Exhibit 10.21


 


RESTRICTED COMMON STOCK AGREEMENT

FOR EXECUTIVE OFFICER HOLDING A UNITS


 


RESTRICTED COMMON STOCK
AGREEMENT (this “Agreement”) made as of November 6, 2009 (the “Effective Date”),
by and between STR Holdings, Inc., a Delaware corporation (the “Company”),
and Dennis L. Jilot (the “Holder”).


 


WHEREAS, STR Holdings (New) LLC (“New LLC”) entered
into that certain Unit Grant Agreement with the Holder dated as of November 5,
2009 (the “Grant Agreement”), whereby New LLC granted units of New LLC to the
Holder;


 


WHEREAS, pursuant to that certain Plan of Conversion
by New LLC, dated as of November 6, 2009 (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  units of New LLC
granted pursuant to the Grant Agreement shall be converted from unvested 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
397,491 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 and
shall be subject to forfeiture to the Company pursuant to this Agreement.  At such time as a Restricted Share vests in
accordance with this Section 3, it shall no longer be a Restricted Share
and shall not be subject to forfeiture.


 


(b)           Vesting.  The Restricted Shares shall vest based
on the passage of time.


 


(i)         Vesting
Schedule.  Subject to Sections 3(b)(ii),
3(b)(iii), 3(b)(iv) and to the Holder’s continued employment with the
Company on each vesting date, the Restricted Shares shall vest in equal 1/54 installments
as of the last day of each of the 54 calendar months following the Effective
Date, which for the sake of clarity means November 30, 2009.


 


(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 is employed with the Company on
the date of the Change of Control.


 


(iii)       Acceleration
at July 18, 2012.  On July 18,
2012, all then unvested Restricted Shares shall immediately vest in full, so
long as the Holder is actively employed with the Company in the capacity of
chairman, president and chief executive officer.


 


(iv)       Termination.  (A)  Upon the termination of employment
by the Holder for Good Reason or by the Company without Cause, all then
unvested Restricted Shares shall immediately vest in full.


 


(B)  Upon the termination of the Holder’s employment for Cause or
for any reason other than pursuant to Clause (A) above, all unvested
Restricted Shares shall be forfeited.


 


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 


 


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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 Restricted
Share Permitted Transferees of the Holder. 
Any attempt to Transfer any of the Restricted Shares to Persons other
than Restricted Share 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.  The Holder understands that this
 Agreement contains forfeiture provisions
in respect of the Restricted Shares in favor of the Company or its designee
upon the Holder’s termination of employment.


 


6.             Definitions.


 


The following terms shall have the meanings ascribed
below:


 


“Cause” means “cause” as
defined in the Holder’s
employment agreement with the Company or any of its subsidiaries.


 


“Change of Control” means “Change of Control” as
defined in the Holder’s employment
agreement with the Company or any of its subsidiaries.


 


“Good Reason” means “good reason” as defined in the Holder’s employment agreement with the Company or any
of its subsidiaries.


 


“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.


 


3

















 


“Registration Rights Agreement” means the
Registration Rights Agreement, dated as of November 6, 2009, among the Company and certain stockholders of
the Company, as amended, modified or supplemented from time to time.


 


“Restricted Share Permitted Transferees” means (i) any
spouse, lineal descendant, sibling, parent, heir, executor, administrator,
testamentary trustee, legatee or beneficiary of the Holder, (ii) a trust
that is for the exclusive benefit of the Holder or its Restricted Share
Permitted Transferees under clause (i) above or (iii) 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 (i) above.


 


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


 


“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.


 


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 or of the Holder’s employment with the Company.


 


(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 


 


4

















 


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]


 


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


 


 


	
   

  	
  STR HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Barry A. Morris

  
	
   

  	
   

  	
  Name:

  	
  Barry
  A. Morris

  
	
   

  	
   

  	
  Title
  

  	
  Executive
  Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDER

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Dennis L. Jilot

  
	
   

  	
  Dennis
  L. Jilot

  



 


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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.


 


8