Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into as of the 4th day of
February, 2009, by and between MEMC Electronic Materials Inc., a
Delaware corporation (the “ Company ”), and
Ahmad Chatila (“ Executive ”).
WITNESSETH:
WHEREAS, the Company desires to
employ Executive as the chief executive officer of the Company and
Executive desires to be employed by the Company on the terms and
conditions set forth herein, with Executive’s actual first
day of employment by the Company to be March 2, 2009 (such date,
the “ Effective Date ”);
NOW, THEREFORE, in consideration of
the premises and the mutual covenants and promises contained herein
and for other good and valuable consideration, the Company and
Executive hereby agree as follows:
1.
Term; Position and
Responsibilities . Unless
Executive’s employment shall sooner terminate pursuant to
Section 4 hereof, the Company shall employ Executive on the terms
and subject to the conditions of this Agreement for the term
commencing on the Effective Date and ending on the four year
anniversary of the Effective Date, provided that the term
shall be automatically renewed for successive one-year terms
following the expiration of the initial term described above (the
initial term and each additional one-year term each, a “
Term ”), unless either party provides the other party
with notice pursuant to Section 9(f) at least sixty (60) calendar
days before the expiration of the applicable Term of its (or his)
intention not to renew such Term, in which case the
Executive’s employment shall terminate at the end of such
Term. The entire period during which Executive is employed by the
Company pursuant to this Agreement shall be referred to as the
“ Employment Period. ” During the Employment
Period, Executive shall serve as Chief Executive Officer of the
Company and shall have such duties and responsibilities as are
customarily assigned to individuals serving in such positions and
such other duties as the Company specifies from time to time.
During the Employment Period, the Company will also cause the Board
of Directors of the Company (the “Board”) to appoint
Executive as a director of the Company and to nominate Executive
for re-election to the Board when his term as director expires.
Executive shall comply with all written policies and procedures of
the Company. Executive shall devote all of his skill, knowledge,
commercial efforts and working time to the conscientious and
faithful performance of his duties and responsibilities for the
Company (except for (i) vacation time as set forth in Section 3(b)
hereof and absence for sickness or similar disability and (ii) to
the extent that it does not interfere with the performance of
Executive’s duties hereunder, (A) such reasonable time as may
be devoted to the fulfillment of Executive’s civic
responsibilities, (B) such reasonable time as may be necessary from
time to time for personal financial matters and (C) certain other
activities with the prior written consent of the Board).
2.
Compensation
.
(a)
Base Salary . As compensation for the services to be
performed by Executive during the Employment Period, the Company
shall pay Executive a base salary at an annualized rate of
$750,000, payable in installments on the Company’s regular
payroll dates. Executive’s base salary shall be reviewed
annually by the Board and may be adjusted upwards by the Board, in
its sole discretion. The annual base salary payable to Executive
under this Section 2(a) shall hereinafter be referred to as the
“ Base Salary .”
(b)
Annual Bonus . During the Employment Period, Executive shall
have the opportunity to earn an annual bonus (an “ Annual
Bonus ”) in respect of each calendar year in accordance
with this Section 2(b) and pursuant to the terms of the
Company’s Annual Incentive Plan then existing for such
calendar year; provided, however, that, except as may be provided
in Section 4(f) hereof, the Annual Bonus for any calendar year
shall be payable to Executive only if Executive is employed by the
Company on December 31 of such year. In respect of calendar year
2009 and thereafter, Executive will have a target bonus of 100% of
Executive’s Base Salary and a maximum bonus of 200% of
Executive’s Base Salary; provided, however , that for
calendar year 2009, Executive’s bonus under this Section 2(b)
shall be no less than $500,000. Any Annual Bonus that becomes
payable to Executive shall be payable in the form of cash. The
amount of any Annual Bonus and all other terms and conditions
related thereto (including without limitation any performance
criteria) shall be determined by the Board, in its sole
discretion.
(c)
Transition Bonus . In lieu of a relocation allowance,
Executive shall be paid a sign-on and transition bonus of $600,000
(the “ Transition Bonus ”), which Transition
Bonus shall be paid to Executive within 30 days of the Effective
Date. If Executive voluntarily terminates his employment with the
Company (i) within one year of the Effective Date for a reason
other than Good Reason (as defined below in Section 0), one hundred
percent (100%) of the after tax amount of the Transition Bonus
shall be repaid by Executive, in full, within 14 days of the date
of his termination; and (ii) more than one year after the Effective
Date but less than two years after the Effective Dave for a reason
other than Good Reason (as defined below in Section 0), fifty
percent (50%) of the after tax amount of the Transition Bonus shall
be repaid by Executive, in full, within 14 days of the date of his
termination.
(d)
Stock Options and RSUs .
(i)
Initial Equity Grants . On the Effective Date, the Company
shall cause the Board or a committee thereof to grant to Executive
(w) a non-qualified option to purchase 750,000 shares of common
stock of the Company, at an exercise price per share equal to the
fair market value per share as of the date of grant (the “
Sign-on Option ”), which Sign-on Option shall vest
fifty percent on the third anniversary of the date of grant and
fifty percent on the fifth anniversary of the date of grant; (x) an
additional non-qualified option to purchase 750,000 shares of
common stock of the Company, at an exercise price equal to the fair
market value per share as of the date of grant (the " Service
Option "), which Service Option shall vest twenty five percent
per year on each of the first, second, third and fourth anniversary
of the date of grant; (y) a non-qualified option to purchase
200,000 shares of common stock of the Company, at an exercise price
per share equal to the fair market value per share as of the date
of grant (the
“ Performance Option
”, and together with the Sign-on Option and the Service
Option, the “ Options ”), which Performance
Option shall vest on the fourth anniversary of the date of grant if
Executive is still employed by the Company and the Company’s
common stock price outperforms the S&P 500 market index
compounded annual growth rate by five percent (5%) over that
four-year period (otherwise, the Performance Option will expire)
all as more specifically set forth in the applicable stock option
grant agreement for the Performance Option; provided,
however , that 40% of the shares under the Performance Option
shall vest on the third anniversary of the date of grant if
Executive is still employed by the Company and the Company’s
common stock price outperforms the S&P 500 market index
compounded annual growth rate by five percent (5%) over that
three-year period; and (z) a stock unit award in the amount of
75,000 shares (the “ Sign-on RSUs ”), which
Sign-on RSUs shall vest twenty five percent per year on each of the
first, second, third and fourth anniversary of the date of grant.
