SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

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Check the appropriate box:

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[_] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

MEMC ELECTRONIC MATERIALS, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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MEMC ELECTRONIC MATERIALS, INC.

501 Pearl Drive (City Of O'Fallon)

St. Peters, Missouri 63376

NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD MAY 9, 2000

MEMC Electronic Materials, Inc. will hold its 2000 Annual Stockholders'
Meeting at The St. Louis Frontenac Hilton, 1335 South Lindbergh Boulevard, St.
Louis, Missouri 63131 on Tuesday, May 9, 2000 at 10:00 a.m., local time, for
the following purposes:

1. To elect directors;

2. To consider and act upon a proposal to amend MEMC's 1995 Equity
Incentive Plan to increase the number of shares of common stock
available under the plan from 3,597,045 to 7,197,045;

3. To consider and act upon a proposal to amend MEMC's Restated Certificate
of Incorporation to change the advance notice required for a stockholder
to nominate a person for election to MEMC's Board of Directors; and

4. To transact such other business as may properly come before the meeting
and all adjournments thereof.

The Board of Directors has fixed March 13, 2000 as the record date for the
determination of the stockholders entitled to notice of, and to vote at, the
annual meeting and all adjournments thereof. A list of stockholders entitled
to vote at the annual meeting will be available for examination by any
stockholder at our executive offices not less than ten days prior to the
annual meeting and at the meeting.

Sincerely,

HELENE F. HENNELLY
Secretary

March 27, 2000

Whether or not you plan to attend the meeting, so that your shares will be
represented, please complete the enclosed proxy card, and sign, date and
return it in the enclosed envelope, which does not require postage if mailed
in the United States. You may withdraw your proxy at any time before it is
voted.

TABLE OF CONTENTS

Page
Number
------

Proxy Statement--Voting Procedures...................................... 1

Item No. 1. Election of Directors....................................... 2

Information About Nominees and Continuing Directors..................... 3

Common Stock Ownership By Directors and Executive Officers.............. 4

Ownership of MEMC Common Stock by Certain Beneficial Owners............. 4

Board of Directors--Committees.......................................... 5

Compensation Committee Report on Executive Compensation................. 6

Summary Compensation Table.............................................. 9

Option Grants in Last Fiscal Year....................................... 11

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End
Option Values.......................................................... 11

Stock Price Performance Graph........................................... 20

Certain Transactions.................................................... 20

Item No. 2. Amendment to MEMC's 1995 Equity Incentive Plan.............. 23

Item No. 3. Amendment to MEMC's Restated Certificate of Incorporation... 28

Stockholder Proposals for 2001 Annual Meeting........................... 30

Other Matters........................................................... 30

PROXY STATEMENT--VOTING PROCEDURES

YOUR VOTE IS VERY IMPORTANT

MEMC is soliciting proxies to be used at our 2000 Annual Stockholders'
Meeting. This proxy statement and the proxy card will be mailed to
stockholders beginning March 27, 2000.

Who Can Vote

Record holders of MEMC common stock on March 13, 2000 may vote at the
annual meeting. On March 13, 2000, there were shares of common stock
outstanding. The shares of common stock held in our treasury will not be
voted. Each share of common stock is entitled to one vote on each matter
submitted to a vote at the annual meeting.

How You Can Vote

. By Proxy--Simply mark your proxy card, date and sign it, and return it in
the envelope provided.
. In Person--You can come to the annual meeting and cast your vote there.
If your shares are held in the name of your broker, bank or other nominee
and you wish to vote at the annual meeting, you must obtain a legal proxy
or power of attorney from the nominee and present it at the meeting to
establish your right to vote the shares.

How You May Revoke or Change Your Vote

If you give a proxy, you may revoke it at any time before your shares are
voted. You may revoke your proxy in one of three ways:

. Send in another proxy with a later date;
. Notify our Corporate Secretary in writing before the annual meeting that
you have revoked your proxy; or
. Vote in person at the annual meeting.

Special Voting Rules for Participants in MEMC Retirement Savings Plan

The MEMC Stock Fund holds MEMC common stock as an investment alternative
for participants in the MEMC Retirement Savings Plan. Plan participants may
direct the plan's trustee how to vote the shares held by the plan, but only if
the participant signs and returns a voting direction card. If cards
representing shares held in the plan are not returned, the trustee will vote
those shares in the same proportion as the shares for which signed cards are
returned by other participants.

Quorum

A majority of the outstanding shares entitled to vote at the annual meeting
represented in person or by proxy will constitute a quorum. Abstentions and
broker non-votes are counted as present for establishing a quorum. A broker
non-vote occurs when a broker returns a proxy card but does not vote on one or
more matters because the broker does not have authority to do so. Shares
represented by proxies that are marked "withheld" with respect to the election
of one or more directors will be counted as present in determining whether
there is a quorum.

Vote Required

If a quorum is present at our annual meeting, the following vote is
required for approval of each matter to be voted on:

Election of Three A plurality of the shares entitled to vote and
Directors present in person or by proxy at the meeting
must be voted "FOR" each nominee. "Plurality"
means that the nominees who receive the largest
number of votes cast are elected as directors
up to the maximum number of directors to be
elected at the annual meeting. Consequently,
any shares represented by proxies that are
marked "withhold" will have no impact on the
election of directors.

Amendment of 1995 A majority of the shares entitled to vote and
Equity Incentive present in person or by proxy at the meeting
Plan and Amendment must be voted "FOR" these matters. Shares
of Restated represented by proxies that are marked
Certificate of "abstain" with respect to these matters will be
Incorporation treated as shares present and entitled to vote.
This will have the same effect as a vote
against any such matter. If a broker indicates
on the proxy that it lacks discretionary
authority as to certain shares to vote on one
of these matters, the shares will not be
considered as present and entitled to vote with
respect to that matter.

Costs of Solicitation

We will pay for preparing, printing and mailing this proxy statement.
Proxies may be solicited personally or by telephone by our regular employees
without additional compensation. We will reimburse banks, brokers and other
custodians, nominees and fiduciaries for their costs of sending the proxy
materials to our beneficial owners.

Selection of Auditors

We have appointed KPMG LLP as our independent accountant for the current
year ending December 31, 2000. KPMG LLP was our independent accountant for the
year ended December 31, 1999. A representative of KPMG LLP will be present at
the 2000 Annual Stockholders' Meeting, will have an opportunity to make a
statement, if desired, and will be available to respond to appropriate
questions.

ITEM NO. 1. ELECTION OF DIRECTORS

The Board of Directors consists of nine members organized into three
classes, with each class consisting of three members and with each director
elected to serve for a three-year term. There are currently two vacancies on
the Board created by the resignations of Prof. Dr. Erhard Meyer-Galow in 1998
and Mr. Ludger H. Viefhues in 1999. The terms of Prof. Dr. Meyer-Galow and Mr.
Viefhues would both have expired at our 2001 annual meeting. The Board has not
identified a replacement for Prof. Dr. Meyer-Galow or Mr. Viefhues.

Three directors will be elected at our 2000 annual meeting to serve for a
three-year term expiring at our annual meeting in the year 2003. The Board has
nominated Dr. Hans Michael Gaul, Helmut Mamsch and Michael B. Smith for
election as directors at this meeting. Each nominee is currently serving as a
director and has consented to serve for a new term. Each nominee elected as a
director will continue in office until his successor has been elected and
qualified. If any nominee is unable to serve as a director at the time of the
annual meeting, the persons named on the enclosed proxy card may vote for any
alternative designated by the present Board.

You may not vote for more than the number of nominees listed on the
enclosed proxy card. The persons named on the enclosed proxy card intend to
vote the proxy representing your shares for the election of the three nominees
named above, unless you indicate on the proxy card that the vote should be
withheld or you indicate contrary directions. If you sign and return the proxy
card without giving any direction, the persons named on the enclosed proxy
card will vote the proxy representing your shares FOR the election of the
three nominees named on the proxy card.

The Board of Directors recommends a vote "FOR" the election of these nominees
for election as directors.

INFORMATION ABOUT NOMINEES AND CONTINUING DIRECTORS

Please review the following information about the nominees and other
directors continuing in office.

Nominees for Election in 2000

Dr. Hans Michael Gaul, Director since 1998, Age 58

Member of the Board of Management of VEBA AG, an affiliate of MEMC, since
1990; Chief Financial Officer of VEBA AG since 1996; Deputy Chairman of the
Board of Management of PreussenElektra AG, an affiliate of MEMC, from 1993
to 1996; Member of the Board of Management of PreussenElektra AG from 1978
to 1996; Member of the Supervisory Boards of Degussa-Huls AG, an affiliate
of MEMC, Allianz Versicherungs-AG, RAG Aktiengesellschaft, an affiliate of
MEMC, Viterra AG, an affiliate of MEMC, Stinnes AG, an affiliate of MEMC,
Deutsche Krankenversicherung AG, Volkswagen AG, PreussenElektra AG, VEBA
Oel AG, an affiliate of MEMC, and VAW aluminum AG; Director of VEBA
Corporation, an affiliate of MEMC.

Helmut Mamsch, Director since 1998, Age 55

Chairman of the Board of MEMC since 1998; Member of the Board of Management
of VEBA AG since 1993; Chairman of the Board of Management of Stinnes AG
from 1996 to 1998; Chairman of the Board of Management of Raab Karcher AG,
an affiliate of MEMC, from 1991 to 1996; Member of the Board of Directors
of Logica Plc; Member of the Supervisory Boards of Degussa-Huls AG,
Commerzbank AG, K&S Aktiengesellschaft, Readymix AG, SGE Deutsche Holding
GmbH and Steag AG, an affiliate of MEMC.

Michael B. Smith, Director since 1995 and from 1989 to 1993, Age 63

Vice Chairman of Global USA, Inc. since 1997; Senior Principal of
Capitoline/Manning, Selvage & Lee from 1996 to 1997; President of SJS
Advanced Strategies from 1989 to 1995.

Continuing Directors

Willem D. Maris, Director since 1995, Age 60
(Continuing in Office--Term Expiring 2002)

President and Chief Executive Officer of ASM Lithography Holdings from 1990
to 1999.

Paul T. O'Brien, Director since 1995, Age 54
(Continuing in Office--Term Expiring 2002)

Executive Vice President and a Director of Degussa-Huls Corporation, an
affiliate of MEMC, since 1999; Executive Vice President of CREANOVA Inc.,
an affiliate of MEMC, from 1992 to 1999; General Counsel and Secretary of
CREANOVA Inc. from 1985 to 1999.

Dr. Alfred Oberholz, Director since 1997, Age 47
(Continuing in Office--Term Expiring 2001)

Member of the Board of Management of Degussa-Huls AG since 1999; Member of
the Board of Management of Huls AG, an affiliate of MEMC, from 1998 to
1999; Deputy Member of the Board of Management of Huls AG from 1996 to
1998; Head of Silicones/Silanes Business Unit of Huls AG from 1995 to 1996;
Member of the Supervisory Boards of Rohm GmbH, an affiliate of MEMC, and
CERDEC AG, an affiliate of MEMC.

Klaus R. von Horde, Director since 1997, Age 57
(Continuing in Office--Term Expiring 2002)

Chief Executive Officer of MEMC since 1999; President of MEMC since 1997;
Chief Operating Officer of MEMC from 1997 to 1999; Chief Executive Officer
and Chairman of the Management Board of Carl Schenck AG from 1993 to 1997.

COMMON STOCK OWNERSHIP BY
DIRECTORS AND EXECUTIVE OFFICERS

The following table lists the beneficial ownership of MEMC's common stock
as of January 31, 2000 by each of our directors, each executive officer named
in the Summary Compensation Table below, and all directors and executive
officers as a group. Except as indicated below, each person has the sole power
to vote and transfer his or her shares.

Shares Which
Directors and Executive Shares May Be Obtained % of Shares
Officers Owned (1) Within 60 Days Total Outstanding (2)
- ----------------------- --------- --------------- ------- ---------------

Marcel Coinne............... 6,429(3) 51,604 58,033 *
Dr. John P. DeLuca ......... 16,504 45,804 62,308 *
Dr. Hans Michael Gaul....... -- 967 967 *
Jonathon P. Jansky ......... 2,200 26,400 28,600 *
Helmut Mamsch .............. -- 1,900 1,900 *
Willem D. Maris............. -- 4,200 4,200 *
Dr. Alfred Oberholz ........ -- 3,850 3,850 *
Paul T. O'Brien............. -- 4,200 4,200 *
Michael B. Smith ........... 400 4,200 4,600 *
James M. Stolze ............ 34,504 60,904 95,408 *
Ludger H. Viefhues ......... 9,598 327,500 337,098 *
Klaus R. von Horde.......... -- 96,250 96,250 *
All directors and executive
officers as a group (17
persons)................... 69,835 681,029 750,864 1.1%

- --------
*Represents less than 1% of MEMC's outstanding common stock as of January 31,
2000.
(1) The following directors and executive officers share voting and investment
power with their spouses as follows: Mr. Coinne -- 3,059 shares; Mr.
Jansky -- 2,200 shares; Mr. Smith -- 400 shares; Mr. Stolze -- 8,000
shares; and Mr. Viefhues -- 9,598 shares.
(2) The number of shares outstanding for purposes of these calculations is the
sum of (1) the 69,534,300 shares of MEMC common stock outstanding on
January 31, 2000 and (2) the number of shares of MEMC common stock which
the person or group may obtain within 60 days of January 31, 2000.
(3) Includes 3,370 shares owned by Mr. Coinne's spouse.

OWNERSHIP OF MEMC COMMON STOCK
BY CERTAIN BENEFICIAL OWNERS

The following table lists the persons known by us to beneficially own 5% or
more of our common stock as of January 31, 2000.

Percentage
Number of Shares of Shares
Name and Address of Beneficial Owner Beneficially Owned Outstanding
------------------------------------ ------------------ -----------

VEBA Corporation........................... 21,490,942(1) 30.9%
605 Third Avenue
New York, NY 10158

VEBA Zweite Verwaltungsgesellschaft mbH.... 28,469,028(1) 40.9%
Bennigsenplatz 1
D-40474 Dusseldorf, Germany

State of Wisconsin Investment Board........ 4,210,000(2) 6.1%
P.O. Box 7842
Madison, WI 53707

- --------
(1) Based on information contained in Amendment No. 3 to Schedule 13D jointly
filed with the Securities and Exchange Commission by VEBA AG and its
direct and indirect, wholly owned subsidiaries, VEBA Corporation and VEBA
Zweite Verwaltungsgesellschaft mbH, on September 27, 1999. VEBA AG and
VEBA Corporation have sole voting power and sole investment power over all
21,490,942 shares owned by VEBA Corporation. VEBA AG and VEBA Zweite
Verwaltungsgesellschaft have sole voting power and sole investment power
over all 28,469,028 shares owned by VEBA Zweite Verwaltungsgesellschaft.
In Amendment No. 3 to the Schedule 13D, VEBA AG indicated that it is
currently focusing on its core businesses and has determined to dispose of
its interests in certain non-core business areas over time. This includes
the shares of MEMC common stock indirectly owned by VEBA AG. VEBA AG also
indicated that various non-core investments, including the investment in
MEMC held by VEBA AG and its subsidiaries, will be systematically and
optimally divested.

(2) Based on information contained in Amendment No. 2 to Schedule 13G filed
with the Securities and Exchange Commission by The State of Wisconsin
Investment Board on February 2, 2000. The State of Wisconsin Investment
Board has sole voting power and sole investment power over all 4,210,000
shares.

BOARD OF DIRECTORS -- COMMITTEES

Audit Committee

The Audit Committee reviews our internal accounting and auditing
procedures, meets from time to time with management and with our independent
auditors to review their accounting recommendations, and submits reports
periodically on the foregoing matters to the Board. Messrs. Maris and Smith
serve on this Committee. The Audit Committee met four times in 1999.

Compensation Committee

The Compensation Committee:

. Selects the executive and salaried employees who participate in our
executive compensation program
. Periodically reviews management development efforts
. Reviews and approves new compensation programs
. Sets base salaries for certain executives
. Reviews and approves base salaries of certain newly hired executives
. Approves annual cash incentive plan participants, targets and award
amounts
. Approves participants and awards under long-term equity incentive
programs
. Approves profit sharing programs
. Reviews and approves annual adjustments in compensation necessitated by
competitive, inflationary or governmental pressures
. Reviews and approves compensation for our Board

Drs. Gaul and Oberholz and Messrs. Mamsch, O'Brien and Smith serve on this
Committee. The Compensation Committee met three times in 1999.

