarding the
Policy or this letter. If you are in agreement with the provision outlined above
and those contained in the Policy, will you please date, sign and return the
original copy of this letter to Xxxxxx X. Xxxx retaining a copy for your files.
Best wishes to you in your new assignment.
/s/ Xxxxxx X. Xxxxxxxx 03/30/93
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Xxxxxx X. Xxxxxxxx Date
President & COO, MEMC, Inc.
Accepted:
/s/ Xxxxx X. Xxxxxxx 04/02/93
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Xxxxx X. Xxxxxxx Date
/s/ Xxxxxx X. Xxxx 04/05/93
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Xxxxxx X. Xxxx Date
Director, Employee Relations
