10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2003
Or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________________________ to _________________________________
Commission File Number: 1-13828
MEMC ELECTRONIC MATERIALS, INC.
(Exact name of registrant as specified in its charter)
Delaware	56-1505767
(State or other jurisdiction of incorporation or organization)	(I. R. S. Employer Identification No.)
501 Pearl Drive (City of O'Fallon) St. Peters, Missouri	63376
(Address of principal executive offices)	(Zip Code)
(636) 474-5000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. |X| Yes |_| No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). |X| Yes |_| No
The number of shares of the registrant's common stock outstanding at October 31, 2003 was 206,961,289.

TABLE OF CONTENTS

PART I--FINANCIAL INFORMATION

Item 1. Financial Statements

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Item 4. Controls and Procedures

PART II--OTHER INFORMATION

Item 5. Other Information

Item 6. Exhibits and Reports on Form 8-K

SIGNATURE

EXHIBIT INDEX

PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited; Dollars in thousands, except share data)
			Three Months Ended			Nine Months Ended
			September 30,			September 30,
			2003	2002	2003		2002
Net sales			$195,897	$190,264	$ 576,071		$ 501,186
Cost of goods sold			137,378	137,417	407,726		381,805
	Gross margin		58,519	52,847	168,345		119,381
Operating expenses:
	Marketing and administration		13,613	16,053	41,098		51,221
	Research and development		8,406	6,725	24,326		19,993
	Restructuring		-	8,315	-		15,300
		Operating income	36,500	21,754	102,921		32,867
Nonoperating (income) expense:
	Interest expense		2,665	58,250	9,975		69,194
	Interest income		(1,870)	(1,860)	(5,777)		(4,672)
	Royalty income		(1,038)	(769)	(2,924)		(2,371)
	Other, net		(11,921)	3,843	(10,920)		(4,582)
		Total nonoperating (income) expense	(12,164)	59,464	(9,646)		57,569
		Income (loss) before income taxes, equity in income of joint ventures and minority interests	48,664	(37,710)	112,567		(24,702)
Income taxes			12,166	5,368	28,142		13,235
		Income (loss) before equity in income of joint ventures and minority interests	36,498	(43,078)	84,425		(37,937)
Equity in income of joint ventures			1,589	1,308	4,317		1,971
Minority interests			(2,890)	(2,982)	(6,529)		(4,839)
		Net income (loss)	$ 35,197 =======	($ 44,752) =======	$ 82,213 =======		($ 40,805) =======
		Cumulative preferred stock dividends	$ - =======	($ 934) =======	$ - =======		($ 17,027) =======
		Income (loss) allocable to common stockholders	$ 35,197 =======	($ 45,686) =======	$ 82,213 =======		($ 57,832) =======
Basic income (loss) per share			$ 0.17 =====	($ 0.25) =====	$ 0.41 =====		($0.54) =====
Diluted income (loss) per share			$ 0.16 =====	($ 0.25) =====	$ 0.38 =====		($0.54) =====
Weighted average shares used in computing basic income
(loss) per share			206,517,384 =========	182,742,775 =========	200,908,620 =========		107,850,403 =========
Weighted average shares used in computing diluted income
(loss) per share			223,771,825 =========	182,742,775 =========	217,401,562 =========		107,850,403 =========

See accompanying notes to consolidated financial statements.

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, except share data)
				September 30,	December 31,
				2003	2002
				(Unaudited)
ASSETS
Current assets:
	Cash and cash equivalents			$ 85,141	$ 119,651
	Short-term investments			40,680	45,995
	Accounts receivable, less allowance for doubtful accounts of $3,583 and $3,294 in 2003 and 2002, respectively			107,378	95,022
	Inventories			97,962	85,106
	Prepaid and other current assets			25,767	17,934
			Total current assets	356,928	363,708
Property, plant and equipment, net of accumulated depreciation of $157,948 and $143,821 in 2003and 2002, respectively				253,453	184,875
Investments in joint ventures				22,237	16,820
Goodwill, net of accumulated amortization of $736 in 2003 and 2002				3,761	3,761
Deferred tax assets, net				18,494	33,668
Other assets				38,489	28,850
		Total assets		$ 693,362 ========	$ 631,682 ========
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIENCY)
Current liabilities:
	Short-term borrowings and current portion of long-term debt			$ 80,625	$ 123,640
	Accounts payable			82,642	68,014
	Accrued liabilities			28,768	33,986
	Customer deposits			14,555	15,055
	Provision for restructuring costs			3,020	7,808
	Income taxes			10,992	14,183
	Accrued wages and salaries			22,239	23,387
		Total current liabilities		242,841	286,073
Long-term debt, less current portion				60,017	160,998
Pension and similar liabilities				109,445	104,866
Customer deposits				9,742	19,617
Other liabilities				32,274	26,812
		Total liabilities		454,319	598,366
Minority interests				62,015	57,996
Commitments and contingencies
Stockholders' equity (deficiency):
	Preferred stock, $.01 par value, 50,000,000 shares authorized, 0 issued and outstanding at 2003 and 2002			- -	- -
	Common stock, $.01 par value, 300,000,000 shares authorized, 207,821,619 and 196,461,339 issued at 2003 and 2002, respectively			2,078	1,965
	Additional paid-in capital			150,553	26,965
	Retained earnings (deficit)			47,746	(34,467)
	Accumulated other comprehensive loss			(14,712)	(7,329)
	Deferred compensation			(4,190)	(7,094)
	Treasury stock, 875,455 shares in 2003 and 929,205 shares and 2002			(4,447)	(4,720)
		Total stockholders' equity (deficiency)		177,028	(24,680)
		Total liabilities and stockholders' equity (deficiency)		$ 693,362 ========	$ 631,682 ========

See accompanying notes to consolidated financial statements.

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited; Dollars in thousands)
				Nine Months Ended
				September 30,
				2003	2002
Cash flows from operating activities:
	Net income (loss)			$ 82,213	($ 40,805)
	Adjustments to reconcile net income (loss) to net cash provided by operating activities:
		Depreciation and amortization		23,274	25,149
		Interest accretion		1,868	56,556
		Minority interests		6,529	4,839
		Stock compensation		2,904	6,682
		Equity in income of joint ventures		(4,317)	(1,971)
		Working capital and other		(39,087)	(6,332)
			Net cash provided by operating activities	73,384	44,118
Cash flows from investing activities:
	Capital expenditures			(62,224)	(12,325)
	Short-term investments, net			7,063	(4,409)
	Proceeds from sale of property, plant and equipment			37	911
			Net cash used in investing activities	(55,124)	(15,823)
Cash flows from financing activities:
	Net short-term borrowings			(61,129)	9,950
	Proceeds from issuance of common stock			100,498	695
	Dividend to minority interest			(2,510)	(2,251)
	Proceeds from issuance of long-term debt			-	40,000
	Principal payments on long-term debt			(94,295)	(57,502)
			Net cash used in financing activities	(57,436)	(9,108)
Effect of exchange rates changes on cash and cash equivalents				4,666	3,827
Net increase (decrease) in cash and cash equivalents				(34,510)	23,014
Cash and cash equivalents at beginning of period				119,651	75,356
Cash and cash equivalents at end of period				$ 85,141 =======	$ 98,370 =======

See accompanying notes to consolidated financial statements.

MEMC ELECTRONIC MATERIALS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except share data)

(1) Nature of Operations

We are a leading worldwide producer of wafers for the semiconductor industry. We operate manufacturing facilities in every major semiconductor manufacturing region throughout the world, including Europe, Japan, Malaysia, South Korea and the United States and through an unconsolidated joint venture in Taiwan. Our customers include virtually all of the major semiconductor device manufacturers in the world, including the major memory, microprocessor and applications specific integrated circuit, or ASIC, manufacturers, as well as the world's largest foundries. We provide wafers in sizes ranging from 100 millimeters (4 inch) to 300 millimeters (12 inch) and in three general categories: prime polished, epitaxial and test/monitor. A prime polished wafer is a highly refined, pure wafer with an ultra-flat and ultra-clean surface. An epitaxial wafer consists of a thin, silicon layer grown on the polished surface of the wafer. A test/monitor wafer is substantially the same as a prime polished wafer, but with som e less rigorous specifications.

(2) Significant Accounting Policies

Change in Accounting Principle

Effective with the beginning of our 2003 fiscal year, we prospectively changed our accounting principles to depreciate the cost of significant long-lived spare parts when placed in service, consistent with our fixed asset capitalization policy. The depreciation is recognized on a straight-line basis over the estimated useful lives of the spare parts. Prior to January 1, 2003, we directly expensed the full cost of the spare parts when placed in service. We believe this change is preferable because it reflects a more appropriate recognition of expense over the productive useful lives of the parts as used in the production process and it provides a better matching of costs with related revenues. This change had a favorable impact on gross margin for the three and nine month periods ended September 30, 2003 of $1,400 and $5,000, respectively, and a favorable after tax impact on income for the three and nine month periods ended September 30, 2003 of approximately $1,000 and $3,700, respectively. The impact to both basic and diluted earnings per share was less than 1 cent for the three months ended September 30, 2003 and approximately 2 cents for the nine months ended September 30, 2003.

