Exhibit 10.24


 


RESTRICTED COMMON STOCK AGREEMENT 

FOR HOLDERS OF F UNITS


 


RESTRICTED COMMON STOCK
AGREEMENT (this “Agreement”) made as of [                              ],
by and between STR Holdings, Inc., a Delaware corporation (the “Company”),
and [                    ]
(the “Holder”).


 


WHEREAS, STR Holdings LLC (“Old LLC”) entered into
that certain Incentive Unit Grant Agreement with the Holder dated as of [            ]
(the “Grant Agreement”), whereby Old LLC granted incentive units of Old LLC to the
Holder;


 


WHEREAS, on the date hereof, Old LLC will enter into
a corporate reorganization, whereby the unitholders of Old LLC will become
unitholders of STR Holdings (New) LLC (“New LLC”);


 


WHEREAS, pursuant to that certain Plan of Conversion
by New LLC, dated as of [            ]
(the “Plan of Conversion”), New LLC filed with the Secretary of State of the
State of Delaware a certificate of conversion converting New LLC into the
Company and automatically converting the membership interests of New LLC into
shares of common stock, par value $0.01 per share (“Common Stock”), of the
Company;


 


WHEREAS, due to the conversion of New LLC into the
Company, any unvested incentive units of Old LLC granted pursuant to the Grant
Agreement and converted in the corporate reorganization into unvested incentive
units of New LLC shall be converted from unvested incentive units of New LLC into
Restricted Shares (as defined below) subject to the terms and conditions herein;


 


WHEREAS, in consideration of the mutual covenants
contained herein, the receipt and sufficiency of which are hereby acknowledged;
and


 


WHEREAS, certain capitalized terms used herein are
defined in Section 6 hereof.


 


NOW, THEREFORE, the parties hereto agree as follows:


 


1.                                       Restricted
Shares.  Subject to the terms and
conditions of this Agreement and pursuant to the Plan of Conversion, the
Company hereby issues to the Holder [        ]
shares of Common Stock (the “Restricted Shares”).


 


2.                                       Holder
Representations and Warranties.


 


(a)                                  As an
inducement to the Company to issue the Restricted Shares to the Holder and as a
condition thereto, the Holder represents, acknowledges and agrees (as
applicable) that this Agreement constitutes the legal, valid and binding
obligation of the Holder, enforceable against the Holder in accordance with its
terms, except to the extent the enforceability thereof may be limited by
bankruptcy laws, insolvency laws, moratorium laws or other laws affecting
creditors’ rights generally or by general equitable principles, and the
execution, delivery and performance of this Agreement by the Holder does not
and will not conflict with, violate or cause 


 

















 


a breach of any agreement,
contract or instrument to which the Holder is a party or any judgment, order or
decree to which the Holder is subject.


 


(b)                                 In addition,
the Holder represents, acknowledges and agrees (as applicable) that:


 


(i)                                     (x) the Restricted
Shares have not been registered under the Securities Act, (y) the
Restricted Shares are restricted securities under the Securities Act and (z) the
Restricted Shares may not be resold or transferred unless they are first
registered under the Securities Act or unless an exemption from such
registration is available;


 


(ii)                                  the Holder hereby makes the
representations and warranties set forth in Exhibit A hereto; and


 


(iii)                               the Company may, but shall
not be obligated to, register or qualify the issuance, or the resale, of any of
the Restricted Shares under the Securities Act or any other applicable law.


 


3.                                       Vesting of
Shares.


 


(a)                                  All Restricted
Shares shall initially be unvested.


 


(b)                                 Time-Vesting.  All
of the Restricted Shares shall vest based on the passage of time.


 


(i)                                     Vesting Schedule.  Subject to Section 3(b)(ii), the Restricted
Shares shall vest on June 15, 2010.


 


(ii)                                  Acceleration upon Change of
Control.  Upon the occurrence of a
Change of Control, all then unvested Restricted Shares shall immediately vest
in full, so long as the Holder holds unvested Restricted Shares on the date of
the Change of Control.


 


4.                                       Legend.


 


(a)                                  Each
certificate representing Restricted Shares shall bear each of the following
legends.


