Exhibit
10.4


 


EXECUTION COPY


 


AMENDMENT TO THE


 


EMPLOYMENT AGREEMENT


 


BETWEEN


 


SPECIALIZED TECHNOLOGY RESOURCES, INC.


 


AND


 


DENNIS L. JILOT


 


This Amendment (the “Amendment”) to that
certain Employment Agreement (the “Agreement”) by and between
Specialized Technology Resources, Inc., a Delaware corporation (together
with any successor thereto, the “Company”) and Dennis L. Jilot (the “Executive”),
dated as of July 18, 2008, is made as of the date hereof by and between the
Company and the Executive.


 


RECITALS


 


WHEREAS, the Company and the Executive entered into
the Agreement as of July 18, 2008;


 


WHEREAS, Section 14
of the Agreement permits the Company and the Executive to amend or supplement
the Agreement by a writing signed by a duly authorized officer of the Company
and the Executive; and


 


WHEREAS, the Company and the Executive wish to amend
the Agreement with respect to the contemplated issuance of restricted shares of
STR Holdings LLC, a Delaware limited liability company (together with any
successor thereto, “Parent”), pursuant to Section 6 of the
Agreement.


 


AGREEMENT


 


In consideration of the mutual promises, covenants
and conditions hereinafter set forth, the Company and the Executive agree to
amend the Agreement as follows:


 


1.             All capitalized
terms not defined herein shall have the meaning ascribed to them in the Agreement.


 


2.             Section 6
of the Agreement is hereby amended and restated in its entirety with the
following:


 


“6.           Restricted Stock; Phantom Units.


 


(a)           In General.  Upon the occurrence of an initial public
offering or, if earlier, the conversion of Parent to an entity treated as a
corporation for federal income tax purposes (a “Conversion”), the
Company intends to issue to the Executive a number of restricted shares of
Parent having an aggregate fair market value (at the initial public offering
price or, in the case of a Conversion, at a price determined in good faith by
the Board) equal to the fair market value at the date of the initial public
offering or Conversion of 223,464 Class A Units of Parent (the “Restricted
Shares”); provided, however, should neither an initial public offering nor
a Conversion occur by December 31, 2009, the Company intends to issue to the
Executive 223,464 phantom Class A Units of Parent (such phantom Class A
Units of Parent, the “Phantom Units”). 
In the event the 


 

















 