Accounting Estimates

In connection with the adjustment to property, plant and equipment caused by the TPG contingent performance purchase price payment (see Note 11), effective with the third quarter of 2003, we reevaluated our accounting estimates related to the useful lives for most of our machinery and equipment, infrastructure and buildings. As a result of this evaluation, we concluded that the useful lives of certain of our assets should be extended to better reflect their economic life. This reevaluation had a favorable impact on gross margin for both the three and nine month periods ended September 30, 2003 of $2,100. The impact on income allocable to common stockholders was $1,700 for both the three and nine month periods ended September 30, 2003. The impact on basic and diluted earnings per share was approximately 1 cent for both the three and nine month periods ended September 30, 2003.

Stock-Based Compensation

We account for our stock-based compensation under Accounting Principles Board Opinion No. 25 (Opinion 25), "Accounting for Stock Issued to Employees", and related interpretations. We record compensation expense related to restricted stock awards over the vesting periods of the awards and reflect the unearned portion of deferred compensation as a separate component of stockholders' equity (deficiency). We recognize compensation cost for fixed awards with ratable vesting in the period in which the awards are earned.

 No compensation cost has been recognized for non-qualified stock options granted under the plans when the exercise price of the stock options equals the market price on the date of grant. Compensation expense equal to the intrinsic value of the options has been recognized for options granted at a price below market price on the date of the grant. Had compensation cost been determined for our non-qualified stock options based on the fair value at the grant dates, as determined using the Black-Scholes option pricing model, consistent with the alternative method set forth under Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation," we would have reported the amounts indicated below:

		Three Months Ended			Nine Months Ended
		September 30,			September 30,
	2003		2002	2003		2002
Net income (loss) allocable to common stockholders, as reported	$ 35,197		($45,686)	$ 82,213		($57,832)
Add:
Stock-based employee compensation included in reported net income, net of related tax effects	832		1,941	2,904		4,938
Deduct:
Total stock-based compensation expense determined under fair value based method for all awards, net of related tax effects	(4,164)		(4,706)	(10,212)		(11,260)
Pro forma net income (loss) allocable to common stockholders	$ 31,865 ======		($48,451) ======	$ 74,905 ======		($64,154) =======
Income (loss) per share:
Basic-as reported	$ 0.17		($ 0.25)	$ 0.41		($ 0.54)
Diluted-as reported	$ 0.16		($ 0.25)	$ 0.38		($ 0.54)
Basic-pro forma	$ 0.15		($ 0.27)	$ 0.37		($ 0.59)
Diluted-pro forma	$ 0.14		($ 0.27)	$ 0.35		($ 0.59)

 A summary of our significant accounting policies is presented in our audited financial statements and related management's discussion and analysis for the fiscal year ended December 31, 2002 contained in Exhibit 13 to our annual report on Form 10-K, as amended on Form 10-K/A, for the fiscal year ended December 31, 2002. See also management's discussion and analysis below.

(3) Basis of Presentation

The accompanying unaudited consolidated financial statements of MEMC, in our opinion, include all adjustments (consisting of normal, recurring items) necessary to present fairly MEMC's financial position and results of operations and cash flows for the periods presented. We have presented the consolidated financial statements in accordance with the requirements of Regulation S-X and consequently do not include all disclosures required by accounting principles generally accepted in the United States of America. This report on Form 10-Q, including unaudited consolidated financial statements, should be read in conjunction with our annual report on Form 10-K, as amended on Form 10-K/A, for the fiscal year ended December 31, 2002, which contains MEMC's audited financial statements for such year and the related management's discussion and analysis of financial condition and results of operations. Operating results for the nine-month period ended September 30, 2003 are not necessarily indicat ive of the results that may be expected for the year ending December 31, 2003.

(4) Earnings (loss) per share

For the three and nine-month periods ended September 30, 2002 the numerator of the basic and diluted loss per share calculation was net loss allocable to common stockholders. Cumulative preferred stock dividends were not added back to the net loss, as the related conversion of the preferred stock would have been antidilutive. For these periods, the preferred stock, the warrants, and options outstanding were not considered in computing diluted loss per share, as they were antidilutive.

For the three-month period ended September 30, 2003, basic and diluted earnings per share (EPS) were calculated as follows:

	Three Months Ended
	September 30, 2003
	Basic	Diluted
EPS numerator:
Net income allocable to common stockholders	$ 35,197 ======	$ 35,197 ======
EPS denominator:
Weighted average shares outstanding	206,517	206,517
Warrants	-	12,458
Stock options	-	4,797
Total shares (in thousands)	206,517 ======	223,772 ======
Earnings per share	$0.17 ======	$0.16 ======

For the nine-month period ended September 30, 2003, basic and diluted EPS were calculated as follows:

	Nine Months Ended
	September 30, 2003
	Basic	Diluted
EPS numerator:
Net income allocable to common stockholders	$ 82,213 ======	$ 82,213 ======
EPS denominator:
Weighted average shares outstanding	200,909	200,909
Warrants	-	12,006
Stock options	-	4,392
Weighted average restricted stock outstanding	-	95
Total shares (in thousands)	200,909 ======	217,402 ======
Earnings per share	$0.41 ======	$0.38 ======

 At September 30, 2003, MEMC had outstanding 8,831,642 options and 16,666,667 warrants.

(5) Inventories

Inventories consist of the following:	September 30, 2003	December 31, 2002
Raw materials and supplies	$ 17,258	$ 23,067
Goods in process	35,489	23,745
Finished goods	45,215	38,294
	$ 97,962 =======	$ 85,106 =======

(6) Restructuring Costs

We recorded no restructuring charges in the first nine months of 2003.

During the nine months ended September 30, 2002, we reduced our workforce by approximately 450 employees, including U.S., Italy and Japan salaried and hourly employees. We recorded a restructuring charge of $15,300 in the nine months ended September 30, 2002 related to these actions, including $8,315 in the third quarter of 2002.

	Asset	Dismantling
	Impairment/	And Related	Personnel
	Write-off	Costs	Costs	Total
Balance, December 31, 2002	$ 488	$ 1,859	$ 5,461	$ 7,808
Amounts utilized	-	(1,827)	(2,961)	(4,788)
Balance, September 30, 2003	$ 488 =======	$ 32 =======	$ 2,500 =======	$ 3,020 =======

Of the $3,020 restructuring reserve at September 30, 2003, approximately $1,000 is expected to be utilized in the remainder of 2003.

(7) Comprehensive Income (Loss)

Comprehensive income (loss) for the three months ended September 30, 2003 and 2002 was $27,041 and ($39,356), respectively. Comprehensive income (loss) for the nine months ended September 30, 2003 and 2002 was $74,830 and ($43,812) respectively. MEMC's only adjustment from net income (loss) to comprehensive income (loss) was foreign currency translation adjustments in all periods presented.

(8) Debt

Our short-term unsecured borrowings from banks total approximately $22,000 at September 30, 2003, under approximately $69,000 of short-term loan agreements.

We have long-term committed loan agreements of approximately $300,000 of which $117,000 is outstanding at September 30, 2003, and as of October 31, 2003, $3,300 of the committed loan agreements have been utilized to cover outstanding letters of credit. In addition, during third quarter 2003 we recorded a $1,700 adjustment to the carrying value of our $50,000 face value of senior subordinated secured notes payable to an investor group led by Texas Pacific Group (TPG) in connection with the settlement agreement between TPG and E.ON of August 19, 2003. (See further discussion in Note 11, below) We are accreting these notes up to their face value plus their related stated interest over the six years preceding their maturity using the effective interest method. At September 30, 2003, the accreted value of these notes was approximately $1,900; however, the face value of these notes plus accrued stated interest was approximately $58,000 at September 30, 2003.

Of the long-term debt and the short-term borrowings, approximately $58 million is owed by MEMC Korea Company ("MKC"), our Korean subsidiary, within Korea. Substantially all of this $58 million debt is due within the next year. MKC had cash and cash equivalents and short-term investments at September 30, 2003 of approximately $78 million. Of this amount, approximately $60 million is subject to regulatory approval on transferability outside Korea. All of the debt in Korea may be repaid by MKC at or prior to maturity without any regulatory approval.

(9) Income Taxes

For the nine months ended September 30, 2003, we recognized income tax expense of $28,142, as compared to income tax expense of $13,235 for the nine months ended September 30, 2002. Income tax expense in the first nine months of 2003 relates to tax jurisdictions in which we expect to owe current taxes and foreign withholding taxes. As of September 30, 2003, our net operating loss carryforwards do not carry any value in our consolidated balance sheet.

 (10) Common Stock Offering

In the second quarter of 2003, we sold 10,000,000 shares of common stock and generated net proceeds of approximately $94 million. We utilized $70 million of the net proceeds to pay in its entirety the outstanding balance on our $150 million revolving credit facility.

(11) TPG Contingent Performance Purchase Price Payment to E.ON

On November 13, 2001, TPG purchased from E.ON and its affiliates (E.ON) all of E.ON's debt and equity holdings in MEMC for a nominal purchase price of 6 dollars. In addition, on that date MEMC and TPG restructured MEMC's debt acquired from E.ON. In connection with such transactions, we applied purchase accounting and pushed down TPG's nominal basis in MEMC to our accounting records, reflected in our consolidated financial statements subsequent to November 13, 2001.

In accordance with the terms and conditions of the purchase agreement between E.ON and TPG, TPG agreed to a contingent performance purchase price payment to E.ON based on MEMC's Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as that term was defined in the purchase agreement, for fiscal year 2002. Due to the uncertainty as to which level of contingent performance purchase price might be paid, if any, we did not consider this contingency in applying purchase accounting as of November 13, 2001.

