STMICROELECTRONICS EMPLOYEES’ AGREEMENT

CLAUSE 1: TITLE

This Agreement shall be known as the “STMICROELECTRONICS EMPLOYEES’ AGREEMENT 2006”.

CLAUSE 2: SCOPE

(1) This Agreement shall coverall locally engaged confirmed employees of the Company with the exception of –

(a) Managerial, executive, supervisory, confidential and professional employees;

(b) Apprentices; and

(2) “Confidential employees” Include employees in the Human Resource, Administration (Finance), MIS Departments, secretaries and security guards.

CLAUSE 3: DURATION OF AGREEMENT

(1) This Agreement shall take effect on 1st January 2006 and shall remain in force until 31st December 2008.

(2) During the currency of this Agreement, neither the Company nor the Union shall seek to vary, modify or annul any of its terms in any way whatsoever, save as is provided herein or by operation of law.

(3) Negotiations for a new collective agreement may commence three months before the expiry of this Agreement.

CLAUSE 4: RECOGNITION

(1) The Company recognizes the Union as the sole collective negotiating body in respect of all terms and conditions of service of the employees coming within the scope of this Agreement.

(2) The Union recognizes the rights of the Company to control, operate and manage its business in all respects.

(3) The Union agrees to use its best endeavors to ensure that all its members cooperate loyally with the Company and conscientiously carry out work for the advancement of the Company’s business in all respects.

CLAUSE 5: NON-UNION MEMBERS

Employees belonging to grades within the scope of this Agreement and who are not members of the Union shall not receive benefits more favorable than those conferred on union members of the same grades.

CLAUSE 6: GRIEVANCE PROCEDURE

(1) It is the desire of the Union and the Company that an employee’s grievance shall be dealt with as expeditiously as possible. In pursuance of this mutual desire, it is agreed that an employee’s grievance shall be dealt with in accordance with the following procedure:

(a) Step One: An employee having a grievance may within three working days of its arising, bring the matter to the attention of his section supervisor with the aid of the Branch committee if so required, the supervisor shall attempt to settle the matter and shall give a decision within three working days of the grievance having been reported to him. If the employee has a grievance against his supervisor, he may bring the matter to the section superintendent who shall give a decision within three working days of the grievance having been reported to him.

(b) Step Two: If no settlement is reached at Step One, the Chairman or Branch Secretary may take the matter to the attention of the Head of Department or his representative who shall give his decision within three working days of the grievance having been reported to him.

(c) Step Three: If no settlement is reached at Step Two within three working days, the grievance shall then be discussed between the Company management and the Union.

(d) Step Four: If the grievance remains unresolved after action under Step Three has been taken, the grievance may be referred to the Ministry of Manpower for conciliation.

(2) In the event of there being no settlement at Step Four, the matter shall be dealt with in accordance with the provision of clause 7 of this Agreement.

CLAUSE 7: REFEREE

Any dispute or disputes between the parties to this Agreement while it is in force and arising out of its operation shall be referred by either party to the President of the Industrial Arbitration Court who shall have the discretion to select a referee appointed under section 43 of the Industrial Relations Act to hear and determine the dispute or disputes.

CLAUSE 8: PROBATION

(1) An employee shall on first appointment be placed on probation for a period of three months.

(2) If an employee is found suitable for permanent employment, he shall be informed, by letter, of his confirmation on or before the last day of his probation.

(3) The Company may extend an employee’s probation by a further period of three months, in which case, he shall be notified in writing of the extension on or before the last day of his probation.

(4) Probationary employment may be terminated by either the Company or the employee by giving to the other party one day’s notice or one day’s pay In lieu without any reason being assigned.

(5) Unless an employee is terminated in his service or extended on probation, he shall be deemed to have been confirmed in his service on completion of his probationary period.

CLAUSE 9: PROMOTION

(1) An employee who is promoted to a higher Job grade shall have his salary adjusted to the minimum salary of the new job grade or shall be granted a promotion increment of 7% of his last drawn basic monthly salary, whichever is higher.

(2) If the promotion coincides with his annual incremental date, he shall first be given the annual increment before his promotion and in addition the promotional increment as provided in sub-clause (1) of this clause.

CLAUSE 10: WORKING HOURS

(1) The number of working hours per week shall be regulated by the Employment Act.

(2) Every employee shall be given the following tea and meal breaks:

(3) Every employee shall clock-in his attendance upon reporting for work and clack out upon completion of work.

