exv10w01






Exhibit 10.01









AMENDED AND RESTATED EMPLOYMENT AGREEMENT




          This Agreement is made as of this November 3, 2008, (this “Agreement”) by and between First
Solar, Inc., a Delaware corporation having its principal office at 350 West Washington Street,
Suite 600, Tempe, Arizona 85281 (hereinafter “Employer”) and Michael J. Ahearn (hereinafter
“Employee”).




WITNESSETH:




          WHEREAS, Employer and Employee wish to amend and restate the Employment Agreement dated
October 31, 2006 between Employer and Employee (the “Prior Employment Agreement”) and enter into
this Agreement relating to the employment of Employee by Employer.




          NOW, THEREFORE, in consideration of the foregoing premises, and the mutual covenants, terms
and conditions set forth herein, and intending to be legally bound hereby, Employer and Employee
hereby agree as follows:




Article I. Employment




          1.1 At-Will Nature of Employment. Employer hereby employs Employee as a full-time,
at-will employee, and Employee hereby accepts employment with Employer as a full-time, at-will
employee. Employer or Employee may terminate this Agreement at any time and for any reason, with
or without cause and with or without notice, subject to the provisions of this Agreement.




          1.2 Position and Duties of Employee. Employer hereby employs Employee in the initial
capacity of Chief Executive Officer and Employee hereby accepts such position. Employee agrees to
diligently and faithfully perform such duties as may from time to time be assigned to Employee by
the Board of Directors of Employer (the “Board”), consistent with Employee’s position with
Employer. Employee recognizes the necessity for established policies and procedures pertaining to
Employer’s business operations, and Employer’s right to change, revoke or supplement such policies
and procedures at any time, in Employer’s sole discretion. Employee agrees to comply with such
policies and procedures, including those contained in any manuals or handbooks, as may be amended
from time to time in the sole discretion of Employer.




          1.3 No Salary or Benefits Continuation Beyond Termination. Except as may be required
by law or as otherwise specified in this Agreement or the Change in Control Severance Agreement
between Employer and Employee dated October 19, 2006, and amended as of the date hereof, or as may
be amended from time to time (the “Change in Control Agreement”), Employer shall not be liable to
Employee for any salary or benefits continuation beyond the date of Employee’s cessation of
employment with Employer. The rights and obligations of the parties under the provisions of this
Agreement, including Sections 1.3, 1.5 and 4.1, shall survive and remain binding and enforceable,
notwithstanding the termination of




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Employee’s employment for any reason, to the extent necessary to preserve the intended
benefits of such provisions.




          1.4 Termination of Employment. Employee’s employment with Employer shall terminate
upon the earliest of: (a) Employee’s death; (b) unless waived by Employer, Employee’s
“Disability”, (which for purposes of this Agreement, shall mean either a physical or mental
condition (as determined by a qualified physician mutually agreeable to Employer and Employee)
which renders Employee unable, for a period of at least six (6) months, effectively to perform the
obligations, duties and responsibilities of Employee’s employment with Employer); (c) the
termination of Employee’s employment by Employer for Cause (as hereinafter defined); (d) Employee’s
resignation; and (e) the termination of Employee’s employment by Employer without Cause. As used
herein, “Cause” shall mean the Employer’s good faith determination of: (i) Employee’s dishonest,
fraudulent or illegal conduct relating to the business of Employer; (ii) Employee’s willful breach
or habitual neglect of Employee’s duties or obligations in connection with Employee’s employment;
(iii) Employee’s misappropriation of Employer funds; (iv) Employee’s conviction of a felony or any
other criminal offense involving fraud or dishonesty, whether or not relating to the business of
Employer or Employee’s employment with Employer; (v) Employee’s excessive use of alcohol; (vi)
Employee’s use of controlled substances or other addictive behavior; (vii) Employee’s unethical
business conduct; (viii) Employee’s breach of any statutory or common law duty of loyalty to
Employer; or (ix) Employee’s material breach of this Agreement, the Non-Competition and
Non-Solicitation Agreement between Employer and Employee dated October 19, 2006, or as may be
amended from time to time (the “Non-Competition Agreement”), the Confidentiality and Intellectual
Property Agreement between Employer and Employee dated October 19, 2006, or as may be amended from
time to time (the “Confidentiality Agreement”) or the Change in Control Agreement. Upon
termination of Employee’s employment with Employer for any reason, Employee will promptly return to
Employer all materials in any form acquired by Employee as a result of such employment with
Employer and all property of Employer.




          1.5 Severance Payments and Vacation Pay.




          (a) Vacation Pay in the Event of a Termination of Employment. In the event of the
termination of Employee’s employment with Employer for any reason, Employee shall be entitled to
receive, in addition to the Severance Payments described in Section 1.5(b) below, if any, the
dollar value of any earned but unused (and unforfeited) vacation. Such dollar value shall be paid
to Employee within fifteen (15) days following the date of termination of employment.




          (b) Severance Payments in the Case of a Termination Without Cause.




               (i) Severance Payments. If Employee’s employment is terminated by Employer without
Cause then, (A) subject to the Change in Control Agreement, (B) Employee’s satisfaction of the
Release Condition described in Section 1.5(b)(ii) below, and (C) Employee’s mitigation obligation
described in Section 1.5(b)(iii) below, Employee shall be entitled to continuation of Employee’s
Base Salary (as defined in Section 2.1) (such salary continuation, the



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“Severance Payments”) for a period of 12 months (which period shall commence on the thirty-sixth
(36th) day following the date of termination of employment) in accordance with
Employer’s regular payroll practices and procedures.




               (ii) Release Condition. Notwithstanding anything to the contrary herein, no
Severance Payments shall be due or made to Employee hereunder unless, (i) Employee shall have
executed and delivered a general release in favor of Employer and its affiliates, (which release
shall be submitted to Employee for his review by the date of Employee’s termination of employment
(or shortly thereafter), be substantially in the form of the Separation Agreement and Release
attached hereto as Exhibit A and otherwise be satisfactory to Employer) and (ii) unless the
Release Effective Date shall have occurred on or before the thirty-sixth (36th) day
following the date of termination of employment. The “Release Effective Date” shall be the date
the general release becomes effective and irrevocable.



               (iii) Mitigation. Severance Payments shall be reduced by any compensation that
Employee earns from employment during the twelve (12) months following such termination of
employment. Severance Payments shall be subject to any applicable tax withholding. Employee
agrees to notify Employer of the amounts of such compensation earned.



          (c) Medical Insurance. In the event of the termination of Employee’s employment with
Employer without Cause, Employer will provide or pay for Employee’s medical insurance benefit, at
the same or a comparable level as provided by Employer during Employee’s employment, until the
earlier of (a) twelve (12) months after such termination and (b) Employee obtains coverage under
any other medical benefits plan. Except as permitted by Section 409A (as defined below), the
continued benefits provided to Employee pursuant to this Section 1.5(c) during any calendar year
will not affect the continued benefits to be provided to Employee pursuant to this Section 1.5(c)
in any other calendar year.




