Document:

EX-10.13

 

Exhibit 10.13

EMPLOYMENT AGREEMENT

          This Agreement is made as of this October 19, 2006, (this “Agreement”) by and between First
Solar, Inc., a Delaware corporation having its principal office at 4050 East Cotton Center
Boulevard, Building 6, Suite 68, Phoenix, Arizona 85040 (hereinafter “Employer”) and Paul Kacir
(hereinafter “Employee”).

WITNESSETH:

          WHEREAS, Employer and Employee wish to enter into an agreement relating to the employment of
Employee by Employer.

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

ARTICLE I. Employment

1.1 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.

1.2 Position and Duties of Employee. Employer hereby employs Employee in the initial
capacity of Vice President — General Counsel and Secretary of First Solar and Employee hereby
accepts such position. Employee agrees to diligently and faithfully perform such duties as may
from time to time be assigned to Employee by the Chief Executive Officer (“CEO”) or other senior
manager of Employer, 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 Agreement between Employer
and Employee substantially in the form attached hereto as Exhibit A (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
set forth in Sections 1.3, 1.5 and 4.1 of this Agreement shall survive termination of Employee’s
employment and termination of this Agreement.

 

 

1.4 Termination of Employment. Employee’s employment with Employer shall terminate upon
the earliest of: (i) Employee’s death; (ii) unless waived by Employer, Employee’s disability,
either physical or mental (as determined by a physician chosen by Employer) 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; (iii) the termination of Employee’s
employment by Employer for cause (as hereinafter defined); (iv) Employee’s resignation; and (v)
the termination of Employee’s employment by Employer without cause. As used herein, “cause” shall
mean the Employer’s good faith determination of: (a) Employee’s dishonest, fraudulent or illegal
conduct relating to the business of Employer; (b) Employee’s willful breach or habitual neglect of
Employee’s duties or obligations in connection with Employee’s employment; (c) Employee’s
misappropriation of Employer funds; (d) 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; (e) Employee’s excessive use of alcohol; (f) Employee’s use of
controlled substances or other addictive behavior; (g) Employee’s unethical business conduct; (h)
Employee’s breach of any statutory or common law duty of loyalty to Employer; (i) Employee’s
material breach of this Agreement, the Non-Competition and Non-Solicitation Agreement between
Employer and Employee (the “Non-Competition Agreement”), in substantially the form attached hereto
as Exhibit B, or the Confidentiality and Intellectual Property Agreement between Employer and
Employee (the “Confidentiality Agreement”), in substantially the form attached hereto as Exhibit C,
or the Change in Control Agreement; or (j) any other act or omission by Employee which Employer
concludes in good faith is prejudicial or injurious to the business or goodwill of Employer. 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. Employee shall be
entitled to receive, in addition to the severance payments described in Sections 1.5(a) above, the
dollar value of any earned but unused (and unforfeited) vacation.

          (b) Severance Payments in the Case of a Termination Without Cause Pursuant to Clause
1.4(v). If Employee’s employment is terminated by Employer pursuant to clause (v) of Section
1.4 (termination without cause), then, subject to the Change in Control Agreement, Employee shall
be entitled to severance pay equal to one times the Base Salary (as hereinafter defined) in effect
as of the date of termination of employment payable in accordance with Employer’s regular payroll
practices. Severance payments shall be reduced by any compensation that Employee earns 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. Notwithstanding anything to the contrary herein, no severance payments shall
be made unless Employee executes a general release in favor of Employer and its affiliates in a
form satisfactory to Employer and such release is effective and irrevocable.

First Solar, Inc.—P. Kacir

Confidential

Page 2 of 6

 

 

          (c) Medical Insurance. In the event of the termination of Employee’s
employment with Employer without cause under Section 1.4(v) above, 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’s coverage under any other medical benefits plan.

ARTICLE II. Compensation

2.1 Base Salary. Employee shall be compensated at an annual base salary of three hundred
thousand dollars ($300,000) (the “Base Salary”) while Employee is employed by Employer under this
Agreement, subject to such annual increases or decreases 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 a discretionary annual
bonus of up to thirty-five percent (35%) of Employee’s Base Salary based upon individual and
company performance, as determined by Employer in its sole discretion. The specific bonus
eligibility and the standards for earning a bonus will be developed by Employer and communicated to
Employee as soon as practicable after the beginning of each year.

2.3 Benefits. Employee also shall be eligible to receive all benefits as are available to
similarly situated employees of Employer generally, and any other benefits which Employer may in
its sole discretion elect to grant to Employee. In addition, Employee shall be entitled to four
(4) weeks paid vacation per year, which shall be accrued in accordance with Employer’s policies
applicable to similarly situated employees of the Employer. In addition, Employer shall pay for
all professional fees, dues and taxes, including attorney occupation and similar taxes required to
maintain Employee’s license to practice law, continuing legal education requirements and costs of
membership in professional organizations reasonably requested by Employee for the purpose of
Employee’s professional growth required to serve Employer’s needs.

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 therefore.

2.5 Grant of Stock Options. Employer will grant to Employee options to acquire shares of
common stock of Employer, subject to and in accordance with the following contingencies: (1)
additional terms contained in Employer’s stock option plan, (2) approval of the Employer’s equity
incentive plan by Employer’s Board of Directors (the “Board”) and shareholders of Employer, (3)
approval of the grants by the Board, (4) Employee’s execution of documents reasonably requested by
Employer at the time of grant (5) Employee’s continued employment through the grant date and (6)
additional terms described in Annex 1.

2.6 Location. The position will be based in Phoenix, Arizona. It is understood that,
subject to Employee’s continued employment with Employer, Employee will commute from Employee’s
current home in Vancouver, British Columbia to Phoenix during an interim

First Solar, Inc.—P. Kacir

Confidential

Page 3 of 6

 

 

transition stage ending October 2, 2007, after which time Employee will relocate permanently to
Phoenix. During the transition period Employer will reimburse Employee pursuant to the Relocation
Memo (defined below).

2.7 Relocation. Subject to Employee’s continued employment with Employer, Employer will
provide Employee with a comprehensive relocation package as provided in the Relocation Memo between
Employer and Employee, in substantially the form attached hereto as Exhibit D (the “Relocation
Memo”), which is effective until October 2, 2007.

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.

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 of 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

First Solar, Inc.—P. Kacir

Confidential

Page 4 of 6

 

 

facsimile transmission or by courier or mailed, registered or certified mail, postage prepaid as
follows:

			
	          If to Employer:          	 	First Solar, Inc.

4050 East Cotton Center Boulevard

Building 6

Suite 68

Phoenix, AZ 85040

Attention: Michael J. Ahearn

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

4.6 Entire Agreement. This Agreement, the Relocation Memo, 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.
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.

First Solar, Inc.—P. Kacir

Confidential

Page 5 of 6

 

 

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”.

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

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	/s/ Paul Kacir
 	 
	 	Paul Kacir 	 
	 	 	 
	 
	 	EMPLOYER:

FIRST SOLAR, INC.

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

First Solar, Inc.—P. Kacir

Confidential

Page 6 of 6

 

 

Annex 1

Equity Program. Effective immediately after an initial public offering (“IPO”) of Employer
which occurs in the fourth quarter of 2006, Employer will grant Employee options to purchase 85,000
shares of Employer common stock (the “Options”) (such number to be adjusted for any stock splits of
Employer common stock prior to the IPO), exercisable at the IPO price per share of Employer common
stock. The Options will vest with respect to 20% of the shares underlying such Options on each
anniversary of the effective date of grant. The Options will be
subject to Employer’s 2006 Omnibus
Incentive Compensation Plan. The Options
will be subject to the terms of the option award agreement entered into between Employer and
Employee.

If Employer does not complete an IPO by December 31, 2006, Employer will grant Employee the Options
as described in the preceding paragraph except that (i) the grant shall be effective as of December
31, 2006, (ii) the grant shall be for a total of 17,000 shares of Employer common stock (such
number to be adjusted for any stock splits of Employer common stock prior to the IPO) and (iii) the
exercise price shall be the equal to the fair market value per share of common stock as of the
effective date of grant, as determined by the Board.

