Exhibit 10.28
EXECUTION COPY
(FIRST SOLAR LOGO) [p75017p7501700.gif]
EMPLOYMENT AGREEMENT
          This Employment Agreement (this “Agreement”) is made as of
December 17, 2007, by and between First Solar, Inc., a Delaware corporation
having its principal office at 4050 East Cotton Center Boulevard, Building 6,
Suite 68, Phoenix, Arizona 85040 (hereinafter “Employer”) and John T. Gaffney
(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
1.1 Term; At-Will Nature of Employment. The term of this Agreement (the “Term”)
shall commence as of January 15, 2008. As of such date, Employer shall employ
Employee as a full-time, at-will employee, and Employee shall accept 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 Executive Vice President and General Counsel for First Solar
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 Employer’s Chief Executive Officer or Employer’s Board of Directors (the
“Board”), 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.
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 (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

 

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and obligations set forth in Section 1.5 and Articles IV and V of this Agreement
shall survive termination of Employee’s employment and termination of this
Agreement. In addition, during the Term, Employer shall pay for all professional
fees, dues and taxes, including attorney occupation and similar taxes required
to maintain Employee’s license to practice law, continuing legal education
requirements and costs of membership in professional organizations reasonably
requested by Employee for the purpose of Employee’s professional growth required
to serve Employer’s needs. Any such non-tax payments provided in any calendar
year shall not affect the amount of any such non-tax payments provided in any
other calendar year, and any reimbursements for any such non-tax payments made
by Employee shall be made prior to the end of the calendar year following the
calendar year in which Employee makes the applicable payment. Any such tax
payments made by the Company shall occur prior to the end of the calendar year
following the calendar year in which Employee remits the underlying taxes to the
applicable taxing authority.
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, either physical or mental (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 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
(the “Non-Competition Agreement”), the Confidentiality and Intellectual Property
Agreement between Employer and Employee (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.
First Solar, Inc.
Confidential — agt v.2-07
Page 2 of 9

 

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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 Sections 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
Pursuant to Section 1.4(e). If Employee’s employment is terminated by Employer
pursuant to Section 1.4(e) (termination without cause), then, subject to the
Change in Control Agreement, Employee shall be entitled to a lump sum cash
severance payment, payable within ten (10) business days following the Release
Effective Date (as defined below) equal to the Base Salary (as hereinafter
defined) in effect as of the date of termination of employment. Severance
payments shall be subject to any applicable tax withholding requirements.
Notwithstanding anything to the contrary herein, no severance payments shall be
due or made to Employee hereunder unless, on or prior to the tenth (10th)
business day prior to March 15 of the year following the year in which the
termination of employment occurs, (i) Employee shall have executed and delivered
a general release in favor of Employer and its affiliates, which shall be
substantially in the form of the Separation Agreement and Release attached
hereto as Exhibit A and otherwise satisfactory to Employer and (ii) such general
release has become effective and irrevocable (the date such release is effective
and irrevocable, the “Release Effective Date”).
          (c) Medical Insurance. If Employee’s employment is terminated by
Employer pursuant to Section 1.4(e) (termination without cause), Employer will
provide or pay for Employee’s medical insurance benefits at the same or a
comparable level as provided by Employer during Employee’s employment, 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 termination and (ii) the date
that Employee is covered under a medical benefits plan of a subsequent employer.
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) Vesting. If Employee’s employment is terminated by Employer
pursuant to Section 1.4(e) (termination without cause), (i) Employee’s stock
options, restricted stock, restricted stock units and any other equity
compensation granted to Employee by Employer and subject to vesting, other than
the restricted stock units and stock options granted to Employee pursuant to
Section 2.6(b), shall continue to vest for another twelve (12) months after the
effective date of such termination and (ii) the restricted stock units and stock
options granted to Employee pursuant to Section 2.6(b) shall become fully vested
and exercisable as of the effective date of such termination. After such
twelve-month period, in the case of clause (i), and after the effective date of
termination of employment, in the case of clause (ii), Employee will have a
ninety (90) day period in which to exercise any vested stock options or other
equity
First Solar, Inc.
Confidential — agt v.2-07
Page 3 of 9

