MEMC ELECTRONIC MATERIALS, INC.
STOCK OPTION AGREEMENT
(Nonemployee Directors)
(Name & Address)
This letter describes the terms of the grant by MEMC Electronic Materials,
Inc. (the "Company") to you of nonqualified stock options (the "Options") to
purchase shares of the Company's Common Stock, par value $.01 per share (the
"Common Stock"), under the Company's 1995 Equity Incentive Plan (the "Plan").
The Company is granting these Options to you in recognition of your valuable
services to the Company as a nonemployee director and to facilitate your
participation in the Company's success.
Capitalized terms used in this letter without definition shall have the
meanings assigned to them in the Plan. This letter, the Options and the Common
Stock issued upon the exercise of the Options shall be controlled by the terms
of the Plan, the terms of which are incorporated by reference into this letter.
In the event of any conflict or inconsistency between the Plan and this letter,
the Plan will govern.
Before we describe how the Options work, it is important that you know that
none of the Options may be sold, transferred, assigned, pledged, or otherwise
encumbered or disposed of, except by will or the laws of descent and
distribution. Therefore, during your lifetime, an Option shall be exercisable
only by you or by your guardian or legal representative. Each permitted
transferee of an Option shall, as a condition of the transfer thereof, execute
an agreement pursuant to which it shall agree to comply with the terms of this
letter.
1. Grant of Options. You are hereby granted the number of Options shown on
Exhibit A, attached to this letter. Although you are first receiving this letter
today, these Options became effective as of ____________, the "Date of Grant."
Each such Option will entitle you to purchase upon payment of the Exercise
Price, one share of Common Stock. The decision to use an Option to purchase a
share of Common Stock will be referred to in this letter as "exercising an
option." The "Exercise Price" shall be the amount shown on Exhibit A, which was
the Fair Market Value, as defined in the Plan, of a share of Common Stock on
____________.
The Options granted pursuant to this letter shall be non-qualified stock
options, which are not qualified under Section 422 of the Code.
2. Terms and Conditions of Options. The Options granted under this letter
have the following terms and conditions:
(a) Vesting. Of the total number of Options granted to you by this letter,
you will have the right to exercise 33-1/3% of them (i.e. 33-1/3% will vest) on
the first anniversary of the Date of Grant and an additional 33-1/3% on each
anniversary of the Date of Grant thereafter, such that by the third anniversary
of the Date of Grant, you will have the right to exercise all (100%) of them
(i.e. 100% will be vested). If a Change in Control occurs (except as the
Compensation Committee of the Board of Directors of the Company (the
"Committee"), as constituted immediately prior to such Change in Control, may
otherwise determine in its sole discretion) any Options then outstanding (other
than any Option granted within six months of such Change in Control) will become
fully exercisable as of the date of the Change in Control.
(b) Option Period. The Options will not be exercisable after the tenth
anniversary of the Date of Grant, and may be subject to earlier termination as
described below and in the Plan.
Upon termination of your position as a director of the Company and any of
its Subsidiaries ("Directorship Termination") for reasons other than your death
or Disability, you (or your estate) may exercise any Option to the extent
exercisable on the date of such Directorship Termination within the sixty day
period after the effective date of the Directorship Termination (but never later
than the tenth anniversary of the Date of Grant). Any Options which have not yet
vested at the time of your Directorship Termination shall terminate and be
cancelled (except as the Committee may otherwise determine in its sole
discretion). Also, any Options not exercised within sixty days after such a
Directorship Termination shall terminate and be cancelled.
Upon your Directorship Termination on account of your death or Disability,
all Options shall vest and you (or your Beneficiary) may exercise any or all
Options within the three year period after your Directorship Termination (but
never later than the tenth anniversary of the Date of Grant); provided, however,
that in the event of Disability, no Option may be exercised until at least six
months after its Date of Grant. From time to time, on a form acceptable to the
Committee or its delegate, you may designate any person or persons
(concurrently, contingently or successively) to whom the Options shall be
transferred in the event that you die before you exercise the Options. A
beneficiary designation form shall be effective only when the form is signed by
you and filed in writing with the Company while you are alive, and shall cancel
all beneficiary designation forms that you previously signed and filed. If no
Beneficiary is so designated, your Beneficiary shall be your estate or the
distributees thereof.
(c) Exercising Options. You may exercise any or all vested Options by
notifying the Company in writing that you wish to exercise your Options and
accompanying the written notice (as described in paragraph 4 below) with the
payment for the Common Stock you are purchasing with such Options. Payment must
be equal to the total number of Options that you wish to exercise, multiplied by
the Exercise Price.