Restricted Shares are issued to the
Executive, the Executive shall have the option to make an election under Section
83(b) of the Internal Revenue Code of 1986, as amended (“Code” and
such an election, an “83(b) Election”), to include the fair market value
of the Restricted Shares in his current taxable income as of the date of
issuance, and Parent agrees to reasonably cooperate with the Executive if he
chooses to make this election.  The
Restricted Shares or Phantom Units, as the case may be, shall be subject to any
terms and conditions reasonably determined by the Board of Directors of the
Company or the compensation committee of the Board of Directors of the Company
and shall entitle the Executive to receive the value of the Class A Units
underlying the Phantom Units (or the equity interests into which such Class A
Units have converted) payable by the Company to the Executive, in cash or in
equity of Parent or the Company (or either of their successors), at the
earliest of (a) July 18, 2012, (b) a Change of Control and (c) the
Executive’s termination by the Company
without Cause or by the Executive for Good Reason (including by reason of the
Executive’s death or Disability) (such earliest date, the “Payment
Date”); provided, that in the event that Executive is determined by the
Company to be a “specified employee” (as defined in Code Section 409A(2)(B) and
determined in accordance with Code Section 416(i) (without regard to
paragraph (5) thereof)) of the Company at a time when its stock is deemed to be
publicly traded on an established securities market, any payments determined to
be “nonqualified deferred compensation” payable following termination of
employment shall be made no earlier than the earlier of (i) the last day
of the sixth (6th) complete calendar month following such termination of
employment, or (ii) Executive’s death, consistent with the provisions of
Code Section 409A.  Any payment delayed
by reason of the prior sentence shall be paid out in a single lump sum at the
end of such required delay period in order to catch up to the original payment
schedule.  The Restricted Shares or Phantom Units, as the case may be, shall vest
in equal 1/60th installments as of the last day of each of the 60 successive
calendar months beginning after April 2009, which, for the sake of clarity,
means that the first vesting date for such Restricted Shares or Phantom Units
will be May 31, 2009; provided, however, if the Executive is still
actively employed in his current capacity
as Chairman, President and Chief Executive Officer of the Company as of July 18,
2012, the remaining unvested Restricted Shares or Phantom Units, as the case
may be, shall become immediately vested; provided, further that if Executive’s
employment is terminated by the Company for Cause or by the Executive without
Good Reason, Executive shall immediately forfeit any Restricted Shares or
Phantom Units that remain unvested as of the date of such termination.  In the
event of a Change of Control or in the event the Executive’s employment is
terminated by the Company without Cause or by the Executive for Good Reason
(including by reason of the Executive’s death or Disability) whether prior to
or after the issuance date of the Restricted Shares or Phantom Units, as the
case may be, the Restricted Shares or Phantom Units, as the case may be, to the
extent they then remain unvested, shall become immediately and fully vested and
payable in accordance with the terms of this Section 6(a).  A “Change of Control”  shall
mean (i) the sale (in one transaction or a series of transactions) of all
or substantially all of the assets of the Company to a third party; (ii) a
sale or issuance (in one transaction or a series of transactions) of any
securities resulting in more than 50% of the voting power of the Company being
held, directly or indirectly, by a “person” or “group” (as such terms are used
in the Exchange Act) that does not include any of the then existing
shareholders of the Company or any of their respective Affiliates; or (iii) a
merger or consolidation of the Company with or into another Person if following
such merger or consolidation, more than 50% of the voting power of the Company
is held, directly or indirectly, by a “person” or “group” (as such terms are
used in the Exchange Act) that does not include any of the then existing
shareholders of the Company or any of their respective Affiliates; 


 


2

















 


provided, however,
notwithstanding the foregoing provisions of this Paragraph 6(a) or
anything in this Agreement to the contrary, the definition of “Change of
Control” herein shall in all instances comply with Treasury Regulation Section 1.409A-3(a)(5).


 


(b)           Gross-Up.  In the event the Phantom Units are issued to
the Executive, upon the payment by the Company of the amounts described in Section 6(a) above,
the Company shall pay to the Executive an amount in cash to compensate the
Executive for the difference between the federal income taxes payable with
respect to amounts received pursuant to Section 6(a) above and the
federal income taxes that would have been payable by the Executive were the
Executive to have (i) been issued Restricted Shares on April 1, 2009, (ii) made
an 83(b) Election with respect to his receipt of such Restricted Shares and (iii) to
have sold such Restricted Shares on the Payment Date for an amount equal to the
amount payable pursuant to Section 6(a). 
Any payment made by the Company to the Executive pursuant to this Section
6(b) shall be made no later than the end of the taxable year of the Executive
following the taxable year in which the Executive remits such taxes.


 


3.             All other
provisions of the Agreement not specifically amended by this Amendment shall
remain in full force and effect.  This
Amendment shall become automatically effective upon the execution of this
Amendment by the Company and the Executive.


 


4.             This Amendment
shall be construed in accordance with and governed by the laws of the State of Nevada,
without giving effect to the provisions, policies or principles thereof
relating to choice or conflict of laws.


 


5.             This Amendment
may be executed in counterparts and by facsimile signature, each of which shall
be deemed an original, but all of which together shall constitute one
instrument.


 


[Signature Page Follows]


 


3

















 


IN WITNESS
WHEREOF, the parties have executed this Amendment as of the date first written
above.


 


 


	
   

  	
  /s/ Dennis L. Jilot

  
	
   

  	
  Dennis L. Jilot

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECIALIZED TECHNOLOGY RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry A. Morris

  
	
   

  	
  Name: Barry A. Morris

  
	
   

  	
  Title:
    Executive Vice President and Chief
  Financial Officer

  



 


SIGNATURE PAGE TO AMENDMENT (D. JILOT EMPLOYMENT AGMT)