(4) The working hours shall be as follows:

(5) The Company shall inform the Union if the working hours are to be changed.

CLAUSE 11: WORK ON PUBLIC HOLIDAYS

If and when an employee is required to work on any gazetted public holiday, he shall be paid an additional day’s pay for the actual contractual hours of work for the day, even though the work required of the employee on that public holiday is less than the normal contractual hours of work. If the work is in excess of the normal contractual hours for the day, the payment shall be at one and a half limes the hourly rate of pay for any hour beyond the normal working hours of that day.

CLAUSE 12: RETIREMENT

(1) The retirement age shall be regulated in accordance with the Retirement Age Act. Every employee shall retire on the last day of the month on which he reaches the retirement age.

(2) Upon mutual agreement between the employee and the Company, employment may be extended on a year-to-year basis. The employee shall also be required to undergo an annual medical examination conducted by the Company doctor during the extended period of employment to certify his fitness for continuous employment.

CLAUSE 13: RETRENCHMENT

(1) In the event of retrenchment due to redundancy, reorganization or liquidation of the Company’s business, the Company shall inform the Union in writing of such impending retrenchment two weeks before the retrenchment notices are given to the affected employees.

CLAUSE 14: SALARY STRUCTURE

(1) The salary ranges for all employees shall be In accordance with Appendix I to this Agreement.

(2) The Company and the Union agree to adopt the Competitive Based Wage System in line with the recommendations of the National Wages Council (NWC).

CLAUSE 15: FLEXIBLE WAGE SCHEME

(1) The Company recognizes the National Wages Council (NWC) as the national wages body for recommending annual wage adjustments. Both the Company and the Union shall respect the recommendations of the National Wages Council.

(2) In line with the recommendations of the National Wages Council (NWC), a Flexible Wage Scheme comprising of the following components is implemented:

(a) Annual Increment

(i) Every confirmed employee with one year’s service as at 30th June shall receive an annual increment with effect from 1st July of each year. A confirmed employee with less than one year’s service as at 30th June shall receive a pro-rated annual increment based on the number of completed months of service. For purposes of computation, an employee who joins on or before the 15th of the month shall be deemed to have completed a full month.

(ii) The Company and the Union shall negotiate annually on the quantum of annual increment payable to employees covered by this Agreement taking into account the recommendations by the National Wages Council (NWC) as well as Company’s performance. Such negotiation shall commence in May of each year. The employee distribution and spread of the increment shall be as follows:

(b) Monthly Variable Component

(i) For the purpose of Monthly Variable Component (MVC) computation, the MVC percentage for employees in the Company shall be 10.0% of the employee’s basic monthly salary. The MVC shall apply uniformly for all employees covered under this Agreement.

(ii) The MVC shall be treated as part of the basic monthly salary and shall be included in the computation for annual wage supplement (AWS), MBO bonus scheme as well as all statutory payments.

(iii) New employees shall upon joining the Company and thereafter have the prevailing MVC included in their basic monthly salary.

(iv) The MVC may be varied only by mutual agreement between the Company and the Union.

(c) MBO Bonus Scheme

(i) Details of the MBO Bonus Scheme are elaborated in Appendix II to this Agreement.

(ii) In the event of unfavorable business conditions, the Company and the Union shall review the quarterly MBO Bonus Scheme.

CLAUSE 16: ANNUAL WAGE SUPPLEMENT

(1) Every employee with one year’s service as at 30th November each year shall be entitled to an annual wage supplement equivalent to one month’s basic salary on or before 20th December of the year.

(2) An employee who is confirmed but with less than one year’s service as at 30th November shall receive a pro-rated annual wage supplement based on the number of completed months of service. For this purpose, an employee who joins on or before the 15th of the month shall be deemed to have completed a full month.

(3) An employee on 8-hour or normal shift who has accumulated 15 days or more unpaid leave in the year or in the case of 12-hour shift, an employee who has accumulated eight days or more unpaid leave in the year shall receive a pro-rated annual wage supplement.

(4) Payment of the annual wage supplement shall be based on the employee’s basic monthly salary as at 30th November.

(5) An employee who resigns on or before 30th November shall not be entitled to any annual wage supplement.

(6) An employee who is dismissed for misconduct shall not be entitled to any annual wage supplement.

(7) An employee who is retrenched, medically boarded out, retired or died whilst in service of the Company shall be entitled to prorated annual wage supplement.

