EMPLOYEE HANDBOOK

Index Pages

Foreword…………………………………………………………………......................2

Introduction……………………………………………………………………………………..2

Beginning in India…………………………………………………………………………..2

Our Corporate Values……………………………………………………………………..3

Employment Policies……………………………………………………………………….3

Termination of Employment………………………………………………………….5

Salary Administration…………………………………………………………………….5

Leave Benefits………………………………………………………………………………….9

Medical & Insurance Benefits……………………………………………………..10

Other Benefits…………………………………………………………………………………11

Employee Communication……………………………………………………………17

Employee Grievance and Complaints…………………………………………17

Training…………………………………………………………………………………………… 18

Confidentiality of Company Information…………………………………..19

Security…………………………………………………………………………………………….20

Rules of Conduct…………………………………………………………………………….20

1
STMicroelectronics was created in 1987 by the merger of SGS Microelettronica of Italy and
Thomson Semiconducteurs of France with the aim of becoming a world leader in the sub-micron
era. The new company pursued an aggressive growth strategy, investing heavily in R&D, forging
strategic alliances with blue-chip customers and academia, building up an integrated presence in
major economic regions, and honing one of the world’s most efficient manufacturing operations.

Since its formation, ST has grown faster than the semiconductor industry as a whole and it has
been one of the world’s Top Ten semiconductor suppliers since 1999. Today, an unrivalled
combination of silicon and system expertise, manufacturing strength, Intellectual Property (IP)
portfolio, industrial and academic partnerships, and one of the industry’s broadest product ranges
makes ST a world leader in developing and delivering semiconductor solutions across the spectrum
of microelectronics applications.

You are now going through the ST India Employee Handbook. This Handbook summarizes the
policies as contained in the Company's Standard Operating Procedures/Local Operating
Procedures/Policy documents/policy decisions taken by the management from time to time. In the
following pages, you will find information on various HR policies and rules which relate to
employment, benefits, training, security etc. Please go through them thoroughly, before
committing yourself to any action covered by these policies. Please feel free to approach the
Human Resource Department for whatever assistance or clarification you may need.

In the rare event of disagreement regarding interpretation, the information that is expressed in the
Procedures shall be taken in context and deemed correct. The benefits expressed in the Handbook
and Procedures may be amended, withdrawn or added to the policies as deemed necessary. Any
such changes shall supersede or annul the previous policy effective from the implementation. In all
cases where a concern/issue may arise, Management's interpretation through the Human
Resources Department shall be final and conclusive.

AN INTRODUCTION

Microelectronics, as you may be well aware, is becoming absolutely vital to the success of the
World Economy, as it is essential for the advancement of industry, commerce, science, medicine
and the arts. STMicroelectronics is a key player in these arenas. The main objective of
STMicroelectronics is to provide its customers and partners around the world with leading edge
technology necessary for their strategic advantage, and the company strives to achieve this
through stress on innovation, quality and service.

STMicroelectronics is a truly international company, operating on a global scale in a world-wide

market. The Company's commitment to service is total and is customer-driven. To this end, Total
Quality Management (TQM) has become an integral part of the ST culture. Management and
employees work in cross-functional Quality Improvement Teams using various statistical tools
aiming at continuous and consistent improvement, built into every product and process from the
first step.

BEGINNING IN INDIA

STMicroelectronics made a modest entry into India in 1985 with the setting up of a Liaison Office
for SGS Microelectronica Pte. Ltd., Singapore. Following the merger of SGS Microelectronica &
Thomson Semiconductors in June 1987, the India office became the Liaison Office of SGS-Thomson

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Microelectronics, with the mission of marketing ST products in India. The decision to set up a
Design and Software Centre in NOIDA was motivated by the company's recognition of the technical
skills available in this country as also a part of its overall global strategy. In January 1990 the
company, was granted a letter of Intent to set up a 100% Export Oriented Unit for Integrated
Circuit Design, CAD Tools and Computer software.

OUR CORPORATE VALUES

Mission
To offer strategic independence to our partners worldwide, as a profitable and viable broad range
semiconductor supplier.

Vision
We aim at becoming the undisputed leader in multimedia convergence and power applications,
dedicating significant resources to product innovation and increasingly becoming a solution
provider.

Financial
To generate economic return equal to or better than the average of the top 10 world suppliers.

Social
To contribute to the well-being of every community in which we operate with particular emphasis
on environmental responsibility. People are our major asset and primary social concern.

Our Corporate Philosophy

The customers, employees and shareholders are the key stake holders of STMicroelectronics. Our
customers are especially important to us as they are the very purpose of our existence and key to
our success. From having the technology at the right time and at the right price through on-time
delivery and zero defects, we are committed to winning the confidence of the customers in the
Company, by providing the best service.

EMPLOYMENT POLICIES

Equal Opportunity
It is Company policy to provide equal employment opportunities for those having similar
qualifications, skills and aspirations. STMicroelectronics requires that all employment practices be
non-discriminatory and be based upon factors that are job related. Race, color, religion, sex, age,
national origin, therefore, play no part in the Company's employment practices. The Company is
committed to equal employment opportunity including but not limited to treatment, selection,
placement, transfers, training, promotions, compensations, benefits, termination, and all other
conditions or privileges of employment.

Recruitment
Employment by the Company is not to be construed as being fixed, either in job duties, work place
or work hours. As and when necessary, an employee may be assigned to another job within the
group and the terms of employment may be reviewed. Similarly, employees who have been
employed for specific jobs may also be given other jobs due to operational needs.

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Medical Examination
The offer of employment is subject to the new employee submitting a fitness certificate from a
qualified medical practitioner. The Company may also have a new employee examined for fitness
by the company Doctor if considered necessary.

