exhibit106.htm


    Exhibit
10.6

     

    SUNPOWER
CORPORATION

     

    MANAGEMENT
CAREER TRANSITION PLAN

     

    Preamble

     

    The Board
of Directors of SunPower Corporation and its Compensation Committee believe that
it is in the best interest of the Company and its wholly-owned subsidiaries
(collectively, the “Company”) to provide additional security to (a) the Chief
Executive Officer of the Company and those employees who have been employed by
the Company for at least six (6) months and who report directly to the Chief
Executive Officer (“Executives”) and (b) other key employees within the Company
who are recommended for participation in the Plan (as defined below) by the
Chief Executive Officer of the Company (“Key Managers” and, collectively with
the Executives, “Plan Participants”).1

     

    Accordingly,
in order to (a) induce the Plan Participants to remain in the employ of the
Company and (b) facilitate the hiring of new executive officers and key
employees, the Company adopts the plan hereinafter set forth (the “Plan”) for
the payment of certain benefits in the event that any Plan Participant’s
employment is terminated either by the Company without Cause or by the Plan
Participant for Good Reason.

     

    The Plan
is an employee welfare benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).  This Plan document is
also the summary plan description of the Plan.

     

    Plan
Provisions

     

    1. Termination of
Employment.

     

    1.1 Participation in
Plan.  A Plan Participant shall be entitled to participate in
this Plan upon the termination of his or her employment (a) by reason of death
or Disability or (b) by the Company without Cause or by the Plan Participant for
Good Reason, in either case other than in Connection with a Change of
Control.  In the event a Plan Participant’s employment agreement, if
any, is not renewed (i.e. terminated) upon the expiration of its term, under no
circumstances shall such non-renewal/termination qualify as a termination of
employment for purposes of triggering the compensation payable under Section 2
below.

     

    1.2 Compensation.  The
compensation payable under the circumstances set forth in Section 1.1 shall be
as described in Section 2.

     

    1.3 Voluntary Termination for
Good Reason.  A termination of employment by a Plan Participant
shall be deemed to be for Good Reason so long as one or more events qualifying
as Good Reason has occurred, notwithstanding that the Plan Participant may have
other reasons for terminating employment, including employment by another
employer that the Plan Participant desires to accept.

     

    
      
        
          1
Notwithstanding the foregoing, Marty Neese will not be considered a Plan
Participant until July 2, 2009.  Until such date, Marty Neese’s
severance provisions will be stated exclusively in his Employment Agreement
dated August 28, 2008.

           

        

      

      
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    2. Payments Upon
Termination.  Provided that the Plan Participant has executed
(and not revoked within any applicable period) a release of claims against the
Company in a form acceptable to the Company and submitted such release of claims
to the Company within forty-five (45) days of the Date of Termination, upon a
termination under the circumstances stated in Section 1.1, the Plan Participant
shall be paid as follows:

     

    2.1 Termination by Death or
Disability.  In the event a Plan Participant’s termination of
employment occurs as a result of his or her death or Disability, the Company
shall pay such Plan Participant or his or her estate within sixty (60) days
following the Date of Termination an amount equal to the sum of (a) the Plan
Participant’s accrued and unpaid Base Salary through the Date of Termination and
(b) any accrued and unpaid paid time-off (“PTO”) earned by such Plan Participant
through the Date of Termination.  For this purpose, this Plan shall be
enforceable by the Plan Participant’s personal or legal representatives,
executors, administrators, successors, heirs, distributes, devisees and
legatees.  The Company’s payment obligations under this Section 2.1
shall supersede the Company’s obligations set forth in Sections 2.2 and 2.3 in
the event of a Plan Participant’s death or Disability.

