exhibit10-6.htm


     EXHIBIT
10.6


    EXPLANATORY
NOTE

    


    Each of
the named executive officers and other executive officers entered into an
employment agreement with SunPower Corporation or, in the case of Mr. Daniel
Shugar, its subsidiary SunPower Corporation, Systems.  Each officer’s
employment agreement was substantially similar to the form being filed with this
Quarterly Report on Form 10-Q and as appended hereto, with the following
exceptions:

    


    Mr.
Werner

    
      	
              1.  

            	
              Section
      7(a) provides for a lump-sum payment equal to 36 months (instead of 24
      months) of base salary, a lump-sum payment equal to the target annual
      bonus multiplied by three (instead of two), continuation of health
      benefits for up to 36 months (instead of 24
  months).

            


    

     

    
      	
              2.  

            	
              Section
      8(a) grants accelerated vesting of awards, regardless of whether
      termination or resignation is in Connection with a Change of Control
      (instead of only in Connection with a Change of
      Control).  However, it specifies that vesting is not accelerated
      with respect to performance-based equity awards which are subject to
      achievement of specified milestones that are not achieved as of the
      Termination Date.

            


    

     

    
      	
              3.  

            	
              Section
      9(e) requires Mr. Werner’s agreement not to compete for a period of twelve
      months following the Termination Date if his employment is terminated by
      the company without Cause or by him for Good Reason, and is not in
      Connection with a Change of
Control.

            


    

     

    Messrs. Dinwoodie, Ledesma,
Wenger, Shugar

    
      	
              1.  

            	
              The
      agreements become effective on November 1, 2008 (instead of August 28,
      2008), when the officers’ pre-existing employment agreements expire, and
      the new agreements expire on August 28,
2011.

            


    

     

    
      	
              2.  

            	
              Section
      10(f) cites the company’s current business location in Richmond,
      California (instead of San Jose, California) as the original location for
      determining whether the officers’ primary place of business is moved more
      than 45 miles from their current primary place of
  business.

            


    

     

    Mr.
Neese

    
      	
              1.  

            	
              Section
      7(a) provides that Mr. Neese only becomes eligible for certain benefits as
      of July 2, 2009, and that prior to July 2, 2009 Mr. Neese is entitled to a
      lump-sum payment equal to $1,500,000 if his employment is terminated by
      the company without Cause.

            


    

     

    Mr.
Arriola

    
      	
              1.  

            	
              Section
      17 incorporates Mr. Arriola’s October 13, 2008 offer letter that provides
      the following additional terms:

            


    

     

    
      	
              a.  

            	
              Eligible
      to receive a $300,000.00 sign on bonus (less withholding tax). This bonus
      will be paid in full after completion of 30 days continuous employment
      with SunPower. The cash bonus shall be subject to a vest rate of 1/12th
      per month. It is designed in part to incentivize you to remain
      employed with SunPower for at least one full year. Therefore, it will not
      be vested or earned until you have completed each monthly benchmark, and
      it will not be earned in full until Arriola has completed a full year of
      service with SunPower. In the event of Arriola’s voluntary termination
      from SunPower before completing one year of service, unless for “Good
      Reason” as defined by the Employment Agreement, the unvested cash bonus
      shall be repaid by you to SunPower.  If Arriola is terminated without
      cause within 12 months of employment, he will not be required to repay the
      unvested portion of the sign on
bonus.

            


    

     

    
      	
              b.  

            	
              SunPower
      will reimburse Arriola for personal legal expenses to review his offer
      terms and agreements, not to exceed
$10,000.

            


    

     

    
      	
              c.  

            	
              Entitled
      to participate in SunPower’s Executive Relocation program.  A summary of
      relocation benefits is included in the table
  below:

            


    

     


    
      
        
          -

        

         


      

      
        1

        
          

        

      

      
         


      

    


    


    
      	
              Benefit

            	
              SunPower
      Executive Relocation Practice

            
	
              Moving

            	
              Household
      Goods

            	
              100%
      of cost to move one household, including speciality pack and ship
      items

            
	 
      	
              Car(s)

            	
              Ship
      2 cars

            
	 
      	
              Recreational
      Vehicles

            	
              none

            
	 
      	
              Household
      Goods storage

            	
              if
      needed, for 12 month period

            
	
              Househunting

            	
              Number
      of trips

            	
              3
      trips

            
	 
      	
              Duration

            	
              10
      days

            
	 
      	
              Spouse

            	
              Included

            
	
              Temporary
      Expenses

            	
              Term

            	
              Up
      to 60 days

            
	 
      	
              Amount

            	
              Actual
      expenses

            
	 
      	
              Settling
      in Allowance

            	
              1
      month's salary payable after 30 days worked

            
	 
      	
              Temporary
      Housing

            	
              Up
      to 12 months, not to exceed $80,000, or until home
sells

            
	
              Selling
      Old Home

            	
              Closing
      costs

            	
              All
      closing costs

            
	 
      	
              Buying
      old home

            	
              No
      purchase of old home

            
	 
      	
              Loss
      on sale protection

            	
              $500,000.00
      maximum benefit

            
	 
      	
              Carrying
      cost

            	
              none

            
	
              Buying
      New Home

            	
              Closing
      costs

            	
              Cover
      all closing costs on purchase of home or land

            
	 
      	
              Mortgage
      points

            	
              up
      to 2 points

            
	 
      	
              Company
      Loans

            	
              none

            
	