Probationary Period
Unless otherwise stated in the appointment letter, a new employee will be on probation for 3
months commencing from the date he/she starts work. During the probation period, the employee
will be assessed on his/her suitability for confirmation. If necessary, the probationary period may
be extended for another 3 months. If at the end of this period the employee is not found suitable
for confirmation, the services would be terminated.

Change of Status
Employees must notify the Human Resources Department of any change in their status concerning
family, address, telephone numbers, or educational/professional qualification to enable the
Company to maintain up-to-date Employee records.

Transfers
All transfers are governed by the Internal Mobility Policy of the company as applicable to India.

Promotions
A promotional increase is granted when an employee moves to a higher-level position carrying
greater responsibility and classified in a higher salary grade.
The amount of increase is determined by:
• the grade level of the new job;
• the minimum of the salary of the new grade;
• the employee's position in the salary range;
• the salaries of others in the department including peers, managers and subordinates;
• the current promotional increase guidelines.

Working Hours
The company observes a 40 hour work week. Every employee shall clock his access card at in-time
/ out-time and is required to carry and display the access card at all times while in the premises of
the Company. The working hours shall be from Monday to Friday - (8.45 AM TO 5:30 PM) or in
shifts as may be decided by the Management from time to time.

Attendance
Every employee is expected to be at work on time. If he/she is frequently absent without
permission, this can lead to disciplinary action including suspension or termination of employment.
Employees must use their Access-cum-Identity card to mark their attendance.

Call-in
For occasional absences due to unforeseen reasons, an employee or any of his family members
must notify the employee's supervisor or manager whenever possible within the work day. The
employee should indicate the reason for the absence and the expected duration. If the employee is
continuously absent from work for more than two days without calling in, he is considered to have
voluntarily resigned from the Company without giving due notice.

Special Situation
If an employee is unable to work due to a handicap, continuing medical problem, or other special
situations, he should consult the medical practitioner and inform the Human Resource Department
as soon as the condition arises and subsequently submit medical certificate from the attending
doctor.

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TERMINATION OF EMPLOYMENT

Termination can be voluntary, involuntary and administrative.

Either the company or the employee can terminate employment by giving the other party a written
notice of his intention to terminate the contract of service or pay in lieu of notice. This will be as
per the terms of service agreement issued to an employee at the time of joining.

Voluntary Termination
Voluntary Termination is where the action is originated by the employee. These include
resignations; failure to return from leave of absence; and continued absence without call-in.
Employees resigning from the Company are to give 01 week's notice if they have not been
confirmed in their position and 01 month's notice if they are confirmed. The day on which the
notice is given is included in the period of notice.

Involuntary Termination
Terminations where the action is originated by the Company for reasons such as misconduct;
unsatisfactory work performance; excessive absenteeism; conduct not in the best interest of the
Company; and lack of work. The Company may dismiss, without notice, an employee on the
grounds of misconduct inconsistent with the expressed or implied conditions of service, after due
inquiry has been made.

Administrative Termination
Administrative termination is caused by retirement; death or total permanent disability. Employees
must return all Company items upon termination. Retirement age has been fixed as 60 years.

SALARY ADMINISTRATION

Compensation :

Salary Structure
The Company's salary structure is designed to provide salary rates for individual jobs that are
competitive in the Industry. Each job is evaluated as per the Hay Job Evaluation system, to identify
the skills and education required, responsibility involved and any other factors important to that
job. Based on the evaluation, the job is assigned to a salary grade within the Hay structure.
Within each salary grade is a salary range. This range includes a minimum, midpoint and maximum
pay rate. A low or higher position in the range is effected by factors such as time in the position,
individual skills, level of performance and level of past experience.

Annual Performance Review

All employees who have successfully completed their initial probation as on 31st December of a
given year, are eligible for the annual performance review on 1 January the following year. The
performance of individual employees will be measured against pre-determined objectives as set out
in the Performance Assessments and Development Process Form.

Formal reviews provide the opportunity for the employee and her/his manager or supervisor to
discuss past performance, future expectations and specific action to help him develop on the job. A
performance review may or may not be accompanied by a review of salary.

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Service Increment and Incentives
The Company normally pays service increments based on the following:
* economic situation;
* profitability of the company;
* internal and external salary equity; and
* individual employee's performance
Service increments are normally given once a year and are determined by the Employee's
Managers. This is the fixed portion of an employee's remuneration.

The Variable Payment : The variable portion of the employee's remuneration is given in the form
of MBO(Management By Objective).The MBO payment is a Company variable payment and will be
paid one-time if an employee is confirmed as on 31 December of the appraisal year, with the
exception of sales personnel who are administered under the Sales Incentive Program, provided
the employee remains in active service of the company as on 31 January of the forthcoming year.
An MBO incentive awarded to the employee yet unpaid will be forfeited if on the date of
disbursement, the employee is no longer in employment with the company.

Salary & Job Grade

Every employee is assigned to a job grade within the appropriate confidential salary structure and
each employee is paid a monthly salary within the range of that salary grade. He/she is eligible for
pay increase within that range. SALARY IS CONFIDENTIAL AND THE RESPONSIBILITY TO
MAINTAIN ITS CONFIDENTIALITY REMAINS WITH THE EMPLOYEE.

Payment of Salaries
An employee will receive his salary (comprising of Basic pay, House Rent Allowance, Special
Allowance, MSI, etc. less deductions if any) on the last day of the month through bank transfer
only, in a bank nominated by the company (currently Axis Bank, Noida). Under extraordinary
circumstances, salary can be credited on any other day than the last day of the month. Salary
notification will be provided by payroll through email. New joinees are required to open the salary
account as soon as possible.

Leave Travel Allowance (LTA)

Eligibility
All employees of STMicroelectronics India are entitled to an LTA of one (1) months prevailing
Monthly Gross salary. Employees who have joined during the course of the year, will be entitled to
a pro-rated LTA for the period they have been in employment in ST in the previous year. The
minimum period for which LTA would be paid in such cases, is one (1) month.

