EXHIBIT 10.33
(FIRST SOLAR LOGO) [p14089p1408902.gif]
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
          This Agreement is made as of this November 11, 2008, (this
“Agreement”) 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 Bruce Sohn (hereinafter “Employee”).
WITNESSETH:
          WHEREAS, Employer and Employee wish to amend and restate the
Employment Agreement dated March 12, 2007 between Employer and Employee (the
“Prior Employment Agreement”) and enter into this 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
1.1 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 and Employee hereby accepts such position.
Employee agrees to diligently and faithfully perform such duties as may from
time to time be assigned to Employee by the Chief Executive Officer. 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.
1.3 No Salary or Benefits Continuation Beyond Termination. Except as may be
required by law or as otherwise specified in this Agreement or the Change in
Control Agreement between Employer and Employee dated March 12, 2007 and amended
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. The rights and obligations of

 

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the parties under the provisions of this Agreement, including Sections 1.3, 1.5
and 4.1, 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.
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 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 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
dated March 12, 2007, or as may be amended from time to time (the
“Non-Competition Agreement”), the Confidentiality and Intellectual Property
Agreement between Employer and Employee dated March 16, 2007, 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.

 

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          (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, (A) subject to 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 2.1) (such salary continuation,
the “Severance Payments”) for a period of 24 months (which period shall commence
on the thirty-sixth (36th) day following the date of the termination of
employment) in accordance with Employer’s regular payroll practices and
procedures. Severance Payments shall be subject to any applicable tax
withholding.
               (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
his 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 of the termination of employment. The
“Release Effective Date” shall be the date the general release becomes effective
and irrevocable.
               (iii) Mitigation. Severance Payments shall be reduced by any
compensation that Employee earns from employment during the twenty-four
(24) months following such termination of employment. Employee agrees to notify
Employer of the amounts of such compensation earned.
          (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 during his employment at the
same or a comparable coverage level, for a period beginning on the date of
termination and ending on the date that is 24 months following such termination.
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. In the event of (i) the termination of
Employee’s employment with Employer due to Employee’s death, (ii) the
termination of Employee’s employment with Employer due to Disability, or
(iii) the termination of Employee’s employment by Employer without Cause,
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

 

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equity-based compensation of the Employer granted to Employee in the course of
his employment with Employer under this Agreement (collectively, “Equity
Awards”). 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, and any such stock options and stock appreciation rights and any of
Employee’s stock options and stock appreciation rights that are otherwise vested
and exercisable as of Employee’s termination of employment shall remain
exercisable for one (1) year and ninety (90) days following Employee’s
termination of employment (or such longer period as shall be provided by the
applicable award agreement), 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. If the terms of this Agreement are
contrary to or conflict with the terms of any document or agreement addressing
or governing the Equity Awards, the terms of this Agreement shall apply except
that no provision in this Agreement shall operate to extend the term of any
stock option or stock appreciation right beyond its original expiration date.
ARTICLE II. Compensation
2.1 Base Salary. Employee shall be compensated at an annual base salary of
$412,500 (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.
2.2 Annual Bonus Eligibility. Employee shall be eligible to receive an annual
bonus of up to eighty percent (80%) of Employee’s Base Salary, based upon
individual and company performance, as determined by Employer in its sole
discretion. The specific bonus eligibility and the standards for earning a bonus
will be developed by Employer and communicated to Employee as soon as
practicable after the beginning of each year.
2.3 Benefits. Employee also shall be eligible to receive all benefits as are
available to similarly situated employees of Employer generally, and any other
benefits which Employer may in its sole discretion elect to grant to Employee.
In addition, Employee shall be entitled to four (4) weeks paid vacation per
year, which shall be accrued in accordance with Employer’s policies applicable
to similarly situated employees of the Employer.
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.

 

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2.5 Grant of Equity. Employee will be eligible to participate in the Employer’s
equity participation programs to acquire options or equity incentive
compensation units in the common stock of First Solar, Inc., subject to and in
accordance with the following contingencies: (1) additional terms contained in
Employer’s equity grant documentation, (2) approval if required of the
Employer’s equity incentive plan by Employer’s Board of Directors (the “Board”)
and shareholders of Employer, (3) approval of the grants by the Board,
(4) Employee’s execution of documents requested by Employer at the time of grant
(5) Employee’s continued employment through the grant date, (6) in accordance
with the 2006 Omnibus Equity Incentive Compensation Plan and (7) in accordance
with the policies, procedures and practices from time to time of the Employer
for granting such options or equity incentive compensation units.
2.6 Location. The position will be based in Tempe, Arizona.
ARTICLE III. Absence of Restrictions
3.1 Employee hereby represents and warrants 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.
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. 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.

 

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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
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 supersedes all prior agreements between Employer and Employee
covering the terms of Employee’s employment (including the Prior Agreement)
except that the relocation benefits in the Prior Agreement (as described in
Section 2.8 and Schedule A of the Prior Agreement) shall continue to apply until
all such benefits have been provided. 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

 

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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”.
ARTICLE V. Section 409A
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.

 

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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).
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     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/ Bruce Sohn                   Bruce Sohn    
 
                EMPLOYER:    
 
                FIRST SOLAR, INC.    
 
           
 
  By:   /s/ Michael J. Ahearn
 
        Name Printed: Michael J. Ahearn         Title: Chief Executive Officer  
 

 