CLAUSE 17: SHIFT ALLOWANCE

Every shift employee shall be paid a shift allowance for each day of work as follows:

CLAUSE 18: ATTENDANCE ALLOWANCE

(1) Attendance allowance shall be paid to employees who are holding Job Grade J5 position as follows:

(2) Employees granted union leave, annual leave, marriage leave, maternity leave, paternity leave, medical leave, compassionate leave and National Service (reservist training) leave shall be deemed to be present for work.

(3) The following conditions pertinent to absence shall apply:

(a) “Absence” means being absent from work without paid leave exceeding three hours a day.

(b) Accumulative lateness exceeding 30 minutes within a calendar month shall be regarded as one day of absence.

(c) An employee who has an incomplete calendar month of service either on first appointment or resignation shall be paid the attendance allowance of S$1.00 per day of actual attendance (for 8-hour shift and normal shift) and S&3.7G per day of actual attendance (for 12-hour shift).

(4) An employee in Job Grade J5 who is promoted to a higher job grade position shall have the attendance allowance incorporated into their basic salary and shall forego their eligibility for the attendance allowance.

CLAUSE 19: EMPLOYEE SAVINGS PLAN

Every confirmed employee shall be eligible to participate in the Company’s Employee Savings Plan in accordance with the following:

(a) Each employee may contribute a minimum of $20.00 and up to a maximum of 10% of his basic monthly salary for the Savings Plan. The monthly contribution shall be in multiples of tens.

(b) Each employee may only participate in one plan concurrently.

(c) The employee’s savings left in the Plan for a period of two years shall earn 33 1/3% matching payment from the Company.

(d) The employee is deemed to have terminated his participation in the Savings Plan and shall not qualify for the 33 1/3% Company’s contribution if he:

(i) Resigns from the Company:

(ii) Is terminated on disciplinary grounds;

(iii) Makes a withdrawal from his SAYE account;

(iv) Stops his monthly contributions into his SAYE account before the Plan matures.

(e) Proportionate payment of the Company’s 33 1/3% contribution shall be made to the employee if he:

(i) Retires from service;

(ii) Is retrenched or medically boarded out;

(iii) Dies; or

(iv) Is promoted or re-classified out of the bargainable group.

CLAUSE 20: ANNUAL LEAVE

(1) An employee shall be entitled to paid annual leave according to the following schedules:

(2) If an employee terminates his service or has his service terminated (except for dismissal on disciplinary grounds), he shall be entitled to prorated annual leave based on the number of completed months of service. For this purpose, if his last day of service falls on the 15th or later, he shall be considered as having served a complete month.

(3) For normal and 8-hour shift employees, annual leave taken on a Saturday shall be treated as half-day leave.

(4) The Company may declare in a year a maximum of six days mass vacation In conjunction with the Chinese New Year, Hari Raya Puasa, Deepavali and Christmas. However, the Company may operate on these days or change the dates of the mass vacation provided it allows the interest group to proceed on the planned mass vacation.

(5) Any employee with annual leave to his credit may apply in writing at least one week prior to the commencement of the leave. The Company shall grant such leave as requested subject to mutual arrangement between the Company and the employee with consideration to operational and production requirements.

(6) Employees may accumulate their annual leave up to a maximum of one year’s entitlement only.

CLAUSE 21: SICK LEAVE

(1} Every confirmed employee shall be eligible up to 14 days sick leave in a calendar year.

(2) Paid sick leave shall be granted only if:

(a) The employee informs the Company of his incapacity within 48 hours of its commencement; and

(b) A medical certificate issued by the Company doctor or a Government medical officer is submitted to the Company.

(3) No employee shall be entitled to paid sick leave during maternity leave.

(4) Absence from work arising from dental illness or treatment shall be regarded as normal sick leave under this clause, provided that a registered dental surgeon or Government dental officer certifies such sick leave.

(5) Sterilization leave granted by a Government medical officer shall be considered as hospitalization leave under clause 28 of this Agreement.

(6) An employee granted medical leave for contracting chicken-pox shall be considered as hospitalization leave under clause 28 of this Agreement.

CLAUSE 22: MATERNITY LEAVE

(a) Every female employee who has been employed by the Company for not less than 180 days immediately preceding the day of confinement shall be entitled to twelve (12) weeks of paid maternity leave subject to the conditions stipulated in the Employment Act and the Children Development Co-Savings Act, provided she has fewer than 4 living children at the time of her confinement and her child is a Singapore citizen at birth.