On August 19, 2003, TPG agreed to pay E.ON $25,200 to settle their dispute over the amount of contingent performance purchase price owed by TPG to E.ON. The payment resulted in an increase in TPG's basis in MEMC that was pushed down to our accounting records. This increased our property, plant and equipment balance by approximately $26,100, increased the value of our investments in joint ventures by approximately $1,100, and decreased our net deferred tax assets by approximately $2,000. Additionally, the value assigned to the common stock and warrants acquired by TPG was increased by approximately $23,500 and the value assigned to the senior subordinated secured notes held by TPG was increased by approximately $1,700. Assuming the senior subordinated secured notes remain outstanding until their maturity, interest expense expected to be recorded in our statement of operations related to the accretion of the notes and related stated interest expense is expected to be $700, $3,900, $10,200, $26,400, and $55, 600 in the years 2003 through 2007, respectively.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Net Sales.

Our net sales increased by 3% to $196 million in third quarter 2003 from $190 million in third quarter 2002. This increase was primarily due to a 4% increase in product volumes and a richer product mix, partially offset by a modest decline in overall average selling prices. Product volumes in the third quarter 2003 increased across diameters 150mm and larger as compared to the third quarter 2002.

Our net sales increased by 15% to $576 million in the nine months ended September 30, 2003 from $501 million in the nine months ended September 30, 2002. This increase was primarily caused by a 15% increase in product volumes due to an increase in overall wafer industry volumes, as well as increased sales of our new products. Product volumes increased across all product diameters 150mm and larger.

Gross Margin.

In third quarter 2003, our gross margin was $59 million compared to $53 million in third quarter 2002. We also continue to benefit from improvements in yield and cost reductions. Our cost of goods sold decreased slightly in spite of the 4% volume increase, unfavorable currency impact, and more costly product mix. Beginning January 1, 2003, we began to depreciate spare parts consistent with our fixed asset capitalization policy, which had a $1.4 million favorable impact on the 2003 third quarter. Beginning July 1, 2003, we also reevaluated the accounting estimates related to the useful lives for most of our machinery and equipment, infrastructure and buildings. This had a $2.1 million favorable impact on the 2003 third quarter. See Note 2 to the Consolidated Financial Statements herein.

For the nine months ended September 30, 2003, our gross margin was $168 million compared to $119 million in the nine months ended September 30, 2002. This increase primarily resulted from the significant increase in volumes and improved productivity. Our cost of goods sold increased by approximately 7% in spite of the 15% increase in volume, parity impacts, and more costly product mix.

Marketing and Administration.

Marketing and administration expenses declined to $14 million for the three months ended September 30, 2003 compared with $16 million for the three months ended September 30, 2002. This decrease was primarily a result of both headcount reductions and controlled spending. As a percentage of net sales, marketing and administration expenses decreased in the nine months of 2003 to 7% from 8% in 2002.

Marketing and administration expenses declined to $41 million for the nine months ended September 30, 2003 compared with $51 million for the nine months ended September 30, 2002. This decrease also was primarily a result of both headcount reductions and controlled spending. As a percentage of net sales, marketing and administration expenses decreased in the nine months of 2003 to 7% from 10% in the nine months of 2002.

Research and Development.

Our research and development expenses increased in the three months ended September 30, 2003 to $8 million compared to $7 million in the year ago period. The increased expense is primarily related to increasing our capability for next-generation products.

Our research and development expenses increased in the first nine months of 2003 to $24 million compared to $20 million in the year ago period. The increased expense is primarily related to increasing our capability for next-generation products to accommodate flatness, particle, purity and power dissipation requirements of our customers caused by their devices' smaller line widths.

Operating Income.

Operating income increased $15 million to $37 million in the third quarter of 2003, and increased by $70 million to $103 million in the nine months ended September 30, 2003, from the respective comparable periods in 2002. The improved operating results were a result of the increase in gross margin and a decrease in operating expenses in both the three and nine month periods ending September 30, 2003 as compared to the 2002 periods.

 Nonoperating (Income) Expense.

Interest Expense.

In the three months ended September 30, 2003, our interest expense decreased to $3 million from $58 million for the three months ended September 30, 2002. In the nine months ended September 30, 2003, our interest expense decreased to $10 million from $69 million for the nine months ended September 30, 2002. The decrease in both periods was primarily a result of $53 million in non-recurring accretion recorded in the three months ended September 30, 2002 related to the 55 million Euro Italian subsidiary note retained by TPG in connection with our debt restructuring on November 13, 2001.

Other, net

In the three months ended September 30, 2003, our other nonoperating income (expense) increased to income of $12 million from a loss of $4 million in the three months ended September 30, 2002. This was primarily a result of $12 million in currency gains in the three months ended September 30, 2003 mostly attributable to the revaluation of a Yen-based intercompany loan. In the nine months ended September 30, 2003, other nonoperating income (expense) was income of $11 million compared to $5 million in the nine months ended September 30, 2002. This increase was primarily the result of currency gains in the nine months ended September 30, 2003 totaling approximately $11 million versus currency gains in the nine months ended September 30, 2002 of $7 million. The currency gains in both periods were primarily associated with the revaluation of a Yen-based intercompany loan. The currency gains resulted primarily from the significant strengthening of the US Dollar against the Japanese Yen in the ni ne months ended September 30, 2003.

Income Taxes.

For the nine months ended September 30, 2003, we recognized income tax expense of $28 million, as compared to income tax expense of $13 million for the nine months ended September 30, 2002. Income tax expense in the first nine months of 2003 relates to tax jurisdictions in which we expect to owe current taxes and foreign withholding taxes. As of September 30, 2003, our net operating loss carryforwards do not carry any value in our consolidated balance sheet. The income tax rate is expected to be 25% for calendar year 2003.

Outlook.

Depending upon our customers' fab shutdown schedules during the holiday season, we expect our net sales in the 2003 fourth quarter to increase by approximately 3 to 5 percentage points compared to the 2003 third quarter. We also anticipate that our operating results will continue to improve sequentially in the 2003 fourth quarter compared to the 2003 third quarter.

Liquidity and Capital Resources.

Accounts receivable of $107 million at September 30, 2003 increased $12 million, or 13%, from $95 million at December 31, 2002. This increase was primarily attributable to an increase in sales in the quarter ended September 30, 2003 compared to the quarter ended December 31, 2002 and an increase in days' sales outstanding. Days' sales outstanding were 50 at September 30, 2003 compared to 47 days at December 31, 2002 based upon annualized sales for the respective immediately preceding quarters. This increase in days sales outstanding is primarily attributable to the timing of sales in the quarter.

Our inventories increased $13 million, or 15%, to $98 million at September 30, 2003 from $85 million at December 31, 2002. Total related inventory reserves for obsolescence, lower of cost or market issues, or other impairments were $6 million and $11 million at September 30, 2003 and December 31, 2002, respectively. Although the dollar balance of inventory increased, annualized inventory turns remained constant at six for the three months ended September 30, 2003 and December 31, 2002 based upon annualized cost of goods sold for the respective immediately preceding quarters.

Our net deferred tax assets decreased to $25 million at September 30, 2003 versus $34 million at December 31, 2002. We provide for income taxes on a quarterly basis based on an estimated annual effective income tax rate. Management believes it is more likely than not that, with our projections of future taxable income and after consideration of the valuation allowance, MEMC will generate sufficient taxable income to realize the benefits of the net deferred tax assets existing at September 30, 2003.

In the nine months ended September 30, 2003, we generated $73 million of cash from operating activities, compared to $44 million in the nine months ended September 30, 2002. This improvement was primarily due to our improved operating results.

The net result of the pushdown of the contingent payment by TPG to E.ON, the extension of the useful lives of property, plant and equipment, and the increase in our planned 2003 capital expenditures is expected to favorably impact the quarterly run rate of depreciation and amortization by approximately $2.5 million per quarter.

Our cash used in investing activities increased $38 million to $57 million in the nine months ended September 30, 2003 compared to $19 million in the nine months ended September 30, 2002 primarily as a result of increased capital expenditures. Capital expenditures in 2003 primarily related to increasing our capability and capacity for our next generation products. At September 30, 2003, we had approximately $12 million of committed capital expenditures related to various manufacturing and technology projects. We expect our capital expenditures for the year ended December 31, 2003 will be in the range of $80 to $90 million.

Cash used in financing activities increased to $57 million in the nine months ended September 30, 2003 from $9 million in the nine months ended September 30, 2002. In the second quarter of 2003, we generated approximately $94 million in net proceeds from the sale of 10 million shares of our common stock in a public offering. We paid down $155 million in debt in the nine months ended September 30, 2003.

Our unsecured short-term borrowings total approximately $22 million at September 30, 2003, under approximately $69 million of short-term loan agreements. We have long-term committed loan agreements of approximately $300 million, of which $117 million is outstanding at September 30, 2003. At October 31, 2003, approximately $3 million has been utilized to cover outstanding letters of credit and is therefore not available for borrowing. Our weighted average cost of borrowing, excluding accretion, was 4.0% at September 30, 2003 and 4.1% at December 31, 2002. Our total debt to capital ratio at September 30, 2003 was 37%, compared to 90% at December 31, 2002. The improvement in the debt to capital ratio is primarily a result of the $94 million net proceeds from the sale of our common stock in a public offering and higher retained earnings, coupled with net debt repayments of $155 million in the nine months ended September 30, 2003.

Of the long-term debt and the short-term borrowings, approximately $58 million is owed by MEMC Korea Company ("MKC"), our Korean subsidiary, within Korea. Substantially all of this $58 million debt is due within the next year. MKC had cash and cash equivalents and short-term investments at September 30, 2003 of approximately $78 million. Of this amount, approximately $60 million is subject to regulatory approval on transferability outside Korea. All of the debt in Korea may be repaid by MKC at or prior to maturity without any regulatory approval.