          (d) Equity Award Vesting. In the event of (i) the termination of Employee’s
employment with Employer due to Employee’s death, (ii) the termination of Employee’s employment
with Employer due to Disability, or (iii) the termination of Employee’s employment by Employer
without Cause, Employee shall on the date of such termination of employment immediately receive an
additional twelve (12) months’ vesting credit with respect to the stock options, stock appreciation
rights, restricted stock and other equity or equity-based compensation of the Employer granted to
Employee in the course of his employment with Employer under this Agreement (collectively, “Equity
Awards”). The shares of Employer underlying any restricted stock units that become vested pursuant
to this Section 1.5(d) shall be payable on the vesting date. Any of Employee’s stock options and
stock appreciation rights that become vested pursuant to this Section 1.5(d) shall be exercisable
immediately upon vesting, and any such stock options and stock appreciation rights and any of
Employee’s stock options and stock appreciation rights that are otherwise vested and exercisable as
of Employee’s termination of employment shall remain exercisable for one (1) year and ninety (90)
days following Employee’s termination of employment (or such longer period as shall be provided by
the applicable award agreement), provided that, if during such period Employee is under any trading
restriction due to a lockup agreement or closed trading window such period shall be tolled during




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the period of such trading restriction, and provided, further, that in no event shall any stock
option or stock appreciation right continue to be exercisable after the original expiration date of
such stock option or stock appreciation right. If the terms of this Agreement are contrary to or
conflict with the terms of any document or agreement addressing or governing the Equity Awards, the
terms of this Agreement shall apply except that no provision in this Agreement shall operate to
extend the term of any stock option or stock appreciation right beyond its original expiration
date.




Article II. Compensation




          2.1 Base Salary. Employee shall be compensated at an annual base salary of Five
Hundred Twenty Five Thousand Dollars ($525,000) (the “Base Salary”) while Employee is employed by
Employer under this Agreement, subject to such annual increases that Employer may in its sole
discretion determine to be appropriate. Such Base Salary shall be paid in accordance with
Employer’s standard policies and shall be subject to applicable tax withholding.




          2.2 Annual Bonus Eligibility. Employee shall be eligible to receive an annual bonus
based upon individual and company performance, as determined by the Board or the compensation
committee of the Board (the “Committee”) in its sole discretion. The specific bonus eligibility
and the standards for earning a bonus will be developed by the Board or the Committee and
communicated to Employee as soon as practicable after the beginning of each year.




          2.3 Benefits. Employee also shall be eligible to receive all benefits as are
available to similarly situated employees of Employer generally, and any other benefits which
Employer may in its sole discretion elect to grant to Employee. In addition, Employee shall be
entitled to four weeks paid vacation per year, which shall be accrued in accordance with Employer’s
policies applicable to similarly situated employees of the Employer.




          2.4 Reimbursement of Business Expenses. Employee may incur reasonable expenses in the
course of employment hereunder for which Employee shall be eligible for reimbursement or advances
in accordance with Employer’s standard policy therefor.




          2.5 Location. The position will be based in Tempe, Arizona.




Article III. Absence of Restrictions




          Employee hereby represents and warrants that Employee has full power, authority and legal
right to enter into this Agreement and to carry out all obligations and duties hereunder and that
the execution, delivery and performance by Employee of this Agreement will not violate or conflict
with, or constitute a default under, any agreements or other understandings to which Employee is a
party or by which Employee may be bound or affected, including any order, judgment or decree of any
court or governmental agency.




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Article IV. Miscellaneous




          4.1 Withholding. Any payments made under this Agreement shall be subject to
applicable federal, state and local tax reporting and withholding requirements.




          4.2 Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware without reference to the principles of conflicts
of laws. Any judicial action commenced relating in any way to this Agreement including, the
enforcement, interpretation or performance of this Agreement, shall be commenced and maintained in
a court of competent jurisdiction located in Maricopa County, Arizona. In any action to enforce
this Agreement, the prevailing party shall be entitled to recover its litigation costs, including
its attorneys’ fees. The parties hereby waive and relinquish any right to a jury trial and agree
that any dispute shall be heard and resolved by a court and without a jury. The parties further
agree that the dispute resolution, including any discovery, shall be accelerated and expedited to
the extent possible. Each party’s agreements in this Section 4.2 are made in consideration of the
other party’s agreements in this Section 4.2, as well as in other portions of this Agreement.




          4.3 No Waiver. The failure of Employer or Employee to insist in any one or more
instances upon performance of any terms, covenants and conditions of this Agreement shall not be
construed as a waiver or relinquishment of any rights granted hereunder or of the future
performance of any such terms, covenants or conditions.




          4.4 Notices. All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if personally delivered, delivered by
facsimile transmission or by courier or mailed, registered or certified mail, postage prepaid as
follows:




	 	 	 
	If to Employer:

	 	First Solar, Inc.
	 

	 	350 West Washington Street
	 

	 	Suite 600
	 

	 	Tempe, Arizona 85281
	 

	 	Attention: Corporate Secretary
	 
	 	 
	If to Employee:

	 	To Employee’s then current address on file with
	 

	 	Employer





or at such other address or addresses as any such party may have furnished to the other party in
writing in a manner provided in this Section 4.4.




          4.5 Assignability and Binding Effect. This Agreement is for personal services and is
therefore not assignable by Employee. This Agreement may be assigned by Employer to any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of Employer. This Agreement shall be binding upon




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and inure to the benefit of the parties, their successors, assigns, heirs, executors and legal
representatives. If there shall be a successor to Employer or Employer shall assign this
Agreement, then as used in this Agreement, (a) the term “Employer” shall mean Employer as
hereinbefore defined and any successor or any permitted assignee, as applicable, to which this
Agreement is assigned and (b) the term “Board” shall mean the Board as hereinbefore defined and the
board of directors or equivalent governing body of any successor or any permitted assignee, as
applicable, to which this Agreement is assigned.




          4.6 Entire Agreement. This Agreement, the Change in Control Agreement, the
Non-Competition Agreement and the Confidentiality Agreement set forth the entire agreement between
Employer and Employee regarding the terms of Employee’s employment and supersedes all prior
agreements between Employer and Employee covering the terms of Employee’s employment (including the
Prior Employment Agreement). This Agreement may not be amended or modified except in a written
instrument signed by Employer and Employee identifying this Agreement and stating the intention to
amend or modify it.




          4.7 Severability. If it is determined by a court of competent jurisdiction that any
of the restrictions or language in this Agreement are for any reason invalid or unenforceable, the
parties desire and agree that the court revise any such restrictions or language, including
reducing any time or geographic area, so as to render them valid and enforceable to the fullest
extent allowed by law. If any restriction or language in this Agreement is for any reason invalid
or unenforceable and cannot by law be revised so as to render it valid and enforceable, then the
parties desire and agree that the court strike only the invalid and unenforceable language and
enforce the balance of this Agreement to the fullest extent allowed by law. Employer and Employee
agree that the invalidity or unenforceability of any provision of this Agreement shall not affect
the remainder of this Agreement.




          4.8 Construction. As used in this Agreement, words such as “herein,” “hereinafter,”
“hereby” and “hereunder,” and the words of like import refer to this Agreement, unless the context
requires otherwise. The words “include,” “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”.




ARTICLE V. Section 409A




          5.1 In General. It is intended that the provisions of this Agreement comply with
Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder as in
effect from time to time (collectively, “Section 409A”), and all provisions of this Agreement shall
be construed and interpreted in a manner consistent with the requirements for avoiding taxes or
penalties under Section 409A.




          5.2 No Alienation, Set-offs, Etc. Neither Employee nor any creditor or beneficiary of
Employee shall have the right to subject any deferred compensation (within the meaning of Section
409A) payable under this Agreement or under any other plan, policy, arrangement or agreement of or
with Employer or any of its affiliates (this Agreement and such other plans, policies, arrangements
and agreements, the “Employer Plans”) to any anticipation,




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alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment.
Except as permitted under Section 409A, any deferred compensation (within the meaning of Section
409A) payable to or for the benefit of Employee under any Employer Plan may not be reduced by, or
offset against, any amount owing by Employee to Employer or any of its affiliates.




          5.3 Possible Six-Month Delay. If, at the time of Employee’s separation from service
(within the meaning of Section 409A), (a) Employee shall be a specified employee (within the
meaning of Section 409A and using the identification methodology selected by Employer from time to
time) and (b) Employer shall make a good faith determination that an amount payable under an
Employer Plan constitutes deferred compensation (within the meaning of Section 409A) the payment of
which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in
order to avoid taxes or penalties under Section 409A, then Employer (or an affiliate thereof, as
applicable) shall not pay such amount on the otherwise scheduled payment date but shall instead
accumulate such amount and pay it, without interest, on the first day of the seventh month
following such separation from service.




