Document:

Exhibit 10.23

 

SPECIALIZED TECHNOLOGY RESOURCES, INC. 

MANAGEMENT
INCENTIVE PLAN

 

1.             Purpose.   This Plan includes a
continuation of the management compensation program of the Company, which has
been in place but informally documented for many years, and is designed to give
to key managers of the Company additional incentive to promote the Company’s
further development and success.

 

2.             Definitions.   The following terms shall have
the meanings given below unless the context otherwise requires:

 

(a)           “Individual
Incentive Plan” means, with respect to each Manager, an annual statement of
goals or objectives for such Manager based primarily on the EBITDA or revenues
of the Company and its Subsidiaries as a whole, or of such profit center or SBU
of the Company as the Committee may determine, with respect to the performance
or achievement of which the Manager’s bonus entitlement under the Plan shall be
determined. The Individual Incentive Plan with respect to any Manager may also
include such other qualitative or quantitative objectives or conditions as the
Committee may determine in its sole discretion, in which event the Individual
Incentive Plan shall include, as appropriate, a statement as to how such
objectives shall be weighted in determining the Manager’s performance.

 

(b)           “Chief Executive
Officer” means the President and Chief Executive Officer of the Company.

 

(c)           “Company” means
Specialized Technology Resources, Inc. Unless the context otherwise
requires, references to the Company shall be deemed to include its
Subsidiaries.

 

(d)           “Committee” means
the Compensation Committee of the Board of Directors of the Company.

 

(e)           “EBITDA” means
earnings before interest, taxes, depreciation and amortization.

 

(f)            “Manager” means an
eligible employee of the Company who has been granted a bonus under the Plan.

 

(g)           “Plan” means the Specialized Technology Resources, Inc.
Management Incentive Plan.

 

(h)           “Plan Year” means a
fiscal year of the Company.

 

 

(i)            “Salary” means,
with respect to any Manager, such Manager’s annual base salary rate at the
beginning of any Plan Year.

 

(j)            “SBU” means a
strategic business unit of the Company.

 

(k)           “Subsidiary” means
any entity in which the Company owns directly or indirectly a majority of the
outstanding voting stock or other equity securities.

 

(1)           “Target Bonus” means
that bonus, expressed as a Bonus Percentage of Salary, to which a Manager shall
be entitled for a Plan Year during which the Manager is continuously employed
by the Company on a full-time basis and achieves 100% of his or her annual
financial and qualitative objectives.

 

(m)          “Target Bonus
Multiplier” means a number ranging from 0.500 to 2.000 by which a Manager’s
Target Bonus is multiplied to obtain the amount of the Manager’s bonus.

 

(n)           “Bonus Percentage”
means a percentage of a Manager’s Salary ranging from a minimum of 5% to a
maximum of 50% which the Manager may earn as a bonus under the Plan if the
Manager achieves l 00% of his or her Individual Incentive Plan.

 

3.             Eligibility. Bonus rights may be granted under the Plan by
the Committee to those full-time, salaried employees recommended by the Chief
Executive Officer who, in the sole opinion of the Committee are,
from time to time, responsible for the management and/or growth of all or part
of the business of the Company, and who have signed the Company’s standard form
of Non-Compete Agreement, as amended from time to time. Without limiting the foregoing discretion of the Committee, persons eligible to
receive bonus awards under the Plan shall include, but not be limited to, the
Company’s Chief Executive Officer, Chief Financial Officer, managers of SBU’s,
regional SBU managers, designated foreign affiliate managers, senior level
marketing and sales managers, and designated department managers.

 

4.             Granting of Bonuses Rights.  Bonuses
rights may be granted under the
Plan at the recommendation of the Chief Executive Officer, subject to approval
by the Committee. The Chief Executive Officer, with the assistance of the Chief
Financial Officer and Controller of the Company, shall prepare bonus
recommendations for review and action by the Committee as soon as reasonably
possible following the availability of audited financial statements of the
Company for its most recently completed fiscal year. No such bonus right shall
be deemed granted under the Plan unless and until such Manager’s bonus
eligibility and Individual Incentive Plan have been approved by the Committee
with the concurrence of the Chief Executive Officer.
No Manager shall be deemed to have earned a bonus payment except in relation to
the level of achievement of the Manager’s applicable Individual Incentive Plan
and subject to the payment limitations in Section 7 and other provisions
of the Plan. As soon as reasonably possible following the approval by the
Committee with the concurrence of the Chief Executive Officer of a Manager’s
bonus eligibility for a Plan Year, such Manager shall be provided in
writing with a statement of such Manager’s bonus entitlement and the conditions
to the earning and payment of such bonus including, but not limited to, the
following information:

 

1

 

(a)           the Manager’s Salary
as of the beginning of the current Plan Year;

 

(b)           the Manager’s Target
Bonus;

 

(c)           the Manager’s Bonus
Percentage;

 

(d)           the Manager’s
Individual Incentive Plan; and

 

(e)           in the event of
multiple bonus criteria, the weightings to be given such criteria in
determining the bonus.

 

5.             Minimum and
Maximum Bonuses.  A Manager’s bonus entitlement under the Plan will range from 0% to 200%
of his or her Target Bonus. Actual entitlement will be based upon performance
relative to goals and objectives set forth in the Manager’s Individual
Incentive Plan and revenue growth objectives individually established for
Managers who are sales and marketing executives. Attachment 1 sets forth Bonus
Plan Multipliers for use in connection with Individual Incentive Plans based
upon SBU EBITDA of less than $4.0 million. SBU EBITDA of $4.0 million or
greater, or revenue growth. All EBITDA targets will include fully funded
provision for expected bonus payments at all performance payout levels so that
such targets take into account the payment of bonuses as normal operating
expenses in determining bonus entitlements at any level. All targets and EBITDA
or revenue growth objectives will exclude the impact of any unbudgeted
acquisition. With respect to Individual Incentive Plans based upon EBITDA,
annual budgeted EBITDA must represent at least a 5% increase over the prior year’s actual results in order for the Manager to achieve any
bonus entitlement during that Plan Year.

 

6.             Determination,
Approval and Payment of Bonuses.  Bonuses payable under the Plan shall be determined by the
Chief Financial Officer and Controller and shall be subject to approval by the
Chief Executive Officer and the Committee. Payment of any bonus so
approved shall be made on April 30 of the year following the year with respect to which the bonus is determined. In the event that the Company
has not received its audited financial statements for the prior year by March 31
of such following year, such bonus
shall be paid on April 30
of such year or as soon as practicable thereafter, consistent with the provisions of Section 409A of the Internal Revenue Code of 1986,
as amended, but in no event later than the last day of such following year.

 

7.             Payment
Limitations.

 

(a)           No bonus shall be
payable to any Manager who is not a full-time employee of
the Company on the day such bonus would
otherwise be paid, subject to
any contrary provision which may appear in any contract between the Company and such Manager.

 

(b)           Any bonus otherwise payable to a Manager may be reduced or eliminated in the event that the payment
of such bonus would cause the Company to be in violation or default of any bank
financial covenant or in view of any extraordinary circumstance as determined
by the Board of Directors of the Company; provided, however, that any such
reduction or elimination shall be applied consistently and ratably to all
eligible Managers.

 

2

 

8.               Tax Withholding Requirements.  All bonus
payments under the Plan shall be subject to any applicable federal, state,
municipal and foreign tax withholding requirements.

 

9.               No Right to
Receive Bonuses; No Employment Rights.  No eligible Manager shall have
any right to receive bonuses except as the Committee may determine. The Plan
does not confer upon any employee any right to continued employment with the
Company or a Subsidiary, nor does it interfere in any way with the right of the
Company or a Subsidiary to terminate the employment of any of its employees.

 

10.             Term,
Termination and Amendment.  The Plan and continuation of the
management compensation program of the Company which it contains was approved by
the Board of Directors of the Company on May 14, 2002 and shall remain in
effect until terminated by the Board of Directors, subject to such
modifications and amendments of the Plan as the Board of Directors may from
time to time adopt. However, no such termination, modification or amendment
shall adversely affect any bonus entitlement of a Manager based upon an
Individual Incentive Plan which has previously been approved by the Chief Executive
Officer and the Committee and presented in writing to such Manager, other than
as provided under 7. (b).

