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EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”) is made as of this 9th day of September, 2009 (this “Agreement”) by and between First Solar, Inc., a Delaware corporation having its principal office at 350 West Washington Street, Suite 600, Tempe, Arizona 85281 (hereinafter “Employer”) and Robert J. Gillette (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 Nature of Employment . The term of this Agreement (the “Term”) shall commence as of October 1, 2009 or such other date as may be agreed upon by Employer and Employee (the “Start Date”). As of such date, Employer shall employ Employee as a full-time employee, and Employee shall accept employment with Employer as a full-time employee, subject to the provisions of this Agreement. Employer or Employee may terminate this Agreement at any time and for any reason, with or without cause and with or without notice, subject to the provisions of this Agreement.
1.2 Position, Duties and Location of Employee . Employer shall employ Employee in the capacity of Chief Executive Officer and Employee shall accept such position. Employee shall have, and agrees to diligently and faithfully perform, all duties customarily associated with the position of chief executive officer of a public company of comparable size and such other lawful duties as may from time to time reasonably be assigned to Employee by the Board of Directors of Employer (the “Board”), consistent with Employee’s position with Employer. Employee shall also serve as a member of the Board. 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. Employee’s position will be based in Tempe, Arizona. Employee will be required to travel for business purposes as necessary, including internationally.
1.3 No Salary or Benefits Continuation Beyond Termination . Except as may be required by law or as otherwise specified in this Agreement or the Change in Control Severance Agreement between Employer and Employee dated as of the date hereof, or as may be amended from time to time (the “Change in Control Agreement”), Employer shall not be liable to Employee for any salary or benefits continuation beyond the date of Employee’s cessation of employment with Employer. The rights and obligations of the parties under the provisions of this Agreement, including Section 1.5 and Articles IV and V, shall survive and remain binding and enforceable, notwithstanding the termination of Employee’s employment for any reason, to the extent necessary to preserve the intended benefits of such provisions.
1.4 Termination of Employment . Employee’s employment with Employer shall terminate upon the earliest of: (a) Employee’s death; (b) unless waived by Employer, Employee’s “Disability” (which, for purposes of this Agreement, shall mean either a physical or mental condition (as determined by a qualified physician mutually agreeable to Employer and Employee) which renders Employee unable, for a period of at least six months, effectively to perform the obligations, duties and responsibilities of Employee’s employment with Employer); (c) the termination of Employee’s employment by Employer for Cause (as hereinafter defined); (d) Employee’s resignation for any reason; and (e) the termination of Employee’s employment by Employer without Cause. As used herein, “Cause” shall mean Employer’s good faith determination of: (i) Employee’s dishonest, fraudulent or illegal conduct relating to the business of Employer; (ii) Employee’s willful breach or habitual neglect of Employee’s duties or obligations in connection with Employee’s employment; (iii) Employee’s misappropriation of Employer funds; (iv) Employee’s conviction of a felony or any other criminal offense involving fraud or dishonesty, whether or not relating to the business of Employer or Employee’s employment with Employer; (v) Employee’s excessive use of alcohol; (vi) Employee’s unlawful use of controlled substances or other addictive behavior; (vii) Employee’s unethical business conduct; (viii) Employee’s breach of any statutory or common law duty of loyalty to Employer; or (ix) Employee’s material breach of this Agreement, the Non-Competition and Non-Solicitation Agreement between Employer and Employee dated as of the date hereof or as may be amended from time to time (the “Non-Competition Agreement”), the Confidentiality and Intellectual Property Agreement between Employer and Employee dated as of the date hereof or as may be amended from time to time (the “Confidentiality Agreement” and, together with this Agreement and the Non-Competition Agreement, the “Agreements”) or the Change in Control Agreement. Upon termination of Employee’s employment with Employer for any reason, Employee will promptly return to Employer all materials in any form acquired by Employee as a result of such employment with Employer and all property of Employer, and will promptly resign from the Board and the boards of directors of any of Employer’s subsidiaries on which he then serves. The immediately preceding sentence shall not preclude Employee from retaining documents directly related to his compensation for services to Employer or any of its affiliates or which are reasonably required to preserve Employee’s rights, or fulfill Employee’s duties and obligations, under this Agreement or any other compensatory agreement with Employer or any of its affiliates.
