EXHIBIT
10.1


 


EXECUTION COPY


 


EMPLOYMENT
AGREEMENT


 


This Employment Agreement
(the “Agreement”), dated as of April 12, 2010, is made by and
between SPECIALIZED TECHNOLOGY RESOURCES, INC., a Delaware corporation
(together with any successor thereto, the “Company”), and ALAN N.
FORMAN, of New Rochelle, New York (the “Executive”).


 


Recitals


 


A.                                   The Company desires to engage the
Executive to perform services under the terms hereof and the Executive desires
to be employed by the Company.


 


B.                                     The Company desires to be assured that
the unique and expert services of the Executive will be substantially available
to the Company, and that the Executive is willing and able to render such
services on the terms hereinafter set forth.


 


C.                                     The Company desires to be assured that
the confidential information and goodwill of the Company will be preserved for
the exclusive benefit of the Company.


 


Terms


 


In consideration of such
employment and the respective agreements of the parties set forth below, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:


 


1.                                      Certain Definitions


 


(a)                                  “Annual Base Salary” shall have
the meaning set forth in Section 3(a).


 


(b)                                 “Annual Bonus” shall have the meaning
set forth in Section 3(b).


 


(c)                                  “Board” shall mean the Board of
Directors of Parent.


 


(d)                                 The Company shall have “Cause” to
terminate the Executive’s employment hereunder upon:  (i) the
Executive’s breach of Section 2(c) (other than any such failure resulting
from the Executive’s Disability), which is not remedied within 30 days after
receipt by the Executive of written notice from the Company specifying such
failure in reasonable detail or the Executive’s breach of Section 21; (ii) the
Executive’s failure or refusal to follow the reasonable instructions of the
Board or the board of directors of any Subsidiary of the Company, which failure
or refusal is not cured within 30 days following written notice; (iii) the
Executive’s conviction of a felony or of a misdemeanor if such misdemeanor
involves moral turpitude or misrepresentation, including a plea of guilty or nolo
contendere; (iv) the Executive’s unlawful use (including being under
the influence) or possession of illegal drugs on the Company’s or any of its
Subsidiaries’ premises; (v) the Executive’s commission of any act of
fraud, embezzlement, misappropriation of funds, material misrepresentation,
breach of fiduciary duty or other act of dishonesty detrimental to the Company
or any of its Subsidiaries; or (vi) the Executive’s intentional wrongful
act or gross negligence that has a material detrimental effect on the Company
or its Subsidiaries.


 


(e)                                  “Company” shall have the meaning
set forth in the preamble hereto.


 


(f)                                    “Date of Termination” shall mean (i) if
the Executive’s employment is terminated by his death, the date of his death; (ii) if
the Executive’s employment is terminated due to his Disability, the date
determined pursuant to Section 4(a)(ii); (iii) if the Executive’s
employment is terminated pursuant to Section 4(a)(iii)-(vi) either
the date indicated in the Notice of Termination or any earlier date specified
by the


 

















 


Company pursuant to Section 4(b);
or (iv) if the Executive’s employment is terminated pursuant to Section 4(a)(vii) the
date on which the Term expires.


 


(g)                                 “Disability” shall mean any
physical or mental illness, injury or infirmity which prevents the Executive
from performing the Executive’s job functions for a period of (i) one
hundred twenty consecutive calendar days or (ii) an aggregate of one
hundred eighty calendar days out of any consecutive twelve month period. 
Any determination of disability shall be made by the Board in consultation with
a qualified physician or physicians selected by the Board and reasonably acceptable
to the Executive.  The failure of the Executive to submit to a reasonable
examination by such physician or physicians shall act as an estoppel to any
objection by the Executive to the determination of disability by the Board.


 


(h)                                 “Effective Date” shall have the
meaning set forth in Section 2(b).


 


(i)                                     “Executive” shall have the meaning
set forth in the preamble hereto.


 


(j)                                     The Executive shall have “Good Reason”
to resign his employment upon the occurrence (without the Executive’s prior
written consent) of any of the following:  (A) a material diminution
in the nature or scope of the Executive’s responsibilities, duties or authority
in his capacity as Vice President and General Counsel, without regard to any
other responsibilities, duties or authority the Executive may have had or
performed for the Company at any time; (B) the Company’s material breach
of this Agreement; (C) any change in the Executive’s reporting
relationship so that he no longer reports to the Chief Executive Officer; (D) a
relocation of the Executive’s place of employment to a location more than
thirty miles by road from Enfield, Connecticut; or (E) any decrease in the
Executive’s Annual Base Salary, target bonus percentage as set forth in Section 3(a),
or benefit plans, programs and arrangements as in effect from time to time
(other than a general reduction in base salary, target bonus percentages or
benefit plans, programs and arrangements that affects all members of senior
management equally); provided, however,
that the Executive may not resign his employment for Good Reason unless:  (x) the
Executive provided the Company with at least 30 days prior written notice of
his intent to resign for Good Reason (which notice must be provided within 45
days following (i) the occurrence of the event(s) purported to
constitute Good Reason, or (ii) if the Executive could not reasonably have
known of the occurrence of any of such events, the date on which the Executive
had actual knowledge of the occurrence of any of such events); and (y) the
Company has not remedied the alleged occurrence(s) within the 30-day
period following its receipt of such notice from the Executive.