 

 

     CHANGE IN CONTROL SEVERANCE AGREEMENT (this “Agreement”)
dated as of October 19, 2006, between First Solar, Inc., a Delaware
corporation (the “Company”), and Paul Kacir (the
“Executive”).

          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
by virtue of the uncertainties and risks created by the circumstances surrounding a Change in
Control and to ensure the Executive’s full attention to the Company and its subsidiaries during
such a period of uncertainty;

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

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

          (a) “280G Gross-Up Payment” shall have the meaning set forth in Section 5(a).

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

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

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

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

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

 

 

          (g) “Bonus Amount” 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, 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

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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;

     (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

3

 

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) “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,

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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 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.

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

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

          (v) “Payment” means any payment, benefit or distribution (or combination thereof) by
the Company, any of its Affiliates or any trust established by the

5

 

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.

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

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

          (y) “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.

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

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

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

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

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

          (ee) “Section 409A Tax” shall have the meaning set forth in Section 6.

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

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

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

          (ii) “Termination Date” means the date on which the termination of the Executive’s
employment, in accordance with the terms of this Agreement, is effective, provided that in
the event of a Qualifying Termination described in clause (iii) of the

6

 

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 shall become effective immediately
after the consummation of the Company’s initial public offering (the “Effective Date”), and
the consummation of such offering shall not constitute a Change in Control, provided that
if such consummation does not occur prior to the first anniversary of the date hereof, this
Agreement shall expire and terminate and neither party to this Agreement shall have any obligations
hereunder. 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:

7

 

          (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 described in Section 4(a)(v) becomes effective and irrevocable (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 current fiscal year through the Termination Date, 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 for the Executive’s continued group health plan coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), in the case
of each of clauses (A) and (B), for a period of time commencing on the Release Effective Date and
ending on the earlier of (1) two years after the Release Effective Date and (2) 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.

          (iv) Accrued Rights. The Executive shall be entitled to (A) payments of any unpaid
annual base salary, annual bonus or other amount earned or accrued through the Termination Date and
for 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”).

          (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.

          (vi) Release of Claims; Non-Competition. Notwithstanding any provision of this
Agreement to the contrary, the Company shall not be obligated to make any payments or provide any
benefits described in this Section 4, other than payments or

8

 

benefits with respect to the Accrued Rights, unless and until such time as the Executive has
executed and delivered a Separation Agreement and Release (the “Release”) substantially in
the form of Exhibit A hereto and such Release has become effective and irrevocable in accordance
with its terms.

          (b) Termination on Account of Death or Disability; Non-Qualifying Termination. (i)
The Executive’s employment shall terminate automatically upon the Executive’s death or Disability.
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.

          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. The
reduction of the amounts payable hereunder shall be made by first reducing the payments under
Section 4(a), unless an alternative method of reduction is elected by the Executive.

          (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

9

 

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 Gross-Up Payment, as
determined pursuant to this Section 5, shall be paid by the Company to the Executive within five
business days of the receipt of the Accounting Firm’s determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall so indicate to the Executive in
writing. Any determination by the Accounting Firm shall be binding upon the Company and the
Executive. As a result of the uncertainty in the application of the Excise Tax, at the time of the
initial determination by the Accounting Firm hereunder, it is possible that the amount of the 280G
Gross-Up Payment determined by the Accounting Firm to be due to the Executive, consistent with the
calculations required to be made hereunder, will be lower than the amount actually due (an
“Underpayment”). 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

10

 

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 direct the Executive to pay the tax claimed and 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 or more appellate courts, as the Company shall determine; provided,
however, that (A) if the Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment to the Executive, on an interest-free
basis, and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise
Tax or income tax (including interest or penalties) imposed with respect to such advance or with
respect to any imputed income in connection with such advance 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 receipt by the Executive of an amount advanced by the Company 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 receipt by the Executive of an amount
advanced by the Company 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 such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent thereof, the
amount of 280G Gross-Up Payment required to be paid.

          SECTION 6. Section 409A. It is the intention of the Company and the Executive that
the provisions of this Agreement comply with Section 409A of the Code, and all provisions of this
Agreement shall be construed and interpreted in a manner consistent with Section 409A of the Code.
To the extent necessary to avoid imposition of any additional tax or interest penalties under
Section 409A (such tax and interest

11

 

penalties, a “Section 409A Tax”), notwithstanding the timing of payment provided in
any other Section of this Agreement, the timing of any payment, distribution or benefit pursuant to
this Agreement shall be subject to a six-month delay in a manner consistent with Section
409A(a)(2)(B)(i) of the Code.

          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 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.

          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

12

 

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 or her
hereunder if he or she 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. As used in this Agreement, (i) the term “Company” shall mean the Company as hereinbefore
defined and any Successor and any permitted assignee to which this Agreement is assigned and (ii)
the term “Board” shall mean the Board as hereinbefore defined and the board of directors or
equivalent governing body of any Successor and any permitted assignee to which this Agreement is
assigned.

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

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

13

 

          (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.

          SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN THE STATE OF
DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL
RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS PRINCIPLES OF
CONFLICTS OF LAW.

          SECTION 14. Amendment; No Waiver. No provision of this Agreement may be amended,
modified, waived or discharged except by a written document signed by the Executive and a duly
authorized officer of the Company. The failure of a party to insist upon strict adherence to any
term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or
deprive such party of the right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. 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 other
provision is invalid, illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement

14

 

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.

          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.
	 	 
	 

	 	4050 East Cotton Center Boulevard	 	 
	 

	 	Building 6, Suite 68	 	 
	 

	 	Phoenix, Arizona 85040	 	 
	 
	 	 	 	 
	 

	 	Attention: Michael J. Ahearn	 	 
	 
	 	 	 	 
	 

	 	Fax:	 	 
	 
	 	 	 	 
	     If to the Executive:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Fax:	 	 

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.

15

 

          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.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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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	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Michael J. Ahearn	 	 
	 

	 	 	 	Title: President and Chief Executive
Officer	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE,	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Paul Kacir	 	 

17

 

Exhibit A

SEPARATION AGREEMENT AND RELEASE

I. Release. For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned, with the intention of binding himself/herself, his/her heirs,
executors, administrators and assigns, does hereby release and forever discharge First Solar, Inc.,
a Delaware corporation (the “Company”), and its present and former officers, directors,
executives, agents, employees, affiliated companies, subsidiaries, successors, predecessors and
assigns (collectively, the “Released Parties”), from any and all claims, actions, causes of
action, demands, rights, damages, debts, accounts, suits, expenses, attorneys’ fees and liabilities
of whatever kind or nature in law, equity, or otherwise, whether now known or unknown
(collectively, the “Claims”), which the undersigned now has, owns or holds, or has at any
time heretofore had, owned or held against any Released Party, arising out of or in any way
connected with the undersigned’s employment relationship with the Company, its subsidiaries,
predecessors or affiliated entities, or the termination thereof, under any Federal, state or local
statute, rule, or regulation, or principle of common, tort or contract law, including but not
limited to, the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. §§ 201
et seq., the Family and Medical Leave Act of 1993, as amended (the
“FMLA”), 29 U.S.C. §§ 2601 et seq., Title VII of the Civil Rights Act of
1964, as amended, 42 U.S.C. §§ 2000e et seq., the Age
Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621 et
seq., the Americans with Disabilities Act of 1990, as amended, 42 U.S.C. §§
12101 et seq., the Worker Adjustment and Retraining Notification Act of 1988,
as amended, 29 U.S.C. §§ 2101 et seq., the Employee Retirement
Income Security Act of 1974, as amended, 29 U.S.C. §§ 1001 et seq.,
and any other equivalent or similar Federal, state, or local statute; provided,
however, that nothing herein shall release the Company of its obligations under that
certain Change in Control Severance Agreement in which the undersigned participates and pursuant to
which this Separation Agreement and Release is being executed and delivered. 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 Release 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 Release Party
in any forum by the undersigned or by any agency, group, or class persons. The undersigned further
affirms that he/she has been paid and/or has received all leave (paid or unpaid), compensation,
wages, bonuses, commissions, and/or benefits to which he/she may be entitled and that no other
leave (paid or unpaid), compensation, wages, bonuses, commissions and/or benefits are due to
him/her from the Company and its subsidiaries, except as specifically provided in this Separation
Agreement and Release. The undersigned furthermore affirms that he/she has no known workplace
injuries or occupational diseases and has been provided and/or has not been denied any leave
requested under the FMLA. If any agency or court assumes jurisdiction of any such Claim, complaint
or action against any Released Party on 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 other agency obtain monetary relief on his/her behalf, the
undersigned assigns to the Company all rights to such relief.