          5.4 Treatment of Installments. For purposes of Section 409A, each of the installments
of continued Base Salary referred to in Section 1.5(b) shall be deemed to be a separate payment as
permitted under Treas. Reg. Sec. 1.409A-2(b)(2)(iii).




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          IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by one of its duly
authorized officers and Employee has individually executed this Agreement, each intending to be
legally bound, as of the date first above written.




	 	 	 	 	 
	 	      EMPLOYEE,

 	 
	 	By  	     /s/ Michael J. Ahearn
 	 
	 	 	Name:  	Michael J. Ahearn 	 
	 	 	Title:  	Chief Executive
Officer 	 
	 



	 	 	 	 	 
	 	      EMPLOYER:

      FIRST SOLAR, INC.,

 	 
	 	By  	/s/ Michael Sweeney
 	 
	 	 	Name:  	Michael Sweeney 	 
	 	 	Title:  	Chairman,
Compensation Committee 	 
	 



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SEPARATION AGREEMENT AND RELEASE



I. Release. For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned, with the intention of binding himself/herself, his/her heirs,
executors, administrators and assigns, does hereby release and forever discharge First Solar, Inc.,
a Delaware corporation (the “Company”), and its present and former officers, directors,
executives, agents, employees, affiliated companies, subsidiaries, successors, predecessors and
assigns (collectively, the “Released Parties”), from any and all claims, actions, causes of
action, demands, rights, damages, debts, accounts, suits, expenses, attorneys’ fees and liabilities
of whatever kind or nature in law, equity, or otherwise, whether now known or unknown
(collectively, the “Claims”), which the undersigned now has, owns or holds, or has at any
time heretofore had, owned or held against any Released Party, arising out of or in any way
connected with the undersigned’s employment relationship with the Company, its subsidiaries,
predecessors or affiliated entities, or the termination thereof, under any Federal, state or local
statute, rule, or regulation, or principle of common, tort or contract law, including but not
limited to, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201
et seq., the Family and Medical Leave Act of 1993, as amended (the
“FMLA”), 29 U.S.C. §§ 2601 et seq., Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. §§ 2000e et seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et
seq., the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§
12101 et seq., the Worker Adjustment and Retraining Notification Act of 1988,
as amended, 29 U.S.C. §§ 2101 et seq., the Employee Retirement
Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001 et seq.,
and any other equivalent or similar Federal, state, or local statute; provided,
however, that nothing herein shall release the Company from (a) its obligations under that
certain [Employment Agreement] [Change in Control Severance Agreement] to which the undersigned is
a party and pursuant to which this Separation Agreement and Release is being executed and
delivered, (b) any claims by the undersigned arising out of any director and officer
indemnification or insurance obligations in favor of the undersigned (c) any director and officer
indemnification obligations under the Company’s by-laws and (d) any claim for benefits under the
First Solar, Inc. 401(k) Plan. The undersigned understands that, as a result of executing this
Separation Agreement and Release, he/she will not have the right to assert that the Company or any
other Released Party unlawfully terminated his/her employment or violated any of his/her rights in
connection with his/her employment or otherwise.



The undersigned affirms that he/she has not filed, caused to be filed, or presently is a party to
any Claim, complaint or action against any Released Party in any forum or form and that he/she
knows of no facts which may lead to any Claim, complaint or action being filed against any Released
Party in any forum by the undersigned or by any agency, group, or class persons. The undersigned
further affirms that he/she has been paid and/or has received all leave (paid or unpaid),
compensation, wages, bonuses, commissions, and/or benefits to which he/she may be entitled and that
no other leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due
to him/her from the Company and its subsidiaries, except as specifically provided in this
Separation Agreement and Release. The undersigned furthermore affirms that he/she has no known
workplace injuries or occupational diseases and has been provided and/or has not been




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denied any leave requested under the FMLA. If any agency or court assumes jurisdiction of any such
Claim, complaint or action against any Released Party on behalf of the undersigned, the undersigned
will request such agency or court to withdraw the matter.



The undersigned further declares and represents that he/she has carefully read and fully
understands the terms of this Separation Agreement and Release and that he/she has been advised and
had the opportunity to seek the advice and assistance of counsel with regard to this Separation
Agreement and Release, that he/she may take up to and including 21 days from receipt of this
Separation Agreement and Release, to consider whether to sign this Separation Agreement and
Release, that he/she may revoke this Separation Agreement and Release within seven calendar days
after signing it by delivering to the Company written notification of revocation, and that he/she
knowingly and voluntarily, of his/her own free will, without any duress, being fully informed and
after due deliberate action, accepts the terms of and signs the same as his own free act.



[To effect a full and complete general release as described above, the undersigned expressly waives
and relinquishes all rights and benefits of Section 1542 of the Civil Code of the State of
California, and the undersigned does so understanding and acknowledging the significance and
consequence of specifically waiving Section 1542. Section 1542 of the Civil Code of the State of
California states as follows:





A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if known
by him must have materially affected his settlement with the debtor.


Thus, notwithstanding the provisions of Section 1542, and to implement a full and complete release
and discharge of the Released Parties, the undersigned expressly acknowledges this Separation
Agreement and Release is intended to include in its effect, without limitation, all Claims the
undersigned does not know or suspect to exist in the undersigned’s favor at the time of signing
this Separation Agreement and Release, and that this Separation Agreement and Release contemplates
the extinguishment of any such Claim or Claims.]1



II. Protected Rights. The Company and the undersigned agree that nothing in this
Separation Agreement and Release is intended to or shall be construed to affect, limit or otherwise
interfere with any non-waivable right of the undersigned under any Federal, state or local law,
including the right to file a charge or participate in an investigation or proceeding conducted by
the Equal Employment Opportunity Commission (“EEOC”) or to exercise any other right that
cannot be waived under applicable law. The undersigned is releasing, however, his/her right to any
monetary recovery or relief should the EEOC or any other agency pursue Claims on his/her behalf.
Further, should the EEOC or any






 




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





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other agency obtain monetary relief on his/her behalf, the undersigned assigns to the Company all
rights to such relief.



III. Equitable Remedies. The undersigned acknowledges that a violation by the undersigned
of any of the covenants contained in this Agreement would cause irreparable damage to the Company
and its subsidiaries in an amount that would be material but not readily ascertainable, and that
any remedy at law (including the payment of damages) would be inadequate. Accordingly, the
undersigned agrees that, notwithstanding any provision of this Separation Agreement and Release to
the contrary, the Company shall be entitled (without the necessity of showing economic loss or
other actual damage) to injunctive relief (including temporary restraining orders, preliminary
injunctions and/or permanent injunctions) in any court of competent jurisdiction for any actual or
threatened breach of any of the covenants set forth in this Agreement in addition to any other
legal or equitable remedies it may have.



IV. Return of Property. The undersigned shall return to the Company on or before [10 DAYS
AFTER TERMINATION DATE], all property of the Company in the undersigned’s possession or subject to
the undersigned’s control, including without limitation any laptop computers, keys, credit cards,
cellular telephones and files. The undersigned shall not alter any of the Company’s records or
computer files in any way after [TERMINATION DATE].



V. Severability. If any term or provision of this Separation Agreement and Release is
invalid, illegal or incapable of being enforced by any applicable law or public policy, all other
conditions and provisions of this Separation Agreement and Release shall nonetheless remain in full
force and effect so long as the economic and legal substance of the transactions contemplated by
this Separation Agreement and Release is not affected in any manner materially adverse to any
party.