As a result of the restructuring of MEMC's debt in 2001, TPG acquired $50 million in principal amount of our senior subordinated secured notes maturing in November 2007. On August 19, 2003 TPG paid E.ON approximately $25 million to settle their dispute over the amount of a contingent performance purchase price owed by TPG to E.ON. As result of the settlement and subsequent pushdown of TPG's increased basis to our financial statements, we increased the value of these notes by approximately $2 million. We will accrete the senior subordinated secured notes up to their face value plus their related stated interest over the years preceding their maturity using the effective interest method. Assuming these notes remain outstanding until their maturity, interest expense expected to be recorded in our statement of operations related to accretion of the notes and related stated interest expense will be approximately $1 million in 2003, approximately $4 million in 2004, approximately $10 million in 2005, approximat ely $26 million in 2006, and approximately $56 million in 2007. If these notes are redeemed prior to their maturity, on the redemption date we will recognize interest expense equal to the remaining unaccreted face value of the notes and the related accrued but unpaid stated interest. At September 30, 2003 the face value of these notes plus accrued stated interest was approximately $58 million.

As part of the purchase and restructuring transactions in 2001, TPG committed to provide a five-year $150 million revolving credit facility to MEMC. That revolving credit facility was replaced with a five-year $150 million revolving credit facility from Citibank/UBS (the Citibank/UBS Facility), guaranteed by TPG. Loans under this facility bear interest at a rate of LIBOR plus 1.5% or an alternate base rate plus 0.5% per annum. At September 30, 2003, we had no outstanding balance against this credit facility. TPG has also provided us with a five-year $35 million revolving credit facility (the TPG Facility) bearing interest at a rate of LIBOR plus 10% or an alternate base rate plus 9%. As a condition to any borrowings under the TPG Facility, we must have borrowed all amounts available under the Citibank/UBS Facility. The commitments under the TPG Facility terminate and any outstanding loans under the facility, together with any accrued interest thereon, will become due and payable upon the closing and fundi ng of a debt or equity financing in which the net proceeds to MEMC equal or exceed $100 million. At September 30, 2003, we had no outstanding balance against this credit facility.

The Citibank/UBS Facility, the TPG Facility, and the indenture for our senior subordinated secured notes contain certain highly restrictive covenants, including covenants to maintain minimum quarterly consolidated Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), as defined in the agreement; minimum monthly consolidated backlog; minimum monthly consolidated revenues; maximum annual capital expenditures; and other covenants customary for revolving loans and indentures of this type and size. The minimum quarterly consolidated EBITDA covenant is $25 million in the fourth quarter of 2003. Thereafter, the minimum quarterly consolidated EBITDA covenant progressively increases to $35 million, $44 million, $52 million and $60 million at the end of the last quarter of 2004, 2005, 2006 and 2007, respectively. The minimum monthly consolidated backlog covenant was 49 million square inches (msi) in January 2003, progressively increasing to 53 msi, 63 msi, 74 msi, 81 msi and 92 msi in the last mo nth of 2003, 2004, 2005, 2006 and 2007, respectively. The minimum monthly consolidated revenue covenant was $52 million in January 2003, progressively increasing to $56 million, $67 million, $76 million, $84 million and $92 million in the last month of 2003, 2004, 2005, 2006 and 2007, respectively. Finally, the maximum annual capital expenditures covenant is $80 million for 2003 and $55 million for each of the years 2004 through 2007. We intend to seek the consent of our lenders and note holders to increase the 2003 maximum annual capital expenditures covenant to $90 million. In the event that we violate these covenants, which in our highly cyclical industry could occur in a sudden or sustained downturn, the loan commitments under the revolving credit facilities may terminate and the loans and accrued interest then outstanding under the facilities and the senior subordinated secured notes and related accrued interest may be due and payable immediately. At September 30, 2003, we are in compliance with all of these debt covenants.

The Citibank/UBS Facility is guaranteed by certain TPG entities. The various guaranties terminate in December 2003, prior to the expiration of the Citibank/UBS Facility. We have been informed that the various TPG entities intend to renew their respective guarantees on or before the December 2003 termination date. In addition, each guarantor may terminate its guaranty for any reason. In the event that a guarantor terminates its guaranty, or does not renew its guaranty and in the case of a non-renewal the lenders have not received cash collateral or a replacement guaranty executed by a replacement guarantor satisfactory to the lenders, then the loan commitments under the revolving credit facility will terminate and we will be required to repay all outstanding loans and accrued interest under this facility. Likewise, if any guarantor defaults under its guaranty, then the guarantor's default will constitute an event of default under this revolving credit facility. In such event, the loan commitments under thi s revolving credit facility may terminate and the loans and accrued interest under the facility may be due and payable immediately.

In any of these events, the guarantors and their affiliates have severally agreed to make new revolving credit loans available to us on terms and conditions no less favorable to us than provided in the original $150 million revolving credit facility between us and TPG. The original TPG $150 million revolving credit facility was substantially similar to the Citibank/UBS Facility except that the interest rates were 2% higher than the interest rates under the Citibank/UBS Facility.

The Citibank/UBS Facility, the TPG Facility, and the indenture for the senior subordinated secured notes contain change in control provisions. Under these instruments, if (1) TPG's ownership interest in us is reduced below 15% (or, in the case of the indenture, 30%) of our total outstanding equity interests, (2) another person or group acquires ownership of a greater percentage of our outstanding equity than TPG, or (3) a majority of our Board of Directors is neither nominated by our Board of Directors nor appointed by directors so nominated, then:

- an event of default shall be deemed to have occurred under the Citibank/UBS Facility and the TPG Facility in which event the loan commitments under these facilities may terminate and the loans and accrued interest then outstanding may become immediately due and payable; and

- the holders of the senior subordinated secured notes will have the right to require us to repurchase the notes at a purchase price equal to 101% of the principal amount plus accrued and unpaid interest.

We believe that we have the financial resources needed to meet business requirements for the next 12 months, including capital expenditures and working capital requirements.

 Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related footnotes. In preparing these financial statements, management has made its best estimates of certain amounts included in the financial statements. However, application of these accounting policies involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. MEMC's significant accounting policies are more fully discussed in Exhibit 13 to our annual report on Form 10-K, as amended, for the fiscal year ended December 31, 2002.

Push-down Accounting

As a result of the purchase of E.ON's equity interest in MEMC by TPG and the rights possessed by TPG through its ownership of the preferred stock as of November 13, 2001, we applied purchase accounting and pushed down TPG's nominal basis in MEMC to our accounting records, reflected in our consolidated financial statements subsequent to November 13, 2001. We assumed that on November 13, 2001, upon full conversion of the preferred stock, excluding any accrued but unpaid dividends, TPG would have owned 89.4% of MEMC's common stock.

To revalue our assets and liabilities, we first estimated their fair market values. To the extent the fair market value differed from the book value, 89.4% of that difference was recorded as an adjustment to the carrying value of the respective asset or liability. To the extent the adjusted net carrying value of assets and liabilities exceeded the pushed down basis of TPG's investment in MEMC, negative goodwill was generated. The negative goodwill was then allocated to the bases of existing goodwill and other identifiable intangible assets, investments in joint ventures, and property, plant and equipment.

This revaluation resulted in a net decrease to assets of approximately $800 million and a net decrease to liabilities of approximately $900 million. The net decrease in assets reflects the write-down of goodwill, certain intangible assets, investments in joint ventures, and property, plant and equipment to reflect TPG's nominal purchase price.

On August 19, 2003, TPG paid E.ON $25 million to settle their dispute over the amount of contingent performance purchase price owed by TPG to E.ON. The payment resulted in increases to our property, plant and equipment of $26 million; the value of our investments of $1 million; the book value of debt of $2 million; stockholders' equity of $24 million; and a decrease to our deferred tax assets of $2 million.

Inventory Reserves

We value our inventories at cost or market, if lower. We adjust the value of our inventory to the estimated market value based upon assumptions of future demand and market conditions. If actual market conditions are less favorable than those projected by management, additional inventory write-downs may be required.

Income Taxes

Deferred taxes arise because of different treatment between financial statement accounting and tax accounting, known as temporary differences. We record the tax effect of these temporary differences as deferred tax assets (generally items that can be used as a tax deduction or credit in future periods) and deferred tax liabilities (generally items that we received a tax deduction for, but have not yet been recorded in the statement of operations). A valuation allowance is recorded when management believes it is more likely than not that some items recorded as deferred tax assets will not be realized.

We provide for U.S. income taxes on earnings of consolidated international subsidiaries that we plan to remit to the U.S. We do not provide for U.S. income taxes on the remaining earnings of these subsidiaries, as we expect to reinvest these earnings overseas or we expect the taxes to be minimal based upon available foreign tax credits.

Section 382 of the IRC restricts the utilization of net operating losses and other carryover tax attributes upon the occurrence of an ownership change, as defined. Such an ownership change occurred during 2001 as a result of the acquisition by TPG. To the extent that any U.S. or foreign net operating loss carryforwards remain, we have recognized a valuation allowance to fully offset any associated deferred tax assets. In the third quarter 2003, we reviewed our total net deferred taxes by taxable jurisdiction and recognized a valuation allowance where it was deemed more likely than not that we would be unable to realize a benefit from these assets.