LTA falls due on the 1st of January every year for every completed year of service or part thereof.

An eligible employee can carry forward the LTA to the next year and claim the same for 2 years
together.

Any LTA not claimed before the end of the second year shall be paid off as an Ex-Gratia
payment (taxable) along with the January salary of the following year.

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Leave

The minimum Annual Leave required to be taken to avail LTA (if Tax exemption under the IT
Act is sought) is 2 days.

No leave is required to be taken if no IT exemption under the Income Tax Act is sought.

LTA Options
Annual LTA : Based on the option chosen by the employee, this is payable after the completion of
the current year i.e. in the following year beginning from January till next December. This is a lump
sum amount taken by the employee along with a min. of 2 days Annual Leave. The employee has
the option to claim tax exemption under the IT Act, twice in a block of 4 years as notified by the
government.
A) For travel by Air in Economy Class for self and family as defined in the Income Tax Rules.
B) For 1st Class A/C, if the travel is undertaken by rail or by recognized State Transport Co.
C) For Bus Fare, if the travel is undertaken by bus, incase the above mentioned modes of
transportation are not available for a particular destination.
The LTA is calculated as follows: (Sum of Monthly Gross of each month in previous year) / 12

Advance LTA : This is payable monthly (Monthly Gross Salary / 12) along with the salary for each
month (This monthly payment option was introduced in January 2007, while prior to this the
payment for the advance LTA would start from JULY of each year). Any changes in monthly salary
occurring on account of Annual Salary review or a promotion, is immediately reflected in the LTA as
well, in the month such change occurs. In other words, the impact on LTA is with prospective effect
i.e. it is a pro-rated payment.
In this case, the tax shall be deducted at source, as per the prevailing tax rate.

Procedure

To avail the benefit of a MONTHLY PAYMENT, employees will be required to intimate their
choice of payment to Payroll Section in the month of January every year.

To avail the LTA on an Annual amount, eligible employees will be required to submit an application
to the Payroll section in F&A, duly approved by the Department/ D.U.Manager and accompanied by
at least 2 days of sanctioned leave application.

Monthly Seniority Incentive

All new recruits joining STMicroelectronics Pvt. Ltd. ( apart from ones those acquired as part of
mergers & acquisition ) will be eligible for the Monthly Seniority Incentive ( MSI ) as per the India
Plan. This incentive will expire on completion of 7 years of service in ST India.

The equivalent Monthly Seniority Incentive (MSI) would be paid at different rates over the 7 years
period and has been calculated as follows :

Up to end of 3rd year : 16.70% of M.G

3rd year - 5th year : 25.00% of M.G
5th year - 7th year : 20.80% of M.G
More than 7 years : Nil

All employees who have joined STMicroelectronics Pvt. Ltd. due to Global Mergers & Acquisitions
are not eligible for the MSI Plan since their overall compensation has already been mapped
accordingly.

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Providend Fund
Every permanent employee in India shall be entitled to contributory providend fund at the
prevailing rate of 12% of Basic pay. The amount deducted from the employee's pay along with the
company's own contribution and administrative charges shall be paid into the notified bank account
with the Regional Provident Fund Commissioner. Contribution toward provident fund shall be made
from the date of joining of the employee.

Gratuity
Gratuity will be payable to an employee on separation (either resignation or termination) if he/she
completes 5 years service in the company at the rate of 15 days basic salary for every completed
year of Service. Gratuity payment received will not be subject to Income Tax as per the current
Income Tax Act for an amount upto Rs. 3,50,000/-. However, any amount received in excess of Rs.
3,50,000/- is liable for payment of Income Tax.

Illustration : Calculation of gratuity for an employee drawing a basic salary of Rs.5000 per
month will be done as follows.
Rs. 5000 / 26 x 15 x no. of years of service = Gratuity

Superannuation
The Superannuation Scheme is introduced by the Company as a 3rd retiral benefit besides
Provident Fund and Gratuity.
The Scheme stipulates that the Employer would contribute every month 15% of Basic Pay as
Superannuation Contribution to employee account.
An Employee is eligible for the contribution from the date of his/her joining the organization.
An employee is eligible for the Scheme benefit on attaining superannuation which is 60 years, as
per Trust Rules.

However, an employee can withdraw the Superannuation amount on resignation subject to

fulfillment of certain conditions as laid down in our Trust Rules.
The Conditions mentioned in the Trust Rules are as under :
Eligibility

Employee who resigns from the services of our Organization after Completion of 5 years of
Service 100% contribution made by the Employer.

Employees who resign from the services of our Organization 50% of contribution made by
the Employer After 3 years of service but before completion of 5 years Of service.

Employees who leave the Organization before completion of 3 years of Service Not entitled
for the Scheme Benefit.
Any withdrawal of Superannuation amount on resignation is subject to Income Tax in the hands of
the employee. On resignation, the withdrawal is paid in the following manner :

Employees who put in 5 years of service and opt for withdrawal = 1/3rd of the contribution
can be commuted and the 2/3rd is paid as an Annuity by LIC in the form of Pension. (The
1/3rd amount is subject to income tax).

Employees who put in less than 5 years of service And opt for withdrawal = 50% of the
contribution can be commuted and the rest is paid as an Annuity by LIC.