Environmental, Safety and Health Committee

The Environmental, Safety and Health Committee:

. Ensures that MEMC implements and maintains uniform environmental, safety
and health standards and performance expectations at all our locations
which protect the environment and the health and safety of our employees
and surrounding communities

. Ensures that we maintain an effective process for evaluating the
potential environmental, safety and health impacts of our new capital
expenditures
. Evaluates the impact that existing and developing environmental, safety
and health laws, regulations, trends and issues may have on our
operations, personnel and performance
. Ensures that we take appropriate actions to minimize or mitigate the
impact of such laws, regulations, trends and issues on MEMC, our
operations and our personnel
. Monitors our processes, performance and allocated resources in the
environmental, safety and health areas

Messrs. O'Brien, Smith and von Horde serve on this Committee. The
Environmental, Safety and Health Committee met four times in 1999.

Planning and Capital Expenditures Committee

The Planning and Capital Expenditures Committee reviews our planned capital
expenditures and makes recommendations to the Board regarding these
expenditures. Drs. Gaul and Oberholz and Messrs. Mamsch, Maris and von Horde
serve on this Committee. The Planning and Capital Expenditures Committee met
four times in 1999.

Director Nominations

We do not have a standing nominating committee. Our Board performs this
function. The Board accepts nominations of persons for election to the Board
of Directors by any MEMC stockholder who is a stockholder on the record date
for the annual meeting and who submits a notice to us setting forth the
information about both the nominee (including information required by the
federal proxy solicitation rules) and the stockholder making the nomination.
See "STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING," below.

Director Compensation and Attendance

Employee directors receive no compensation other than their normal salary
for serving on the Board and its Committees.

Non-employee directors receive the following fees for their service on the
Board and its Committees:

. $25,000 annual Board retainer
. $3,000 annual retainer for each Committee ($6,000 for chairperson)
. $1,000 for each Board meeting attended
. $1,000 for each Committee meeting attended ($2,000 for chairperson)

In addition, on January 1, 1999 we granted each non-employee director stock
options to purchase 2,100 shares of MEMC common stock. One-third of these
stock options will vest on the first, second and third anniversaries of the
date of grant.

During 1999, all directors attended 75% or more of the Board and Committee
meetings on which they served, except for Dr. Gaul who attended 73% of the
Board and Committee meetings on which he served because he was unable to
attend the Board meeting and two Committee meetings held on December 6, 1999.

COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION

Our executive compensation program is based on the premise that a balance
is required between our need to operate our business in an effective and
profitable manner and the competitiveness of rewards in competing for
management talent in the marketplace. The Compensation Committee reviews this
program at least annually to ensure that this balance is maintained.

Policies, Goals and Responsibilities

The objective of the Compensation Committee is to establish compensation at
a level that will allow us to attract, retain and motivate the caliber of
individuals required to manage and expand our business. We establish
compensation levels using guidelines developed by internationally recognized
compensation consultants. These guidelines are based upon survey data of
comparable U.S. companies, or comparable companies in the relevant geographic
area where an executive is located.

Our 1999 guideline for executive compensation was based on the Towers
Perrin Executive Compensation Survey Database, General Industry, with a
special emphasis placed on a subset of the Towers Perrin Executive
Compensation Survey Database that included companies in the electric and
electronic equipment industries. We consider the companies included in these
surveys to be representative of those with which we compete for executive
officers and employees. Many of the companies in the surveys are also included
among the companies that make up the comparative indices used in our Stock
Price Performance Graph. To retain and attract key executives, in 1999 the
Compensation Committee adopted a compensation guideline that targets base
salaries, annual incentives and long-term equity incentives for executive
officers at the 50th percentile of the surveys.

Our 1999 executive compensation program consisted of four components: (1)
base salary, (2) annual cash incentive awards, (3) long-term equity incentive
awards, and (4) special retention bonuses, which were awarded in 1998 and
earned over a fifteen (15)-month period ended June 30, 1999.

Base Salaries

We review the base salary of each executive officer on an annual basis. In
making base salary decisions, the Compensation Committee first reviews the
comparable salary ranges from the compensation surveys. In addition, we
consider certain other factors and use discretion as appropriate when setting
base salary levels. In 1999, we adopted an overall compensation guideline that
targets base salaries for executive officers at the 50th percentile of
companies included in the compensation surveys. In setting base salaries for
1999, the Compensation Committee considered the special retention bonuses
awarded to certain executive officers in 1998, fifty percent (50%) of which
was paid in 1999, as well as the Company's difficult financial performance in
recent periods. As a result, we authorized no increases in base salaries to
executive officers in 1999 except in cases of substantial increases in
responsibility.

Annual Cash Incentive Awards

Participation in our Annual Incentive Bonus Plan is discretionary and the
plan is non-contractual. Under current practice, we make annual cash awards to
certain management, professional and technical personnel to recognize and
reward individual and corporate performance.

The Compensation Committee establishes a performance/payout schedule each
year to set target bonuses (as a percentage of salary) for each designated
participant. In 1999, we adopted an overall compensation guideline that
targets annual incentives for executive officers at the 50th percentile of
companies included in the compensation surveys. In setting target bonuses for
1999, we also considered the need to retain and attract key executive officers
during the difficult market and financial conditions being experienced by the
Company. In 1998, we generally set target annual bonus levels at the 75th
percentile of companies included in the compensation surveys. For 1999, the
Compensation Committee generally did not adjust the target annual bonus levels
for executive officers as compared with 1998, although the maximum award
payout for 1999 was reduced to 100% of a participant's target bonus from a
maximum award payout of 125% in 1998. The 1999 target bonus levels for
participants ranged from 10% to 140% of each participant's annual base salary.

The 1999 annual incentive award for executive officers was subject to three
factors: (1) the Company's performance against a net income budget and certain
other financial targets, (2) the participant's performance against his or her
individual goals and (3) a discretionary award as determined by management. A
certain

percentage of a participant's target bonus was dependent on each of these
factors and each factor was independent of the other factors. Notwithstanding
the foregoing, under the retirement agreement between the Company and Ludger
H. Viefhues, our former chief executive officer, Mr. Viefhues' 1999 annual
incentive award was based solely on the overall performance of the Company in
1999.

In 1999, if the net income budget and financial targets were met, then each
participant who was an executive officer received fifty percent (50%) of his
or her target bonus. Each such participant could receive up to twenty-five
percent (25%) of his or her target bonus based on the participant's
performance against individual goals. The remaining twenty-five percent (25%)
of each such participant's target bonus was discretionary.

Because we did not achieve the required budgeted net income and financial
targets in 1999, none of the participants received the fifty percent (50%)
portion of the target bonus that was dependent on this factor. The individual
goal achievement and discretionary portions of the target bonus were
determined for each participant on an individual basis.

Special Retention Bonuses

In an effort to retain the services of certain key executive officers
during the difficult market and financial conditions being experienced by the
Company, in 1998 the Compensation Committee provided special retention bonuses
to certain key executive officers and employees. These bonuses were earned
over a fifteen (15)-month period ended June 30, 1999.

Long-Term Incentive Awards

We established a long-term incentive bonus plan beginning in 1996 for
senior executives and certain members of middle management. The long-term
incentive bonus plan had a four (4)-year performance period beginning January
1, 1996 and ending December 31, 1999. The long-term incentive bonus plan
originally consisted of two parts: (1) annual grants of non-qualified stock
options with 25% of such options vesting on each anniversary of such grant and
(2) for certain executive officers, a one time grant of performance vesting
restricted stock which vested only upon attainment of certain cumulative
earnings per share goals. For each participant in the long-term incentive
bonus plan, the Compensation Committee originally determined a target
percentage of base salary to be received by such participant in the form of
equity-based compensation during the long-term incentive period. Because the
Company did not achieve the required cumulative earnings per share goals, as
of December 31, 1999, each participant forfeited his or her performance
vesting restricted stock previously awarded under the long-term incentive
plan.

In 1998, we revised the long-term incentive bonus plan to provide for
equity-based compensation only in the form of annual grants of non-qualified
stock options with twenty-five percent (25%) of such options vesting on each
anniversary of the date of grant. The non-qualified stock options have an
exercise price equal to 100% of the market value on the date of grant.

In 1999, the Compensation Committee adopted an overall compensation
guideline that targeted long-term equity incentives for executive officers at
the 50th percentile of companies included in the compensation surveys.
However, in 1999 we also considered the limited number of shares remaining
under the Company's Equity Incentive Plan and the number of non-qualified
stock options awarded in 1998. For most participants, we reduced the number of
non-qualified stock options awarded in 1999 by approximately twenty percent
(20%) as compared to 1998, except in cases of substantial increases in
responsibility.

Compensation of Chief Executive Officer

We had two chief executive officers during 1999: Ludger H. Viefhues and
Klaus R. von Horde.

Mr. Viefhues served as chief executive officer through February 17, 1999
and retired as an employee on August 17, 1999. He also remained on the Board
of Directors until August 17, 1999. In recognition of his efforts

in ensuring a successful transition in leadership, Mr. Viefhues received a
base salary of $328,990 in 1999 for his service as an employee through August
17, 1999 at the annual base salary rate of $520,000. Mr. Viefhues did not
receive an increase in his annual base salary in 1999. Mr. Viefhues received a
pro rata annual incentive bonus of $100,000 in 1999 based on (1) his target
bonus of 140% of his base salary, (2) his partial year of service and (3) the
overall performance of the Company in 1999. Finally, in 1999 we awarded Mr.
Viefhues non-qualified stock options to purchase 126,800 shares of stock. All
of these stock options vested as of Mr. Viefhues' termination of employment.
Consistent with his retirement agreement, on August 17, 1999 Mr. Viefhues also
received a supplemental severance payment of $520,000.

On February 17, 1999, Mr. von Horde became our President and Chief
Executive Officer. In recognition of his substantially increased
responsibility, we approved a base salary increase of twenty-five percent
(25%) for Mr. von Horde, taking his base salary to an annual rate of $520,000.
Mr. von Horde received an annual incentive bonus of $330,000 in 1999 based on
his target bonus of 140% of his base salary and the performance of the Company
and Mr. von Horde relative to the factors used to determine his annual
incentive bonus. We determined Mr. von Horde's annual incentive bonus based on
several factors, including his individual leadership and the progress of the
Company toward attaining certain of its operational and strategic goals.
Because the Company did not achieve the required budgeted net income and
financial targets in 1999, Mr. von Horde did not receive the portion of his
annual incentive target bonus that was based on this factor. Finally, in 1999
we awarded Mr. von Horde non-qualified stock options to purchase 109,000
shares of stock.

Members of the Compensation Committee

Mr. Helmut Mamsch, Chairman
Dr. Hans Michael Gaul
Dr. Alfred Oberholz
Mr. Paul T. O'Brien
Ambassador Michael B. Smith

SUMMARY COMPENSATION TABLE

Long-Term
Compensation
Annual Compensation Awards
-------------------------------------------- ------------
Name and Securities All Other
Principal Other Annual Underlying Compensation
Position Year Salary ($)(1) Bonus ($)(2) Compensation ($) Options (#) ($)(3)
--------- ---- ------------- ------------ ---------------- ----------- ------------

Ludger H.
Viefhues
(4)
Former
Chief 1999 328,990 100,000 -- 126,800 576,597
Executive 1998 514,986 121,339 -- 160,600 6,720
Officer 1997 500,000 -- -- 30,600 6,720

Klaus R. 1999 505,853 330,000 -- 109,000 1,854
von Horde 1998 420,806(5) 97,072 -- 138,000 --
(4) 1997 33,204(5) -- -- -- --
Chief
Executive
Officer
and
President

James M. 1999 260,088 214,000 -- 39,200 6,720
Stolze 1998 257,586 157,514 -- 49,600 6,720
Executive 1997 247,662 -- -- 5,600 6,720
Vice
President
and
Chief
Financial
Officer

Marcel
Coinne
Corporate
Vice
President 1999 230,000 198,000 103,969(6) 43,200 151,383
Marketing 1998 218,002(7) 171,313(7) 260,607(7)(8) 54,800 90,746(7)
Operations 1997 206,444(7) -- 360,899(7)(8) 4,400 --

Dr. John
P. DeLuca
Corporate
Vice 1999 185,800 175,000 -- 25,200 6,720
President 1998 183,800 146,678 -- 32,000 6,720
Technology 1997 176,075 -- -- 4,000 6,720

Jonathon
P. Jansky
Corporate
Vice 1999 205,000 156,710 -- 36,000 6,720
President 1998 181,350 120,646 -- 30,600 6,720
Operations 1997 144,200 -- -- 3,400 6,056

- --------
(1) Amounts shown include cash compensation earned and received as well as
cash compensation earned but deferred at the election of the executive
officer.
(2) The amounts shown in this column consist of the following:
Annual incentive bonuses (under annual incentive bonus plan):
. Mr. Viefhues, $100,000 in 1999 and $121,339 in 1998
. Mr. von Horde, $330,000 in 1999 and $97,072 in 1998
. Mr. Stolze, $89,000 in 1999 and $32,514 in 1998
. Mr. Coinne, $73,000 in 1999 and $36,418 in 1998
. Dr. DeLuca, $50,000 in 1999 and $21,678 in 1998
. Mr. Jansky, $73,000 in 1999 and $36,936 in 1998

Special incentive bonuses (under special incentive bonus program):
. Mr. Stolze, $125,000 in both 1999 and 1998
. Mr. Coinne, $125,000 in 1999 and $134,895 in 1998
. Dr. DeLuca, $125,000 in both 1999 and 1998
. Mr. Jansky, $83,710 in both 1999 and 1998

(3) For all executive officers other than Mr. Viefhues and Mr. Coinne, the
amounts shown in this column represent matching contributions by MEMC to
the MEMC Retirement Savings Plan. For Mr. Viefhues and Mr. Coinne, the
amounts shown in this column consist of the following:

Mr. Viefhues:
1999:
. $520,000 supplemental severance payment
. $45,455 payment related to geographic relocation
. $6,720 matching contributions by MEMC to MEMC Retirement Savings Plan
. $4,422 for dental and term life insurance premiums and related tax gross-
ups

1998:
. $6,720 matching contributions by MEMC to MEMC Retirement Savings Plan

1997:
. $6,720 matching contributions by MEMC to MEMC Retirement Savings Plan

Mr. Coinne:
1999:
. $70,000 installment of $115,000 adjustment payment in connection with Mr.
Coinne's transfer of employment from Huls Benelux S.A., an affiliate of
MEMC, to MEMC on October 1, 1998
. $81,383 tax gross-up on $115,000 adjustment payment
1998:
. $45,000 installment of $115,000 adjustment payment in connection with Mr.
Coinne's transfer of employment from Huls Benelux S.A. to MEMC on October
1, 1998
. $45,746 allowance required by Belgian law in connection with Mr. Coinne's
leaving the Belgian social security system and transfer of employment
(4) Mr. Viefhues resigned from service as our Chief Executive Officer
effective February 17, 1999 and retired as an employee effective as of
August 17, 1999. Mr. von Horde became Chief Executive Officer and
President on February 17, 1999.
(5) Deutsche mark amounts have been translated into U.S. dollars at the noon
buying rate in New York City for cable transfer in Deutsche marks as
certified for customs purposes by the Federal Reserve Bank of New York on
the last trading day of the respective fiscal year. On December 31, 1998,
the noon buying rate was DM 1.6670 = $1.00. On December 31, 1997, the noon
buying rate was DM 1.7991 = $1.00.

(6) Includes $44,078 paid under Mr. Coinne's insurance contract with Royale
Belge and $41,260 of tax equalization and tax gross-up payments associated
with certain benefits provided by MEMC to Mr. Coinne.
(7) Belgian franc amounts have been translated into U.S. dollars at the noon
buying rate in New York City for cable transfer in Belgian francs as
certified for customs purposes by the Federal Reserve Bank of New York on
the last trading day of the respective fiscal year. On December 31, 1998,
the noon buying rate was BFr 34.36 = $1.00. On December 31, 1997, the noon
buying rate was BFr 37.08 = $1.00.
(8) Includes tax payments paid by MEMC in connection with Mr. Coinne's
international assignment of $183,860 in 1998 and $293,718 in 1997. Until
Mr. Coinne became an employee of MEMC on October 1, 1998, MEMC reimbursed
Huls Benelux S.A. for direct payments of, among other things, a housing
allowance, a vacation bonus and other payments made in connection with the
international assignment.

