EMPLOYMENT AGREEMENT
Exhibit 10.12
This Agreement is made as of this 30th day of May, 2001, by and between FIRST SOLAR, LLC, a
Delaware limited liability company having its principal office at 0000 Xxxxx Xxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxx, Xxxxxxx 00000 (hereinafter, together with its successors, “Employer”) and Xxxxxx
X. (“Chip”) Hambro (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, it is hereby agreed
between Employer and Employee 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. Articles III, IV, V, VI and VII of
this Agreement shall survive any termination of this Agreement.
1.2 Position and Duties of Employee. Employer hereby employs Employee in the capacity of
Vice President — Engineering of Employer, and Employee hereby accepts such position, and agrees to
diligently and faithfully perform in connection with such position such duties assigned to Employee
by the Chief Operating Officer of Employer. Employee shall perform his duties hereunder in
conformity with the directions of the Chief Operating Officer.
1.3 No Salary or Benefits Continuation Beyond Termination. Except as may be required by law
or as otherwise specified in this 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.
1.4 Termination of Employment. Employee’s employment shall terminate upon (i) Employee’s
death; or (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; or (iii) the termination of Employee’s employment by Employer
for cause (as hereinafter defined); or (iv) Employee’s voluntary quit; or (v) the termination of
Employee’s employment by Employer without cause. As used herein, “cause” shall mean (a) dishonest,
fraudulent or illegal conduct of Employee relating to the business of Employer
or Employee’s performance of his employment with Employer; (b) misappropriation of Employer funds;
(c) conviction of a felony whether or not relating to the business of Employer or Employee’s
employment with Employer; (d) excessive use of alcohol, (e) use of controlled substances or other
addictive behavior; (f) unethical business conduct; (g) willful breach of any statutory or common
law duty of loyalty to Employer; or (h) willful action by Employee which is prejudicial or
injurious to the business or goodwill of Employer or a material breach of this Agreement.
1.5 Severance Payments in the Case of a Termination Without Cause or for Disability.
(a) Termination Pursuant to Clause 1.4(v) Without Post-Employment Non-Competition
Period. Except as provided in Section 1.5(b), if Employee’s employment is terminated by
Employer pursuant to clause (ii) or clause (v) of Section 1.4 (termination without cause), then, in
any such case:
| (i) | Employee shall be entitled to severance pay for a period of twelve (12) months following the termination of his employment, the payments of such severance pay to be made in equal monthly installments, such monthly installments (A) to be in an amount equal to the monthly Base Salary (as hereinafter defined) payment in effect on the date of cessation of Employee’s employment and (B) to be made on the dates that the monthly Base Salary payments would have been due had Employee’s employment with Employer not been terminated; provided, however, that such monthly severance payments shall be reduced by any amounts that Employee earns in any capacity during such twelve (12) month period; and |
| (ii) | Employer shall pay Employee the sum of $90,000 to defray the cost of relocating Employee and his family from Toledo to a different place of residence. Such amount shall be payable in full immediately upon Employee’s commencement of relocation, regardless of any expenses actually incurred by Employee for relocation or the timing thereof. |
(b) Termination Pursuant to Clause 1.4(v) With Post-Employment Non-Competition
Period. If Employee’s employment is terminated by Employer pursuant to clause (ii) or
clause (v) of Section 1.4 (termination without cause), Employer shall have the option, at its
discretion, to enforce the covenant not to compete as set forth in Section 5.2 (a) during the
Post-Employment Non-Competition Period (as defined in Section 5.2 (a)) for a period of up to three
(3) years. In the event Employer exercises its option to enforce the covenant not to compete,
Employee shall be entitled to severance pay for a period of twenty-four months following
termination, the payments of such severance pay to be made in equal monthly installments, such
monthly installments (i) to be in an amount equal to the monthly Base Salary payment in effect on
the date of cessation of Employee’s employment, and (ii) to be made on the dates that the monthly
Base Salary payments would have been due had Employee’s employment with Employer not been
terminated. Payment under this Section 1.5 (b) is in lieu of the payments provided for under
Section 1.5 (a).