VI. GOVERNING LAW. THIS SEPARATION AGREEMENT AND RELEASE SHALL BE DEEMED TO BE MADE IN
THE STATE OF DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS
AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
ITS PRINCIPLES OF CONFLICTS OF LAW.




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




	 	 	 	 	 
	 	      FIRST SOLAR, INC.,

 	 
	 	By:  	 
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



EMPLOYEE,




	 	 	 	 	 
	 	 	 
	 	        	 
 	 
	 	 	[NAME] 	 
	 	 	Date


Signed:                                          	 
	 



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     CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”)
dated as of October 19, 2006, between First Solar, Inc., a Delaware
corporation (the “Company”), and Michael J. Ahearn (the
“Executive”), and amended and restated as of November 3, 2008.



          WHEREAS the Executive is a skilled and dedicated employee of the Company who has important
management responsibilities and talents that benefit the Company;




          WHEREAS the Board of Directors of the Company (the “Board”) considers it essential to
the best interests of the Company and its stockholders to assure that the Company and its
subsidiaries will have the continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined below); and




          WHEREAS the Board believes that it is imperative to diminish the distraction of the Executive
inherently present by virtue of the uncertainties and risks created by the circumstances
surrounding a Change in Control and to ensure the Executive’s full attention to the Company and its
subsidiaries during such a period of uncertainty;




          NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as follows:




          SECTION 1. Definitions. For purposes of this Agreement, the following terms shall
have the meanings set forth below:



(a) “280G Gross-Up Payment” shall have the meaning set forth in Section .



(b) “Accounting Firm” shall have the meaning set forth in Section 5(b).



(c) “Accrued Rights” shall have the meaning set forth in Section 4(a)(iv).



(d) “Affiliate(s)” means, with respect to any specified Person, any other Person that,
directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under
common control with, such specified Person.



(e) “Annual Base Salary” shall mean the greater of the Executive’s annual rate of base
salary in effect (i) immediately prior to the Change in Control Date and (ii) immediately prior to
the Termination Date.



(f) “Annual Bonus” shall mean the target annual cash bonus the Executive is eligible to
earn (assuming 100% fulfillment of all elements of the formula under which such bonus would have
been calculated) for the year in which the Termination Date occurs.




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(g) “Bonus Amount” means, as of the Termination Date, the greater of (i) the Annual Bonus
and (ii) the average annual cash bonuses payable to the Executive in respect of any of the three
calendar years immediately preceding the Termination Date.



(h) “Cause” means the occurrence of any one of the following:





     (i) the Executive is convicted of, or pleads guilty or nolo contendere
to, (A) a misdemeanor involving moral turpitude or misappropriation of the assets
of the Company or a Subsidiary or (B) any felony (or the equivalent of such a
misdemeanor or felony in a jurisdiction outside of the United States);




     (ii) the Executive commits one or more acts or omissions constituting gross
negligence, fraud or other gross misconduct that the Company reasonably and in good
faith determines has a materially detrimental effect on the Company;




     (iii) the Executive continually and willfully fails, for at least 14 days
following written notice from the Company, to perform substantially the Executive’s
employment duties (other than as a result of incapacity due to physical or mental
illness or after delivery by the Executive of a Notice of Termination for Good
Reason); or




     (iv) the Executive commits a gross violation of any of the Company’s material
policies (including the Company’s Code of Business Conduct and Ethics, as in effect
from time to time) that the Company reasonably and in good faith determines is
materially detrimental to the best interests of the Company.



          The termination of employment of the Executive for Cause shall not be effective unless and
until there has been delivered to the Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the Board (excluding the
Executive) at a meeting of the Board called and held for such purpose (after reasonable notice is
provided to the Executive and the Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that in the good faith opinion of the Board, the Executive is
guilty of the conduct described in clause (i), (ii), (iii) or (iv) above and specifying the
particulars thereof in detail.



(i) “Change in Control” means the occurrence of any of the following:





     (i) individuals who, as of the date of this Agreement, were members of the
Board (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date of this Agreement whose
appointment or election, or nomination for election, by the Company’s stockholders
was approved by a vote of at least a majority of the Incumbent Directors shall be
considered as though such individual were an Incumbent Director, but excluding, for
purposes of this proviso,



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any such individual whose assumption of office after the date of this
Agreement occurs as a result of an actual or threatened proxy contest with respect
to election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of any “person” (as such term is used in
Section 13(d) of the Exchange Act) (each, a “Person”) other than the Board
or any Specified Shareholder;




     (ii) the consummation of (A) a merger, consolidation, statutory share exchange
or similar form of corporate transaction involving (x) the Company or (y) any of
its Subsidiaries, but in the case of this clause (y) only if Company Voting
Securities (as defined below) are issued or issuable in connection with such
transaction (each of the transactions referred to in this clause (A) being
hereinafter referred to as a “Reorganization”) or (B) a sale or other
disposition of all or substantially all the assets of the Company (a
“Sale”), unless, immediately following such Reorganization or Sale, (1) all
or substantially all the individuals and entities who were the “beneficial owners”
(as such term is defined in Rule 13d-3 under the Exchange Act (or a successor rule
thereto)) of shares of the Company’s common stock or other securities eligible to
vote for the election of the Board outstanding immediately prior to the
consummation of such Reorganization or Sale (such securities, the “Company
Voting Securities”) beneficially own, directly or indirectly, more than 50% of
the combined voting power of the then outstanding voting securities of the
corporation or other entity resulting from such Reorganization or Sale (including a
corporation or other entity that, as a result of such transaction, owns the Company
or all or substantially all the Company’s assets either directly or through one or
more subsidiaries) (the “Continuing Entity”) in substantially the same
proportions as their ownership, immediately prior to the consummation of such
Reorganization or Sale, of the outstanding Company Voting Securities (excluding any
outstanding voting securities of the Continuing Entity that such beneficial owners
hold immediately following the consummation of such Reorganization or Sale as a
result of their ownership prior to such consummation of voting securities of any
corporation or other entity involved in or forming part of such Reorganization or
Sale other than the Company or a Subsidiary), (2) no Person (excluding (x) any
employee benefit plan (or related trust) sponsored or maintained by the Continuing
Entity or any corporation or other entity controlled by the Continuing Entity and
(y) any Specified Shareholder) beneficially owns, directly or indirectly, 20% or
more of the combined voting power of the then outstanding voting securities of the
Continuing Entity and (3) at least a majority of the members of the board of
directors or other governing body of the Continuing Entity were Incumbent Directors
at the time of the execution of the definitive agreement providing for such
Reorganization or Sale or, in the absence of such an agreement, at the time at
which approval of the Board was obtained for such Reorganization or Sale;



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     (iii) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company, unless such liquidation or dissolution is part of a
transaction or series of transactions described in Section 1(i)(ii) that does not
otherwise constitute a Change in Control; or




     (iv) any Person, corporation or other entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than any Specified
Shareholder becomes the beneficial owner, directly or indirectly, of securities of
the Company representing a percentage of the combined voting power of the Company
Voting Securities that is equal to or greater than the greater of (x) 20% and (y)
the percentage of the combined voting power of the Company Voting Securities
beneficially owned directly or indirectly by all the Specified Shareholders at such
time; provided, however, that for purposes of this Section 1(i)(iv)
only (and not for purposes of Sections 1(i)(i) through (iii)), the following
acquisitions shall not constitute a Change in Control: (A) any acquisition by the
Company or any Subsidiary, (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Subsidiary, (C) any
acquisition by an underwriter temporarily holding such Company Voting Securities
pursuant to an offering of such securities or (D) any acquisition pursuant to a
Reorganization or Sale that does not constitute a Change in Control for purposes of
Section 1(i)(ii).


(j) “Change in Control Date” means the date on which a Change in Control occurs.



