Exhibit 10.20


 


UNIT GRANT AGREEMENT


 


THIS UNIT GRANT AGREEMENT is made as of November 6, 2009
(the “Agreement”), by
and between STR
Holdings (New) LLC, a Delaware limited liability company (the “Company”),
and Dennis L. Jilot (the “Grantee”).


 


W I T N E S S E T H :


 


WHEREAS, the Grantee has entered into that certain
Employment Agreement with Specialized Technology Resources, Inc. (“STR”)
dated as of July 18, 2008 (as amended, the “Employment Agreement”) whereby
the Grantee has agreed to render services to STR and its affiliates, including
the Company.


 


WHEREAS, in exchange for the services to be rendered
to or for the benefit of the Company by the Grantee and pursuant to the
provisions of the Employment Agreement, the Company desires to issue and grant
to the Grantee Units (as hereinafter defined), on the terms and conditions set
forth in this Agreement and in the Second Amended and Restated Limited
Liability Company Agreement of the Company, dated as of November 6, 2009 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms thereof, the “LLC Agreement”), a
copy of which has been furnished to the Grantee.


 


NOW, THEREFORE, in order to implement the foregoing
and in consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:


 


1.             Issuance
and Grant.  Pursuant to the terms and
subject to the conditions set forth in this Agreement, the Employment Agreement
and the LLC Agreement, the Company
hereby agrees to issue and grant to the Grantee 22,346 unrestricted Class A Units of the Company (the “Unrestricted
Units”) and 201,118 restricted Class A Units of the Company (the “Restricted
Units” and together with the Unrestricted Units, the “Units”).  For the avoidance of doubt, the Unrestricted
Units shall not be subject to vesting.  The
Company agrees the Grantee’s provision of services to or for the benefit of the
Company constitutes sufficient consideration for the Units.  Capitalized terms used in this Agreement and
not otherwise defined in this Agreement shall have the meanings assigned to them
in the LLC Agreement.


 


2.             Vesting.  The
grant of the Units shall occur on the date hereof (the “Grant Date”).  The Restricted Units shall vest in equal 1/54 installments as of the last day of
each of the 54 successive calendar months after the date hereof, which, for the
sake of clarity, means that the first vesting date for such Restricted Units
will be November 30, 2009; provided, however, if the Grantee is still
actively employed in his current capacity
as Chairman, President and Chief Executive Officer of STR as of July 18,
2012, the remaining unvested Restricted Units shall become immediately vested;
provided, further that if the Grantee’s employment is terminated by STR for
Cause (as defined in the Employment Agreement) or by the Grantee without Good
Reason (as defined in the Employment Agreement), the Grantee shall immediately
forfeit any Restricted Units that remain unvested as of the date of such
termination.  In the event of a Change of Control (as defined
in the Employment Agreement) or in the event the Grantee’s employment is
terminated by the Company without Cause or by the Grantee for Good Reason
(including by reason of the Grantee’s death or Disability (as defined in the
Employment Agreement) whether prior to or after the issuance date of the
Restricted Units, the Restricted 


 

















 


Units to
the extent they then remain unvested, shall become immediately and fully vested
and payable in accordance with the terms of this Section 2.


 


3.             Section 83(b) Election.  The Grantee shall have the option to make an
election under Section 83(b) of the Internal Revenue Code of 1986, as
amended (“Code” and such an election, an “83(b) Election”),
to include the fair market value of the Restricted Units in his current taxable
income as of the date of issuance, and the Company agrees to reasonably
cooperate with the Grantee if he chooses to make this election.


 


4.             Representations and Warranties of the Company.  The Company hereby represents and warrants to
the Grantee as follows:


 


(a)           The Company is a limited liability company, duly
organized, existing and in good standing, under the laws of its state of
formation.


 


(b)           The Company has full limited liability company power and
authority to enter into and perform this Agreement.  The execution, delivery and performance of
this Agreement by the Company has been duly and validly approved by the
Company.  This Agreement has been duly
executed and delivered by the Company and constitutes a legal, valid and
binding agreement of the Company, enforceable against Company in accordance
with its terms.


 


(c)           When issued and delivered in accordance with this
Agreement, the Units will be duly authorized, validly issued, fully paid and
nonassessable and will be free of all preemptive rights and any other liens,
claims, charges and other encumbrances other than restrictions on transfer
under the LLC Agreement and applicable federal and state securities laws.


 


5.             Representations and Warranties of the Grantee.  The Grantee hereby represents and warrants to
the Company that:


 


(a)           The Grantee has the power and authority to enter into and
perform this Agreement and this Agreement constitutes a valid and legally
binding obligation of the Grantee.


 


(b)           The Grantee is in a financial position to hold the Units
for an indefinite period of time and is able to bear the economic risk and
withstand a complete loss of the Grantee’s investment in the Units.