              Tax
      Support

            	
              Gross
      up

            	
              Provided
      on all taxable income for relocation expenses described in this offer
      letter

            
	 
      	
              Tax
      advice

            	
              Provided
      for 2 year period

            


    

     
 

    The “loss
on sale protection” referenced above means that SunPower will pay Arriola the
amount, if any, that original purchase price + improvements exceeds the actual
amount for which he sells his primary residence in San Diego (the “Loss
Amount”); provided, however, that (a) SunPower shall pay no more than $500,000
of the Loss Amount, and (b) the residence is sold no later than November 3,
2010. SunPower’s payment of the Loss Amount shall be made promptly following the
close of the sale of the residence. However, this payment is designed in part to
incentivize Arriola to remain employed with SunPower for at least one full year.
Therefore, it will not be earned in full until Arriola has completed a full year
of service with SunPower.   In the event of Arriola’s voluntary
termination from SunPower, unless for “Good Reason” as defined by the Employment
Agreement,  before completing one year of service, the Loss Amount
shall be repaid by Arriola to SunPower. Any payment of the Loss Amount is
subject to the gross up referenced under “Tax Support” in the table above. If
Arriola is terminated without cause within year one of employment, he will not
be required to repay the “Loss Amount” and SunPower will provide relocation back
to San Diego with a maximum amount not to exceed $100,000.00.

     

    
      	
              2.  

            	
              Mr. Arriola’s relocation benefits
      were modified on September 4, 2009.  The amended
      relocation benefits provide that SunPower may purchase his home at the
      current fair market value, determined by a third party relocation service
      company and independent appraisers.  The amended relocation
      benefits also provide that he will receive up to an additional $150,000
      (for a maximum of $650,000) of compensation for loss on the sale of his
      home.  Additionally, the amended relocation benefits provide
      that the compensation or loss on the sale of his home will not be deemed
      earned in full until completing two more years of employment; the
      compensation shall be subject to vest and deemed earned at a rate of
      1/4th for each
      six

            


    

    


     

    
      
        
           

        

         


      

      
        2

        
          

        

      

      
         


      

    

     

    


     

    
      	 	months of continued
      employment.  However, if SunPower terminates his employment
      without “Cause” (as defined in his employment agreement dated November 17,
      2008), or if he resigns for “Good Reason” (as defined in his employment
      agreement dated November 17, 2008), prior to completing two more full
      years of employment with SunPower, vesting will accelerate and the
      unvested portion of such compensation will be deemed fully earned.  .


    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    SUNPOWER
CORPORATION

     

    [NAME
OF EXECUTIVE]

     

    EMPLOYMENT
AGREEMENT

     

    This
Employment Agreement (this “Agreement”) is entered into as of [_______], 200_
(the “Effective Date”) by and between SunPower Corporation (the “Company”) and
[Name of Executive] (“Executive”).

     

    1. Duties and Scope of
Employment.

     

    (a) Positions and
Duties.  As of the Effective Date, Executive will serve as
[Title].  Executive will render such business and professional
services in the performance of his duties, consistent with Executive’s position
within the Company, as will reasonably be assigned to him by the Chief Executive
Officer of the Company (the “Supervisor”).  The period of Executive’s
employment under this Agreement is referred to herein as the “Employment
Term.”

     

    (b) Obligations.  During
the Employment Term, Executive will devote Executive’s full business efforts and
time to the Company.  Executive acknowledges that the performance of
his duties may require reasonable business travel.  For the duration
of the Employment Term, Executive agrees not to actively engage in any other
employment, occupation, or consulting activity for any direct or indirect
remuneration without the prior approval of the Supervisor; provided, however,
that Executive may, without the approval of the Supervisor, serve in any
capacity with any civic, educational, or charitable organization, provided such
services do not interfere with Executive’s obligations to, or compliance with
the policies of, the Company.

     

    2. At-Will
Employment.  Executive and the Company agree that Executive’s
employment with the Company constitutes “at-will”
employment.  Executive and the Company acknowledge that,
notwithstanding the term described in Section 3, this employment relationship
may be terminated at any time, upon written notice to the other party, with or
without good cause or for any or no cause, at the option either of the Company
or Executive.  Executive agrees to resign from all positions that he
holds with the Company (other than his position, if any, as a member of the
Board of Directors (the “Board”) of the Company) immediately following the
termination of his employment if the Supervisor so requests.

     

    3. Term of
Agreement.  This Agreement will have an initial term of three
years commencing on the Effective Date.  On the third anniversary of
the Effective Date, and on each three-year anniversary thereafter, this
Agreement will automatically renew for an additional three-year term unless the
Company provides Executive with written notice of non-renewal at least 120 days
prior to the date of automatic renewal.  In the event this Agreement
is not renewed (i.e. terminated) upon the expiration of its Term, under no
circumstances shall such non-renewal/termination trigger any entitlement to
severance or any other benefits set forth in Sections 7 and 8 of this
Agreement.


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    4. Compensation.

     

    (a) Base
Salary.  The Company will pay Executive a base salary as
compensation for Executive’s services (the “Base Salary”).  The Base
Salary will be paid periodically in accordance with the Company’s normal payroll
practices and be subject to the usual, required withholdings and to deductions
authorized by Executive.  Executive’s salary will be subject to
review, and adjustments will be made based upon the Company’s standard
practices.