 


“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY, THAT
SUCH REGISTRATION IS NOT REQUIRED.”


 


“THE
SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR EXCHANGED UNLESS
SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OR
EXCHANGE COMPLIES WITH THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT AND THE
RESTRICTED COMMON STOCK AGREEMENT, 


 

















 


EACH
AS AMENDED FROM TIME TO TIME, BETWEEN OR AMONG THE COMPANY AND THE INVESTORS
PARTY THERETO.  IN ADDITION TO
RESTRICTIONS ON TRANSFER, THE RESTRICTED COMMON STOCK AGREEMENT PROVIDES FOR
THE VESTING OF THE SHARES ACCORDING TO THE SPECIFIC PROVISIONS OF THE
RESTRICTED COMMON STOCK AGREEMENT. 
COPIES OF THE REGISTRATION RIGHTS AGREEMENT AND THE RESTRICTED COMMON
STOCK AGREEMENT ARE ON FILE WITH THE COMPANY.”


 


(b)                                 The
certificates shall also bear any legend required by any applicable state
securities law.


 


(c)                                  The
certificates shall be deposited by the Holder, together with a stock power
endorsed in blank, with the Company, to be held in escrow during any
restriction period.


 


5.                                       Restrictions on
Transfer and Conversion.


 


(a)                                  The Company and
the Holder acknowledge and agree that the Restricted Shares are subject to and
restricted by this Agreement.  Once
vested, the Restricted Shares shall no longer be restricted by the terms of
this Agreement but shall be subject to the restrictions set forth in the Registration
Rights Agreement and the Securities Act.


 


(b)                                 The Restricted
Shares shall only be transferable to Permitted Transferees of the Holder. Any
attempt to Transfer any of the Restricted Shares to Persons other than
Permitted Transferees of the Holder shall be null and void and have no force or
effect, and the Company shall not, and shall cause any transfer agent not to,
give any effect in such entity’s share records to such attempted Transfer.


 


(c)                                  The Holder
acknowledges that the transfer restrictions contained in this Agreement are
reasonable and in the best interests of the Company.


 


6.                                       Definitions.


 


The following terms shall have the meanings ascribed
below:


 


“Affiliate” of any Person means any Person that
directly, or indirectly through one or more intermediaries, Controls, is
Controlled by or is under common Control with such Person.


 


“Change of Control” means:


 


(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 other than any of the Existing Stockholders or any of
their respective Affiliates;


 


(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 by a “person” or “group”
(as such terms are used in the Exchange Act) that does not include any of the
Existing Stockholders or any of their respective Affiliates;


 

















 


(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 by a “person” or “group”
(as such terms are used in the Exchange Act) that does not include any of the
Existing Stockholders or any of their respective Affiliates; or


 


(iv)                              the sale or Transfer by the
DLJMB Stockholders to a prospective purchaser (other than a Permitted
Transferee) of fifty percent (50%) or more of their original beneficial
ownership of the Company.


 


“Control” and “Controlled”
mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.


 


“DLJMB Stockholders” means DLJ Merchant Banking
Partners IV, L.P., DLJMB Offshore Partners IV, L.P., DLJ Merchant Banking
Partners IV (Pacific), L.P. and MBP IV Plan Investors, L.P., DLJ Merchant
Banking Partners IV (Co-Investments), L.P., together with any Permitted
Transferees thereof.


 


“Exchange Act” means the Securities Exchange Act of
1934, as amended and the rules and regulations promulgated thereunder.


 


“Existing Stockholders” means each of the
Stockholders other than the Management Stockholders.


 


“Initial Public Offering” means the underwritten
initial public offering of Common Stock of the Company pursuant to an effective
registration statement filed under the Securities Act.


 


“Management Stockholder” means any Stockholder who
is an employee of the Company or any of its subsidiaries.  In no event shall any DLJMB Stockholder be
deemed to be a Management Stockholder.


 


“Other Stockholder” means each of the Stockholders
other than the DLJMB Stockholders, the Management Stockholders and the Whitney
Stockholders.