OPTION GRANTS IN LAST FISCAL YEAR

Individual Grants Potential Realizable
---------------------------------------------- Value at Assumed
Number of % of Total Annual Rates of Stock
Securities Options Price Appreciation
Underlying Granted to Exercise for Option Term(1)
Options Employees in Price Expiration ---------------------
Name Granted(#)(2) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ------------- ------------ -------- ---------- ---------------------

Ludger H. Viefhues...... 126,800 18.4% 8.50 8/17/02 209,220 446,336
Klaus R. von Horde...... 109,000 15.8% 8.50 1/1/09 582,671 1,476,602
James M. Stolze......... 39,200 5.7% 8.50 1/1/09 209,548 531,035
Marcel Coinne........... 43,200 6.3% 8.50 1/1/09 230,930 585,222
Dr. John P. DeLuca...... 25,200 3.7% 8.50 1/1/09 134,709 341,380
Jonathon P. Jansky...... 36,000 5.2% 8.50 1/1/09 192,442 487,685

- --------
(1) The dollar amounts under these columns are the result of calculations at
the 5% and 10% rates set by the SEC and are not intended to forecast
possible future appreciation, if any, of MEMC's common stock price. If
MEMC's common stock does not increase in value, then the option grants
described in the table will be valueless.
(2) Under Mr. Viefhues' retirement agreement, on August 17, 1999 Mr. Viefhues'
options vested and became exercisable for a period of three years. See
"Employment Agreements -- Ludger H. Viefhues." For each of the other named
executive officers, options vest and become exercisable at the rate of 25%
per year on January 1, 2000, January 1, 2001, January 1, 2002 and January
1, 2003. All options expire ten years from the date of grant. In the event
of a change in control of MEMC and except as the Compensation Committee
may otherwise determine, all restrictions and conditions on the remaining
unvested stock options will lapse as of the date of the change in control.
In addition, upon termination of employment due to death, permanent
disability or retirement, all stock options become immediately
exercisable.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES

Number of Securities Underlying Value of Unexercised
Unexercised Options at FY-End(#) In-the-Money Options at FY-End ($)(1)
--------------------------------------- ----------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
---- ---------------- ----------------- ------------------ -------------------

Ludger H. Viefhues...... 327,500(2) -- 475,500 --
Klaus R. von Horde...... 34,500 212,500 -- 408,750
James M. Stolze......... 35,904 80,600 -- 147,000
Marcel Coinne........... 35,704 87,600 -- 162,000
Dr. John P. DeLuca...... 29,504 52,200 -- 94,500
Jonathon P. Jansky...... 13,700 61,100 -- 135,000

- --------
(1) The closing price of MEMC common stock on December 31, 1999, the last
trading day prior to MEMC's year end, was $12.25 per share.
(2) Under Mr. Viefhues' retirement agreement, on August 17, 1999 all of his
options vested and became exercisable for a period of three years. See
"Employment Agreements -- Ludger H. Viefhues."

The named executive officers did not exercise any options during 1999.

Pension Plan

MEMC sponsors the MEMC Pension Plan, a defined benefit pension plan
covering most domestic employees of MEMC and its subsidiaries.

The basic benefit payable under the MEMC Pension Plan is determined based
on a lump sum equal to 8% of a participant's "average total earnings" (as
defined below) up to one-half of the Social Security wage base plus 12% of the
participant's average total earnings over one-half of the Social Security wage
base, multiplied by the participant's years of benefit service, less 2% of
such amount for every year by which the current age of the participant is less
than age 65 (the "Basic Formula").

In addition to the normal annuity options, the benefit payable to employees
hired on or after January 1, 1997, and to participants who were covered by the
MEMC Southwest Inc. Pension Plan on December 31, 1996, is also available in an
immediate lump-sum distribution at termination of employment. The benefit for
other participants is payable only in the form of an annuity with monthly
payments for life beginning at the participant's retirement age, the amount of
which annuity is the actuarial equivalent value of the participant's lump-sum
formula amount.

Employees who were participants in our former Pension Plan for Salaried
Employees (the "Salaried Plan"), a prior plan merged into the MEMC Pension
Plan as of December 31, 1996, are entitled to a benefit calculated under the
formula in effect as of such date under the Salaried Plan, if such benefit is
greater than the benefit calculated under the Basic Formula. The basic benefit
payable under the Salaried Plan formula is a single life annuity equal to 1.2%
of the participant's average total earnings multiplied by the participant's
years of benefit service. However, if the participant was hired in the United
States by Monsanto Company ("Monsanto"), a prior owner of a substantial part
of our business, before April 1, 1986 and was employed by us at any time
during the period April 1, 1989 through May 31, 1989, or if the participant
was employed by MEMC at any time during the period January 1, 1989 through
March 31, 1989, the factor is 1.4% of the participant's "average total
earnings" instead of 1.2%. If a participant with either the 1.2% or 1.4%
formula retires on or after age 55 but prior to age 65, his benefit will be
reduced 1/4% for each month that his retirement date precedes his 65th
birthday. However, if the participant is under age 65 but at least age 55 at
the time of his retirement, and the participant's age and years of vesting
service add up to at least 80, then the benefit is not subject to any
reduction.

The basic benefit under either the 1.2% or 1.4% formula is reduced by the
amount the participant is entitled to receive under any other designated
Monsanto defined benefit pension plan.

For purposes of the MEMC Pension Plan, "average total earnings" means
twelve times the greater of (a) the monthly average earnings received in the
36 full calendar months immediately prior to the date of employment
termination or (b) the monthly average of earnings received during the highest
three of the ten calendar years immediately prior to the year in which
employment terminates. "Earnings" means amounts paid to participants that are
subject to federal income tax withholding (including salary and bonus
payments), subject to certain adjustments. Generally, "earnings" utilized for
pension formula purposes includes salary and annual bonus reported in the
salary and bonus columns of the Summary Compensation Table. However, earnings
utilized for pension formula purposes does not include payments in lieu of
accrued vacation, relocation payments, and the special incentive bonuses paid
in 1998 and 1999. In addition, since annual incentive bonuses are paid in the
year following the year earned, such bonuses are included in earnings utilized
for pension formula purposes in the year following the year such bonuses are
reported in the bonus column of the Summary Compensation Table.

Retirement benefits payable under qualified defined benefit plans are
subject to the annual pension limitations imposed under Section 415 of the
Internal Revenue Code, for which limitations vary annually. The Section 415
limitation for 1999 is $130,000. In addition, Section 401(a)(17) of the
Internal Revenue Code specifies a maximum amount of annual compensation, also
adjusted annually, that may be taken into account in computing benefits under
a qualified defined benefit plan. The Section 401(a)(17) limitation for 1999
is $160,000. Our Supplemental Executive Pension Plan (the "MEMC SEPP"), a non-
qualified and unfunded plan, provides benefits over the applicable Internal
Revenue Code limitations. Benefits under the MEMC SEPP are payable in the form
of a lump-sum distribution, in the form of an annuity with monthly payments
for life beginning at the participant's retirement age, or in annual
installments not to exceed fifteen years.

The following table shows the estimated annual pension benefits under the
MEMC Pension Plan and the MEMC SEPP in the remuneration and years of service
classifications indicated using the Basic Formula. The table is based on the
1999 Social Security Wage Base, a 6.0% interest rate and the GAM83(50/50)
Mortality Table. The amounts shown in the table are calculated on a single
life annuity basis and assume retirement at age 65.

Pension Plan Table(1)

Years Of Service
-------------------------------------------------------------
Remuneration 5 10 15 20 25 30 35
------------ ------- -------- -------- -------- -------- -------- --------

$ 125,000.............. $ 6,363 $ 12,726 $ 19,088 $ 25,451 $ 31,814 $ 38,177 $ 44,539

150,000.............. 7,772 15,543 23,315 31,087 38,858 46,630 54,402

175,000.............. 9,181 18,361 27,542 36,722 45,903 55,084 64,264

200,000.............. 10,590 21,179 31,769 42,358 52,948 63,537 74,127

225,000.............. 11,998 23,997 35,995 47,994 59,992 71,991 83,989

250,000.............. 13,407 26,815 40,222 53,630 67,037 80,445 93,852

300,000.............. 16,225 32,451 48,676 64,901 81,126 97,352 113,577

400,000.............. 21,861 43,722 65,583 87,444 109,305 131,166 153,027

500,000.............. 27,497 54,994 82,490 109,987 137,484 164,981 192,477

600,000.............. 33,133 66,265 99,398 132,530 165,663 198,795 231,928

700,000.............. 38,768 77,537 116,305 155,073 193,841 232,610 271,378

800,000.............. 44,404 88,808 133,212 177,616 222,020 266,424 310,828

900,000.............. 50,040 100,079 150,119 200,159 250,199 300,238 350,278

1,000,000.............. 55,675 111,351 167,026 222,702 278,377 334,053 389,728

Mr. von Horde is covered by the Basic Formula. As of December 31, 1999, Mr.
von Horde has 1.8 years of benefit service and annualized average total
earnings of $523,390. Under the terms of the MEMC Pension Plan and MEMC SEPP,
because Mr. von Horde did not participate in the MEMC Pension Plan and MEMC
SEPP until April 1, 1998, as of December 31, 1999, Mr. von Horde had no vested
benefit.

Pension Plan Table(2)

Years of Service
-----------------------------------
Remuneration 20 25 30 35
------------ -------- -------- -------- --------

$125,000.............................. $ 35,000 $ 43,750 $ 52,500 $ 61,250

150,000.............................. 42,000 52,500 63,000 73,500

175,000.............................. 49,000 61,250 73,500 85,750

200,000.............................. 56,000 70,000 84,000 98,000

225,000.............................. 63,000 78,750 94,500 110,250

250,000.............................. 70,000 87,500 105,000 122,500

300,000.............................. 84,000 105,000 126,000 147,000

400,000.............................. 112,000 140,000 168,000 196,000

450,000.............................. 126,000 157,500 189,000 220,500

500,000.............................. 140,000 175,000 210,000 245,000

Dr. DeLuca and Mr. Jansky are covered by the 1.4% formula. As of December
31, 1999, Dr. DeLuca had 22.6 years of benefits service and annualized average
total earnings of $243,836, and Mr. Jansky had 26.0 years of benefits service
and annualized average total earnings of $197,421.

The following table shows the estimated annual pension benefits under the
MEMC Pension Plan and the MEMC SEPP in the remuneration and years of service
classifications indicated using the 1.2% Salaried Plan formula described
above. As discussed above, the 1.2% formula is an alternative to the Basic
Formula. The table presents the better of the Basic Formula or the
grandfathered 1.2% formula for each level of remuneration and years of service
classification as a single life annuity assuming retirement at age 65. The
basic benefit is calculated using the 1999 Social Security Wage Base, a 6%
interest rate and the GAM83(50/50) Mortality Table to convert the lump sums to
annuities.

Pension Plan Table(3)

Years of Service
------------------------
Remuneration 5 10 15
------------ ------- ------- --------

$225,000......................................... $13,500 $27,000 $ 40,500
250,000......................................... 15,000 30,000 45,000
300,000......................................... 18,000 36,000 54,000
400,000......................................... 24,000 48,000 72,000
500,000......................................... 30,000 60,000 90,000
600,000......................................... 36,000 72,000 108,000
700,000......................................... 42,000 84,000 126,000

Mr. Viefhues and Mr. Stolze are eligible for the 1.2% formula. When he
resigned on August 17, 1999, Mr. Viefhues had 6.2 years of benefit service,
including one additional year of benefit service credited to him under the
terms of his retirement agreement, and annualized average total earnings of
$609,411. See "Employment Agreements -- Ludger H. Viefhues." As of December
31, 1999, Mr. Stolze had 4.5 years of benefit service and annualized average
total earnings of $336,182. Under the terms of the MEMC Pension Plan and MEMC
SEPP and because Mr. Stolze joined MEMC in June 1995, as of December 31, 1999,
Mr. Stolze had no vested benefit.

Mr. Coinne does not participate in either the MEMC Pension Plan or the MEMC
SEPP. Under his employment agreement, Mr. Coinne is covered by a pension
arrangement maintained through an insurance contract with Royale Belge and a
pension agreement with us. The Royale Belge contract duplicates the benefit
provided under Mr. Coinne's prior employer's pension plan.

If Mr. Coinne had retired on December 31, 1999 and began receiving payment
at age 65, Mr. Coinne would be eligible to receive an annual pension from the
Royale Belge contract arrangement of approximately $42,616. Under the pension
agreement with us, Mr. Coinne would be eligible to receive an annual pension
of $35,958 beginning at age 65, if he had terminated employment on December
31, 1999. Amounts provided reflect the exchange rate for Belgian francs on
December 31, 1999. Pension benefits under Mr. Coinne's pension agreement with
us are subject to reduction for accrued pension benefits under a combination
of government benefits, benefits under Royale Belge contract and under plans
maintained by Mr. Coinne's prior employers. If Mr. Coinne were to retire on or
after age 55 but prior to age 65 and begin receiving his pension benefit from
MEMC, his pension benefit would be reduced by 1/4% for each month prior to his
attaining age 65.

Employment Agreements

Ludger H. Viefhues

Mr. Viefhues originally entered into an employment agreement with MEMC in
1996. On February 17, 1999, this agreement was superseded by a retirement
agreement between Mr. Viefhues and MEMC.

Under the terms of the retirement agreement, Mr. Viefhues resigned from
service as our Chief Executive Officer effective as of February 17, 1999.
During the period from February 17, 1999 to August 17, 1999, Mr. Viefhues
remained an employee and a director of MEMC. On August 17, 1999, Mr. Viefhues
resigned his employment with MEMC and retired from our Board of Directors.

Under his retirement agreement, Mr. Viefhues was eligible to receive
62.4658% of his full annual incentive payment for 1999, which annual incentive
amount was to be determined based on the Compensation Committee's review of
MEMC's actual performance for 1999. The annual incentive amount was payable at
such time as annual incentive payments were paid to other participants in
MEMC's annual incentive bonus plan.

On August 17, 1999, Mr. Viefhues received the following:

. A supplemental severance payment of $520,000
. A lump-sum amount of $45,455 in order to defray expenses to be incurred
by him and his family in returning to Germany
. Vesting of all stock options previously awarded to Mr. Viefhues under
MEMC's 1995 Equity Incentive Plan (Mr. Viefhues is allowed to exercise
these stock options until August 17, 2002)
. An additional year of credit for service under the MEMC SEPP with his
accrued benefit under the MEMC SEPP to be paid as soon as practicable
after August 18, 2000

MEMC also agreed to provide Mr. Viefhues with the following:

. Reasonable and customary tax preparation services and financial planning
assistance for the 1999 tax year
. A one-year, $1 million term life insurance policy
. The cost of continuing certain dental benefits
. A tax gross-up associated with the term life insurance policy and the
dental benefits

MEMC is obligated to require any successor to assume and agree to perform
Mr. Viefhues' retirement agreement.

Klaus R. von Horde

On February 17, 1999, MEMC entered into a new employment agreement with Mr.
von Horde following his appointment as our President and Chief Executive
Officer. This new employment agreement provides that Mr. von Horde will be
employed by MEMC as President and Chief Executive Officer from February 17,
1999 to March 31, 2003.

Mr. von Horde's employment agreement includes the following:

. An initial annual base salary of $520,000 which may be increased, but not
decreased, at the discretion of the Compensation Committee based on
performance and responsibilities assigned to Mr. von Horde
. Annual grants of stock options under MEMC's 1995 Equity Incentive Plan,
including annual stock option grants in January 2000, 2001 and 2002
comprised of options to purchase a number of shares with a face value of
no less than 200% of Mr. von Horde's base salary, not to exceed 100,000
shares in any one year, with an exercise price per share equal to 100% of
market value on the date of grant
. Vesting of all stock options at the rate of 25% per year starting one
year after the date of grant such that 100% vesting will occur on the
fourth anniversary of the date of grant
. Participation in our welfare and fringe benefit plans, the MEMC Pension
Plan and the MEMC SEPP
. An annual bonus under MEMC's annual incentive bonus plan with a target
bonus of no less than 50% of his annual base salary

Mr. von Horde's employment agreement provides that all stock options
granted to him after February 17, 1999 will vest upon his retirement on or
following March 31, 2003, or earlier, with the consent of the Compensation
Committee. Under Mr. von Horde's previous employment agreement, all stock
options granted to him prior to February 17, 1999 will vest upon his
retirement on or following August 31, 2002 or earlier with the consent of the
Compensation Committee.

