7
 
 
 
Exhibit 10.2
 
EMPLOYMENT AGREEMENT
 
 
This Employment Agreement (this “Agreement”) is made as of February 22, 2011, by
and between First Solar, Inc., a Delaware corporation having its principal
office at 350 West Washington Street, Suite 600, Tempe, Arizona 85281
(hereinafter, “Employer”) and T.L. (“TK”) Kallenbach (hereinafter, “Employee”).
 
WITNESSETH:
WHEREAS, Employer and Employee wish to enter into an agreement relating to the
employment of Employee by Employer.
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants, terms and conditions set forth herein, and intending to be legally
bound hereby, Employer and Employee hereby agree as follows:
 
ARTICLE I. Employment
 
1.
    Term; At-Will Nature of Employment. Employer hereby employs Employee as a
full-time, at-will employee, and Employee hereby accepts employment with
Employer as a full-time, at-will employee. Employer or Employee may terminate
this Agreement at any time and for any reason, with or without cause and with or
without notice, subject to the provisions of this Agreement.

 
1.2        Position and Duties of Employee. Employer hereby employs Employee in
the initial capacity of President, Components Business Group for Employer and
Employee hereby accepts such position. In this position, Employee initially
shall report to Employer's Chief Executive Officer (the “Supervisor”). Employee
agrees to diligently and faithfully perform such duties as may from time to time
be assigned to Employee by the Supervisor, consistent with Employee's position
with Employer. Employee recognizes the necessity for established policies and
procedures pertaining to Employer's business operations, and Employer's right to
change, revoke or supplement such policies and procedures at any time, in
Employer's sole discretion. Employee agrees to comply with such policies and
procedures, including those contained in any manuals or handbooks, as may be
amended from time to time in the sole discretion of Employer. Employee shall be
based in Tempe, AZ but shall be required to travel to such locations as shall be
required to fulfill the responsibilities of his position.
 
1.3        No Salary or Benefits Continuation Beyond Termination. Except as may
be required by applicable law or as otherwise specified in this Agreement, or
the Change in Control Severance Agreement between Employer and Employee dated as
of the date hereof or as may be amended from time to time (the “Change in
Control Agreement”), Employer shall not be liable to Employee for any salary or
benefits continuation beyond the date of Employee's cessation of employment with
Employer.
 
1.4        Termination of Employment. Employee's employment with Employer shall
terminate upon the earliest of: (a) Employee's death; (b) unless waived by
Employer, Employee's “Disability”, (which for purposes of this Agreement, shall
mean either a physical or mental condition (as determined by a qualified
physician mutually agreeable to Employer and Employee) which renders Employee
unable, for a period of

 

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at least six (6) months, effectively to perform the obligations, duties and
responsibilities of Employee's employment with Employer); (c) the termination of
Employee's employment by Employer for Cause (as hereinafter defined); (d)
Employee's resignation; and (e) the termination of Employee's employment by
Employer without Cause. As used herein, “Cause” shall mean Employer's good faith
determination of: (i) Employee's dishonest, fraudulent or illegal conduct
relating to the business of Employer; (ii) Employee's willful breach or habitual
neglect of Employee's duties or obligations in connection with Employee's
employment; (iii) Employee's misappropriation of Employer funds; (iv) Employee's
conviction of a felony or any other criminal offense involving fraud or
dishonesty, whether or not relating to the business of Employer or Employee's
employment with Employer; (v) Employee's excessive use of alcohol; (vi)
Employee's unlawful use of controlled substances or other addictive behavior;
(vii) Employee's unethical business conduct; (viii) Employee's breach of any
statutory or common law duty of loyalty to Employer; or (ix) Employee's material
breach of this Agreement, the Non-Competition and Non-Solicitation Agreement
between Employer and Employee entered into on the date hereof or as may be
amended from time to time (the “Non-Competition Agreement”), the Confidentiality
and Intellectual Property Agreement between Employer and Employee entered into
on the date hereof or as may be amended from time to time (the “Confidentiality
Agreement”) or the Change in Control Agreement. Upon termination of Employee's
employment with Employer for any reason, Employee will promptly return to
Employer all materials in any form acquired by Employee as a result of such
employment with Employer, and all property of Employer.
 