Push-down accounting as described above created differences in the bases of certain assets and liabilities for financial statement accounting and for tax accounting. These differences resulted in the recognition of a net deferred tax asset. We reviewed our total net deferred tax assets by taxable jurisdiction and recognized a valuation allowance where it was determined more likely than not that we would be unable to realize a benefit from these assets.

Revenue Recognition

We record revenue from product sales when the goods are shipped and title passes to the customer. Our wafers are made to customer specifications at plant sites that have been pre-qualified by the customer. We conduct rigorous quality control and testing procedures to ensure that the finished wafers meet the customer's specifications before the product is shipped.

Recently Issued Accounting Pronouncements

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN 46). This interpretation of Accounting Research Bulletin No. 51, "Consolidated Financial Statements, " addresses consolidation by business enterprises of variable interest entities (VIEs) that either: (1) do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) the equity investors lack an essential characteristic of a controlling financial interest. We do not have any entities that require disclosure or new consolidation as a result of adopting the provisions of FIN 46. As a result, we do not believe the implementation of FIN 46 will have a material effect on our financial condition or results of operations.

In April 2003, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accountings Standards (SFAS) No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. In May 2003, FASB issued SFAS No. 150, Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity. We do not believe the implementation of Statements No. 149 or 150 will have a material effect on our financial condition or results of operations.

 Cautionary Statement Regarding Forward-Looking Statements.

This Form 10-Q contains "forward-looking" statements within the meaning of the Securities Litigation Reform Act of 1995, including those concerning: the amount of the restructuring reserve expected to be paid out in the remainder of 2003; our expectation that our effective income tax rate in 2003 will be 25%; our expectation that, depending on our customers' fab shutdown schedules during the holiday season, our net sales in the 2003 fourth quarter will increase by approximately 3 to 5 percentage points compared to the 2003 third quarter; our anticipation that our operating results will improve sequentially in the 2003 fourth quarter compared to the 2003 third quarter; our expectation that we will generate sufficient taxable income to realize the benefits of net deferred tax assets existing as of September 30, 2003; our expectation that the net result of the pushdown of the contingent payment by TPG to E.ON, the extension of the useful lives of property, plant and equipment and the increase in our planned 2003 capital expenditures will favorably impact the quarterly run rate of depreciation and amortization by approximately $2.5 million per quarter; our expectation that our capital expenditures for the year ended December 31, 2003 will be in the range of $80 to $90 million; the interest expense we expect to record in our statement of operations related to accretion of our senior subordinated secured notes in each of the years 2003 through 2007; our belief that we have the financial resources needed to meet business requirements for the next twelve months including capital expenditure and working capital requirements; and our belief that the implementation of FIN 46, SFAS No. 149 and SFAS No. 150 will not have a material effect on our financial condition or results of operations. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include such factors as: market demand for si licon wafers; customer acceptance of our new products; utilization of manufacturing capacity; our ability to reduce manufacturing and operating costs; inventory levels of our customers; demand for semiconductors generally; changes in the pricing environment; general economic conditions; actions by our competitors, customers and suppliers; changes in interest and currency exchange rates; the impact of competitive products and technologies; technological changes; changes in product specifications and manufacturing processes; changes in financial market conditions; changes in the composition of worldwide taxable income; the accuracy of our assumptions regarding the amount and timing of our capital expenditures; and other risks described in MEMC's filing with the Securities and Exchange Commission, including MEMC's annual report on Form 10-K, as amended on Form 10-K/A, for the year ended December 31, 2002.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risks relating to MEMC's operations result primarily from changes in interest rates and changes in foreign exchange rates. MEMC enters into currency forward contracts to minimize its transactional currency risks. MEMC does not use derivative financial instruments for speculative or trading purposes. There have been no significant changes in MEMC's holdings of interest rate sensitive or foreign currency exchange rate sensitive instruments since December 31, 2002.

At September 30, 2003, we had unhedged Yen exposure represented by a loan to our Japanese consolidated subsidiary, of approximately $123 million and a $70 million unhedged Won exposure represented by our Korean subsidiary's net Won financial assets. Our Korean subsidiary utilizes the U.S. Dollar as its functional currency.

Item 4. Controls and Procedures.

MEMC carried out an evaluation, under the supervision and with the participation of MEMC's management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of MEMC's disclosure controls and procedures under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based upon that evaluation, our Company's Chief Executive Officer and Chief Financial Officer concluded that MEMC's disclosure controls and procedures are effective as of the end of the period covered by this report. Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

There have been no significant changes in our internal control over financial reporting that occurred during the third quarter of 2003 that has materially affected or is reasonably likely to materially affect MEMC's internal control over financial reporting.

PART II -- OTHER INFORMATION

Item 5. Other Information

During the quarterly period covered by this filing, our Audit Committee has approved the provision by our external auditor, KPMG LLP, of the following non-audit services: non-audit accounting services and tax matter consultations.

Item 6. Exhibits and Reports on Form 8- K.

(a) Exhibits

Exhibit Number	Description
2-a	Restructuring Agreement between TPG Wafer Holdings LLC and the Company, dated as of November 13, 2001 (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K dated November 28, 2001)
2-b	Merger Agreement between TPG Wafer Holdings LLC and the Company, dated as of November 13, 2001 (incorporated by reference to Exhibit 2.2 of the Company's Current Report on Form 8-K dated November 28, 2001)
3(i)	Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3-a of the Company's Form 10-Q for the Quarter ended June 30, 1995)
3(i)(a)	Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware on June 2, 2000 (incorporated by reference to Exhibit 3(i)(a) of the Company's Form 10-Q for the Quarter ended June 30, 2000)
3(i)(b)	Certificate of Amendment of Restated Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware on July 10, 2002 (incorporated by reference to Exhibit 3(i)(b) of the Company's Form 10-Q for the Quarter ended September 30, 2002)
3(ii)	Restated By-laws of the Company (incorporated by reference to Exhibit 3(ii) of the Company's Form 10-Q for the Quarter ended June 30, 2002)
4-a	Amended and Restated Indenture, dated as of December 21, 2001, among the Company, Citibank, N.A., as trustee, and Citicorp USA, Inc., as collateral agent, and Form of Note attached as an exhibit thereto (incorporated by reference to Exhibit 4.1 of the Company's Current Report on Form 8-K dated January 14, 2002)
4-a(1)	Security Agreement among the Company, each subsidiary listed on Schedule I thereto, and Citicorp USA, Inc., dated as of November 13, 2001 (incorporated by reference to Exhibit 4.2 of the Company's Current Report on Form 8-K dated November 28, 2001)
4-a(2)	Pledge Agreement among the Company, each subsidiary listed on Schedule I thereto, and Citicorp USA, Inc., dated as of November 13, 2001 (incorporated by reference to Exhibit 4.3 of the Company's Current Report on Form 8-K dated November 28, 2001)
4-a(3)	Indemnity, Subrogation and Contribution Agreement among the Company, each subsidiary listed on Schedule I thereto, and Citicorp USA, Inc., dated as of November 13, 2001 (incorporated by reference to Exhibit 4.4 of the Company's Current Report on Form 8-K dated November 28, 2001)
4-a(4)	Guarantee Agreement among the Company, each subsidiary listed on Schedule I thereto, and Citicorp USA, Inc., dated as of November 13, 2001 (incorporated by reference to Exhibit 4.5 of the Company's Current Report on Form 8-K dated November 28, 2001)
4-a(5)	Amendment No. 1, dated as of March 21, 2002, to Amended and Restated Indenture, dated as of December 21, 2001, among the Company, Citibank, N.A., as trustee, and Citicorp USA, Inc., as collateral agent (incorporated by reference to Exhibit 4-a(5) of the Company's Form 10-Q for the Quarter ended March 31, 2002)
4-a(6)	Amendment No. 2, dated as of March 3, 2003, to Amended and Restated Indenture, dated as of December 31, 2001, among the Company, Citibank, N.A., as trustee, and Citicorp USA, Inc. as collateral agent (incorporated by reference to Exhibit 4-a(6) of the Company's Form 10-K for the Year ended December 31, 2002)
4-a(7)	Amendment No. 1, dated as of March 3, 2003, to the Pledge Agreement, dated as of November 13, 2001, among the Company, each subsidiary of the Company listed in Schedule I thereto, and Citicorp USA, Inc. (incorporated by reference to Exhibit 4-a(7) of the Company's Form 10-K for the Year ended December 31, 2002)
4-a(8)	Italian Supplement, dated as of March 3, 2003, to the Pledge Agreement, dated as of November 13, 2001, among the Company, each subsidiary of the Company listed on Schedule I thereto, and Citicorp USA, Inc. (incorporated by reference to Exhibit 4-a(8) of the Company's Form 10-K for the Year ended December 31, 2002)
4-b	Form of Warrant Certificate (incorporated by reference to Exhibit 4.6 of the Company's Current Report on Form 8-K dated November 28, 2001)
10-i(4)	Amendment No. 4 to Registration Rights Agreement dated August 31, 2003 among the Company, TPG Wafer Holdings LLC and the Guarantors specified therein.
10-nn*	Agreement dated July 7, 2003 between the Company and Jonathon P. Jansky.
31.1	Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by the Chief Executive Officer and the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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

* This Exhibit constitutes a management contract, compensatory plan or arrangement.