 


“Permitted Transferees” means (i) in the case
of any DLJMB Stockholder, (A) any other DLJMB Stockholder, (B), any actual
or prospective shareholder, member or general or limited partner of any DLJMB
Stockholder (a “DLJMB Partner”), and any corporation, partnership, limited
liability company, or other entity that is an Affiliate of any DLJMB Partner
(collectively, “DLJMB Affiliates”), (C) any managing director, general partner,
director, limited partner, officer or employee of any DLJMB Stockholder or any
DLJMB Affiliate, or any spouse, lineal descendant, sibling, parent, heir,
executor, administrator, testamentary trustee, legatee or beneficiary of any of
the foregoing persons described in this clause (C) (collectively, “DLJMB
Associates”) or (D) any trust the beneficiaries of which, or any corporation,
limited liability company or partnership the stockholders, members or general
or limited partners of which, include only such DLJMB Stockholders, DLJMB
Affiliates, DLJMB Associates, their spouses or other lineal descendants;


 


(ii)                                  in the case of any Other
Stockholder, (A) any entity that is an Affiliate of such Other
Stockholder, (B) any actual or prospective shareholder, member or general
or limited 


 

















 


partner of any such Other
Stockholder, and any corporation, partnership, limited liability company, or
other entity that is an Affiliate of any such Other Stockholder, (C) any
spouse, lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of such Other Stockholder, or (D) a
trust that is for the exclusive benefit of such Other Stockholder or its
Permitted Transferees under clause (B) above;


 


(iii)                              in the case of
any Whitney Stockholders, any other Whitney Stockholder; and


 


(iv)                              in the case of
any Management Stockholder, (A) any spouse, lineal descendant, sibling,
parent, heir, executor, administrator, testamentary trustee, legatee or
beneficiary of the Holder, (B) a trust that is for the exclusive benefit
of the Holder or the transferees listed in (A) above or (C) a limited
liability company or corporation, all of the outstanding capital stock or
membership interests of which is of record and beneficially owned by the Holder
or any of those Persons in clause (A) above.


 


“Person” means any individual or any general
partnership, limited partnership, limited liability company, corporation, joint
venture, trust, business trust, cooperative, association or other entity and,
where the context so permits, the legal representatives, successors in interest
and permitted assigns of such Person.


 


“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of [                    ],
among the Company and certain stockholders of the Company, as amended, modified
or supplemented from time to time.


 


“Securities Act” means the Securities Act of 1933, as amended, or
any successor federal law then in force.


 


“Stockholder” means each Person who held Common
Stock of the Company prior to the Initial Public Offering together with any
Permitted Transferees thereof, so long as such Person or Permitted Transferee
thereof holds such Common Stock.


 


“Transfer” means the sale, transfer, assignment, pledge or other
disposal (whether with or without consideration and whether voluntarily or
involuntarily or by operation of law) of any Restricted Shares.


 


“Whitney Stockholder” means Prairie Fire Trust, Michael
R. Stone, Michael R. Stone 2008 GRAT, MRS Trust, Harrington Sound, LLC and Paul
Vigano.


 


7.                                       General
Provisions.


 


(a)                                  Notices.  Any notification required by the terms of
this Agreement shall be given in writing and shall be deemed effective upon personal
delivery or within three (3) days of deposit with the United States Postal
Service, by registered or certified mail, with postage and fees prepaid.  A notice shall be addressed to the Company at
its principal executive office and to the Holder at the address that he or she
most recently provided to the Company.


 


(b)                                 Survival of
Representations, Warranties and Agreements.  All representations, warranties and
agreements contained herein shall survive indefinitely, including following
termination of this Agreement.


 

















 


(c)                                  Entire
Agreement.  This
Agreement and the Registration Rights Agreement shall constitute the entire
contract between the parties hereto with regard to the subject matter
hereof.  They supersede any other
agreements, representations or understandings (whether oral or written and
whether express or implied) which relate to the subject matter hereof.


 


(d)                                 Waiver.  No waiver of any breach or condition of this
Agreement shall be deemed to be a waiver of any other or subsequent breach or
condition whether of like or different nature.