(k) “COBRA” shall have the meaning set forth in Section 4(a)(iii).



(l) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and the
regulations promulgated thereunder.



(m) “Company Voting Securities” shall have the meaning set forth in Section 1(i)(ii).



(n) “Continuing Entity” shall have the meaning set forth in Section 1(i)(ii).



(o) “Disability” shall have the meaning set forth in Section 4(b)(ii).



(p) “Effective Date” shall have the meaning set forth in Section 2.



(q) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time,
or any successor statute thereto.



(r) “Excise Tax” means the excise tax imposed by Section 4999 of the Code, together with
any interest or penalties imposed with respect to such tax.



(s) “Executive Tax Year” shall have the meaning set forth in Section 4(a)(iii).




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(t) “Good Reason” means, without the Executive’s express written consent, the occurrence of
any one or more of the following:





               (i) any material reduction in the authority, duties or responsibilities held by the
Executive immediately prior to the Change in Control Date, but excluding for this purpose
an inadvertent reduction not occurring in bad faith and which is remedied by the Company
within ten business days after receipt of notice thereof given by the Executive;




               (ii) any material reduction in the annual base salary or annual incentive opportunity
of the Executive as in effect immediately prior to the Change in Control Date, other than
an inadvertent reduction not occurring in bad faith and which is remedied by the Company
within ten business days after receipt of notice thereof given by the Executive;




               (iii) any change of the Executive’s principal place of employment to a location more
than 50 miles from the Executive’s principal place of employment immediately prior to the
Change in Control Date;




               (iv) any failure of the Company to pay the Executive any compensation when due (other
than an inadvertent failure that is remedied within ten business days after receipt of
written notice thereof given by the Executive);




               (v) delivery by the Company or any Subsidiary of a written notice to the Executive of
the intent to terminate the Executive’s employment for any reason, other than Cause or
Disability, in each case in accordance with this Agreement, regardless of whether such
termination is intended to become effective during or after the Protection Period; or




               (vi) any failure by the Company to comply with and satisfy the requirements of Section
10(c).



          The Executive’s right to terminate employment for Good Reason shall not be affected by the
Executive’s incapacity due to physical or mental illness. A termination of employment by the
Executive for Good Reason for purposes of this Agreement shall be effectuated by giving the Company
written notice (“Notice of Termination for Good Reason”) of the termination setting forth
in reasonable detail the specific conduct of the Company that constitutes Good Reason and the
specific provisions of this Agreement on which the Executive relied, provided that such
notice must be delivered to the Company no later than three months after the occurrence of the
event or events constituting Good Reason. Unless the parties agree otherwise, a termination of
employment by the Executive for Good Reason shall be effective on the 30th day following the date
when the Notice of Termination for Good Reason is given, unless the Company elects to treat such
termination as effective as of an earlier date; provided, however, that so long as
an event that constitutes Good Reason occurs during the Protection Period and the Executive
delivers the Notice of Termination for Good Reason at any time prior to the earlier of the end of
the six-month period following the occurrence of such event, for purposes of the




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payments, benefits and other entitlements set forth herein, the termination of the Executive’s
employment pursuant thereto shall be deemed to occur during the Protection Period.



(u) “Incumbent Directors” shall have the meaning set forth in Section 1(i)(i).



(v) “Notice of Termination for Good Reason” shall have the meaning set forth in Section
1(t).



(w) “Payment” means any payment, benefit or distribution (or combination thereof) by the
Company, any of its Affiliates or any trust established by the Company or its Affiliates, to or for
the benefit of the Executive, whether paid, payable, distributed, distributable or provided
pursuant to this Agreement or otherwise, including any payment, benefit or other right that
constitutes a “parachute payment” within the meaning of Section 280G of the Code.



(x) “Person” shall have the meaning set forth in Section 1(i)(i).



(y) “Protection Period” means the period commencing on the Change in Control Date and
ending on the second anniversary thereof.



(z) “Qualifying Termination” means any termination of the Executive’s employment (i) by the
Company, other than for Cause, death or Disability, that is effective (or with respect to which the
Executive is given written notice) during the Protection Period, (ii) by the Executive for Good
Reason during the Protection Period or (iii) by the Company that is effective prior to the Change
in Control Date, other than for Cause, death or Disability, at the request or direction of a third
party who took action that caused, or is involved in or a party to, a Change in Control.



(aa) “Release” shall have the meaning set forth in Section 4(a)(vi).



(bb) “Release Effective Date” shall mean the date the Release becomes effective and
irrevocable.



(cc) “Reorganization” shall have the meaning set forth in Section 1(i)(ii).



(dd) “Safe Harbor Amount” shall have the meaning set forth in Section 5(a).



(ee) “Sale” shall have the meaning set forth in Section 1(i)(ii).



(ff) “Specified Shareholder” shall mean any of (i) the Estate of John T. Walton and its
beneficiaries, (ii) JCL Holdings, LLC and its beneficiaries, (iii) Michael J. Ahearn and any of his
immediate family, (iv) any Person directly or indirectly controlled by any of the foregoing and (v)
any trust for the direct or indirect benefit of any of the foregoing.



(gg) “Subsidiary” means any entity in which the Company, directly or indirectly, possesses
50% or more of the total combined voting power of all classes of its stock.




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(hh) “Successor” shall have the meaning set forth in Section 10(c).



(ii) “Termination Date” means the date on which the termination of the Executive’s
employment, in accordance with the terms of this Agreement, is effective, provided that in
the event of a Qualifying Termination described in clause (iii) of the definition thereof, the
Termination Date shall be deemed to be the Change in Control Date.



(jj) “Underpayment” shall have the meaning set forth in Section 5(b).




          SECTION 2. Effectiveness and Term. This Agreement was originally effective on
November 17, 2006 (the “Effective Date”). This Agreement shall remain in effect until the third
anniversary of the Effective Date, except that, beginning on the second anniversary of the
Effective Date and on each anniversary thereafter, the term of this Agreement shall be
automatically extended for an additional one-year period, unless the Company or the Executive
provides the other party with 60 days’ prior written notice before the applicable anniversary that
the term of this Agreement shall not be so extended. Notwithstanding the foregoing, in the event
of a Change in Control during the term of this Agreement (whether the original term or the term as
extended), this Agreement shall not thereafter terminate, and the term hereof shall be extended,
until the Company and its Subsidiaries have performed all their obligations hereunder with no
future performance being possible; provided, however, that this Agreement shall only be effective
with respect to the first Change in Control that occurs during the term of this Agreement.




          SECTION 3. Impact of a Change in Control on Equity Compensation Awards. Effective as
of the Change in Control Date, notwithstanding any provision to the contrary, other than any such
provision which expressly provides that this Section 3 of this Agreement does not apply (which
provision shall be given full force and effect), in any of the Company’s equity-based,
equity-related or other long-term incentive compensation plans, practices, policies and programs
(including the Company’s 2003 Unit Option Plan and the Company 2006 Omnibus Incentive Compensation
Plan) or any award agreements thereunder, (a) all outstanding stock options, stock appreciation
rights and similar rights and awards then held by the Executive that are unexercisable or otherwise
unvested shall automatically become fully vested and immediately exercisable, as the case may be,
(b) all outstanding equity-based, equity-related and other long-term incentive awards then held by
the Executive that are subject to performance-based vesting criteria shall automatically become
fully vested and earned at a deemed performance level equal to the maximum performance level with
respect to such awards and (c) all other outstanding equity-based, equity-related and long-term
incentive awards, to the extent not covered by the foregoing clause (a) or (b), then held by the
Executive that are unvested or subject to restrictions or forfeiture shall automatically become
fully vested and all restrictions and forfeiture provisions related thereto shall lapse.