 

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

2

 

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.

3

 

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

	 	 	 	 	 	 	 
	 	 	FIRST SOLAR, INC.,	 	 
	 
	 	 	 	 	 	 
	 

	 	by	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 
	 
	 	 	 	 	 	 
	 	 	EMPLOYEE,	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	[NAME]	 	 
	 

	 	 	 	Date Signed:                    	 	 

4

 

Exhibit B

NON-COMPETITION AND NON-SOLICITATION AGREEMENT

     In consideration of Employee’s (as defined below) ongoing at-will employment with Employer (as
defined below) or one of its subsidiary companies, the compensation and benefits provided to me
including those set forth in a separate Employment Agreement, Relocation Agreement, Confidentiality
and Intellectual Property Agreement (the “Confidentiality Agreement”), Change in Control Agreement
(the “Change in Control Agreement”) and Employer’s agreement to provide Employee with access to
Employer’s confidential information, intellectual property and trade secrets, access to its
customers and other promises made below, Employee enters into the following non-competition and
non-solicitation agreement:

     This Non-Competition and Non-Solicitation Agreement (“Agreement”) is effective by and between
Paul Kacir (“Employee”) and First Solar, Inc. (“Employer”) as of                     .

     Whereas, Employee desires to be employed by Employer and Employer has agreed to employ
Employee in the position of Vice President — General Counsel of First Solar, or such other position
as Employer may from time to time determine;

     Whereas, because of the nature of Employee’s duties, in the performance of such duties,
Employee will have access to and will necessarily utilize sensitive, secret and proprietary data
and information, the value of which derives from its secrecy from Employer’s competitors, which,
like Employer, sell products and services throughout the world;

     Whereas, Employee and Employer acknowledge and agree that Employee’s conduct in the manner
prohibited by this Agreement during, or for the period specified in this Agreement following the
termination of Employee’s employment with Employer, would jeopardize Employer’s Confidential
Information (as defined in the Confidentiality Agreement) and the goodwill the Employer has
developed and generated over a period of years, and would cause Employer to experience unfair
competition and immediate, irreparable harm; and

     Whereas, in consideration of Employer’s hiring Employee, Employee therefore has agreed to the
terms of This Agreement, the Employment Agreement, the Confidentiality Agreement, the Change in
Control Agreement, the Relocation Agreement and specifically to the restrictions contained herein.

     Therefore, Employee and Employer hereby agree as follows (THE FOLLOWING ARE IMPORTANT
RESTRICTIONS TO WHICH EMPLOYEE AGREES IN ORDER TO INDUCE EMPLOYER TO RETAIN EMPLOYEE AND WHICH,
ONCE EMPLOYEE SIGNS THIS AGREEMENT, ARE BINDING ON EMPLOYEE. BY SIGNING THIS AGREEMENT, EMPLOYEE
SIGNIFIES THAT EMPLOYEE HAS READ THESE RESTRICTIONS CAREFULLY BEFORE SIGNING THIS AGREEMENT,
UNDERSTANDS THE AGREEMENT’S TERMS, AND ASSENTS TO ABIDE BY THESE RESTRICTIONS.):

 

 

     1. Nature and Period of Restriction. At all times during Employee’s employment and
for a period of one year after the termination of employment (for any reason, including discharge
or resignation) with Employer (the “Restricted Period”), Employee agrees as follows:

     1.1. Employee agrees not to engage or assist, in any way or in any capacity, anywhere in the
Territory (as defined below), either directly or indirectly, (a) in the business of the
development, sale, marketing, manufacture or installation that would be in direct competition with
of any type of product sold, developed, marketed, manufactured or installed by Employer during
Employee’s employment with Employer, including photovoltaic modules, or (b) in any other activity
in direct competition or that would be in direct competition with the business of Employer as that
business exists and is conducted during the Employee’s employment with Employer. In addition and
in particular, Employee agrees not to sell, market, provide or distribute, or endeavor to sell,
market, provide or distribute, in any way, directly or indirectly, on behalf of Employee or any
other person or entity, any products or services competitive with those of Employer to any person
or entity which is or was an actual or prospective customer of Employer at any time during
Employee’s employment by Employer.

     1.2. “Territory” for purposes of this Agreement means North America.

     1.3. Employee agrees not to solicit, recruit, hire, employ or attempt to hire or employ, or
assist any other person or entity in the recruitment or hiring of, any person who is an employee of
Employer, and agrees not to otherwise urge, induce or seek to induce any person to terminate his or
her employment with Employer.

     1.4. The parties understand and agree that the restrictions set forth in the paragraphs in
this Section 1 also extend to Employee’s recommending or directing any such actual or prospective
customers to any other competitive concerns, or assisting in any way any competitive concerns in
soliciting or providing products or services to such customers, whether or not Employee personally
provides any products or services directly to such customers. For purposes of this Agreement, a
prospective customer is one that Employer solicited or with which Employer otherwise sought to
engage in a business transaction during the time that Employee is or was employed by Employer.

     1.5. Employee and Employer acknowledge and agree that Employer has expended substantial
amounts of time, money and effort to develop business strategies, customer relationships, employee
relationships, trade secrets and goodwill and to build an effective organization and that Employer
has a legitimate business interest and right in protecting those assets as well as any similar
assets that Employer may develop or obtain. Employee and Employer acknowledge that Employer is
entitled to protect and preserve the going concern value of Employer and its business and trade
secrets to the extent permitted by law. Employee acknowledges and agrees the restrictions imposed
upon Employee under this Agreement are reasonable and necessary for the protection of Employer’s
legitimate interests, including Employer’s Confidential Information, intellectual property, trade
secrets and goodwill. Employee and Employer acknowledge that Employer is engaged in a highly
competitive business, that Employee is expected to serve a key role with Employer, that Employee
will have access to Employer’s Confidential Information, that Employer’s business and customers and

2

 

prospective customers are located around the world, and that Employee could compete with
Employer from virtually any location in the world. Employee acknowledges and agrees that the
restrictions set forth in this Agreement do not impose any substantial hardship on Employee and
that Employee will reasonably be able to earn a livelihood without violating any provision of this
Agreement. Employee acknowledges and agrees that part of the consideration for the restrictions in
this Section 1 consists of Employer’s agreement to make severance payments as set forth in the
separate Employment Agreement between Employer and Employee.

     1.6. Employee agrees to comply with each of the restrictive covenants contained in this
Agreement in accordance with its terms, and Employee shall not, and hereby agrees to waive and
release any right or claim to, challenge the reasonableness, validity or enforceability of any of
the restrictive covenants contained in this Agreement.

     2. Notice by Employee to Employer. During the Restricted Period, prior to engaging in
any activities prohibited by the above paragraphs, or prior to accepting any position or employment
which would be so prohibited, Employee agrees to provide at least thirty (30) days’ prior written
notice (by certified mail) to Employer in accordance with Section 6, stating the description of the
activities or position sought to be undertaken by Employee, and to provide such further information
as Employer may reasonably request in connection therewith (including the location where the
services would be performed and the present or former customers or employees of Employer
anticipated to receive such products or services). Employer shall be free to object or not to
object in its unfettered discretion, and the parties agree that any actions taken or not taken by
Employer with respect to any other employees or former employees shall have no bearing whatsoever
on Employer’s decision or on any questions regarding the enforceability of any of these restraints
with respect to Employee.

     3. Notice to Subsequent Employer. Prior to accepting employment with any other person
or entity during the Restricted Period, Employee shall provide such prospective employer with
written notice of the provisions of this Agreement, with a copy of such notice delivered promptly
to Employer in accordance with Section 6.

     4. Extension of Non-Competition Period in the Event of Breach. It is agreed that the
Restricted Period shall be extended by an amount of time equal to the amount of time during which
Employee is in breach of any of the restrictive covenants set forth above.