Either party may terminate Mr. von Horde's employment agreement upon twelve
months' prior notice. In the event of Mr. von Horde's involuntary termination
without cause (other than by reason of death, total and permanent disability
or retirement at the end of the agreement term) or Mr. von Horde's resignation
for good reason, he will be entitled to:

. His base salary, benefits and pension credit through the notice period,
the end of which will be the date of termination
. A pro rata bonus for the year of termination to be paid at the same time
and to the same extent (i.e., based on MEMC's performance for the full
year) as bonuses are paid generally to MEMC's executives with respect to
such year
. Reimbursement for all reasonable relocation expenses incurred by him in
returning to Germany with his family
. All unvested options under MEMC's 1995 Equity Incentive Plan will vest
and remain outstanding and exercisable for three years following his
termination date unless the options are exercised or expire sooner by
their terms
. A lump-sum cash payment equal to six months' salary
. Continued medical and dental plan coverage for six months (but not beyond
March 31, 2003 or his return to Germany)
. Pension service credit through March 31, 2003 for benefit accrual
purposes
. Accelerated pension vesting and waiver of early retirement reduction
factors such that a full unreduced normal retirement pension amount
(including benefits under the MEMC SEPP) will be available to Mr. von
Horde six months after his termination date (or March 31, 2003, if
sooner), based on at least five years of service

In the event Mr. von Horde voluntarily retires on or after March 31, 2003:

. His pension will be fully vested and the early retirement reduction
factors shall be waived, such that a full unreduced normal retirement
pension amount (including benefits under the MEMC SEPP) will be available
to Mr. von Horde on his retirement date
. He will also be entitled to continued medical and dental plan coverage
until the earlier of (i) the first anniversary of his retirement date and
(ii) his return to Germany

James M. Stolze

Mr. Stolze entered into an employment arrangement with MEMC effective as of
June 16, 1995. Under this agreement, Mr. Stolze was appointed our Chief
Financial Officer. The agreement has no specified term and contains no
termination provision. The agreement provides for:

. An initial annual base salary of $230,000
. Annual incentives
. Participation in any long-term incentive plan established by MEMC
. Grants of options and restricted stock under MEMC's 1995 Equity Incentive
Plan
. A signing bonus of $327,994 (which Mr. Stolze must repay if he terminates
his employment prior to completing five years of service)
. Other pension and welfare benefits

The agreement contains no provisions regarding payment in the event of
termination or change of control.

Marcel Coinne

Mr. Coinne entered into a new employment arrangement with MEMC effective as
of October 1, 1998. The agreement has no specified term and contains no
termination provision. The agreement provides for:

. An initial base salary of $230,000 per year, reduced by certain insurance
and retirement expenses
. Participation in MEMC's annual incentive bonus plan and long-term
incentive bonus plan
. Coverage under certain medical, dental, insurance and pension policies
. Certain tax preparation, estate planning, tax planning and other legal
services
. A one-time payment of $115,000 payable in two installments

The agreement provides that Mr. Coinne will be entitled to two weeks pay
for each year of service, plus one additional week pay, in the event Mr.
Coinne is terminated by MEMC without cause. MEMC is also obligated to pay
certain relocation and transportation expenses in the event of Mr. Coinne's
retirement or termination. However, if Mr. Coinne is terminated and the
severance benefits payable to Mr. Coinne under the MEMC Severance Plan for
Senior Officers are more favorable than the severance benefits payable under
his employment agreement, then Mr. Coinne will receive the severance benefits
payable under the MEMC Severance Plan for Senior Officers. See "Severance Plan
for Senior Officers."

Annual Incentive Bonus Plan

We have adopted an annual incentive bonus plan which is administered by the
Compensation Committee. Employees assigned to certain management, professional
and technical positions are eligible to participate in the annual incentive
bonus plan.

Under the annual incentive bonus plan, annual bonuses are paid based upon
the extent to which MEMC's performance has met or exceeded certain performance
goals specified by the Compensation Committee. A portion of the annual awards
may also be based on individual performance. Awards under the annual incentive
bonus plan are paid in cash.

In the event a participant terminates employment prior to the end of a year
for any reason other than disability, retirement, death or involuntary layoff,
no award is paid to the participant unless otherwise determined by the
Compensation Committee in its sole discretion. If a participant's employment
terminates by reason of disability, retirement, death or involuntary layoff,
then the participant is entitled to receive a pro rata award provided the
participant participated in the annual incentive bonus plan for at least six
months. In the event of a change of control of MEMC, the payment of awards are
accelerated and the amount of such awards is calculated as if the applicable
performance goals have been met.

The Board of Directors may terminate or amend the annual incentive bonus
plan, in whole or in part, at any time. Because awards under the annual
incentive bonus plan are based on the attainment of specified performance
goals, it is not possible to determine the benefits and amounts that will be
received by any individual participant or group of participants in the future.

Special Incentive Bonus Plan

In March 1998, we adopted a special incentive bonus program designed to
retain the services of certain officers and key employees during the period
commencing April 1, 1998 and ending June 30, 1999. Under the program,
participants received a special incentive bonus. Each participant received an
advance payment of fifty percent (50%) of the special incentive bonus at the
time the participant executed a special incentive bonus agreement. The
remaining fifty percent (50%) of each participant's special incentive bonus
was paid on June 30, 1999 provided the participant remained an employee of
MEMC through June 30, 1999.

In the event a participant terminated his or her employment prior to April
1, 1999, the special incentive bonus agreement provided that the participant
was required to reimburse MEMC the entire amount of the advance payment.
However, no reimbursement of the advance payment was required in the event of
the death or total and permanent disability of a participant or in the event a
participant's employment was involuntarily terminated by MEMC as a result of a
change of control of MEMC or a reduction in MEMC's workforce.

In the event a participant terminated his or her employment with MEMC after
March 31, 1999 and before July 1, 1999, the incentive bonus agreement provided
that the participant was required to reimburse MEMC a pro rata portion of the
advance payment. Such reimbursement was based on the portion of the retention
period during which the participant failed to remain an employee of MEMC.

Severance Plan for Senior Officers

On October 15, 1999, we adopted a severance plan for our senior officers.
The plan provides severance benefits to certain key executive officers in the
event of their termination of employment both before and after a change of
control of MEMC. Executive Vice Presidents and Corporate Vice Presidents
reporting to MEMC's Chief Executive Officer are eligible to participate in the
plan. However, the Compensation Committee must designate all participants.
There are currently nine participants in the plan, including Mr. Coinne, Dr.
DeLuca, Mr. Jansky and Mr. Stolze.

The plan has an initial term of three years ending October 15, 2002. After
the initial term, the plan automatically renews for successive one-year terms
until terminated on twelve months' prior notice to each participant. However,
if there is a change in control of MEMC, the plan continues for two years
following the change in control at which time the plan will terminate.

The Compensation Committee may remove a participant from the plan by giving
the participant twelve months' notice. However, no participant may be removed
from the plan for two years following a change in control of MEMC.

A participant is entitled to severance benefits under the plan in the event
that he or she is:

. Involuntarily terminated, other than for cause, while a participant in
the plan; or

. Constructively discharged within two years following a change in control
of MEMC.

A participant is not entitled to severance benefits under the plan in the
event of his or her termination of employment on account of death, total and
permanent disability, voluntary termination of employment by the participant
or termination of employment by MEMC for cause.

Participants who are entitled to severance benefits under the plan receive
the following:

Cash Compensation

Salary: The greater of (1) one year's base salary in effect at the time of
termination of employment without any accrued and unused vacation or (2)
two weeks' of such salary for each year of service with MEMC plus one
additional week's salary plus accrued and unused vacation.

Bonus: A pro rata bonus for the year of termination based on the number of
days in the year before the termination date. The bonus will be determined
based on the actual level of achievement of the relevant goals. However, if
the termination of employment occurs within two years following a change in
control, then (1) the pro rata bonus will be based on the full targeted
level and (2) the participant will receive an additional payment equal to
the bonus the participant would have received for the year of termination
at the full targeted level.

Stock Options

If the termination of employment occurs within two years following a change
in control, then the participant will be deemed to have retired for
purposes of determining the vesting and expiration of all stock options
previously granted to the participant.

Retirement Benefits

For purposes of determining benefits payable under the MEMC SEPP, the
period used above to determine the salary severance benefit (e.g., either
one year, or two weeks for each year of service plus one additional week)
will be treated as additional service to MEMC.

Medical and Dental Benefits

A participant will receive a payment equal to the cost of 18 months of
COBRA premiums for dental coverage for the same level of coverage the
participant is enrolled immediately prior to his or her termination. In
addition, if a participant is not eligible for retiree medical benefits,
the participant will receive an additional payment equal to cost of 18
months of COBRA premiums for medical coverage for the same level of
coverage the participant is enrolled immediately prior to his or her
termination. These payments will be grossed up for taxes.

Compensation Committee Interlocks and Insider Participation

During 1999, the Compensation Committee was comprised of Dr. Hans Michael
Gaul, Mr. Helmut Mamsch, Dr. Alfred Oberholz, Mr. Paul T. O'Brien, and
Ambassador Michael B. Smith.

None of these directors has been an officer or employee of MEMC or any of
its subsidiaries. Because the full Board of Directors approved certain
compensation recommendations of the Compensation Committee, Mr. Viefhues and
Mr. von Horde are deemed to have participated in deliberations of the Board of
Directors regarding remuneration paid to executive officers.

Section 16(a) Beneficial Ownership Reporting Compliance

Based on our review of the Forms 3, 4 and 5 furnished to us, all of the
filings for our executive officers and directors and greater than 10%
stockholders required under Section 16(a) of the Securities Exchange Act of
1934 were made on a timely basis in 1999.

STOCK PRICE PERFORMANCE GRAPH

The graph below compares cumulative total stockholder return with the
cumulative total return (assuming reinvestment of dividends) of the S&P 500
Index and the Hambrecht & Quist Semiconductor Index. The information on the
graph covers the period from July 12, 1995 (the date MEMC common stock began
trading following MEMC's initial public offering), through December 31, 1999.
The stock price performance shown on the graph below is not necessarily
indicative of future stock price performance.

MEMC S&P 500 H&Q Semiconductor
7/12/95 100 100 100
12/31/95 136 114 72
12/31/96 94 136 94
12/31/97 64 183 99
12/31/98 35 234 139
12/31/99 51 283 346

CERTAIN TRANSACTIONS

VEBA Corporation, a corporation owned by VEBA AG and its subsidiaries, and
VEBA Zweite Verwaltungsgesellschaft mbH, another subsidiary of VEBA AG,
collectively own 71.8% of the outstanding shares of MEMC common stock.

In an effort to minimize conflicts of interest by members of our Board of
Directors affiliated with VEBA AG or other related parties, the Audit
Committee, or a special committee consisting entirely of independent
directors, generally approves or ratifies any material transaction with a
related party.

In 1999, we sold 28,469,028 shares of common stock to VEBA Zweite
Verwaltungsgesellschaft in connection with a private placement and rights
offering. We also made payments to VEBA AG and certain of its affiliates for
software, equipment, credit commitments and interest. MEMC reimbursed VEBA AG
and certain of its affiliates for certain insurance premiums paid on our
behalf. The following discussion summarizes the significant agreements and
arrangements between MEMC and VEBA AG and its affiliates.

Private Placement and Rights Offering

On March 22, 1999, we sold 15,399,130 shares of our common stock to VEBA
Zweite Verwaltungsgesellschaft mbH in a private placement for a purchase price
of $6.89 per share. On April 16, 1999,

we sold an additional 13,069,898 shares of our common stock to VEBA Zweite
Verwaltungsgesellschaft mbH in connection with a rights offering for a
purchase price of $6.89 per share. VEBA Zweite Verwaltungsgesellschaft had
agreed to purchase all shares of common stock issuable upon exercise of rights
that were not subscribed for by other stockholders in the rights offering. The
purpose of the private placement and rights offering was to raise
approximately $200 million of additional capital in a manner that would
provide an opportunity for our stockholders to maintain their proportionate
ownership in MEMC.

VEBA-VIAG Merger

In 1999, MEMC retained KPMG LLP to provide certain accounting review
procedures requested by VEBA AG in connection with the pending merger between
VEBA AG and VIAG AG. MEMC also responded to various due diligence requests of
VEBA AG related to the merger. MEMC formed a Special Committee of the Board of
Directors to consider and act upon these due diligence requests. The Special
Committee retained Bryan Cave LLP to provide legal counsel to the committee.

VEBA AG has agreed to reimburse MEMC for out-of-pocket expenses incurred by
MEMC in connection with the accounting review and the due diligence requests,
including the fees and expenses of KPMG LLP and Bryan Cave LLP. In 1999, VEBA
AG paid $141,250 to KPMG LLP for fees and expenses incurred in connection with
the accounting review procedures.

Loan Agreements and Guarantees

In 1999, MEMC incurred approximately $63.5 million in interest, commitment
fees and other financing fees to VEBA AG and certain of its affiliates. We
have entered into a number of credit and loan arrangements with VEBA AG and
its affiliates. Our loan and credit agreements with VEBA AG and its affiliates
provide that the maturities on all outstanding debt maturing prior to January
1, 2001 will be extended until their maturity date anniversaries in 2001 (but
only in the event we have used our best efforts to obtain replacement
financing on equivalent terms and have been unsuccessful). On December 31,
1999, we had approximately $729.1 million of U.S. dollar and Japanese yen
based loans outstanding with VEBA AG and its affiliates. These loans had
interest rates ranging from 3.5% to 11.0%. We pay an annual commitment fee of
1/4 of one percent on the undrawn portion of these loans. Additionally, we
have agreed that, without the consent of VEBA AG and certain of its
affiliates, we will not allow any encumbrances, such as mortgages and security
interests, to be placed on our properties.

For all loans that mature prior to January 1, 2001 and which maturities are
extended by VEBA AG and its affiliates until 2001, the interest rates we must
pay during the extension period will be adjusted to reflect the then-current
interest rate spreads applicable to an average industrial borrower at an
assumed credit rating. The assumed credit rating for these loans was assumed
solely for purposes of these loans and does not reflect a view by MEMC or VEBA
AG or its affiliates as to the rating that would be assigned by an independent
rating agency. No independent rating agency currently rates MEMC's debt.

MEMC and an affiliate of VEBA AG guaranteed certain indebtedness of POSCO
HULS Company, Ltd., a joint venture with Pohang Iron and Steel and Samsung,
operating in South Korea ("PHC"), that matured in March 1999. Neither MEMC nor
the affiliate of VEBA AG was required to make any payments under this
guarantee. For this guarantee, we paid the affiliate of VEBA AG an annual fee
of 1/8 of one percent calculated on the outstanding principal balance.

Agreement for Communication Services

MEMC has an arrangement with VEBA Corporation covering our communication
service needs. This arrangement allows MEMC to participate with VEBA
Corporation and several of its affiliates in a communication service agreement
between VEBA Corporation and AT&T. The term of the communication services
agreement expires in 2001. In return for volume pricing discounts, VEBA
Corporation provided AT&T

with minimum revenue commitments for each contract year during the term of the
communication services agreement. MEMC entered into a reimbursement agreement
with VEBA Corporation which requires us to reimburse VEBA Corporation if our
payments to AT&T under the communication services agreement do not meet
certain minimum levels for each contract year. To date, the Company has not
made any reimbursement payments to VEBA Corporation under this agreement.

Tax Agreements

From 1990 to 1995, we were a party to various tax sharing agreements with
VEBA Corporation and its affiliates. The tax sharing agreements provided a
method to determine each party's respective federal income tax liabilities. In
1995, we entered into a tax disaffiliation agreement with VEBA Corporation
terminating the tax sharing agreements. As a result, MEMC is now responsible
for its own federal, state, and local tax returns and tax liabilities. Under
the terms of the tax disaffiliation agreement, MEMC and VEBA Corporation
agreed to indemnify each other from and against any additional federal income
tax liability attributable to each other's operations that is determined to be
due for taxable periods covered by the tax sharing agreements.

Registration Rights Agreement

Under a registration rights agreement, as amended in 1999 in connection
with our private placement to VEBA Zweite Verwaltungsgesellschaft mbH, we
granted VEBA AG and its affiliates the right to demand registration of their
MEMC common stock under federal securities laws. Except as described below,
the demand rights are exercisable at any time and must be exercised for at
least 25% of the MEMC common stock covered by the registration rights
agreement. We may be required to effect up to three such demand registrations.
VEBA AG and its affiliates will pay the expenses of any such demand
registration. We are not obligated to take any action to register shares of
MEMC common stock owned by VEBA AG and its affiliates:

. during the period starting 30 days prior to the estimated date of filing
of, and ending 90 days after the effective date of, any other
registration statement filed by MEMC under federal securities laws
. more than once during any six-month period
. for up to 90 days after a request from VEBA AG or its affiliates if our
President certifies that the MEMC Board of Directors has determined that
such registration would interfere with a material transaction then being
pursued by MEMC

In addition, except in certain circumstances and subject to certain
limitations, if MEMC proposes to register any shares of its common stock under
the federal securities laws, VEBA AG or any affiliate of VEBA AG will be
entitled to require us to include in the registration all or a portion of the
shares of MEMC common stock owned by VEBA AG or such affiliate. We will pay
the expenses of any such "piggyback" registration, other than underwriting
discounts, commissions and filing fees relating to the MEMC common stock sold
by VEBA AG or its affiliates.