     

    (b) Annual
Bonus.  Executive’s target bonus will be determined from time
to time by the Board and/or its compensation committee (“Target
Bonus”).  The actual bonus paid may be higher or lower than the Target
Bonus for over- or under-achievement of goals as determined by the Board and/or
its compensation committee in its or their sole discretion.

     

    (c) Equity
Compensation.  Executive may be entitled to participate in the
Company’s equity incentive programs, as determined from time to time by the
Board and/or its compensation committee.

     

    5. Executive
Benefits.  During the Employment Term, Executive will be
eligible to participate in accordance with the terms of all Benefit Plans that
are applicable to other senior executives of the Company, as such Benefit Plans
may exist from time to time.

     

    6. Expenses.  The
Company will reimburse Executive for reasonable travel, entertainment, and other
expenses incurred by Executive in the furtherance of the performance of
Executive’s duties hereunder, in accordance with the Company’s expense
reimbursement and other policies as in effect from time to time.  Any
such reimbursement under this Section 6 shall be for expenses incurred by
Executive during his employment by the Company and such reimbursement shall be
made not later than the last day of the calendar year following the calendar
year in which Executive incurs the expense.  In no event will the
amount of expenses so reimbursed by the Company in one year affect the amount of
expenses eligible for reimbursement, or in-kind benefits to be provided, in any
other taxable year.

     

    7. Severance in Connection with
Change of Control.

     

    (a) Termination Without Cause or
Resignation for Good Reason.  If Executive’s employment is
terminated by the Company without Cause or by Executive for Good Reason, and the
termination constitutes a “separation from service” within the meaning of
Section 409A of the Code and is in Connection with a Change of Control, then,
subject to Section 9, Executive will receive:  (i) a lump-sum payment
equal to Executive’s Base Salary at the monthly rate in effect on the
Determination Date multiplied by twenty-four (24), (ii) in the event the
Termination Date follows a completed fiscal year for which Executive’s annual
bonus relating to such prior completed fiscal year has not been paid as of the
Termination Date, a lump-sum payment equal to the actual bonus that would have
been paid for such completed fiscal year, (iii) a lump-sum payment equal to
Executive’s Target Bonus at the annual rate in effect on the Determination Date
multiplied by two, (iv) continuation of Executive’s and Executive’s eligible
dependents’ coverage under the Company’s Benefit Plans for twenty-four (24)
months, or, if earlier, until Executive is eligible for similar benefits from
another employer (provided 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        
Executive
validly elects to continue coverage under applicable law and assumes the cost,
on an after-tax basis, for such continuation coverage), (v) a lump-sum payment
equal to Executive’s accrued and unpaid Base Salary and paid time off earned by
the Executive through the Termination Date, (vi) reimbursement of up to $15,000
for the services of an outplacement firm mutually acceptable to the Company and
Executive, provided that Executive incurs such outplacement services no later
than the last day of the second year following the year in which Executive’s
Termination Date occurs, and (vii) except as provided in Section 7(c), on or
about January 31 of the year following the year in which the Termination Date
occurs and continuing on or about each January 31 until the year following the
last year of Executive’s Benefit Plans’ coverage pursuant to this Section, the
Company will make a payment to Executive (the “Benefit Plans Make-Up Payment”)
such that after payment of all taxes incurred by Executive, Executive receives
an amount equal to the amount Executive paid during the immediately preceding
calendar year for the Benefit Plans’ coverage described in this
Section.  The Company shall provide the reimbursement provided in
clause (vii) no later than the last day of the third year following the year in
which Executive’s Termination Date occurs.  Except as provided in
Section 7(c), or as earlier required by applicable law, the Company shall pay
the lump sum payments prescribed by Section 7(a) on the sixtieth (60th) day
following the Termination Date.

    

     

    (b) Sole Right to
Severance.  This Agreement is intended to represent Executive’s
sole entitlement to severance payments and benefits in the event of a
termination of his employment in connection with a Change of
Control.

     

    (c) Timing of
Payments.  To the extent necessary to avoid taxes and penalties
under Section 409A of the Code, if, as of the Termination Date, Executive is a
“specified employee,” within the meaning of Treasury Regulation §1.409A and
using the identification methodology selected by the Company from time to time,
the lump-sum payments specified in Sections 7(a) and, if it would otherwise be
paid before the date specified in this Section 7(c), the first Benefit Plans
Make-Up Payment, shall be paid on the first business day of the seventh month
after the Termination Date, or, if earlier, upon Executive’s
death.  Any payments that are deferred pursuant to this Section 7(c)
shall be credited with interest at the short-term Applicable Federal Rate with
annual compounding, as announced by the Internal Revenue Service for the month
in which the Termination Date occurs.

     

    8. Acceleration of Vesting in
Connection with Change of Control.

     

    (a) If
Executive’s employment is terminated by the Company without Cause or by
Executive for Good Reason, and the termination constitutes a “separation from
service” within the meaning of Section 409A of the Code and is in Connection
with a Change of Control, then, subject to Section 9, (x) all of such
Executive’s unvested options, shares of restricted stock and restricted stock
units will become fully vested and (as applicable) exercisable as of the
Termination Date and remain exercisable for the time period otherwise applicable
to such equity awards following such Termination Date pursuant to the applicable
equity incentive plan and equity award agreement and (y) all provisions
regarding forfeiture, restrictions on transfer, and the Company’s or its
Affiliate’s (as applicable) rights of repurchase, in each case otherwise
applicable to shares of restricted stock or restricted stock units held by such
Executive, shall lapse as of the Termination Date.  