 


(e)                                  Successors and
Assigns.  The provisions of this
Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and upon the Holder, the Holder’s assigns and the
legal representatives, heirs and legatees of the Holder’s estate, whether or
not any such person shall have become a party to this Agreement and have agreed
in writing to be joined herein and be bound by the terms hereof.


 


(f)                                    Choice of Law;
Jurisdiction; Waiver of Jury Trial.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF DELAWARE WITHOUT
REGARD TO CONFLICTS OF LAWS.


 


SUBJECT TO THE TERMS OF THIS AGREEMENT, THE PARTIES AGREE THAT ANY AND
ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AGREEMENT SHALL BE LITIGATED IN
THE FEDERAL OR STATE COURTS IN DELAWARE. 
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY IRREVOCABLY
SUBMITS TO THE PERSONAL JURISDICTION OF SUCH COURTS FOR ITSELF, HIMSELF, OR
HERSELF AND IN RESPECT OF ITS, HIS OR HER PROPERTY WITH RESPECT TO SUCH
ACTION.  EACH PARTY AGREES THAT VENUE
WOULD BE PROPER IN ANY OF SUCH COURTS, AND HEREBY WAIVES ANY OBJECTION THAT ANY
SUCH COURT IS AN IMPROPER OR INCONVENIENT FORUM FOR THE RESOLUTION OF ANY SUCH
ACTION.


 


EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL
BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS AGREEMENT.


 


(g)                                 Amendment.  The Board of Directors of the Company, or the
Compensation Committee thereof, may amend or alter this Agreement and the
Restricted Shares issued hereunder at any time; provided that, no such
amendment or alteration shall be made without the consent of the Holder if such
action would materially diminish any of the rights of the Holder under this
Agreement or with respect to the Restricted Shares.


 


(h)                                 Employment
Rights.  Neither this Agreement nor any
of its provisions is intended to confer or should be construed as conferring
any rights on the Holder to continued employment with the Company or any rights
of employment for a fixed term.  No
contract of employment, express or implied, is created hereby and nothing
contained herein shall be construed as creating a joint venture, partnership,
agency or other enterprise between the parties.


 


(i)                                     No Waiver;
Modifications in Writing.  No
waiver of or consent to any departure from any provision of this Agreement
shall be effective unless signed in writing by the party entitled to the
benefit thereof; provided, however, that the Company may amend, modify or 


 

















 


terminate the terms of the
Restricted Shares in accordance with the terms in the Company’s Certificate of
Incorporation.


 


(j)                                     Severability. The provisions of this
Agreement are severable and if any one or more provisions are determined to be
illegal or otherwise unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.


 


(k)                                  Signature in
Counterparts.  This
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.


 


[SIGNATURE PAGE
FOLLOWS]


 

















 


IN WITNESS WHEREOF, the parties hereto have executed this Restricted Common
Stock Agreement as of the date first written above.


 


 


	
   

  	
  STR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title

  
	
   

  	
   

  
	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 





















 


EXHIBIT
A


 


Investment Representations
and Warranties


 


The Holder hereby represents
and warrants to the Company that:


 


1.                                       The Restricted
Shares received by him will be held by him for investment only for his own
account, not as a nominee or agent, and not with a view to the sale or
distribution of any part thereof in violation of applicable U.S. federal or
state or foreign securities laws.  The Holder has no current
intention of selling, granting participation in or otherwise distributing the
Restricted Shares in violation of applicable U.S. federal or state or foreign
securities laws.  The Holder does not have
any contract, undertaking, agreement or arrangement with any person or entity
to sell, transfer or grant participation to such person or entity, or to any
third person or entity, with respect to any of the Restricted Shares, in each
case, in violation of applicable U.S. federal or state or foreign securities
laws.


 


2.                                       The Holder understands
that the Restricted Shares have not been registered under the Securities Act or
any applicable U.S. federal, state or foreign securities laws, and that the
Restricted Shares are being issued in reliance on an exemption from
registration, which exemption depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Holder’s
representations as expressed herein.