(c) Vacation Pay and “Comp Time” in the Event of a Termination Pursuant to Clause
1.4(ii) or 1.4(v). If Employee’s employment is terminated by Employer pursuant to clause (ii)
or clause (v) of Section 1.4, Employee shall be entitled to receive, in addition to the severance
payments described in Sections 1.5(a) and 1.5(b) above, the dollar value of any earned but unused
(and unforfeited) (x) vacation time and (y) other “comp” time due to Employee on the date of
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termination. The payment with respect to such earned but unused (and unforfeited) vacation and
“comp” time shall be made to Employee within thirty (30) days following the date of the termination
of Employee’s employment.
ARTICLE II. Compensation
2.1 Base Salary. Employee shall be compensated at an annual base salary of One Hundred
Seventy Five Thousand Dollars ($175,000.00) for each year Employee is employed by Employer, subject
to such annual increases that Employer may in its sole discretion determine appropriate. Such Base
Salary shall be paid in accordance with Employer’s standard policies and shall be subject to such
withholdings as are required by law.
2.2 Bonuses. Employee shall be eligible to receive an annual bonus equal to 20%-40% of
Employee’s Base Salary based upon individual and company performance. The specific bonus
eligibility and the standards for earning 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
employees of Employer generally, and any other benefits which Employer may elect to grant to
Employee. In addition, Employee shall be entitled to four weeks paid vacation and reimbursement of
his COBRA payments during the initial; 30 days of employment.
2.4 Reimbursement of Business Expenses. Employee may incur reasonable expenses in the
course of employment hereunder for which he shall be eligible for reimbursement or advances in
accordance with Employer’s standard policy therefor.
2.5 Grant of Stock Option. Pursuant to a separate agreement of even date herewith between
Employer and Employee (the “Restricted Unit Agreement”), Employer is granting to Employee, certain
stock options in accordance with the terms and conditions of the Restricted Unit Agreement.
2.6 Relocation Payments. Employee’s position shall be based in Toledo, Ohio. In order to
defray the cost of Employee’s move to Ohio, Employer shall make the following payments to Employee:
(a) Closing Costs in Ohio. Employer shall reimburse Employee for customary closing
costs incurred by Employee in purchasing a house in Ohio.
(b) Relocation Costs. Employer shall pay or reimburse Employee for (i) Employee’s
commuting costs between California and Toledo (or alternatively, commuting costs for Employee’s
spouse) until Employee’s house in California is sold, (ii) commissions and miscellaneous
transaction costs related to the sale of Employee’s house in California, (iii) the cost of moving
to Toledo, including the cost of transporting vehicles, (iv) fitting and fixtures allowance of
$20,000, (v) the cost of renting a residence in Toledo until Employee is able to sell his house in
California and purchase a house in Toledo, and (vi) the amount necessary to “gross up” the forgoing
payments for federal and state income tax purposes. The gross up shall be calculated by dividing
total reimbursable expenses by the percentage obtained by subtracting from 100% the combined
effective federal and state income tax rate of Employee for the tax year in question.
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2.7 One Time Payment. Company shall pay Employee $25,000 upon commencement of employment in
consideration for Employee forgoing certain other benefits to which
he may have been entitled from his former Employer.
ARTICLE III. Invention, Disclosure, Patent Assignment and Copyright
3.1 Disclosure of Inventions. Employee shall promptly disclose in writing to Employer
complete and accurate information concerning each and every invention, discovery, improvement,
device, design, apparatus, practice, process, software or computer program, method or product,
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 Employer Inventions. Any and all Inventions relating to the actual or contemplated
business, technologies or products of Employer are and shall be the exclusive property of Employer
(collectively, the “Employer Inventions”). Employee hereby assigns to Employer any and all of
Employee’s right, title and interest in and to any and all of the Employer 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 Employer may
in the future reasonably request in order to confirm in Employer the rights granted pursuant to
this Section 3.2.