We have agreed to indemnify any underwriter in connection with any
registration made under the registration rights agreement against certain
liabilities, including liabilities under federal securities laws.

Treasury Management

Under an informal arrangement, MEMC participates in VEBA AG's global
treasury management system. As part of this arrangement, we generally offer
VEBA AG or an affiliate a right of first refusal to act as our financial
intermediary in transacting currency hedging activities. As a result of this
arrangement, we have entered into a number of foreign exchange hedging
contracts using VEBA AG or an affiliate as our financial intermediary. MEMC
believes that these hedging arrangements with VEBA AG or an affiliate allow
for transactions on terms that are comparable to terms available from
unrelated third party financial intermediaries. Consistent with our past
practice, we may deposit excess cash with VEBA AG or certain of its affiliates
on a short-term basis at market rates of interest. We believe that the
interest rates received under these short term

arrangements are comparable to market rates received for similar transactions
from non-affiliated persons. The treasury management arrangements may be
modified from time to time or terminated at any time on short notice, either
by MEMC or VEBA AG or certain affiliates.

Purchases of Equipment

We purchase equipment from Steag Electronic Systems and its affiliates.
VEBA AG holds a significant minority ownership interest in Steag Electronic
Systems. We believe that the price we pay for this equipment is not materially
different from the price that we could obtain from unrelated third parties for
comparable equipment. In 1999, we paid Steag Electronic Systems and its
affiliates approximately $5.8 million for equipment.

SAP Software

We have obtained the use of SAP R/3 software and related maintenance
services through VEBA AG, which has a license and maintenance contract with
SAP AG. SAP R/3 software is a comprehensive enterprise resource planning
software package designed to integrate our various business processes. In
1999, we paid VEBA AG a one-time fee of approximately $368,000 for the use of
the SAP R/3 software. In addition, in 2000, we expect to begin paying VEBA AG
for annual maintenance charges related to SAP maintenance services. Because of
VEBA AG's volume pricing, we believe that both the one-time fee and the annual
maintenance charges are more favorable than we would be required to pay if we
independently contracted with SAP for the license and maintenance services.

Insurance

We participate in a marine cargo insurance policy maintained by VEBA AG or
an affiliate. In 1999, we paid premiums of $78,790 under this policy. We also
participate in a blended liability insurance policy sponsored by an unrelated
third party. Our participation in the blended liability policy was arranged by
VEBA AG. The premiums on the blended liability policy are paid by VEBA AG on
our behalf. We reimburse VEBA AG for these premiums. In 1998, we reimbursed
VEBA AG in the amount of $1.5 million for a three-year premium paid under this
policy. We believe that the total premiums paid for the marine cargo policy
and the blended liability policy are comparable to premiums that are available
from unrelated third parties.

ITEM NO. 2. AMENDMENT TO MEMC'S 1995 EQUITY INCENTIVE PLAN

On December 6, 1999, MEMC's Board of Directors adopted an amendment to
MEMC's 1995 Equity Incentive Plan and directed that the amendment be presented
for approval at MEMC's 2000 Annual Stockholders' Meeting. The amendment
provides for an increase of 3,600,000 shares in the number of shares of MEMC
common stock available under the plan.

The amendment will become effective upon approval by stockholders holding
at least a majority of the shares of MEMC common stock present in person or by
proxy at the 2000 Annual Stockholders' Meeting.

General

The purpose of the plan is to provide an additional incentive to officers,
other eligible key employees and directors of MEMC upon whom responsibilities
for the successful operations, administration and management of MEMC rest and
whose present and potential contributions are important to the continued
success of MEMC. The plan also allows us to attract and retain highly
qualified persons as employees and directors. The purpose of the proposed
amendment is to increase the number of available shares to enable MEMC to
continue the plan in future years. The plan became effective in July 1995. The
maximum number of shares available under the plan is currently 3,597,045
shares of common stock, less the number of shares reserved for issuance under
our

retirement savings plan or under a broad-based employee stock purchase plan.
As of January 31, 2000, only 244,906 shares remain available for future awards
under the plan. The shares currently authorized under the plan have been
registered under federal securities laws and, if Item No. 2 is approved, we
intend to register the additional shares under federal securities laws.

The Compensation Committee administers the plan. The plan provides for the
grant of different awards, including incentive and non-qualified stock
options, restricted stock and performance shares. Individuals who are either
directors or salaried employees of MEMC with potential to contribute to our
future success are eligible to receive awards under the plan. The Compensation
Committee has discretion to:

. Select the employees and directors to whom awards are granted
. Determine the type, size and terms and conditions applicable to each
award
. Interpret, construe and implement the provisions of the plan

The Compensation Committee's decisions are binding on MEMC and employees
and directors eligible to participate in the plan and all other persons having
any interest in the plan.

Common stock issued under the plan may be either authorized but unissued
shares, treasury shares or any combination thereof. Shares underlying expired,
canceled or forfeited awards are available for new awards under the plan. Any
shares of restricted stock that are returned to MEMC as part of a
restructuring of benefits granted under the plan are also available for new
awards under the plan. Likewise, shares underlying stock options and
performance share awards are available for new awards under the plan in the
following circumstances:

. If the exercise price for stock options is paid in shares of MEMC common
stock, then the number of shares received in payment of the exercise
price increases the number of shares available for new awards under the
plan
. If the Compensation Committee approves the payment of the exercise price
for a stock option by the withholding of shares from the distribution,
then the shares withheld are available for new awards under the plan
. If the Compensation Committee approves the payment of cash to the owner
of a stock option equal to the difference between the fair market value
of the underlying shares and the exercise price for such shares, then the
underlying shares are available for new awards under the plan
. If a performance share award is paid in cash, the shares for which such
payment is made are available for new awards under the plan

The closing price of MEMC common stock on February 29, 2000 on the New York
Stock Exchange was $17 7/16 per share. As of January 31, 2000, there were
seven directors and approximately 1,600 salaried employees who were
potentially eligible to participate in the plan.

Types of Awards

Set forth below is a description of the types of awards that may be granted
under the plan.

Stock Options

Under the plan, the Compensation Committee may grant options to purchase
shares of MEMC common stock. Each option represents the right to purchase one
share of MEMC common stock at a specified price. The options may be non-
qualified or incentive stock options. The Compensation Committee determines
the exercise price for each stock option grant.

Options expire not later than ten years after the date of grant (five years
in the case of an incentive stock option granted to an individual owning 10%
or more of MEMC's outstanding common stock). Options become exercisable at
such times as are determined by the Compensation Committee. The Compensation
Committee may provide that options are exercisable in whole or in part based
upon length of service or attainment of specific

performance criteria. The Compensation Committee may also accelerate the
period for the exercise of any or all options held by an optionee.

Payment of the exercise price must be made in full at the time of exercise
in cash, certified or bank check, note or other instrument acceptable to the
Compensation Committee. The Compensation Committee also has discretion to
accept payment in full, or in part, as follows:

. In shares of MEMC common stock already owned by the optionee, which
shares are valued at fair market value on the exercise date
. By withholding shares of MEMC common stock that we would otherwise issue
to the optionee upon the exercise of the stock option with such withheld
shares valued at fair market value on the exercise date less the
applicable exercise price for the shares
. Through a "cashless exercise" procedure involving a broker or dealer
approved by the Compensation Committee

Restricted Stock

Under the plan, the Compensation Committee may grant awards of restricted
stock. Restricted stock is an award of MEMC common stock that is subject to
restrictions determined by the Compensation Committee, including forfeiture
conditions and restrictions against transfer for a specified period.
Restricted stock awards may be granted either for or without consideration.
The restrictions on restricted stock may lapse in installments based on
factors determined by the Compensation Committee. In addition, the
Compensation Committee has discretion to waive or accelerate the lapsing of
restrictions in whole or in part.

Prior to the expiration of the restricted period, unless otherwise provided
by the Compensation Committee, a grantee of restricted stock has the rights of
an MEMC stockholder, including the right to vote and receive cash dividends on
the restricted stock. Any stock dividends on shares of restricted stock will
be treated as additional shares under the restricted stock award and will be
subject to the same restrictions and other terms and conditions as the
restricted stock on which the stock dividend was paid.

Performance Shares

Under the plan, the Compensation Committee may grant awards of performance
shares. Performance shares are an award of a number of units that represent
the right to receive a specified number of shares of MEMC common stock. The
right to receive MEMC common stock is conditioned upon the satisfaction of
certain performance goals and is subject to other terms and conditions as are
specified by the Compensation Committee. Performance goals are established
before, or as soon as practicable after, the start of the applicable
performance period and may be based on the following or any combination
thereof:

. Net earnings
. Operating earnings or income
. Absolute and/or relative return on equity or assets
. Earnings per share
. Cash flow
. Pretax profits
. Earnings growth
. Revenue growth
. Comparison to peer companies
. Such other measures of performance, including individual measures of
performance, as the Compensation Committee deems appropriate

Prior to the end of a performance period, the Compensation Committee has
the discretion to adjust performance goals to reflect events that may
materially affect MEMC's performance, including, but not limited

to, market conditions or a significant acquisition or disposition of assets or
other property. However, any such adjustment may only be made under conditions
that do not affect the deductibility of compensation attributable to
performance shares under Section 162(m) of the Internal Revenue Code.

At the end of a performance period, the Compensation Committee determines
the extent to which a grantee is entitled to payment in settlement of the
performance share award. The Compensation Committee makes this determination
based on whether the Compensation Committee determines that the applicable
performance goals have been met.

Payment in settlement of a performance share award is made as soon as
practicable following the last day of the performance period, or at such other
time as the Compensation Committee may determine. Such payment is made in
shares of MEMC common stock.

Unless otherwise provided by the Compensation Committee, a grantee of a
performance share award has no rights as an MEMC stockholder with respect to
the performance share award until the award is paid to the grantee in the form
of MEMC common stock following the last day of the performance period.

Additional Information

Change in Capitalization

Under the plan, if there is a change in the outstanding shares of MEMC
common stock by reason of any stock dividend, recapitalization, merger,
consolidation, stock split, combination or exchange of shares or other form or
reorganization, or any other change involving MEMC common stock, proportionate
adjustments will be made to reflect the change. The proportionate adjustments
will be in the form determined by the Compensation Committee as necessary to
prevent dilution or enlargement of the following rights:

. The aggregate number of shares of MEMC common stock for which awards may
be granted under the plan
. The number of shares of MEMC common stock covered by each outstanding
award under the plan and the price per share for each such award

Change of Control

In the event of a change of control of MEMC, unless the Compensation
Committee (as it exists immediately prior to the change of control) otherwise
determines:

. All outstanding options will become fully exercisable, whether or not
then exercisable
. All restrictions and conditions of all restricted stock awards then
outstanding will lapse
. All performance share awards will be deemed to have been fully earned

A "change of control" is deemed to have occurred when:

. Any person (excluding VEBA AG and its affiliates, MEMC and its
subsidiaries and employee benefit plans, and certain other related
entities), alone or together with its affiliates, becomes the beneficial
owner of 20% or more of the outstanding shares of MEMC common stock or
the combined voting power of MEMC's outstanding voting securities; or
. During any two consecutive years, there is a change in the composition of
the MEMC Board of Directors such that the following individuals (the
continuing directors) no longer constitute a majority of the directors:
. individuals who at the beginning of the period make up the MEMC Board
of Directors; and
. new directors (other than representatives or nominees of the
acquiring person or group) whose election by the MEMC Board of
Directors or whose nomination for election by MEMC's stockholders was
approved by a vote of at least a majority of the directors still in
office who either

were directors at the beginning of the period or whose election or
nomination for election was previously so approved.

However, no "change of control" will be deemed to have occurred in the
following circumstances:

. A person becomes the beneficial owner of 20% or more of the outstanding
shares of MEMC common stock or the combined voting power of MEMC's
outstanding voting securities as a result of an offer for all outstanding
shares of MEMC common stock at a price and upon such terms and conditions
as a majority of the continuing directors determine to be in the best
interest of MEMC and its stockholders; or
. VEBA AG and any of its affiliates are the beneficial owners of 50% or
more of the combined voting power of MEMC's outstanding voting securities
and designees of VEBA AG and its affiliates constitute a majority of the
MEMC Board of Directors.

Other Terms

Generally, an individual's rights under the plan may not be assigned or
transferred except in the event of death.

The plan will remain in effect until terminated by the MEMC Board of
Directors. However, the plan will continue thereafter until all awards
previously granted under the plan are satisfied or otherwise terminated. No
awards may be granted under the plan after July 12, 2005, the tenth
anniversary of the original effective date of the plan. The MEMC Board of
Directors may at any time terminate, modify or amend the plan. However, no
amendment, modification or termination may adversely affect an optionee's or
grantee's rights under any previously granted award without the consent of the
optionee or grantee. In addition, no termination, modification or amendment to
the plan is effective without the approval of the MEMC stockholders if such
approval is required to comply with any law, regulation or stock exchange
rule.

Certain Federal Income Tax Consequences

The following is a summary of certain of the federal income tax
consequences to optionees and MEMC of options granted under the plan.

Non-Qualified Stock Options

Although an optionee will not recognize income upon the original grant of a
non-qualified stock option, if an optionee chooses to exercise his or her
option, the optionee will recognize ordinary income in an amount equal to the
difference between the fair market value of the shares of MEMC common stock on
the date of exercise and the aggregate exercise price for such shares. To the
extent, and in the year, that an optionee recognizes income, MEMC may take a
deduction. An optionee's tax basis in the shares received will equal the fair
market value of such shares on the date of exercise.

If an optionee disposes of shares purchased pursuant to a non-qualified
stock option, any gain or loss will be short-term or long-term capital gain or
loss, depending upon the period during which the optionee held such shares.
See "Capital Gains and Losses" below. No gain or loss will be recognized on
the surrender of the previously acquired shares. If an optionee surrenders
previously acquired shares to pay for a non-qualified stock option, the
excess, if any, of the fair market value of the newly-acquired shares over the
fair market value of the surrendered shares will be includable in the
optionee's income.

Incentive Stock Options

An optionee is not required to recognize income upon the original grant of
an incentive stock option, and MEMC may not take a deduction upon the grant of
such option. Similarly, when an optionee exercises any incentive stock
options, provided the optionee does not dispose of the shares for at least one
year after exercise and at least two years after the date of grant, the
optionee will not be required to recognize income, and MEMC

may not take a deduction. An optionee's basis in shares of MEMC common stock
received upon exercise will equal the aggregate exercise price that the
optionee paid for such shares.

Furthermore, an optionee must include in his or her alternative minimum
taxable income the difference between the fair market value of the shares of
MEMC common stock received on the date of exercise and the aggregate exercise
price of such shares. Section 55 of the Internal Revenue Code imposes an
alternative minimum tax equal to the excess, if any, of a percentage of the
optionee's "alternative minimum taxable income" over the optionee's "regular"
federal income tax. Alternative minimum taxable income is determined by adding
(a) the difference between the fair market value of an optionee's shares of
MEMC common stock received on the date of exercise of an incentive stock
option and the aggregate exercise price of such shares, plus (b) other items
of tax preference, to an optionee's adjusted gross income, and then
subtracting certain allowable deductions and an exemption amount.

If an optionee pays the exercise price of an incentive stock option with
previously acquired shares, the optionee does not recognize gain or loss on
the exercise of such option. If an optionee pays for the exercise of a current
incentive stock option with previously acquired shares acquired by exercise of
another incentive stock option, however, and the optionee did not hold the
stock for at least the one-year-after-exercise and two-years-from-grant
holding period, the optionee's disposition will be disqualified. In this case,
the optionee will recognize ordinary income on the disqualifying disposition
equal to the difference between the fair market value of such shares on the
date of exercise of the prior incentive stock option and the amount paid for
such shares (but not in excess of the gain realized on the disqualifying
disposition).

Capital Gains and Losses

If an optionee holds shares for more than twelve months and, in the case of
shares acquired by exercise of an incentive stock option, does not dispose of
such shares for at least two years after the date of grant, upon a subsequent
disposition, the optionee will realize long-term capital gain or loss equal to
the difference between the amount the optionee receives upon such disposition
and the optionee's basis in the shares.

Except in the case of shares acquired by exercise of an incentive stock
option, if an optionee disposes of shares twelve months or less after the
optionee acquires them, the optionee will realize short-term capital gain or
loss equal to the difference between the amount the optionee receives upon
such disposition and the optionee's basis in the shares.

If an optionee disposes of shares acquired through exercise of an incentive
stock option within two years from the date of grant or within two years from
the date of exercise, the optionee will recognize ordinary income equal to the
excess, if any, of the lesser of (a) the amount the optionee receives on such
disposition, or (b) the fair market value of the shares on exercise of the
incentive stock option, over the option price. The amount the optionee
receives, if any, in excess of the amount of ordinary income the optionee
recognizes upon such disposition, will be long-term or short-term capital gain
depending upon whether the optionee held the shares for more than twelve
months.

