EX-10.4





Exhibit 10.4

EMPLOYMENT AGREEMENT




     THIS EMPLOYMENT AGREEMENT is made and entered into as of this 31 day of May, 2006, by and
between SOLSIL, INC., a Delaware corporation with offices at
[                                        ] (the “Corporation”), and Alan Kestenbaum, an individual residing at
                                                             (the “Executive”).



RECITALS:




     A. The Corporation is a company primarily engaged in the manufacture and sale of solar grade
silicon (the “Business”).



     B. The Corporation desires to secure the services of the Executive upon the terms and
conditions hereinafter set forth; and



     C. The Executive desires to render services to the Corporation upon the terms and conditions
hereinafter set forth.



     NOW, THEREFORE, the parties mutually agree as follows:



     1. Employment. The Corporation hereby employs the Executive and the Executive hereby
accepts employment as an executive of the Corporation, subject to the terms and conditions set
forth in this Agreement.



     2. Duties. The Executive shall serve as Chairman of the Corporation with such duties,
responsibilities and authority as are commensurate and consistent with his position, as may be,
from time to time, assigned to him by the Board of Directors of the Corporation (the “Board”). The
Executive shall report directly to the Board. During the Term of this Agreement, the Executive
shall devote up to 25% of his full business time and efforts necessary for the performance of his
duties hereunder. Notwithstanding the foregoing, nothing herein shall prevent the Executive from
being employed by, acting as consultant to, or otherwise rendering services of any nature for or
on behalf of any person or entity, making personal investments, or conducting private business
affairs and charitable and professional activities, provided such activities do not materially
interfere with the services required to be rendered to the Corporation hereunder and do not
violate the restrictive covenants set forth in Section 9 below.



     3. Term of Employment. The term of the Executive’s employment hereunder, unless
sooner terminated as provided herein (the “Initial Term”), shall be for a period of three
years commencing on the date hereof (the “Commencement Date”). The term of this Agreement
shall automatically be extended for additional one-year terms (each a “Renewal Term”)
unless either party gives prior written notice of non-renewal to the other party no later than
sixty days prior to the expiration of the Initial Term (“Non-Renewal Notice”), or the then
current Renewal Term, as the case may be. For purposes of this Agreement, the Initial Term and any
Renewal Term are hereinafter collectively referred to as the “Term.”



 









 




     4. Compensation of Executive.


          (a) The Corporation shall pay, the Executive as compensation for his services hereunder, in
accordance with the Corporation’s regular payroll practices, during the Term, the sum of One
Hundred Thousand Dollars ($100,000) per annum (the “Base Salary”), less such deductions as
shall be required to be withheld by applicable law. The Base Salary shall be increased (but shall
not be decreased) on an annual basis in an amount determined by the Board.


          (b) In addition to the Base Salary set forth in Section 4(a) above, the Executive shall be
entitled to such bonus compensation (in cash, capital stock or other property) as of the Board may
determine from time to time in its sole discretion.


          (c) The Corporation shall pay or reimburse the Executive for all out-of-pocket expenses
reasonable incurred or paid by the Executive in the course of his employment, consistent with the
Corporation’s policy for reimbursement of expenses.


          (d) The Executive shall be entitled to participate in such pension, profit sharing, group
insurance, hospitalization, and group health and benefit plans and all other benefits and plans as
the Corporation provides to its senior executives (the “Benefit Plans”).


          (e) The Executive shall be granted a ten-year non-qualified stock option to purchase 50
shares of common stock, par value $0.01 per share, of the Corporation at an exercise price of
$50,000 per share, under the Corporation’s 2006 Non-Qualified Stock Plan (the “Option”).
The Option shall vest and become exercisable with respect to 16.66 shares on the date hereof and
with respect to an additional 16.67 shares, on each of the first and second anniversaries of the
date hereof, provided however, that in the event the Executive is terminated without Cause or
resigns for Good Reason or upon a Change of Control (as such terms are defined below) all unvested
shares subject to the Option shall automatically vest and become immediately exercisable.