    
      
        
        

      

      
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    (b) Section 280G
Limitation.  If any payment or benefit Executive would receive
pursuant to Section 7 and/or Section 8(a) (collectively, the “Payment”) would
(i) constitute a “parachute payment” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties payable with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then Executive’s benefits under this Agreement shall be
either:  (1) delivered in full, or (2) delivered as to such lesser
extent which would result in no portion of such benefits being subject to the
Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by Executive on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code.  Any reduction under this
Subsection (b) shall be applied first to Payments that constitute “deferred
compensation” (within the meaning of Section 409A of the Code and the
regulations thereunder).  If there is more than one such Payment, then
such reduction shall be applied on a pro rata basis to all such
Payments.

     

    (c) The
accounting firm engaged by the Company for general audit purposes as of the day
prior to the effective date of the Change of Control shall perform the foregoing
calculations.  If the accounting firm so engaged by the Company is
also serving as accountant or auditor for the individual, entity or group which
will control the Company upon the occurrence of a Change of Control, the Company
shall appoint a nationally recognized accounting firm other than the accounting
firm engaged by the Company for general audit purposes to make the
determinations required hereunder.  The Company shall bear all
expenses with respect to the determinations by such accounting firm required to
be made hereunder.

     

    (d) The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and Executive within thirty (30) calendar days after the date on which such
accounting firm has been engaged to make such determinations or such other time
as requested by the Company or Executive.  Any good faith
determinations of the accounting firm made hereunder shall be final, binding,
and conclusive upon the Company and Executive.

     

    9. Conditions to Receipt of
Severance; No Duty to Mitigate.

     

    (a)  Separation Agreement and
Release of Claims.  The receipt of any severance pursuant to
Section 7 or acceleration of equity awards pursuant to Section 8 will be subject
to Executive signing and not revoking a separation agreement and release of
claims in the form attached as Annex A hereto, which
separation agreement and release of claims must be delivered to Executive within
seven (7) days after the Termination Date and must be signed and submitted by
Executive within forty-five (45) days of Executive’s receipt of the separation
agreement and release of claims.  No severance will be paid or
provided until the separation agreement and release of claims becomes
effective.

     

    (b) Nonsolicitation.  In
the event of a termination of Executive’s employment that otherwise would
entitle Executive to the receipt of severance pursuant to Section 7, Executive
agrees that, during the one (1) year period following the Termination Date,
Executive, 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        
directly
or indirectly, whether as employee, owner, sole proprietor, partner, director,
member, consultant, agent, founder, co-venturer or otherwise, will (i) not
solicit, induce, or influence any person to modify his or her employment or
consulting relationship with the Company or its Affiliates (the
“No-Inducement”), and (ii) shall not use the Company’s confidential or
proprietary information to solicit business from any of the Company’s or its
Affiliates’ substantial customers and users (the “No-Solicit”).  If
Executive breaches the No-Inducement or the No-Solicit, all continuing payments
and benefits to which Executive otherwise may be entitled pursuant to Section 7
and/or Section 8(a) will cease immediately and the Company and its Affiliates
may pursue all other available remedies against Executive.  As used in
this Agreement, “Affiliate” means any entity that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Company.

    

     

    (c) Nondisparagement.  In
the event of a termination of Executive’s employment that otherwise would
entitle Executive to the receipt of severance pursuant to Section 7, Executive
agrees to refrain from any disparagement, criticism, defamation, or slander of
the Company or its Affiliates, or their respective directors, executive
officers, or employees, and to refrain from tortious interference with the
contracts and relationships of the Company or its Affiliates.  The
foregoing restrictions will not apply to any statements that are made truthfully
in response to a subpoena or other compulsory legal process.

     

    (d) No Duty to
Mitigate.  Executive will not be required to mitigate the
amount of any payment contemplated by this Agreement, nor will any earnings that
Executive may receive from any other source reduce any such
payment.

     

    10. Definitions.

     

    (a) Benefit
Plans.  For purposes of this Agreement, “Benefit Plans” means
plans, policies, or arrangements that the Company sponsors (or participates in)
and that immediately prior to Executive’s Termination Date provide Executive and
Executive’s eligible dependents with medical, dental, or vision
benefits.  Benefit Plans do not include any other type of benefit
(including, but not by way of limitation, financial counseling, disability, life
insurance, or retirement benefits).  A requirement that the Company
provide Executive and Executive’s eligible dependents with (or reimburse for)
coverage under the Benefit Plans will not be satisfied unless the coverage is no
less favorable than that provided to Executive and Executive’s eligible
dependents immediately prior to Executive’s Termination Date; provided, however,
that the Company may reduce coverage under the Benefit Plans if such reduction
is applicable to all other senior executives of the Company.  Subject
to the immediately preceding sentence, the Company may, at its option, satisfy
any requirement that the Company provide (or reimburse for) coverage under any
Benefit Plan by instead providing (or reimbursing for) coverage under a separate
plan or plans providing coverage that is no less favorable.