     5. Judicial Reformation to Render Agreement Enforceable. If it is determined by a
court of competent jurisdiction that any of the restrictions or language in this Agreement are for
any reason invalid or unenforceable, the parties desire and agree that the court revise any such
restrictions or language, including reducing any time or geographic area, so as to render them
valid and enforceable to the fullest extent allowed by law. If any restriction or language in this
Agreement is for any reason invalid or unenforceable and cannot by law be revised so as to render
it valid and enforceable, then the parties desire and agree that the court strike only the invalid
and unenforceable language and enforce the balance of this Agreement to the fullest 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.

3

 

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

	 	 	 	 	 
	If to Employer:

	 	First Solar, Inc.
	 	 
	 

	 	4050 East Cotton Center Boulevard	 	 
	 

	 	Building 6, Suite 68	 	 
	 

	 	Phoenix, Arizona 85040	 	 
	 	 	Attention: Chief Executive Officer and General Counsel
	 

	 	Fax: (602) 414-9400	 	 
	 
	 	 	 	 
	If to Employee:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Fax:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	 

     7. Enforcement. Except as expressly stated herein, the covenants contained in this
Agreement shall be construed as independent of any other provision or covenants of any other
agreement between Employer and Employee, and the existence of any claim or cause of action of
Employee against Employer, whether predicated on this Agreement or otherwise, or the actions of
Employer with respect to enforcement of similar restrictions as to other employees, shall not
constitute a defense to the enforcement by Employer of such covenants. Employee acknowledges and
agrees that Employer has invested great time, effort and expense in its business and reputation,
that the products and information of the Employer are unique and valuable, and that the services
performed by Employee are unique and extraordinary, and Employee agrees that the Employer will
suffer immediate, irreparable harm and shall be entitled, upon a breach or a threatened breach of
this Agreement, to emergency, preliminary, and permanent injunctive relief against such activities,
without having to post any bond or other security, and in addition to any other remedies available
to Employer at law or equity. Any specific right or remedy set forth in this Agreement, legal,
equitable or otherwise, shall not be exclusive but shall be cumulative upon all other rights and
remedies allowed or by law, including the recovery of money damages. The failure of Employer to
enforce any of the provisions of this Agreement, or the provisions of any agreement with any other
Employee, shall not constitute a waiver or limit any of Employer’s rights.

     8. At-Will Employment; Termination. This Agreement does not alter the at-will
nature of Employee’s employment by Employer, and Employee’s employment may be terminated by either
party, with or without notice and with or without cause, at any time. In addition to the foregoing
provisions of this Agreement, upon Employee’s termination, Employee shall cease all identification
of Employee with Employer and/or the business, products or services of Employer, and the use of
Employer’s name, trademarks, trade name or fictitious name. All provisions, obligations, and
restrictions in this Agreement shall survive termination of Employee’s employment with Employer.

4

 

     9. Choice of Law, Choice of Forum. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without reference to the
principles of conflicts of laws. Any judicial action commenced relating in any way to this
Agreement including the enforcement, interpretation, or performance of this Agreement, shall be
commenced and maintained in a court of competent jurisdiction located in Maricopa County, Arizona.
In any action to enforce this Agreement, the prevailing party shall be entitled to recover its
litigation costs, including its attorneys’ fees. The parties hereby waive and relinquish any right
to a jury trial and agree that any dispute shall be heard and resolved by a court and without a
jury. The parties further agree that the dispute resolution, including any discovery, shall be
accelerated and expedited to the extent possible. Each party’s agreements in this Section 9 are
made in consideration of the other party’s agreements in this Section 9, as well as in other
portions of this Agreement.

     10. Entire Agreement, Modification and Assignment.

     10.1. This Agreement, the Employment Agreement, the Confidentiality Agreement, the Change in
Control Agreement and the Relocation Agreement comprise the entire agreement relating to the
subject matter hereof between the parties and supersedes, cancels, and annuls any and all prior
agreements or understandings between the parties concerning the subject matter of the Agreement.

     10.2. This Agreement may not be modified orally but may only be modified in a writing executed
by both Employer and Employee.

     10.3. This Agreement shall inure to the benefit of Employer, its successors and assigns, and
may be assigned by Employer. Employee’s rights and obligations under this Agreement may not be
assigned by Employee.

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

5

 

     IN WITNESS WHEREOF, the parties have executed this Agreement, effective as of the day and year
first written above.

	 	 	 
	EMPLOYER:

	 	EMPLOYEE:
	 
	 	 
	First Solar, Inc.
	 	 
	 
	 	 
	By:
	 	 
	 

	 	 
	 
	 	 
	Its:
	 	 
	 
	 	 
	 
	 	 
	Printed Name:
	 	 
	 
	 	 

6

 

Exhibit C

First Solar, Inc.

Confidentiality and Intellectual Property Agreement

Employee:     Paul Kacir

	 	 	 	 	 	 	 
	Place of Signing:
	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

In consideration of my ongoing at-will employment with First Solar, Inc. or one of its subsidiary
companies (collectively, the “Company”), for the compensation and benefits provided to me, and for
the Company’s agreement to provide me with access to experience, knowledge, and Confidential
Information (as defined below) gained by me in the course of such employment relating to the
methods, plans, and operations of the Company and its suppliers, clients, and customers I enter
into the following Confidentiality and Intellectual Property Agreement (the “Agreement”) and agree
as follows:

     1. Except for any items I have identified and described in a writing given to the Company and
acknowledged in writing by an officer of the Company on or before the date of this Agreement, which
items are specifically excluded from the operation of the applicable provisions hereof, I do not
own, nor have any interest in, any patents, patent applications, inventions, improvements, methods,
discoveries, designs, trade secrets, copyrights, and/or other patentable or proprietary rights.

     2. I will promptly and fully disclose to the Company all developments, inventions, ideas,
methods, discoveries, designs, and innovations (collectively referred to herein as “Developments”),
whether patentable or not, relating wholly or in part to my work for the Company or resulting
wholly or in part from my use of the Company’s materials or facilities, which I may make or
conceive, whether or not during working hours, whether or not using the Company’s materials,
whether or not on the Company facilities, alone or with others, at any time during my employment or
within ninety (90) days after termination thereof, and I agree that all such Developments shall be
the exclusive property of the Company, and that I shall have no proprietary or shop rights in
connection therewith.

     3. I will assign, and do hereby assign, to the Company or the Company’s designee, my entire
right, title and interest in and to all such Developments including all trademarks, copyrights,
moral rights and mask work rights in or relating to such Developments, and any patent applications
filed and patents granted thereon including those in foreign countries; and I agree, both during my

 

 

employment by the Company and thereafter, to execute any patent or other papers deemed necessary or
appropriate by the Company for filing with the United States or any other country covering such
Developments as well as any papers that the Company may consider necessary or helpful in obtaining
or maintaining such patents during the prosecution of patent applications thereon or during the
conduct of any interference, litigation, or any other matter in connection therewith, and to
transfer to the Company any such patents that may be issued in my name. If, for some reason, I am
unable to execute such patent or other papers, I hereby irrevocably designate and appoint the
Company and its designees and their duly authorized officers and agents, as the case may be, as my
agent and attorney in fact to act for and in my behalf and stead to execute any documents and to do
all other lawfully permitted acts in connection with the foregoing. I agree to cooperate with and
assist the Company as requested by the Company to provide documentation reflecting the Company’s
sole and complete ownership of the Developments. All expenses incident to the filing of such
applications, the prosecution thereof and the conduct of any such interference, litigation, or
other matter will be borne by the Company. This Section 3 shall survive the termination of this
Agreement.