     

    2.2 Key
Managers.

     

    (a) Termination Other Than in Connection
with a Change of Control.  In the event a Key Manager’s
employment is terminated either by the Company or its successors without Cause
other than in Connection with a Change of Control and such termination
constitutes a “separation from service” within the meaning of Section 409A of
the Code, the Company shall pay such Key Manager an amount equal to the sum
of:

     

    
      	
              (i)  

            	
              Accrued
      Base Salary.  Such Key
      Manager’s accrued and unpaid Base Salary through the Date of Termination;
      plus

            


    

     

    
      	
              (ii)  

            	
              Accrued
      Bonus. In
      the event the Termination Date follows a completed fiscal year for which
      such Key Manager’s annual bonus relating to such prior completed fiscal
      year has not been paid as of the Termination Date, a payment equal to the
      actual bonus that would have been paid for such completed fiscal year;
      plus

            


    

     

    
      	
              (iii)  

            	
              Paid
      Time-Off.  Any accrued and
      unpaid PTO earned by such Key Manager through the Date of Termination;
      plus

            


    

     

    
      	
              (iv)  

            	
              Additional
      Base Salary.  Such Key
      Manager’s monthly Base Salary in effect on the Determination Date
      multiplied by six (6); plus

            


    

     

    
      	
              (v)  

            	
              Pro Rata
      Target Bonus.  Such Key
      Manager’s annual target bonus in effect on the Determination Date divided
      by twelve (12) and multiplied by the number of whole calendar months
      between the commencement of the then current fiscal year and the Date of
      Termination; plus

            


    

     

    (b) Medical and
Dental Benefits.  Continuation coverage
for such Key Manager and his or her eligible dependents under the Company’s
Benefit Plans for a period of six (6) months following the Date of Termination,
or, if earlier, until such Key Manager is eligible for similar benefits from
another employer (provided such Key Manager validly elects to continue
coverage

    
      
        
        

      

      
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 under
applicable law and assumes the cost, on an after-tax basis, for such
continuation coverage); plus

    

     

    (i) Benefit Plans
Make-Up Payment.  Except as provided in Section 3.4, on or
about January 31 of the year following the year in which the Date of Termination
occurs and continuing on or about January 31 of the next succeeding year, if
necessary, the Company will make a payment to the Key Manager (the “Benefit
Plans Make-Up Payment”) such that after payment of all taxes incurred by the Key
Manager, the Key Manager receives an amount equal to the amount the Key Manager
paid during the immediately preceding calendar year for the Benefit Plans’
coverage described in this Section.

     

    (c) COBRA Coverage.  The
continuation of the Key Manager’s coverage under the Company’s Benefit Plans
under Section 2.2(a)(vi) shall not in any manner extend the applicable coverage
period for the Key Manager under the Consolidated Omnibus Reconciliation Act of
1985, as amended (“COBRA”).

     

    2.3 Executives.

     

    (a) Termination Other Than in Connection
with a Change of Control.  In the event an Executive’s
employment is terminated either by the Company or its successors without Cause
other than in Connection with a Change of Control and such termination
constitutes a “separation from service” within the meaning of Section 409A of
the Code, the Company shall pay such Executive an amount equal to the sum
of:

     

    
      	
              (i)  

            	
              Accrued
      Base Salary.  Such Executive’s
      accrued and unpaid Base Salary through the Date of Termination;
      plus

            


    

     

    
      	
              (ii)  

            	
              Accrued
      Bonus.  In the event the
      Termination Date follows a completed fiscal year for which such
      Executive’s annual bonus relating to such prior completed fiscal year has
      not been paid as of the Termination Date, a payment equal to the actual
      bonus that would have been paid for such completed fiscal year;
      plus

            


    

     

    
      	
              (iii)  

            	
              Paid
      Time-Off.  Any accrued and
      unpaid PTO earned by such Executive through the Date of Termination;
      plus

            


    

     

    
      	
              (iv)  

            	
              Additional
      Base Salary.  Such Executive’s
      monthly Base Salary in effect on the Determination Date multiplied by (i)
      twenty-four (24) if the Executive is the Chief Executive Officer of the
      Company and (ii) twelve (12) for each Executive other than the Chief
      Executive Officer of the Company;
plus