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LEAVE BENEFITS

Annual Leave
Annual leave earned by an employee is based on the number of completed years of service worked
in the Company. Upon confirmation, an employee is entitled to paid annual leave as follows:

JG 14 & above JG 11 to 13 JG 8 to 10
1st and 2nd year 18 days 15 days 13 days
3rd to 5th year 21 days 17 days 15 days
6th to 14th year 24 days 19 days 17 days
15th year and above 24 days 19 days 18 days
The Company may at its discretion, schedule mass vacations which will be debited against the
annual credit of each employee. If a confirmed employee is certified sick and granted medical leave
during the vacation period, additional sick leave may be granted by the Company and the
employee will be credited with the actual number of days of sick leave taken.
Employees are allowed to accumulate their annual leave up to 1 year's entitlement only. Any
annual leave in excess of 1 year entitlement will be forfeited.

Sick/Hospitalization Leave
Paid Sick leave is provided when a confirmed employee is certified unfit for work by a registered
Doctor. Upon confirmation, the employee is allowed up to 20 work days paid sick leave and 50
work days (inclusive of the 20 work days sick leave) paid hospitalization leave in the calendar year.
An employee will be eligible to avail of paid sick leave if the period of absence due to sickness 2
days or more. The employee will need to provide a certificate from a qualified and certified medical
practitioner (doctor) at the time of claiming sick or hospitalization leaves. In addition, sick leave is
not paid for any period of temporary disablement covered and compensated under the Workmen's
Compensation Act or other relevant statutory/ordinances.

Extended Medical Leave

An employee who has served the Company for more than 3 years and is certified in writing by the
qualified doctor to be suffering from a prolonged serious illness (whether requiring hospitalization
or not) shall be entitled to a maximum of 6 months leave on half-pay, after the employee has
exhausted his normal sick leave and annual leave.

Casual Leave
Employee may take up to 10 days of Casual Leave in a calendar year. This leave is granted for
exigencies such as personal work, injury due to accident, sickness of self or a family member,
bereavement in the family, etc. Casual Leave may not be taken for more than 2 days at a stretch.
This leave, normally, cannot be clubbed with any other type of leave that may be due to an
employee. Casual leaves not availed during the year will lapse at the end of the calendar year.

Compassionate Leave
Confirmed employees are allowed to take up to a maximum of 8 working days of compassionate
leave in a calendar year in the event of the following unforeseen circumstances:

A bereavement in the immediate family - 5 consecutive working days

A critical illness in the immediate family - 3 consecutive working days

The Company will also give a cash donation to help the employee or his family to tide over any
financial difficulties. The amount of the donation is as follows :
a) Death of an employee's immediate family member - an amount equivalent to INR 8000
b) Death of an employee - an amount equivalent to INR 24000

9
The Company, through the employee's immediate superior, may arrange to send wreaths to the
employee on the death of an immediate family member or to the employee's family on the death of
the employee. The above entitlement should include the cost of the wreath sent.
Immediate family members include parents, grandparents, parents-in-law, legal spouse and legal
children, brothers and sisters.

Marriage Leave
Confirmed employees are eligible for 5 consecutive working days marriage leave on the occasion of
their first legal marriage registered while in the service of the Company.

Maternity Leave
All confirmed female employees who have worked with the Company continuously for not less than
80 days are entitled to 3 months paid maternity leave for each childbirth if, at the time of
confinement, she does not have 2 or more surviving children.
However, during the first 7 months of pregnancy, absence from work due to illness arising out of
such pregnancy (including miscarriage) shall be considered as normal sick leave.

Paternity Leave
All confirmed male employees are entitled to 2 days' paternity leave on the birth of their first 3
legal surviving children.

Examination Leave
Confirmed employees who are sponsored by the Company to attend a course or are enrolled in a
Company-approved course are entitled to paid examination leave for the number of days required
for examination. This applies only to first examination, and excludes supplementary or repeat
examinations for candidates who missed or failed the first sitting.
An employee who goes on leave for examination without the prior approval of his supervisor and
Human Resources Department, is not entitled to paid examination leave. Documentary evidence in
the form of an examination schedule is required before examination leave is granted.

MEDICAL AND INSURANCE BENEFITS

Medical Reimbursement (including Dental treatment)

All employees are entitled to reimbursement of the actual expense incurred for medical treatment
subject to the limits given below.
The maximum reimbursement per financial year is as follows:

Marital Status Maximum Reimbursement/Year

Single Rs. 15,000/-
Married Rs. 18,000/-

Maximum reimbursement per year mentioned above includes medical as well as dental/optical
reimbursement. An employee is allowed to claim medical reimbursements for self and dependents
up to the limits mentioned above.

However, out of the above amount, an employee can claim reimbursement for dental up to a
maximum of Rs.5,000/- in a year for self & dependants and for Optical, maximum reimbursement

10
allowed is Rs.3,500/- in a year for self & dependants. For optical, employees have to attach eye
testing card along with the expense claim.

The amount of reimbursement can be claimed from the date of joining and an employee need not
wait till his confirmation.

Group Insurance Benefits

> Group Personal Accident Insurance Policy
> Incase of accidental death : 24 times of monthly gross salary.

Life Insurance Policy

> Incase of death due to any reason: 24 times of monthly gross salary.
> Note : Incase of death due to accident, the cover is valid in addition to the coverage under the
Group Personal Accident Insurance Policy as above.

Group Mediclaim Insurance Policy

> All confirmed employees and their dependants (Spouse, 2 Children & fully dependant parents) are
eligible under this scheme.
> Hospitalization and Surgical expenses are reimbursed – coverage is Rs. 7 lacs per annum
> Maternity cover – Rs.100,000 per childbirth, upto 2 children.

OTHER BENEFITS

Cafeteria

The Company has a well-equipped Cafeteria, which offers subsidized Vegetarian and Non -
Vegetarian food to all employees. There is a special counter offering Continental Veg. and Non-Veg.
cuisines which can be obtained on showing the access card. Also available is Fruit Lunch which can
be obtained by using the same card as the Veg. lunch.