     4. Subject to Section 5 below, I will not, either during my employment with the Company or at
any time thereafter, use, disclose or authorize, or assist anyone else to disclose or use or make
known for anyone’s benefit, any information, knowledge or data of the Company or any supplier,
client, or customer of the Company in any way acquired by me during or as a result of my employment
with the Company, whether before or after the date of this Agreement, (hereinafter the
“Confidential Information”). Such Confidential Information shall include the following:

     (a) Information of a business nature including financial information and
information about sales, marketing, purchasing, prices, costs, suppliers and
customers;

     (b) Information pertaining to future developments including research and
development, new product ideas and developments, strategic plans, and future
marketing and merchandising plans and ideas;

     (c) Information and material that relate to the Company’s manufacturing
methods, machines, articles of manufacture, compositions, inventions, engineering
services, technological developments, “know-how”, purchasing, accounting,
merchandising and licensing;

     (d) Trade secrets of the Company, including information and material with
respect to the design, construction, capacity or method of operation of the
Company’s equipment or products and information regarding the Company’s customers
and sales or marketing efforts and strategies;

     (e) Software in various stages of development (source code, object code,
documentation, diagrams, flow charts), designs, drawings, specifications, models,
data and customer information; and

2

 

     (f) Any information of the type described above that the Company obtained from
another party and that the Company treats as proprietary or designates as
confidential, whether or not owned or developed by the Company.

     5. It is understood and agreed that the term “Confidential Information” shall not include
information which is generally available to the public, other than through any act or omission on
the part of Employee in breach of this Agreement.

     6. I acknowledge (a) that such Confidential Information derives its value to the Company from
the fact that it is maintained as confidential and secret and is not readily available to the
general public or the Company’s competitors; (b) that the Company undertakes great effort and
sufficient measures to maintain the confidentiality and secrecy of such information; and (c) that
such Confidential Information is protected and covered by this Agreement regardless of whether or
not such Confidential Information is a “trade secret” under applicable law. I further acknowledge
and agree that the obligations and restrictions herein are reasonable and necessary to protect the
Company’s legitimate business interests, and that this Agreement does not impose an unreasonable or
undue burden on me and will not prevent me from earning a livelihood subsequent to the termination
of my employment. I agree to comply with each of the restrictive covenants contained in this
Agreement in accordance with its terms, and will not, and I hereby agree to waive and release any
right or claim to, challenge the reasonableness, validity or enforceability of any of the
restrictive covenants contained in this Agreement.

     7. I will deliver to the Company promptly upon request, and, in any event, on the date of
termination of my employment, all documents, copies thereof and other materials in my possession,
including any notes or memoranda prepared by me, pertaining to the business of the Company, whether
or not including any Confidential Information, and thereafter will promptly deliver to the Company
any documents and copies thereof pertaining to the business of the Company that come into my
possession.

     8. I represent that I have no agreements with or obligations to others with respect to any
innovations, developments, or information that could conflict with any of the foregoing.

     9. The invalidity or unenforceability of any provision of this Agreement, whether in whole or
in part, shall not in any way affect the validity and/or enforceability of any of the other
provisions of this Agreement. Any invalid or unenforceable provision or portion thereof shall be
deemed severable to the extent of any such invalidity or unenforceability. The restrictions
contained in this Agreement are reasonable for the purpose of preserving for the Company and its
affiliates the proprietary rights, intangible business value and Confidential Information of the
Company and its affiliates. If it is determined by a court of competent jurisdiction that any of
the restrictions or language in this Agreement is for any reason invalid or unenforceable, the
parties desire and agree that the court revise any such restrictions or language so as to render it
valid and enforceable to the fullest extent allowed by law. If any restriction or language in this
Agreement is for any reason invalid or unenforceable and cannot by law be revised so as to render
it valid and enforceable, then the parties desire and agree that the court strike only the invalid
and unenforceable language and enforce the balance of this Agreement to the fullest extent allowed
by law.

3

 

     10. I agree that any breach or threatened breach by me of any of the provisions in this
Agreement cannot be remedied solely by the recovery of damages. I expressly agree that upon a
threatened breach or violation of any of such provisions, the Company, in addition to all other
remedies, shall be entitled as a matter of right, and without posting a bond or other security, to
emergency, preliminary, and permanent injunctive relief in any court of competent jurisdiction.
Nothing herein, however, shall be construed as prohibiting the Company from pursuing, in concert
with an injunction or otherwise, any other remedies available at law or in equity for such breach
or threatened breach, including the recovery of damages.

     11. This Agreement is made in consideration of my continued employment by the Company. I
understand that the Company is under no obligation to employ me for any duration and that my
employment with the Company is terminable at the will of the Company or at my will at any time and
for any reason and without notice.

     12. Upon termination of my employment with the Company, I shall, if requested by the Company,
reaffirm my recognition of the importance of maintaining the confidentiality of the Company’s
Confidential Information and reaffirm all of my obligations set forth herein. The provisions,
obligations, and restrictions in this Agreement shall survive the termination of my employment, and
will be binding on me whether or not the Company requests a re-affirmation.

     13. This Agreement, my Employment Agreement with the Company (the “Employment Agreement”), the
Noncompetition Agreement (as defined in the Employment Agreement), the Change in Control Agreement
(as defined in the Employment Agreement) and the Relocation Agreement (as defined in the Employment
Agreement) represent the full and complete understanding between me and the Company with respect to
the subject matter hereof and supersedes all prior representations and understandings, whether oral
or written regarding such subject matter. This Agreement may not be changed, modified, released,
discharged, abandoned or otherwise terminated, in whole or in part, except by an instrument in
writing signed by both the Company and Employee. My obligations under this Agreement shall be
binding upon my heirs, executors, administrators, or other legal representatives or assigns, and
this Agreement shall inure to the benefit of the Company, its successors, and assigns.

     14. This Agreement shall be governed by and construed and enforced in accordance with the laws
of the State of Delaware without reference to principles of conflict of laws. Any judicial action
commenced relating in any way to this Agreement including the enforcement, interpretation, or
performance of this Agreement, shall be commenced and maintained in a court of competent
jurisdiction located in Maricopa County, Arizona. In any action to enforce this Agreement, the
prevailing party shall be entitled to recover its litigation costs, including its attorneys’ fees.
The parties hereby waive and relinquish any right to a jury trial and agree that any dispute shall
be heard and resolved by a court and without a jury. The parties further agree that the dispute
resolution, including any discovery, shall be accelerated and expedited to the extent possible.
Each party’s agreements in this Section 14 are made in consideration of the other party’s
agreements in this Section 14, as well as in other portions of this Agreement.

     15. As used in this Agreement, words such as “herein,” “hereinafter,” “hereby” and
“hereunder,” and the words of like import refer to this Agreement, unless the context requires

4

 

otherwise. The words “include,” “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”.

	 	 	 	 	 	 	 
	Signed:

	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Employee	 	 
	 
	 	 	 	 	 	 
	Agreed to by First Solar, Inc.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 

5

 

Exhibit D

RELOCATION MEMO

The following constitutes those expenses that First Solar Inc. (the Company) will reimburse with
regards to your relocation.

	A.	 	You have up to one year from date of hire to complete your relocation.
	 
	B.	 	Travel Expenses — Reimbursable

	 	1.	 	Home Finding Trips:

You and your spouse are allowed a total of two round trips to Phoenix, Arizona. for
the purpose of selecting a new residence. The number of days reimbursed for Home
Finding will not exceed a total of eight (8) days and eight (8) nights at the
relocation destination. Costs related to round trip transportation, lodging, car
rental and reasonable meals will be reimbursed.
	 
	 	2.	 	Initial Trip to Phoenix, Arizona:

You will be reimbursed for the initial trip to report for work at First Solar.
	 
	 	3.	 	Final Move:

First Solar will reimburse all actual and reasonable expenses of transporting you
and your family to Phoenix, Arizona. Reimbursable expenses include transportation as
well as lodging and meal costs.
	 
	 	4.	 	Trips home:

First Solar will reimburse you for up to two (2) trips home per month from the date
of your hire up to three (3) months.
	 