            


    

     

    
      	
              (v)  

            	
              Pro Rata
      Target Bonus.  Such Executive’s
      annual target bonus in effect on the Determination Date divided by twelve
      (12) and multiplied by the number of whole calendar months between the
      commencement of the then current fiscal year and the Date of Termination;
      plus

            


    

     

    
      	
              (vi)  

            	
              Medical and
      Dental Benefits. Continuation
      coverage for such Executive and such Executive’s eligible dependents under
      the Company’s Benefit Plans for a period of (i) twenty-four (24) months
      following the Date of Termination if such 

            


    

     

    
      
        
        

      

      
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      	 	 Executive
      is the Chief Executive Officer of the Company and (ii) twelve (12) months
      following the Date of Termination if such Executive is not the Chief
      Executive Officer of the Company, or, if earlier, until such Executive is
      eligible for similar benefits from another employer (provided such
      Executive validly elects to continue coverage under applicable law and
      assumes the cost, on an after-tax basis, for such continuation coverage);
      plus
	
              (vii)  

            	
              Benefit
      Plans Make-Up Payment.  Except as provided in Section
      3.4, on or about January 31 of the year following the year in which the
      Date of Termination 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.

            


    

     

    (b) COBRA Coverage.  The
continuation of Executive’s coverage under Section 2.3(a)(vi) shall not in any
manner extend the applicable coverage period for the Executive under
COBRA.

     

    3. Payment
Mechanics.

     

    3.1 Except as
otherwise required by applicable law and as provided in Section 3.4, the Plan
Participant shall receive the aggregate payments identified in Section 2.1, 2.2
or 2.3 (as applicable) in a single lump sum payment on the sixtieth (60th) day
following the Date of Termination, subject to Sections 2, 3.3 and
3.4.

     

    3.2 The Plan
Participant shall not be required to mitigate the amount of any payment provided
for in Sections 2.2 or 2.3 by seeking other employment or otherwise, nor shall
the amount of any such payment be reduced by any compensation earned by the Plan
Participant as the result of employment by another employer after the Date of
Termination (except as described in Sections 2.2(a)(vi) and 2.3(a)(vi)), or
otherwise.

     

    3.3 All
amounts payable under this Plan shall be subject to (and reduced by) any
applicable required tax withholdings.

     

    3.4 Timing of
Payments.  To the extent necessary to avoid taxes and penalties
under Section 409A of the Code, if, as of the Date of Termination, Plan
Participant 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 2.2 and 2.3 and, if it
would otherwise be paid before the date specified in Section 2.2 or 2.3, 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 Plan
Participant’s death.  Any payments that are deferred pursuant to this
Section 3.4 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.

    
      
        
        

      

      
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    4. Duration and
Amendment.

     

    4.1 This Plan
shall become effective on August 28, 2008 (the “Effective Date”) and shall
terminate on the third anniversary thereof unless, prior thereto, a Change of
Control shall have occurred, in which case the Plan shall terminate immediately
after the consummation of the Change of Control.

     

    4.2 The
Company expressly reserves the right to amend in any manner or terminate this
Plan during its term at any time.

     

    5. Section 280G
Limitation.  If any payment or benefit a Plan Participant would
receive pursuant to the Plan (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
Plan Participant’s benefits under this Plan 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 Plan Participant 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 Section 5 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.

     

    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.

     

    The
accounting firm engaged to make the determinations hereunder shall provide its
calculations, together with detailed supporting documentation, to the Company
and Plan Participant 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 Plan Participant.  Any good faith
determinations of the accounting firm made hereunder shall be final, binding,
and conclusive upon the Company and Plan Participant.