     

    (b) Cause.  For
purposes of this Agreement, “Cause” means the occurrence of any of the
following, as determined by the Company in good faith: (i) acts or omissions
constituting gross negligence or willful misconduct on the part of Executive
with respect to Executive’s obligations or otherwise relating to the business of
Company, (ii) Executive’s conviction of, or plea of guilty or nolo
contendere to, crimes involving fraud, misappropriation or embezzlement, or a
felony crime of moral turpitude, (iii) Executive’s violation or breach of


     

    
      
        
        

      

      
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any
fiduciary duty (whether or not involving personal profit) to the Company, except
to the extent that his violation or breach was reasonably based on the advice of
the Company’s outside counsel, or willful violation of a published policy of the
Company governing the conduct of it executives or other employees, or (iv)
Executive’s violation or breach of any contractual duty to the Company which
duty is material to the performance of the Executive’s duties or results in
material damage to the Company or its business; provided that if any of the
foregoing events is capable of being cured, the Company will provide notice to
Executive describing the nature of such event and Executive will thereafter have
thirty (30) days to cure such event.

    

     

    (c) Change of
Control.  For purposes of this Agreement, “Change of Control”
means (i) a sale of all or substantially all of the assets of the Company, (ii)
any merger, consolidation, or other business combination transaction of the
Company with or into another corporation, entity, or person, other than a
transaction in which the holders of at least a majority of the shares of voting
capital stock of the Company outstanding immediately prior to such transaction
continue to hold (either by such shares remaining outstanding or by their being
converted into shares of voting capital stock of the surviving entity) a
majority of the total voting power represented by the shares of voting capital
stock of the Company (or the respective surviving entity) outstanding
immediately after such transaction, (iii) the direct or indirect acquisition
(including by way of a tender or exchange offer) by any person, or persons
acting as a group, of beneficial ownership or a right to acquire beneficial
ownership of shares representing a majority of the voting power of the then
outstanding shares of capital stock of the Company, (iv) one or more contested
elections of directors during a period of 36 consecutive months, as a result of
which or in connection with which the persons who were directors before the
first of such elections or their nominees cease to constitute a majority of the
Board, or (v) a dissolution or liquidation of the
Company.  Notwithstanding anything herein to the contrary, any (1) pro
rata distribution (or retirement and pro rata issuance) of shares of the
Company’s stock held by Cypress Semiconductor Corporation (“Cypress”) to the
then existing public shareholders of Cypress (in proportion to their
shareholdings of Cypress), (2) repurchase by the Company of the shares of the
Company’s stock held by Cypress, or (3) acquisition, merger, consolidation, or
other business combination transaction of Cypress with or into the Company shall
not itself constitute a Change of Control, provided in the case of
Clause (3) that Cypress assumes this Agreement in writing and is thereafter
deemed to be the “Company” for all purposes under this Agreement.

     

    (d) Code.  For
purposes of this Agreement, “Code” means the Internal Revenue Code of 1986, as
amended.

     

    (e) Determination
Date.  For purposes of this Agreement, “Determination Date”
means the date during the 12-month period preceding the Termination Date on
which the sum of Executive’s annual Base Salary plus his annual Target Bonus was
highest.

     

    (f) Good
Reason.  For purposes of this Agreement, “Good Reason” means
the occurrence of any of the following without Executive’s express prior written
consent: (i) a material reduction in Executive’s position or duties after the
Effective Date, (ii) a material breach of this Agreement, (iii) a material
reduction in the Executive’s aggregate target compensation, including
Executive’s Base Salary and Target Bonus on a combined basis, excluding a
reduction that is applied to substantially all of the Company’s other senior
executives; provided, however, 

    
      
        
        

      

      
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    that for
purposes of this clause (iii) whether a reduction in Target Bonus has occurred
shall be determined without any regard to any actual bonus payments made to
Executive, or (iv) a relocation of Executive’s primary place of business for the
performance of his duties to the Company to a location that is more than
forty-five (45) miles from the Company’s current business location in San Jose,
California.  Executive shall be considered to have Good Reason
hereunder only if, no later than ninety (90) days following an event otherwise
constituting Good Reason under this Section 10(f), Executive gives notice to the
Company of the occurrence of such event and the Company fails to cure the event
within thirty (30) days following its receipt of such notice from Executive, and
the Executive terminates service within twenty-four (24) months following a
Change of Control.

     

    (g) In Connection with a Change
of Control.  For purposes of this Agreement, a termination of
Executive’s employment with the Company is “in Connection with a Change of
Control” if Executive’s employment terminates during the period beginning three
(3) months prior to a Change of Control and ending twenty-four (24) months
following a Change of Control.

     

    (h) Termination
Date.  For purposes of this Agreement, “Termination Date” means
the date on which Executive incurs a “separation from service” within the
meaning of Section 409A of the Code.

     

    11. Indemnification and
Insurance.  Executive will be covered under the Company’s
insurance policies and, subject to applicable law, will be provided
indemnification to the maximum extent permitted by the Company’s bylaws and
Articles of Incorporation, with such insurance coverage and indemnification to
be in accordance with the Company’s standard practices for senior executive
officers but on terms no less favorable than provided to any other Company
senior executive officer or director.

     

    12. Confidential
Information.  Executive acknowledges that the Agreement
Concerning Proprietary Information and Inventions between Executive and the
Company (the “Confidential Information Agreement”) will continue in
effect.  During the Employment Term, Executive agrees to execute any
updated versions of the Company’s form of Confidential Information Agreement
(any such updated version also referred to as the “Confidential Information
Agreement”) as may be required of substantially all of the Company’s executive
officers.