     5. Termination.


          (a) This Agreement and the Executive’s employment hereunder shall terminate upon the
happening of any of the following events:


               (i) upon the Executive’s death;


               (ii) upon the Executive’s Total Disability (as herein defined);


               (iii) upon the expiration of the Initial Term of this Agreement or any Renewal Term thereof,
if either party has provided a timely Non-Renewal Notice in accordance with Section 3, above;


               (iv) at the Corporation’s option, without Cause, upon sixty days prior written notice to the
Executive;


               (v) at the Executive’s option, without Good Reason, upon sixty days prior written notice to
the Corporation;


 








 





               (vi) at the Executive’s option, in the event of an act by the Corporation, defined in Section
5(c), below, as constituting Good Reason for termination by the Executive; and



               (vii) at the Corporation’s option, in the event of an act by the Executive, defined in
Section 5(d), below, as constituting Cause for termination by the Corporation.



          (b) For purposes of this Agreement, the Executive shall be deemed to be suffering from a
“Total Disability” if the Executive has failed to perform his regular and customary duties
to the Corporation for a period of 180 days out of any 360-day period and if before the Executive
has become “Rehabilitated” (as herein defined) due to a mental or physical incapacity resulting in
the Executive’s inability to continue to materially perform his regular and customary duties of
employment as determined by the Executive’s physician. As used herein, the term
“Rehabilitated” shall mean such time as the Executive is willing, able and commences to
devote his time and energies to the affairs of the Corporation to the extent and in the manner that
he did so prior to his Disability.




          (c) For purposes of this Agreement, the term “Good Reason” shall mean that the
Executive has resigned due to (i) the failure of the Corporation to meet any of its material
obligations to the Executive under this agreement between the Corporation and the Executive, (ii)
the material diminution of the Executive’s duties, responsibilities, title or authority, (iii) the
failure, other than for Cause, to elect the Executive to, or removal, other than for Cause, of the
Executive from, the Board or (iv) a Change of Control shall have occurred.




          (d) For purposes of this Agreement, the term “Cause” shall mean material, gross and
willful misconduct on the part of the Executive in connection with his employment duties hereunder
or conviction of a felony or act of dishonesty by the Executive.




          (e) For purposes of this Agreement, the term “Change of Control” shall mean (i) the direct or
indirect sale, lease, exchange or other transfer (other than a license in the ordinary course of
Business) of all or substantially all (more than 50%) of the assets of the Corporation to any
person or entity or group of persons or entities acting in concert as a partnership or other group
(a “Group of Persons”), (ii) the merger, consolidation or other business combination of the
Corporation with or into another corporation with the effect that the stockholders of the
Corporation, immediately following the merger, consolidation or other business combination, hold
less than 50% of the combined voting power of the then outstanding securities of the surviving
corporation of such merger, consolidation or other business combination having the right to vote
in the election of directors, (iii) the replacement of a majority of the Corporation’s Board of
Directors, or (iv) a person or Group of Persons shall, as a result of a tender or exchange offer,
open market purchases, privately negotiated purchases or otherwise, have become the beneficial
owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
securities of the Corporation representing more than 50% of the combined voting power of the then
outstanding securities of the Corporation having the right to vote in the election of directors.




 









 





     6. Effects of Termination.



          (a) Upon termination of the Executive’s employment pursuant to Section 5(a)(i), the
Executive’s estate or beneficiaries shall be entitled to the following benefits: (i) three months’
Base Salary at the then current rate, payable in a lump sum, less withholding of applicable taxes;
and (ii) continued provision for a period of one year following the Executive’s death of benefits
under Benefit Plans extended from time to time by the Corporation to its senior executives.




          (b) Upon termination of the Executive’s employment pursuant to Section 5(a)(ii), the
Executive shall be entitled to the following benefits: (i) twelve months’ Base Salary at the then
current rate, to be paid from the date of termination in accordance with the Corporation’s regular
payroll practices, including the withholding of all applicable taxes; (ii) continued provision
during such twelve-month period of the benefits under Benefit Plans extended from time to time by
the Corporation to its senior executives; and (iii) payment on a prorated basis of any bonus or
other payments earned in connection with the Corporation’s then-existing bonus plan in place at
the time of termination.