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(FIRST SOLAR LOGO) [p14089p1408902.gif]
Exhibit A
SEPARATION AGREEMENT AND RELEASE
I. Release. For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the undersigned, with the intention of binding
himself/herself, his/her heirs, executors, administrators and assigns, does
hereby release and forever discharge First Solar, Inc., a Delaware corporation
(the “Company”), and its present and former officers, directors, executives,
agents, employees, affiliated companies, subsidiaries, successors, predecessors
and assigns (collectively, the “Released Parties”), from any and all claims,
actions, causes of action, demands, rights, damages, debts, accounts, suits,
expenses, attorneys’ fees and liabilities of whatever kind or nature in law,
equity, or otherwise, whether now known or unknown (collectively, the “Claims”),
which the undersigned now has, owns or holds, or has at any time heretofore had,
owned or held against any Released Party, arising out of or in any way connected
with the undersigned’s employment relationship with the Company, its
subsidiaries, predecessors or affiliated entities, or the termination thereof,
under any Federal, state or local statute, rule, or regulation, or principle of
common, tort or contract law, including but not limited to, the Fair Labor
Standards Act of 1938, as amended, 29 U.S.C. §§ 201 et seq., the Family and
Medical Leave Act of 1993, as amended (the “FMLA”), 29 U.S.C. §§ 2601 et seq.,
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. §§ 2000e et
seq., the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§
621 et seq., the Americans with Disabilities Act of 1990, as amended, 42 U.S.C.
§§ 12101 et seq., the Worker Adjustment and Retraining Notification Act of 1988,
as amended, 29 U.S.C. §§ 2101 et seq., the Employee Retirement Income Security
Act of 1974, as amended, 29 U.S.C. §§ 1001 et seq., and any other equivalent or
similar Federal, state, or local statute; provided, however, that nothing herein
shall release the Company (a) from its obligations under that certain
[Employment Agreement] [Change in Control Severance Agreement] to which the
undersigned is a party and pursuant to which this Separation Agreement and
Release is being executed and delivered, (b) from any claims by the undersigned
arising out of any director and officer indemnification or insurance obligations
in favor of the undersigned (c) from any director and officer indemnification
obligations under the Company’s by-laws, and (d) from any claim for benefits
under the First Solar, Inc. 401(k) Plan. The undersigned understands that, as a
result of executing this Separation Agreement and Release, he/she will not have
the right to assert that the Company or any other Released Party unlawfully
terminated his/her employment or violated any of his/her rights in connection
with his/her employment or otherwise.
The undersigned affirms that he/she has not filed, caused to be filed, or
presently is a party to any Claim, complaint or action against any Released
Party in any forum or form and that he/she knows of no facts which may lead to
any Claim, complaint or action being filed against any Released Party in any
forum by the undersigned or by any agency, group, or class persons. The
undersigned further affirms that he/she has been paid and/or has received all
leave (paid or unpaid),

 

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compensation, wages, bonuses, commissions, and/or benefits to which he/she may
be entitled and that no other leave (paid or unpaid), compensation, wages,
bonuses, commissions and/or benefits are due to him/her from the Company and its
subsidiaries, except as specifically provided in this Separation Agreement and
Release. The undersigned furthermore affirms that he/she has no known workplace
injuries or occupational diseases and has been provided and/or has not been
denied any leave requested under the FMLA. If any agency or court assumes
jurisdiction of any such Claim, complaint or action against any Released Party
on behalf of the undersigned, the undersigned will request such agency or court
to withdraw the matter.
The undersigned further declares and represents that he/she has carefully read
and fully understands the terms of this Separation Agreement and Release and
that he/she has been advised and had the opportunity to seek the advice and
assistance of counsel with regard to this Separation Agreement and Release, that
he/she may take up to and including 21 days from receipt of this Separation
Agreement and Release, to consider whether to sign this Separation Agreement and
Release, that he/she may revoke this Separation Agreement and Release within
seven calendar days after signing it by delivering to the Company written
notification of revocation, and that he/she knowingly and voluntarily, of
his/her own free will, without any duress, being fully informed and after due
deliberate action, accepts the terms of and signs the same as his own free act.
[To effect a full and complete general release as described above, the
undersigned expressly waives and relinquishes all rights and benefits of
Section 1542 of the Civil Code of the State of California, and the undersigned
does so understanding and acknowledging the significance and consequence of
specifically waiving Section 1542. Section 1542 of the Civil Code of the State
of California states as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.
Thus, notwithstanding the provisions of Section 1542, and to implement a full
and complete release and discharge of the Released Parties, the undersigned
expressly acknowledges this Separation Agreement and Release is intended to
include in its effect, without limitation, all Claims the undersigned does not
know or suspect to exist in the undersigned’s favor at the time of signing this
Separation Agreement and Release, and that this Separation Agreement and Release
contemplates the extinguishment of any such Claim or Claims.]1
II. Protected Rights. The Company and the undersigned agree that nothing in this
Separation Agreement and Release is intended to or shall be construed to affect,
limit or otherwise interfere with any non-waivable right of the undersigned
under any Federal, state or local law, including the right to file a charge or
participate in an investigation or
 

1   Only include for employees who were employed by the Company or its
subsidiaries in California.

 

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proceeding conducted by the Equal Employment Opportunity Commission (“EEOC”) or
to exercise any other right that cannot be waived under applicable law. The
undersigned is releasing, however, his/her right to any monetary recovery or
relief should the EEOC or any other agency pursue Claims on his/her behalf.
Further, should the EEOC or any other agency obtain monetary relief on his/her
behalf, the undersigned assigns to the Company all rights to such relief.
III. Equitable Remedies. The undersigned acknowledges that a violation by the
undersigned of any of the covenants contained in this Agreement would cause
irreparable damage to the Company and its subsidiaries in an amount that would
be material but not readily ascertainable, and that any remedy at law (including
the payment of damages) would be inadequate. Accordingly, the undersigned agrees
that, notwithstanding any provision of this Separation Agreement and Release to
the contrary, the Company shall be entitled (without the necessity of showing
economic loss or other actual damage) to injunctive relief (including temporary
restraining orders, preliminary injunctions and/or permanent injunctions) in any
court of competent jurisdiction for any actual or threatened breach of any of
the covenants set forth in this Agreement in addition to any other legal or
equitable remedies it may have.
IV. Return of Property. The undersigned shall return to the Company on or before
[10 DAYS AFTER TERMINATION DATE], all property of the Company in the
undersigned’s possession or subject to the undersigned’s control, including
without limitation any laptop computers, keys, credit cards, cellular telephones
and files. The undersigned shall not alter any of the Company’s records or
computer files in any way after [TERMINATION DATE].
V. Severability. If any term or provision of this Separation Agreement and
Release is invalid, illegal or incapable of being enforced by any applicable law
or public policy, all other conditions and provisions of this Separation
Agreement and Release shall nonetheless remain in full force and effect so long
as the economic and legal substance of the transactions contemplated by this
Separation Agreement and Release is not affected in any manner materially
adverse to any party.
VI. GOVERNING LAW. THIS SEPARATION AGREEMENT AND RELEASE SHALL BE DEEMED TO BE
MADE IN THE STATE OF DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION
AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS
OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.