 

Issued fiscal year 2008

 

3Exhibit 10.24

 

THIS AGREEMENT (the “Award Agreement”) is made
effective as of [                          ]
(the “Date of Grant”) between STR Holdings, Inc., a Delaware corporation
(with any successor, the “Company”), and [                      ]
(the “Participant”):

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the STR Holdings, Inc.
2009 Equity Incentive Plan (the “Plan”), which Plan is incorporated herein by
reference and made a part of this Award Agreement.  Capitalized terms not otherwise defined herein
shall have the same meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would
be in the best interests of the Company and its stockholders to grant the
option provided for herein to the Participant pursuant to the Plan and the
terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties agree as follows:

 

1.             Grant of the Option.  The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions
hereinafter set forth, all or any part of an aggregate of (i) [                ]
Shares (the “Time Vesting Option Shares”) and (ii) [                ]
Shares (the “Performance Vesting Option Shares”), subject to adjustment as set
forth in the Plan.  The Option is
intended to be an “incentive stock option” within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the “Code”).  If this Option does not qualify as such for
any reason, then to the extent of such non-qualification, this option shall be
regarded as a non-qualified stock option.

 

2.             Option Price.  The purchase price of the Shares subject to
the Option shall be $[        ] per
Share (the “Option Price”), subject to adjustment as set forth in the Plan;
provided, that the Option Price shall not be less than 100% of the Fair Market
Value of a Share on the Date of Grant (or 110% of such Fair Market Value in the
case of a grant to a Ten Percent Stockholder).

 

3.             Vesting.

 

(a)           Time Vesting Option Shares.  Subject to the Participant’s continued
Service on each vesting date and Sections 4 and 5(a), [                ]
Time Vesting Option Shares shall vest on [                  ] with the remaining Time
Vesting Option Shares vesting in equal monthly installments as of the last day
of each of the successive[   ] months
thereafter.

 

(b)           Performance Vesting Option Shares.  Subject to the Participant’s continued
Service on each vesting date and Section 4, [                ]
Performance Vesting Option Shares shall vest on [                  ] with the remaining
Performance Vesting Option Shares vesting on the terms set forth on Annex 1
hereto.

 

 

At any time, the portion of the Option which has
become vested as described in this Section 3 is hereinafter referred to as
the “Vested Portion.”  The Vested Portion
of the Option shall remain exercisable for the period set forth in Section 6.

 

4.             Accelerated Vesting Upon a
Change in Control. Upon the occurrence of a Change of Control, the
unvested portion of the Option, to the extent not previously cancelled or
forfeited, shall immediately vest in full, so long as the Participant’s Service
has not been terminated before the date of the consummation of the Change of
Control.

 

5.             Forfeiture.

 

(a)           If
the Participant’s Service is terminated by the Participant for Good Reason
or by the Company without Cause, the unvested portion of the Option for the
Time Vesting Option Shares, to the extent not previously cancelled or
forfeited, that would have vested had the Participant been employed for an
additional twelve (12) months from the date of termination of employment shall
vest immediately upon such date of termination. 
Thereafter, the Option shall, to the extent not then vested, be
cancelled by the Company without consideration and the Vested Portion of the
Option shall remain exercisable for the period set forth in Section 6.

 

(b)           If the Participant’s Service is terminated for any
reason other than pursuant to clause 5(a) above, the Option shall, to the
extent not then vested, be cancelled by the Company without consideration and
the Vested Portion of the Option shall remain exercisable for the period set
forth in Section 6.

 

6.             Exercise of Option.

 

(a)           Period of Exercise.  Subject to the provisions of the Plan and
this Award Agreement, the Participant may exercise all or any part of the
Vested Portion of the Option at any time prior to the earliest to occur
of:

 

(i)            the tenth anniversary of the Date of Grant (fifth
anniversary of the Date of Grant for a Ten Percent Stockholder);

 

(ii)           the date that is ninety (90) days following
termination of the Participant’s Service for any reason other than death,
Permanent Disability or Cause;

 

(iii)          the date that is one (1) year following
termination of the Participant’s Service due to death or Permanent Disability;

 

(iv)          the date of termination of the Participant’s Service
due to Cause.