 

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compensation, provided that if during such ninety (90) day period, Employee is
under any trading restriction due to a lockup agreement or closed trading
window, such ninety (90) day period shall be tolled during the period of such
trading restriction. 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; provided
that, notwithstanding anything to the contrary herein, 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.
ARTICLE II. Compensation
2.1 Sign on Bonus. Subject to applicable tax withholding requirements, Employee
shall receive a Seven Million and 00/100 Dollar ($7,000,000) sign on bonus
payable in twenty (20) equal quarterly installments, commencing on March 31,
2008. Each installment shall be payable on the last business day of the
applicable calendar quarter. Any undistributed portion of the bonus shall be
forfeited if Employee’s employment terminates prior to the payment date for such
portion for any reason other than a termination by Employer pursuant to
Section 1.4(e) (termination without cause).
2.2 Base Salary. Employee shall be compensated at an annual base salary of Five
Hundred Thousand and 00/100 Dollars ($500,000) (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.
2.3 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.
2.4 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 accrued in accordance with
Employer’s policies applicable to similarly situated employees of Employer.
2.5 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.
2.6 Grant of Equity.
First Solar, Inc.
Confidential — agt v.2-07
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          (a) Eligibility. Employee will be eligible to participate in
Employer’s equity participation programs to acquire options or equity incentive
compensation units in the common stock of Employer, subject to and/or in
accordance with the following: (i) the additional terms contained in Employer’s
equity grant documentation; (ii) approval, if required, of Employer’s equity
incentive plan by the Board and the shareholders of Employer; (iii) approval of
the grants by the Board; (iv) Employee’s execution of documents requested by
Employer at the time of grant; (v) Employee’s continued employment through the
grant date; (vi) the terms of the 2006 Omnibus Equity Incentive Compensation
Plan or the successor thereto; and (vii) the policies, procedures and practices
that may be adopted from time to time by Employer in its sole discretion for
granting such options or equity incentive compensation units.
          (b) Hiring Grant. Promptly following the date hereof, Employee will
receive restricted stock units valued at Seven Million and 00/100 Dollars
($7,000,000) on the date of grant, as determined by the Board, which shall vest,
contingent on continued employment, in twenty (20) equal quarterly installments
commencing on March 31, 2008, and One Hundred Thousand (100,000) stock options,
exercisable at fair market value on the date of grant, as determined by the
Board, which shall vest, contingent on continued employment, in five (5) equal
annual installments commencing on December 31, 2008, in each case subject to
Section 1.5(d).
2.7 Location. Employee’s position will be based in New York, New York.
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.
First Solar, Inc.
Confidential — agt v.2-07
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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.
 
      28101 Cedar Park Blvd
 
      Perrysburg, OH 43551
 
      Attention: Human Resources
 
       
 
  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. Notwithstanding the foregoing, 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 (the “Successor”). As used in this Agreement,
(a) the term “Employer” shall mean Employer as hereinbefore defined and any
Successor and any permitted assignee 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 and any permitted
assignee to which this Agreement is assigned. This Agreement shall be binding
upon and inure to the benefit of the parties, their successors, assigns, heirs,
executors and legal representatives.
First Solar, Inc.
Confidential — agt v.2-07
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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. 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”.
First Solar, Inc.
Confidential — agt v.2-07
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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.
     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.
First Solar, Inc.
Confidential — agt v.2-07
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EMPLOYEE:
/s/ John T. Gaffney
John T. Gaffney
EMPLOYER:
First Solar, Inc.
By: /s/ Michael J. Ahearn
Name Printed: Michael J. Ahearn
Title: CEO
First Solar, Inc.
Confidential — agt v.2-07
Page 9 of 9

 

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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) of its obligations under that certain Employment
Agreement in which the undersigned participates 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 and
(c) from any director and officer indemnification obligations under the
Company’s by-laws. 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 or caused to be filed, and
presently is not 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), 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

 

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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.
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 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.

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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.
Effective on the eighth calendar day following the date set forth below.
FIRST SOLAR, INC.