Committees
The Company encourages and supports employees in recreation, sporting, health & hygiene and
community & environment related activities. There are different committees formed which are
involved in separate functions & activities relative to the above mentioned areas.

Cultural Committee called “After 5” is a group of volunteers who are talented in the fields of
music, dance & dramatics. This committee starts their work after 5 o’clock and entertains us at
almost all the site events.

Sports Committee organises a series of sport events & tournaments at the site for employees like
football, volleyball, table tennis, etc. ST encourages its employees to participate in external
11
tournaments also, e.g. Sports Quizzes, Lawn Tennis sponsored by Agilent, etc. These activities
provide for a good working relationship and team spirit amongst the employees. A gymnasium is
also there for the health-conscious.

Canteen Committee takes active part to ensure that employees are served with healthy, hygenic &
nutritious food. The canteen staff, kitchen and other areas of the cafeteria are inspected regularly
by them to ensure hygienic practices being followed.

CES Committee is involved in social & environmental related activities. They also organize
programs & stalls from time to time at the site for general awareness of the employees related to
our responsibility towards society & environment.

Employee Service Recognition

The Company recognizes long and continuous employee service through service recognition awards
at 5-yearly intervals and at retirement. The recipient must be an employee at the time the award is
presented or is due to retire after observing the service anniversary.
Continuous service means uninterrupted service which includes service whilst on transfer, or
temporary assignment to the other STMicroelectronics business units. However, employees on
unpaid leave of absence of whatever duration will not have these periods recognized as service.
Service awards are in the form of gifts inscribed with the Company logo or appropriate inscription
denoting STMicroelectronics, as follows:

Service Award for Completion of:
05-years service
10-years service
15-years service
20-years service
25-years service
Employees who have completed 5,10 & 15 Years of service with ST India are eligible for an
allowance of Rs. 2,500/-, Rs. 3,500/- & Rs. 4,500/- respectively for Dinner with Family in
any Restaurant or towards expenses on lodging/boarding for staying in a hotel/resort
supported with necessary bills/receipts.

Retirement Award
Less than 10 years of service
10 years or more but less than 15 years
15 years or more but less than 20 years
20 years and above

Arrival of New Born

The immediate supervisor may arrange for flowers up to a value of Rs. 250/-to be sent to the
employee on the arrival of the new born baby.

Shifting Allowance

To facilitate greater work life balance, ST India encourages its employees to live closer to the
office!
Accordingly employees who shift to a rented accommodation in the vicinity of the office, will be
eligible to claim one time shifting allowance.

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GREATER NOIDA/NOIDA

Employees who are shifting to Noida or Greater Noida, will be eligible to claim one time shifting
allowance subject to the following limits:

Single : Rs.3,000/-
Married : Rs.5,000/-

Those shifting from outstation to the above mentioned places will also be eligible for the same.
Those claiming this allowance should give proof of shifting residence to the HR department.
Employee shall not be eligible for this allowance, incase he/she is shifting from Noida to Greater
Noida or vice-versa. Also shifting allowance shall not be applicable, incase of shifting within the
same city, i.e. Noida to Noida or G.Noida to G.Noida.

One time brokerage equivalent to 1 month rent is reimbursable to employees who are shifting into
a rented accommodation.

Documents to be submitted with the claim: A photocopy of Lease Deed between the landlord /
owner and the employee to be submitted to Finance Department.

The employees at the time of claiming reimbursement of brokerage shall submit to the Finance
Department a proper receipt, along with the bill of the brokerage charges paid to the property
consultant.

BANGALORE

The localities which will be covered in this program are: Doddanekundi, Mahadevapura, Garudachar
Palya, Karthik Nagar, Narayanapura, Aswath Nagar, Marathalli, Basava Nagar and Vibhutipura. The
one time amount payable in case of shifting to any of the above mentioned places is

Single : Rs.3,000/-
Married : Rs.5,000/-

This program, consequent to movement of ST India Bangalore Office from JP Techno Park & Indira
Nagar ( formerly Genesis Office ) to Ferns Icon, Doddanekundi, Outer Ring Road (K.R.Puram-
Marathalli), Bangalore – 560037, is effective 1st July,2009.

Employees relocating from outside Bangalore to the localities as described above are eligible for
the onetime allowance. However, those relocating, (i.e. Marathalli to Doddanekundi, Karthik Nagar
to Aswath Nagar, etc.), within the above listed localities aren’t eligible for the shifting allowance.

The benefit is also open to those who may have availed previously either at Bangalore or at Noida /
Greater Noida. However, in such cases the window will close on May 31, 2010.

Documents to be submitted with the claim: A photocopy of Lease Deed between the landlord /
owner and the employee to be submitted to Finance Department.

In addition, one time brokerage equivalent of 1 month rent is reimbursable to the employees who
are shifting into a rented accommodation under the above program.

The employees at the time of claiming reimbursement of brokerage shall submit to the Finance
Department a proper receipt, along with the bill of the brokerage charges paid to the property
consultant.

13
Relocation Policy

SCOPE
This policy covers all units of ST in India, including subsidiaries. This policy is applicable to all
new hires & transferees joining any of the units of ST in India.
All NEW HIRES who are relocating to any of the units of ST in India from any city, town or
location. Minimum Distance to be 150KMS for relocation in order this policy becomes
effective.
All EXISTING EMPLOYEES who may have been transferred between any ST locations in India
or from any ST location worldwide to any of the ST locations in India.