     

    6. Benefits
Implications.

     

    6.1 All
benefits to be provided hereunder shall be in addition to any pension,
disability, worker’s compensation, or other Company benefit plan distribution
that the Plan Participant has accrued at his or her Date of
Termination.  The receipt of severance pay under

    
      
        
        

      

      
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 this
Plan shall have no effect on the Plan Participant’s right, if any, to benefits
under any other employee pension or welfare benefit plan, except that this Plan
supersedes and replaces all prior negotiations and agreements, proposed or
otherwise, whether written or oral, concerning severance payments and benefits
in the event of the termination of employment of a Plan Participant not in
connection with a Change of Control.

    

     

    7. Definitions.  The
capitalized terms used in this Plan have the following meanings for purposes of
the Plan:

     

    7.1 “Base
Salary” means the base salary of a Plan Participant for the applicable period,
without regard to bonus, car allowance, incentive payments, equity incentives,
or commission payments.

     

    7.2 “Benefit
Plans” means plans, policies, or arrangements that the Company sponsors (or
participates in) and that, immediately prior to Plan Participant’s termination
of employment, provide medical, dental, or vision benefits for Plan Participants
and their eligible dependents.  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 Plan Participant and Plan Participant’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 Plan
Participant and Plan Participant’s eligible dependents immediately prior to Plan
Participant’s termination of employment; provided, however, that the Company may
reduce coverage under the Benefit Plans if such reduction is applicable to all
other senior executives of SunPower Corporation.  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.

     

    7.3 “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 Plan Participant with respect to Plan Participant’s
obligations or otherwise relating to the business of Company, (ii) Plan
Participant’s (A) felony conviction of, or felony plea of nolo contendere to,
crimes involving fraud, misappropriation or embezzlement, or a felony crime of
moral turpitude, or (B) conviction of crimes involving fraud, misappropriation
or embezzlement, (iii) Plan Participant’s violation or breach of any fiduciary
duty (whether or not involving personal profit) to the Company, or willful
violation of a published policy of the Company governing the conduct of it
executives or other employees, or (iv) Plan Participant’s violation or breach of
any contractual duty to the Company which duty is material to the performance of
the Plan Participant’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 Plan Participant describing the nature
of such event and Plan Participant will thereafter have thirty (30) days to cure
such event.

     

    7.4 “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 

    
      
        
        

      

      
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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) a
contested election of directors, as a result of which or in connection with
which the persons who were directors before such election 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.

    

     

    7.5 “Code”
means the Internal Revenue Code of 1986, as amended.

     

    7.6 “Date of
Termination” means the date on which Plan Participant incurs a “separation from
service” within the meaning of Section 409A of the Code.

     

    7.7 “Determination
Date” means the date during the 12-month period preceding the Date of
Termination on which the sum of Plan Participant’s annual Base Salary plus his
annual target bonus was highest.

     

    7.8 “Disability”
shall have the same defined meaning as in the Company’s long-term disability
plan.

     

    7.9 “Good
Reason” means the occurrence of any of the following without Plan Participant’s
express prior written consent:  (i) a material reduction in Plan
Participant’s position or duties after the Effective Date, (ii) a material
breach of this Plan, (iii) a material reduction in Plan Participant’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
SunPower Corporation’s other senior executives; provided, however, 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 Plan Participant’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 business location in which Plan
Participant works as of the Effective Date.  A Plan Participant 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
7.8, Plan Participant 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 Plan Participant, and the Plan Participant
terminates services within one hundred eighty (180) days following the initial
existence of such event.

    
      
        
        

      

      
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    7.10 “in
Connection with a Change of Control” means a termination of Plan Participant’s
employment with the Company during the period beginning three (3) months prior
to a Change of Control and ending twenty-four (24) months following a Change of
Control.

     

    8. General.

     

    8.1 Time
Limits:  All time limits refer to calendar days.  If
the expiration of any time limit falls on a weekend or a holiday observed by the
Company, the time limit will be deemed to end on the next workday.

     

    8.2 Source of
Benefits:  The Plan is unfunded.  The benefits
provided under the Plan are payable solely from the Company’s general
assets.