             
By
                     
 
            Name:        
 
            Title:        
 
            EMPLOYEE:        
 
                     
 
            [NAME]        
 
            Date        
 
            Signed:        
 
           

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(FIRST SOLAR.LOGO) [p75017p7501700.gif]
NON-COMPETITION AND NON-SOLICITATION AGREEMENT
     In consideration of Employee’s (as defined below) ongoing at-will
employment with Employer (as defined below) or one of its subsidiary companies,
the compensation and benefits provided to me including those set forth in a
separate Employment Agreement, Change in Control Agreement and Confidentiality
and Intellectual Property Agreement (the “Confidentiality Agreement”) and
Employer’s agreement to provide Employee with access to Employer’s confidential
information, intellectual property and trade secrets, access to its customers
and other promises made below, Employee enters into the following
non-competition and non-solicitation agreement:
     This Non-Competition and Non-Solicitation Agreement (“Agreement”) is
effective by and between John T. Gaffney (“Employee”) and First Solar, Inc.
(“Employer”) as of January 15, 2008.
     Whereas, Employee desires to be employed by Employer and Employer has
agreed to employ Employee in the current position of Employee with Employer, or
such other position as Employer may from time to time determine;
     Whereas, because of the nature of Employee’s duties, in the performance of
such duties, Employee will have access to and will necessarily utilize
sensitive, secret and proprietary data and information, the value of which
derives from its secrecy from Employer’s competitors, which, like Employer, sell
products and services throughout the world;
     Whereas, Employee and Employer acknowledge and agree that Employee’s
conduct in the manner prohibited by this Agreement during, or for the period
specified in this Agreement following the termination of, Employee’s employment
with Employer, would jeopardize Employer’s Confidential Information (as defined
in the Confidentiality Agreement) and the goodwill Employer has developed and
generated over a period of years, and would cause Employer to experience unfair
competition and immediate, irreparable harm; and
     Whereas, in consideration of Employer’s hiring Employee, Employee therefore
has agreed to the terms of this Agreement, the Employment Agreement and the
Confidentiality Agreement, and specifically to the restrictions contained
herein.
     Therefore, Employee and Employer hereby agree as follows (THE FOLLOWING ARE
IMPORTANT RESTRICTIONS TO WHICH EMPLOYEE AGREES IN ORDER TO INDUCE EMPLOYER TO
RETAIN EMPLOYEE AND WHICH, ONCE EMPLOYEE SIGNS THIS AGREEMENT, ARE BINDING ON
EMPLOYEE. BY SIGNING THIS AGREEMENT, EMPLOYEE SIGNIFIES THAT EMPLOYEE HAS READ
THESE RESTRICTIONS CAREFULLY BEFORE SIGNING THIS AGREEMENT, UNDERSTANDS THE
AGREEMENT’S TERMS, AND ASSENTS TO ABIDE BY THESE RESTRICTIONS.):

 