 


(k)                                  “Notice of Termination” shall have
the meaning set forth in Section 4(b).


 


(l)                                     “Parent” means STR Holdings, Inc.,
a Delaware corporation.


 


(m)                               “Term” shall have the meaning set
forth in Section 2(b).


 


2.                                      Employment


 


(a)                                  In General.  The Company shall employ the Executive and the
Executive shall enter the employ of the Company, for the period set forth in Section 2(b),
in the position set forth in Section 2(c), and upon the other terms and
conditions herein provided.


 


(b)                                 Term of Employment.  The initial term of employment
under this Agreement (the “Initial Term”) shall be for the period
beginning on May 3, 2010 (the “Effective Date”) and ending on the
third anniversary thereof, unless earlier terminated as provided in Section 4. 
The employment term hereunder shall automatically be extended for successive
one-year periods (“Extension Terms” and, collectively with the Initial
Term, the “Term”) unless either party gives written notice of
non-extension to the other no later than 90 days prior to the expiration of the
then applicable Term.


 


(c)                                  Position and Duties.  The Executive shall serve as Vice
President and General Counsel of the Company and the Parent, with
responsibilities, duties and authority customary for such position, subject to 


 


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direction by the Chief
Executive Officer.  The Executive shall report to the Chief Executive
Officer.  The Executive shall devote substantially all his working time
and efforts to the business and affairs of the Company and its
subsidiaries.  The Executive agrees to observe and comply with the Company’s
rules and policies as adopted by the Company from time to time. 
During the Term, it shall not be a violation of this Agreement for the
Executive to (i) serve on industry trade, civic or charitable boards or
committees; (ii) deliver lectures or fulfill speaking engagements; or (iii) manage
personal investments (which shall include (x) investments by the Executive
of his personal assets in any business which does not compete directly or
indirectly with the Company, in such form or manner as will not require any
services on the part of the Executive in the operation of such business and (y) the
purchase by the Executive of a total of up to 1% of the regularly traded
securities of any entity, whether or not it competes with the Company), as long
as, in the reasonable judgment of the Chief Executive Officer of the Company,
such activities do not and will not interfere with the performance of the
Executive’s duties and responsibilities as an employee of the
Company.   The Executive shall
perform his duties hereunder at the Company’s corporate headquarters in
Enfield, Connecticut, provided, however, that, for as long as the Executive
resides in New Rochelle, New York, the Executive may work from his residence
one day each week; and shall travel as necessary or as reasonably requested by
the Chief Executive Officer of the Company.


 


3.                                      Compensation and Related
Matters


 


(a)                                  Annual Base Salary.  During the Term, the Executive
shall receive a base salary at a rate of $235,000.00 per annum, which shall be
paid in accordance with the customary payroll practices of the Company, subject
to increase as determined by the Board in its sole discretion (the “Annual
Base Salary”).  The Executive’s Annual Base Salary will be reviewed
annually by the Board and the Board may, in its sole discretion, increase the
Annual Base Salary considering the Executive’s performance and that of the
Company.


 


(b)                                 Bonus Compensation; Equity Incentives.


 


(i)                                     In addition to the Annual Base Salary, for
each fiscal year, or portion thereof, during the Term, the Executive shall be
eligible to participate in the Company’s management incentive plan (or any
successor incentive plan adopted by the Board) pursuant to which Executive may
be paid a target amount of 35% of his Annual Base Salary except as the parties
may have agreed otherwise in writing (the “Annual Bonus”).  The
Annual Bonus will be based upon performance measured against goals established
by the Chief Executive Officer and the Board.  Any Annual Bonus otherwise
payable for the 2010 fiscal year, shall be pro-rated for the portion of the 2010
fiscal year in which the Executive is employed following the Effective Date.


 


(ii)                                  In the discretion of management,
Executive shall be eligible to receive awards pursuant to the terms of the STR
Holdings, Inc. 2009 Equity Incentive Plan (the “Equity Incentive Plan”).


 


(iii)                               On the Effective Date, Executive shall
receive a signing bonus in an amount equal to $100,000 (the “Signing Bonus”);
provided, however, should Executive’s employment be
terminated within one year after the Effective Date either by the Company for
Cause or by the Executive without Good Reason, Executive shall reimburse the
Company in an amount equal to the Signing Bonus.


 


(c)                                  Benefits.  The Executive shall be entitled to participate
in employee benefit plans, programs and arrangements of the Company now (or, to
the extent determined by the Board, hereafter) in effect which are applicable
to the senior management of the Company.


 


(d)                                 Vacation.  During the Term, the Executive shall be
entitled to three weeks paid vacation each calendar year.  Any vacation
shall be taken at the reasonable and mutual convenience of the Company and the
Executive.


 


(e)                                  Expenses.  The Company shall promptly reimburse the
Executive for all reasonable travel and other business expenses incurred by him
in the performance of his duties to the Company in accordance with the Company’s
applicable expense reimbursement policies and procedures.  Travel expenses between the Executive’s 


 


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residence and the Company’s
corporate headquarters in Enfield, Connecticut and Executive’s lodging,
non-business meals and other living expenses incurred while performing his
duties in Enfield, Connecticut shall be deemed personal and not business
expenses.  Membership fees for applicable
bar associations, required continuing legal education and other professional
fees or costs approved by the Chief Executive Officer shall be deemed business
expenses.