 

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Effective on the eighth calendar day following the date set forth below.

                  FIRST SOLAR, INC.,    
 
           
 
  By        
 
     
 
     Name:    
 
           Title:    
 
                EMPLOYEE,    
 
           
 
           
 
         Bruce Sohn

     Date Signed:                                                               
 

 

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(FIRST SOLAR LOGO) [p14089p1408902.gif]
     CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”) dated as of
March 12, 2007, between First Solar, Inc., a Delaware corporation (the
“Company”), and Bruce Sohn (the “Executive”), and amended and restated as of
November 3, 2008.
          WHEREAS the Executive is a skilled and dedicated employee of the
Company who has important management responsibilities and talents that benefit
the Company;
          WHEREAS the Board of Directors of the Company (the “Board”) considers
it essential to the best interests of the Company and its stockholders to assure
that the Company and its subsidiaries will have the continued dedication of the
Executive, notwithstanding the possibility, threat or occurrence of a Change in
Control (as defined below); and
          WHEREAS the Board believes that it is imperative to diminish the
distraction of the Executive inherently present by virtue of the uncertainties
and risks created by the circumstances surrounding a Change in Control and to
ensure the Executive’s full attention to the Company and its subsidiaries during
such a period of uncertainty;
          NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, and intending to be legally bound hereby, the
parties hereto agree as follows:
          SECTION 1. Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:
          (a) “280G Gross-Up Payment” shall have the meaning set forth in
Section 5(a).
          (b) “Accounting Firm” shall have the meaning set forth in
Section 5(b).
          (c) “Accrued Rights” shall have the meaning set forth in
Section 4(a)(iv).
          (d) “Affiliate(s)” means, with respect to any specified Person, any
other Person that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.
          (e) “Annual Base Salary” shall mean the greater of the Executive’s
annual rate of base salary in effect (i) immediately prior to the Change in
Control Date and (ii) immediately prior to the Termination Date.

 

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          (f) “Annual Bonus” shall mean the target annual cash bonus the
Executive is eligible to earn (assuming 100% fulfillment of all elements of the
formula under which such bonus would have been calculated) for the year in which
the Termination Date occurs.
          (g) “Bonus Amount” the greater of (i) the Annual Bonus and (ii) the
average of the annual cash bonuses payable to the Executive in respect of the
three (3) calendar years immediately preceding the calendar year that includes
the Termination Date or, if the Executive has not been employed for three
(3) full calendar years preceding the calendar year that includes the
Termination Date, the average of the annual cash bonuses payable to the
Executive for the number of full calendar years prior to the Termination Date
that she has been employed.
          (h) “Cause” means the occurrence of any one of the following:
     (i) the Executive is convicted of, or pleads guilty or nolo contendere to,
(A) a misdemeanor involving moral turpitude or misappropriation of the assets of
the Company or a Subsidiary or (B) any felony (or the equivalent of such a
misdemeanor or felony in a jurisdiction outside of the United States);
     (ii) the Executive commits one or more acts or omissions constituting gross
negligence, fraud or other gross misconduct that the Company reasonably and in
good faith determines has a materially detrimental effect on the Company;
     (iii) the Executive continually and willfully fails, for at least 14 days
following written notice from the Company, to perform substantially the
Executive’s employment duties (other than as a result of incapacity due to
physical or mental illness or after delivery by the Executive of a Notice of
Termination for Good Reason); or
     (iv) the Executive commits a gross violation of any of the Company’s
material policies (including the Company’s Code of Business Conduct and Ethics,
as in effect from time to time) that the Company reasonably and in good faith
determines is materially detrimental to the best interests of the Company.
          The termination of employment of the Executive for Cause shall not be
effective unless and until there has been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board (excluding the Executive) at a meeting of the
Board called and held for such purpose (after reasonable notice is provided to
the Executive and the Executive is given an opportunity, together with counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board, the Executive is guilty of the conduct described in clause (i), (ii),
(iii) or (iv) above and specifying the particulars thereof in detail.
          (i) “Change in Control” means the occurrence of any of the following:

 

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     (i) individuals who, as of the date of this Agreement, were members of the
Board (the “Incumbent Directors”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to the date of this Agreement whose appointment or election,
or nomination for election, by the Company’s stockholders was approved by a vote
of at least a majority of the Incumbent Directors shall be considered as though
such individual were an Incumbent Director, but excluding, for purposes of this
proviso, any such individual whose assumption of office after the date of this
Agreement occurs as a result of an actual or threatened proxy contest with
respect to election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of any “person” (as such
term is used in Section 13(d) of the Exchange Act) (each, a “Person”) other than
the Board or any Specified Shareholder;
     (ii) the consummation of (A) a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving (x) the Company or
(y) any of its Subsidiaries, but in the case of this clause (y) only if Company
Voting Securities (as defined below) are issued or issuable in connection with
such transaction (each of the transactions referred to in this clause (A) being
hereinafter referred to as a “Reorganization”) or (B) a sale or other
disposition of all or substantially all the assets of the Company (a “Sale”),
unless, immediately following such Reorganization or Sale, (1) all or
substantially all the individuals and entities who were the “beneficial owners”
(as such term is defined in Rule 13d-3 under the Exchange Act (or a successor
rule thereto)) of shares of the Company’s common stock or other securities
eligible to vote for the election of the Board outstanding immediately prior to
the consummation of such Reorganization or Sale (such securities, the “Company
Voting Securities”) beneficially own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities of the
corporation or other entity resulting from such Reorganization or Sale
(including a corporation or other entity that, as a result of such transaction,
owns the Company or all or substantially all the Company’s assets either
directly or through one or more subsidiaries) (the “Continuing Entity”) in
substantially the same proportions as their ownership, immediately prior to the
consummation of such Reorganization or Sale, of the outstanding Company Voting
Securities (excluding any outstanding voting securities of the Continuing Entity
that such beneficial owners hold immediately following the consummation of such
Reorganization or Sale as a result of their ownership prior to such consummation
of voting securities of any corporation or other entity involved in or forming
part of such Reorganization or Sale other than the Company or a Subsidiary),
(2) no Person (excluding (x) any employee benefit plan (or related trust)
sponsored or maintained by the Continuing Entity or any corporation or other
entity controlled by the Continuing Entity and (y) any Specified Shareholder)
beneficially owns, directly or indirectly, 20% or more of the combined voting
power of the then outstanding voting securities of the Continuing Entity and
(3) at least a majority of the members of the board of directors or other
governing body of the Continuing Entity were