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     1. Nature and Period of Restriction. At all times during Employee’s
employment and for a period of twelve months after the termination of employment
(for any reason, including discharge or resignation) with Employer (the
“Restricted Period”), Employee agrees as follows:
     1.1. Employee agrees not to engage or assist, in any way or in any
capacity, anywhere in the Territory (as defined below), either directly or
indirectly, (a) in the business of the development, sale, marketing, manufacture
or installation that would be in direct competition with of any type of product
sold, developed, marketed, manufactured or installed by Employer during
Employee’s employment with Employer, including photovoltaic modules, or (b) in
any other activity in direct competition or that would be in direct competition
with the business of Employer as that business exists and is conducted (or with
any business planned or seriously considered, of which Employee has knowledge)
during Employee’s employment with Employer. In addition and in particular,
Employee agrees not to sell, market, provide or distribute, or endeavor to sell,
market, provide or distribute, in any way, directly or indirectly, on behalf of
Employee or any other person or entity, any products or services competitive
with those of Employer to any person or entity which is or was an actual or
prospective customer of Employer at any time during Employee’s employment by
Employer.
     1.2. “Territory” for purposes of this Agreement means North America, South
America, Australia, Europe and Asia.
     1.3. Employee agrees not to solicit, recruit, hire, employ or attempt to
hire or employ, or assist any other person or entity in the recruitment or
hiring of, any person who is (or was) an employee of Employer, and agrees not to
otherwise urge, induce or seek to induce any person to terminate his or her
employment with Employer.
     1.4. The parties understand and agree that the restrictions set forth in
the paragraphs in this Section 1 also extend to Employee’s recommending or
directing any such actual or prospective customers to any other competitive
concerns, or assisting in any way any competitive concerns in soliciting or
providing products or services to such customers, whether or not Employee
personally provides any products or services directly to such customers. For
purposes of this Agreement, a prospective customer is one that Employer
solicited or with which Employer otherwise sought to engage in a business
transaction during the time that Employee is or was employed by Employer.
     1.5. Employee and Employer acknowledge and agree that Employer has expended
substantial amounts of time, money and effort to develop business strategies,
customer relationships, employee relationships, trade secrets and goodwill and
to build an effective organization and that Employer has a legitimate business
interest and right in protecting those assets as well as any similar assets that
Employer may develop or obtain. Employee and Employer acknowledge that Employer
is entitled to protect and preserve the going concern value of Employer and its
business and trade secrets to the extent permitted by law. Employee acknowledges
and agrees the restrictions imposed upon Employee under this Agreement are
reasonable and necessary for the protection of Employer’s legitimate interests,
including Employer’s Confidential Information, intellectual property, trade
secrets and goodwill.

2

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Employee and Employer acknowledge that Employer is engaged in a highly
competitive business, that Employee is expected to serve a key role with
Employer, that Employee will have access to Employer’s Confidential Information,
that Employer’s business and customers and prospective customers are located
around the world, and that Employee could compete with Employer from virtually
any location in the world. Employee acknowledges and agrees that the
restrictions set forth in this Agreement do not impose any substantial hardship
on Employee and that Employee will reasonably be able to earn a livelihood
without violating any provision of this Agreement. Employee acknowledges and
agrees that, in addition to Employer’s agreement to hire him, part of the
consideration for the restrictions in this Section 1 consists of Employer’s
agreement to make severance payments as set forth in the separate Employment
Agreement between Employer and Employee.
     1.6. Employee agrees to comply with each of the restrictive covenants
contained in this Agreement in accordance with its terms, and Employee shall
not, and hereby agrees to waive and release any right or claim to, challenge the
reasonableness, validity or enforceability of any of the restrictive covenants
contained in this Agreement.
     2. Notice by Employee to Employer. Prior to engaging in any employment or
business during the Restricted Period, Employee agrees to provide prior written
notice (by certified mail) to Employer in accordance with Section 6, stating the
description of the activities or position sought to be undertaken by Employee,
and to provide such further information as Employer may reasonably request in
connection therewith (including the location where the services would be
performed and the present or former customers or employees of Employer
anticipated to receive such products or services). Employer shall be free to
object or not to object in its unfettered discretion, and the parties agree that
any actions taken or not taken by Employer with respect to any other employees
or former employees shall have no bearing whatsoever on Employer’s decision or
on any questions regarding the enforceability of any of these restraints with
respect to Employee.
     3. Notice to Subsequent Employer. Prior to accepting employment with any
other person or entity during the Restricted Period, Employee shall provide such
prospective employer with written notice of the provisions of this Agreement,
with a copy of such notice delivered promptly to Employer in accordance with
Section 6.
     4. Extension of Non-Competition Period in the Event of Breach. It is agreed
that the Restricted Period shall be extended by an amount of time equal to the
amount of time during which Employee is in breach of any of the restrictive
covenants set forth above.
     5. Judicial Reformation to Render Agreement Enforceable. 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

3

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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.
     6. Notice. All documents, notices or other communications that are required
or permitted to be delivered or given under this Agreement shall be in writing
and shall be deemed to be duly delivered or given when received.

         
 
  If to Employer:   First Solar, Inc.
 