1.5        Severance Payments and Vacation Pay.
 
(a) Vacation Pay in the Event of a Termination of Employment. In the event of
the termination of Employee's employment with Employer for any reason, Employee
shall be entitled to receive, in addition to the Severance Payments described in
Section 1.5(b) below, if any, the dollar value of any earned but unused (and
unforfeited) vacation. Such dollar value shall be paid to Employee within
fifteen (15) days following the date of termination of employment.
 
(b)    Severance Payments in the Case of a Termination Without Cause.
 
(i) Severance Payments. If Employee's employment is terminated by Employer
without Cause then, subject to (A) the Change in Control Agreement, (B)
Employee's satisfaction of the Release Condition described in Section 1.5(b)(ii)
below, and (C) Employee's mitigation obligation described in Section 1.5(b)(iii)
below, Employee shall be entitled to continuation of Employee's Base Salary (as
defined in Section 2.2) (such salary continuation, the “Severance Payments”) for
a period of 12 months (which period shall commence on the thirty-sixth (36th)
day following the date employment terminates) in accordance with Employer's
regular payroll practices and procedures.
 
(ii) Release Condition. Notwithstanding anything to the contrary herein, no
Severance Payments shall be due or made to Employee hereunder unless (i)
Employee shall have executed and delivered a general release in favor of
Employer and its affiliates, (which release shall be submitted to Employee for
her review by the date of Employee's termination of employment (or shortly
thereafter), be substantially in the form of the Separation Agreement and
Release attached hereto as Exhibit A and otherwise be satisfactory to Employer)
and (ii) the Release Effective Date shall have occurred on or before the
thirty-sixth (36th) day following the date employment terminates. The “Release
Effective Date” shall be the date the general release becomes effective and
irrevocable.
 
(c) Medical Insurance. If Employee's employment is terminated by Employer
without Cause, Employer will provide or pay the cost of continuing the medical
coverage provided by Employer to Employee and her dependents during her
employment at the same or a comparable coverage level, for a period beginning on
the date of termination and ending on the earlier of (i) the date that is twelve
(12) months following such

 

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termination and (ii) the date that Employee is covered under a medical benefits
plan of a subsequent employer. Employee agrees to make a timely COBRA election,
to the extent requested by Employer, to facilitate Employer's provision of
continuation coverage. Except as permitted by Section 409A (as defined below),
the continued benefits provided to Employee pursuant to this Section 1.5(c)
during any calendar year will not affect the continued benefits to be provided
to Employee pursuant to this Section 1.5(c) in any other calendar year.
 
(d) Equity Award Vesting.
 
(i)Vesting Acceleration. In the event of (A) the termination of Employee's
employment with Employer due to Employee's death, (B) the termination of
Employee's employment with Employer due to Disability, or (C) the termination of
Employee's employment by Employer without Cause, the Employee shall on the date
of such termination of employment immediately receive an additional twelve (12)
months' vesting credit with respect to the stock options, stock appreciation
rights, restricted stock and other equity or equity-based compensation of
Employer granted to Employee in the course of her employment with Employer.
 
(ii)    Effect of Vesting. The shares of Employer underlying any restricted
stock units that become vested pursuant to this Section 1.5(d) shall be payable
on the vesting date. Any of Employee's stock options and stock appreciation
rights that become vested pursuant to this Section 1.5(d) shall be exercisable
immediately upon vesting. Employee will have one (1) year and ninety (90) days
after termination of employment without Cause, death or Disability to exercise
any vested stock options or other equity compensation, provided, that, if during
such period Employee is under any trading restriction due to a lockup agreement
or closed trading window such period shall be tolled during the period of such
trading restriction, and provided, further, that in no event shall any stock
option or stock appreciation right continue to be exercisable after the original
expiration date of such stock option or stock appreciation right.
 
(iv)    Conflict with Award Agreement. In the event the terms of this Agreement
are contrary to or conflict with the terms of any document or agreement
addressing Employee's stock options, restricted stock, restricted stock units or
any other equity compensation, the terms of this Agreement shall govern and
control.
 
ARTICLE II. Compensation
 
2.1        Base Salary. Employee shall be compensated at an annual base salary
of $450,000 (the “Base Salary”) while Employee is employed by Employer under
this Agreement, subject to such annual increases that Employer may, in its sole
discretion, determine to be appropriate. Such Base Salary shall be paid in
accordance with Employer's standard policies and shall be subject to applicable
tax withholding requirements.
 