 


(f)                                    Equity Grant.        
On the Effective
Date, and pursuant to the terms and subject to the conditions set forth in the
award agreement between Parent and the Executive and the Equity Incentive Plan,
Executive shall be granted options to purchase 125,000 shares of Parent common
stock at an exercise price equal to the fair market value of a share of Parent
common stock as of the date of grant. 
These options shall vest in 48 equal monthly installments as of the last
day of each of the successive 48 months after May 2010, beginning with the
last day of June 2010, subject to the Equity Incentive Plan and the award
agreement, and shall be Incentive Stock Options as defined in, and to the
extent permitted by, the Equity Incentive Plan and Section 422 of the
Internal Revenue Code of 1986, as amended (the “Code”), and, to the extent not
so permitted, shall be Nonqualified Stock Options, as defined in the Equity
Incentive Plan.


 


4.                                      Termination.  The Executive’s employment
hereunder may be terminated by the Company or the Executive, as applicable,
without any breach of this Agreement only under the following circumstances:


 


(a)                                  Circumstances


 


(i)                                     Death.  The Executive’s employment hereunder shall
terminate upon his death.


 


(ii)                                  Disability.  If the Executive incurs a Disability, the
Company may give the Executive written notice of its intention to terminate the
Executive’s employment.  In that event, the Executive’s employment with
the Company shall terminate effective on the later of the 30th day after
receipt of such notice by the Executive or the date specified in such notice, provided that within the 30 days after
such receipt, the Executive shall not have returned to full-time performance of
his duties.


 


(iii)                               Termination for Cause.  The Company may terminate the
Executive’s employment for Cause.


 


(iv)                              Termination without Cause.  The Company may terminate the
Executive’s employment without Cause.


 


(v)                                 Resignation for Good Reason.  The Executive may resign his
employment for Good Reason.


 


(vi)                              Resignation without Good Reason.  The Executive may resign his
employment without Good Reason.


 


(vii)                           Non-renewal.  Either party may notify the other
of his or its intent not to renew this Agreement at least 90 days prior to the
expiration of the Term, which shall be treated as a termination without Cause
if such notice is given by the Company and the Company does not concurrently
waive the Executive’s obligations under Section 2 of the Agreement Not to
Compete, or a resignation without Good Reason if such notice is given by the
Executive.


 


(b)                                 Notice of Termination.  Any termination of the Executive’s
employment by the Company or by the Executive under this Section 4 (other
than termination pursuant to paragraph (a)(i)) shall be communicated by a
written notice to the other party hereto indicating (i) the specific
termination provision in this Agreement relied upon, (ii) except with
respect to a termination pursuant to Section 4(a)(iv) or 4(a)(vi),
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive’s employment under the
provision so indicated, and (iii) specifying a Date of Termination which,
if submitted by the Executive (or, in the case of a termination described in Section 4(a)(ii),
by the Company), shall be at least 30 days following the receipt 


 


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of such notice (a “Notice
of Termination”); provided, however,
that a Notice of Termination delivered by the Company pursuant to Section 4(a)(ii) shall
not be required to specify a Date of Termination, in which case the Date of
Termination shall be determined pursuant to Section 4(a)(ii); and provided, further, that in the event that
the Executive delivers a Notice of Termination to the Company, the Company may,
in its sole discretion, change the Date of Termination to any date that occurs
following the date of Company’s receipt of such Notice of Termination (even if
such date is prior to the date specified in such Notice of Termination;
provided, however, that the Company may not change a Date of Termination
specified in a Notice of Termination delivered by the Executive pursuant to Section 4(a)(v) to
a date which is less than 90 days following the receipt of such notice). 
A Notice of Termination submitted by the Company may provide for a Date of
Termination on the date the Executive receives the Notice of Termination, or
any date thereafter elected by the Company in its sole discretion; provided,
however, that a Notice of Termination delivered by the Company pursuant to Section 4(a)(iv) may
not provide for a Date of Termination which is less than 90 days following the
receipt of such notice.  The failure by the Executive or the Company to
set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause or Good Reason shall not waive any right of
the Executive or the Company hereunder or preclude the Executive or the Company
from asserting such fact or circumstance in enforcing the Executive’s or the
Company’s rights hereunder.


 


5.                                      Company Obligations Upon
Termination of Employment


 


(a)                                  In General.  Upon a termination of the Executive’s
employment for any reason, the Executive (or the Executive’s estate) shall be
entitled to receive in a lump sum within 20 business days following the  Date of Termination: the sum of the Executive’s
Annual Base Salary through the Date of Termination and any expenses owed to the
Executive under Section 3(e).  The Executive shall also be entitled
to receive in a lump sum any awarded but unpaid Annual Bonus for the fiscal
year of the Company prior to the fiscal year during which the Date of
Termination occurs (except in the event of a termination by the Company for
Cause) within 20 business days following the Company’s receipt of audited
financial statements for such prior fiscal year.  The Executive shall also
be entitled to any accrued vacation pay owed to the Executive pursuant to Section 3(d);
any amount arising from the Executive’s participation in, or benefits under,
any employee benefit plans, programs or arrangements under Section 3(c) (including
without limitation, any disability or life insurance benefit plans, programs or
arrangements), which amounts shall be payable in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements; and any
benefits that may be due the Executive under the Equity Incentive Plan or award
agreements between the Executive and the Company.