      4050 East Cotton Center Boulevard
 
      Building 6, Suite 68
 
      Phoenix, Arizona 85040
 
      Attention: Chief Executive Officer
Fax: (602) 414-9400
 
       
 
  If to Employee:    
 
       

     7. Enforcement. Except as expressly stated herein, the covenants contained
in this Agreement shall be construed as independent of any other provision or
covenants of any other agreement between Employer and Employee, and the
existence of any claim or cause of action of Employee against Employer, whether
predicated on this Agreement or otherwise, or the actions of Employer with
respect to enforcement of similar restrictions as to other employees, shall not
constitute a defense to the enforcement by Employer of such covenants. Employee
acknowledges and agrees that Employer has invested great time, effort and
expense in its business and reputation, that the products and information of
Employer are unique and valuable, and that the services performed by Employee
are unique and extraordinary, and Employee agrees that Employer will suffer
immediate, irreparable harm and shall be entitled, upon a breach or a threatened
breach of this Agreement, to emergency, preliminary, and permanent injunctive
relief against such activities, without having to post any bond or other
security, and in addition to any other remedies available to Employer at law or
equity. Any specific right or remedy set forth in this Agreement, legal,
equitable or otherwise, shall not be exclusive but shall be cumulative upon all
other rights and remedies allowed or by law, including the recovery of money
damages. The failure of Employer to enforce any of the provisions of this
Agreement, or the provisions of any agreement with any other Employee, shall not
constitute a waiver or limit any of Employer’s rights.
     8. At-Will Employment; Termination. This Agreement does not alter the
at-will nature of Employee’s employment by Employer, and Employee’s employment
may be terminated by either party, with or without notice and with or without
cause, at any time. In addition to the foregoing provisions of this Agreement,
upon Employee’s termination, Employee shall cease all identification of Employee
with Employer and/or the business, products or services of Employer, and the use
of Employer’s name, trademarks, trade name or fictitious name. All provisions,
obligations, and restrictions in this Agreement shall survive termination of
Employee’s employment with Employer.
     9. Choice of Law, Choice of Forum. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware,
without reference

4

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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 9 are made in
consideration of the other party’s agreements in this Section 9, as well as in
other portions of this Agreement.
     10. Entire Agreement, Modification and Assignment.
     10.1. This Agreement, the Employment Agreement, the Confidentiality
Agreement and the Change in Control Agreement comprise the entire agreement
relating to the subject matter hereof between the parties and supersede, cancel,
and annul any and all prior agreements or understandings between the parties
concerning the subject matter of the Agreement.
     10.2. This Agreement may not be modified orally but may only be modified in
a writing executed by both Employer and Employee.
     10.3. This Agreement shall inure to the benefit of Employer, its successors
and assigns, and may be assigned by Employer. Employee’s rights and obligations
under this Agreement may not be assigned by Employee.
     11. 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”.
     IN WITNESS WHEREOF, the parties have executed this Agreement, effective as
of the day and year first written above.

          EMPLOYER:   EMPLOYEE:
 
        First Solar, Inc.    
 
       
By:
  /s/ Michael J. Ahearn   /s/ John T. Gaffney
 
       
Its:
  CEO    

Printed Name: Michael J. Ahearn

5

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First Solar, Inc.
Confidentiality and Intellectual Property Agreement

             
Employee:
  John T. Gaffney        
 
           
Place of Signing:
           
 
         
 
           