(b) Every female employee who has been employed by the Company for not less than 180 days immediately preceding the day of confinement, who does not satisfy the conditions in sub-clause (1) (a) above shall, in respect of each confinement, be entitled to 8 weeks of paid maternity leave and an additional 4 weeks of unpaid maternity leave, provided that she has fewer than 2 living children at the time of her confinement (unless those children were born during the same confinement).

(2) The employee shall submit her application for maternity leave not later than two weeks before the date of commencement of such leave.

(3) Maternity leave shall commence not later than two weeks before the date of confinement.

(4) Application for maternity leave shall be supported by a medical certificate from any registered medical practitioner or a Government maternity officer.

(5) Any absence from work as a result of miscarriage or abortion during the first seven months of pregnancy shall be deemed as normal sick leave under clause 21 of this Agreement.

(6) Upon expiry of the maternity leave, should the Company doctor or a Government medical officer certify an employee as medically unfit for duty, her absence shall be treated as normal sick leave under clause 21 of this Agreement.

(7) To help defray medical expenses, a lump sum payment of S$ 300.00 shall be paid to the female employee prior to her confinement for the first, second, third and fourth born child, provided that the Company has employed her for not less than 180 days. No lump sum payment shall be paid after the fourth born child.

CLAUSE 23: PATERNITY LEAVE

Every male confirmed employee shall be entitled to two days’ paid leave in the event of the birth of his first four children.

CLAUSE 24: MARRIAGE LEAVE

A confirmed employee shall be entitled to five days’ paid marriage leave for his first legal marriage registered at any time during his employment with the Company. The employee shall be required to submit a copy of his marriage certificate to the Company within one week of taking such leave.

CLAUSE 25: COMPASSIONATE LEAVE

(1) A confirmed employee is entitled to paid compassionate leave in the following cases:

(a) Death of parent, spouse or child – 4 working days

(b) Death of grandparent, parent-in-law, brother or sister – 3 working days

(d) Critical illness of grandparent, parent-in-law, brother or sister – 1 working day

The compassionate leave shall be taken consecutively. In the event that more than one family member dies and/or is critically ill at the same time, compassionate leave shall be granted concurrently in accordance with the prevailing limits.

(2) A critically ill person is defined as one who is warded in hospital and who is under intensive care or on the dangerously ill list.

(3) Paid compassionate leave shall not exceed a total of eight working days in each calendar year. An employee applying for such leave has to furnish evidence for verification.

CLAUSE 26: EXAMINATION LEAVE

(1) Every confirmed employee shall be entitled to apply for paid examination leave of up to five days in a calendar year for Company-approved courses. This provision shall also apply to employees attending courses under the Employee Education Assistance Scheme.

(2) Notwithstanding the above, the Company shall also grant full paid leave in excess of the five days for Company-sponsored courses.

(3) Examination leave is only granted for the days scheduled for examinations. All applications for examination leave must be supported by proof in the form of an examination schedule before the examination leave can be granted.

(4) Examination leave shall only be approved for first attempts.

CLAUSE 27: LONG TERM SICK LEAVE

(1)) In the event a confirmed employee, Is diagnosed and certified by the Company’s doctor or Government medical officer to have contracted tuberculosis, heart disease, cancer, diabetes, kidney disease, leukemia, AIDS or Parkinson’s Disease, which requires prolonged medical treatment and further medical leave is recommended by the Company’s doctor or Government medical officer, he shall be granted to an extended sick leave on the following basis:

CLAUSE 28: MEDICAL BENEFITS AND HOSPITALISATION

(1) Every employee shall be entitled to free medical attention, treatment and medicine prescribed by the Company in-house clinic.

(2) The Company shall reimburse the outpatient charges for medical attention, treatment and medicine obtained at the Government outpatient clinic.

(3) The Company shall also appoint a panel of 13 Company doctors and reimbursement of medical expenses shall be as follows:

(a) Up to S$15 – Full reimbursement

(b) From S$16 – SS25 – Employee pays S1.

(4) If the employee wishes to seek medical treatment from the Government outpatient clinic or the Company doctor during his working hours, he shall first obtain a referral letter from the Company in-house clinic before leaving the Company premises. Full reimbursement shall be given when the employee is referred by the Company in-house clinic.

(5) If the employee seeks medical treatment from the Government outpatient clinic or the Company doctor during his working hours and no sick leave is granted, his period of absence from work shall be unpaid, unless he is referred by the Company in-house clinic.