 

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Incumbent Directors at the time of the execution of the definitive agreement
providing for such Reorganization or Sale or, in the absence of such an
agreement, at the time at which approval of the Board was obtained for such
Reorganization or Sale;
     (iii) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company, unless such liquidation or
dissolution is part of a transaction or series of transactions described in
Section 1(i)(ii) that does not otherwise constitute a Change in Control; or
     (iv) any Person, corporation or other entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than any Specified
Shareholder becomes the beneficial owner, directly or indirectly, of securities
of the Company representing a percentage of the combined voting power of the
Company Voting Securities that is equal to or greater than the greater of
(x) 20% and (y) the percentage of the combined voting power of the Company
Voting Securities beneficially owned directly or indirectly by all the Specified
Shareholders at such time; provided, however, that for purposes of this
Section 1(i)(iv) only (and not for purposes of Sections 1(i)(i) through (iii)),
the following acquisitions shall not constitute a Change in Control: (A) any
acquisition by the Company or any Subsidiary, (B) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary, (C) any acquisition by an underwriter temporarily holding
such Company Voting Securities pursuant to an offering of such securities or
(D) any acquisition pursuant to a Reorganization or Sale that does not
constitute a Change in Control for purposes of Section 1(i)(ii).
          (j) “Change in Control Date” means the date on which a Change in
Control occurs.
          (k) “COBRA” shall have the meaning set forth in Section 4(a)(iii).
          (l) “Code” means the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
          (m) “Company Voting Securities” shall have the meaning set forth in
Section 1(i)(ii).
          (n) “Continuing Entity” shall have the meaning set forth in
Section 1(i)(ii).
          (o) “Disability” shall have the meaning set forth in Section 4(b)(ii).
          (p) “Effective Date” shall have the meaning set forth in Section 2.
          (q) “Exchange Act” means the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute thereto.

 

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          (r) “Excise Tax” means the excise tax imposed by Section 4999 of the
Code, together with any interest or penalties imposed with respect to such tax.
          (s) Executive Tax Year” shall have the meaning set forth in
Section 4(a)(iii).
          (t) “Good Reason” means, without the Executive’s express written
consent, the occurrence of any one or more of the following:
          (i) any material reduction in the authority, duties or
responsibilities held by the Executive immediately prior to the Change in
Control Date, but excluding for this purpose an inadvertent reduction not
occurring in bad faith and which is remedied by the Company within ten business
days after receipt of notice thereof given by the Executive;
          (ii) any material reduction in the annual base salary or annual
incentive opportunity of the Executive as in effect immediately prior to the
Change in Control Date, other than an inadvertent reduction not occurring in bad
faith and which is remedied by the Company within ten business days after
receipt of notice thereof given by the Executive;
          (iii) any change of the Executive’s principal place of employment to a
location more than 50 miles from the Executive’s principal place of employment
immediately prior to the Change in Control Date;
          (iv) any failure of the Company to pay the Executive any compensation
when due (other than an inadvertent failure that is remedied within ten business
days after receipt of written notice thereof given by the Executive);
          (v) delivery by the Company or any Subsidiary of a written notice to
the Executive of the intent to terminate the Executive’s employment for any
reason, other than Cause or Disability, in each case in accordance with this
Agreement, regardless of whether such termination is intended to become
effective during or after the Protection Period; or
          (vi) any failure by the Company to comply with and satisfy the
requirements of Section 10(c).
          The Executive’s right to terminate employment for Good Reason shall
not be affected by the Executive’s incapacity due to physical or mental illness.
A termination of employment by the Executive for Good Reason for purposes of
this Agreement shall be effectuated by giving the Company written notice
(“Notice of Termination for Good Reason”) of the termination setting forth in
reasonable detail the specific conduct of the Company that constitutes Good
Reason and the specific provisions of this Agreement on which the Executive
relied, provided that such notice must be delivered to the Company no later than
three months after the occurrence of the event or events constituting Good
Reason. Unless the parties agree otherwise, a termination of employment by the
Executive for Good Reason shall be effective on the 30th day following the date
when

 

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the Notice of Termination for Good Reason is given, unless the Company elects to
treat such termination as effective as of an earlier date; provided, however,
that so long as an event that constitutes Good Reason occurs during the
Protection Period and the Executive delivers the Notice of Termination for Good
Reason at any time prior to the earlier of the end of the six-month period
following the occurrence of such event, for purposes of the payments, benefits
and other entitlements set forth herein, the termination of the Executive’s
employment pursuant thereto shall be deemed to occur during the Protection
Period.
          (u) “Incumbent Directors” shall have the meaning set forth in
Section 1(i)(i).
          (v) “Notice of Termination for Good Reason” shall have the meaning set
forth in Section 1(t).
          (w) “Payment” means any payment, benefit or distribution (or
combination thereof) by the Company, any of its Affiliates or any trust
established by the Company or its Affiliates, to or for the benefit of the
Executive, whether paid, payable, distributed, distributable or provided
pursuant to this Agreement or otherwise, including any payment, benefit or other
right that constitutes a “parachute payment” within the meaning of Section 280G
of the Code.
          (x) “Person” shall have the meaning set forth in Section 1(i)(i).
          (y) “Protection Period” means the period commencing on the Change in
Control Date and ending on the second anniversary thereof.
          (z) “Qualifying Termination” means any termination of the Executive’s
employment (i) by the Company, other than for Cause, death or Disability, that
is effective (or with respect to which the Executive is given written notice)
during the Protection Period, (ii) by the Executive for Good Reason during the
Protection Period or (iii) by the Company that is effective prior to the Change
in Control Date, other than for Cause, death or Disability, at the request or
direction of a third party who took action that caused, or is involved in or a
party to, a Change in Control.
          (aa) “Release” shall have the meaning set forth in Section 4(a)(vi).
          (bb) “Release Effective Date” shall mean the date the Release becomes
effective and irrevocable.
          (cc) “Reorganization” shall have the meaning set forth in
Section 1(i)(ii).
          (dd) “Safe Harbor Amount” shall have the meaning set forth in
Section 5(a).
          (ee) “Sale” shall have the meaning set forth in Section 1(i)(ii).