 


(b)                                 Termination without Cause or Resignation
for Good Reason. 
If the Executive’s employment shall be terminated by the Company without Cause
or by the Executive for Good Reason (but not by reason of the Executive’s
death, Disability, termination by the Company for Cause or termination by the
Executive without Good Reason), then, in addition to the payments and benefits
described in Section 5(a) (including benefits under stock option
agreements), the Company shall:


 


(i)                                     Continue to pay to the Executive, in
accordance with the Company’s regular payroll practice following the Date of
Termination, the Executive’s Annual Base Salary, and continue the Executive’s
participation at active employee contribution rates in the Company’s health,
life insurance and retirement plans through nine months from the Date of
Termination; provided that each payment is intended to constitute a
separate payment within the meaning of Code Section 409A and the
regulations thereunder; provided, further 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 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.  During such nine months,
Executive shall not be required to seek or accept any other employment nor
shall any other employment income of the Executive earned during such nine
months constitute grounds for any reduction of the continued salary payment
obligation of the Company under this Section 5(b)(i).;


 


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(ii)                                  If the Executive otherwise would have
been entitled to receive a payment pursuant to the Company’s bonus plan had he
been employed on the last day of the Company’s fiscal year, then pay to the
Executive on April 30 of the year following the year in which the
Executive’s termination occurs, (and in the event that the Company has not
received its audited financial statements for the prior year by April 30
of such year, such bonus shall be paid as soon as practicable thereafter,
consistent with the provisions of Code Section 409A, but in no event later
than the last day of such following year), the amount of such payment,
multiplied by a fraction the numerator of which is the number of days during
such fiscal year that the Executive was employed and the denominator of which
is 365; and


 


(iii)                               Continue paid coverage for the Executive
and any eligible dependents under all Company group health benefit plans in
which the Executive and any dependents were entitled to participate immediately
prior to the Date of Termination through the ninth month after the Date of
Termination, to the extent permitted thereunder.  As of the date that the
Executive ceases to receive coverage under any group health plan pursuant to
this Section 5(b)(iii), the Executive shall be eligible to elect to
receive “COBRA” continuation coverage to the extent permitted by Section 601
et seq. of the Employee
Retirement Income Security Act of 1974, as amended, and if such coverage ceases
prior to nine months from the Date of Termination, the Company shall pay for
such COBRA coverage through such nine month period.


 


6.                                      Agreement Not To Compete.  As of the date hereof the
Executive shall enter into an Agreement Not To Compete, in substantially the
form attached hereto as Appendix A, the terms and conditions of which
are incorporated herein by this reference.  If the Executive breaches any
his covenants in such Agreement Not to Compete, then notwithstanding any other
provision of this Agreement, the Executive shall be entitled to no further
payments or benefits provided for in this Agreement.


 


7.                                      Assignment and
Successors. 
The Company may assign its rights under this Agreement to any entity, including
any successor to all or substantially all the assets of the Company, by merger
or otherwise, shall use its best efforts to require any such successor or other
assignee to assume its obligations under this Agreement, and may assign or
encumber this Agreement and its rights hereunder as security for indebtedness
of the Company and entities controlled by the Company or under common control
with the Company.  The Executive may not assign his rights or obligations
under this Agreement to any individual or entity.  This Agreement shall be
binding upon and inure to the benefit of the Company, the Executive and their
respective successors, assigns, personnel and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as applicable.


 


8.                                      Governing Law.  This Agreement shall be governed,
construed, interpreted and enforced in accordance with the substantive laws of
the State of New York, without reference to the principles of conflicts of law
of the State of New York or any other jurisdiction, and where applicable, the
laws of the United States.


 


9.                                      Validity.  The invalidity or
unenforceability of any provision or provisions of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.


 


10.                               Notices.  Any notice, request, claim,
demand, document and other communication hereunder to any party shall be
effective upon receipt (or refusal of receipt) and shall be in writing and
delivered personally or sent by telex, telecopy, or certified or registered
mail, postage prepaid, to the following address (or at any other address as any
party shall have specified by notice in writing to the other party):


 


If to
the Company, to:


 


Specialized Technology
Resources, Inc.

10 Water Street

Enfield, Connecticut  06082-4899

Attn:  Barry A. Morris

Facsimile:  (860) 749-9158


 


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If to
the Executive, at the address set forth on the signature page hereto.


 


11.                               Counterparts.  This Agreement may be executed in
several counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same Agreement.


 


12.                               Entire Agreement.  The terms of this Agreement
(together with any other agreements and instruments contemplated hereby or
referred to herein) is intended by the parties to be the final expression of
their agreement with respect to the employment of the Executive by the Company
and may not be contradicted by evidence of any prior or contemporaneous
agreement.  The parties further intend that this Agreement shall
constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding to vary the terms of this Agreement.