 


(c)           The Grantee believes the Grantee, either alone or with the
assistance of the Grantee’s own professional advisor, has such knowledge and
experience in financial and business matters that the Grantee is capable of
reading and interpreting financial statements and evaluating the merits and
risks of the prospective investment in the Units and has the net worth to
undertake such risks.


 


(d)           The Grantee has obtained, to the extent the Grantee deems
necessary, the Grantee’s own personal professional advice with respect to the
tax consequences of receiving, and the risks inherent in, the investment in the
Units, and the suitability of an investment in the Units in light of the
Grantee’s financial condition and investment needs.


 

















 


(e)           The Grantee believes that the investment in the Units is
suitable for the Grantee based upon the Grantee’s investment objectives and
financial needs, and the Grantee has adequate means for providing for the
Grantee’s current financial needs and personal contingencies and has no need
for liquidity of investment with respect to the Units.


 


(f)            The Grantee has had, prior to the issuance of the Units,
been furnished with, and has carefully read, the LLC Agreement, and the Grantee
has been given access to full and complete information regarding the Company
and has utilized such access to the Grantee’s satisfaction for the purpose of
obtaining information the Grantee believes to be relevant in making its
investment decision and, particularly, the Grantee has either attended or been
given reasonable opportunity to attend a meeting with representatives of the
Company for the purpose of asking questions of, and receiving answers from, such
representatives concerning the Company and to obtain any additional
information, to the extent reasonably available, the Grantee believes to be
relevant in making its investment decision.


 


(g)           The Grantee recognizes that an investment in the Units
involves a high degree of risk, including, but not limited to, the risk of
economic losses from operations of the Company.


 


(h)           The Grantee realizes that (i) the acquisition of the
Units is a long-term investment; (ii) the Grantee must bear the economic
risk of investment for an indefinite period of time because the Units have not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”), or under the securities laws of any state and, therefore, none of
such Units can be sold unless they are subsequently registered under said laws
or exemptions from such registrations are available, and there can be no
assurance that any such registration will be effected at any time in the
future; (iii) the Grantee may not be able to liquidate the Grantee’s
investment in the event of an emergency or pledge any of such Units as
collateral for loans; and (iv) the transferability of the Units is
restricted in accordance with the LLC Agreement.


 


(i)            The Grantee is a bona fide resident of, is domiciled in
and received the offer and made the decision to invest in the Units in the
state set forth on the signature page below under “Address,” and the Units
are being accepted by the Grantee in the Grantee’s name solely for the Grantee’s
own beneficial interest and not as nominee for, or on behalf of, or for the
beneficial interest of, or with the intention to transfer to, any other person,
trust or organization.


 


(j)            The Grantee has not retained any finder, broker, agent,
financial advisor, “Purchaser Representative” (as defined in Rule 501(h) of
Regulation D of the Securities Act) or other intermediary in connection with
the transactions contemplated by this Agreement and agrees to indemnify and
hold harmless the Company from any liability for any compensation to any such
intermediary retained by the Grantee and the fees and expenses of defending
against such liability or alleged liability.


 


(k)           The Grantee has completed Schedule A to this
Agreement as to his/her status as an “Accredited Grantee” (as defined
therein) and such information is true and complete.


 


(l)            The Grantee agrees promptly to notify the Company should
the Grantee become aware of any change in the information set forth in this Section 5.


 

















 


6.               Conditions to Obligations of
the Company.  The obligations
of the Company to grant the Units are subject to the Grantee having
entered into the LLC Agreement.


 


7.               Authority of the Board of Managers.  All decisions, interpretations and other
actions of the Board of Managers and/or any committee designated by the Board
of Managers, shall be final and binding on the Grantee and other persons
deriving their rights from the Grantee.  Without limiting the generality of the foregoing,
the Board of Managers and/or any committee designated by the Board of
Managers may, in its sole discretion,
clarify, construe or resolve any ambiguity in any provision of this Agreement,
accelerate vesting, or waive any terms or conditions applicable to any Units.


 


8.               Counterparts. 
This Agreement may be executed in one or more counterparts, each of
which shall be considered an original, but all of which taken together shall
constitute one and the same Agreement.


 


9.               Employment Rights.  Neither this Agreement nor any of its
provisions is intended to confer or should be construed as conferring any
rights on the Grantee 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.


 


10.             No Waiver; Modifications in Writing.  This Agreement, together with the LLC
Agreement and the other agreements referred to herein and therein and any
exhibits, schedules or other documents referred to herein or therein, sets
forth the entire understanding of the parties, and supersedes all prior
agreements, arrangements, term sheets, presentations and communications,
whether oral or written, with respect to the specific subject matter hereof.  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 Units accordance with the terms in the LLC
Agreement.