3.3 Inventions Which Are Not Employer Inventions. If Employee develops an Invention which
Employee believes is not an Employer Invention, Employee shall disclose in writing to Employer all
information reasonably requested by Employer from time to time concerning such Invention for the
purpose of permitting Employer to confirm, determine and/or verify that the Invention is not an
Employer Invention. If Employer determines that such Invention is an Employer Invention, Employee
shall not disclose, assign, license, use, sell or in any other manner exploit such Invention until
the question of whether it is an Employer Invention has been finally resolved, either by agreement
between Employer 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 Employer, 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 Employer, 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 Employer Inventions,
and for perfecting, affirming and recording Employer’s complete ownership of and title thereto.
Such acts shall be performed by Employee during the term of Employee’s employment without the
payment of additional compensation by Employer. Provided, however, that if Employee is asked to
undertake or perform any such acts after the termination of Employee’s employment with Employer,
Employee shall be entitled to reasonable compensation for the performance of such acts.
3.5 Employee’s Records. Employee shall keep complete, accurate and authentic accounts,
notes, data and records of all of the Inventions in the manner and form requested by Employer. Such
accounts, notes, data and records relating to Employer Inventions shall be the exclusive property
of Employer, and, upon its request, Employee shall promptly surrender the same to Employer or, if
not previously surrendered upon Employer’s request or otherwise, Employee
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shall surrender the same, and all copies thereof, to Employer upon the conclusion of his or her
employment.
3.6 United States Government Contracts. Employee understands that Employer may enter into
agreements or arrangements with agencies of the United States Government, and that Employer may be
subject to laws and regulations which impose obligations, restrictions and limitations on it with
respect to inventions and patents which may be acquired by it or which may be conceived or
developed by employees, consultants or other agents rendering services to it. Employee agrees that
he shall be bound by all such obligations, restrictions and limitations applicable to any said
invention conceived or developed by him during the term of his employment and shall take any and
all further action which may be required to discharge such obligations and to comply with such
restrictions and limitations.
ARTICLE IV. Ventures.
4.1 If, during the term of his employment, Employee is engaged in or associated with the research,
investigation, planning or implementation of any project, program or venture on behalf of or
involving Employer, all rights in the project, program or venture shall belong exclusively to
Employer and shall constitute an opportunity belonging exclusively to Employer. Except as approved
in advance and in writing by Employer, 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.
ARTICLE V. Non-Competition & Non-Solicitation
5.1 Definition of “Employer”. For purposes of this Article V, the term “Employer” includes
Employer, its subsidiaries and affiliates, and any other business enterprises through which
Employer conducts business from time to time, whether alone or with others.
5.2 Covenant Not To Compete. Employee agrees that during his employment with Employer and
for the Post-Employment Non-Competition Period (as defined below in this Section 5.2), Employee
shall not 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 Employer (or any successor to the operations of Employer) that engages in the
manufacture of photovoltaic products anywhere in the world. Ownership of not more than five percent
(5%) of the issued and outstanding shares of a class of securities of a corporation, the securities
of which are traded on a national securities exchange or in the over-the-counter market shall not
cause Employee to be in violation of this provision. As used in this Agreement, the term
“Post-Employment Non-Competition Period” means a period of three (3) years following the date of
termination of Employee’s employment. [Notwithstanding anything to the contrary, the
Post-Employment Non-Competition Period will only apply if Employee voluntarily terminates his
employment with Employer or Employee is terminated by Employer for cause]
5.3 No Solicitation. During the term of this Agreement and during the Post-Employment
Non-Competition Period, if any, Employee shall not (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
Employer serviced by Employee during any part of the term of Employee’s employment with
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Employer, or any of the prospective clients, customers or accounts of Employer which were
contacted, solicited or served by Employee during any part of the time Employee was employed by
Employer, or (b) directly or indirectly recruit, solicit or hire any employee of Employer, or
induce or attempt to induce any employee of Employer to discontinue his or her employment
relationship with Employer.