          (c) Upon termination of the Executive’s employment pursuant to Section 5(a)(iii), where the
Corporation has offered to renew the term of the Executive’s employment for an additional one-year
period and the Executive chooses not to continue in the employ of the Corporation, the Executive
shall be entitled to receive the following benefits: (i) the accrued but unpaid compensation and
vacation pay through the date of termination; and (ii) any other benefits accrued to him under any
Benefit Plans outstanding at such time. In the event the Corporation tenders a Non-Renewal Notice
to the Executive, then the Executive shall be entitled to the same benefits as if the Executive’s
employment were terminated pursuant to Section 5(a)(iv) or Section 5(a)(vi); provided,
however, if such Non-Renewal Notice was triggered due to the Corporation’s statement that
the Executive’s employment was terminated due to Section 5(a)(v) (for “Cause”), then payment of
severance benefits shall be contingent upon a determination as to whether termination was properly
for Cause.




          (d) Upon termination of the Executive’s employment pursuant to Section 5(a)(iv) or (vi), the
Executive shall be entitled to the following benefits: (i) continued payment of Executive’s Base
Salary at the then current rate in monthly installments, less withholding of all applicable taxes
for the greater of (A) twelve (12) months from the date of termination or (B) that number of
months remaining in the Initial Term; (ii) continued provision during the twelve-month period
following the date of termination of the benefits under Benefit Plans extended from time to time
by the Corporation to its senior executives; (iii) payment on a prorated basis of any bonus or
other payments earned in connection with the Corporation’s then-existing bonus plan in place at
the time of termination; and (iv) upon Executive’s election, the Corporation shall cancel the
Executive’s Option and pay the Executive the difference between the fair market value of the
shares issuable upon exercise of the Option and the exercise price of those shares. Upon
termination of the Executive’s employment pursuant to Section 5(a)(v) or (vii), the Executive
shall be entitled to the following benefits: (i) accrued and unpaid Base Salary and vacation pay
through the date of termination, less withholding of applicable taxes; and (ii) continued
provision, for a period of one (1) month after the date of the Executive’s termination of




 









 




employment, of benefits under Benefit Plans extended to the Executive at the time of termination.



          Any payments required to be made hereunder by the Corporation to the Executive shall continue
to the Executive’s beneficiaries in the event of his death until paid in full.



     7. Vacations. The Executive shall be entitled to four weeks paid vacation per year.
The Executive shall take his vacation at such time or times as the Executive and the Corporation
shall determine is mutually convenient.


     8. Confidential Information. The Executive recognizes, acknowledges and agrees that
he has and shall continue to have access to proprietary and confidential information regarding the
Corporation, including but not limited to, its products, formulae, patents, sources of supply,
customer dealings, data, know-how, business plans, financial condition and prospects, provided
such information is not in or does not hereafter become part of the public domain, or become known
to others through no fault of the Executive (“Confidential
Information”). The Executive
acknowledges that such information is of great value to the Corporation, is the sole property of
the Corporation, and has been and shall be disclosed to him in confidence. The Executive shall
therefore retain in strict confidence and not, at any time, during or after his employment
hereunder, directly or indirectly, use, reveal, divulge, copy, transfer or make known to any
person or entity, any Confidential Information except in furtherance of the Business for the
benefit of the Corporation. The provisions of this Section 8 shall survive the termination or
expiration of this Agreement.


     9. Covenant Not To Compete or Solicit.


          (a) The Executive acknowledges and recognizes the highly competitive nature of the business
of the Corporation. The parties confirm that it is necessary for the protection of the Corporation
and accordingly, the Executive agrees as follows:



               (i) During the Term and, for a period of twelve months following the date the Executive
ceases to be a employed by the Corporation (the “Restricted Period”), the Executive shall
not, directly or indirectly, in the United States, (i) engage in any business that materially
competes with the primary business of the Corporation, (ii) enter the employ of, or render any
services to, any person or entity engaged in any business that materially competes with the
primary business of the Corporation in the portions of the Business so competing, (iii) acquire a
financial interest in, or otherwise become actively involved with, any person or entity engaged in
any business that materially competes with the primary business of the Corporation, other than as
an inactive investor holding not more than 5% of the outstanding publicly traded securities of an
entity which is registered under Section 12(b) or 12(g) of the Securities Act of 1934 or (iv)
interfere with, or attempt to interfere with, business relationships between the Corporation and
its customers, clients, suppliers or investors.