(b) Reports on Form 8-K

During the third quarter of 2003, we filed the following current reports on Form 8-K:

 1. Item 7 and Item 12 Form 8-K filed on July 28, 2003.

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
	MEMC Electronic Materials, Inc.
November 12, 2003	/s/ James M. Stolze
	James M. Stolze Executive Vice President and Chief Financial Officer (on behalf of the registrant and as principal financial and accounting officer)

EXHIBIT INDEX
The exhibits below are numbered in accordance with the Exhibit Table of Item 601of Regulation S-K.
Number
Exhibit	Description
10-i(4)	Amendment No. 4 to Registration Rights Agreement dated August 31, 2003 among the Company, TPG Wafer Holdings LLC and the Guarantors specified therein.
10-nn	Agreement dated July 7, 2003 between the Company and Jonathon P. Jansky.
31.1	Certification by the Chief Executive Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by the Chief Financial Officer of the Company pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	Certification by the Chief Executive Officer and the Chief Financial Officer of the Company pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

EX-10

MEMC Electronic Materials, Inc.501 Pearl Drive (City of O'Fallon)
Post Office Box 8
St. Peters, Missouri 63376 USA
Phone: 636-474-5000
Fax: 636-474-5158
www.memc.com

August 31, 2003

TPG Wafer Holdings LLC
Attn.: Richard A. Ekleberry, Esq.
301 Commerce Street
Suite 3300
Fort Worth, Texas 76102

Re: Amendment No. 4 to Registration Rights Agreement

Dear Rick:

Reference is made to the Registration Rights Agreement dated as of November 13, 2001, by and between MEMC Electronic Materials, Inc., a Delaware corporation (the "Company"), the guarantors included on the signature lines thereto (the "Guarantors" and, together with the Company, the "Company Parties") and TPG Wafer Holdings LLC, a Delaware limited liability company (together with its permitted assigns, "TPG"), as amended by letter agreements among the parties dated July 15, 2002, November 14, 2002 and February 17, 2003 (as amended, the "Agreement").

The Company Parties and TPG agree that, effective as of the date hereof, the definitions of "Effectiveness Date" and "Filing Date" as set forth Section 1.2 of the Agreement shall be deleted in their entirety and the following shall substituted in lieu thereof:

"Effectiveness Date" means the 60^th day following the Filing Date.

"Filing Date" means the date to be specified by TPG in a written notice to the Company which date shall not be earlier than the 30th day following the date of delivery of such notice.

Except as otherwise provided herein, all other terms and conditions of the Agreement shall remain in full force and effect.

This letter agreement may be executed in counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

Very truly yours,

MEMC ELECTRONIC MATERIALS, INC.

By: /s/ David L. Fleisher
David L. Fleisher
Vice President, General Counsel
and Secretary

EACH OF THE SUBSIDIARIES LISTED ON
SCHEDULE 1 HERETO, as Guarantors

By: /s/ Kenneth L. Young
Kenneth L. Young, in his capacity
as Treasurer for each of the
Subsidiaries listed on Schedule I
hereto

ACCEPTED AND AGREED:

TPG WAFER HOLDINGS LLC

By: TPG Wafer Partners LLC,
its Managing Member

By: TPG Partners III, L.P.,
its Managing Member

By: TPG GenPar III, L.P.,
its general partner

By: TPG Advisors III, Inc.
its general partner

By: /s/ Richard A. Ekleberry
Richard A. Ekleberry
Vice President

Schedule I

Guarantors:
MEMC Pasadena, Inc.
MEMC International, Inc.
MEMC Southwest Inc.
SiBond, L.L.C.
PlasmaSil, L.L.C.
MEMC Holdings Corporation

EX-10

SEPARATION AGREEMENT AND
GENERAL RELEASE

This Separation Agreement and General Release ("Agreement") is made and entered into by and between Jonathon P. Jansky ("Mr. Jansky") and MEMC Electronic Materials, Inc. ("MEMC"). In consideration of the following promises, the parties agree as follows:

1. Separation from Employment. Mr. Jansky acknowledges that he will separate from employment with MEMC effective as of January 3, 2004 (the "Separation Date"). As of the Separation Date, Mr. Jansky's employment relationship with MEMC will end. In connection with Mr. Jansky's separation, MEMC and Mr. Jansky have agreed to settle all matters relating to Mr. Jansky's employment relationship with MEMC and its termination.

2. Resignation Status of Employee. Mr. Jansky voluntarily terminates and irrevocably resigns from MEMC effective as of the Separation Date, which termination and resignation is hereby accepted by MEMC. Mr. Jansky's MEMC personnel file will reflect hisresignation as of the Separation Date. As of the effective date of this Agreement, Mr. Jansky shall automatically and without taking any further actions be deemed to have resigned from all officer and director positions then held by him with MEMC and all of its subsidiaries and joint ventures. Notwithstanding the foregoing, Mr. Jansky will continue as an employee of MEMC until the Separation Date, although his active employment will end on June 23, 2003. He will be on paid leave from June 23, 2003 through the Separation Date (the "Leave of Absence Period").

3. Separation Payments and Benefits. In consideration and recognition of past services rendered and in exchange for Mr. Jansky's promises and obligations herein and as payment in full of the amounts to which Mr. Jansky is entitled from MEMC under any plan of MEMC in which Mr. Jansky is a participant, including without limitation the MEMC 2002 Annual Incentive Plan, any 2003 bonus or incentive compensation plan adopted by MEMC, and/or under any employment agreement with MEMC to which Mr. Jansky is a party, including the Employment Agreement between Mr. Jansky and MEMC entered into as of January 1, 2002, and so long as Mr. Jansky adheres to the promises and agreements set out in this Agreement, MEMC shall provide the following to Mr. Jansky if this Agreement becomes effective:

1. The sum of $123,877.00 in cash, such sum to be made in twelve (12) semi-monthly installments of approximately $10,166.67 (subject to applicable tax withholding) and a final semi-monthly installment of approximately $1,876.96 in accordance with the MEMC salaried payroll cycle beginning with the July 15, 2003 payroll and ending with the January 15, 2004 payroll.
2. Provided Mr. Jansky complies with the terms and conditions of this Agreement through the date of payment, MEMC will pay Mr. Jansky the sum of $51,050.00 in cash (subject to applicable tax withholding) in accordance with the 2002 Annual Incentive Plan, at the same time and in the same manner as such payments are made to other eligible employees. In addition, MEMC agrees to pay Mr. Jansky any amount (subject to applicable tax withholding) due from the Incentive Plan related to Mr. Jansky's performance in first quarter 2003 and second quarter 2003; such payment to be made in the same manner and at the same time as such payments are made to other eligible executives.
3. Continued eligibility for all U.S. benefit programs (as those plans may exist from time to time) during the Leave of Absence Period, provided that Mr. Jansky contributes the same amount for such benefit coverages as other similarly situated employees (which contributions will be withheld from the payments provided in subparagraph (a) above), and provided that MEMC continues to provide such coverage for active non-union employees.
4. So long as Mr. Jansky continues to adhere to the promises and agreements set out in this Agreement, during the Leave of Absence Period, Mr. Jansky shall continue to vest in the stock options granted to him under the MEMC 1995 Equity Incentive Plan (the "1995 Plan"), the MEMC 2001 Equity Incentive Plan (the "2001 Plan") and the stand-alone Stock Option Grant Agreement between Mr. Jansky and MEMC dated as of January 1, 2002 for 215,000 shares of MEMC common stock (the "Stand-Alone Option Agreement" and, together with the 2001 Plan and the 1995 Plan, the "Plans"). Any stock options granted to Mr. Jansky under the Plans which are not vested as of the Separation Date shall be forfeited. Any stock options granted to Mr. Jansky under the 1995 Plan which are vested as of the Separation Date shall remain exercisable for 60 days following the Separation Date. Any stock options granted to Mr. Jansky under the 2001 Plan and the Stand-Alone Option Agreement which are vested as of the Separation Dat e shall remain exercisable for 90 days following the Separation Date. Such stock options shall be subject to the terms of the applicable stock option agreements.
5. So long as Mr. Jansky continues to adhere to the promises and agreements set out in this Agreement, during the Leave of Absence Period, MEMC understands that Mr. Jansky will continue to vest in his "Profits Interest" in TPG Wafer Management LLC.

The payments and benefits provided herein are made in lieu of any and all payments or benefits that might otherwise be available to Mr. Jansky arising out of his employment with MEMC, excluding Mr. Jansky's non-forfeitable rights to his accrued benefits (within the meaning of Sections 203 and 204 of ERISA), if any, under the MEMC Pension Plan and the MEMC Retirement Savings Plan, as such plans may be hereafter amended, and Mr. Jansky's right, if any, to continued COBRA coverage after the Leave of Absence Period. Mr. Jansky acknowledges and agrees that the payments and benefits provided herein are in full settlement of any amounts or benefits to which he might be entitled under any employment agreements with MEMC.

4. Mr. Jansky's Agreement to Provide Assistance. Mr. Jansky agrees that during the Leave of Absence Period he will, without further compensation, be available as to assist MEMC as reasonably necessary regarding activities pertaining to his prior responsibilities with MEMC and do such other things as are reasonably necessary to provide for a transition of his employment responsibilities.