     

    13. Assignment.  This
Agreement will be binding upon and inure to the benefit of (a) the heirs,
executors, and legal representatives of Executive upon Executive’s death, and
(b) any successor of the Company.  Any such successor of the
Company will be deemed substituted for the Company under the terms of this
Agreement for all purposes.  For this purpose, “successor” means any
person, firm, corporation, or other business entity which at any time, whether
by purchase, merger, or otherwise, directly or indirectly acquires all or
substantially all of the assets or business of the Company.  None of
the rights of Executive to receive any form of compensation payable pursuant to
this Agreement may be assigned or transferred except by will or the laws of
descent and distribution.  Any other attempted assignment, transfer,
conveyance, or other disposition of Executive’s right to compensation or other
benefits will be null and void.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    14. Notices.  All
notices, requests, demands, and other communications called for hereunder will
be in writing and will be deemed given (a) on the date of delivery if delivered
personally, (b) one day after being sent by a well established commercial
overnight service, or (c) four days after being mailed by registered or
certified mail, return receipt requested, prepaid and addressed to the parties
or their successors at the following addresses, or at such other addresses as
the parties may later designate in writing:

     

    If to the
Company:

    


    Attn: Chief Executive
Officer

    SunPower
Corporation

    3939
North First Street

    San Jose,
CA 95134

    


    If to
Executive, at the last known residential address on file with the
Company.

    


    15. Severability.  If
any provision hereof becomes or is declared by a court of competent jurisdiction
to be illegal, unenforceable, or void, this Agreement will continue in full
force and effect without said provision.

     

    16. Arbitration.  The
Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released, shall
be subject to binding arbitration in San Francisco, California before a retired
judge then employed by the Judicial Arbitration and Mediation Service (JAMS)
under its employment arbitration rules and procedures, supplemented by the
California Code of Civil Procedure.  Judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction
thereof.  The Parties
hereby agree to waive their right to have any dispute between them resolved in a
court of law by a judge or jury.  This paragraph will not
prevent either party from seeking preliminary injunctive relief (or any other
provisional remedy) in aid of arbitration from any court having jurisdiction
over the Parties under applicable state laws.

     

    17. Integration and Existing
Agreement.  This Agreement, together with the Confidential
Information Agreement, Executive’s equity award agreements and any
indemnification agreement between Executive and the Company, represents the
entire agreement and understanding between the parties as to the subject matter
herein and supersedes all prior or contemporaneous agreements, whether written
or oral (but excluding the Confidential Information Agreement, Executive’s
equity award agreements and any indemnification agreement between Executive and
the Company).  In the event of any conflict between this Agreement and
the Confidential Information Agreement or Executive’s equity award agreements,
this Agreement shall prevail.  No waiver, alteration, or modification
of any of the provisions of this Agreement will be binding unless in writing
that specifically references this Section and is signed by duly authorized
representatives of the parties hereto.  Notwithstanding the preceding
sentence, both the Company and Executive agree to amend this Agreement with
respect to the timing of payments if the Board determines that an amendment is
necessary to prevent the imposition of additional tax liability under Section
409A of the Internal Revenue Code of 1986, as amended.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    18. Waiver of
Breach.  The waiver of a breach of any term or provision of
this Agreement, which must be in writing, will not operate as or be construed to
be a waiver of any other previous or subsequent breach of this
Agreement.

     

    19. Survival.  The
Confidential Information Agreement, and the Company’s and Executive’s
responsibilities under Sections 6 through 22 will survive the termination of
this Agreement.

     

    20. Headings.  All
captions and Section headings used in this Agreement are for convenient
reference only and do not form a part of this Agreement.

     

    21. Tax
Withholding.  All payments made pursuant to this Agreement will
be subject to withholding of applicable taxes.

     

    22. Governing
Law.  This Agreement will be governed by the laws of the State
of California (with the exception of its conflict of laws
provisions).

     

    23. Acknowledgment.  Executive
acknowledges that he has had the opportunity to discuss this matter with and
obtain advice from his private attorney, has had sufficient time to, and has
carefully read and fully understands all the provisions of this Agreement, and
is knowingly and voluntarily entering into this Agreement.

     

    24. Counterparts.  This
Agreement may be executed in counterparts, and each counterpart will have the
same force and effect as an original and will constitute an effective, binding
agreement on the part of each of the undersigned.

     

    25. Section 409A of the
Code.  Each payment and the provision of each benefit under
this Agreement will be considered a separate payment and not one of a series of
payments for purposes of Section 409A of the Code.  It is intended
that this Agreement comply with the provisions of Section 409A of the
Code.  This Agreement will be administered in a manner consistent with
such intent.

     

    *  *  *  *  *

     


    
      
        
          -

        

         


      

      
        9

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
the Company by a duly authorized officer, as of the Effective Date.

     

    


    COMPANY:                                                                           EXECUTIVE:

    


    


    


    By:                                                                

    Name:                                                                Print
Name:                                                              

    Its:                                                                

    


    



    
      
        
           -

        

         


      

      
        10

        
          

        

      

      
         


      

    


    ANNEX
A                                                                                                                     DATE

    


    SUNPOWER
CORPORATION

    SEPARATION AGREEMENT AND
RELEASE OF CLAIMS

     

    This
Separation Agreement and Release of Claims (hereinafter referred to as
"Agreement") is made and entered into by and between Executive Name (hereinafter
referred to as "Employee"), and SunPower Corporation (hereinafter referred to as
"Company").  It is hereby agreed by and between the parties as
follows:

     

     

    1.           The
last day of Employee’s work for the Company and termination date will be DATE.

     

     

    2.           As
separate consideration for this Agreement, the Company agrees to pay to Employee
the amounts required pursuant to Section 7, and accelerate the vesting of equity
awards pursuant to Section 8, of that certain Employment Agreement between the
Company and Employee in effect as of the date hereof (the “Employment
Agreement”).