 

(b)           Method of Exercise.

 

(i)            Subject to Section 4, the Vested Portion of the
Option may be exercised by delivering to the Company at its principal office
written notice of intent to so exercise; provided that the Option may be
exercised with respect to whole Shares only. 
Such notice shall specify the number of Shares for which the Option is
being exercised and shall be accompanied by payment in full of the Option
Price.  In the event the Option is being
exercised by the Participant’s representative, the notice shall be accompanied
by 

 

2

 

proof (satisfactory to the Committee) of the representative’s right to
exercise the Option.  The payment of the
Option Price may be made at the election of the Participant (A) in cash or
its equivalent (e.g., by cashier’s check), (B) to the extent permitted by
the Committee, in Shares having a Fair Market Value equal to the aggregate
Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee, (C) partly in cash and,
to the extent permitted by the Committee, partly in such Shares, (D) by
reducing the number of Shares otherwise deliverable upon the exercise of the
Option by the number of Shares having a Fair Market Value equal to the Option
Price, or (E) if there is a public market for the Shares at such time,
subject to such requirements as may be imposed by the Committee, through the
delivery of irrevocable instructions to a broker to sell Shares obtained upon
the exercise of the Option and to deliver promptly to the Company an amount out
of the proceeds of such sale equal to the aggregate Option Price for the Shares
being purchased.  The Committee may
prescribe any other method of payment that it determines to be consistent with
applicable law.  Neither the Participant
nor the Participant’s representative shall have any rights to dividends or
other rights of a stockholder with respect to Shares subject to an Option until
the Participant has given written notice of exercise of the Option, paid in
full for such Shares and, if applicable, has satisfied any other conditions
imposed by the Committee pursuant to the Plan.

 

(ii)           Notwithstanding any other provision of the Plan or
this Award Agreement to the contrary, the Option may not be exercised prior to
the completion of any registration or qualification of the Option or the Shares
under applicable securities or other laws, or under any ruling or regulation of
any governmental body or national securities exchange that the Committee shall
in its sole discretion determine to be necessary or advisable.

 

(iii)          Upon the Company’s determination that the Option has
been validly exercised as to any of the Shares, the Company shall issue
certificates in the Participant’s name for such Shares.  However, the Company shall not be liable to
the Participant for damages relating to any delays in issuing the certificates
to him, any loss of the certificates, or any mistakes or errors in the issuance
of the certificates or in the certificates themselves.

 

(iv)          In the event of the Participant’s death, the Vested
Portion of the Option shall remain exercisable during the period set forth in Section 6
by the Participant’s executor or administrator, or the person or persons to
whom the Participant’s rights under this Award Agreement shall pass by will or
by the laws of descent and distribution as the case may be.  Any heir or legatee of the Participant shall
take rights herein granted subject to the terms and conditions hereof.

 

7.             No Right to Continued
Service.  The granting of the Option
evidenced hereby and this Award Agreement shall impose no obligation on the
Company or any Affiliate to continue the Service of the Participant and shall
not lessen or affect any right that the Company or any Affiliate may have to
terminate the Service of such Participant.

 

8.             Securities Laws/Legend on
Certificates.  The
issuance and delivery of Shares shall comply with all applicable requirements
of law, including (without limitation) the Securities Act of 1933, as amended,
the rules and regulations promulgated thereunder, state securities laws
and regulations, and the regulations of any stock exchange or other securities 

 

3

 

market on which the Company’s
securities may then be traded.  If the
Company deems it necessary to ensure that the issuance of securities under the
Plan is not required to be registered under any applicable securities laws,
each Participant to whom such security would be issued shall deliver to the
Company an agreement or certificate containing such representations, warranties
and covenants as the Company may deem necessary which satisfies such requirements.
The certificates representing the Shares shall be subject to such stop transfer
orders and other restrictions as the Committee may deem reasonably advisable,
and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

 

9.             Transferability.  You may transfer the Option granted hereunder
only in accordance with the terms of the Plan and since your Option is intended
to qualify as an incentive stock option, its transferability is limited.

 

10.           Adjustment of Option.  Adjustments to the Option (or any of the
Shares underlying the Option) shall be made in accordance with the terms of the
Plan.