The Options and the Sign-on RSUs shall be governed by the Company's
2001 Equity Incentive Plan, as it may be amended from time to time
(the " 2001 Equity Plan "), and shall be evidenced by
separate stock option or RSU agreements executed by the Company and
Executive (the " 2001 Plan Stock Option Agreements "), which
shall contain terms consistent with this Section 2(d)(i) and terms
and condition that are substantially similar to the terms and
conditions contained in the 2001 Equity Plan.
(ii)
Annual Grant . For any calendar year during the Employment
Period, the Board in its discretion may make an award to Executive
under the Company’s 2001 Equity Plan or any successor equity
incentive plan thereto. The size and vesting of any such award
shall be in the discretion of the Board. Notwithstanding the
foregoing, in connection with the option grants and RSU grants to
be provided to the Executive simultaneously with the execution of
this Agreement, Executive understands that the Company does not
intend to grant him any stock options or RSUs for the first four
years of the Employment Period.
(iii)
Acceleration . Notwithstanding any contrary provision in
Section 0(i) above, in the 2001 Equity Plan or in the 2001 Plan
Stock Option Agreements, all grants of stock options and stock
units received by Executive from the Company shall become 100%
vested in the event that (a) the Company is subject to a
Change in Control (as defined in the 2001 Equity Plan) before
Executive’s employment with the Company terminates and
(b) Executive’s employment is terminated by the Company
Without Cause or by Executive for Good Reason (as these terms are
defined below) within two years after such Change in
Control.
3.
Employee Benefits and
Perquisites .
(a)
Participation in Employee Benefit Plans . During the
Employment Period, Executive shall be eligible to participate in
the employee benefit plans and programs maintained by the Company
from time to time and generally available to the senior executives
of the Company including to the extent maintained by the Company
life, medical, dental, accidental and disability insurance plans
and profit sharing, pension, retirement, deferred compensation and
savings plans, in accordance with the terms and conditions thereof
as in effect from time to time.
(b)
Vacation . During the Employment Period, Executive shall be
entitled to the same amount of annual vacation that is generally
available to the senior executives of the Company, as may be
increased from time to time consistent with the Company’s
past practices.
(c)
Relocation . Executive shall relocate to the St. Peters,
Missouri area.
(d)
Indemnification . Executive and the Company shall enter into
an indemnification agreement substantially similar to the existing
indemnification agreements between by the Company and its directors
and officers.
4.
Termination of Employment . Executive’s employment may
be terminated prior to the end of the Term specified in Section 1
hereof as follows:
(a)
Termination Due to Death or Disability . Executive’s
employment may be terminated by the Company due to
Executive’s Disability (as defined below). In the event that
Executive’s employment hereunder terminates due to his death
or is terminated by the Company due to Executive’s
Disability, no termination benefits shall be payable to or in
respect of Executive except as provided in Section 4(f)(ii). For
purposes of this Agreement, “ Disability ” shall
mean a physical or mental condition entitling Executive to benefits
under the long-term disability policy maintained by the Company, as
such policy may be amended from time to time. Executive’s
employment shall be deemed to have terminated as a result of
Disability on the date as of which he is first entitled to receive
disability benefits under such policy.
(b)
Termination by the Company for Cause . Executive’s
employment may be terminated by the Company for Cause (as defined
below). In the event of a termination of Executive’s
employment by the Company for Cause, no termination benefits shall
be payable to or in respect of Executive except as provided in
Section 4(f)(ii). For purposes of this Agreement, “
Cause ” shall mean (i) the failure of Executive to
make a good faith effort to substantially perform his duties
hereunder (other than any such failure due to Executive’s
Disability) or Executive’s insubordination with respect to a
specific resolution of the Board; (ii) Executive’s
dishonesty, gross negligence in the performance of his duties
hereunder or engaging in willful misconduct, but only if such
action or omission has caused or is reasonably expected to result
in direct or indirect material injury to the Company or any of its
Affiliates (as defined below in Section 0); (iii) breach by
Executive of any material provision of this Agreement or of any
other written agreement with the Company or any of its Affiliates
or material violation of any written Company policy applicable to
Executive; or (iv) Executive’s indictment for a crime that
constitutes a felony or other crime of moral turpitude or fraud
that reasonably could impair Executive’s ability to
satisfactorily perform his duties hereunder. If, subsequent to
Executive’s termination of employment hereunder for other
than Cause, it is determined in good faith by the Company that
Executive’s employment could have been terminated for Cause
hereunder, Executive’s employment shall, at the election of
the Company, be deemed to have been terminated for Cause
retroactively to the date the events giving rise to Cause occurred.
Notwithstanding the foregoing, a failure, insubordination or breach
described in items (i) or (iii) above shall not constitute Cause
unless the Company shall have first given Executive written notice
describing the failure, insubordination or breach and a reasonable
opportunity, not less than ten (10) business days in length, to
cure such failure, insubordination or breach.
(c)
Termination Without Cause . Executive&