 


13.                               Amendments; Waivers.  This Agreement may not be
modified, amended, or terminated except by an instrument in writing, signed by
the Executive and a duly authorized officer of Company.  By an instrument
in writing similarly executed, the Executive or a duly authorized officer of
the Company may waive compliance by the other party or parties with any
provision of this Agreement that such other party was or is obligated to comply
with or perform; provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure.  No failure to exercise and no delay in
exercising any right, remedy, or power hereunder preclude any other or further
exercise of any other right, remedy, or power provided herein or by law or in
equity.  Notwithstanding anything herein to the contrary, no amendment may
be made to this Agreement if it would cause the Agreement or any payment
hereunder not to be in compliance with Code Section 409A.


 


14.                               No Inconsistent Actions.  The parties hereto shall not
voluntarily undertake or fail to undertake any action or course of action
inconsistent with the provisions or essential intent of this Agreement. 
Furthermore, it is the intent of the parties hereto to act in a fair and
reasonable manner with respect to the interpretation and application of the
provisions of this Agreement.


 


15.                               Construction.  This Agreement shall be deemed
drafted equally by both the parties.  Its language shall be construed as a
whole and according to its fair meaning.  Any presumption or principle
that the language is to be construed against any party shall not apply. 
The headings in this Agreement are only for convenience and are not intended to
affect construction or interpretation.  Any references to paragraphs,
subparagraphs, sections or subsections are to those parts of this Agreement,
unless the context clearly indicates to the contrary.  Also, unless the
context clearly indicates to the contrary, (a) the plural includes the
singular and the singular includes the plural; (b) “or” is used both
conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every”
means “any and all,” and “each and every”; (d) “includes” and “including”
are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and
other similar compounds of the word “here” refer to the entire Agreement and
not to any particular paragraph, subparagraph, section or subsection; and (f) all
pronouns and any variations thereof shall be deemed to refer to the masculine,
feminine, neuter, singular or plural as the identity of the entities or persons
referred to may require.


 


16.                               Enforcement.  If any provision of this Agreement
is held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully
severable; this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a portion of this
Agreement; and the remaining provisions of this Agreement shall remain in full
force and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance from this Agreement.  Furthermore, in lieu
of such illegal, invalid or unenforceable provision there shall be added
automatically as part of this Agreement a provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and be legal,
valid and enforceable.


 


17.                               Withholding.  The Company shall be entitled to
withhold from any amounts payable under this Agreement any federal, state,
local or foreign withholding or other taxes or charges that the Company is
required to withhold.  The Company shall be entitled to rely on an opinion
of counsel if any questions as to the amount or requirement of withholding
shall arise.


 


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18.                               Employee Acknowledgement.  The Executive acknowledges that he
has read and understands this Agreement, is fully aware of its legal effect and
has consulted with legal counsel as to its legal effect, has not acted in
reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely
based on his judgment.


 


19.                               Survival.  The expiration or termination of
the Term shall not impair the rights or obligations of any party hereto, which shall
have accrued prior to such expiration or termination.


 


20.                               Disputes.  All disputes between the parties
arising from or in connection with this Agreement or the Executive’s employment
hereunder, including those relating to the existence and validity of this
agreement to arbitrate, shall be submitted to full and binding arbitration in
Hartford, Connecticut, before a panel of three arbitrators and administered by
the American Arbitration Association under its National Rules for the
Resolution of Employment Disputes, and judgment upon the award rendered by the
arbitrators may be entered by any court having jurisdiction thereof.  Each
party shall be responsible for its own costs and expenses of such
arbitration.  Notwithstanding the foregoing, nothing in this Section 20
shall prevent or otherwise hinder the ability of the Company to seek injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions in connection with any controversy or claim arising out
of or relating to the Agreement Not to Compete.


 


21.                               Representation by the
Executive. 
The Executive represents and warrants that his entering into this Agreement
does not, and that his performance under this Agreement will not, violate the
provisions of any agreement or instrument to which the Executive is a party or
any decree, judgment or order to which the Executive is subject, and that this
Agreement constitutes a valid and binding obligation of the Executive in
accordance with its terms.  Breach of the representation contained in this
Section 21 will render all of the Company’s obligations under this
Agreement void ab initio.


 


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


 


 


	
   

  	
   

  	
   

  	
  /s/ Alan N. Forman

  
	
   

  	
   

  	
   

  	
  Alan N. Forman

  
	
   

  	
   

  	
   

  	
  201 Barnard Road

  
	
   

  	
   

  	
   

  	
  New Rochelle, New York
  10801

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  SPECIALIZED TECHNOLOGY
  RESOURCES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Barry A. Morris

  
	
   

  	
   

  	
   

  	
   

  	
  Barry A. Morris

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice
  President and Chief Financial Officer

  



 


SIGNATURE PAGE FOR
EMPLOYMENT AGREEMENT (FORMAN)


 


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Appendix
A


 


Agreement
Not To Compete


 


EXECUTION COPY


 


AGREEMENT
NOT TO COMPETE


 


This Agreement Not To
Compete (this “Agreement”) dated as of April 12, 2010 (the “Effective
Date”), is made by and between SPECIALIZED TECHNOLOGY RESOURCES, INC., a
Delaware corporation (together with any successor thereto, the “Company”),
and ALAN N. FORMAN, of New Rochelle, New York (the “Employee”).