 

11.           Definitions.  For purposes of this Award Agreement:

 

“Cause”
shall have the meaning set forth in the Participant’s employment agreement with
the Company or its Affiliates.

 

“Good
Reason” shall have the meaning set forth in the Participant’s employment
agreement with the Company or its Affiliates.

 

“Permanent
Disability” shall have the meaning set forth in the Participant’s employment
agreement with the Company or its Affiliates, if any, or if the Participant is
not a party to an employment agreement with a definition of “Permanent
Disability,” then “Permanent Disability” means any physical or mental
disability rendering the Participant unable to perform his or her duties for a
period of at least one hundred twenty (120) days out of any twelve (12) month
period, as determined by a doctor approved by the Company.

 

“Share” means a share of common stock
of the Company or such other class or kind of shares or other securities
resulting from the application of Section 12.1 of the Plan.

 

12.           Withholding.  The Participant may be required to pay to the
Company or any Affiliate and the Company shall have the right and is hereby
authorized to withhold, any applicable withholding taxes in respect of the
Option, its exercise or any payment or transfer under or with respect to the
Option and to take such other action as may be necessary in the opinion of the
Committee to satisfy all obligations for the payment of such withholding taxes.

 

13.           Notices. Any
notification required by the terms of this Award 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, Attention: Secretary, at its
principal executive office and to the Participant at the address that he or she
most recently provided to the Company.

 

14.           Notification of
Disqualifying Disposition.  Your
Option is intended to qualify as an incentive stock option and by exercising
this Option you agree that you will notify 

 

4

 

the Company in writing
within fifteen (15) days after the date of any disposition of any of the Shares
issued upon exercise of this Option that occurs within two (2) years after
the Date of Grant of this Option or within one (1) year after such Shares
are transferred upon exercise of this Option. 
You also agree to provide the Company with any information concerning
any such transfer required by the Company for tax purposes. The Company may require
you to reimburse the Company in an amount necessary to satisfy the Company’s
obligation to withhold taxes incurred by reason of the disposition of the
Shares acquired by exercise of the Option in a disqualifying disposition
(within the meaning of Section 421(b) of the Code).

 

15.           Employment Requirement.  Your Option is an incentive stock option and,
in order for you to obtain the federal income tax advantages associated with an
“incentive stock option,” the Code requires that at all times beginning on the
Date of Grant of this Option and ending on the day three (3) months before
the date you exercise this Option, you must be an employee of the Company or an
“Affiliate” (as defined in the Code), except in the event of your termination
due to death or Permanent Disability.

 

16.           Limitation.  Your Option is
an incentive stock option and, therefore, as provided in the Plan, to the
extent that the aggregate Fair Market Value (determined as of the Date of
Grant) of the Shares with respect to which this Option plus all other incentive
stock options you hold are exercisable for the first time by you during any
calendar year (under all plans of the Company and its “Affiliates,” as defined
in the Code) exceeds one hundred thousand dollars ($100,000), your Option(s) or
portions thereof that exceed such limit (according to the order in which they
were granted) shall be treated as non-qualified stock options.

 

17.           Entire Agreement.  This Award Agreement and the Plan 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.

 

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

 

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

 

20.           Choice of Law; Jurisdiction;
Waiver of Jury Trial.  THIS AWARD 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 AWARD AGREEMENT, THE PARTIES AGREE THAT
ANY AND ALL ACTIONS ARISING UNDER OR IN RESPECT OF THIS AWARD AGREEMENT SHALL
BE LITIGATED IN THE FEDERAL OR STATE COURTS IN DELAWARE.  BY EXECUTING AND DELIVERING THIS AWARD
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 

 

5

 

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 AWARD AGREEMENT.

 

21.           Option Subject to Plan.  By entering into this Award Agreement the
Participant agrees and acknowledges that the Participant has received and read
a copy of the Plan.  The Option is
subject to the Plan.  The terms and
provisions of the Plan as it may be amended from time to time are hereby
incorporated herein by reference (subject to the limitation set forth in Section 19).  In the event of a conflict between any term
or provision contained herein and a term or provision of the Plan, the
applicable terms and provisions of the Plan will govern and prevail.  The Participant has had the opportunity to
retain counsel, and has read carefully, and understands, the provisions of the
Plan and the Award Agreement.