1.5 Severance Payments and Vacation Pay .
(a) Vacation Pay in the Event of a Termination of Employment . In the event of the termination of Employee’s employment with Employer for any reason, Employee shall be entitled to receive, in addition to the Severance Payment described in Section 1.5(b) below, if any, the dollar value of any earned but unused (and unforfeited) vacation. Such dollar value shall be paid to Employee within 15 days following the date of termination of employment.
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(b) Severance Payment in the Case of a Termination Without Cause .
(i) Severance Payments . If Employee’s employment is terminated by Employer without Cause then, subject to (A) the Change in Control Agreement and (B) Employee’s satisfaction of the Release Condition described in Section 1.5(b)(ii) below, Employee shall be entitled to a lump-sum cash severance payment (the “Severance Payment”), payable within 10 business days following the Release Effective Date (as defined below), equal to two times the Base Salary (as defined in Section 2.1) in effect as of the date of termination of employment.
(ii) Release Condition . Notwithstanding anything to the contrary herein, no Severance Payment shall be due or made to Employee hereunder unless (A) Employee shall have executed and delivered a general release in favor of Employer and its affiliates (which release shall be (x) submitted to Employee for his review by the date of Employee’s termination of employment (or shortly thereafter), (y) substantially in the form of the Separation Agreement and Release attached hereto as Exhibit A and (z) otherwise satisfactory to Employer) and (B) the Release Effective Date shall have occurred on or before the tenth business day prior to March 15 of the year following the year in which the date of termination of employment occurs. The “Release Effective Date” shall be the date the general release becomes effective and irrevocable in accordance with its terms.
(c) Medical Insurance . If Employee’s employment is terminated by Employer without Cause, Employer will provide or pay for Employee’s medical insurance benefits, at the same or a comparable level as provided by Employer during Employee’s employment, until the earlier of (i) the date that is 24 months after such termination and (ii) the date Employee obtains coverage under any other medical benefits plan.
(d) Equity Award Vesting . In the event of (i) the termination of Employee’s employment with Employer due to Employee’s death, (ii) the termination of Employee’s employment with Employer due to Disability or (iii) the termination of Employee’s employment by Employer without Cause, Employee shall on the date of such termination of employment immediately receive an additional 12 months’ vesting credit with respect to the stock options, stock appreciation rights, restricted stock and other equity or equity-based compensation of Employer granted to Employee in the course of his employment with Employer under this Agreement, other than the Initial Employer Stock Options (defined below) and the Initial Employer RSUs (defined below) (which Initial Employer Stock Options and Initial Employer RSUs will have the vesting terms provided in Section 2.1(b)) (such equity awards, other than the Initial Employer Stock Options and the Initial Employer RSUs, collectively, “Equity Awards”). By reason of such additional vesting credit, any Equity Award (or portion thereof) that would have vested or become exercisable by its terms within 12 months following the date of Employee’s termination of employment (assuming that Employee continued to perform services for such 12-month period) will become vested or exercisable as of the date of Employee’s termination of employment (the “Vesting Date”). The shares of Employer stock underlying any restricted stock units that become vested pursuant to this Section 1.5(d) shall be payable on the Vesting Date. Any of Employee’s stock options and stock appreciation rights that become vested pursuant to this Section 1.5(d) shall be exercisable immediately upon the Vesting Date, and any such stock options and stock appreciation rights (and any of Employee’s stock options and stock appreciation rights that are otherwise vested and exercisable as of Employee’s termination of employment, other than the Initial Employer Stock Options (which Initial Employer Stock Options will have the post-termination exercise terms provided in Section 2.1(b)) shall remain exercisable for one year and 90 days following Employee’s termination of employment (or such longer period as shall be provided by the applicable award agreement), provided that if during such period Employee is under any trading restriction due to a lockup agreement or closed trading window, such period shall be tolled during the period of such trading restriction; and provided , further , that in no event shall any stock option or stock appreciation right continue to be exercisable after the original expiration date of such stock option or stock appreciation right. If the terms of this Section 1.5(d) are more favorable to Employee than the terms of any document or agreement addressing or governing the Equity Awards, the terms of this Section 1.5(d) shall apply except that no provision in this Agreement shall operate to extend the term of any stock option or stock appreciation right beyond its original expiration date.
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(e) No Mitigation or Offset . Employer’s obligation to make the payments provided for in this Section 1.5 and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action that Employer may have against Employee. In no event shall Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee 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 Employee obtains other employment.
Article II. Compensation
2.1 Make-Whole Payments . To compensate Employee for his forfeiture of earned, but not yet vested, compensation, including stock options and stock units (including Growth Plan units) (the “Forfeited Equity Awards”), from his current employer, Employer shall pay or grant to Employee the following:
(a) Initial Cash Award . Subject to applicable tax withholding requirements and the terms of this Section 2.1(a), Employee shall receive a $5,000,000 cash award. Fifty percent of such initial cash award shall be paid to Employee as soon as practicable following the Start Date, but no later than 15 days thereafter, and the remainder of such initial cash award shall be paid to Employee on the first anniversary of the Start Date, in each case regardless of whether Employee remains employed through the applicable payment date.
(b) Initial Equity Grant . Employer shall grant to Employee, as soon as practicable following the Start Date, but no later than 15 days thereafter, (i) fully vested Employer common shares (the “Initial Employer Shares”) having an aggregate fair market value on the date of grant equal to $3,250,000, (ii) fully vested and exercisable Employer stock options (the “Initial Employer Stock Options”) having (A) a number of underlying Employer common shares determined so that, as of the date of grant, the aggregate Black-Scholes value of the Initial Employer Stock Options is equal to $3,250,000, (B) a strike price per share of Employer common stock equal to the closing price per Employer common share as reported by the National Association of Securities Dealers Automated Quotations on the date of grant, (C) an expiration date of ten years from the date of grant and (D) a remaining exercise period of three years following the termination of Employee’s employment with Employer due to Employee’s death or Disability or the termination of Employee’s employment by Employer without Cause ( provided that in no event shall the Initial Employer Stock Options continue to be exercisable after their original expiration date) and (iii) Employer restricted stock units (the “Initial Employer RSUs”) (x) having a number of underlying Employer common shares determined so that, as of the date of grant, the aggregate fair market value of the Employer common shares underlying the Initial Employer RSUs is equal to $6,500,000 and (y) cliff-vesting on the second anniversary of the date of grant, with no provision for early vesting upon termination of employment, death or disability. The Initial Employer RSUs shall be subject to the terms and conditions set forth in Employer’s form of restricted stock unit award agreement for executives (except to the extent that any provisions thereof conflict with the provisions of this Agreement) and the accelerated vesting provision set forth in the Change in Control Agreement. Employer’s obligation to deliver the Initial Employer Shares, the Initial Employer Stock Options and the Initial Employer RSUs to Employee is conditioned on Employee’s providing Employer with reasonably satisfactory evidence of the Forfeited Equity Awards and Employee’s forfeiture thereof. The Initial Employer Shares, the Initial Employer Stock Options and the Initial Employer RSUs shall be granted under, and subject to the terms and conditions of, the 2006 Omnibus Equity Incentive Compensation Plan (except to the extent that any provisions thereof conflict with the provisions of this Agreement).
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2.2 Base Salary . Employee shall be compensated at an annual base salary of $850,000 (the “Base Salary”) while Employee is employed by Employer under this Agreement, subject to such annual increases that Employer may in its sole discretion determine to be appropriate. Such Base Salary shall be paid in accordance with Employer’s standard policies.
2.3 Annual Bonus Eligibility . Employee shall be eligible to receive an annual bonus based upon individual and company performance, as determined by the compensation committee of the Board (the “Committee”) in its sole discretion; provided that (a) Employee’s target bonus opportunity for each of fiscal years 2009 and 2010 will be equal to the Base Salary and (b) Employee’s annual bonus for fiscal year 2009 will be at least $850,000 (without proration) and subject to upward adjustment based on performance. The specific bonus terms and the standards for earning a bonus will be developed by the Committee and communicated to Employee as soon as practicable after the beginning of each year.
2.4 Benefits . Employee shall be eligible to receive all benefits as are available to similarly situated employees of Employer generally, and any other benefits that Employer may in its sole discretion elect to grant to Employee from time to time. In addition, Employee shall be entitled to four weeks paid vacation per year, which shall be accrued in accordance with Employer’s policies applicable to similarly situated employees of Employer.
2.5 Reimbursement of Business Expenses . Employee may incur reasonable expenses in the course of employment hereunder for which Employee shall be eligible for reimbursement or advances in accordance with Employer’s standard policy therefor.
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2.6 Eligibility for Equity Grants . Employee will be eligible to participate in Employer’s equity participation programs to acquire options or equity incentive compensation units in the common stock of Employer, and, with respect to fiscal years 2009 and 2010, Employee will be provided with annual restricted stock unit awards under such programs with an annual grant date value of $5,000,000 (valuing such awards consistently with Employer’s practices for other senior executives). Employee’s participation in Employer’s equity participation programs will be subject to and/or in accordance with the following: (i) the additional terms contained in Employer’s equity grant documentation, which shall be no less favorable to Employee than the terms of similar annual awards made to Employer’s other senior officers; (ii) approval, if required, of Employer’s equity incentive plan by the Board and the shareholders of Employer; (iii) approval of the grants by the Committee; (iv) Employee’s execution of documents requested by Employer at the time of grant; (v) Employee’s continued employment through the grant date; (vi) the terms of the 2006 Omnibus Equity Incentive Compensation Plan or the successor thereto; and (vii) the generally applicable policies, procedures and practices that may be adopted from time to time by Employer in its sole discretion for granting such options or equity incentive compensation units; provided that subclauses (ii), (iii) and (vii) shall not be conditions to the grants with respect to 2009 and 2010 specified above.
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. Employee further represents and warrants to Employer that Employee is free to accept employment with Employer as contemplated herein and that Employee has no prior or other obligations or commitments of any kind to any person, firm, partnership, association, corporation, entity or business organization that would in any way hinder or interfere with Employee’s acceptance of, or the full performance of, Employee’s duties hereunder.
Article IV. Miscellaneous
4.1 Withholding . Any payments made under this Agreement shall be subject to applicable federal, state, local and foreign tax reporting and withholding and deduction 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.
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4.3 No Waiver . The failure of Employer or Employee to insist in any one or more instances upon performance of any terms, covenants and conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted hereunder or of the future performance of any such terms, covenants or conditions.
4.4 Notices . All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered, delivered by facsimile transmission or by courier or mailed, registered or certified mail, postage prepaid as follows:
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 Legal Fees . Employer shall pay Employee’s reasonable legal fees and expenses incurred in connection with the negotiation and preparation of this Agreement, up to a maximum of $25,000. Such amount shall be paid prior to December 31, 2009 upon presentation by Employee of evidence of such fees and expenses reasonably satisfactory to Employer.
4.6 Assignability and Binding Effect . This Agreement is for personal services and is therefore not assignable by Employee. This Agreement may be assigned by Employer to any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of Employer. This Agreement shall be binding upon and inure to the benefit of the parties, their successors, assigns, heirs, executors and legal representatives. If there shall be a successor to Employer or Employer shall assign this Agreement, then as used in this Agreement, (a) the term “Employer” shall mean Employer as hereinbefore defined and any successor or any permitted assignee, as applicable, to which this Agreement is assigned and (b) the term “Board” shall mean the Board as hereinbefore defined and the board of directors or equivalent governing body of any successor or any permitted assignee, as applicable, to which this Agreement is assigned.
4.7 Entire Agreement . This Agreement, the Change in Control Agreement, the Non-Competition Agreement and the Confidentiality Agreement set forth the entire agreement between Employer and Employee regarding the terms of Employee’s employment and supersede all prior agreements between Employer and Employee covering the terms of Employee’s employment. This Agreement may not be amended or modified except in a written instrument signed by Employer and Employee identifying this Agreement and stating the intention to amend or modify it.
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4.8 Severability . If it is determined by a court of competent jurisdiction that any of the restrictions or language in this Agreement are for any reason invalid or unenforceable, the parties desire and agree that the court revise any such restrictions or language, including reducing any time or geographic area, so as to render them valid and enforceable to the fullest extent allowed by law. If any restriction or language in this Agreement is for any reason invalid or unenforceable and cannot by law be revised so as to render it valid and enforceable, then the parties desire and agree that the court strike only the invalid and unenforceable language and enforce the balance of this Agreement to the fullest extent allowed by law. Employer and Employee agree that the invalidity or unenforceability of any provision of this Agreement shall not affect the remainder of this Agreement.
4.9 Construction . As used in this Agreement, words such as “herein,” “hereinafter,” “hereby” and “hereunder,” and the words of like import refer to this Agreement, unless the context requires otherwise. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation”.
Article V. Section 409A
5.1 General . It is intended that the provisions of the Agreements comply with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder as in effect from time to time (collectively, “Section 409A”), and all provisions of the Agreements shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes and penalties under Section 409A.
5.2 No Alienation, Set-offs, Etc . Neither Employee nor any creditor or beneficiary of Employee shall have the right to subject any deferred compensation (within the meaning of Section 409A) payable under the Agreements or under any other plan, policy, arrangement or agreement of or with Employer or any of its affiliates (the Agreements and such other plans, policies, arrangements and agreements, the “Employer Plans”) to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A, any deferred compensation (within the meaning of Section 409A) payable to or for the benefit of Employee under any Employer Plan may not be reduced by, or offset against, any amount owing by Employee to Employer or any of its affiliates.
5.3 Possible Six-Month Delay . If, at the time of Employee’s separation from service (within the meaning of Section 409A), (a) Employee shall be a specified employee (within the meaning of Section 409A and using the identification methodology selected by Employer from time to time) and (b) Employer shall make a good faith determination that an amount payable under an Employer Plan constitutes deferred compensation (within the meaning of Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A in order to avoid taxes or penalties under Section 409A, then Employer (or an affiliate thereof, as applicable) shall not pay such amount on the otherwise scheduled payment date but shall instead accumulate such amount and pay it, without interest, on the first day of the seventh month following such separation from service.
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5.4 Reimbursements and In-Kind Benefits . Except as specifically permitted by Section 409A, the amounts of any benefits and reimbursements provided to Employee under the Agreements during any calendar year shall not affect the amounts of any benefits and reimbursements to be provided to Employee under the Agreements in any other calendar year, and the right to such benefits and reimbursements cannot be liquidated or exchanged for any other benefit. Furthermore, any reimbursement payments provided to Employee under the Agreements shall be made to Employee no later than the last day of the calendar year following the calendar year in which the applicable expense is incurred.
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IN WITNESS WHEREOF, Employer has caused this Agreement to be executed by one of its duly authorized officers and Employee has individually executed this Agreement, each intending to be legally bound, as of the date first above written.
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Exhibit A
SEPARATION AGREEMENT AND RELEASE
I. Release. For good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned, with the intention of binding himself/herself, his/her heirs, executors, administrators and assigns, does hereby release and forever discharge First Solar, Inc., a Delaware corporation (the “ Company ”), and its present and former officers, directors, executives, agents, employees, affiliated companies, subsidiaries, successors, predecessors and assigns (collectively, the “ Released Parties ”), from any and all claims, actions, causes of action, demands, rights, damages, debts, accounts, suits, expenses, attorneys’ fees and liabilities of whatever kind or nature in law, equity, or otherwise, whether now known or unknown (collectively, the “ Claims ”), which the undersigned now has, owns or holds, or has at any time heretofore had, owned or held against any Released Party, arising out of or in any way connected with the undersigned’s employment relationship with the Company, its subsidiaries, predecessors or affiliated entities, or the termination thereof, under any Federal, state or local statute, rule, or regulation, or principle of common, tort or contract law, including but not limited to, the Fair Labor Standards Act of 1938, as amended , 29 U.S.C. §§ 201 et seq. , the Family and Medical Leave Act of 1993, as amended (the “ FMLA ”), 29 U.S.C. §§ 2601 et seq. , Title VII of the Civil Rights Act of 1964, as amended , 42 U.S.C. §§ 2000e et seq. , the Age Discrimination in Employment Act of 1967, as amended , 29 U.S.C. §§ 621 et seq. , the Americans with Disabilities Act of 1990, as amended , 42 U.S.C. §§ 12101 et seq. , the Worker Adjustment and Retraining Notification Act of 1988, as amended , 29 U.S.C. §§ 2101 et seq. , the Employee Retirement Income Security Act of 1974, as amended , 29 U.S.C. §§ 1001 et seq. , and any other equivalent or similar Federal, state, or local statute; provided , however , that nothing herein shall release the Company from (a) its obligations under that certain Employment Agreement to which the undersigned is a party and pursuant to which this Separation Agreement and Release is being executed and delivered, (b) any claims by the undersigned arising out of any director and officer indemnification or insurance obligations in favor of the undersigned, (c) any director and officer indemnification obligations under the Company’s by-laws; (d) any claim for benefits under the First Solar, Inc. 401(k) Plan or any other employee pension benefit plan and (e) any claim in respect of Employee’s rights under any equity award that, by its terms, continues in effect following, or is payable upon or in connection with the undersigned’s, termination of employment but which, as of the date hereof, has not been paid (the items references in subclauses (a)-(e) are hereafter collectively referred to as the “ Preserved Benefits ”). The undersigned understands that, as a result of executing this Separation Agreement and Release, he/she will not have the right to assert that the Company or any other Released Party unlawfully terminated his/her employment or violated any of his/her rights in connection with his/her employment or otherwise.
The undersigned affirms that he/she has not filed or caused to be filed, and presently is not a party to, any Claim, complaint or action against any Released Party in any forum or form and that he/she knows of no facts which may lead to any Claim, complaint or action being filed against any Released Party in any forum by the undersigned or by any agency, group, or class persons. The undersigned further affirms that, except for the Preserved Benefits, 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. 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.
II. Protected Rights. The Company and the undersigned agree that nothing in this Separation Agreement and Release is intended to or shall be construed to affect, limit or otherwise interfere with any non-waivable right of the undersigned under any Federal, state or local law, including the right to file a charge or participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission (“ EEOC ”) or to exercise any other right that cannot be waived under applicable law. The undersigned is releasing, however, his/her right to any monetary recovery or relief should the EEOC or any other agency pursue Claims on his/her behalf. Further, should the EEOC or any other agency obtain monetary relief on his/her behalf, the undersigned assigns to the Company all rights to such relief.
III. Equitable Remedies. The undersigned acknowledges that a violation by the undersigned of any of the covenants contained in this Agreement would cause irreparable damage to the Company and its subsidiaries in an amount that would be material but not readily ascertainable, and that any remedy at law (including the payment of damages) would be inadequate. Accordingly, the undersigned agrees that, notwithstanding any provision of this Separation Agreement and Release to the contrary, the Company shall be entitled (without the necessity of showing economic loss or other actual damage) to injunctive relief (including temporary restraining orders, preliminary injunctions and/or permanent injunctions) in any court of competent jurisdiction for any actual or threatened breach of any of the covenants set forth in this Agreement in addition to any other legal or equitable remedies it may have.
IV. Return of Property . The undersigned shall return to the Company on or before [10 DAYS AFTER TERMINATION DATE], all property of the Company in the undersigned’s possession or subject to the undersigned’s control, including without limitation any laptop computers, keys, credit cards, cellular telephones and files. The undersigned shall not alter any of the Company’s records or computer files in any way after [TERMINATION DATE].
V. Severability. If any term or provision of this Separation Agreement and Release is invalid, illegal or incapable of being enforced by any applicable law or public policy, all other conditions and provisions of this Separation Agreement and Release shall nonetheless remain in full force and effect so long as the economic and legal substance of the transactions contemplated by this Separation Agreement and Release is not affected in any manner materially adverse to any party.
VI. GOVERNING LAW. THIS SEPARATION AGREEMENT AND RELEASE SHALL BE DEEMED TO BE MADE IN THE STATE OF DELAWARE, AND THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT IN ALL RESPECTS SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
Effective on the eighth calendar day following the date set forth below.
EXECUTION COPY
CHANGE IN CONTROL SEVERANCE AGREEMENT
This CHANGE IN CONTROL SEVERANCE AGREEMENT (this “ Agreement ”), dated as of this 9th day of September, 2009 , between First Solar, Inc., a Delaware corporation (the “ Company ”), and Robert J. Gillette (the “ Executive ”).
RECITALS:
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 (as defined below) will have the continued dedication of the Executive, notwithstanding the possibility, threat or occurrence of a Change in Control (as defined below); and
WHEREAS the Board believes that it is imperative to diminish the distraction of the Executive inherently present by virtue of the uncertainties and risks created by the circumstances surrounding a Change in Control and to ensure the Executive’s full attention to the Company and its Subsidiaries during such a period of uncertainty;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:
SECTION 1. Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:
(a) “ 280G Gross-Up Payment ” shall have the meaning set forth in Section 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 o | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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