5. Mr. Jansky's Agreement Not to File Suit. In consideration of the payments and benefits set out in paragraph 3 above, Mr. Jansky agrees for himself and on behalf of, as applicable, his heirs, beneficiaries, executors, administrators, successors, assigns, and anyone claiming by, through or under any of the foregoing, that he will not file or otherwise submit any charge, claim, complaint or action to any agency, court, organization, or judicial forum (nor will he permit any person, group of persons, or organization to take such action on his behalf except as otherwise provided by law) against MEMC, nor file or otherwise submit any such charge, claim, complaint or action against any subsidiary, affiliate or parent company of MEMC, or against any officer, agent, employee, attorney, representative, successor or assign of MEMC (or of any such subsidiary, affiliate or parent company of MEMC) arising out of any action or non-action on the part of MEMC or on the part of any such above-referenced entity or any officer, agent, employee, attorney or representative of MEMC or of any such entity for any act or event that occurred on or prior to the Separation Date. Said claims, complaints and actions include, but are not limited to (a) any breach of an actual or implied contract of employment between Mr. Jansky and MEMC, (b) any claim of unjust, wrongful, or tortious discharge (including any claim of fraud, negligence, whistle blowing, or intentional infliction of emotional distress), (c) any claim of defamation or other common-law action, (d) any claim of violations arising under the Civil Rights Act of 1964, as amended, 42 U.S.C. Sections 2000e, et seq., 42 U.S.C. Section 1981, the Age Discrimination in Employment Act, 29 U.S.C. Sections 621, et seq., the Americans with Disabilities Act, 42 U.S.C. Sections 12101, et seq., the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sections 201, et seq., the Rehabilitat ion Act of 1973, as amended, 29 U.S.C. Sections 701, et seq., the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Sections 1001, et seq., the Worker Adjustment and Retraining Notification Act ("WARN"), 29 U.S.C. Sections 2101, et seq., the Older Worker Benefit Protection Act ("OWBPA") 29 U.S.C. Sections 621, et seq., and (e) all other claims arising under any other federal, state, or local law, regulation or ordinance.

6. Mr. Jansky's Release of Claims. Mr. Jansky hereby agrees for himself, and as applicable, his heirs, beneficiaries, executors, administrators, successors, assigns and anyone claiming by, through or under any of the foregoing, to release and forever discharge MEMC and its subsidiaries, affiliates, and parent companies, and their respective officers, agents, employees, attorneys, representatives, successors and assigns, from any and all matters, claims, demands, damages, causes of action, debts, liabilities, controversies, judgments and suits of every kind and nature whatsoever, foreseen, unforeseen, known or unknown, including claims, complaints and actions described in paragraph 5, which have arisen or could arise between Mr. Jansky, on the one hand, and MEMC or the persons and related entities listed above, on the other hand, from matters which occurred on or prior to the Separation Date, which matters include, but are not limited to, Mr. Jansky's separation of employme nt from MEMC.

7. Mr. Jansky's Release and Waiver of Other Claims. Except as expressly provided in this Agreement, Mr. Jansky agrees, for himself, and, as applicable, for and on behalf of his heirs, beneficiaries, executors, administrators, successors, assigns, and anyone claiming by, through or under any of the foregoing, to further release and waive any claims related to pay, vacation pay, insurance or welfare benefits or any other benefits of employment with MEMC arising from events occurring on or prior to the Separation Date. Notwithstanding any provision of this Agreement, this Agreement does not include any release or waiver of Mr. Jansky's non-forfeitable rights to his accrued benefits (within the meaning of Sections 203 and 204 of ERISA), if any, under the MEMC Pension Plan and the MEMC Retirement Savings Plan, as such plans may be hereafter amended, and Mr. Jansky's right, if any, to continued COBRA coverage after the Leave of Absence Period, which rights are not released hereb y but survive unaffected by this Agreement.

8. MEMC's Release of Claims. MEMC hereby releases, remises and forever discharges Mr. Jansky from any and all claims or other causes of action it may have against Mr. Jansky on account of any contract, supposed liability, or thing done or omitted for all times in the past to the Separation Date.

9. Obligations Under Employment Agreement. Mr. Jansky agrees that he has continuing obligations to MEMC pursuant to Section 5 of the Employment Agreement between Mr. Jansky and MEMC entered into as of January 1, 2002, a copy of which is attached hereto as Exhibit 1 (the "Employment Agreement") provided that the provisions of paragraph 13 below shall supersede the non-solicitation provisions included in the second paragraph under "Competitive Activity" of the exhibit to the Employment Agreement. Any violation of those obligations by Mr. Jansky constitutes a material breach of this Agreement and subjects Mr. Jansky to forfeiture of all benefits and payments pursuant to this Agreement. MEMC expressly reserves the right to pursue all other legal and equitable remedies available to it by virtue of any breach of Section 5 of the Employment Agreement or any promise made in this Agreement, including paragraphs 12 and 13, below.

10. Nondisparagement. Mr. Jansky represents that he will not, in any way, disparage MEMC or any subsidiary, affiliate or parent of MEMC, or any officer, agent, employee, attorney, representative, successor or assign of any of them, or make or solicit any comments, statements or the like to the media or to others that may be considered to be derogatory or detrimental to the good name or business reputation of any of the aforementioned persons or entities. MEMC represents that it will not, in any way, disparage Mr. Jansky or make or solicit any comments, statements or the like to the media or to others that may be considered to be derogatory or detrimental to the good name or business reputation of Mr. Jansky.

11. No Admission of Wrongdoing. The parties agree that nothing in this Agreement is an admission of any wrongdoing by either party.

12. CONFIDENTIALITY OF AGREEMENT. MR. JANSKY AGREES TO KEEP THE TERMS OF THIS AGREEMENT CONFIDENTIAL EXCEPT AS HE MIGHT BE LAWFULLY COMPELLED TO GIVE TESTIMONY BY A COURT OF COMPETENT JURISDICTION OR AS HE MAY BE REQUIRED BY LAW, REGULATION, GOVERNMENTAL AUTHORITY OR SIMILAR BODY TO DISCLOSE. THIS MEANS THAT EXCEPT AS STATED ABOVE, HE WILL NOT, AT ANY TIME, TALK ABOUT, WRITE ABOUT OR OTHERWISE PUBLICIZE THIS AGREEMENT, OR ITS NEGOTIATION, EXECUTION OR IMPLEMENTATION, EXCEPT (A) WITH AN ATTORNEY WHO MAY BE ADVISING HIM IN CONNECTION WITH THIS AGREEMENT; (B) WITH A FINANCIAL CONSULTANT OR EXECUTIVE OUTPLACEMENT COUNSELOR; (C) WITH HIS SPOUSE; (D) WITH ANY TAXING AUTHORITIES; (E) AS NECESSARY TO ENFORCE THIS AGREEMENT; OR (F) WITH RESPECT TO THE FACTUAL INFORMATION CONTAINED IN PARAGRAPHS 1, 2 AND 13 HEREOF AND THE CONTINUING OBLIGATIONS OF MR. JANSKY UNDER SECTION 5 OF THE EMPLOYMENT AGREEMENT, PROVIDED THAT SAID PERSONS TO WHOM DISCLOSURE IS PERMITTED PURSUANT TO (A), (B) AND (C) OF THIS PARAGRAPH 12 PROMISE TO KEEP THE INFORMATION THAT MAY BE REVEALED TO THEM CONFIDENTIAL AND NOT TO DISCLOSE IT TO OTHERS. NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS PARAGRAPH 12 SHALL TERMINATE WITH RESPECT TO ANY INFORMATION THAT MEMC DISCLOSES IN A PUBLIC FILING WITH THE SECURITIES AND EXCHANGE COMMISSION.

13. NON-SOLICITATION. DURING THE PERIOD COMMENCING ON THE EFFECTIVE DATE OF THIS AGREEMENT AND ENDING ON THE SECOND ANNIVERSARY OF THE SEPARATION DATE, MR. JANSKY WILL NOT, DIRECTLY OR INDIRECTLY, FOR HIS OWN ACCOUNT OR FOR THE ACCOUNT OF ANY OTHER PERSON OR ENTITY, ANYWHERE IN THE UNITED STATES OR ANYWHERE ELSE IN THE WORLD WHERE MEMC OR ANY OF ITS SUBSIDIARIES OR AFFILIATES ARE CONDUCTING BUSINESS, (I) SOLICIT FOR EMPLOYMENT, EMPLOY OR OTHERWISE INTERFERE WITH THE RELATIONSHIP OF MEMC OR ANY OF ITS SUBSIDIARIES OR AFFILIATES WITH ANY NATURAL PERSON THROUGHOUT THE WORLD WHO IS OR WAS EMPLOYED BY OR OTHERWISE ENGAGED TO PERFORM SERVICES FOR MEMC OR ANY OF ITS SUBSIDIARIES OR AFFILIATES IN A SALES, TECHNICAL OR MANAGERIAL CAPACITY AT ANY TIME DURING WHICH MR. JANSKY WAS EMPLOYED BY MEMC OR (II) INDUCE ANY SALES, TECHNICAL OR MANAGERIAL EMPLOYEE OF MEMC OR ANY OF ITS SUBSIDIARIES OR AFFILIATES (A) TO ENGAGE IN ANY ACTIVITY WHICH MR. JANSKY IS PROHIBITED FROM ENGAGING IN UNDE R THIS AGREEMENT OR (B) TO TERMINATE HIS OR HER EMPLOYMENT WITH MEMC OR ANY OF ITS SUBSIDIARIES OR AFFILIATES. FOR PURPOSES OF THIS PARAGRAPH 13, "SOLICIT" MEANS ANY COMMUNICATION OF ANY KIND WHATSOEVER, REGARDLESS OF BY WHOM INITIATED, INVITING, ENCOURAGING OR REQUESTING ANY PERSON OR ENTITY TO TAKE OR REFRAIN FROM TAKING ANY ACTION. THE PROVISIONS OF THIS PARAGRAPH 13 SHALL SUPERSEDE THE NON-SOLICITATION PROVISIONS INCLUDED IN THE SECOND PARAGRAPH UNDER "COMPETITIVE ACTIVITY" OF THE EXHIBIT TO THE EMPLOYMENT AGREEMENT.