5.4 Severability. Employee acknowledges and agrees that the foregoing agreements are a
material inducement to Employer in employing Employee, and that Employee has had a full and fair
opportunity to consider the advisability of entering into such agreements and to seek legal advice
in connection with such consideration. If, despite the mutual intentions of Employer and Employee,
any provision of this Article V is determined by any court of competent jurisdiction to be invalid,
illegal or unenforceable, in whole or in part, the offending provision shall not affect the
enforceability of the remaining provisions of this Agreement, and Employee and Employer shall
promptly and in good faith negotiate a replacement provision that is fully enforceable and gives
maximum effect to the intentions of Employee and Employer in entering into an employment
relationship.
ARTICLE VI. Confidentiality
During the course of employment pursuant to this Agreement, Employee will be privy to
information belonging to or received in confidence by Employer or its subsidiaries or affiliates
which information is valuable to Employer and which information Employer believes to be novel and
which it holds in confidence for itself or third parties. Except as permitted or directed by
Employer, Employee shall not during the term of his employment or at any time thereafter, divulge,
furnish, disclose, make accessible or use any Confidential Information (as defined below).
“Confidential Information” includes, without limitation, confidential designs, processes or
formulae; confidential software or computer programs; the identities of Employer’s customers and
suppliers and the terms under which Employer deals with them; confidential marketing, sales,
product development, financing or engineering plans; confidential strategic or other business
plans; confidential development or research work of Employer; and any other confidential aspects of
the business of Employer. For purposes of this Agreement, a matter is “confidential” if Employer
identifies it as confidential, either before or after disclosure to Employee, or if Employee should
reasonably know that Employer regards it as confidential based on the facts and circumstances
available to Employee. At the expiration or termination of this Agreement or termination of
employment hereunder, Employee will, at Employer’s request, return to Employer all written
confidential information received from Employer 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 Employer in writing. This section shall survive the
termination of this Agreement.
Notwithstanding the foregoing, Confidential Information does not include information which (a)
is or becomes generally available to the public other than as a result of a disclosure by Employee,
(b) was available to Employee on a nonconfidential basis prior to its disclosure by the Employer to
Employee, or (c) became available to Employee on a nonconfidential basis from a person who is not
bound by a confidentiality agreement with the Employer, or is not otherwise prohibited from
transmitting the information to Employee.
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ARTICLE VII. Injunctive Relief
Because the services to be performed by Employee hereunder are of a special, unique, unusual,
confidential, extraordinary and intellectual character which character renders such services unique
and because Employee will acquire by reason of his employment and association with Employer, an
extensive knowledge of Employer’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 by Employee, Employer shall be entitled to an immediate injunction from any court of
competent jurisdiction restraining Employee, as well as any third parties, including successor
employers, whose joinder may be necessary to effect full and complete relief, from committing or
continuing to commit a breach of such provisions without the showing or proving of actual damages.
Any preliminary injunction or restraining order shall continue in full force and effect until any
and all disputes between the parties to such injunction or order regarding this Agreement have been
finally resolved.
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 his 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. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
9.2 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.
9.3 Notices. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered, delivered by facsimile
transmission or by courier or mailed, registered or certified mail, postage prepaid as follows:
| If to Employer: | First Solar, LLC | |||||
| 0000 Xxxxx Xxxxxxxxxx Xxxx | ||||||
| Xxxxx 000 | ||||||
| Xxxxxxxxxx, XX 00000 | ||||||
| Attention: Xxxxxxx X. Xxxxxx | ||||||
| Telecopy: (000) 000-0000 |
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| 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 9.3.
9.4 Assignability. This Agreement is for personal services and is therefore not assignable
by the Employee. This Agreement is freely assignable by Employer.
9.5 Entire Agreement. This Agreement sets 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 and 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.