     

    


    Employee
agrees that the foregoing shall constitute an accord and satisfaction and a full
and complete settlement of Employee’s claims, shall constitute the entire amount
of monetary consideration provided to Employee under this Agreement except as
provided herein, and that Employee will not seek any further compensation for
any other claimed damage, costs or attorneys' fees in connection with the
matters encompassed in this Agreement.

    


    Employee
acknowledges and agrees that the Company has made no representations to Employee
regarding the tax consequences of any amounts received by Employee pursuant to
this Agreement.  Other than withholdings as provided for herein,
Employee agrees to pay any additional federal or state taxes which are required
by law to be paid with respect to this Agreement.

    


     

    3.           The
Company agrees that Employee will receive any sums due and owing to Employee as
unpaid wages, salary and/or computed commissions, as may be applicable to
Employee, to the extent Employee is owed such compensation as of Employee’s
termination date, less legally required withholdings as in effect for Employee
on the termination date of Employee’s employment.

     

     

    4. The
Company agrees that Employee will receive any sums due and owing to Employee
under the Company’s PTO policy to the extent Employee is owed accrued PTO pay as
of Employee’s termination date, less legally required withholdings as in effect
for Employee on the termination date of Employee’s employment.

     

    


    5.           Employee
represents that Employee has not filed any complaint, claims or actions against
the Company, its affiliated companies, or their officers, agents, directors,
supervisors, employees or representatives with any state, federal or local
agency or court and that Employee will not do so at any time
hereafter.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    6. Employee
hereby agrees that all rights Employee may have under section 1542 of the Civil
Code of the State of California are hereby waived by
Employee.  Section 1542 provides as follows:

     

    
      	
              A.  

            	
              “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.”

            


    

     

     

    7. Notwithstanding
the provisions of section 1542 of the Civil Code of the State of California,
Employee without limitation hereby irrevocably and unconditionally releases and
forever discharges the Company, and its affiliated companies, their officers,
agents, directors, supervisors, employees, representatives, successors and
assigns, and all persons acting by, through, under, or in concert with any of
them from any and all charges, complaints, claims, causes of action, debts, sums
of money, controversies, agreements, promises, damages and liabilities of any
kind or nature whatsoever, both at law and equity, known or unknown, suspected
or unsuspected (hereinafter referred to as "claim" or "claims"), arising from
conduct occurring on or before the date of this Agreement, including without
limitation any claims incidental to or arising out of Employee’s employment with
the Company or the termination thereof.  It is expressly understood by
Employee that among the various rights and claims being waived in this release
are those arising under the Age Discrimination in Employment Act of 1967 (29
U.S.C. § 621. et seq.), including the
Older Workers’ Benefit Protection Act (29
U.S.C. § 626(f)).  This provision is intended by the parties
to be all encompassing and to act as a full and total release of any claim,
whether specifically enumerated herein or not, that Employee might have or has
had, that exists or ever has existed on or to the date of this Agreement, to the
extent permitted by law.  However, this Section 7 shall not apply
to (a) any claim that may not be released under applicable law and
(b) any claim to be indemnified for any losses, damages or costs arising
from any action or omission as a director, officer or employee of the Company or
a parent or subsidiary of the Company.

     

     

    8.           The
parties understand the word "claim" or "claims" to include without limitation
all actions, claims and grievances, whether actual or potential, known or
unknown, related, incidental to or arising out of Employee’s employment with the
Company and the termination thereof.  All such claims, including
related attorneys' fees and costs, are forever barred by this Agreement and
without regard to whether those claims are based on any alleged breach of a duty
arising in contract or tort; any alleged unlawful act, any other claim or cause
of action; and regardless of the forum in which it might be
brought.

     

    


    9.           Employee
agrees that Employee will now and forever keep the terms and monetary settlement
amount of this Agreement completely confidential, and that Employee shall not
disclose such to any other person directly or indirectly.  As an
exception to the foregoing, and the only exception, Employee may disclose the
terms and monetary settlement amount of this Agreement to Employee’s attorney,
tax advisor, accountant and immediate family (defined as and limited to spouse
and children) who shall be advised of its
confidentiality.  Notwithstanding the foregoing, Employee may make
such disclosures of the terms and monetary settlement amount of this Agreement
as are required by law or as necessary for legitimate enforcement or


     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    compliance
purposes.  Employee agrees that the failure to comply with the terms
of this paragraph shall amount to a material breach of this Agreement which will
subject Employee to the liability for all damages the Company might
incur.  In the event of such a breach, the Company will be entitled to
all legal and equitable remedies available, including, but not limited to,
injunctive relief and its attorneys’ fees to obtain said relief.

     

    


    10. Employee
has no recall to employment rights with respect to the Company or its affiliated
companies, and this Agreement severs the employment relationship between
Employee and the Company on Employee’s termination date.  While
Employee may apply for future employment with the Company or its affiliated
companies pursuant to employment policies then in effect, the Company and its
affiliated companies may in their discretion without cause decline the
re-employment of Employee.