To the extent that an optionee recognizes ordinary income, MEMC is allowed
to take a deduction.

The MEMC Board of Directors recommends a vote "FOR" the approval of
the amendment to MEMC's 1995 Equity Incentive Plan.

ITEM NO. 3. AMENDMENT TO MEMC'S RESTATED CERTIFICATE OF INCORPORATION

On December 6, 1999, MEMC's Board of Directors adopted an amendment to
MEMC's Restated Certificate of Incorporation and directed that the amendment
be presented for approval at MEMC's 2000 Annual Stockholders' Meeting. The
amendment changes the advance notice required for a stockholder to notify MEMC
that such stockholder wishes to nominate a director for election at an annual
stockholders' meeting.

To effect the amendment, MEMC's Restated Certificate of Incorporation will
be amended by deleting Section 3(c) of Article Fifth in its entirety and
inserting the following:

"(c) Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided in this Restated Certificate of
Incorporation (as it may be amended from time to time) or the resolution or
resolutions adopted by the Board of Directors with respect to the rights of
holders of Preferred Stock of the Corporation to nominate and elect a
specified number of directors in certain circumstances. Nomination of
persons for election to the Board of Directors may be made at any annual
meeting of stockholders, or at any special meeting of stockholders called
for the purpose of electing directors, (a) by or at the direction of the
Board of Directors (or any duly authorized committee thereof) or (b) by any
stockholder of the Corporation (i) who is a stockholder of record on the
date of the giving of the notice provided for in this Section 3(c) of
Article Fifth and on the record date for the determination of stockholders
entitled to vote at such meeting and (ii) who complies with the notice
procedures set forth in this Section 3(c) of Article Fifth. In addition to
any other applicable requirements, for a nomination to be made by a
stockholder, such stockholder must have given timely notice thereof in
proper written form to the Secretary of the Corporation.

To be timely, a stockholder's notice to the Secretary must be delivered
to or mailed and received at the principal executive offices of the
Corporation (a) in the case of an annual meeting, not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately
preceding annual meeting of stockholders; provided, however, that in the
event that the annual meeting is called for a date that is not within 30
days before or after such anniversary date, in order to be timely, notice
by the stockholder must be so received not later than the close of business
on the tenth day following the day on which notice of the date of the
annual meeting is mailed to stockholders or public disclosure of the date
of the annual meeting is made, whichever first occurs, or (b) in the case
of a special meeting of stockholders called for the purpose of electing
directors, not later than the close of business on the tenth day following
the day on which notice of the date of the special meeting is mailed to
stockholders or public disclosure of the date of the special meeting is
made, whichever first occurs.

To be in proper written form, a stockholder's notice to the Secretary
must set forth (a) as to each person whom the stockholder proposes to
nominate for election as a director, (i) the name, age, business address
and residence address of the person, (ii) the principal occupation or
employment of the person, (iii) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or of record
by the person and (iv) any other information relating to the person that
would be required to be disclosed in a proxy statement or other filings
required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and the rules and regulations
promulgated thereunder; and (b) as to the stockholder giving the notice,
(i) the name and record address of such stockholder, (ii) the class or
series and number of shares of capital stock of the Corporation which are
owned beneficially or of record by such stockholder, together with evidence
reasonably satisfactory to the Secretary of such beneficial ownership,
(iii) a description of all arrangements or understandings between such
stockholder and each proposed nominee and any other person or persons
(including their names) pursuant to which the nomination(s) are to be made
by such stockholder, (iv) a representation that such stockholder intends to
appear in person or by proxy at the meeting to nominate the persons named
in its notice and (v) any other information relating to such stockholder
that would be required to be disclosed in a proxy statement or other
filings required to be made in connection with solicitations of proxies for
election of directors pursuant to Section 14 of the Exchange Act and the
rules and regulations promulgated thereunder. Such notice must be
accompanied by a written consent of each proposed nominee to being named as
a nominee and to serve as a director if elected.

No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth in
this Section 3(c) of Article Fifth. If the chairman of the meeting
determines that a nomination was not made in accordance with the foregoing
procedures, the chairman of the meeting shall declare to the meeting that
the nomination was defective and such defective nomination shall be
disregarded."

Section (3)(c) of Article Fifth of MEMC's Restated Certificate of
Incorporation currently provides that a stockholder who wishes to nominate a
person for election as a director at an annual stockholders' meeting must
notify MEMC not less than 60 days nor more than 90 days prior to the
anniversary date of the last annual stockholders' meeting. Under MEMC's
Restated By-Laws, a stockholder who wishes to bring any other business before
an annual stockholders' meeting must notify MEMC not less than 90 days nor
more than 120 days prior to the anniversary date of the immediately preceding
annual stockholders' meeting. If Item No. 3 is approved, Section (3)(c) of
Article Fifth of MEMC's Restated Certificate of Incorporation will be amended
to provide that a stockholder who wishes to nominate a person for election as
a director at an annual stockholders' meeting must notify MEMC not less than
90 days nor more than 120 days prior to the anniversary date of the last
annual stockholders' meeting. This will make the advance notice period for
director nominations consistent with the advance notice period for other
business.

The MEMC Board of Directors recommends a vote "FOR" the approval of
the amendment to the MEMC's Restated Certificate of Incorporation.

STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING

Stockholder proposals intended to be presented at our 2001 Annual
Stockholders' Meeting must be received by us by November 27, 2000 for
inclusion in our proxy statement and form of proxy card for that meeting.

In order for a stockholder to nominate a candidate for director for
election at an annual stockholders' meeting, under our Restated Certificate of
Incorporation, we must receive timely notice of the nomination in advance of
the meeting. Such notice must be given not less than 60 nor more than 90 days
prior to the anniversary date of the immediately preceding annual
stockholders' meeting under our current Restated Certificate of Incorporation.
However, if the stockholders approve the amendment to our Restated Certificate
of Incorporation included as Item No. 3 of this proxy statement, then the
notice must be given not less than 90 nor more than 120 days prior to the
anniversary date of the immediately preceding annual stockholders' meeting.
The stockholder filing a notice of nomination must include information about
the nominee, such as name, address, occupation and shares held.

In order for a stockholder to bring other business before an annual
stockholders' meeting, we must receive timely notice in advance of the
meeting. Such notice must be given not less than 90 nor more than 120 days
prior to the anniversary date of the immediately preceding annual
stockholders' meeting. The notice must include a description of the proposed
business, the reasons therefor, and other specified matters. These
requirements are separate from and in addition to the requirements a
stockholder must meet to have a proposal included in our proxy statement. Upon
receipt of any such proposal, we will determine whether or not to include such
proposal in the proxy statement, form of proxy card and/or annual
stockholders' meeting agenda under regulations governing the solicitation of
proxies. The above time limits also apply in determining whether notice is
timely for purposes of rules adopted by the Securities and Exchange Commission
relating to the exercise of discretionary voting authority.

In each case, the notice must be given to MEMC's Secretary, whose address
is 501 Pearl Drive (City of O'Fallon), P. O. Box 8, St. Peters, Missouri
63376.

Any stockholder desiring a copy of our Restated Certificate of
Incorporation or Restated By-Laws will be furnished a copy without charge upon
written request to our Secretary.

OTHER MATTERS

The Board of Directors knows of no other matters to be presented for
consideration at the 2000 Annual Stockholders' Meeting by the Board of
Directors or by stockholders who have requested inclusion of proposals in this
proxy statement. If any other matter shall properly come before the meeting,
the persons named in the accompanying proxy card intend to vote on such
matters in accordance with their judgment.

March 27, 2000

MEMC Electronic Materials, Inc.

1995 EQUITY INCENTIVE PLAN

as Amended and Restated on May 9, 2000

1. Purpose. The purpose of the MEMC Electronic Materials, Inc. 1995 Equity
Incentive Plan as amended and restated herein (the "Plan") is to provide an
additional incentive to officers, other eligible key employees and directors
of MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"),
and its Subsidiaries (as hereinafter defined) upon whom responsibilities for
the successful operation, administration and management of the Company rest
and whose present or potential contributions are important to the continued
success of the Company, and to enable the Company to attract and retain in its
employ and as directors highly qualified persons for the successful conduct of
its business. It is intended that this purpose will be effected through the
granting of incentive and nonqualified Stock Options, Restricted Stock Awards,
or Performance Share Awards, as provided herein (as each term is hereinafter
defined and collectively defined as the "Awards").

2. Definitions. For purposes of the Plan, the following terms shall be
defined as follows:

"Affiliate" and "Associate" have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.

"Award" means an award to an Eligible Employee (as hereinafter defined)
in the form of Stock Options, Restricted Stock Awards, or Performance Share
Awards.

"Award Agreement" means an agreement granting an Award and containing
such terms and conditions as the Committee deems appropriate and that are
not inconsistent with the terms of the Plan.

"Beneficial Owner" has the meaning ascribed to such term in Rule 13d-3
promulgated under the Exchange Act.

"Board" means the Board of Directors of the Company.

A "Change in Control" of the Company shall be deemed to have occurred
when (A) any Person (other than (x) the Company, any Subsidiary of the
Company, or any Parent of the Company including VEBA AG, Huls Corporation
and any of their Affiliates or (y) any employee benefit plan of the Company
or of any Subsidiary of the Company, or any Person or entity organized,
appointed or established by the Company or any Subsidiary of the Company
for or pursuant to the terms of any such plan, alone or together with its
Affiliates and Associates) shall become the Beneficial Owner of twenty
percent (20%) or more of the then outstanding shares of Common Stock or the
Combined Voting Power of the Company's then outstanding voting securities
(except pursuant to an offer for all outstanding shares of Common Stock at
a price and upon such terms and conditions as a majority of the Continuing
Directors determine to be in the best interests of the Company and its
shareholders (other than the Person on whose behalf the offer is being
made) (an "Acquiring Person")), or (B) during any period of two (2)
consecutive years, individuals who at the beginning of such period
constitute the Board, and any new director (other than a director who is a
representative or nominee of an Acquiring Person) whose election by the
Board or nomination for election by the Company's shareholders was approved
by a vote of at least a majority of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved (collectively, the
"Continuing Directors"), cease for any reason to constitute a majority of
the Board. Notwithstanding the foregoing, no Change in Control shall be
deemed to have occurred if VEBA AG and any of its Affiliates are the
Beneficial Owners of fifty percent (50%) or more of the Combined Voting
Power of the Company's then outstanding voting securities and designees of
VEBA AG and its Affiliates constitute a majority of the Board.

"Code" means the Internal Revenue Code of 1986, as amended.

"Combined Voting Power" means the combined voting power of the Company's
then outstanding voting securities.

"Committee" means the Compensation Committee appointed by the Board
pursuant to Section 3(a) hereof to administer the Plan.

"Common Stock" means the Voting Common Stock, par value $.01 per share,
of the Company.

"Disability" means, with respect to any Participant, that, as a result
of incapacity due to physical or mental illness, such Participant is, or is
reasonably likely to become, unable to perform his or her duties for more
than six (6) consecutive months or six (6) months in the aggregate during
any twelve (12) month period.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" means, on any given date, the closing price of the
shares of Common Stock, as reported on the New York Stock Exchange for such
date or such national securities exchange as may be designated by the Board
or, if Common Stock was not traded on such date, on the next preceding day
on which Common Stock was traded.

"Incentive Stock Option" means a Stock Option which is an "incentive
stock option" within the meaning of Section 422 of the Code and designated
by the Committee as an Incentive Stock Option in an Award Agreement.

"Nonqualified Stock Option" means a Stock Option which is not an
Incentive Stock Option.

"Parent" means any corporation which is a "parent corporation" within
the meaning of Section 424(e) of the Code with respect to the Company.

"Participant" means an Eligible Employee to whom an Award has been
granted under the Plan.

"Performance Share Award" means a conditional Award of shares of Common
Stock granted to an Eligible Employee pursuant to Section 9 hereof.

"Person" means any person, entity or "group" within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act.

"Restricted Stock Award" means an Award of shares of Common Stock
granted to an Eligible Employee pursuant to Section 8 hereof.

"Retirement" means retirement from active employment with the Company
and its Subsidiaries on or after the attainment of age 55, or such other
retirement date as may be approved by the Committee for purposes of the
Plan and specified in the applicable Award Agreement, but shall not include
the termination of the directorship of a nonemployee director.

"Stock Option" means an Award to purchase shares of Common Stock granted
to an Eligible Employee pursuant to Section 7 hereof.

"Subsidiary" means any corporation which is a "subsidiary corporation"
within the meaning of Section 424(f) of the Code with respect to the
Company.

"Ten Percent Shareholder" means an Eligible Employee who, at the time an
Incentive Stock Option is to be granted to him or her, owns (within the
meaning of Section 422(b)(6) of the Code,) stock possessing more than ten
percent (10%) of the total Combined Voting Power of all classes of stock of
the Company, or of a Parent or a Subsidiary.

"Window Period" means the ten (10) business day period in each fiscal
quarter of the Company commencing on the third (3rd) business day following
the release for publication of the Company's quarterly or annual sales and
earnings for the next preceding fiscal quarter or year, as the case may be,
and ending on the twelfth (12th) business day following such date of
release.

3. Administration of the Plan.

(a) The Plan shall be administered by the Committee, which shall be
comprised of no fewer than two members of the Board who shall be appointed
from time to time by the Board. Members of the Committee

shall serve at the pleasure of the Board and the Board may from time to
time remove members from, or add members to, the Committee. All
determinations of the Committee at a meeting shall be made by a majority of
the members in attendance. Any decision or determination reduced to writing
and signed by all the members shall be fully as effective as if it had been
made by a majority vote at a meeting duly called and held. No member of the
Committee shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, and all members
of the Committee shall be indemnified by the Company to the fullest extent
permitted by the certificate of incorporation or by-laws of the Company or
applicable Delaware law with respect to any such action, determination or
interpretation.

(b) Within the limitations described herein, the Committee shall
administer the Plan, select the Eligible Employees to whom Awards will be
granted, determine the number and type of Awards to be granted to each such
Eligible Employee, determine the terms and conditions applicable to each
Award (which need not be identical), make any amendment or modification to
any Award Agreement consistent with the terms of the Plan, and interpret,
construe and implement the provisions of the Plan. The Committee shall have
the authority to adopt rules and regulations for administering the Plan
which shall not be inconsistent with the terms of the Plan. Decisions of
the Committee shall be binding on the Company, on all Eligible Employees
and Participants and all other persons having any interest in the Plan. The
Company shall effect the granting of Awards under the Plan in accordance
with the determinations made by the Committee, which shall be evidenced by
an Award Agreement.

(c) The Committee shall have the authority to adopt such rules and
regulations and to add such terms, conditions and sub-schemes to the Plan
as it deems necessary or desirable to permit or facilitate the granting of
Awards under the Plan to, or obtain favorable tax treatment for, Eligible
Employees resident for tax purposes in jurisdictions outside the United
States; provided, however, that any such rule, regulation, term, condition
or sub-scheme shall not be inconsistent with the terms of the Plan.

(d) Any act that the Committee is authorized to perform hereunder may
instead be performed by the Board at its discretion, and to the extent that
the Board so acts, references in the Plan to the Committee shall refer to
the Board as applicable. In addition, the Committee in its discretion may
delegate its authority to grant Awards pursuant to Section 3(b) to an
officer or committee of officers, subject to specific limits and guidelines
established by the Committee at the time of such delegation.

4. Duration of Plan. The Plan shall remain in effect until terminated by
the Board of Directors and thereafter until all Awards granted under the Plan
are satisfied by the issuance of shares of Common Stock or the payment of cash
or are terminated under the terms of the Plan or under the Award Agreement
entered into in connection with the grant thereof. Notwithstanding the
foregoing, no Awards may be granted under the Plan after the tenth anniversary
of the Effective Date (as hereinafter defined).

5. Shares of Stock Subject to the Plan. Subject to the provisions of
Section 13(b) (relating to adjustment for changes in capital stock) there are
reserved for issuance under the Plan an aggregate of 7,197,045 shares of
Common Stock, less the number of shares that may be reserved for issuance
under the Company's Retirement Savings Plan or under any broad-based employee
stock purchase plan (the "Plan Maximum"). Such shares may be authorized but
unissued or treasury shares.