          SECTION 4. Termination of Employment. (a) Qualifying Termination.
In the event of a Qualifying Termination, the Executive shall be entitled, subject to Section
4(a)(vi), to the following payments and benefits:




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          (i) Severance Pay. The Company shall pay the Executive an amount equal to two times
the sum of (A) the Executive’s Annual Base Salary (without regard to any reduction giving rise to
Good Reason) and (B) the Bonus Amount, in a lump-sum payment payable on the tenth business day
after the Release Effective Date; provided, however, that such amount shall be paid
in lieu of, and the Executive hereby waives the right to receive, any other cash severance payment
relating to salary or bonus continuation the Executive is otherwise eligible to receive upon
termination of employment under any severance plan, practice, policy or program of the Company or
any Subsidiary.




          (ii) Prorated Annual Bonus. The Company shall pay the Executive an amount equal to
the product of (A) the Executive’s Annual Bonus and (B) a fraction, the numerator of which is the
number of days in the Company’s fiscal year containing the Termination Date that the Executive was
employed by the Company or any Affiliate, and the denominator of which is 365, in a lump-sum
payment on the tenth business day after the Release Effective Date.




          (iii) Continued Welfare Benefits. The Company shall, at its option, either (A)
continue to provide medical, life insurance, accident insurance and disability benefits to the
Executive and the Executive’s spouse and dependents at least equal to the benefits provided by the
Company and its Subsidiaries generally to other active peer executives of the Company and its
Subsidiaries, or (B) pay Executive the cost of obtaining equivalent coverage, in the case of each
of clauses (A) and (B), for a period of time commencing on the Termination Date and ending on the
date that is eighteen (18) months after the Termination Date; provided, however, that if the
Executive becomes reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan during such applicable
period of eligibility. Any provision of benefits pursuant to this Section 4(a)(iii) in one (1) tax
year of the Executive (the “Executive Tax Year”) shall not affect the amount of such
benefits to be provided in any other Executive Tax Year. The right to such benefits shall not be
subject to liquidation or exchange for any other benefit. Executive agrees to make (and to cause
his dependents to make) a timely election under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended (“COBRA”) to the extent requested by Employer, to facilitate Employer’s
provision of continuation coverage.




          (iv) Accrued Rights. The Executive shall be entitled to (A) payments of any unpaid
salary, bonuses or other amount earned or accrued through the Termination Date and reimbursement of
any unreimbursed business expenses incurred through the Termination Date, (B) any payments
explicitly set forth in any other benefit plans, practices, policies and programs in which the
Executive participates, and (C) any payments the Company is or becomes obligated to make pursuant
to Sections 5, 7 and 12 (the rights to such payments, the “Accrued Rights”). The Accrued Rights
payable pursuant to Section 4(a)(iv)(A) and Section 4(a)(iv)(B) shall be payable on their
respective otherwise scheduled payment dates, provided that any amounts payable in respect of
accrued but unused vacation shall be paid in a lump sum within 15 days




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following the Termination Date. The Accrued Rights payable pursuant to Section 4(a)(iv)(C)
shall be payable at the times set forth in the applicable Section hereof.




          (v) Outplacement. The Company shall reimburse the Executive for individual
outplacement services to be provided by a firm of the Executive’s choice or, at the Executive’s
election, provide the Executive with the use of office space, office supplies, and secretarial
assistance satisfactory to the Executive. The aggregate expenditures of the Company pursuant to
this paragraph shall not exceed $20,000. Notwithstanding anything to the contrary in this
Agreement, the outplacement benefits under this Section 4(a)(v) shall be provided to the Executive
for no longer than the one-year period following the Termination Date, and the amount of any
outplacement benefits or office space, office supplies, and secretarial assistance provided to the
Executive in any Executive Tax Year shall not affect the amount of any such outplacement benefits
or office space, office supplies and secretarial assistance provided to the Executive in any other
Executive Tax Year.




          (vi) Release of Claims. Notwithstanding any provision of this Agreement to the
contrary, unless on or prior to the tenth (10th) business day prior to March 15 of the
year following the year in which the Termination Date occurs, the Executive has executed and
delivered a Separation Agreement and Release (the “Release”) substantially in the form of
Exhibit A to the employment agreement between the Executive and the Company and the Release
Effective Date shall have occurred, (A) no payments shall be paid or made available to the
Executive under Section 4(a)(i) or 4(a)(ii), (B) the Company shall be relieved of all obligations
to provide or make available any further benefits to the Executive pursuant to Section 4(a)(iii)
and 4(a)(v) and (C) the Executive shall be required to repay the Company, in cash, within five
business days after written demand is made therefor by the Company, an amount equal to the value of
any benefits received by the Executive pursuant to Section 4(a)(iii) and 4(a)(v) prior to such
date.



(b) Termination on Account of Death or Disability; Non-Qualifying Termination.




          (i) In the event of any termination of Executive’s employment other than a Qualifying
Termination, the Executive shall not be entitled to any additional payments or benefits from the
Company under this Agreement, other than payments or benefits with respect to the Accrued Rights.




          (ii) For purposes of this Agreement, the Executive shall be deemed to have a
“Disability” in the event of the Executive’s absence for a period of 180 consecutive
business days as a result of incapacity due to a physical or mental condition, illness or injury
which is determined to be total and permanent by a physician mutually acceptable to the Company and
the Executive or the Executive’s legal representative (such acceptance not to be unreasonably
withheld) after such physician has completed an examination of the Executive. The Executive agrees
to make himself available for such examination upon the reasonable request of the Company, and the
Company shall be responsible for the cost of such examination.




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          SECTION 5. Certain Additional Payments by the Company. 




          (a) Notwithstanding anything in this Agreement to the contrary and except as set forth below,
in the event it shall be determined that any Payment that is paid or payable during the term of
this Agreement would be subject to the Excise Tax, the Executive shall be entitled to receive an
additional payment (a “280G Gross-Up Payment”) in an amount such that, after payment by the
Executive of all taxes (and any interest or penalties imposed with respect to such taxes),
including any income and employment taxes and Excise Taxes imposed upon the 280G Gross-Up Payment,
the Executive retains an amount of the 280G Gross-Up Payment equal to the Excise Tax imposed upon
such Payments. The Company’s obligation to make 280G Gross-Up Payments under this Section 5 shall
not be conditioned upon the Executive’s termination of employment and shall survive and apply after
the Executive’s termination of employment. Notwithstanding the foregoing provisions of this
Section 5(a), if it shall be determined that the Executive is entitled to a 280G Gross-Up Payment,
but that the Payments do not exceed 110% of the greatest amount that could be paid to the Executive
without giving rise to any Excise Tax (the “Safe Harbor Amount”), then no 280G Gross-Up Payment
shall be made to the Executive and the amounts payable under this Agreement shall be reduced so
that the Payments, in the aggregate, are reduced to the Safe Harbor Amount. If such a reduction is
necessary, the Payments shall be reduced in the following order: (i) the Payments payable under
Section 4(a)(i) (severance), (ii) the Payments payable under Section 4(a)(ii) (prorated annual
bonus), (iii) any other cash Payments, (iv) the Payments payable under Section 4(a)(iii) (welfare
benefit continuation) and (v) the accelerated vesting under Section 3.