     

    8.3 Expenses:  The
expenses of operating and administering the Plan shall be borne entirely by the
Company.

     

    8.4 Plan Sponsor and
Administrator.  The Company is the “Plan Sponsor” and the
“Administrator” of the Plan, as such terms are defined in ERISA, unless the
Company designates a fiduciary to serve as the Administrator of the Plan in
Exhibit B (the
entity or individual serving as Administrator of the Plan shall be referred to
herein as the “Plan Administrator”).  The Company shall appoint a
Claims Fiduciary (as such term is defined in Exhibit A) to review
adverse benefit determinations as described in Exhibit
A.

     

    The Plan
Administrator shall make any and all determinations required to be made in
connection with the operation and administration of the Plan, including (without
limitation) the determination of all questions relating to eligibility for
benefits and the amount of any benefits payable hereunder.  The Plan
shall be interpreted in accordance with its terms and their intended
meanings.  However, the Plan Administrator shall have the discretion
to interpret or construe ambiguous, unclear, or implied (but omitted) terms in
any fashion it deems to be appropriate in its sole discretion, and to make any
findings of fact needed in the administration of the Plan.  The
validity of any such interpretation, construction, decision, or finding of fact
shall not be subject to de
novo review if challenged in court, by arbitration, or in any other
forum, and shall be upheld unless clearly arbitrary or capricious.

     

    8.5 Errors in
Drafting:  If, due to errors in drafting, any Plan provision
does not accurately reflect its intended meaning, as demonstrated by consistent
interpretations or other evidence of intent, or as determined by the Plan
Administrator in its sole discretion, the provision shall be considered
ambiguous and shall be interpreted by the Plan Administrator in a fashion
consistent with its intent, as determined in the sole discretion of the Plan
Administrator.  The Company shall amend the Plan retroactively to cure
any such ambiguity.

     

    8.6 Named
Fiduciary:  The Plan Administrator is the “named fiduciary” of
the Plan within the meaning of ERISA, including the “named fiduciary” with the
power to act with respect to the review of initial claims for benefits under the
Plan.

     

    8.7 Allocation and Delegation of
Responsibilities:  The Plan Administrator may allocate any of
its responsibilities for the operation and administration of the Plan to any
officer or other employee of the Company.  It may also delegate any of
its responsibilities under the 

    
      
        
        

      

      
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Plan by
designating, in writing, another person to carry out such
responsibilities.  Any such written designation shall become effective
when executed by an officer of the Company, and the designated person shall then
be responsible for carrying out the responsibilities described in such
writing.

    

     

    8.8 No Individual
Liability:  It is the express purpose of the Company that no
individual liability whatsoever shall attach to, or be incurred by, any
director, officer, employee, representative, or agent of the Company under, or
by reason of, the operation of the Plan.

     

    8.9 This Plan Supersedes All
Other Severance Pay Arrangements for Plan Participants:  This
Plan constitutes and contains the entire agreement and understanding between the
Company and Plan Participants and supersedes and replaces all prior negotiations
and agreements, proposed or otherwise, whether written or oral, concerning
severance payments and benefits in the event of the termination of employment of
a Plan Participant (other than the Chief Executive Officer) not in connection
with a Change of Control.  For the Chief Executive Officer, this Plan and
his written Employment Agreement constitute and contain the entire agreement and
understanding between the Company and the Chief Executive Officer and supersede
and replace all prior negotiations and agreements, proposed or otherwise,
whether written or oral, concerning severance payments and benefits in the event
of the termination of the Chief Executive Officer’s employment not in connection
with a Change of Control.

     

    8.10 Claims and Review
Procedures:  Any Plan participant (or his or her authorized
representative) who believes he or she has not received the proper benefit under
the Plan (a “Claimant”) may file a formal claim, in writing, with the Plan
Administrator.  Any such formal claim must be filed within ninety (90)
days after the date the Claimant first knew or should have known of the facts on
which the claim is based, unless the Company in writing consents
otherwise.  The Company has adopted procedures for considering claims
(which are set forth in Exhibit A), which it
may amend from time to time, provided that the Company shall notify Plan
Participants of any such amendment.  These procedures shall comply
with all applicable legal requirements.  The right to receive benefits
under this Plan is contingent on a Claimant using the prescribed claims process
to resolve any claim.  On request, the Company shall provide a
Claimant with a copy of the then-current claims procedures.