 


11.             Indemnification. 
The Grantee will, to the fullest extent permitted by applicable law,
indemnify the Company and each member, manager, officer and employee (each an “Indemnitee”)
against any losses, claims, damages or liabilities to which any of them may
become subject in any capacity in any action, proceeding or investigation
arising out of or based upon any false representation or warranty, or breach or
failure by the Grantee to comply with any covenant or agreement made by the Grantee
herein.  The Grantee will reimburse each
Indemnitee for reasonable legal and other expenses (including the cost of any
investigation and preparation) as they are incurred in connection with any such
action, proceeding or investigation (whether incurred between any Indemnitee
and the Grantee, or between any Indemnitee and any third party).  The reimbursement and indemnity obligations
of the Grantee under this Section 11 will survive the Grant Date and will
be in addition to any liability which the Grantee may otherwise have
(including, without limitation, liabilities under the LLC Agreement), and will
be binding upon and inure to the benefit of any successors, assigns, heirs,
estates, executors, administrators and personal representatives of any
Indemnitee.


 


12.             Binding Effect;
Assignment.  The rights
and obligations of each party under this Agreement may not be assigned to any
other person or entity.  Except as
expressly provided in this Agreement, this Agreement shall not be construed so
as to confer any right or benefit upon any person or entity other than the
parties to this Agreement, and their respective 


 

















 


successors and assigns.  This Agreement shall be binding upon the
Company, the Grantee and their respective heirs, successors, legal
representatives and permitted assigns.


 


13.             Severability of
Provisions.  Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction.


 


14.             Conflict with Other Agreements.  For so long as the LLC Agreement is in full
force and effect, this Agreement shall be subject to the provisions of the LLC
Agreement.  To the extent any of the
provisions of this Agreement conflict or are inconsistent with any of the
provisions of the LLC Agreement, the LLC Agreement shall control.  Upon the conversion of the Company to a
corporation (the “Conversion”), this Agreement shall be subject to the
provisions of the restricted stock agreement between the Grantee and the
successor corporation to the Company (the “Restricted Stock Agreement”).  Following the Conversion, to the extent any
of the provisions of this Agreement conflict or are inconsistent with any of
the provisions of the Restricted Stock Agreement, the Restricted Stock
Agreement shall control.


 


15.             Schedules and Descriptive Headings.  All Schedules to this Agreement shall be
deemed to be a part of this Agreement. 
The descriptive headings of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement.


 


16.             Governing Law. 
This Agreement, and all disputes, claims or causes of action that arise
from or are in connection with this Agreement, shall be governed by and
construed in accordance with the domestic substantive laws of the State of New
York without giving effect to any choice or conflict of law provision or rule that
would cause the application of the domestic substantive laws of any other
jurisdiction.


 


[The remainder of this page has been
intentionally left blank.]


 

















 


IN WITNESS WHEREOF, the Grantee has executed this
Agreement as of the date first written above.


 


	
   

  	
  GRANTEE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Dennis L. Jilot

  
	
   

  	
  Dennis L. Jilot

  



 


 


ACCEPTED AND AGREED,

as of the date first written above:


 


 


STR HOLDINGS (NEW) LLC


 


 


	
  By:

  	
  /s/
  Barry A. Morris

  	
   

  
	
   

  	
  Name:

  	
  Barry
  A. Morris

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President and

  	
   

  
	
   

  	
   

  	
  Chief Financial Officer

  	
   

  



 


[SIGNATURE PAGE TO UNIT
GRANT AGREEMENT]


 

















 


Exhibit A


 


ELECTION
TO INCLUDE CERTAIN CLASS A UNITS


 


IN
GROSS INCOME PURSUANT TO


 


SECTION 83(b) OF
THE INTERNAL REVENUE CODE


 


On                   ,
2009 the undersigned was granted certain Class A Units (the “Units”)
in STR Holdings (New) LLC (the “Company”).  The Units are subject to certain restrictions
pursuant to the Second Amended and Restated Limited Liability Company Agreement
of the Company, dated as of                 ,
2009 (the “Agreement”).


 


Pursuant to §83(b) of the Internal Revenue Code of 1986, as
amended, and Treasury Regulation §1.83-2 promulgated thereunder, the
undersigned hereby makes an election, with respect to the Units, to report as
taxable income for the calendar year 2009 the excess (if any) of the value of
the Units on               
2009 over the purchase price thereof.


 


The following information is supplied in accordance with Treasury
Regulation §1.83-2(e):


 


1.                                       The name,
address and social security number of the undersigned:


 


Name:


Address:


SSN:


 


2.                                       A description
of the property with respect to which the election is being made:  restricted units in the Company known as Class A
Units which entitle the holder thereof to a share of the Company’s capital and
profits.


 


3.                                       (a)           The date on which the Units were
transferred:                  ,
2009 (the “Grant Date”).