 

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          (ff) “Specified Shareholder” shall mean any of (i) the Estate of John
T. Walton and its beneficiaries, (ii) JCL Holdings, LLC and its beneficiaries,
(iii) Michael J. Ahearn and any of his immediate family, (iv) any Person
directly or indirectly controlled by any of the foregoing and (v) any trust for
the direct or indirect benefit of any of the foregoing.
          (gg) “Subsidiary” means any entity in which the Company, directly or
indirectly, possesses 50% or more of the total combined voting power of all
classes of its stock.
          (hh) “Successor” shall have the meaning set forth in Section 10(c).
          (ii) “Termination Date” means the date on which the termination of the
Executive’s employment, in accordance with the terms of this Agreement, is
effective, provided that in the event of a Qualifying Termination described in
clause (iii) of the definition thereof, the Termination Date shall be deemed to
be the Change in Control Date.
          (jj) “Underpayment” shall have the meaning set forth in Section 5(b).
          SECTION 2. Effectiveness and Term. This Agreement was originally
effective on March 12, 2007 (the “Effective Date”). This Agreement shall remain
in effect until the third anniversary of the Effective Date, except that,
beginning on the second anniversary of the Effective Date and on each
anniversary thereafter, the term of this Agreement shall be automatically
extended for an additional one-year period, unless the Company or the Executive
provides the other party with 60 days’ prior written notice before the
applicable anniversary that the term of this Agreement shall not be so extended.
Notwithstanding the foregoing, in the event of a Change in Control during the
term of this Agreement (whether the original term or the term as extended), this
Agreement shall not thereafter terminate, and the term hereof shall be extended,
until the Company and its Subsidiaries have performed all their obligations
hereunder with no future performance being possible; provided, however, that
this Agreement shall only be effective with respect to the first Change in
Control that occurs during the term of this Agreement.
          SECTION 3. Impact of a Change in Control on Equity Compensation
Awards. Effective as of the Change in Control Date, notwithstanding any
provision to the contrary, other than any such provision which expressly
provides that this Section 3 of this Agreement does not apply (which provision
shall be given full force and effect), in any of the Company’s equity-based,
equity-related or other long-term incentive compensation plans, practices,
policies and programs (including the Company’s 2003 Unit Option Plan and the
Company 2006 Omnibus Incentive Compensation Plan) or any award agreements
thereunder, (a) all outstanding stock options, stock appreciation rights and
similar rights and awards then held by the Executive that are unexercisable or
otherwise unvested shall automatically become fully vested and immediately
exercisable, as the case may be, (b) all outstanding equity-based,
equity-related and other long-term incentive awards then held by the Executive
that are subject to performance-based vesting criteria shall automatically
become fully vested and earned at a deemed

 

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performance level equal to the maximum performance level with respect to such
awards and (c) all other outstanding equity-based, equity-related and long-term
incentive awards, to the extent not covered by the foregoing clause (a) or
(b), then held by the Executive that are unvested or subject to restrictions or
forfeiture shall automatically become fully vested and all restrictions and
forfeiture provisions related thereto shall lapse.
          SECTION 4. Termination of Employment. (a) Qualifying Termination. In
the event of a Qualifying Termination, the Executive shall be entitled, subject
to Section 4(a)(vi), to the following payments and benefits:
          (i) Severance Pay. The Company shall pay the Executive an amount equal
to two times the sum of (A) the Executive’s Annual Base Salary (without regard
to any reduction giving rise to Good Reason) and (B)  the Bonus Amount, in a
lump-sum payment payable on the tenth business day after the Release Effective
Date; provided, however, that such amount shall be paid in lieu of, and the
Executive hereby waives the right to receive, any other cash severance payment
relating to salary or bonus continuation the Executive is otherwise eligible to
receive upon termination of employment under any severance plan, practice,
policy or program of the Company or any Subsidiary.+
          (ii) Prorated Annual Bonus. The Company shall pay the Executive an
amount equal to the product of (A) the Executive’s Annual Bonus and (B) a
fraction, the numerator of which is the number of days in the Company’s fiscal
year containing the Termination Date that the Executive was employed by the
Company or any Affiliate, and the denominator of which is 365, in a lump-sum
payment on the tenth business day after the Release Effective Date.
          (iii) Continued Welfare Benefits. The Company shall, at its option,
either (A) continue to provide medical, life insurance, accident insurance and
disability benefits to the Executive and the Executive’s spouse and dependents
at least equal to the benefits provided by the Company and its Subsidiaries
generally to other active peer executives of the Company and its Subsidiaries,
or (B) pay Executive the cost of obtaining equivalent coverage, in the case of
each of clauses (A) and (B), for a period of time commencing on the Termination
Date and ending on the date that is eighteen (18) months after the Termination
Date; provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. Any provision of benefits pursuant to this
Section 4(a)(iii) in one (1) tax year of the Executive (the “Executive Tax
Year”) shall not affect the amount of such benefits to be provided in any other
Executive Tax Year. The right to such benefits shall not be subject to
liquidation or exchange for any other benefit. Executive agrees to make (and to
cause her dependents to make) a timely election under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”) to the extent requested
by Employer, to facilitate Employer’s provision of continuation coverage.