 


3.                                       The Holder has such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of his owning the Restricted Shares.  The Holder is a
sophisticated investor, has relied upon independent investigations made by the Holder and, to the
extent believed by the Holder to be appropriate, the Holder’s
representatives, including the Holder’s own
professional, tax and other advisors, and is making an independent decision to
invest in the Restricted Shares.  The Holder has been
furnished with such documents, materials and information that the Holder deems
necessary or appropriate concerning the terms and conditions of the
transactions contemplated by the Agreement and the Holder’s holding of
the Restricted Shares and for evaluating an investment in the Company, and the Holder has read
carefully such documents, materials and information and understands and has
evaluated the types of risks involved with holding the Restricted Shares.  The Holder has not relied
upon any representations or other information (whether oral or written) from
the Company or its stockholders, directors, officers or affiliates, or from any
other person or entity, in connection with his investment in the Restricted
Shares.  The Holder acknowledges
that the Company has not given any assurances with respect to the tax
consequences of the ownership and disposition of the Restricted Shares.


 


4.                                       The Holder understands
that no U.S. federal or state or foreign agency has passed upon the Restricted
Shares or upon the Company, or upon the accuracy, validity or completeness of
any documentation provided to the Holder in connection
with the transactions contemplated by the Agreement, nor has any such agency
made any finding or determination as to holding the Restricted Shares.


 


5.                                       The Holder understands
that there are substantial restrictions on the transferability of the
Restricted Shares and that on the date of the Agreement and for an indefinite
period thereafter there will be no public market for the Restricted Shares and,
accordingly, it may not be possible for the Holder to liquidate
his investment in case of emergency, if at all. 
In addition, the Holder understands that the
Agreement contains substantial restrictions on the 


 

















 


transferability of the
Restricted Shares and provide that, in the event that the conditions relating
to the transfer of any Restricted Shares in such document have not been
satisfied, the holder shall not transfer any such Restricted Shares, and unless
otherwise specified the Company will not recognize the transfer of any such
Restricted Shares on its books and records or issue any share certificates
representing any such Restricted Shares, and any purported transfer not in
accordance with the terms of the Agreement shall be void.  As such, Holder understands
that: a restrictive legend or legends in a form to be set forth in the Agreement
will be placed on the certificates representing the Restricted Shares; a
notation will be made in the appropriate records of the Company indicating that
each of the Restricted Shares are subject to restrictions on transfer and, if
the Company should at some time in the future engage the services of a
securities transfer agent, appropriate stop-transfer instructions will be
issued to such transfer agent with respect to the Restricted Shares; and the Holder will sell,
transfer or otherwise dispose of the Restricted Shares only in a manner
consistent with the Holder’s representations set forth
herein and then only in accordance with the Agreement.


 


6.                                       The Holder understands
that (i) the Restricted Shares may not be sold, transferred or otherwise
disposed of without registration under the Securities Act or an exemption
therefrom, (ii) the Restricted Shares have not been registered under the
Securities Act; (iii) the Restricted Shares must be held indefinitely and
he must continue to bear the economic risk of holding the Restricted Shares
unless such shares are subsequently registered under the Securities Act or an
exemption from such registration is available; (iv) the Holder is prepared to
bear the economic risk of holding the Restricted Shares for an indefinite
period of time; (v) it is not anticipated that there will be any public
market for the Restricted Shares; (vi) the Restricted Shares are
characterized as “restricted securities” under the U.S. federal securities
laws; and (vii) the Restricted Shares may not be sold, transferred or
otherwise disposed of except in compliance with federal, state and local law.


 


7.                                       The Holder understands
that an investment in the Restricted Shares is not recommended for investors
who have any need for a current return on this investment or who cannot bear
the risk of losing their entire investment. 
In that regard, the Holder understands that his
holding the Restricted Shares involves a high degree of risk of loss.  The Holder acknowledges
that: (i) he has adequate means of providing for his current needs and
possible personal contingencies and has no need for liquidity in this
investment; (ii) his commitment to investments which are not readily
marketable is not disproportionate to his net worth; and (iii) his holding
the Restricted Shares will not cause his overall financial commitments to
become excessive.


 


8.                                       The Holder is/is not
(circle one) an “accredited investor,” as such term is defined in Rule 501
of the Securities Act.