 


Recitals


 


A.                                   Contemporaneously with the execution
hereof, the Company and Employee are executing an Employment Agreement (the “Employment
Agreement”) pursuant to which the Company will employ Employee as its Vice
President and General Counsel.


 


B.                                     Pursuant to the Employment Agreement,
Employee has agreed to enter into this Agreement as a condition of his
employment.


 


Terms


 


In consideration of the
Employment Agreement, the respective agreements of the parties herein and other
good and valuable consideration received by each party from the other, the
parties agree as follows:


 


1.                                       Defined Terms. Any capitalized term used herein but not
defined shall have the meaning ascribed to such term in the Employment
Agreement.


 


2.                                       Agreement Not to Compete. For a period equal to the term of
Employee’s employment with the Company and through the date which is nine (9) months
following the Employee’s Date of Termination for any reason (the “Initial
Noncompetition Period”), Employee shall not, without the prior written
consent of the Company, and whether as employee, principal, agent, shareholder,
partner, consultant, advisor, limited liability company manager or member,
director, or otherwise, directly or indirectly, compete with the Company or any
subsidiary of the Company in the business of manufacturing solar panel
encapsulent, or the business of providing consumer product quality assurance
services to third parties (collectively, the “Business”). The making or
guarantying of a loan, lease or any other financial arrangement to, with or for
any person or entity that engages in any of the activities described in the
preceding sentence shall be deemed a breach of the covenant set forth in the
preceding sentence. However, Employee may purchase or own up to 1% of the
outstanding stock of any publicly traded corporation that competes with the
Company or any Company Affiliate, but may not be employed by or otherwise
participate in the activities of such corporation. For purposes of this
agreement, “Company Affiliate” means any entity directly or indirectly
controlled by the Company, and also includes STR Holdings, Inc. and any of
its direct or indirect subsidiaries.


 


The Company shall have
the option to extend the Initial Noncompetition Period for an additional twelve
(12) months (the “Extended Noncompetition Period” and, together with the
Initial Noncompetition Period, the “Noncompetition Period”); provided,
that the Company gives the Executive written notice of such extension at least
six (6) months prior to the expiration of the Initial Noncompetition
Period, and agrees to pay to the Employee, in accordance with the Company’s
regular payroll practice, the Executive’s Annual Base Salary, and to continue
the 


 


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Executive’s participation
in the Company’s health and life insurance and retirement plans through the
Extended Noncompetition Period.


 


Employee represents and
warrants that he does not own, directly, indirectly, in whole or in part,
beneficially or otherwise, any company or enterprise that competes with or
participates in the Business, or otherwise engage in any activity that would
violate this Section 1.


 


3.                                       Confidential Information;
Non-Solicitation; Non-Disparagement; Inventions.


 


(a)                                  Employee acknowledges that he will occupy
a position of trust and confidence with the Company and may become familiar
with the following, any and all of which constitute confidential information of
the Company or Company Affiliates (collectively, the “Confidential
Information”): (i) all information related to vendors, suppliers and
customers, including, without limitation, customer lists, the identities of
existing, past or prospective customers and acquisition targets, prices charged
or proposed to be charged to customers, customer contacts, special customer
requirements and all related information; (ii) all marketing plans,
materials and techniques; (iii) all methods of business operation and
related procedures of the Company or Company Affiliates; and (iv) all
patterns, devices, compilations of information, copyrightable material and
technical information, if any, in each case that relates in any way to the
Business of the Company or any Company Affiliate.


 


(b)                                 Employee acknowledges and agrees that all
Confidential Information learned or obtained by him is the property of the
Company or a Company Affiliate. Therefore, Employee shall not at any time
disclose to any unauthorized persons or use for his own account or for the
benefit of any third party any Confidential Information, whether Employee has
such information in his memory or embodied in writing or other physical form,
without the Company’s prior written consent (which it may grant or withhold in
its sole discretion), unless and to the extent that the Confidential
Information is or becomes generally known to and available for use by the
public other than as a result of Employee’s fault or, to Employee’s knowledge, the
fault of any other person bound by a duty of confidentiality to the Company or
any Company Affiliate. Employee agrees to deliver to the Company at any time
the Company may request, all documents, memoranda, notes, plans, records,
reports, and other documentation, models, components, devices, or computer
software, whether embodied in a disk or in other form (and all copies of all of
the foregoing), relating to the businesses, operations, or affairs of the
Company or any Company Affiliate and any other Confidential Information that
Employee may then possess or have under Employee’s control.


 


(c)                                  If the Employee or any entity controlled
by Employee (an “Employee Affiliate”) is required by law to disclose any
Confidential Information, Employee shall promptly notify the Company in writing
so that the Company may seek a protective order or other motion to prevent or
limit the production or disclosure of such information. If such motion has been
denied, then the person required to disclose such information may disclose only
such portion of such information that, based on advice of Employee’s outside
legal counsel, is required by law to be disclosed (provided that the person
required to disclose such information shall use all reasonable efforts to
preserve the confidentiality of the remainder of such information). Employee
shall continue to be bound by his obligations pursuant to this Agreement for
any information that is not required to be disclosed, or that has been afforded
protective treatment, pursuant to such motion.