Stock underlying outstanding Stock Options, Restricted Stock Awards, or
Performance Share Awards will reduce the Plan Maximum while such Stock
Options, Restricted Stock Awards, or Performance Share Awards are outstanding.
Shares underlying expired, canceled or forfeited Stock Options, Restricted
Stock Awards, or Performance Share Awards shall be added back to the Plan
Maximum. When the exercise price of Stock Options is paid by delivery of
shares of Common Stock of the Company, or if the Committee approves the
withholding of shares from a distribution in payment of the exercise price,
the Plan Maximum shall be reduced by the net (rather than the gross) number of
shares issued pursuant to such exercise, regardless of the number of shares
surrendered or withheld in payment. If the Committee approves the payment of
cash to an optionee equal to the difference between the fair market value and
the exercise price of stock subject to a Stock Option, or if a

Performance Share Award is paid in cash, the Plan Maximum shall be increased
by the number of shares with respect to which such payment is applicable.
Restricted Stock issued pursuant to the Plan will reduce the Plan Maximum
while outstanding even while subject to restrictions. Shares of Restricted
Stock shall be added back to the Plan Maximum if such Restricted Stock is
forfeited or is returned to the Company as part of a restructuring of benefits
granted pursuant to the Plan.

6. Maximum Number of Shares per Eligible Employee. To satisfy the
requirements under Section 162(m) of the Code, no Eligible Employee whose
Performance Award the Committee reasonably believes will be subject to Section
162(m) of the Code shall receive a grant of Awards with respect to more than
325,000 shares of Common Stock in any Plan year.

7. Eligible Employees. Awards may be granted by the Committee to
individuals ("Eligible Employees") who are either directors or salaried
employees of the Company or a Subsidiary with potential to contribute to the
future success of the Company or its Subsidiaries. Awards shall not be
affected by any change of duties or positions so long as the holder continues
to be an employee or director of the Company or of a Subsidiary.

8. Stock Options. Stock Options granted under the Plan may be in the form
of Incentive Stock Options or Nonqualified Stock Options. Stock Options
granted under the Plan shall be subject to the following terms and conditions
and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Committee shall deem appropriate:

(a) Award Agreement. Stock Options shall be evidenced by an Award
Agreement in such form and containing such terms and conditions as the
Committee deems appropriate and which are not inconsistent with the terms
of the Plan.

(b) Terms of Stock Options Generally. Subject to the terms of the Plan
and the applicable Award Agreement, each Stock Option shall entitle the
Participant to whom such Stock Option was granted to purchase, upon payment
of the relevant exercise price, the number of shares of Common Stock
specified in the Award Agreement.

(c) Exercise Price. The Exercise Price per share of Common Stock
purchasable under a Stock Option shall be determined by the Committee at
the time of grant and set forth in the Award Agreement.

(d) Option Term. The term of each Stock Option shall be fixed by the
Committee and set forth in the Award Agreement; provided, however, that a
Stock Option shall not be exercisable after the expiration of ten (10)
years after the date the Stock Option is granted (five (5) years in the
case of an Incentive Stock Option granted to a Ten Percent Shareholder).

(e) Exercisability. A Stock Option shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by
the Committee. The Committee may provide that Stock Options shall be
exercisable in whole or in part based upon length of service or attainment
of specified performance criteria. The Committee, in its sole discretion,
may provide for the acceleration of vesting of a Stock Option, in whole or
in part, based on such factors or criteria (including specified performance
criteria) as the Committee may determine.

(f) Method of Exercise. A Stock Option may be exercised, in whole or in
part, by giving written notice of exercise to the Company specifying the
number of shares to be purchased. Such notice shall be accompanied by
payment in full of the exercise price either by cash, certified or bank
check, note or other instrument acceptable to the Committee. Except as set
forth in Section 8(i) hereof, as determined by the Committee in its sole
discretion, payment of the exercise price 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 and, where such shares are
withheld (as described below), net of the applicable exercise price) at
least equal to such full or partial payment. Common Stock used to pay the
exercise price may be shares that are already owned by the Participant, or
the Company may withhold shares of Common Stock that would otherwise have
been received by the Participant upon exercise of the Stock Option. In its
discretion, the Committee

may also permit any Participant to exercise an Option through a "cashless
exercise" procedure involving a broker or dealer approved by the Committee,
provided that the Participant has delivered an irrevocable notice of
exercise (the "Notice") to the broker or dealer and such broker or dealer
agrees: (A) to sell immediately the number of shares of Common Stock
specified in the Notice to be acquired upon exercise of the Option in the
ordinary course of its business, (B) to pay promptly to the Company the
aggregate exercise price (plus the amount necessary to satisfy any
applicable tax liability) and (C) to pay to the Participant the balance of
the proceeds of the sale of such shares over the amount determined under
clause (B) of this sentence, less applicable commissions and fees;
provided, however, that the Committee may modify the provisions of this
sentence to the extent necessary to conform the exercise of the Option to
Regulation T under the Exchange Act. The manner in which the exercise price
may be paid may be subject to certain conditions specified by the
Committee. If requested by the Committee, the Participant shall deliver the
Award Agreement evidencing an exercised Stock Option to the Secretary of
the Company, who shall endorse thereon a notation of such exercise and
return such Award Agreement to the Participant exercising the Option. No
fractional shares (or cash in lieu thereof) shall be issued upon exercise
of a Stock Option and the number of shares that may be purchased upon
exercise shall be rounded to the nearest number of whole shares.

(g) Rights as Shareholder. A Participant shall have no rights as a
shareholder with respect to any shares of Common Stock issuable upon
exercise of a Stock Option until a certificate or certificates evidencing
the shares of Common Stock shall have been issued to the Participant and,
subject to Sections 13(b) and 13(c), no adjustment shall be made for
dividends or distributions or other rights in respect of any share for
which the record date is prior to the date on which the Participant shall
become the holder of record thereof.

(h) Special Rule for Incentive Stock Options. With respect to Incentive
Stock Options granted under the Plan, if the aggregate Fair Market Value
(determined as of the date the Incentive Stock Option is granted) of the
number of shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year
under all plans of the Company or a Parent or Subsidiary exceeds One
Hundred Thousand Dollars ($100,000) or such other limit as may be required
by the Code, such Incentive Stock Options shall be treated, to the extent
of such excess, as Nonqualified Stock Options. No Incentive Stock Option
shall be granted to any person who is not an employee at the time of grant.

(i) Payment Alternatives for Section 16 Persons. Persons subject to
Section 16 of the Exchange Act shall have the unfettered right (but not the
obligation) to pay the exercise price 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 and, where such shares are withheld (as
described below), net of the applicable exercise price) at least equal to
such full or partial payment. Common Stock used to pay the exercise price
may be shares that are already owned by the Participant who is subject to
Section 16 of the Exchange Act, or such Participant shall have the right
but not the obligation to direct the Company to withhold shares of Common
Stock that would otherwise have been received by such Participant upon
exercise of the Stock Option. It is the intent of this provision that the
transactions described in this subsection qualify for the exemption from
short-swing profit liability under Section 16 of the Exchange Act pursuant
to the "disposition to the issuer" exemption set forth at Rule 16b-3(e)
promulgated under Section 16 of the Exchange Act.

9. Restricted Stock Awards. Restricted Stock Awards granted under the Plan
shall be subject to the following terms and conditions and shall contain such
additional terms and conditions, not inconsistent with the Plan, as the
Committee shall deem appropriate:

(a) Award Agreement. Restricted Stock Awards shall be evidenced by an
Award Agreement in such form and containing such restrictions, terms and
conditions as the Committee deems appropriate and which are not
inconsistent with the terms of the Plan, including, without limitation,
restrictions on the sale, assignment, transfer or other disposition of such
shares and provisions requiring that a Participant forfeit such shares upon
a termination of employment or directorship for specified reasons within a
specified period of time.

(b) Terms of Restricted Stock Awards Generally. Restricted Stock Awards
may be granted under the Plan in such form as the Committee may from time
to time approve. Restricted Stock Awards may be granted for no
consideration or such consideration as the Committee deems appropriate.
Restricted Stock Awards may be granted alone or in addition to other Awards
under the Plan. Subject to the terms of the Plan, the Committee shall
determine the number of shares of Common Stock subject to each Restricted
Stock Award granted to a Participant, and the Committee may impose
different terms and conditions on any particular Restricted Stock Award
granted to any Participant. Each Participant receiving a Restricted Stock
Award shall be issued a certificate or certificates in respect of such
shares of Common Stock at the time of grant. Such certificate shall be
registered in the name of such Participant, and shall bear an appropriate
legend referring to the terms, conditions and restrictions applicable to
such Award. The Committee may require that the certificate or certificates
evidencing such shares be held in custody by the Company until the
restrictions thereon shall have lapsed, and that, as a condition of any
Restricted Stock Award, the Participant shall have delivered a stock power,
endorsed in blank, relating to the Common Stock covered by such Award.

(c) Restriction Period. Restricted Stock Awards shall provide that, in
order for a Participant to vest in such Awards, such Participant must
remain in the employment or directorship of the Company or its
Subsidiaries, subject to such exceptions as the Committee may determine in
its sole discretion for specified reasons for a period commencing on the
date of the Award and ending on such later date or dates as the Committee
may designate at the time of the Award and set forth in the Award Agreement
(the "Restriction Period"). During the Restriction Period, a Participant
may not sell, assign, transfer, pledge, encumber or otherwise dispose of
shares of Common Stock received under a Restricted Stock Award. The
Committee, in its sole discretion, may provide for the lapse of
restrictions in installments during the Restriction Period and may waive or
accelerate such restrictions in whole or in part, based on such factors or
criteria, including specified performance criteria, as the Committee may
determine. Upon expiration of the applicable Restriction Period (or lapse
of restrictions during the Restriction Period), the Participant shall be
vested in the Restricted Stock Award, or applicable portion thereof.

(d) Rights as Shareholder. Except as otherwise provided by the Committee
in its sole discretion, a Participant shall have, with respect to the
shares of Common Stock received under a Restricted Stock Award, all of the
rights of a shareholder of the Company, including the right to vote the
shares and the right to receive any cash dividends. Stock dividends issued
with respect to shares covered by a Restricted Stock Award shall be treated
as additional shares under the Restricted Stock Award and shall be subject
to the same restrictions and other terms and conditions that apply to the
shares with respect to which such dividends are issued.

10. Performance Share Awards. Performance Share Awards granted under the
Plan shall be subject to the following terms and conditions and shall contain
such additional terms and conditions, not inconsistent with the Plan, as the
Committee shall deem appropriate:

(a) Award Agreement. Performance Share Awards shall be evidenced by an
Award Agreement in such form and containing such terms and conditions as
the Committee deems appropriate and which are not inconsistent with the
terms of the Plan. Each Award Agreement shall set forth the number of
shares of Common Stock to be received by a Participant upon satisfaction of
certain specified performance criteria and subject to such other terms and
conditions as the Committee deems appropriate.

(b) Terms of Performance Share Awards Generally. Performance Share
Awards may be granted under the Plan in such form as the Committee may from
time to time approve. Performance Share Awards may be granted for no
consideration or such consideration as the Committee deems appropriate.
Performance Share Awards may be granted alone or in addition to other
Awards under the Plan. Subject to the terms of the Plan, the Committee
shall determine the number of shares of Common Stock subject to each
Performance Share Award granted to a Participant.

(c) Performance Goals. Performance Share Awards shall provide that, in
order for a Participant to be entitled to receive shares of Common Stock
under such Award, the Company and/or the Participant must

achieve certain specified performance goals ("Performance Goals") over a
designated performance period ("Performance Period"). The Performance Goals
and Performance Period shall be established by the Committee in its sole
discretion. The Committee shall establish the Performance Goals for each
Performance Period before, or as soon as practicable after, the
commencement of the Performance Period. In setting Performance Goals, the
Committee may use such measures as net earnings, operating earnings or
income, absolute and/or relative return on equity or assets, earnings per
share, cash flow, pretax profits, earnings growth, revenue growth,
comparison to peer companies, any combination of the foregoing, or such
other measure or measures of performance, including individual measures of
performance, in such manner as it deems appropriate. Prior to the end of a
Performance Period, with respect to any Participant the deductibility of
whose Performance Award will not, in the reasonable belief of the
Committee, be subject to Section 162(m) of the Code, the Committee may, in
its discretion, adjust the performance objectives to reflect a Change in
Capitalization (as hereinafter defined) or any other event which may
materially affect the performance of the Company, a Subsidiary or a
division, including, but not limited to, market conditions or a significant
acquisition or disposition of assets or other property by the Company, a
Subsidiary or a division. With respect to any Participant, the
deductibility of whose Performance Award may, in the reasonable belief of
the Committee, be subject to Section 162(m) of the Code, the Committee
shall not be entitled to exercise the discretion conferred upon it in the
preceding sentence to the extent the existence or exercise of such
discretion would result in a loss of tax deductibility under such Section
162(m) of the Code. The extent to which a Participant is entitled to
payment of a Performance Share Award at the end of the Performance Period
shall be determined by the Committee, in its sole discretion, based on the
Committee's determination of whether the Performance Goals established by
the Committee in the granting of such Performance Share Award have been
met.

(d) Payment of Awards. Payment in settlement of a Performance Share
Award shall be made as soon as practicable following the conclusion of the
respective Performance Period, or at such other time as the Committee shall
determine, in shares of Common Stock.

(e) Rights as Shareholder. Except as otherwise provided by the Committee
in the applicable Award Agreement, a Participant shall have no rights as a
shareholder with respect to a Performance Share Award until a certificate
or certificates evidencing the shares of Common Stock shall have been
issued to the Participant following the conclusion of the Performance
Period, and, subject to Sections 13(b) and 13(c), no adjustment shall be
made for dividends or distributions or other rights in respect of any share
for which the record date is prior to the date on which the Participant
shall become the holder of record thereof.

11. Termination of Employment.

(a) Disability or Retirement. Except as may otherwise be provided by the
Committee in its sole discretion at the time of grant or subsequent
thereto, if a Participant's employment with the Company and its
Subsidiaries terminates by reason of Retirement or if a Participant's
employment (or, with respect to a nonemployee director, his directorship)
terminates by reason of Disability, (i) any Stock Option held by the
Participant may thereafter be exercised, to the extent it was exercisable
on the date of termination, for a period (the "Exercise Period") of one (1)
year from the date of such Disability or Retirement or until the expiration
of the stated term of the Stock Option, whichever period is shorter, and to
the extent not exercisable on the date of termination, such Stock Option
shall be forfeited; provided, however, that if a Participant terminates
employment by reason of Retirement and such Participant holds an Incentive
Stock Option, the Exercise Period shall not exceed the shorter of three (3)
months from the date of Retirement and the remainder of the stated term of
such Incentive Stock Option; provided further, however, that if the
Participant dies during the Exercise Period, any unexercised Stock Option
held by such Participant may thereafter be exercised to the extent it was
exercisable on the date of Disability or Retirement, by the legal
representative or beneficiary of the Participant, for a period of one (1)
year from the date of such death or until the expiration of the stated term
of such Stock Option, whichever period is shorter (or, in the case of an
Incentive Stock Option, for a period equal to the remainder of the Exercise
Period), and (ii) if such termination is prior to the end of the applicable
Restriction Period (with respect to a Restricted Stock Award)

or Performance Period (with respect to a Performance Share Award), the
number of shares of Common Stock subject to such Award which have not been
earned as of the date of Disability or Retirement shall be forfeited. In
determining whether to exercise its discretion under the first sentence of
this Section 11(a) with respect to an Incentive Stock Option the Committee
may consider the provisions of Section 422 of the Code.

(b) Death. Except as may otherwise be provided by the Committee in its
sole discretion at the time of grant or subsequent thereto, if a
Participant's employment or directorship with the Company and its
Subsidiaries terminates by reason of death, (i) any Stock Option held by
the Participant may thereafter be exercised, to the extent it was
exercisable on the date of death, by the legal representative or
beneficiary of the Participant, for a period of one (1) year from the date
of the Participant's death or until the expiration of the stated term of
such Stock Option, whichever period is shorter, and to the extent not
exercisable on the date of death, such Stock Option shall be forfeited and
(ii) if such termination is prior to the end of the applicable Restriction
Period (with respect to a Restricted Stock Award) or Performance Period
(with respect to a Performance Share Award), the number of shares of Common
Stock subject to such Award which have not been earned as of the date of
death shall be forfeited.

(c) Other Terminations. Unless the Committee determines otherwise in its
sole discretion at the time of grant or subsequent thereto, if a
Participant's employment or directorship with the Company and its
Subsidiaries terminates for any reason other than death, Disability or
Retirement, (i) any Stock Option held by the Participant may thereafter be
exercised, to the extent it was exercisable on the date of termination, for
a period of sixty (60) days from the date of such termination or until the
expiration of the stated term of such Stock Option, whichever period is
shorter, and to the extent not exercisable on the date of termination, such
Stock Option shall be forfeited, and (ii) if such termination is prior to
the end of the applicable Restriction Period (with respect to a Restricted
Stock Award) or Performance Period (with respect to a Performance Share
Award), the number of shares of Common Stock subject to such Award which
have not been earned as of the date of such termination shall be forfeited.
In determining whether to exercise its discretion under the first sentence
of this Section 10(c) with respect to an Incentive Stock Option, the
Committee may consider the provisions of Section 422 of the Code.