GENERAL
o All claims / re-imbursements would be processed by Finance department and
the same will be credited to the employee’s salary account after the expense
claim is approved by all concerned (viz. HR & DU/Dept Manager)

o For NEW HIRES, relocation expenses to be claimed within 3 months of joining

ST beyond which the benefit will lapse. Any exception to this will be treated on
merit and may be approved by the Site Director as deemed fit.

o Existing EMPLOYEES transferred to a new location are required to submit their

claims within 2 weeks of the relocation.

o If an employee (NEW HIRES / TRANSFEREE) resign from the services of the

company with 12 months from the date of joining / transfer, the entire amount
incurred towards the employee’s relocation expenses( for shifting goods, travel
expenses for self & family, brokerage, etc.) would be recovered in full at the
time of final settlement.

o All reimbursements should be through the prescribed form, PR–5 Form, as per
the prevailing rules of reimbursements, as followed by the Finance
Department.
o This Policy supersedes any other policy in existence for the payment of
relocation expenses to employees, with immediate effect.
o The Management reserves the right to amend, revoke or withdraw the policy at
its discretion at any time it deems fit.

Leased accommodation
The Company will accept to sign a lease agreement on behalf of the employee, only if the
employee is unable to get a residential accommodation on personal lease. All payments in
connection with the lease, such as rentals etc. shall be deducted from salary of the concerned
employee and remitted to the Flat/house owner directly or handed over to the employee through a
cheque. The employee shall be required to sign an Agreement in a standard format to Lease with
the Company, prior to the signing of the lease with the Flat/House owner, which shall be operative
until the termination of the Lease Agreement. The Company shall reimburse money paid towards
brokerage (one-time payment of upto 1 month rent). Employees can claim the same through Non-
T&E Claim Form available at the Finance Website (http://ipdf.dlh.st.com/finance/Non-
Travel%20Expense%20form.pdf), which should be supported with original receipt of payment
made to the broker.

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Also, a Security deposit is paid by the Company as per the following details :
a) Delhi & NCR – If an employee opts for leased accommodation, he/she is entitled to an
advance for Security Deposit equivalent to 3 months’ rent or 3 months’ Gross Salary,
whichever is lower, subject to a maximum of Rs. 60,000. This will be paid directly to the
house owner and will be recovered from the employee’s salary in 6 equal monthly
installments.
b) Bangalore – If an employee opts for a leased accommodation in Bangalore, he/she is
entitled to an advance for Security Deposit equivalent to a maximum of 12 months’ rent or
Rs. 60,000, whichever is lower. This will be paid directly to the house owner.
For any amount beyond Rs. 60,000, if required, the employee may take an advance from
the Company subject to a maximum limit of Rs. 60,000. This will be recovered from the
employee’s salary in 12 equal monthly installments. Therefore, at any given point, the total
outflow to an employee under this scheme shall not exceed Rs. 1,20,000.

Employees who wish to avail the above benefit must either submit a written application or request
through email to Finance (Contact person : Challa Mani; email id : challa.mani@st.com).

Taxi Arrangement

Employees required on account of unusual work exigencies to stay late in office may book a taxi
with their group representatives within a fixed time before close of office hours. This has to be with
the prior consent and approval of the Department Head. Overstay in office on account of one's own
work requirements shall not constitute valid cause for booking the transport.

Mileage Claim
Employees required to undertake business visits or attend office on closed days, and use their own
conveyance for travel shall be entitled to claim reimbursement for distance traveled at the
prevailing rate. The current rates are:

For Four Wheelers = Rs. 8.00/- per kilometre

For Two Wheelers = Rs. 5.75/- per kilometre

This reimbursement can be availed only through T&E system and is subject to prior approval from
Departmental Manager. Each claim needs to be supported by justification (in description column)
and signed by DU Manager for submission to Payroll Section.

Hiring bonus
Hiring Bonus is payable to any employee on whose recommendation a candidate has been hired in
the company.
• Employee wishing to recommend a candidate for employment at ST will need to forward the
resume of the person duly signed and dated along with a recommendation letter to the HR
department. The employee will be required to act as a facilitator between the candidate and
HR until the hiring is completed.
• The quantum of bonus shall be determined based on salary of the Job Grade to which the
new incumbent is hired.
• The disbursement of bonus shall be as follows :
- On the new employee completing
- 03 months service - 25% of entitlement
- 06 months service - 25% of entitlement
- 09 months service - 25% of entitlement
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 - 01 year's service - 25% of entitlement
• In case the new incumbent is given an offer, but does not join the company, no bonus is
payable. Similarly, in case the new employee leaves the company's services without
completing the stipulated period mentioned above, the remaining portion/s of the bonus
amount shall not be payable.
• It shall be the responsibility of HR to intimate the Finance department of any claim amount
matured and payable.
• Claim for Hiring Bonus may not be entertained, if the above process has not been followed.
• Employees who cannot benefit under the scheme include :
o Employees related to HR function
o Hiring Manager Chain (including Interview Panel)
o Senior Management at Site & Department
• Employees referring former interns / subcontractors for permanent positions cannot benefit
under the scheme

Loan Interest Subsidy on Two-wheelers and Cars

The loan subsidy scheme has been introduced to help the employees purchase a vehicle at a low
interest burden. Employees can avail loans for purchase of two-wheelers or cars (as applicable)
from financial institutions and remit the monthly installment directly. The Company will reimburse
the interest subsidy on the eligible loan amount on a deferred basis after proof of purchase of
vehicle has been submitted to payroll.

Quantum of subsidy and eligibility :

A. Two -wheelers : 100% subsidy on interest to be reimbursed for a loan amount of a maximum
of Rs.40,000/- payable on a deferred basis.
All confirmed employees from Grade 8 onwards are eligible for the scheme

B. Cars : 75% subsidy on interest will be reimbursed to employees for a loan amount of a
maximum of Rs. 2,50,000/- payable on a deferred basis.
All confirmed employees in Grade 11 and above are eligible for the scheme.

The scheme is applicable for purchase of both old and new vehicles. The scheme covers interest up
to a maximum of 17% for old and new vehicles.
Employees interested in availing the benefit under this scheme are advised to contact the HR
department for details.