 


(b)           The
taxable year for which such election is made: 
calendar        year 2009.


 


4.                                       The
restrictions to which the property is subject: 
The Units shall vest in equal
installments of [        ] Units as of
the last day of each of the [    ] successive calendar
months after the date hereof, which, for the sake of clarity, means that the
first vesting date for such Units will be November 30, 2009; provided,
however, if the Grantee is still actively employed in his current capacity as Chairman, President and Chief Executive
Officer


 

















 


of Specialized Technology Resources, Inc. (“STR”)
as of July 18, 2012, the remaining unvested Units shall become immediately
vested; provided, further that if the Grantee’s employment is terminated by STR
for Cause (as defined in the Employment Agreement with STR dated as of July 18,
2008 (as amended, the “Employment Agreement”)) or by the Grantee without Good Reason (as defined in the Employment
Agreement), the Grantee shall immediately forfeit any Units that remain
unvested as of the date of such termination.  In the
event of a Change of Control (as defined in the Employment Agreement) or in the
event the Grantee’s employment is terminated by the Company without Cause or by
the Grantee for Good Reason (including by reason of the Grantee’s death or
Disability (as defined in the Employment Agreement)) whether prior to or after
the issuance date of the Units, the Units to the extent they then remain
unvested, shall become immediately and fully vested and payable in accordance
with the terms of the Agreement.


 


5.                                       The fair market
value on               
2009 of the property with respect to which the election is being made,
determined without regard to any lapse restrictions:  [$    ].


 


6.                                       The amount paid
for such property:  $0.


 


A copy of this election is being furnished to the Company pursuant to
Treasury Regulation §1.83-2(e)(7).  A
copy of this election will be submitted with the 2009 U.S. federal income tax
return of the undersigned pursuant to Treasury Regulation §1.83-2(c).


 


Dated:                      ,
2009


 


	
   

  	
   

  
	
   

  	
   

  



 

















 


SCHEDULE A


 


ACCREDITED INVESTOR STATUS


 


The Grantee represents and
warrants that he is an “accredited investor” as defined in Rule 501(a) promulgated
under Regulation D of the Securities Act, because he meets at least one of the
following criteria (please initial each applicable item):


 


	
  o

  	
   

  	
  The Grantee is a
  natural person whose individual net worth, or joint net worth with his or her
  spouse, exceeds $1,000,000 at the time of the subscriber’s purchase; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  natural person who had an individual income in excess of $200,000 in each of
  the two most recent years (2007 and 2008) or joint income with the Grantee’s
  spouse in excess of $300,000 in each of those years and who reasonably
  expects to reach the same income level in the current year (2009); or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  corporation, or similar business trust, partnership or an organization
  described in Section 501(c)(3) of the Internal Revenue Code, not
  formed for the specific purpose of acquiring the Issuer Common Stock, with
  total assets in excess of $5,000,000; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is either
  (i) a bank as defined in Section 3(a)(2) of the Securities
  Act, or any savings and loan association or other institution as defined in
  Section 3(a)(5)(A) of the Securities Act whether acting in its
  individual or fiduciary capacity, (ii) a broker or dealer registered
  pursuant to Section 15 of the Securities Exchange Act of 1934, as
  amended, (iii) an insurance company as defined in Section 2(13) of
  the Securities Act, (iv) an investment company registered under the
  Investment Company Act of 1940, as amended, or a business development company
  as defined in Section 2(a)(48) of such Act, (v) a Small Business
  Investment Company licensed by the U.S. Small Business Administration under
  Section 301(c) or (d) of the Small Business Investment Act of
  1958, (vi) a plan established or maintained by a state, its political
  subdivisions, or any agency or instrumentality of a state or its political
  subdivisions, for the benefit of its employees, if such plan has total assets
  in excess of $5,000,000 or (vii) an employee benefit plan within in the
  meaning of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
  if the investment decision is made by a plan fiduciary, as defined in
  Section 3(21) of ERISA, which plan fiduciary is either a bank, savings
  and loan association, insurance company or registered investment adviser, or
  if the employee benefit plan has total assets in excess of $5,000,000 or, if
  a self-directed plan, with investment decisions made solely by persons who
  are accredited investors; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  private business development company as defined in Section 202(a)(22) of
  the Investment Advisers Act of 1940, as amended; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a
  director or executive officer of the Company; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is a trust,
  with total assets in excess of $5,000,000, not formed for the specific purpose
  of acquiring the Securities, the purchase of which is directed by a
  sophisticated person as described in Rule 506(b)(2)(ii) of
  Regulation D promulgated under the Securities Act; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  The Grantee is any
  entity in which all of the equity owners are accredited investors. (Please
  submit a copy of this page countersigned by each such equity owner if
  relying on this item).