     

    8.11 Notices:  For
the purposes of this Plan, notices and all other communications provided for in
the Plan shall be in writing and shall be deemed to have been duly given when
delivered or mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed:  (a) if to a Plan Participant, to his or
her latest address as reflected on the Company’s employment records, or to him
at his or her place of employment, if known; and (b) if to the Company, to
SunPower Corporation, 3939 N. 1st Street,
San Jose, California 95134 Attention:  Vice President, Human
Resources, or to such other address as the Company may furnish to each Plan
Participant in writing with specific reference to the Plan and the importance of
the notice, except that notice of change of address shall be effective only upon
receipt.

     

    8.12 Governing
Law.  This Plan is a welfare plan subject to ERISA and it shall
be interpreted, administered, and enforced in accordance with that
law.

    
      
        
        

      

      
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    8.13 Invalid or Unenforceable
Provisions:  The invalidity or unenforceability of any
provision of this Plan shall not affect the validity or enforceability of any
other provision of this Plan, which shall remain in full force and
effect.  If a court or arbitrator concludes that there is an invalid
or unenforceable provision, it, he, or she shall replace that provision with one
that is valid and enforceable and that, as closely as possible, achieves the
same result as the invalid or unenforceable provision.

     

    8.14 409A
Compliance:  Each payment and the provision of each benefit
under this Plan 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 Plan comply with the provisions of Section 409A of the
Code.  This Plan will be administered in a manner consistent with such
intent.

     

    8.15 Right to Amend or
Discontinue:  The Company reserves the right at any time, and
without prior or other approval of any employee or former employee, and without
prior notice, to change, modify, amend, terminate, or discontinue this Plan for
any or no reason, except that no such action shall reduce an employee’s benefits
under the Plan that already have accrued by reason of the employee’s prior
termination of employment.

     

    WHEREFORE,
SunPower Corporation has caused this plan to be executed by its undersigned duly
authorized representative on August 28, 2008.

     

    


    
      
        	 	SUNPOWER
      CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Thomas
      H. Werner	 
	 	 	Thomas
      H. Werner	 
	 	 	Chief
      Executive Officer	 
	 	 	 	 


      



      
        
           


        

        
          10

          
            

          

        

        
           


        

      



    Exhibit
A

     

    


     

    Detailed Claims
Procedures

     

    1. Initial
Claims

     

    Any Plan
Participant (or his or her authorized representative) who believes he or she has
not received the proper benefit under the Plan must file a written claim with
the Plan Administrator.  The Plan Administrator will review the claim
and notify the employee of its decision in writing within a reasonable period of
time, but no later than 90 days after receiving the
claim.  Notwithstanding the foregoing, if the Plan Administrator
determines that special circumstances require an additional period of time for
processing the claim, the Plan Administrator may extend the determination period
for up to an additional 90 days by giving the Claimant written notice prior to
the end of the initial 90-day period, which notice shall indicate the special
circumstances requiring the extension and the date by which the Plan expects to
render the benefit determination.  Any claim that the Claimant does
not pursue in good faith through the initial claims stage shall be treated as
having been irrevocably waived.

     

    If the
claim is granted in full, the benefits or relief the Claimant seeks shall be
provided.  If the Plan Administrator makes an adverse benefit
determination, in whole or in part, the Plan Administrator shall provide the
Claimant with written notice of the adverse benefit determination, setting
forth, in a manner calculated to be understood by the Claimant:  (1)
the specific reason or reasons for the adverse benefit determination; (2)
specific references to the provisions of the Plan on which the adverse benefit
determination is based; (3) a description of any additional material or
information necessary for the Claimant to perfect the claim, together with an
explanation of why the material or information is necessary; and (4) an
explanation of the procedures for appealing the adverse benefit determination
and the time limits applicable to such procedure, including a statement of the
Claimant’s right to bring a civil action under ERISA following an adverse
benefit determination on review.