          (b) Subject to the provisions of Section 5(c), all determinations required to be made under
this Section 5, including whether and when a 280G Gross-Up Payment is required, the amount of such
280G Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall
be made in accordance with the terms of this Section 5 by a nationally recognized certified public
accounting firm that shall be designated by the Executive (the “Accounting Firm”). The
Accounting Firm shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the Executive that there has been a
Payment or such earlier time as is requested by the Company. For purposes of determining the
amount of any 280G Gross-Up Payment, the Executive shall be deemed to pay Federal income tax at the
highest marginal rate applicable to individuals in the calendar year in which any such 280G
Gross-Up Payment is to be made and deemed to pay state and local income taxes at the highest
marginal rates applicable to individuals in the state or locality of the Executive’s residence or
place of employment in the calendar year in which any such 280G Gross-Up Payment is to be made, net
of the maximum reduction in Federal income taxes that can be obtained from deduction of state and
local taxes, taking into account limitations applicable to individuals subject to Federal income
tax at the highest marginal rate. All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any 280G Gross-Up Payment, as determined pursuant to this Section 5, shall
be paid by the Company to the Executive within five business days of the receipt of the Accounting
Firm’s determination. If the Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall so indicate to the




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Executive in writing. Any determination by the Accounting Firm shall be binding upon the
Company and the Executive. As a result of the uncertainty in the application of Section 4999 of
the Code, at the time of the initial determination by the Accounting Firm hereunder, it is possible
that 280G Gross-Up Payments that will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made hereunder. In the
event the Company exhausts its remedies pursuant to Section 5(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be paid by the Company to the
Executive within five business days of the receipt of the Accounting Firm’s determination.




          (c) The Executive shall notify the Company in writing of any written claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of a 280G Gross-Up
Payment. Such notification shall be given as soon as practicable, but no later than ten business
days after the Executive is informed in writing of such claim. Failure to give timely notice shall
not prejudice the Executive’s right to 280G Gross-Up Payments and rights of indemnity under this
Section 5. The Executive shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30 day period following the date on which the Executive gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior to the expiration of such
period that the Company desires to contest such claim, the Executive shall: (i) give the Company
any information reasonably requested by the Company relating to such claim, (ii) take such action
in connection with contesting such claim as the Company shall reasonably request in writing from
time to time, including accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company, (iii) cooperate with the Company in good faith in order
effectively to contest such claim and (iv) permit the Company to participate in any proceedings
relating to such claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional income taxes, interest and penalties) incurred in connection
with such contest, and shall indemnify and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax (including interest or penalties) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 5(c), the Company shall control all proceedings taken in connection with such
contest, and, at its sole discretion, may pursue or forgo any and all administrative appeals,
proceedings, hearings and conferences with the applicable taxing authority in respect of such claim
and may, at its sole discretion, either pay the tax claim on behalf of the Executive and direct the
Executive to sue for a refund or contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one (1) or more appellate courts, as the Company shall determine;
provided, however, that (A) if the Company pays the tax claim on behalf of the Executive and
directs the Executive to sue for a refund, the Company shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties) imposed with respect to




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such payment and (B) if such contest results in any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due, such extension must be limited solely to such contested
amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect
to which the 280G Gross-Up Payment would be payable hereunder, and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or
any other taxing authority.




          (d) If, after the payment by the Company of any tax claim pursuant to Section 5(c), the
Executive becomes entitled to receive any refund with respect to such claim, the Executive shall
(subject to the Company’s complying with the requirements of Section 5(c)) promptly pay to the
Company the amount of such refund received (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the payment by the Company of any tax claim pursuant to
Section 5(c), a determination is made that the Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of the 30 day period after such
determination, then the amount the Company paid in respect of such claim shall offset, to the
extent thereof, the amount of 280G Gross-Up Payment required to be paid.




          (e) Notwithstanding anything to the contrary in this Agreement, (i) in no event shall any 280G
Gross-up Payments be made by the Company to the Executive under this Section 5 after the end of the
Executive Tax Year following the Executive Tax Year in which the Executive remits the taxes for
which such 280G Gross-up Payment is required to be made under this Section 5, and (ii) no other
payments will be made by the Company to the Executive under this Section 5 with respect to any
audit or litigation relating to any 280G Gross-Up Payment or Excise Tax or other taxes after the
Executive Tax Year following the Executive Tax Year in which the taxes that are the subject of the
audit or litigation referred to in this Section 5 are remitted to the taxing authority, or where,
as a result of such audit or litigation, no taxes are remitted, the end of the Executive Tax Year
following the Executive Tax Year in which the audit is completed or there is a final and
nonappealable settlement or other resolution of the litigation.




          SECTION 6. Section 409A.




          (a) It is intended that the provisions of this Agreement comply with Section 409A of the Code,
as amended, and the regulations thereunder as in effect from time to time (collectively,
“Section 409A”), and all provisions of this Agreement shall be construed and interpreted
either to (i) exempt any compensation from the application of Section 409A, or (ii) comply with the
requirements for avoiding taxes or penalties under Section 409A.




          (b) Neither the Executive nor any creditor or beneficiary of the Executive shall have the
right to subject any deferred compensation (within the meaning of Section 409A) payable under this
Agreement or under any other plan, policy, arrangement or agreement of or with the Company or any
of its Affiliates (this Agreement and such other plans, policies, arrangements and agreements, the
“Company 




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Plans”) to any anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, attachment or garnishment. Except as permitted under Section 409A, any deferred
compensation (within the meaning of Section 409A) payable to or for the benefit of the Executive
under any Company Plan may not be reduced by, or offset against, any amount owing by the Executive
to the Company or any of its Affiliates.




          (c) If, at the time of the Executive’s separation from service (within the meaning of Section
409A), (i) the Executive shall be a specified employee (within the meaning of Section 409A and
using the identification methodology selected by the Company from time to time) and (ii) the
Company shall make a good faith determination that an amount payable under a Company Plan
constitutes deferred compensation (within the meaning of Section 409A) the payment of which is
required to be delayed pursuant to the six-month delay rule set forth in Section 409A to avoid
taxes or penalties under Section 409A, then the Company (or an Affiliate thereof, as applicable)
shall not pay such amount on the otherwise scheduled payment date but shall instead accumulate such
amount and pay it, without interest, on the first day of the seventh month following such
separation from service.




          SECTION 7. No Mitigation or Offset; Enforcement of this Agreement. 




          (a) The Company’s obligation to make the payments provided for in this Agreement and otherwise
to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the Company may have against the
Executive or others. In no event shall the Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the Executive under any of the
provisions of this Agreement and, except as otherwise expressly provided for in this Agreement,
such amounts shall not be reduced whether or not the Executive obtains other employment.




          (b) The Company shall reimburse, upon the Executive’s demand, any and all reasonable legal
fees and expenses that the Executive may incur in good faith prior to the second anniversary of the
expiration of the term of this Agreement as a result of any contest, dispute or proceeding
(regardless of whether formal legal proceedings are ever commenced and regardless of the outcome
thereof and including all stages of any contest, dispute or proceeding) by the Company, the
Executive or any other Person with respect to the validity or enforceability of, or liability
under, any provision of this Agreement or any guarantee of performance thereof (including as a
result of any contest by the Executive regarding the amount of any payment owed pursuant to this
Agreement), and shall indemnify and hold the Executive harmless, on an after-tax basis, for any tax
(including Excise Tax) imposed on the Executive as a result of payment by the Company of such legal
fees and expenses. Notwithstanding anything to the contrary in this Agreement, (i) any
reimbursement for any fees and expenses under this Section 7 shall be made promptly and no later
than the end of the Executive Tax Year following the Executive Tax Year in which the fees or
expenses are incurred, (ii) the amount of fees and expenses eligible for reimbursement under this
Section 7 during any Executive Tax Year shall not affect the fees and expenses eligible for
reimbursement in another Executive Tax Year, (iii) no right to reimbursement under this Section 7
shall be subject




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to liquidation or exchange for any other payment or benefit, and (iv) no tax gross up payments
shall be made by the Company under this Section 7 after the end of the Executive Tax Year following
the Executive Tax Year in which the related taxes are remitted.