 
  Date:                     , 2008        

In consideration of my ongoing at-will employment with First Solar, Inc. or one
of its subsidiary companies (collectively, the “Company”), for the compensation
and benefits provided to me and for the Company’s agreement to provide me with
access to experience, knowledge and Confidential Information (as defined below)
in the course of such employment relating to the methods, plans and operations
of the Company and its suppliers, clients and customers, I enter into the
following Confidentiality and Intellectual Property Agreement (the “Agreement”)
and agree as follows:
     1. Except for any items I have identified and described in a writing given
to the Company and acknowledged in writing by an officer of the Company on or
before the date of this Agreement, which items are specifically excluded from
the operation of the applicable provisions hereof, I do not own, nor have any
interest in, any patents, patent applications, inventions, improvements,
methods, discoveries, designs, trade secrets, copyrights, and/or other
patentable or proprietary rights.
     2. I will promptly and fully disclose to the Company all developments,
inventions, ideas, methods, discoveries, designs, and innovations (collectively
referred to herein as “Developments”), whether patentable or not, relating
wholly or in part to my work for the Company or resulting wholly or in part from
my use of the Company’s materials or facilities, which I may make or conceive,
whether or not during working hours, whether or not using the Company’s
materials, whether or not on the Company facilities, alone or with others, at
any time during my employment or within ninety (90) days after termination
thereof, and I agree that all such Developments shall be the exclusive property
of the Company, and that I shall have no proprietary or shop rights in
connection therewith.
     3. I will assign, and do hereby assign, to the Company or the Company’s
designee, my entire right, title and interest in and to all such Developments
including all trademarks, copyrights, moral rights and mask work rights in or
relating to such Developments, and any patent applications filed and patents
granted thereon including those in foreign countries; and I agree, both during
my employment by the Company and thereafter, to execute any patent or

 

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other papers deemed necessary or appropriate by the Company for filing with the
United States or any other country covering such Developments as well as any
papers that the Company may consider necessary or helpful in obtaining or
maintaining such patents during the prosecution of patent applications thereon
or during the conduct of any interference, litigation, or any other matter in
connection therewith, and to transfer to the Company any such patents that may
be issued in my name. If, for some reason, I am unable to execute such patent or
other papers, I hereby irrevocably designate and appoint the Company and its
designees and their duly authorized officers and agents, as the case may be, as
my agent and attorney in fact to act for and in my behalf and stead to execute
any documents and to do all other lawfully permitted acts in connection with the
foregoing. I agree to cooperate with and assist the Company as requested by the
Company to provide documentation reflecting the Company’s sole and complete
ownership of the Developments. All expenses incident to the filing of such
applications, the prosecution thereof and the conduct of any such interference,
litigation, or other matter will be borne by the Company. This Section 3 shall
survive the termination of this Agreement.
     4. Subject to Section 5 below, I will not, either during my employment with
the Company or at any time thereafter, use, disclose or authorize, or assist
anyone else to disclose or use or make known for anyone’s benefit, any
information, knowledge or data of the Company or any supplier, client, or
customer of the Company in any way acquired by me during or as a result of my
employment with the Company, whether before or after the date of this Agreement,
(hereinafter the “Confidential Information”). Such Confidential Information
shall include the following:
     (a) Information of a business nature, including financial information and
information about sales, marketing, purchasing, prices, costs, suppliers and
customers;
     (b) Information pertaining to future developments, including research and
development, new product ideas and developments, strategic plans, and future
marketing and merchandising plans and ideas;
     (c) Information and material that relate to the Company’s manufacturing
methods, machines, articles of manufacture, compositions, inventions,
engineering services, technological developments, “know-how”, purchasing,
accounting, merchandising and licensing;
     (d) Trade secrets of the Company, including information and material with
respect to the design, construction, capacity or method of operation of the
Company’s equipment or products and information regarding the Company’s
customers and sales or marketing efforts and strategies;
     (e) Software in various stages of development (including source code,
object code, documentation, diagrams, flow charts), designs, drawings,
specifications, models, data and customer information; and

 