Service Apartment
This scheme has been especially formulated to provide affordable and good lodging/boarding
facilities to the new outstation entrants joining ST, to enable them to settle in NOIDA. This is also
to optimize the cost related to transit accommodation for employees who are on overseas
assignment and are required to be at NOIDA for a few days, during transit.

Eligibility : New Joinees coming from outstation, other than those from Delhi, Gurgaon,
Faridabad, NOIDA or Ghaziabad, can avail this facility on joining the company. Married employees
can be accompanied by spouse and children but are entitled to one room only.

Duration of Stay : A person can avail this facility for a period of 15 days which may be
extended for a maximum of 3 months subject to availability of rooms.

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Charges/Payment : A sum of Rs. 2500/- (Rs. 4000/- for married employees, and if utilizing the
facility with family) per month will be charged towards lodging facilities. This will be deducted from
the salary of the employee. Accommodation upto 15 days will be free of charge (including rent and
electricity). Employees will also be entitled to a daily allowance at the rate of Rs. 200/- per day for
a maximum of 15 days. Stay above 15 days will be charged and rent will be recovered from
employee's salary. However, if the stay is less than 30 days, the amount will be deducted on a pro-
rata basis. Additionally, employees will be required to pay actual per head cost of electricity as and
when the bills are received from the authority (not including the first 15 days).

All additional facilities like food, laundry will be charged separately. Payment is to be made to the
service provider by the employee on a monthly basis or at the time of leaving the apartment,
through cash/cheque.

Business Cards
Business Cards are issued to employees on request basis, once they get confirmed in the
organization. The employee, in order to get the business cards printed may contact their concerned
Department DCA, who will then forward the request to Employee Services for validation of the
Designation & onward request to Finance, for final printing of business cards.

The maximum lead time for printing of business cards is 30 days.

EMPLOYEE COMMUNICATION

Communication
The Company believes that open communication with employees is essential to business operations
and employee satisfaction. All supervisors or managers have a prime responsibility for
communicating with their employees in all matters affecting business operations. General
information relating to the business or to employees is provided to managers, supervisors and
employees from many areas of the company. This information is communicated in many forms
including:
- Newsletter
- Group meetings like Employee Forums, Employee Contact Meetings
- Electronic Mail
- Bulletin Boards

Managers and supervisors have the responsibility to cascade this information to their staff. The
Company also publishes Employee Newsletters on a regular basis both from corporate as well as
local known as "World Class" and "Sanskriti" respectively.

EMPLOYEE GRIEVANCE AND COMPLAINTS

The company recognizes the value and importance of full discussion in solving misunderstandings
and preserving good relations between Management and employees. All employees are responsible
for raising issues and problems that need to be solved. The procedure provides for the grievance to
be referred to the employee's immediate supervisor and continuing up to the Site Management if
necessary. The open door policy is a safeguard against any possible inequitable treatment. All
employees are therefore assured that every effort will be made to resolve problems to their
satisfaction. Under no circumstance will an employee be penalized for presenting a complaint to the
supervisor or to members of Management by following this procedure.

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TRAINING

In-House Training
The Company organizes relevant training for employees in order that they can perform to their full
potential. Training covers a range of technical, professional, personal development and
management development courses.
The employees are also asked to communicate their development related areas to the Department
head at the time of performance evaluation. The relevance of the same is analyzed by the
Department Head and communicated to HR through the Development section of the Appraisal
form.

Employees are also encouraged to visit the STU (ST University) learning catalogue and register for
programs listed through the e-HR approval process. If the request is validated by the manager, the
names are picked-up for the sessions, as & when they are organized.

External Training
These trainings are largely Leadership trainings based on the ACE (Ability, Character & Execution)
Model. The faculty is decided by the Country HR Manager, in consultation with the Site
Management & Manager – OD & Learning.

Employee Education Assistance

Employees with at least one year's service are eligible for educational assistance for any diploma or
degree programs offered by bona-fide institutions, and approved by the Company. Courses must
be related to the employee's current work or would prepare him for advancement within the
Company. The courses undertaken must be approved by the Company and will be confined to part-
time local studies from a recognized bona-fide institution which grants academic or professional
certification upon successful examination. Employee needs to initiate approval in the approval form
before taking up any program (Approval Form available under Quicklinks at the HR Webpage).
Correspondence courses and courses with no recognized graduation qualification will not be
supported. The cost of tuition and registration/examination fees will be computed on the basis of
an integral unit of the course, and excludes supplementary study tuition cost.

The employee is reimbursed up to a maximum of 80% of the cost of the tuition and
registration/examination fees incurred in connection with the course undertaken. It will be granted
for the first attempt of the term, part or the module. There will be no reimbursement for cost
incurred for re-sitting a course or an examination.

An initial 40% of the cost will be reimbursed on successful completion and on presentation of
passing grades & the originals of the official receipts of the course. The remaining 40% shall be
reimbursed if the employee remains in service with the Company for a period of 24 months after
the successful completion of the whole course. Claims for reimbursement should be accompanied
by documentary evidence from the school or institution together with original receipts of fees and
tuition paid in connection with the course undertaken.

Time off to sit for the examinations will only be granted if the employee is sitting the examination
for the first time. The employee will not have time-off or paid leave for study or for attendance of
class. In addition, no meal, transport or overtime allowances are paid for attending course lectures,
tutorials or examinations.

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CONFIDENTIALITY OF COMPANY INFORMATION
Company Information
It is the responsibility of each employee to maintain confidentiality with respect to the Company of
its :

• hardware and software designs

• business plans
• human resources records
• engineering drawings
• processes and methods
• telephone directories
• customer lists, etc.