 

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          (iv) Accrued Rights. The Executive shall be entitled to (A) payments
of any unpaid salary, bonuses or other amount earned or accrued through the
Termination Date and reimbursement of any unreimbursed business expenses
incurred through the Termination Date, (B) any payments explicitly set forth in
any other benefit plans, practices, policies and programs in which the Executive
participates, and (C) any payments the Company is or becomes obligated to make
pursuant to Sections 5, 7 and 12 (the rights to such payments, the “Accrued
Rights”). The Accrued Rights payable pursuant to Section 4(a)(iv)(A) and Section
4(a)(iv)(B) shall be payable on their respective otherwise scheduled payment
dates, provided that any amounts payable in respect of accrued but unused
vacation shall be paid in a lump sum within 15 days following the Termination
Date. The Accrued Rights payable pursuant to Section 4(a)(iv)(C) shall be
payable at the times set forth in the applicable Section hereof.
          (v) Outplacement. The Company shall reimburse the Executive for
individual outplacement services to be provided by a firm of the Executive’s
choice or, at the Executive’s election, provide the Executive with the use of
office space, office supplies, and secretarial assistance satisfactory to the
Executive. The aggregate expenditures of the Company pursuant to this paragraph
shall not exceed $20,000. Notwithstanding anything to the contrary in this
Agreement, the outplacement benefits under this Section 4(a)(v) shall be
provided to the Executive for no longer than the one-year period following the
Termination Date, and the amount of any outplacement benefits or office space,
office supplies and secretarial assistance provided to the Executive in any
Executive Tax Year shall not affect the amount of any such outplacement benefits
or office space, office supplies and secretarial assistance provided to the
Executive in any other Executive Tax Year.
          (vi) Release of Claims. Notwithstanding any provision of this
Agreement to the contrary, unless on or prior to the tenth (10th) business day
prior to March 15 of the year following the year in which the Termination Date
occurs, the Executive has executed and delivered a Separation Agreement and
Release (the “Release”) substantially in the form of Exhibit A to the employment
agreement between the Executive and the Company and the Release Effective Date
shall have occurred, (A) no payments shall be paid or made available to the
Executive under Section 4(a)(i) or 4(a)(ii), (B) the Company shall be relieved
of all obligations to provide or make available any further benefits to the
Executive pursuant to Section 4(a)(iii) and 4(a)(v) and (C) the Executive shall
be required to repay the Company, in cash, within five business days after
written demand is made therefor by the Company, an amount equal to the value of
any benefits received by the Executive pursuant to Section 4(a)(iii) and 4(a)(v)
prior to such date.
          (b) Termination on Account of Death or Disability; Non-Qualifying
Termination. (i) In the event of any termination of Executive’s employment other
than a Qualifying Termination, the Executive shall not be entitled to any
additional payments or benefits from the Company under this Agreement, other
than payments or benefits with respect to the Accrued Rights.

 

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          (ii) For purposes of this Agreement, the Executive shall be deemed to
have a “Disability” in the event of the Executive’s absence for a period of
180 consecutive business days as a result of incapacity due to a physical or
mental condition, illness or injury which is determined to be total and
permanent by a physician mutually acceptable to the Company and the Executive or
the Executive’s legal representative (such acceptance not to be unreasonably
withheld) after such physician has completed an examination of the Executive.
The Executive agrees to make himself available for such examination upon the
reasonable request of the Company, and the Company shall be responsible for the
cost of such examination.
          SECTION 5. Certain Additional Payments by the Company.
          (a) Notwithstanding anything in this Agreement to the contrary and
except as set forth below, in the event it shall be determined that any Payment
that is paid or payable during the term of this Agreement would be subject to
the Excise Tax, the Executive shall be entitled to receive an additional payment
(a “280G Gross-Up Payment”) in an amount such that, after payment by the
Executive of all taxes (and any interest or penalties imposed with respect to
such taxes), including any income and employment taxes and Excise Taxes imposed
upon the 280G Gross-Up Payment, the Executive retains an amount of the 280G
Gross-Up Payment equal to the Excise Tax imposed upon such Payments. The
Company’s obligation to make 280G Gross-Up Payments under this Section 5 shall
not be conditioned upon the Executive’s termination of employment and shall
survive and apply after the Executive’s termination of employment.
Notwithstanding the foregoing provisions of this Section 5(a), if it shall be
determined that the Executive is entitled to a 280G Gross-Up Payment, but that
the Payments do not exceed 110% of the greatest amount that could be paid to the
Executive without giving rise to any Excise Tax (the “Safe Harbor Amount”), then
no 280G Gross-Up Payment shall be made to the Executive and the amounts payable
under this Agreement shall be reduced so that the Payments, in the aggregate,
are reduced to the Safe Harbor Amount. If such a reduction is necessary, the
Payments shall be reduced in the following order: (i) the Payments payable under
Section 4(a)(i) (severance), (ii) the Payments payable under Section 4(a)(ii)
(prorated annual bonus), (iii) any other cash Payments, (iv) the Payments
payable under Section 4(a)(iii) (welfare benefit continuation) and (v) the
accelerated vesting under Section 3.
          (b) Subject to the provisions of Section 5(c), all determinations
required to be made under this Section 5, including whether and when a 280G
Gross-Up Payment is required, the amount of such 280G Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made in
accordance with the terms of this Section 5 by a nationally recognized certified
public accounting firm that shall be designated by the Executive (the
“Accounting Firm”). The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. For purposes of determining the
amount of any 280G Gross-Up Payment, the Executive shall be deemed to pay
Federal income tax at the highest marginal rate applicable to individuals in the

 

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calendar year in which any such 280G Gross-Up Payment is to be made and deemed
to pay state and local income taxes at the highest marginal rates applicable to
individuals in the state or locality of the Executive’s residence or place of
employment in the calendar year in which any such 280G Gross-Up Payment is to be
made, net of the maximum reduction in Federal income taxes that can be obtained
from deduction of state and local taxes, taking into account limitations
applicable to individuals subject to Federal income tax at the highest marginal
rate. All fees and expenses of the Accounting Firm shall be borne solely by the
Company. Any 280G Gross-Up Payment, as determined pursuant to this Section 5,
shall be paid by the Company to the Executive within five business days of the
receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall so indicate
to the Executive in writing. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the uncertainty in
the application of Section 4999 of the Code, at the time of the initial
determination by the Accounting Firm hereunder, it is possible that 280G
Gross-Up Payments that will not have been made by the Company should have been
made (an “Underpayment”), consistent with the calculations required to be made
hereunder. In the event the Company exhausts its remedies pursuant to Section
5(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be paid by the Company to the Executive
within five (5) business days of the receipt of the Accounting Firm’s
determination.
          (c) The Executive shall notify the Company in writing of any written
claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a 280G Gross-Up Payment. Such notification shall be
given as soon as practicable, but no later than ten business days after the
Executive is informed in writing of such claim. Failure to give timely notice
shall not prejudice the Executive’s right to 280G Gross-Up Payments and rights
of indemnity under this Section 5. The Executive shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30 day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that the Company desires to
contest such claim, the Executive shall: (i) give the Company any information
reasonably requested by the Company relating to such claim, (ii) take such
action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively to contest
such claim and (iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay
directly all costs and expenses (including additional income taxes, interest and
penalties) incurred in connection with such contest, and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or income
tax (including interest or penalties) imposed as a result of such representation
and payment of costs and