    


    11. No later
than Employee’s termination date, Employee will deliver to the Company all
property of the Company, proprietary documents, proprietary data and proprietary
information of any nature pertaining to the Company or its affiliated companies,
and will not take from the Company or its affiliated companies any documents or
data of any description or any reproduction containing or pertaining to any
proprietary information nor utilize same.

    


    12.           Employee
acknowledges and agrees to comply with the provisions of the Employment
Agreement, including but not limited to Sections 9(b) and (c)
thereof.

     

    


    13. Employee
agrees that Employee will not hold Employee out as an agent of the Company or
its affiliated companies, or as having any authority to bind the Company or its
affiliated companies.

    


    14. Employee
understands and agrees that Employee:

     

    a.           Has
had the opportunity of a full twenty-one (21) days within which to consider this
Agreement before signing it, and that if Employee has not taken that full time
period that Employee has failed to do so knowingly and voluntarily.

     

    
      	
               
      

            	
              b.

            	
              Has
      carefully read and fully understands all of the provisions of this
      Agreement.

            


    

     

     

    Is,
through this Agreement, releasing the Company, its affiliated companies, and
their officers, agents, directors, supervisors, employees, representatives,
successors and assigns and all persons acting by, through, under, or in concert
with any of them, from any and all claims Employee may have against the Company
or such individuals.

     

     

    Knowingly
and voluntarily agrees to all of the terms set forth in this
Agreement.

     

     

    Knowingly
and voluntarily intends to be legally bound by the same.

     

     

    Was
advised and hereby is advised in writing to consider the terms of this Agreement
and consult with an attorney of Employee’s choice prior to signing this
Agreement.

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Has a
full seven (7) days following the execution of this Agreement to revoke this
Agreement, and has been and hereby is advised in writing that this Agreement,
all of its terms, and all of the obligations of the Company contained herein,
shall not become effective or enforceable until the revocation period has
expired.

     

     

    That
rights or claims under the Age Discrimination in Employment Act of 1967 (29
U.S.C. § 621, et seq.) that may arise
after the date this Agreement is signed are not waived.

     

    15.           Employee
expressly acknowledges that Employee has had the opportunity of a full
twenty-one (21) days within which to consider this Agreement before signing it,
and that if Employee has not taken that full time period, that Employee
expressly waives this time period and will not assert the invalidity of this
Agreement or any portion thereof on this basis.

     

    


    16. This
Agreement and compliance with this Agreement shall not be construed as an
admission by the Company of any liability whatsoever, or as admission by the
Company of any violation of the rights of Employee, violation of any order, law,
statute, duty or contract whatsoever.

    


    17. The
parties hereto represent and acknowledge that in executing this Agreement they
do not rely and have not relied upon any representation or statement made by any
of the parties or by any of the parties' agents, attorneys or representatives
with regard to the subject matter or effect of this Agreement or otherwise,
other than those specifically stated in this written Agreement.

    


    18. This
Agreement shall be binding upon the parties hereto and upon their heirs,
administrators, representatives, executors, successors, and assigns, and shall
inure to the benefit of said parties and each of them and to their heirs,
administrators, representatives, executors, successors, and
assigns.  Employee expressly warrants that Employee has not
transferred to any person or entity any rights or causes of action, or claims
released by this Agreement.

    


    19. Should
any provision of this Agreement be declared or be determined by any court of
competent jurisdiction to be illegal, invalid, or unenforceable, the legality,
validity and enforceability of the remaining parts, terms or provisions shall
not be effected thereby and said illegal, unenforceable, or invalid term, part
or provision shall be deemed not to be a part of this Agreement.

    


    20. With the
exception of the Employment Agreement and any agreement with the Company or its
affiliated companies pertaining to proprietary, trade secret or other
confidential information and/or the ownership of inventions, all of which shall
remain in full force and effect and are unaffected by this Agreement, this
Agreement sets forth the entire agreement between the parties hereto and fully
supersedes any and all prior agreements and understandings, written or oral,
between the parties hereto pertaining to the subject matter
hereof.  This Agreement may only be amended or modified by a writing
signed by the parties hereto.  Any waiver of any provision of this
Agreement shall not constitute a waiver of any other provision of this Agreement
unless expressly so indicated otherwise.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    21. This
Agreement shall be interpreted in accordance with the plain meaning of its terms
and not strictly for or against any of the parties hereto.

    


    22. The
Parties agree that any and all disputes arising out of the terms of this
Agreement, their interpretation, and any of the matters herein released, shall
be subject to binding arbitration in San Francisco, California before a retired
judge then employed by the Judicial Arbitration and Mediation Service (JAMS)
under its employment arbitration rules and procedures, supplemented by the
California Code of Civil Procedure.  Judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction
thereof.  The Parties
hereby agree to waive their right to have any dispute between them resolved in a
court of law by a judge or jury.  This paragraph will not
prevent either party from seeking preliminary injunctive relief (or any other
provisional remedy) in aid of arbitration from any court having jurisdiction
over the Parties under applicable state laws.

    


    23. This
Agreement may be executed in counterparts and each counterpart, when executed,
shall have the efficacy of a second original.  Photographic or
facsimile copies of any such signed counterparts may be used in lieu of the
original for any said purpose.

     

    


     

    
      	
               
      

            	
              For
      Employee:

            


    

     

    
      	
               
      

            	
              Dated:

            	 	 


    

     

    
      	
               
      

            	
              For
      SunPower Corporation:

            


    

     

    
      	
               
      

            	
              Dated:

            	
              By:

            	 


    

     

    


    


    
 

     

     

    15