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.
| EMPLOYER: FIRST SOLAR, LLC |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||
| Name Printed: Xxxxxxx X. Xxxxxx | ||||
| Title: | CEO | |||
| EMPLOYEE: |
||||
| /s/ Xxxxxx X. (“Chip”) Xxxxxx | ||||
| Xxxxxx A. (“Chip”) Hambro | ||||
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FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “First Amendment”) is entered into as of
February 5, 2003, by and between First Solar, LLC, a Delaware limited liability company (the
“Employer”) and Xxxxxx X. (“Chip”) Hambro, an individual resident of Ohio (“Employee”).
WHEREAS, the Employer and Employee entered into an Employment Agreement dated as of May 30,
2001 (the “Original Agreement”); and
WHEREAS, the Employer and Employee desire to amend certain of the terms of the Original
Agreement as set forth in this First Amendment.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements
contained herein, the parties do hereby agree as follows:
1. Severance Payments. Section 1.5 of the Original Agreement will be deleted in its
entirety and replaced with the following:
1.5 Severance Payments.
(a) Termination Pursuant to Clause 1.4(v) Without Cause. If
Employee’s employment is terminated by Employer pursuant to clause (ii) or
clause (v) of Section 1.4 (termination without cause), then, in such case:
(i) the Employer shall pay Employee severance pay for a period of
twenty-four (24) months following the termination of his employment, at
the rate equal to Employee’s highest base salary rate received during his
employment with the Employer and payable by the Employer in equal
installments in accordance with its regular payroll practices; and
(ii) the Employer shall pay Employee a lump sum payment of
$300,000.
(b) Reductions From Severance Payments. The Employer shall be
entitled to deduct from any severance pay otherwise payable to Employee under
Section 1.5(a)(i) any amount earned as income by Employee after his last day of
employment with the Employer as a result of self-employment or employment with any
other employer during the twenty-four (24) month period immediately following
Employee’s last day of employment. For purposes of mitigation and reduction of the
Employer’s financial obligations to Employee under this Section 1.5, Employee
shall diligently seek replacement employment consistent with
his skills and experience and shall promptly and fully disclose to the
Employer in writing the nature and amount of any such earned income from
self-employment or employment with any other employer. In addition, upon
Employer’s request no more frequently than monthly, Employee shall provide a
statement to the Employer describing in detail Employee’s efforts to obtain
replacement employment and stating any and all gross income earned by Employee
from employment or self-employment following the termination of his employment
with the Employer, or, if no such income has been earned, a statement to that
effect. Nothing in this paragraph shall be interpreted to require Employee to
relocate his home residence in order to obtain replacement employment.
(c) Conditions to Receipt of Severance Payments. Notwithstanding the
foregoing provisions of this Section 1.5, the Employer shall not be obligated to
make any payments to Employee under Section 1.5(a) hereof unless all applicable
consideration periods and rescission periods provided by law shall have expired
and Employee is not in material breach of any provisions of this Agreement.
(d) Vacation Pay in the Event of a Termination Pursuant to Clause
1.4(ii) or 1.4(v). If Employee’s employment is terminated by the Employer
pursuant to clause (ii) or clause (v) of Section 1.4, Employee shall be entitled
to receive, in addition to any severance payments described above in this Section
1.5, the dollar value of any earned but unused (and unforfeited) vacation time.
The payment with respect to such earned but unused (and unforfeited) vacation
time shall be made to Employee within thirty (30) days following the date of the
termination of Employee’s employment.
2. Covenant Not To Compete. Section 5.2 of the Original Agreement will be amended by
deleting the last sentence thereof.
3. Miscellaneous. All capitalized terms not otherwise defined herein shall take the
meanings ascribed to such terms in the Original Agreement. Other than as expressly amended in this
First Amendment, the Original Agreement shall continue in full force and effect, as so amended by
this First Amendment.
IN WITNESS WHEREOF, the parties to this Agreement have executed and delivered this First
Amendment on the date first above written.
| FIRST SOLAR, INC | EMPLOYEE | |||||
By:
|
/s/ Xxxxxxx X. Xxxxxx | /s/ Xxxxxx X. (“Chip”) Xxxxxx | ||||
| Its Chief Executive Officer | ||||||
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