 

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expenses. Without limitation on the foregoing provisions of this Section 5(c),
the Company shall control all proceedings taken in connection with such contest,
and, at its sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion, either pay
the tax claim on behalf of the Executive and direct the Executive to sue for a
refund or contest the claim in any permissible manner, and the Executive agrees
to prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one (1) or more appellate courts, as
the Company shall determine; provided, however, that (A) if the Company pays the
tax claim on behalf of the Executive and directs the Executive to sue for a
refund, the Company shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to such payment and (B) if such contest results
in any extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested amount is
claimed to be due, such extension must be limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which the 280G Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
          (d) If, after the payment by the Company of any tax claim pursuant to
Section 5(c), the Executive becomes entitled to receive any refund with respect
to such claim, the Executive shall (subject to the Company’s complying with the
requirements of Section 5(c)) promptly pay to the Company the amount of such
refund received (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the payment by the Company of any tax claim
pursuant to Section 5(c), a determination is made that the Executive shall not
be entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of the 30 day period after such determination, then the
amount the Company paid in respect of such claim shall offset, to the extent
thereof, the amount of 280G Gross-Up Payment required to be paid.
          (e) Notwithstanding anything to the contrary in this Agreement, (i) in
no event shall any 280G Gross-up Payments be made by the Company to the
Executive under this Section 5 after the end of the Executive Tax Year following
the Executive Tax Year in which the Executive remits the taxes for which such
280G Gross-up Payment is required to be made under this Section 5, and (ii) no
other payments will be made by the Company to the Executive under this Section 5
with respect to any audit or litigation relating to any 280G Gross-Up Payment or
Excise Tax or other taxes after the Executive Tax Year following the Executive
Tax Year in which the taxes that are the subject of the audit or litigation
referred to in this Section 5 are remitted to the taxing authority, or where, as
a result of such audit or litigation, no taxes are remitted, the end of the
Executive Tax Year following the Executive Tax Year in which the audit is
completed or there is a final and nonappealable settlement or other resolution
of the litigation.

 

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          SECTION 6. Section 409A.
          (a) It is intended that the provisions of this Agreement comply with
Section 409A of the Code, 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 either to (i) exempt any
compensation from the application of Section 409A, or (ii) comply with the
requirements for avoiding taxes or penalties under Section 409A.
          (b) Neither the Executive nor any creditor or beneficiary of the
Executive 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 the Company or any of its Affiliates
(this Agreement and such other plans, policies, arrangements and agreements, the
“Company 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 the Executive under any Company Plan may not be
reduced by, or offset against, any amount owing by the Executive to the Company
or any of its Affiliates.
          (c) If, at the time of the Executive’s separation from service (within
the meaning of Section 409A), (i) the Executive shall be a specified employee
(within the meaning of Section 409A and using the identification methodology
selected by the Company from time to time) and (ii) the Company shall make a
good faith determination that an amount payable under a Company 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 to avoid taxes or penalties under Section 409A, then the Company
(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.
          SECTION 7. No Mitigation or Offset; Enforcement of this Agreement.
(a) The Company’s obligation to make the payments provided for in this Agreement
and otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other action by way
of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as otherwise expressly provided for in
this Agreement, such amounts shall not be reduced whether or not the Executive
obtains other employment.
          (b) The Company shall reimburse, upon the Executive’s demand, any and
all reasonable legal fees and expenses that the Executive may incur in good
faith prior to the second anniversary of the expiration of the term of this
Agreement as a result of any contest, dispute or proceeding (regardless of
whether formal legal proceedings are ever

 

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commenced and regardless of the outcome thereof and including all stages of any
contest, dispute or proceeding) by the Company, the Executive or any other
Person with respect to the validity or enforceability of, or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive regarding the amount of
any payment owed pursuant to this Agreement), and shall indemnify and hold the
Executive harmless, on an after-tax basis, for any tax (including Excise Tax)
imposed on the Executive as a result of payment by the Company of such legal
fees and expenses. Notwithstanding anything to the contrary in this Agreement,
(i) any reimbursement for any fees and expenses under this Section 7 shall be
made promptly and no later than the end of the Executive Tax Year following the
Executive Tax Year in which the fees or expenses are incurred, (ii) the amount
of fees and expenses eligible for reimbursement under this Section 7 during any
Executive Tax Year shall not affect the fees and expenses eligible for
reimbursement in another Executive Tax Year, (iii) no right to reimbursement
under this Section 7 shall be subject to liquidation or exchange for any other
payment or benefit, and (iv) no tax gross up payments shall be made by the
Company under this Section 7 after the end of the Executive Tax Year following
the Executive Tax Year in which the related taxes are remitted.
          SECTION 8. Non-Exclusivity of Rights. Except as specifically provided
in Section 4(a)(i), nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any plan, practice, policy or
program provided by the Company or a Subsidiary for which the Executive may
qualify, nor shall anything in this Agreement limit or otherwise affect any
rights the Executive may have under any contract or agreement with the Company
or a Subsidiary. Vested benefits and other amounts that the Executive is
otherwise entitled to receive under any incentive compensation (including any
equity award agreement), deferred compensation retirement, pension or other
plan, practice, policy or program of, or any contract or agreement with, the
Company or a Subsidiary shall be payable in accordance with the terms of each
such plan, practice, policy, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
          SECTION 9. Withholding. The Company may deduct and withhold from any
amounts payable under this Agreement such Federal, state, local, foreign or
other taxes as are required to be withheld pursuant to any applicable law or
regulation.
          SECTION 10. Assignment. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution, and any assignment in violation of this Agreement shall be void.
          (b) Notwithstanding the foregoing Section 10(a), this Agreement and
all rights of the Executive hereunder shall inure to the benefit of, and be
enforceable by, the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amounts would still be payable to her hereunder
if she had continued to live, all such amounts, unless

 