12. Non-transferability of Awards. No Awards under the Plan or any rights
or interests therein may be sold, transferred, assigned, pledged or otherwise
encumbered or disposed of except by will or the laws of descent and
distribution; provided, however, that with respect to any Award that is not an
Incentive Stock Option, the foregoing restrictions shall not apply to the
extent determined by the Committee in its sole discretion at the time of grant
and set forth in the applicable Award Agreement; provided further, however,
that if so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a beneficiary to exercise the rights
of the Participant with respect to any Award upon the death of the
Participant. During the lifetime of a Participant, Stock Options shall be
exercisable only by, and payments in settlement of Awards shall be payable
only to, the Participant.

13. Recapitalization or Reorganization.

(a) The existence of the Plan, the Award Agreements and the Awards
granted hereunder shall not affect or restrict in any way the right or
power of the Company or the shareholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change
in the Company's capital structure or its business, any merger or
consolidation of the Company, any issue of stock or of options, warrants or
rights to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Common Stock
or the rights thereof or which are convertible into or exchangeable for
Common Stock, or the dissolution or liquidation of the Company, or any sale
or transfer of all or any part of its assets or business, or any other
corporate act or proceeding, whether of a similar character or otherwise.

(b) Notwithstanding any provision of the Plan or any Award Agreement, in
the event of any change in the outstanding Common Stock by reason of a
stock dividend, recapitalization, reorganization, merger, consolidation,
stock split, combination or exchange of shares (a "Change in
Capitalization"), (i) such

proportionate adjustments as may be necessary (in the form determined by
the Committee in its sole discretion) to reflect such change shall be made
to prevent dilution or enlargement of the rights of Participants under the
Plan with respect to (a) the aggregate number of shares of Common Stock for
which Awards in respect thereof may be granted under the Plan, (b) the
aggregate number of shares of Common Stock which are subject to Awards
hereunder without the approval of the Board pursuant to Section 5 hereof,
(c) the number of shares of Common Stock covered by each outstanding Award,
and (d) the exercise or Award prices in respect thereof and (ii) the
Committee may make such other adjustments, consistent with the foregoing,
as it deems appropriate in its sole discretion.

(c) Upon the occurrence of a merger of, or consolidation involving, the
Company in which the Common Stock is converted into securities of another
corporation or into cash, or any other transaction that results in the
Common Stock no longer being publicly traded, at the sole discretion of the
Committee, and on such terms and conditions as it deems appropriate, the
Committee may provide either by the terms of an Award granted under the
Plan or by a resolution adopted prior to the occurrence of such event that
upon such event, such Award shall be assumed by the successor corporation,
or a Parent or Subsidiary thereof, or shall be substituted for by a similar
Award, covering the stock of the successor corporation, or a Parent or
Subsidiary thereof, with appropriate adjustments as to the number and kind
of shares and exercise or Award prices.

14. Change in Control. In the event of a Change in Control and except as
the Committee (as constituted immediately prior to such Change in Control) may
otherwise determine in its sole discretion, (i) all Stock Options then
outstanding shall become fully exercisable as of the date of the Change in
Control, whether or not then exercisable, (ii) all restrictions and conditions
of all Restricted Stock Awards then outstanding shall lapse as of the date of
the Change in Control and (iii) all Performance Share Awards shall be deemed
to have been fully earned as of the date of the Change in Control.

15. Amendment of the Plan. The Board may at any time and from time to time
terminate, modify, or amend the Plan in any respect, except that no
termination, modification or amendment shall be effective without shareholder
approval if such approval is required to comply with any law, regulation or
stock exchange rule. No termination or amendment of the Plan shall, without
the consent of a Participant to whom any Awards shall previously have been
granted, adversely affect his or her rights under such Awards.

16. Miscellaneous.

(a) Tax Withholding. (i) The Company and its Subsidiaries shall have the
right to deduct from any cash payment made under the Plan any federal,
state or local taxes of any kind required to be withheld with respect to
such payment. It shall be a condition to the obligation of the Company to
deliver shares of Common Stock pursuant to any Award under the Plan that
the recipient of such Award pay to the Company such amount as may be
required by the Company for the purpose of satisfying any liability for any
such withholding taxes. Any Award granted under the Plan may require the
Company, or permit the recipient of such Award to elect, in accordance with
any applicable rules established by the Committee, to withhold or to pay
all or a part of the amount of such withholding taxes in shares of Common
Stock, provided, however, that regardless of whether set forth in the Award
Agreement, any person subject to Section 16 of the Exchange Act shall have
the unfettered right but not the obligation to direct and compel the
Company to withhold, or to accept from such person, such number of shares
of Common Stock valued at the Fair Market Value on the date of such payment
as is necessary to pay, in whole or in part, such person's withholding tax
obligation. Except for elections made by persons subject to Section 16 of
the Exchange Act, elections by all other Participants may be denied by the
Committee in its sole discretion, or may be made subject to certain
conditions specified by the Committee. Neither the Board of Directors nor
the Committee shall have any discretion with respect to the elections by
persons subject to Section 16 of the Exchange Act in order that such
transactions shall qualify for the exemption from short-swing profit
liability pursuant to the "disposition to the issuer" exemption set forth
at Rule 16b-3(e) promulgated under Section 16 of the Exchange Act.

(ii) The applicable Award Agreement for an Incentive Stock Option
shall provide that if a Participant makes a disposition, within the
meaning of Section 424(c) of the Code and the regulations promulgated
thereunder, of any share of Common Stock issued to such Participant
pursuant to the exercise of an Incentive Stock Option within the two
(2)-year period commencing on the day after the date of the grant or
within the one (1)-year period commencing on the day after the date of
transfer of such share of Common Stock to the Participant pursuant to
such exercise, the Participant shall, within ten (10) days of such
disposition, notify the Company thereof, by delivery of written notice
to the Company at its principal executive office.

(b) Loans. On such terms and conditions as shall be approved by the
Committee, the Company may directly or indirectly lend money to a
Participant to accomplish the purposes of the Plan, including to assist
such Participant to acquire or carry shares of Common Stock acquired upon
the exercise of Stock Options granted hereunder, and the Committee may also
separately lend money to any Participant to pay taxes with respect to any
of the transactions contemplated by the Plan.

(c) No Right to Grants or Employment. No Eligible Employee or
Participant shall have any claim or right to receive grants of Awards under
the Plan. Nothing in the Plan or in any Award or Award Agreement shall
confer upon any employee of the Company or any Subsidiary any right to
continued employment with the Company or any Subsidiary, as the case may
be, or interfere in any way with the right of the Company or a Subsidiary
to terminate the employment of any of its employees at any time, with or
without cause.

(d) Unfunded Plan. The Plan shall be unfunded and the Company shall not
be required to segregate any assets that may at any time be represented by
Awards under the Plan. Any liability of the Company to any person with
respect to any Award under the Plan shall be based solely upon any
contractual obligations that may be effected pursuant to the Plan. No such
obligation of the Company shall be deemed to be secured by any pledge of,
or other encumbrance on, any property of the Company.

(e) Other Employee Benefit Plans. Payments received by a Participant
under any Award made pursuant to the provisions of the Plan shall not be
included in, nor have any effect on, the determination of benefits under
any other employee benefit plan or similar arrangement provided by the
Company.

(f) Securities Law Restrictions. The Committee may require each Eligible
Employee purchasing or acquiring shares of Common Stock pursuant to a Stock
Option or other Award under the Plan to represent to and agree with the
Company in writing that such Eligible Employee is acquiring the shares for
investment and not with a view to the distribution thereof. All
certificates for shares of Common Stock delivered under the Plan shall be
subject to such stock-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations, and other
requirements of the Securities and Exchange Commission, the New York Stock
Exchange or any other stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions. No shares of Common
Stock shall be issued hereunder unless the Company shall have determined
that such issuance is in compliance with, or pursuant to an exemption from,
all applicable federal and state securities laws.

(g) Compliance with Rule 16b-3. Notwithstanding anything contained in
the Plan or any Award Agreement to the contrary, if the consummation of any
Award under the Plan would result in the possible imposition of liability
on a Participant pursuant to Section 16(b) of the Exchange Act, the
Committee shall have the right, in its sole discretion, but shall not be
obligated, to defer such transaction to the extent necessary to avoid such
liability, but in no event for a period in excess of 180 days.

(h) Deductibility Under Code Section 162(m). Awards granted under the
Plan to Eligible Employees which the Committee reasonably believes may be
subject to Section 162(m) of the Code shall not be exercisable, and payment
under the Plan in connection with such an Award shall not be made, unless
and until the Committee has determined in its sole discretion that such
exercise or payment would no longer be subject to Section 162(m) of the
Code.

(i) Award Agreement. Each Eligible Employee receiving an Award under the
Plan shall enter into an Award Agreement in a form specified by the
Committee agreeing to the terms and conditions of the Award

and such other matters as the Committee shall, in its sole discretion,
determine. In the event of any conflict or inconsistency between the Plan
and any such Award Agreement, the Plan shall govern, and the Award
Agreement shall be interpreted to minimize or eliminate any such conflict
or inconsistency.

(j) Costs of Plan. The costs and expenses of administering the Plan
shall be borne by the Company.

(k) Governing Law. Except as to matters of federal law, the Plan and all
actions taken thereunder shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to conflicts
of law principles.

(l) Effective Date. The Plan as amended and restated herein shall be
effective on May 9, 2000 (the "Effective Date").

MEMC ELECTRONIC MATERIALS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]

[ ]

1. ELECTION OF DIRECTORS:
Hans Michael Gaul, Helmut Mamsch and
Michael B. Smith

-----------------------------------------------------------------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED ABOVE.)

For Withhold For All
All All Except
[_] [_] [_]

2. TO APPROVE AN AMENDMENT TO MEMC'S 1995 EQUITY INCENTIVE PLAN TO INCREASE
THE NUMBER OF SHARES AVAILABLE.

For Against Abstain
[_] [_] [_]

3. TO APPROVE AN AMENDMENT TO MEMC'S RESTATED CERTIFICATE OF INCORPORATION TO
CHANGE THE ADVANCE NOTICE REQUIRED TO NOMINATE A PERSON FOR ELECTION TO THE
BOARD OF DIRECTORS.

For Against Abstain
[_] [_] [_]

In their discretion, the proxies are authorized to vote upon any other
business which may properly come before the meeting and all adjournments
thereof.

THE PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned hereby revokes all proxies heretofore given by the undersigned
for said meeting. The proxy may be revoked prior to its exercise.

________________________________________________________________________ , 2000
Signature Date

________________________________________________________________________ , 2000
Signature if held jointly Date

Note: Please sign exactly as your name or names appear hereon. When shares are
held by joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a cor-
poration, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized per-
son.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

MEMC ELECTRONIC MATERIALS, INC.

501 Pearl Drive (City of O'Fallon)

St. Peters, Missouri 63376

March 27, 2000

Dear Stockholder:

The annual meeting of stockholders of MEMC Electronic Materials, Inc. will
be held at The St. Louis Frontenac Hilton, 1335 South Lindbergh Boulevard, St.
Louis, Missouri 63131 at 10:00 a.m. local time on Tuesday, May 9, 2000.

It is important that your shares are represented at this meeting. Whether or
not you plan to attend the meeting, please review the enclosed proxy
materials, complete the attached proxy form above, and return it promptly in
the envelope provided.

Thank you,

HELENE F. HENNELLY
Secretary

PROXY PROXY
MEMC ELECTRONIC MATERIALS, INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 9, 2000

The undersigned hereby appoints James M. Stolze and Helene F. Hennelly, and
each of them, with power of substitution, as proxies of the undersigned, to
attend the Annual Meeting of Stockholders of MEMC ELECTRONIC MATERIALS, INC.
(the "Company"), to be held at The St. Louis Frontenac Hilton, 1335 South
Lindbergh Boulevard, St. Louis, Missouri 63131 on Tuesday, May 9, 2000, at
10:00 a.m. local time, and all adjournments thereof, and to vote, as indicated
on the reverse side, the shares of Common Stock of the Company which the
undersigned is entitled to vote with all the powers the undersigned would
possess if present at the meeting.

This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder(s). If no direction is made, this proxy
will be voted FOR the election of the nominees listed and FOR the two other
matters to be voted on.

PLEASE DATE AND SIGN ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.

(Continued and to be signed on reverse side.)

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

MEMC ELECTRONIC MATERIALS, INC. PLEASE MARK VOTE IN OVAL IN THE FOLLOWING
MANNER USING DARK INK ONLY.[X]

1. ELECTION OF DIRECTORS: Hans Michael Gaul, Helmut Mamsch and Michael B. Smith

For All Withhold All For All Except [
[_] [_] [_]

- -----------------------
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED ABOVE.)

2. TO APPROVE AN AMENDMENT TO MEMC'S 1995 EQUITY INCENTIVE PLAN TO INCREASE
THE NUMBER OF SHARES AVAILABLE.

For Against Abstain
[_] [_] [_]

3. TO APPROVE AN AMENDMENT TO MEMC'S RESTATED CERTIFICATE OF INCORPORATION TO
CHANGE THE ADVANCE NOTICE REQUIRED TO NOMINATE A PERSON FOR ELECTION TO THE
BOARD OF DIRECTORS.

For Against Abstain
[_] [_] [_]

In its discretion, the Trustee and its proxies are authorized to vote upon
any other business which may properly come before the meeting and all
adjournments thereof.

The undersigned hereby revokes all prior directions heretofore given by the
undersigned to the Trustee with respect to the subject matter hereof for said
meeting. The direction may be revoked prior to its exercise.

Dated: _________________________________________________________________ , 2000

________________________________________________________________________ , 2000
Signature of Plan Participant Date

Note: Please sign exactly as your name appears hereon.

PLEASE MARK, SIGN AND PROMPTLY RETURN THIS VOTING DIRECTION CARD IN THE EN-
CLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.

- --------------------------------------------------------------------------------
FOLD AND DETACH HERE

MEMC ELECTRONIC MATERIALS, INC.
501 PEARL DRIVE (CITY OF O'FALLON)
ST. PETERS, MISSOURI 63376

March 27, 2000

TO PARTICIPANTS IN THE MEMC RETIREMENT SAVINGS PLAN

Enclosed with this voting direction card are the Notice of Annual Meeting
and Proxy Statement for the Annual Meeting of Stockholders of MEMC Electronic
Materials, Inc. (the "Company") which will be held on May 9, 2000. The number
of shares of Company common stock (the "Common Stock") shown on the voting
direction card represents the number of shares which you are entitled to
direct State Street Bank and Trust Company (the "Trustee") to vote. This share
amount is based on your balance in the MEMC Stock Fund account in the MEMC
Retirement Savings Plan (the "Plan") on March 13, 2000, the record date for
the determination of stockholders eligible to vote. In order for these shares
to be voted by the Trustee of the Plan in accordance with your confidential
instructions, the Trustee must receive your executed voting direction card not
later than May 3, 2000. Under the provisions of the Plan, all shares for which
no executed voting direction cards are received by May 3, 2000 are to be voted
by the Trustee and its proxies in the same proportion for which directions are
received. Please note that you will not be able to vote the shares shown on
the voting direction card at the Annual Meeting; only the Trustee and its
proxies can vote these shares.

PROXY PROXY
MEMC ELECTRONIC MATERIALS, INC.

The undersigned hereby directs State Street Bank and Trust Company as
trustee (the "Trustee") of the MEMC Retirement Savings Plan (the "Plan") to
vote, as designated on the reverse side, all of the shares of Common Stock of
MEMC Electronic Materials, Inc. (the "Company") which the undersigned is
entitled to direct the Trustee to vote pursuant to the terms of the Plan, on
the matters set forth on the reverse side in the discretion of the Trustee and
its proxies, upon any other business which may properly come before the Annual
Meeting of Stockholders of the Company, to be held at The St. Louis Frontenac
Hilton, 1335 South Lindbergh Boulevard, St. Louis, Missouri 63131 on Tuesday,
May 9, 2000, at 10:00 a.m. local time, and all adjournments thereof.

This direction card, when properly executed, will be voted in the manner
directed herein by the undersigned participant. If no direction is made by a
participant, voting will be controlled by the terms of the Plan.

PLEASE DATE AND SIGN ON THE REVERSE SIDE AND MAIL PROMPTLY IN THE ENCLOSED
ENVELOPE.

(Continued and to be signed on reverse side.)

- ------------------------------------------------------------------------------

FOLD AND DETACH HERE