STMicroelectronics takes steps to ensure that all confidential and proprietary information is
safeguarded. This includes restricting access, prohibiting duplication of certain documents and
other reasonable measures to prevent disclosure.
It is critical that certain information be kept in confidence from other employees and outsiders.
Inventions, ideas, concepts, etc. relating to STMicroelectronics business that are conceived or
made during your employment or for a year afterward are the property of the Company. Patents,
for example, are assigned to STMicroelectronics Ltd.
On commencement of employment, a new employee is required to enter into a separate agreement
with the Company whereby he/she undertakes not to disclose any Company information to any
unauthorized third party.

Conflict of Interest
The Company recognizes that an employee may have business interests outside the Company.
However, if the interest is of such an extent or nature that his decisions might be affected or
determined by it, then the employee must report this situation to his supervisor or the Human
Resources Department.
A conflict of interest exists whenever an employee's loyalty to the company could be affected by an
actual or potential personal or family benefit from another source. Examples of conflict of interest
are:
• a consulting or employer/employee relationship with a competitor, customer or supplier; or
• involvement in another business using STMicroelectronics material or intellectual assets; or
• any other personal gain from outside of the Company resulting from employment with
STMicroelectronics.

An employee may not accept a position or any type of compensation from an actual or potential
customer, vendor or competitor of STMicroelectronics without prior written approval from the
Company.
When a new employee joins the Company, he will be required to enter into a separate agreement
with the Company whereby he undertakes to make full disclosure of possible conflict of interest
situations, and not to accept a position or any other type of compensation from an actual/potential
customer, vendor or competitor without prior written approval of the Company.

Enquiries
Employees should not try to speak for the Company. Requests from the news media or outsiders
for information about the Company, its products, plans or practices should be referred to the
Department Head or the Human Resources Manager.

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SECURITY

The Company maintains strict security to protect both employees and Company assets.
No Company property should be taken out of the premises without written authorization. Security
officers will ensure to protect and safeguard the Company's property.

Employee Access Card

Every employee is issued an access card which grants him access to the company premises which
is to be worn at all times. Lost cards can be replaced after payment of a replacement charge of Rs
250/- for the card and Rs 150/- for the card-keep. New employees are issued temporary access
card which is to be returned on receipt of the permanent card.
Outsiders may not enter the Company premises except when invited for business purposes. Visitors
including customers, vendors, contractors and job applicants are given limited access cards. Such
persons must be escorted by the employee concerned beyond the reception area, only if required.

Parking/Vehicular Entry
Parking is in designated spaces only. Employees are advised to maintain safe, low speeds within
company premises. All vehicles may be subjected to security checks.

Property Control
The movement of Company and personal property in and out of the building is strictly monitored.
To control such movement, a system of property passes is used. These passes require a
Department Manager's and/or Finance & Administration Department's written approval and the
passes must be endorsed by the respective authorized signatories in order to be accepted by the
security officers. In the event of company property leaving our premises, the same must be
endorsed by F&A after recording in Fixed Assets Register.
Cameras are not allowed in the Company premises. Where needed for business purposes, written
approval from the Department Manager and/or Human Resources Department is required before
cameras can be brought into the Company's premises.

Evacuation Plan
The Company has an evacuation plan with clearly marked exits that are to be used in the event of
emergency. Employees should become familiar with the location with these exits in their work area.
When the fire alarm sounds, each employee should exit the facility via the nearest emergency exit
in a timely and orderly manner, and meet at the pre-arranged assembly area of the center. For
this, Fire Safety drills and training will be conducted by the Facilities department from time to
time.

RULES OF CONDUCT

Employee Conduct
Employees are expected to behave at all times to reflect credit upon STMicroelectronics and to
respect all Company rules.
Rules are based on generally accepted norms of behavior and have been established to:
• promote good working relations;
• contribute to the efficient operations of the business;
• and to protect the property and interest of the Company, working colleagues, vendors and
customers.

20
Discipline
If any Company rule is violated, disciplinary action may be taken. Serious misconduct could lead to
immediate suspension and even termination of employment.
The employee's immediate supervisor is responsible for assessing any incident, consulting as
needed with higher levels of management and the Human Resources Department and
recommending any disciplinary action.

Disciplinary Procedure
The Company administers discipline in a fair and progressive manner, taking into consideration the
needs and rights of individual employees to be heard and to understand fully any action that
affects them.
Discipline is applied as follows:
a) Employees on probation b) Confirmed Employees
- Counsel - Discussion
- Guidance (Written) - Guidance (Written)
- Extended Probation or - Termination
Termination

Corrective Action
Although it is the Company's intent to provide continuous employment to all employees, conditions
may dictate that the Company take prompt action when an employee shows poor performance
and/or conduct. Every effort will be made to affect prompt and amicable solutions to problems
through informal discussions and counseling.

If an employee fails to improve within a reasonable period of time, a written warning may be
issued. He will then be placed on a probation period, from 1 to 3 months as the supervisor deems
fit.
This written warning will be kept in the employee's personal file. At the end of this period, the
services of the employee shall be terminated if he does not show significant improvement in his
work.

Dress Code
All employees should use discretion in wearing attire that is appropriate for the office and customer
interaction.
The employee is expected to come to office in Formals or Smart Casuals. Any other dress which
does not gel with the professional decorum is not appreciated & therefore will need to be avoided.
The Company maintains a business casual working environment.

Major Infractions
An employee is liable for suspension or even dismissal without preliminary disciplinary procedure if
he/she commits a major infraction of rules in the Company premises.
Examples are:
• Theft or fraud
• Physical violence (actual or threatened)
• Clocking in/out for another employee
• Willful destruction of Company property
• Disclosure of Company secrets
• Gross insubordination
• Possession of unlawful or illegal items
• Deliberate violation of safety rules
• Other conduct which could bring serious discredit to Company
21
• PDA (Public Display of Affection)
• Sexual Harassment

22