     

    An
“adverse benefit determination” is a denial, reduction, termination of, or
failure to make payment of a benefit (in whole or in part), including any such
denial, reduction, termination of or failure to make payment of a benefit that
is based on a determination of a Claimant’s eligibility to participate in the
Plan.

     

    2. Reviews of Adverse Benefit
Determinations

     

    If the
Claimant believes the adverse benefit determination is improper, the Claimant
(or the Claimant’s authorized representative) may file a written request for a
full review of the claim by a review official appointed by the Company (which
official may be a person, committee or other entity) (such official, the “Claims
Fiduciary”).  A request for review must be filed with the Claims
Fiduciary within 60 days after the employee receives the notice of adverse
benefit determination.  The request for review should set forth all of
the grounds upon which it is based, all facts in support of the request, and any
other matters the Claimant (or the Claimant’s authorized representative) deems
pertinent.

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

    The
Claimant (or the Claimant’s authorized representative) may submit written
comments, documents, records or other information relating to the claim and such
information will be taken into account on review without regard to whether such
information was submitted or considered in the initial benefit
determination.  The Claimant (or the Claimant’s authorized
representative) will be provided, upon request, and free of charge, reasonable
access to, and copies of, all documents, records, and other information relevant
to the claim.  Any claim the Claimant does not pursue in good faith
through the review stage, such as by failing to file a timely request for
review, shall be treated as having been irrevocably waived.

     

    The
Claims Fiduciary will notify the employee in writing of the final decision
within a reasonable period of time, but no later than 60 days after receipt of
the written request for review.  Notwithstanding the foregoing, if the
Claims Fiduciary determines that special circumstances require an additional
period of time for processing the claim, the Claims Fiduciary may extend the
review period for up to an additional 60 days by giving the Claimant written
notice prior to the end of the initial 60-day period, which notice shall
indicate the special circumstances requiring the extension and the date by which
the Plan expects to render the determination on review.  If the Claims
Fiduciary denies the appeal, in whole or in part, the decision shall be set
forth in a manner calculated to be understood by the Claimant, and shall include
specific reasons for the decision, specific references to the provisions on
which the decision is based, if applicable, a statement that the Claimant is
entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents records and other information relevant to the claim,
and a statement of the Claimant’s right to bring a civil action under
ERISA.

     


    
      
        
           

        

         


      

      
        A-2

        
          

        

      

      
         


      

    


    Exhibit
B

     

    ADDITIONAL
INFORMATION

     

    RIGHTS
UNDER ERISA

     

    Each Plan
Participant is entitled to certain rights and protections under
ERISA.  ERISA provides that all Plan Participants will be entitled
to:

     

     Receive Information About
The Plan and Plan Benefits

     

    1. Examine,
without charge, at the Plan Administrator’s office and at certain Company
offices, all documents governing the Plan, including collective bargaining
agreements,  and a copy of the latest annual report (Form 5500 Series)
filed by the Plan with the U.S. Department of Labor and available at the Public
Disclosure Room of the Employee Benefits Security Administration
(“EBSA”).

     

    2. Obtain,
upon written request to the Plan Administrator, copies of documents governing
the operation of the Plan, including collective bargaining agreements, and a
copy of the latest annual report (Form 5500 Series) and an updated summary plan
description, if any.  The Plan Administrator may make a reasonable
charge for the copies.

     

    3. Receive a
summary of the Plan’s annual financial report.  The Plan Administrator
is required by law to furnish each Plan Participant with a copy of this summary
annual report.

     

     Prudent Actions by Plan
Fiduciaries

     

    In
addition to creating rights for Plan Participants, ERISA imposes duties upon the
people who are responsible for the operation of the Plan.  The people
who operate the Plan, called “fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of all Plan Participants and
beneficiaries.  No one, including the Company or any other person, may
fire or otherwise discriminate against any Plan Participant to prevent a Plan
Participant from obtaining a benefit or exercising any right under
ERISA.

     

     Enforcing Plan Participants’
Rights

     

    1. If a Plan
Participant’s claim for benefits is denied or ignored, in whole or in part, the
Plan Participant has a right to know why this was done, to obtain copies of
documents relating to the decision without charge, and to appeal any denial, all
within certain time schedules.

     

    2. Under
ERISA, there are steps a Plan Participant can take to enforce the above
rights.  For instance, if a Plan Participant requests a copy of the
Plan documents or the latest annual report from the Plan and does not receive
them within 30 days, the Plan Participant may file suit in a federal
court.  In such a case, the court may require the Plan Administrator
to provide the materials and pay up to $110 a day until the Plan Participant
receives them, unless the materials were not sent because of reasons beyond the
control of the Plan Administrator.  If a 

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        
Plan
Participant’s claim for benefits under the Plan is denied or ignored, in whole
or in part, the Plan Participant may file suit in state or federal court.

    

     

    3. A Plan
Participant who believes he or she has been discriminated against for asserting
rights under ERISA may seek assistance from the U.S. Department of Labor or may
file suit in federal court.  The court will
decide who should pay court costs and legal fees.  If a Plan
Participant is successful the court may order the person sued by the Plan
Participant to pay these costs and fees.  If the Plan Participant
loses, the court may order the Plan Participant to pay these costs and fees, for
example, if the court finds a claim is frivolous.

     

    Assistance with Plan
Participants’ Questions

     

    A Plan
Participant with questions about the Plan or its application should contact the
Plan Administrator.

     

    A Plan
Participant with questions about this statement or about his/her rights under
ERISA, or who needs assistance in obtaining documents from the Plan
Administrator, should contact the nearest office of the EBSA, United States
Department of Labor, listed in the telephone directory and at the EBSA website,
or the Division of Technical Assistance and Inquires, EBSA, United States
Department of Labor, 200 Constitution Avenue N. W., Washington, D. C.
20210.  The Plan Participant may also obtain certain publications
about rights and responsibilities under ERISA by calling the publications
hotline of the EBSA.

     

    


    
      	
              ADMINISTRATIVE
      INFORMATION

            
	
              Name
      of Plan:

            	
              SunPower
      Corporation Management Career Transition Plan

            
	
              Plan
      Identification Number

            	
              601

            
	
              Plan
      Sponsor

            	
              SunPower
      Corporation

              3939
      N. 1st
      Street

              San
      Jose, California 95134

            
	
              Plan
      Administrator:

            	
              Vice
      President, Human Resources

              SunPower
      Corporation

              3939
      N. 1st
      Street

              San
      Jose, California 95134

            
	
              Type
      of Administration:

            	
              Self-Administered

            
	
              Type
      of Plan:

            	
              Welfare
      Benefit Plan that provides for severance pay and certain fringe benefits,
      including subsidized health benefit
coverage

            


    


    
      
        
           

        

         


      

      
        B-2

        
          

        

      

      
         


      

    


    


    
      	
              Federal
      Employer Identification Number:

            	
              94-3008969

            
	
              Direct
      Questions Regarding the Plan to:

            	
              Vice
      President, Human Resources

              SunPower
      Corporation

              3939
      N. 1st
      Street

              San
      Jose, California 95134

               

            
	
              Agent
      for Service of Legal Process:

            	
              Bruce
      Ledesma, Esq.

              General
      Counsel

              SunPower
      Corporation

              1414
      Harbour Way South

              Richmond,
      CA  94804

               

            
	
              Plan
      Year:

            	
              SunPower
      Corporation’s Fiscal Year