          SECTION 8. Non-Exclusivity of Rights. Except as specifically provided in Section
4(a)(i), nothing in this Agreement shall prevent or limit the Executive’s continuing or future
participation in any plan, practice, policy or program provided by the Company or a Subsidiary for
which the Executive may qualify, nor shall anything in this Agreement limit or otherwise affect any
rights the Executive may have under any contract or agreement with the Company or a Subsidiary.
Vested benefits and other amounts that the Executive is otherwise entitled to receive under any
incentive compensation (including any equity award agreement), deferred compensation retirement,
pension or other plan, practice, policy or program of, or any contract or agreement with, the
Company or a Subsidiary shall be payable in accordance with the terms of each such plan, practice,
policy, program, contract or agreement, as the case may be, except as explicitly modified by this
Agreement.




          SECTION 9. Withholding. The Company may deduct and withhold from any amounts payable
under this Agreement such Federal, state, local, foreign or other taxes as are required to be
withheld pursuant to any applicable law or regulation.




          SECTION 10. Assignment. (a) This Agreement is personal to the Executive and, without
the prior written consent of the Company, shall not be assignable by the Executive otherwise than
by will or the laws of descent and distribution, and any assignment in violation of this Agreement
shall be void.




          (b) Notwithstanding the foregoing Section 10(a), this Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by, the Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive’s devisee, legatee or other designee
or, should there be no such designee, to the Executive’s estate.




          (c) The Company shall require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or assets of the Company (a
“Successor”) to assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would have been required to perform it if no such succession had taken
place. If there shall be a Successor, (i) the term “Company” shall mean the Company as
hereinbefore defined and any Successor and any permitted assignee to which this Agreement is
assigned and (ii) the term “Board” shall mean the Board as hereinbefore defined and the board of
directors or equivalent governing body of any Successor and any permitted assignee to which this
Agreement is assigned.




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          SECTION 11. Dispute Resolution. (a) Except as otherwise specifically provided
herein, the Executive and the Company each hereby irrevocably submit to the exclusive jurisdiction
of the United States District Court of Delaware (or, if subject matter jurisdiction in that court
is not available, in any state court located within the city of Wilmington, Delaware) over any
dispute arising out of or relating to this Agreement. Except as otherwise specifically provided in
this Agreement, the parties undertake not to commence any suit, action or proceeding arising out of
or relating to this Agreement in a forum other than a forum described in this Section 11(a);
provided, however, that nothing herein shall preclude the Company or the Executive from bringing
any suit, action or proceeding in any other court for the purposes of enforcing the provisions of
this Section 11 or enforcing any judgment obtained by the Company or the Executive.



(b) The agreement of the parties to the forum described in Section 11(a) is independent of the law
that may be applied in any suit, action or proceeding and the parties agree to such forum even if
such forum may under applicable law choose to apply non-forum law. The parties hereby waive, to
the fullest extent permitted by applicable law, any objection that they now or hereafter have to
personal jurisdiction or to the laying of venue of any such suit, action or proceeding brought in
an applicable court described in Section 11(a), and the parties agree that they shall not attempt
to deny or defeat such personal jurisdiction by motion or other request for leave from any such
court. The parties agree that, to the fullest extent permitted by applicable law, a final and
non-appealable judgment in any suit, action or proceeding brought in any applicable court described
in Section 11(a) shall be conclusive and binding upon the parties and may be enforced in any other
jurisdiction.



(c) The parties hereto irrevocably consent to the service of any and all process in any suit,
action or proceeding arising out of or relating to this Agreement by the mailing of copies of such
process to such party at such party’s address specified in Section 18.



(d) Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right
it may have to a trial by jury in respect of any suit, action or proceeding arising out of or
relating to this Agreement. Each party hereto (i) certifies that no representative, agent or
attorney of any other party has represented, expressly or otherwise, that such party would not, in
the event of any suit, action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other parties hereto have been induced to enter into this Agreement
by, among other things, the mutual waiver and certifications in this Section 11(d).




          SECTION 12. Default in Payment. Any payment not made within ten business days after
it is due in accordance with this Agreement shall thereafter bear interest, compounded annually, at
the prime rate in effect from time to time at Citibank, N.A., or any successor thereto. Such
interest shall be payable at the same time as the corresponding payment is payable.




          SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF
DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS




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AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.




          SECTION 14. Amendment; No Waiver. No provision of this Agreement may be amended,
modified, waived or discharged except by a written document signed by the Executive and a duly
authorized officer of the Company. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or
deprive such party of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Except as provided in Section 1(t), no failure or delay by either
party in exercising any right or power hereunder will operate as a waiver thereof, nor will any
single or partial exercise of any such right or power, or any abandonment of any steps to enforce
such right or power, preclude any other or further exercise thereof or the exercise of any other
right or power. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party, which are not set forth
expressly in this Agreement.




          SECTION 15. Severability. If any term or provision of this Agreement is invalid,
illegal or incapable of being enforced by any applicable law or public policy, all other conditions
and provisions of this Agreement shall nonetheless remain in full force and effect so long as the
economic and legal substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party. Upon any such determination that any term or provision
is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions contemplated hereby be
consummated as originally contemplated to the fullest extent possible.




          SECTION 16. Entire Agreement. This Agreement sets forth the entire agreement of the
parties hereto in respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or representative of any party hereto, and any
prior agreement of the parties hereto in respect of the subject matter contained herein is hereby
terminated and canceled. None of the parties shall be liable or bound to any other party in any
manner by any representations and warranties or covenants relating to such subject matter except as
specifically set forth herein.




          SECTION 17. Survival. The rights and obligations of the parties under the provisions
of this Agreement, including Sections 5, 7 and 12, shall survive and remain binding and
enforceable, notwithstanding the expiration of the Protection Period or the term of this Agreement,
the termination of the Executive’s employment with the Company for any reason or any settlement of
the financial rights and obligations arising from the Executive’s employment hereunder, to the
extent necessary to preserve the intended benefits of such provisions.




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          SECTION 18. Notices. All notices or other communications required or permitted by
this Agreement will be made in writing and all such notices or communications will be deemed to
have been duly given when delivered or (unless otherwise specified) mailed by United States
certified or registered mail, return receipt requested, postage prepaid, addressed as
follows:




	 	 	 
	If to the Company:

	 	First Solar, Inc.
	 

	 	350 West Washington Street
	 

	 	Suite 600
	 

	 	Tempe, AZ 85281
	 

	 	Attention: Corporate Secretary
	 
	 	 
	If to the Executive:

	 	To the Executive’s then current address on file with the
Company





or to such other address as any party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.




          SECTION 19. Headings and References. The headings of this Agreement are inserted for
convenience only and neither constitute a part of this Agreement nor affect in any way the meaning
or interpretation of this Agreement. When a reference in this Agreement is made to a Section, such
reference shall be to a Section of this Agreement unless otherwise indicated.




          SECTION 20. Counterparts. This Agreement may be executed in one or more counterparts
(including via facsimile), each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.




          SECTION 21. Interpretation. For purposes of this Agreement, the words “include” and
“including”, and variations thereof, shall not be deemed to be terms of limitation but rather shall
be deemed to be followed by the words “without limitation”. The term “or” is not exclusive. The
word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other thing
extends, and such phrase shall not mean simply “if”.




          SECTION 22. Time of the Essence. The parties hereto acknowledge and agree that time
is of the essence in the performance of the obligations of this Agreement and that the parties
shall strictly adhere to any timelines herein.




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




FIRST SOLAR, INC.,




	 	 	 	 	 
	 	 	 
	 	By:  	            /s/ Michael Sweeney
 	 
	 	 	Name:  	Michael Sweeney 	 
	 	 	Title:  	Chairman,
Compensation Committee 	 
	 



EXECUTIVE,




	 	 	 	 	 
	 	 	 
	 	       /s/ Michael J. Ahearn
 	 
	 	Michael J. Ahearn 	 
	 	 	 
	 



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