	 	5.	 	Travel Expenses:

Reimbursable travel expenses will include the following:

	 	a)	 	Air — Coach/Tourist Class
	 
	 	b)	 	Auto — mileage allowance at the current company rate of 40.5
cents per mile plus tolls. Reasonable allowable time will be computed on the
basis of 350 miles travel per day.
	 
	 	c)	 	Taxicab, bus, and other like transportation expenses
	 
	 	d)	 	Reasonable and actual cost of meals and lodging
	 
	 	e)	 	Reasonable telephone, and parking expenses
	 
	 	f)	 	Gratuities given in connection with transportation, meals and
lodging

	C.	 	Transportation of Household Goods:

First Solar will contract with a household goods carrier who will pack, transport and unpack
your belongings. First Solar will pay for all reasonable charges for packing at origin, one
pickup at origin, one (1) delivery at destination and unpacking within the guidelines that
follow:

 

 

	 	1.	 	Moving Expenses — Allowable

	 	a)	 	Transport of household and personal effects.
	 
	 	b)	 	Costs of transporting one automobile. Second vehicle is driven
to final destination.
	 
	 	c)	 	Costs related to packing/loading/unloading /unpacking of goods
during a normal Monday through Friday workweek.
	 
	 	d)	 	Fees for preparation, service and normal reinstallation of
appliances.
	 
	 	e)	 	Insurance of household goods both in transit and while goods
are in storage.
	 
	 	f)	 	Storage of household goods not to exceed a maximum of 60 days.
	 
	 	g)	 	If household goods are packed prior to scheduled date of
departure, reasonable meals and lodging at the old location will be reimbursed
for you and all members of your immediate family up to one (1) day and one (1)
night.

	D.	 	Temporary Living Expenses
	 
	 	 	Lodging — First Solar will reimburse for reasonable accommodations for 30 days after date of
hire in Phoenix, Arizona.

	E.	 	Expenses — Sale of a Primary Residence

	 	1.	 	Reimbursed expenses — The following items will be reimbursed in the sale of
your residence:

	 	a)	 	Real estate brokerage fees (not to exceed 6%)
	 
	 	b)	 	Closing fees
	 
	 	c)	 	Transfer tax
	 
	 	d)	 	Deed stamps
	 
	 	e)	 	Title/abstract extension
	 
	 	f)	 	Special assessment search
	 
	 	g)	 	Tax search
	 
	 	h)	 	Other fees

	 	1)	 	Appraisal fee
	 
	 	2)	 	Escrow fees
	 
	 	3)	 	Recording and release fees
	 
	 	4)	 	Legal fees
	 
	 	5)	 	Survey fee
	 
	 	6)	 	Notary fees
	 
	 	7)	 	Express or courier fees
	 
	 	8)	 	Document preparation fees

	F.	 	Expenses — Purchase of a Primary Residence
	 
	 	 	The following closing costs will be reimbursed:

2

 

	 	1)	 	Mortgage origination fee — not to exceed 1% (points are not reimbursed)
	 
	 	2)	 	Legal fees
	 
	 	3)	 	Mortgage approval and credit rating fees
	 
	 	4)	 	Fees for examination of title and/or lender title insurance policy
	 
	 	5)	 	Recording fees
	 
	 	6)	 	Appraisal fees
	 
	 	7)	 	Survey expense
	 
	 	8)	 	Home inspection fees including termite, water/well, septic, structural, radon
gas and asbestos inspection fees
	 
	 	9)	 	Owner’s title insurance

	G.	 	Tax Implications of Relocation
	 
	 	 	For the relocation expense reimbursements and payments made on your behalf that are
considered income, are not deductible, and, are added to your earnings, First Solar will
provide a tax gross-up to reimburse you for the tax impact of your relocation on your
federal, state, local and FICA tax liabilities.

3EX-10.14

 

Exhibit 10.14

EMPLOYMENT AGREEMENT

          This Agreement is made as of this 1st day of November, 2002, by and between FIRST SOLAR, LLC,
a Delaware limited liability company having its corporate office at 4050 E. Cotton Center Blvd.,
Building 6, Suite 68, Phoenix, Arizona 85040 (the “Company”) and Ken Schultz, an individual
(“Employee”).

WITNESSETH:

          WHEREAS, the Company and Employee wish to enter into an agreement relating to the employment
of Employee by the Company.

          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, it is hereby agreed
between the Company and Employee as follows:

ARTICLE I. Employment

1.1 At-Will Nature of Employment. Effective as of November 1, 2002, the Company employs
Employee as a full-time, at-will employee, and Employee accepts such employment with the Company.
Either the Company or Employee may terminate Employee’s employment at any time. Articles III, IV,
V, VI and VII of this Agreement shall survive any termination of Employee’s employment with the
Company.

1.2 Position and Duties of Employee. The Company hereby employs Employee in the capacity
of Vice-President of Product and Marketing Management, and Employee hereby accepts such position.
Employee agrees to devote Employee’s full working time, attention and efforts to the business of
the Company and to diligently and faithfully perform such duties assigned to Employee by the
Company. Employee shall perform the duties hereunder in conformity with the directions of the
Company and shall report to the Chief Executive Officer of the Company or his or her designee.

1.3 No Salary or Benefits Continuation Beyond Termination. Except as may be required by
law or as otherwise specified in Section 1.5 of this Agreement, the Company shall not be liable to
Employee for any salary, bonus, benefits or other compensation for any period after the Termination
Date (as defined below).

1.4 Termination of Employment.

          (a) Reasons for Termination. Employee’s employment shall terminate upon (i)
Employee’s death; (ii) unless waived by the Company, Employee’s Disability (as defined below);
(iii) notice by the Company of termination for Cause (as defined below); (iv) resignation or
abandonment by Employee; (v) notice by the Employee of termination for Good Reason (as defined
below), or (vi) notice by the Company of termination without Cause. The effective date of
termination of Employee’s employment shall be the “Termination Date”.

 

2

          (b) Disability. “Disability” hereunder shall mean the inability of Employee to
perform on a full-time basis the duties and responsibilities of Employee’s employment with the
Company by reason of illness or other physical or mental impairment or condition of Employee, if
such inability continues for an uninterrupted period of 180 days or more during any 360-day period.
A period of inability shall be “uninterrupted” unless and until Employee returns to full-time work
for a continuous period of at least 30 days.

          (c) Cause. “Cause” hereunder shall mean (i) dishonest, fraudulent or illegal conduct
of Employee relating to the business of the Company or Employee’s performance of responsibilities
for the Company; (ii) misappropriation by Employee of Company funds; (iii) conviction of Employee
of a felony; (iv) unlawful conduct or gross misconduct that is willful and deliberate on Employee’s
part and that, in either event, is materially injurious to the Company; (v) failure of Employee to
perform duties and responsibilities hereunder or to satisfy Employee’s obligations as an officer or
employee of the Company; or (vi) material breach of any terms and conditions of this Agreement by
Employee.

          (d) “Good Reason” hereunder shall mean if, without Executive’s express written
consent, any of the following shall occur: (i) a substantial reduction or diminution in the
material duties of Employee, excluding any reduction or diminution not made in bad faith and which
is remedied by the Company promptly after receipt of written notice thereof from Employee, and
excluding a mere change in Employee’s title and/or reporting relationship; (ii) the relocation of
Employee’s principal work location by more than 40 miles from the Phoenix metropolitan area; or
(iii) the material breach by the Company of this Agreement, excluding any breach that is not made
in bad faith by the Company, and which is remedied by the Company promptly after receipt of written
notice thereof from Employee.

1.5 Severance Payments in the Case of Termination Without Cause or for Good Reason.

          (a) Severance Payments. If Employee’s employment is terminated by the Company without
Cause (pursuant to Section l.4(a)(vi)) or by the Employee for Good Reason (pursuant to Section
1.4(a)(v)), subject to Sections l.5(b) and (c) below,

     (i) the Company shall pay Employee severance pay for a period of twelve (12)
months following the Termination Date, at the rate equal to Employee’s base salary
in effect on the Termination Date, payable by the Company in equal installments in
accordance with the regular payroll practices of the Company; and

     (ii) if Employee elects to continue group health and/or dental insurances
after the Termination Date as provided by applicable plans and laws, the Company
shall pay the premiums that Employee is required to pay to maintain such
continuation coverage, at the same level of coverage that was in effect on the
Termination Date, until the earliest of: (i) the first

 

3

anniversary of the Termination Date, (ii) the date on which Employee becomes
eligible for comparable group insurance coverage from any other employer, and (iii)
the date that continuation coverage ends under the applicable plan or laws.