Payment may be made in cash, certified or bank check, note or other
instrument acceptable to the Committee. Payment may also be made in full or in
part in shares of Common Stock with a Fair Market Value (determined as of the
date of exercise of such Stock Option) at least equal to such full or partial
payment. Common Stock used to pay the Exercise Price may be shares that you
already own, or you may direct the Company to withhold shares of Common Stock
that you would otherwise have received upon exercise of the Stock Option. You
also may exercise a Stock Option through a "cashless exercise" procedure
involving a broker or dealer approved by the Committee, provided that the
conditions described in Section 8(f) of the Plan are satisfied.
If you are subject to Section 16 of the Exchange Act, you shall have the
unfettered right (but not the obligation) to pay the exercise price in full or
in part in shares of Common Stock in accordance with the Section 8(i) of the
Plan.
The date of exercise will be the date that all of the requirements above,
as well as the requirements in 2(e) below, are met. No certificate showing the
Common Stock purchased under such Option will be issued to you under 2(f) below
until all of these requirements are met.
(d) Shareholder Rights. You will have no rights as a shareholder with
respect to any shares of Common Stock purchased upon the exercise of an Option
until a certificate or certificates for such shares is issued to you making you
the "holder of record" of such shares. Other than under Sections 13(b) and 13(c)
of the Plan, no adjustment will be made for dividends or distributions or other
rights related to any share for which the date of such dividend or distribution
is prior to the date on which you will become the holder of record of the
shares.
(e) Limitation on Exercise. Notwithstanding the other provisions of this
letter, an Option shall not be exercisable unless and until (i) a registration
statement under the Securities Act of 1933, as amended, has been duly filed and
declared effective pertaining to the Common Stock subject to such Option and
such Common Stock will have been qualified under applicable state "blue sky"
laws, or (ii) the Committee in its sole discretion determines that such
registration, qualification and status is not required as a result of the
availability of an exemption from such registration, qualification, and status
under such laws.
(f) Issuance of Certificate. As soon as practicable following the exercise
of any Options, subject to the tax withholding provisions of Section 3(b), a
certificate showing the number of shares of Common Stock issued in connection
with such exercise will be issued in your name.
3. Miscellaneous.
(a) No Rights to Grants or to Continue as a Director. You will not have any
claim or right to receive future grants under the Plan. Nothing in the Plan or
in this letter will give you any right to continued service as a director of the
Company or any Subsidiary, as the case may be, or interfere in any way with the
right of the Company's shareholders to remove you from office pursuant to law or
the Company's Restated Certificate of Designation, with or without cause.
(b) Tax Withholding. If the Company is required by any government entity to
withhold an amount as a result of any grant or exercise of Options pursuant to
this letter, the Company will not be required to deliver a stock certificate to
you until you pay to the Company the amount required to be withheld with respect
to such event. Payment of such amount may be in cash or in shares of Common
Stock with a Fair Market Value equal to such payment. Common Stock used to pay
the withholding amount may be shares that you already own, or shares of Common
Stock that you would otherwise have received upon the exercise of the Option.
If you are subject to Section 16 of the Exchange Act, you shall have the
unfettered right but not the obligation to direct and compel the Company to
withhold, or to accept from you, such number of shares of Common Stock as is
necessary to pay in whole or in part your withholding tax obligation, in
accordance with Section 16(a)(i) of the Plan.
(c) No Restriction on Right of Company to Effect Corporate Changes. Neither
the Plan nor this letter will affect or restrict in any way the right or power
of the Company or its shareholders to make or authorize any corporate changes
described in Section 13 of the Plan.
4. Notices. All notices and other communications discussed in this letter
will be in writing and will be delivered by hand or sent by mail addressed, if
to you, to your attention at the mailing address that you will have specified to
the Company in writing and, if to the Company, to it at 000 Xxxxx Xxxxx, Xx.
Xxxxxx, Xxxxxxxx 00000, Attention: Chief Financial Officer. All such notices
will be conclusively deemed to be received and will be effective, if sent by
hand delivery, upon receipt, or if sent by registered or certified mail, on the
fifth day after the day on which such notice is mailed.
5. Entire Letter, Governing Law. This letter and the Plan represent the
entire understanding between you and the Company and supersede all prior
understandings relating to the subject matter of this letter. This letter will
be governed by, and construed in accordance with, the laws of the State of
Delaware without giving effect to conflicts of law principles.
6. Date of Option Grant. This letter is dated ____________, but the Options
shall be deemed to have been granted effective as of ____________.
MEMC Electronic Materials, Inc.
By:_____________________________________
Xxxxxx X. Xxxxxxxx
Title: Corporate Vice President, Human Resources
Exhibit A
MEMC Electronic Materials, Inc. 1995 Equity Incentive Plan
Stock Option Award Letter Agreement
____________
Participant Name:
Number of Options:
Exercise Price:
