EXPLANATORY NOTE

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

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

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

1.   Duties and Scope of Employment .

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

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

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

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

4.   Compensation .

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

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

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

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

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

7.   Severance in Connection with Change of Control .

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

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

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

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

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

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

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

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

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

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

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