          (b) Reductions From Severance Payments. The Company shall be entitled to deduct from
any severance pay otherwise payable to Employee hereunder: (i) any amount earned as income by
Employee after the Termination Date as a result of self-employment or employment with any other
employer during the period commencing three months after the Termination Date and ending twelve
months after the Termination Date, and (ii) any amount received by Employee after the Termination
Date under any short-term or long-term disability insurance plan or program provided to Employee by
the Company. For purposes of mitigation and reduction of the Company’s financial obligations to
Employee under this Section 1.5, Employee shall promptly and fully disclose to the Company in
writing: (i) the nature and amount of any such earned income from self-employment or employment
with any other employer, (ii) the amount of any such disability insurance payments, or (iii) the
fact that Employee has become eligible for comparable group health or dental insurance coverage
from any other employer. In addition, Employee shall provide a monthly statement to the Company
stating any and all gross income earned by Employee from employment or self-employment during each
month commencing on the date three months following the Termination Date and ending twelve months
following the Termination Date, or, if no such income has been earned during any such month, a
statement to that effect. Employee shall be liable to repay any amounts to the Company that should
have been so mitigated or reduced but for Employee’s failure or unwillingness to make such
disclosures.

          (c) Conditions to Receipt of Severance Payments. Notwithstanding the foregoing
provisions of this Section 1.5, the Company shall not be obligated to make any payments to Employee
under Section 1.5(a) hereof unless Employee shall have signed a release of claims in favor of the
Company in a form to be prescribed by the Company and approved by Employee, all applicable
consideration periods and rescission periods provided by law shall have expired and Employee is in
strict compliance with the terms of this Agreement.

ARTICLE II. Compensation

2.1 Base Salary. Employee shall be paid a base salary at the annual rate of One Hundred
Seventy Five Thousand Dollars ($175,000.00), subject to such annual adjustments upward that the
Company may in its sole discretion determine; provided, however, that the Company may reduce
Employee’s base salary if such reduction is part of a general reduction in the base salaries for
all senior managers of the Company. If Employee elects to forgo medical benefits provided by
Company, Employee’s base salary will be increased by an additional Seven Thousand Five Hundred
Dollars ($7,500.00). Employee’s base salary shall be paid in accordance with the Company’s
standard policies and shall be subject to such withholdings as are required or authorized by law.

 

4

2.2 Bonuses. Employee shall be eligible to receive an annual bonus for each full calendar
year of employment with the Company, based upon achievement of individual and Company objectives.
The specific bonus amount, eligibility criteria, and objectives will be developed by the Company
and communicated to Employee as soon as practicable after the beginning of each calendar year.

2.3 Benefits. Employee shall be entitled to participate in all employee benefit plans and
programs of the Company to the extent that Employee meets the eligibility requirements for each
individual plan or program. The Company provides no assurance as to the adoption or continuance of
any particular employee benefit plan or program, and Employee’s participation in any such plan or
program shall be subject to the provisions, rules, and regulations applicable thereto.

2.4 Reimbursement of Business Expenses. The Company shall reimburse Employee for all
reasonable and necessary out-of-pocket business, travel and entertainment expenses incurred by
Employee in the performance of Employee’s duties and responsibilities hereunder, subject to the
Company’s normal policies and procedures for expense verification and documentation.

2.5 Equity-based Compensation. Subject to approval of the Board of Directors of the
Company (the “Board”) and final resolution of the Company’s current dispute with Solar Cells, Inc.,
the Company will grant to Employee equity options or other equity-based compensation pursuant to
the terms and conditions of a separate agreement to be entered into between Employee and the
Company. Employee’s equity-based compensation rights will be structured in a manner such that the
pre-tax value of such rights over the time period from the date of grant through December 31, 2007
is projected to be $2,000,000 (assuming that the Company achieves its business and financing plan
through that date as contemplated by the Board as of the date of grant). Such value shall be
determined in good faith by the Company based on the Company’s five-year business plan in effect as
of the date of grant and pursuant to the terms and conditions of a separate agreement, any
applicable policies or plans of the Company, and on the same terms generally applicable to other
officers of the Company. Employee understands that the actual value of such equity-based
compensation rights may be higher or lower than $2,000,000 depending upon the actual performance of
the Company.

ARTICLE III. Invention, Disclosure, Patent Assignment and Copyright

3.1 Disclosure of Inventions. Employee shall promptly disclose in writing to the Company
complete and accurate information concerning each and every invention, discovery, improvement,
device, design, apparatus, practice, process, composition, software or computer program, method,
product, and any other invention or discovery of any kind, whether or not patentable or
copyrightable, made, developed, perfected, devised, conceived or first reduced to practice by
Employee, either solely or in collaboration with others, during the term of Employee’s employment
(an “Invention”).

3.2 Company Inventions. Any and all Inventions relating to the actual or contemplated
business, technologies or products of the Company are and shall be the

 

5

exclusive property of the Company (collectively, “Company Inventions”). Employee hereby assigns to
the Company any and all of Employee’s right, title and interest in and to any and all Company
Inventions, without further payment or other form of consideration. Employee agrees to execute
such additional applications, assignments and other documents, and to perform such other actions,
as the Company may in the future reasonably request in order to confirm in the Company the rights
granted pursuant to this Section 3.2.

3.3 Inventions Which Are Not Company Inventions. If Employee develops an Invention which
Employee believes is not a Company Invention, Employee shall disclose in writing to the Company all
information reasonably requested by the Company from time to time concerning such Invention for the
purpose of permitting the Company to confirm, determine and/or verify that the Invention is not a
Company Invention. If the Company asserts that such Invention is a Company Invention, Employee
shall not disclose, assign, license, use, sell or in any other manner exploit such Invention until
the question of whether it is a Company Invention has been finally resolved, either by agreement
between the Company and Employee or by final, non-appealable order entered by a court of competent
jurisdiction.

3.4 Assignments; Execution of Documents by Employee. Upon the request of the Company,
whether during the term of Employee’s employment or thereafter, Employee shall perform all lawful
acts, including, but not limited to, the execution of papers and lawful oaths and the giving of
testimony, that in the opinion of the Company, its successors and assigns, may be necessary or
desirable in obtaining, sustaining, reissuing, extending and enforcing United States and foreign
Letters Patents, including, but not limited to, design patents, on any and all Company Inventions,
and for perfecting, affirming and recording the Company’s complete ownership of and
title thereto. Such acts shall be performed by Employee for no additional compensation, but at no
expense to Employee.

3.5 Employee’s Records. Employee shall keep complete, accurate and authentic accounts,
notes, data and records of all of the Inventions. Such accounts, notes, data and records relating
to Company Inventions shall be the exclusive property of the Company and Employee shall promptly
surrender the same to the Company upon request or, if not previously surrendered, Employee shall
surrender the same, and all copies thereof, to the Company upon the conclusion of employment with
the Company.

3.6 United States Government Contracts. Employee understands that the Company may enter
into agreements or arrangements with agencies of the United States Government and that the Company
may be subject to laws and regulations that impose obligations, restrictions and limitations on it
with respect to inventions and patents that may be acquired by it or that may be conceived or
developed by employees, consultants or other agents rendering services to it. Employee agrees that
Employee shall be bound by all such obligations, restrictions and limitations applicable to any
said invention conceived or developed by Employee during the term of employment with the Company
and shall take any and all further action that may be required to discharge such obligations and to
comply with such restrictions and limitations.

 

6

ARTICLE IV. Ventures.

          If, during the term of employment with the Company, Employee is engaged in or associated with
the research, investigation, planning or implementation of any project, program or venture on
behalf of or involving the Company, all rights in the project, program or venture shall belong
exclusively to the Company and shall constitute an opportunity belonging exclusively to the
Company. Except as approved in advance and in writing by the Board, Employee shall not be entitled
to any interest in such project, program or venture or to any commission, finder’s fee or other
compensation in connection therewith, other than the compensation to be paid to Employee by the
Company as provided herein. Employee shall have no interest, direct or indirect, in any customer
or supplier that conducts business with the Company, unless such interest has been disclosed in
writing to and approved by the Board before such customer or supplier seeks to do business with the
Company. Ownership by Employee, as a passive investment, of less than 5% of the outstanding shares
of capital stock of any corporation listed on a national securities exchange or publicly traded in
the over-the-counter market shall not constitute a breach of this Article 4.