2.2        Annual Bonus Eligibility. Employee shall be eligible to participate
in Employer's annual bonus program under which Employee's target bonus shall
equal eighty percent (80%) of Employee's Base Salary. Payment of any bonus shall
depend upon individual and company performance, all as determined by Employer in
its sole discretion. The terms of the annual bonus program shall be developed by
Employer and communicated to Employee as soon as practicable after the beginning
of each year.
 
2.3        Benefits; Vacation. Employee shall be eligible to receive all
benefits as are available to similarly situated employees of Employer generally,
and any other benefits that Employer may, in its sole discretion, elect to grant
to Employee from time to time. In addition, Employee shall be entitled to four
(4) weeks paid vacation per year, which shall be pro-rated for the first partial
year of employment and shall accrue in accordance with Employer's policies
applicable to similarly situated employees of Employer.

 

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2.4        Reimbursement of Business Expenses. Employee may incur reasonable
expenses in the course of employment hereunder for which Employee shall be
eligible for reimbursement or advances in accordance with Employer's standard
policy therefor.
 
2.5        Equity Grants. Subject to approval of the Compensation Committee of
the Board, Employee shall be eligible for future equity grants and other
long-term incentives.
 
ARTICLE III. Absence of Restrictions
 
3.1        Employee hereby represents and warrants to Employer that Employee has
full power, authority and legal right to enter into this Agreement and to carry
out all obligations and duties hereunder and that the execution, delivery and
performance by Employee of this Agreement will not violate or conflict with, or
constitute a default under, any agreements or other understandings to which
Employee is a party or by which Employee may be bound or affected, including any
order, judgment or decree of any court or governmental agency. Employee further
represents and warrants to Employer that Employee is free to accept employment
with Employer as contemplated herein and that Employee has no prior or other
obligations or commitments of any kind to any person, firm, partnership,
association, corporation, entity or business organization that would in any way
hinder or interfere with Employee's acceptance of, or the full performance of,
Employee's duties hereunder.
 
ARTICLE IV. Miscellaneous
 
4.1        Withholding. Any payments made under this Agreement shall be subject
to applicable federal, state and local tax reporting and withholding
requirements.
 
4.2        Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without reference
to the principles of conflicts of laws. Any judicial action commenced relating
in any way to this Agreement including the enforcement, interpretation or
performance of this Agreement, shall be commenced and maintained in a court of
competent jurisdiction located in Maricopa County, Arizona. In any action to
enforce this Agreement, the prevailing party shall be entitled to recover its
litigation costs, including its attorneys' fees. The parties hereby waive and
relinquish any right to a jury trial and agree that any dispute shall be heard
and resolved by a court and without a jury. The parties further agree that the
dispute resolution, including any discovery, shall be accelerated and expedited
to the extent possible. Each party's agreements in this Section 4.2 are made in
consideration of the other party's agreements in this Section 4.2, as well as in
other portions of this Agreement.
 
4.3        No Waiver. The failure of Employer or Employee to insist in any one
or more instances upon performance of any terms, covenants and conditions of
this Agreement shall not be construed as a waiver or relinquishment of any
rights granted hereunder or of the future performance of any such terms,
covenants or conditions.
 
4.4        Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered, delivered by facsimile transmission or by courier or
mailed, registered or certified mail, postage prepaid as follows:
 
If to Employer:        First Solar, Inc.
350 West Washington Street
Suite 600
Tempe, Arizona 85281

 

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Attention: Corporate Secretary
 
If to Employee:        To Employee's then current address on file with
Employer
 
Or at such other address or addresses as any such party may have furnished to
the other party in writing in a manner provided in this Section 4.4.
 
4.5        Assignability and Binding Effect. This Agreement is for personal
services and is therefore not assignable by Employee. This Agreement may be
assigned by Employer to any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
or assets of Employer. This Agreement shall be binding upon and inure to the
benefit of the parties, their successors, assigns, heirs, executors and legal
representatives. If there shall be a successor to Employer or Employer shall
assign this Agreement, then as used in this Agreement, (a) the term “Employer”
shall mean Employer as hereinbefore defined and any successor or any permitted
assignee, as applicable, to which this Agreement is assigned and (b) the term
“Board” shall mean the Board as hereinbefore defined and the board of directors
or equivalent governing body of any successor or any permitted assignee, as
applicable, to which this Agreement is assigned.
 