14. Arbitration. Except for the enforcement of any rights to equitable relief pursuant to paragraphs 9, 12 or 13, Mr. Jansky and MEMC agree that any dispute, controversy or claim (between Mr. Jansky and MEMC or any of its subsidiaries, affiliates, or parent companies, or any of their respective officers, agents, employees, attorneys, representatives, successors or assigns) arising out of, based upon or relating to Mr. Jansky's employment, the termination of his employment, this Agreement or its breach, whether denominated as torts or contract claims or as statutory or regulatory claims (including claims for discrimination or discharge based upon race, sex, age, religion, disability or other prohibited grounds), whether arising before, during or after termination of Mr. Jansky's employment, and also including any dispute about whether any particular controversy is arbitrable under the terms of this paragraph, shall be resolved by binding arbitration before one (1) arbit rator. Procedurally, the arbitration will be governed by the then-current Rules for Resolution of Employment Disputes of the American Arbitration Association. Any arbitration herein would be held in St. Louis County, Missouri. Judgment on an arbitration award rendered by the Arbitrator may be entered in any court having jurisdiction thereof. The Arbitrator shall have the authority to award costs of the Arbitration (including attorney's fees) in a manner consistent with the controlling substantive claim at issue. Similarly, the Arbitrator shall have the authority to award damages (or other relief) consistent with the substantive claim being asserted.

15. KNOWING AND VOLUNTARY AGREEMENT. MR. JANSKY HEREBY REPRESENTS, DECLARES AND AGREES THAT HE VOLUNTARILY ACCEPTS THE PROVISIONS OF THIS AGREEMENT FOR THE PURPOSE OF MAKING A FULL AND FINAL COMPROMISE AND SETTLEMENT OF ALL MATTERS RELATING TO MR. JANSKY'S EMPLOYMENT RELATIONSHIP WITH MEMC AND ITS TERMINATION. MR. JANSKY IS ADVISED TO CONSULT AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT. MR. JANSKY UNDERSTANDS THE EFFECT OF SIGNING THIS AGREEMENT.

16. Entire Agreement. This Agreement, including any Exhibits, when signed, contains the entire agreement between the parties and, except as specifically referenced herein, there are no other understandings or agreements, written or oral, between them on the subject except as expressly stated herein. This Agreement, except as specifically referenced herein, fully supersedes and amends any and all prior agreements or understandings, if any, between Mr. Jansky and MEMC on any matter that is addressed in this Agreement. This Agreement cannot be amended or modified except by a written document signed by both MEMC and Mr. Jansky. Separate copies of this document shall constitute original documents which may be signed separately, but which together will constitute one single agreement.

17. Governing Law, Invalidity of Provisions. This Agreement shall be construed and governed by the laws of the State of Missouri (except its laws and decisions regarding conflicts of law which shall be disregarded in their entirety). If any part or provision of this Agreement is determined to be invalid or unenforceable under applicable law, the validity or enforceability of the remaining provisions shall be unaffected. To the extent that any provision of this Agreement is adjudicated to be invalid or unenforceable because it is over-broad, that provision shall not be void, but rather shall be limited only to the extent required by applicable law and enforced as so limited.

18. Consequences of Violation of this Agreement. If it is finally determined by a court or arbitrator that either party has violated any of the promises contained in this Agreement, then such party shall reimburse the other party for all reasonable costs incurred by the other party, including reasonable attorneys' fees, in enforcing or defending its rights under this Agreement.

19. Severance Offer Expiration. If Mr. Jansky does not sign this Agreement before a Notary Public and return the original Agreement signed by him, pursuant to the terms set forth herein, on or before July 15, 2003, the severance offer represented by this Agreement shall be deemed withdrawn and this Agreement shall be null and void, and of no further effect.

20. Consideration Period, Revocation Period, and Effective Date. Mr. Jansky acknowledges that he has been given at least 21 days within which to consider this Agreement before making a decision to sign this Agreement. This Agreement shall not be effective until seven (7) calendar days after the date Mr. Jansky signs and delivers this Agreement to MEMC. During this seven-day period, Mr. Jansky may revoke this Agreement by giving written notice to Tom Stiffler of MEMC at 501 Pearl Drive (City of O'Fallon), P.O. Box 8, St. Peters, Missouri 63376, that Mr. Jansky has decided to revoke the Agreement ("Revocation Notice"). If no such Revocation Notice is timely presented by Mr. Jansky, this Agreement shall be fully effective and binding upon the parties in accordance with its terms on the eighth (8^th) calendar day after the date that Mr. Jansky signed and delivered this Agreement to MEMC.

21. Procedure for Mr. Jansky to Accept and Effectuate Agreement. If Mr. Jansky decides to sign this Agreement, he must sign before a Notary Public and deliver the original of the signed and notarized Agreement to Tom Stiffler of MEMC, at 501 Pearl Drive (City of O'Fallon), P.O. Box 8, St. Peters, Missouri 63376, on or before July 15, 2003.

22. Binding Agreement and Assignment. This Agreement shall be binding upon and inure to the benefit of Mr. Jansky and Mr. Jansky's heirs and representatives, and to MEMC, its successors and assigns; further, this Agreement and the benefits provided hereunder are not assignable by Mr. Jansky without MEMC's express written consent.

23. By signing this Agreement, Mr. Jansky acknowledges:

A. HE HAS READ THIS AGREEMENT COMPLETELY.

B. HE HAS HAD AN OPPORTUNITY TO CONSIDER THE TERMS OF THIS AGREEMENT.

C. HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY OF HIS CHOOSING PRIOR TO EXECUTING THIS AGREEMENT.

D. HE KNOWS THAT HE IS GIVING UP IMPORTANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT.

E. HE UNDERSTANDS AND MEANS EVERYTHING THAT HE HAS SAID IN THIS AGREEMENT, AND HE AGREES TO ALL ITS TERMS.

F. HE IS NOT RELYING ON MEMC OR ANY REPRESENTATIVE OF MEMC TO EXPLAIN THIS AGREEMENT OR HIS RIGHTS TO HIM.

G. HE HAS HAD AN OPPORTUNITY TO CONSULT AN ATTORNEY AND OTHER ADVISORS TO EXPLAIN THIS AGREEMENT AND ITS CONSEQUENCES TO HIM BEFORE HE SIGNED IT, AND HE HAS AVAILED HIMSELF OF THIS OPPORTUNITY TO WHATEVER EXTENT HE DESIRED.

H. HE HAS SIGNED THIS AGREEMENT VOLUNTARILY AND ENTIRELY OF HIS OWN FREE WILL WITHOUT ANY PRESSURE FROM MEMC OR ANY REPRESENTATIVE OF MEMC.

THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES (SEE PARAGRAPH 14).

IN WITNESS WHEREOF, the undersigned parties have signed this Agreement.

JONATHON P. JANSKY

/s/ Jonathon P. Jansky
Date: 7/7/03

STATE OF MISSOURI
COUNTY OF ST. LOUIS

BEFORE ME, the undersigned authority in and for the State of Missouri, personally appeared JONATHON P. JANSKY, personally known to me to be the person whose name is subscribed to the foregoing Agreement, and he acknowledged to me that he executed the above and foregoing Agreement for the purposes and consideration expressed therein.

SUBSCRIBED AND SWORN TO BEFORE ME, on this the 7th day of July, 2003.

My Commission Expires: December 7, 2003	/s/ Angela Lynn Carter Name: Angela Lynn Carter NOTARY PUBLIC IN AND FOR THE STATE OF MISSOURI
	MEMC ELECTRONIC MATERIALS, INC. By: /s/ Thomas P. Stiffler Name: Thomas P. Stiffler Title: Senior Vice President

STATE OF MISSOURI
COUNTY OF ST. CHARLES

BEFORE ME, the undersigned authority in and for the State of Missouri, personally appeared Thomas P. Stiffler of MEMC ELECTRONIC MATERIALS, INC., who being personally known to me, was duly sworn and stated on oath that he is duly authorized to execute this Agreement on behalf of MEMC ELECTRONIC MATERIALS, INC., and that he signed the above and foregoing Agreement for the purposes and consideration expressed therein.

SUBSCRIBED AND SWORN TO BEFORE ME, on this the 8th day of July, 2003.

My Commission Expires:
May 23, 2005 /s/ Linda K. Apprill
Name: Linda K. Apprill
NOTARY PUBLIC IN AND FOR
THE STATE OF MISSOURI

EX-31

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nabeel Gareeb, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2003 By: /s/ Nabeel Gareeb
Name: Nabeel Gareeb
Title: Chief Executive Officer and President

EX-31

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James M. Stolze, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MEMC Electronic Materials, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have:

a) Designed such disclosure controls and procedures or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 12, 2003 By: /s/ James M. Stolze
Name: James M. Stolze
Title: Executive Vice President and Chief Financial Officer

EX-32

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of MEMC Electronic Materials, Inc. (the "Company") on Form 10-Q for the period ending September 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), we, Nabeel Gareeb, President and Chief Executive Officer of the Company, and James M. Stolze, Executive Vice President and Chief Financial Officer of the Company, certify, to the best of our knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 12, 2003	By: /s/ Nabeel Gareeb Name: Nabeel Gareeb Title: President and Chief Executive Officer MEMC Electronic Materials, Inc.
Date: November 12, 2003	By: /s/ James M. Stolze Name: James M. Stolze Title: Executive Vice President and Chief Financial Officer MEMC Electronic Materials, Inc.