 

22.           Amendment.  The Committee may amend or alter this Award
Agreement and the Option granted hereunder at any time; provided that,
subject to Articles 11, 12 and 13 of the Plan, no such amendment or alteration
shall be made without the consent of the Participant if such action would
materially diminish any of the rights of the Participant under this Award
Agreement or with respect to the Option.

 

23.           Severability. The provisions of this Award 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.

 

24.           Signature in Counterparts.  This Award 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]

 

6

 

IN WITNESS WHEREOF, the parties hereto have executed
this Award Agreement.

 

	
   

  	
  STR
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Agreed and acknowledged as

  	
   

  	
   

  
	
  of the date first above written:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PARTICIPANT

  	
   

  	
   

  

 

 

Annex 1

 

Vesting shall be in two (2) equal
installments following the two successive Fiscal Years, beginning with the
Fiscal Year ending on December 31, 2010 (for the 2010 Fiscal Year) if the
Equity Valuation, measured as of the end of such Fiscal Year, is no less than
the Performance Target for such Fiscal Year. 
If the Performance Target for the 2010 Fiscal Year referred to above is
not attained, the Yearly Amount for the 2010 Fiscal Year which is not then
vested shall become vested and exercisable at the end of the second Fiscal Year
in which the Equity Valuation for such Fiscal Year is no less than the
Performance Target for such Fiscal Year. 
For purposes of illustration of the previous sentence, if the
Performance Target is not achieved for the 2010 Fiscal Year but is achieved for
the 2011 Fiscal Year, in 2011, the Yearly Amounts for both 2010 and 2011 would
become vested.

 

“Consolidated EBITDA” means
Consolidated EBITDA as defined pursuant to that certain Credit Agreement, dated
as of June 15, 2007, by and between the Company, STR Acquisition, Inc.
the Lenders (as defined therein) and Credit Suisse, Cayman Islands Branch, as
it may be amended or restated from time to time.

 

“Consolidated Net Debt”
means (i) any Indebtedness of the Company and its subsidiaries minus (ii) the
Company’s and its subsidiaries’ cash on hand and in banks, and any liquid
investments readily convertible to cash, excluding any cash held in escrow or
otherwise restricted.

 

“Equity
Valuation” means, with respect to a particular Fiscal Year, (i) the
product of (A) ten (10) and (B) the Consolidated EBITDA for such
Fiscal Year, less (ii) Consolidated Net Debt as of the end of such Fiscal
Year.

 

“Fiscal Year” means the
twelve month period ending on the last day of each calendar year.

 

“Indebtedness” means,
without duplication, the sum of:  (i) all
principal and accrued (but unpaid) interest owing by the Company and its
subsidiaries for debt for borrowed money owed to any third party (specifically
excluding intercompany debt between the Company and any of its subsidiaries and
any subsidiary of the Company and another subsidiary of the Company); plus (ii) all
obligations of the Company and its subsidiaries under leases that have been
recorded as capital leases under GAAP; plus (iii) indebtedness of any
person other than the Company or any of its subsidiaries that is guaranteed by
the Company or any of its subsidiaries.

 

Restricted
Stock Performance Target Calculation

 

	
   

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Adjusted
  EBITDA

  	
   

  	
  $

  	
  82.3

  	
   

  	
  $

  	
  103.5

  	
   

  
	
  EV
  / EBITDA Multiple

  	
   

  	
  10.0

  	
  x

  	
  10.0

  	
  x

  
	
  Enterprise
  Value

  	
   

  	
  $

  	
  823.1

  	
   

  	
  $

  	
  1,034.5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Less:
  Net Debt on Balance Sheet

  	
   

  	
  (225.9

  	
  )

  	
  (206.4

  	
  )

  
	
  Value
  of Common Equity

  	
   

  	
  $

  	
  597.3

  	
   

  	
  $

  	
  828.1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Performance
  Threshold

  	
   

  	
  85.0

  	
  %

  	
  85.0

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Performance Target

  	
   

  	
  $

  	
  507.7

  	
   

  	
  $

  	
  703.8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00165-of-00352.parquet"}]]