ARTICLE V. Non-Competition & Non-Solicitation

5.1 Affiliated Entities. For purposes of this Article V, the term “Company”
includes the Company and each corporation, partnership, or other entity that controls the Company,
is controlled by the Company, or is under common control with the Company (in each case “control”
meaning the direct or indirect ownership of 50% or more of all outstanding equity interests).

5.2 Covenant Not To Compete. During Employee’s employment with the Company and for the
Post-Employment Non-Competition Period (as defined below), Employee shall not, directly or
indirectly, become employed by, become a director, officer, shareholder, partner, manager or member
of, or consultant to, or otherwise enter into, conduct, or advise or assist any business, other
than that of the Company (or any successor to the operations of the Company) that engages in any
business that the Company has engaged in during the term of Employee’s employment with the Company,
or any part of such business, including without limitation the design, development or manufacture
of photovoltaic products anywhere in the world. Ownership by Employee, as a passive investment, of
less than 5% of the outstanding shares of capital stock of any corporation listed on a national
securities exchange or publicly traded in the over-the-counter market shall not constitute a breach
of this Section 5.2. As used in this Agreement, the term “Post-Employment Non-Competition Period”
means a period of twelve (12) consecutive months following the Termination Date. The
Post-Employment Non-Competition Period shall apply without regard to the reason for termination of
Employee’s employment with the Company, whether such termination is by the Company or by Employee
and whether such termination is with or without Cause; provided, however, that the
Post-Employment Non-Competition Period shall end five (5) business days after written notice by
Employee to the Company specifying any default by the Company with respect to the payment of any
severance benefits to Employee under Section 1.5 hereof, if such default has not been cured by the
Company.

 

7

5.3 No Solicitation. During Employee’s employment with the Company and for the
Post-Employment Non-Competition Period, Employee shall not, directly or indirectly, (a) solicit,
divert or take away, or attempt to divert or take away, the business or patronage of any of the
clients, customers or accounts of the Company serviced by Employee during any part of the term of
Employee’s employment with the Company, or any of the prospective clients, customers or accounts of
the Company which were contacted, solicited or served by Employee during any part of the time
Employee was employed by the Company, or (b) directly or indirectly recruit, solicit or hire, or
induce or attempt to induce any person, who is then an employee of the Company or who was an
employee of the Company at any time during the 90 days prior to the Employee’s Termination Date, to
discontinue his or her employment relationship with the Company.

5.4 Acknowledgment. Employee hereby acknowledges that the provisions of this Article V are
reasonable and necessary to protect the legitimate interests of the Company and that any violation
of this Article V by Employee shall cause substantial and irreparable harm to the Company to such
an extent that monetary damages alone would be an inadequate remedy therefor. Therefore, in the
event that Employee violates any provision of this Article V, the Company shall be entitled to an
injunction, in addition to all the other remedies it may have, restraining Employee from violating
or continuing to violate such provision.

5.5 Blue Pencil Doctrine. If the duration of, the scope of or any business activity
covered by any provision of this Article V is in excess of what is valid and enforceable under
applicable law, such provision shall be construed to cover only that duration, scope or activity
that is valid and enforceable. Employee hereby acknowledges that this Article shall be given the
construction which renders its provisions valid and enforceable to the maximum extent, not
exceeding its express terms, possible under applicable law.

ARTICLE VI. Confidentiality

          During the course of employment pursuant to this Agreement, Employee will have access to
information belonging to or received in confidence by the Company or its subsidiaries or
affiliates, which information is valuable to the Company and which information the Company believes
to be novel and which it holds in confidence for itself or third parties. Except as permitted or
directed by the Company, Employee shall not during the term of Employee’s employment with the
Company or at any time thereafter, divulge, furnish, disclose, make accessible or use any
Confidential Information (as defined below). “Confidential Information” includes, without
limitation, designs, processes and formulae; software and computer programs; the identities of the
Company’s customers and suppliers and the terms under which the Company deals with them; marketing,
sales, product development, financing and engineering plans; strategic and other business plans;
development and research work of the Company; and any other confidential, secret or proprietary
aspects of the business of the Company. Employee acknowledges that the above-described knowledge
and information constitutes a unique and valuable asset of the Company and represents a substantial
investment of time and expense by the Company, and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be wrongful and would

 

8

cause irreparable harm to the Company. During the term of Employee’s employment with the
Company, Employee shall refrain from any acts or omissions that would reduce the value of such
knowledge or information to the Company. At the expiration or termination of Employee’s employment
with the Company, Employee will, at the Company’s request, return to the Company all written
confidential information received from the Company and destroy any transcriptions or copies
Employee may have of such information (including information stored in computer form), unless an
alternative method of disposition is approved by the Company in writing.

          Notwithstanding the foregoing, Confidential Information does not include information which (a)
is or becomes generally available to the public in the form in which it was obtained from the
Company, other than as a direct or indirect result of the breach of this Agreement by Employee, (b)
is independently made available to Employee in good faith by a third party who has not violated a
confidential relationship with the Company, or (c) is required to be disclosed by legal process.

ARTICLE VII. Injunctive Relief

          Because the services to be performed by Employee hereunder are of a special unique, unusual,
confidential, extraordinary and intellectual character, and because Employee will acquire by reason
of employment and association with the Company an extensive knowledge of the Company’s trade
secrets, customers, procedures, and other confidential information, the parties hereto recognize
and acknowledge that, in the event of a breach or threat of breach by Employee of any of the terms
and provisions contained in Article III, IV, V, or VI of this Agreement, the Company shall be
entitled, in addition to any other remedies it may have, to an immediate injunction restraining
Employee from committing or continuing to commit a breach of such provisions without the necessity
of proving actual monetary damages.

ARTICLE VIII. Absence of Restrictions

          Employee hereby represents and warrants that he has full power, authority and legal right to
enter into this Agreement and to carry out the 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 he may be bound or affected, including, but not limited to, any order, judgment
or decree of any court or governmental agency.

ARTICLE IX. Miscellaneous

9.1 Governing Law. All matters relating to the interpretation, construction, application,
validity and enforcement of this Agreement shall be governed by the laws of the State of Arizona
without giving effect to any choice or conflict of law provision or rule, whether of the State of
Arizona or any other jurisdiction, that would cause the application of laws of any jurisdiction
other than the State of Arizona.

 

9

9.2 Jurisdiction and Venue. Employee and the Company consent to jurisdiction of the courts
of the State of Arizona and/or the federal district courts, District of Arizona, for the purpose of
resolving all issues of law, equity, or fact arising out of or in connection with this Agreement.
Any action involving claims of a breach of this Agreement shall be brought in such courts. Each
party consents to personal jurisdiction over such party in the state and/or federal courts of
Arizona and hereby waives any defense of lack of personal jurisdiction. Venue, for the purpose of
all such suits, shall be in Maricopa County, State of Arizona.

9.3 No Waiver. No term or condition of this Agreement shall be deemed to have been waived,
except by a statement in writing signed by the party against whom enforcement of the waiver is
sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated,
shall operate only as to the specific term or condition waived and shall not constitute waiver of
such term or condition for the future or as to any act other than that specifically waived.

9.4 Assignability. This Agreement is for personal services and is therefore not assignable
by the Employee. This Agreement is freely assignable by the Company. After any such assignment by
the Company, the Company shall be discharged from all further liability hereunder and such assignee
shall thereafter be deemed to be the “Company” for purposes of all terms and conditions of this
Agreement, including this Article IX.

9.5 Entire Agreement. This Agreement sets forth the entire agreement between the Company
and Employee regarding the subject matter of this Agreement and supersedes all prior agreements and
understandings between the Company and Employee relating to such subject matter, and the parties
hereto have made no agreements, representations or warranties relating to the subject matter of
this Agreement that are not set forth herein.

9.6 Amendment. This Agreement may not be amended or modified except in a written
instrument signed by the Company and Employee.

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

	 	 	 	 	 
	 	FIRST SOLAR, LC

 	 
	 	By:  	/s/ Michael J. Ahearn
 	 
	 	 	Michael J. Ahearn 	 
	 	 	Its Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	EMPLOYEE:

 	 
	 	/s/ Kenneth M. Schultz.
 	 
	 	Kenneth M. Schultz

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