4.6        Entire Agreement. This Agreement, the Change in Control Agreement,
the Non-Competition Agreement and the Confidentiality Agreement set forth the
entire agreement between Employer and Employee regarding the terms of Employee's
employment and supersede all prior agreements between Employer and Employee
covering the terms of Employee's employment, including without limitation, the
Prior Agreement. This Agreement may not be amended or modified except in a
written instrument signed by Employer and Employee identifying this Agreement
and stating the intention to amend or modify it.
 
4.7        Severability. If it is determined by a court of competent
jurisdiction that any of the restrictions or language in this Agreement are for
any reason invalid or unenforceable, the parties desire and agree that the court
revise any such restrictions or language, including reducing any time or
geographic area, so as to render them valid and enforceable to the fullest
extent allowed by law. If any restriction or language in this Agreement is for
any reason invalid or unenforceable and cannot by law be revised so as to render
it valid and enforceable, then the parties desire and agree that the court
strike only the invalid and unenforceable language and enforce the balance of
this Agreement to the fullest extent allowed by law. Employer and Employee agree
that the invalidity or unenforceability of any provision of this Agreement shall
not affect the remainder of this Agreement.
 
4.8        Construction. As used in this Agreement, words such as “herein,”
“hereinafter,” “hereby” and “hereunder,” and the words of like import refer to
this Agreement, unless the context requires otherwise. The words “include,”
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.
 
4.9        Survival. The rights and obligations of the parties under the
provisions of this Agreement, including Sections 1.5, this Article IV and
Article V, shall survive and remain binding and enforceable, notwithstanding the
termination of Employee's employment for any reason, to the extent necessary to
preserve the intended benefits of such provisions.
 
 
 
 
ARTICLE V. Section 409A
 

 

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5.1        In General. It is intended that the provisions of this Agreement
comply with Section 409A of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder as in effect from time to time (collectively,
“Section 409A”), and all provisions of this Agreement shall be construed and
interpreted in a manner consistent with the requirements for avoiding taxes or
penalties under Section 409A.
 
5.2        No Alienation, Set-offs, Etc. Neither Employee nor any creditor or
beneficiary of Employee shall have the right to subject any deferred
compensation (within the meaning of Section 409A) payable under this Agreement
or under any other plan, policy, arrangement or agreement of or with Employer or
any of its affiliates (this Agreement and such other plans, policies,
arrangements and agreements, the “Employer Plans”) to any anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, attachment or
garnishment. Except as permitted under Section 409A, any deferred compensation
(within the meaning of Section 409A) payable to or for the benefit of Employee
under any Employer Plan may not be reduced by, or offset against, any amount
owing by Employee to Employer or any of its affiliates.
 
5.3        Possible Six-Month Delay. If, at the time of Employee's separation
from service (within the meaning of Section 409A), (a) Employee shall be a
specified employee (within the meaning of Section 409A and using the
identification methodology selected by Employer from time to time) and (b)
Employer shall make a good faith determination that an amount payable under an
Employer Plan constitutes deferred compensation (within the meaning of Section
409A) the payment of which is required to be delayed pursuant to the six-month
delay rule set forth in Section 409A in order to avoid taxes or penalties under
Section 409A, then Employer (or an affiliate thereof, as applicable) shall not
pay such amount on the otherwise scheduled payment date but shall instead
accumulate such amount and pay it, without interest, on the first day of the
seventh month following such separation from service.
 
5.4        Treatment of Installments. For purposes of Section 409A, each of the
installments of continued Base Salary referred to in Section 1.5(b) shall be
deemed to be a separate payment as permitted under Treas. Reg. Sec.
1.409A-2(b)(2)(iii).
 
IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by one of
its duly authorized officers and Employee has individually executed this
Agreement, each intending to be legally bound, as of the date first above
written.
 
 
EMPLOYEE:
 
/s/ TL Kallenbach
T.L. (“TK”) Kallenbach
 
 
 
 
EMPLOYER:
First Solar, Inc.
 
By: /s/ Carol Campbell
 
Name Printed: Carol Campbell
 
Title: EVP, Human Resources