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otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive’s devisee, legatee or other designee or, should there
be no such designee, to the Executive’s estate.
          (c) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company (a “Successor”) to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. If there shall be a Successor, (i) the term
“Company” shall mean the Company as hereinbefore defined and any Successor and
any permitted assignee to which this Agreement is assigned and (ii) the term
“Board” shall mean the Board as hereinbefore defined and the board of directors
or equivalent governing body of any Successor and any permitted assignee to
which this Agreement is assigned.
          SECTION 11. Dispute Resolution. (a) Except as otherwise specifically
provided herein, the Executive and the Company each hereby irrevocably submit to
the exclusive jurisdiction of the United States District Court of Delaware (or,
if subject matter jurisdiction in that court is not available, in any state
court located within the city of Wilmington, Delaware) over any dispute arising
out of or relating to this Agreement. Except as otherwise specifically provided
in this Agreement, the parties undertake not to commence any suit, action or
proceeding arising out of or relating to this Agreement in a forum other than a
forum described in this Section 11(a); provided, however, that nothing herein
shall preclude the Company or the Executive from bringing any suit, action or
proceeding in any other court for the purposes of enforcing the provisions of
this Section 11 or enforcing any judgment obtained by the Company or the
Executive.
          (b) The agreement of the parties to the forum described in Section
11(a) is independent of the law that may be applied in any suit, action or
proceeding and the parties agree to such forum even if such forum may under
applicable law choose to apply non-forum law. The parties hereby waive, to the
fullest extent permitted by applicable law, any objection that they now or
hereafter have to personal jurisdiction or to the laying of venue of any such
suit, action or proceeding brought in an applicable court described in
Section 11(a), and the parties agree that they shall not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court. The parties agree that, to the fullest extent permitted by
applicable law, a final and non-appealable judgment in any suit, action or
proceeding brought in any applicable court described in Section 11(a) shall be
conclusive and binding upon the parties and may be enforced in any other
jurisdiction.
          (c) The parties hereto irrevocably consent to the service of any and
all process in any suit, action or proceeding arising out of or relating to this
Agreement by the mailing of copies of such process to such party at such party’s
address specified in Section 18.

 

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          (d) Each party hereto hereby waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of any
suit, action or proceeding arising out of or relating to this Agreement. Each
party hereto (i) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such party would not,
in the event of any suit, action or proceeding, seek to enforce the foregoing
waiver and (ii) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waiver
and certifications in this Section 11(d).
          SECTION 12. Default in Payment. Any payment not made within ten
(10) business days after it is due in accordance with this Agreement shall
thereafter bear interest, compounded annually, at the prime rate in effect from
time to time at Citibank, N.A., or any successor thereto. Such interest shall be
payable at the same time as the corresponding payment is payable.
          SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE
IN THE STATE OF DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF DELAWARE WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
          SECTION 14. Amendment; No Waiver. No provision of this Agreement may
be amended, modified, waived or discharged except by a written document signed
by the Executive and a duly authorized officer of the Company. The failure of a
party to insist upon strict adherence to any term of this Agreement on any
occasion shall not be considered a waiver of such party’s rights or deprive such
party of the right thereafter to insist upon strict adherence to that term or
any other term of this Agreement. Except as provided in Section 1(t), no failure
or delay by either party in exercising any right or power hereunder will operate
as a waiver thereof, nor will any single or partial exercise of any such right
or power, or any abandonment of any steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party, which are not set forth expressly in this Agreement.
          SECTION 15. Severability. If any term or provision of this Agreement
is invalid, illegal or incapable of being enforced by any applicable law or
public policy, all other conditions and provisions of this Agreement shall
nonetheless remain in full force and effect so long as the economic and legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon any such determination that any
term or provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.

 

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          SECTION 16. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto in respect of the subject matter contained
herein and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto, and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and canceled. None of the parties shall be liable or bound to
any other party in any manner by any representations and warranties or covenants
relating to such subject matter except as specifically set forth herein.
          SECTION 17. Survival. The rights and obligations of the parties under
the provisions of this Agreement, including Sections 5, 7 and 12, shall survive
and remain binding and enforceable, notwithstanding the expiration of the
Protection Period or the term of this Agreement, the termination of the
Executive’s employment with the Company for any reason or any settlement of the
financial rights and obligations arising from the Executive’s employment
hereunder, to the extent necessary to preserve the intended benefits of such
provisions.
          SECTION 18. Notices. All notices or other communications required or
permitted by this Agreement will be made in writing and all such notices or
communications will be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States certified or registered mail,
return receipt requested, postage prepaid, addressed as follows:

         
 
  If to the Company:   First Solar, Inc.
 
      350 West Washington Street
 
      Suite 600
 
      Tempe, AZ 85281
 
      Attention: Corporate Secretary
 
       
 
  If to the Executive:   To the Executive’s then current address on file with
the Company

or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
          SECTION 19. Headings and References. The headings of this Agreement
are inserted for convenience only and neither constitute a part of this
Agreement nor affect in any way the meaning or interpretation of this Agreement.
When a reference in this Agreement is made to a Section, such reference shall be
to a Section of this Agreement unless otherwise indicated.
          SECTION 20. Counterparts. This Agreement may be executed in one or
more counterparts (including via facsimile), each of which shall be deemed to be
an original, but all of which together shall constitute one and the same
instrument.

 

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          SECTION 21. Interpretation. For purposes of this Agreement, the words
“include” and “including”, and variations thereof, shall not be deemed to be
terms of limitation but rather shall be deemed to be followed by the words
“without limitation”. The term “or” is not exclusive. The word “extent” in the
phrase “to the extent” shall mean the degree to which a subject or other thing
extends, and such phrase shall not mean simply “if”.
          SECTION 22. Time of the Essence. The parties hereto acknowledge and
agree that time is of the essence in the performance of the obligations of this
Agreement and that the parties shall strictly adhere to any timelines herein.

 

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               IN WITNESS WHEREOF, this Agreement has been executed by the
parties as of the date first written above.

            FIRST SOLAR, INC.,
      By:   /s/ Michael J. Ahearn         Name:   Michael J. Ahearn       
Title:   Chief Executive Officer and Chairman        EXECUTIVE,
           /s/ Bruce Sohn           Bruce Sohn