 


(d)                                 During the Noncompetition Period,
Employee will not, and will not permit any Employee Affiliate to, directly or
indirectly, (a) recruit or otherwise solicit or induce any employee,
customer, subscriber or supplier of the Company or any Company Affiliate to  terminate its employment or arrangement
with the Company or any Company Affiliate, otherwise change its relationship
with the Company or any Company Affiliate, or establish any relationship with
Employee or any Employee Affiliate to compete in the Business or (b) without
the Company’s prior written consent, hire any employee of the Company or any
Company Affiliate, including any person whose employment with the Company or
any Company Affiliate is terminated by such employee without Good Reason.


 


(e)                                  During the Noncompetition Period,
Employee agrees not to disparage in any material respect the Company or any
Company Affiliate, any of their respective products or practices, or any of
their respective directors, officers, managers, agents, representatives,
stockholders, members or affiliates, either orally or 


 


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in writing. The Company
and any Company Affiliates (including without limitation any officers or
directors of the Company or any Company Affiliate) agree not to disparage in
any material respect the Employee either orally or in writing. Notwithstanding
the forgoing, nothing contained herein shall limit the ability of either party,
as applicable, to provide truthful testimony as required by law or any judicial
or administrative process.


 


(f)                                     All rights to discoveries, inventions,
improvements and innovations (including all data and records pertaining
thereto) related to the Business of the Company or any Company Affiliate,
whether or not patentable, copyrightable, registrable as a trademark, or
reduced to writing, that Employee may discover, invent or originate during the
term of Employee’s consulting arrangement or employment with the Company or any
Company Affiliate, and for a period of 12 months thereafter, either alone or
with others and whether or not during working hours or by the use of the
facilities of either the Company or any of its subsidiaries (“Inventions”),
shall be the exclusive property of the Company. Employee shall promptly disclose
all Inventions to the Company, shall execute at the request of the Company any
assignments or other documents the Company may deem necessary to protect or
perfect its rights therein, and shall assist the Company, at the Company’s
expense, in obtaining, defending and enforcing the Company’s rights therein.
Employee hereby appoints the Company as his attorney-in-fact to execute on his
behalf any assignments or other documents deemed necessary by the Company to
protect or perfect its rights to any Inventions.


 


4.                                       Remedies. The necessity of protection against the competition
of Employee and the nature and scope of such protection has been carefully
considered and agreed upon by the parties hereto. Employee and the Company
acknowledge that the duration, scope and geographic area applicable to the
restrictions set forth in this Agreement are fair, reasonable and necessary.
Employee acknowledges that the consideration provided for herein is sufficient
and adequate to compensate Employee for agreeing to the restrictions contained
in this Agreement and that such restrictions will not cause him undue hardship.
If, however, any court determines that the foregoing restrictions are
unreasonable and for that reason unenforceable, such restrictions shall be
modified, rewritten or interpreted to include as much of their nature and scope
as will render them enforceable. Employee and the Company agree that a monetary
remedy for a breach of this Agreement will be inadequate and will be
impracticable and extremely difficult to prove, and further agree that such a
breach would cause the Company irreparable harm, and that the Company and the
Company Affiliates shall be entitled to temporary and permanent injunctive
relief without the necessity of proving actual damages. Employee agrees that
the Company and the Company Affiliates shall be entitled to such injunctive
relief, including temporary restraining orders, preliminary injunctions and
permanent injunctions, without the necessity of posting bond or other
undertaking in connection therewith.


 


5.                                       Notices. Notices sent by the Company or Employee hereunder
shall be made in writing to such party at the below addresses or as the Company
and Employee may otherwise agree in writing.


 


If to the Company, to:


 


Specialized Technology Resources, Inc.


10 Water Street


Enfield, Connecticut
06082-4899


Attn: Barry A. Morris


Facsimile: (860) 749-9158


 


If to the Employee, at
the address set forth on the signature page hereto.


 


6.                                       Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.


 


7.                                       Headings. The headings herein are for convenience only, do not
constitute part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.


 


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8.                                       Entire Understanding. This Agreement and the other agreements
and instruments incorporated herein constitute the entire agreement and
understanding between the parties, and supersede all prior agreements and
understandings, both written and oral, between the parties hereto with respect
to the subject matter hereof.


 


9.                                       Amendments. This Agreement may not be modified or changed except
by written instrument signed by each of the parties hereto that expressly
states the intention of the parties to modify or change this Agreement.


 


10.                                 Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York, without
regard to principles of conflicts of laws.


 


11.                                 Construction. Whenever in this Agreement the context
so requires, references to the masculine shall be deemed to include feminine
and the neuter, references to the neuter shall be deemed to include the masculine
and feminine, and references to the plural shall be deemed to include the
singular and the singular to include the plural.


 


12.                                 Cooperation. Each party hereto shall cooperate with
the other party and shall take such further action and shall execute and
deliver such further documents as may be necessary or desirable in order to
carry out the provisions and purposes of this Agreement.