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     (f) Any information of the type described above that the Company obtained
from another party and that the Company treats as proprietary or designates as
confidential, whether or not owned or developed by the Company.
     5. It is understood and agreed that the term “Confidential Information”
shall not include information that is generally available to the public, other
than through any act or omission on my part in breach of this Agreement.
     6. I acknowledge that: (a) such Confidential Information derives its value
to the Company from the fact that it is maintained as confidential and secret
and is not readily available to the general public or the Company’s competitors;
(b) the Company undertakes great effort and sufficient measures to maintain the
confidentiality and secrecy of such information; and (c) such Confidential
Information is protected and covered by this Agreement regardless of whether or
not such Confidential Information is a “trade secret” under applicable law. I
further acknowledge and agree that the obligations and restrictions herein are
reasonable and necessary to protect the Company’s legitimate business interests,
and that this Agreement does not impose an unreasonable or undue burden on me
and will not prevent me from earning a livelihood subsequent to the termination
of my employment with the Company. I agree to comply with each of the
restrictive covenants contained in this Agreement in accordance with its terms,
and will not, and I hereby agree to waive and release any right or claim to,
challenge the reasonableness, validity or enforceability of any of the
restrictive covenants contained in this Agreement.
     7. I will deliver to the Company promptly upon request, and, in any event,
on the date of termination of my employment, all documents, copies thereof and
other materials in my possession, including any notes or memoranda prepared by
me, pertaining to the business of the Company, whether or not including any
Confidential Information, and thereafter will promptly deliver to the Company
any documents and copies thereof pertaining to the business of the Company that
come into my possession.
     8. I represent that I have no agreements with or obligations to others with
respect to any innovations, developments, or information that could conflict
with any of the foregoing.
     9. The invalidity or unenforceability of any provision of this Agreement,
whether in whole or in part, shall not in any way affect the validity and/or
enforceability of any of the other provisions of this Agreement. Any invalid or
unenforceable provision or portion thereof shall be deemed severable to the
extent of any such invalidity or unenforceability. The restrictions contained in
this Agreement are reasonable for the purpose of preserving for the Company and
its affiliates the proprietary rights, intangible business value and
Confidential Information of the Company and its affiliates. If it is determined
by a court of competent jurisdiction that any of the restrictions or language in
this Agreement is for any reason invalid or unenforceable, the parties desire
and agree that the court revise any such restrictions or language so as to
render it 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

 

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unenforceable language and enforce the balance of this Agreement to the fullest
extent allowed by law.
     10. I agree that any breach or threatened breach by me of any of the
provisions in this Agreement cannot be remedied solely by the recovery of
damages. I expressly agree that upon a threatened breach or violation of any of
such provisions, the Company, in addition to all other remedies, shall be
entitled as a matter of right, and without posting a bond or other security, to
emergency, preliminary, and permanent injunctive relief in any court of
competent jurisdiction. Nothing herein, however, shall be construed as
prohibiting the Company from pursuing, in concert with an injunction or
otherwise, any other remedies available at law or in equity for such breach or
threatened breach, including the recovery of damages.
     11. This Agreement is made in consideration of my continued employment by
the Company. I understand that the Company is under no obligation to employ me
for any duration and that my employment with the Company is terminable at the
will of the Company or at my will at any time and for any reason and without
notice.
     12. Upon termination of my employment with the Company, I shall, if
requested by the Company, reaffirm my recognition of the importance of
maintaining the confidentiality of the Company’s Confidential Information and
reaffirm all of my obligations set forth herein. The provisions, obligations,
and restrictions in this Agreement shall survive the termination of my
employment, and will be binding on me whether or not the Company requests a
re-affirmation.
     13. This Agreement, my Employment Agreement with the Company (the
“Employment Agreement”), the Non-Competition Agreement (as defined in the
Employment Agreement) and the Change in Control Agreement (as defined in the
Employment Agreement) represent the full and complete understanding between me
and the Company with respect to the subject matter hereof and supersede all
prior representations and understandings, whether oral or written regarding such
subject matter. This Agreement may not be changed, modified, released,
discharged, abandoned or otherwise terminated, in whole or in part, except by an
instrument in writing signed by both the Company and me. My obligations under
this Agreement shall be binding upon my heirs, executors, administrators, or
other legal representatives or assigns, and this Agreement shall inure to the
benefit of the Company, its successors, and assigns.
     14. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without reference to
principles of conflict 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 14 are made in
consideration of the other party’s agreements in this Section 14, as well as in
other portions of this Agreement.

 

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     15. 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”.

     
Signed:
  /s/ John T. Gaffney
 
  Employee
 
    Agreed to by First Solar, Inc.
 
   
 
  By:     /s/ Michael J. Ahearn
 
   
 
  Its:    CEO