(6) If a confirmed employee is hospitalized, he shall be entitled to a maximum of 60 days’ paid hospitalization leave in any calendar year less any sick leave taken in the year,

(7) The Company shall pay up to the following limits for hospitalization subject to a maximum of 60 days In a calendar year In a medisave-approved hospital;

(a) Daily ward and meal charges – S$110

(b) Daily professional fees – S$ 60

Up to $4,000 – Full reimbursement

From $4,001 – $5,000 – 80% reimbursement.

(8) The Company shall not bear any medical expenses, ward charges, or other costs pertaining to the following:

(a) Medical and surgical appliances, including that of spectacles and other optical lenses, dentures, artificial limbs, or other prescribed external therapeutic aids.

(b) Optical services related to the cosmetic correction of eye vision.

(d) Certified mental illness.

(e) Self-inflicted injury or illness or disease caused by misconduct or moral turpitude.

(f) Illness or accident arising out of and in the course of employment which constitutes a valid claim under the terms of the Workmen’s Compensation Act.

(g) Illness, injury, or incapacity arising from the performance of any unlawful act, exposure to any unjustifiable hazards except when endeavoring to save human lives, provoked assaults, the use of drugs not medically prescribed, abortifacient measures, excessive consumption of alcohol, or any breach of the peace or disorderly conduct.

CLAUSE 29: DENTAL TREATMENT

The Company shall reimburse an employee up to S$200.00 in a calendar year for charges in respect of dental treatment incurred at any registered dental clinics.

CLAUSE 30: BASIC LIFE INSURANCE

A lump sum payment equal to 24 times the last drawn basic monthly salary of the employee shall be paid to his nominee in the event of the employee’s death.

CLAUSE 31: PERMANENT AND TOTAL DISABILITY INSURANCE

(1) Every employee with one year’s service shall be eligible for a permanent and total disability benefit of 24 times his last drawn basic monthly salary in the event that he becomes permanently or totally disabled by illness or accident.

(2) “Permanent and total disability” shall mean disability that is total and permanent such that there is neither then nor at any time thereafter any work, occupation or profession that the incumbent can sufficiently do or follow to earn or obtain any wages, compensation or profit. The total and irrecoverable loss of sight of both eyes or the loss by severance of two limbs or of one eye and one limb is considered as total and permanent disability.

(3) ‘Accident” shall be classified as having occurred outside working hours and precludes any industrial accident compensable under the Workmen’s Compensation Act.

(4) No benefits shall be payable for disability directly or indirectly wholly or partially resulting from –

(a) Intentional self-inflicted injury;

(b) Physical or mental infirmity or medical or surgical treatment thereof:

(d) Riot, civil commotion or war (whether declared or not); or

(e) Being under the Influence of intoxicating liquor and/or drug.

CLAUSE 32: SKILLS TRAINING

(1) The Company is committed to train and develop the employee to his fullest potential in order to upgrade their skills, raise their level of productivity and progress in their career development.

(2) The Union shall in cooperation with the Company, assist to identify and promote skills training for employees.

(3) The employee shall attend training and skills upgrading courses arranged by the Company. The employee’s training and courses completed shall be taken into consideration when appraising performance.

CLAUSE 33: UNIFORMS/SAFETY APPARELS AND GEARS

(1) The Company shall provide each employee two smocks / uniform each year. Additional smocks shall be issued in exchange for legitimate cases of wear and tear.

(2) Where appropriate, the Company shall provide employees with protective or safety apparel which shall be worn or used during the performance of their duties. Failure to do so may render them liable to disciplinary action.

(3) Employees provided with uniforms shall wear them whenever at work and shall take reasonable care of protective or safety apparels and gears issued to them.

CLAUSE 34: SAFETY COMMITTEE

The Company shall in cooperation with the Union establish a Safety Committee in accordance with the Workplace Safety and Health Act.

CLAUSE 35: NTUC FAIRPHICE COOPERATIVE SHARE

The Company shall make payment of S$13.00 per union member who purchases NTUC Fairprice Cooperative Share on presentation of the relevant share certificate.

CLAUSE 36: EMPLOYEES’ LIST

(1) The Company shall on signing this Agreement submit to Union a list of the employees coming within the scope hereof showing the employees

(a) Names;

(b) Identification numbers;

(d) New rates of pay;

(e) Service dates; and

(f) Highest educational levels

(2) The Company shall submit up-to-date lists as sub-clause (1) above as on 31st December of each year to reach the Union not later than 31st January of the following year.

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