               (ii) During the Restricted Period, except in performance of this Agreement, the Executive
shall not, directly or indirectly, (i) solicit or encourage any employee of the Corporation to
leave the employment of the Corporation or (ii) hire any such employee


 








 




who was employed by the Corporation as of the date of the Executive’s termination of employment for
the Corporation.




               (iii) During the Restricted Period, the Executive shall not, directly or indirectly, solicit
or encourage to cease to work with the Corporation any employee or consultant then under contract
with the Corporation.



          (b) It is expressly understood and agreed that although the Executive and the Corporation
consider the restrictions contained in this Section 9 to be reasonable, if a final judicial
determination is made by a court of competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction against the Executive, the
provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to
such maximum time and territory and to such maximum extent as such court may judicially determine
or indicate to be enforceable. Alternatively, if a court of competent jurisdiction finds that any
restriction contained in this Agreement is unenforceable, and such restriction cannot be amended
so as to make it enforceable, such finding shall not affect the enforceability of any of the other
restrictions contained herein.




          (c) The provisions of this Section 9 shall survive the termination of the Executive’s
employment hereunder and until the end of the Restricted Period except in the event that this
Agreement is terminated pursuant to Section 5(a)(iv) or (vi), hereof, in which case such
provisions shall not survive termination of this Agreement.




     10. Miscellaneous.



          (a) The Executive acknowledges and agrees that the Corporation’s remedies at law for a breach
or threatened breach of any of the provisions of Section 8 and Section 9 would be inadequate and,
in recognition of this fact, the Executive agrees that, in the event of such a breach or
threatened breach, in addition to any remedies at law, the Corporation, without posting any bond,
shall be entitled to obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable remedy which may then
be available.




          (b) Neither the Executive nor the Corporation may assign or delegate any of their rights or
duties under this Agreement without the express written consent of the other.




          (c) This Agreement constitutes and embodies the full and complete understanding and agreement
of the parties with respect to the Executive’s employment by the Corporation, supersedes all prior
understandings and agreements, whether oral or written, between the Executive and the Corporation,
and shall not be amended, modified or changed except by an instrument in writing executed by the
parties hereto. The invalidity or partial invalidity of one or more provisions of this Agreement
shall not invalidate any other provision of this Agreement. No waiver by either party of any
provision or condition to be performed shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or any prior or subsequent time.




 









 




          (d) This Agreement shall inure to the benefit of, be binding upon and enforceable against,
the parties hereto and their respective successors, heirs, beneficiaries and permitted assigns.


          (e) The headings contained in this Agreement are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Agreement.


          (f) All notices, requests, demands and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given when personally
delivered, sent by registered or certified mail, return receipt requested, postage prepaid, or by
private overnight mail service (e.g. Federal Express) to the party at the address set forth above
or to such other address as either party may hereafter give notice of in accordance with the
provisions hereof. Notices shall be deemed given on the sooner of the date actually received or
the third business day after sending.


          (g) This Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without giving effect to such state’s conflicts of laws provisions and each of
the parties hereto irrevocably consents to the jurisdiction and venue of the federal and state
courts located in the State of New York.


          (h) This Agreement may be executed in counterparts (including facsimile signatures), each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument.


          (i) The Executive acknowledges and agrees that the firm of Arent Fox PLLC represents the
Corporation and is not acting as counsel or providing legal advice to the Executive, the Executive
may have an interest adverse to the company’s interest with respect to the subject matter of this
Agreement and the Executive has his own legal counsel and is relying on such legal counsel with
respect to this Agreement and the transactions contemplated hereby.


     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth
above.


	 	 	 	 	 	 	 
	 	 	SOLSIL, INC.	 	 
	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Arden Sims	 	 
	 	 	 	 	 
	 	 
	 	 	Arden Sims
	 	 	President and Chief Executive Officer
	 	 	 	 	 	 	 
	 	 	/s/ Alan Kestenbaum 	 	 
	 	 	Alan Kestenbaum