 


13.                                 Waiver. Employee or the Company may, by express written
notice to the other: (i) waive any inaccuracies in the representations or
warranties of the other party contained in this Agreement or in any document
delivered pursuant to this Agreement; (ii) waive compliance with any of
the covenants of the other party contained in this Agreement; or (iii) waive
or modify performance of any of the obligations of the other party. No action
taken pursuant to this Agreement shall be deemed to constitute a waiver by the
party taking such action, possessing such knowledge or performing such
investigation of compliance with the representations, warranties, covenants and
agreements contained herein. The waiver by any party hereto of a breach of any
provision of this Agreement shall not operate or be constituted as a waiver of
any subsequent breach. The failure of any party to insist, in any one or more
instances, upon performance of any of the terms, covenants or conditions of
this Agreement shall not be construed as a waiver or relinquishment of any
rights granted hereunder or any such term, covenant or condition.


 


14.                                 Knowledge and Skill. THE EMPLOYEE REPRESENTS AND WARRANTS
THAT THE KNOWLEDGE, SKILLS AND ABILITIES HE OR SHE POSSESSES AT THE TIME OF
COMMENCEMENT OF EMPLOYMENT HEREUNDER ARE SUFFICIENT TO PERMIT HIM OR HER, IN
THE EVENT OF TERMINATION OF HIS OR HER EMPLOYMENT HEREUNDER, TO EARN A
LIVELIHOOD SATISFACTORY TO HIMSELF WITHOUT VIOLATING ANY PROVISION HEREOF, FOR
EXAMPLE, BY USING SUCH KNOWLEDGE, SKILLS AND ABILITIES, OR SOME OF THEM, IN THE
SERVICE OF A NON-COMPETITOR.


 


15.                                 Interpretation of Agreement. Each party hereto cooperated in the
drafting and preparation of this Agreement and the documents referred to
herein, and any and all drafts relating thereto shall be deemed the work
product of the parties and may not be construed against any party by reason of
its preparation. Accordingly, any rule of law, or any legal decision that
would require interpretation of any ambiguities in this Agreement against the
party that drafted it, is of no application and is hereby expressly waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intentions of the parties regarding this Agreement.


 


16.                                 Parties in Interest; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
permitted successors, assigns, heirs and/or personal representatives, except
that neither this Agreement nor any interest herein shall be assigned or
assignable by operation of law or otherwise by Employee without the prior
written consent of the Company. Nothing in this 


 


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Agreement, expressed or
implied, is intended to confer on any person other than the parties and their
respective successors and permitted assigns any rights or remedies under or by
reason of this Agreement.


 


17.                                 Severability. If, notwithstanding the express,
carefully considered agreement of the Company and Employee set forth herein,
any provision of this Agreement shall be deemed invalid, unenforceable or
illegal, or if the period during which this Agreement is to remain effective is
found to exceed the legally permissible period or the territory with respect to
which this Agreement is to be effective is found to exceed the legally
permissible territory, then notwithstanding such invalidity, unenforceability
or illegality the remainder of this Agreement  shall continue in full force and effect during the
maximum period and for the maximum territory legally permissible.


 


18.                                 Waiver of Jury Trial. Consistent with the intention of Section 10,
the Company and Employee each further waives its or his respective right to a
jury trial of any claim or cause of action arising out of this Agreement or any
dealings between them relating to the subject matter of this Agreement. The
scope of this waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
Agreement, including, without limitation, contract claims, tort claims, and all
other common law and statutory claims. This waiver is irrevocable, meaning that
it may not be modified either orally or in writing, and this waiver shall apply
to any subsequent amendments, supplements or other modifications to this
Agreement or to any other document or agreement relating to the transactions contemplated
by this Agreement.


 


19.                                 Specific Performance and Other Equitable
Relief. Without
in any way limiting the provisions of Section 4, Employee acknowledges
that the remedies at law of the Company and Company Affiliates for failure of
Employee to perform any act required to be performed by Employee under this
Agreement are inadequate and, therefore, that the Company and Company
Affiliates shall be entitled to specific performance of this Agreement by
Employee and to such other equitable relief as a court may deem appropriate to
prevent any further violation of this Agreement by Employee, and to exercise
such remedies cumulatively or in conjunction with all other rights and remedies
provided by law or under this Agreement.


 


20.                                 Full Understanding. Employee represents that he fully
understands his right to discuss all aspects of this Agreement with his private
attorney, and that to the extent, if any, Employee desired, Employee availed
himself of this right. Employee further represents that he has carefully read
and fully understands all of the provisions of this Agreement, that Employee is
competent to execute this Agreement, that Employee’s agreement to execute and
deliver this Agreement has not been obtained by any duress and that Employee
freely and voluntarily enters into it, and that Employee has read this
Agreement in its entirety and fully understands the meaning, intent and
consequences of this Agreement.


 


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IN WITNESS WHEREOF, the
parties hereto have executed this Agreement Not to Compete as of the date first
written above.


 


 


	
   

  	
  /s/ Alan N. Forman

  
	
   

  	
  Alan N. Forman

  
	
   

  	
  201 Barnard Road

  
	
   

  	
  New Rochelle, New York
  10801

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SPECIALIZED TECHNOLOGY
  RESOURCES, INC.,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Barry A. Morris

  
	
   

  	
   

  	
  Barry A. Morris

  
	
   

  	
   

  	
  Executive Vice
  President and Chief Financial Officer

  



 


SIGNATURE PAGE FOR
NON-COMPETE AGREEMENT (FORMAN)


 


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