STRI STR Holdings Inc (CE)

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Important Dates for 2014 Annual Meeting of Stockholders (page 10)

        Stockholder proposals submitted for inclusion in our 2014 proxy statement pursuant to SEC Rule 14a-8 must be received by us by December 5, 2013.

        Notice of Stockholder proposals to be raised from the floor of the 2014 annual meeting of stockholders outside of SEC Rule 14a-8 must be received by February 13, 2014.

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STR HOLDINGS, INC.
1699 King Street, Suite 400
Enfield, Connecticut 06082

PROXY STATEMENT

QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING

General Information

        Why am I receiving these materials?     We have made these materials available to you on the Internet in connection with STR's annual meeting of stockholders, which will take place on Tuesday, May 14, 2013. As a stockholder, you are invited to attend the annual meeting and vote on the items of business described in this proxy statement. This proxy statement includes information that we are required to provide to you under rules of the SEC and that is designed to assist you in voting your shares.

        What is included in the proxy materials?     The proxy materials include our proxy statement for the annual meeting of stockholders and our 2012 Annual Report. Included in the 2012 Annual Report is our Form 10-K for the fiscal year ended December 31, 2012.

        If you receive a paper copy of these materials by mail, the proxy materials also will include a proxy card or a voting instruction card for the annual meeting.

        What information is contained in this proxy statement?     The information in this proxy statement relates to the proposals to be voted on at the annual meeting, the voting process, the compensation of our directors and named executive officers, corporate governance and information about our board of directors, and certain other required information.

        Why did I receive a notice in the mail regarding the Internet availability of proxy materials instead of a paper copy of the proxy materials?     Consistent with last year, due to our commitment to reducing our costs and to save paper, we are utilizing the SEC "e-proxy" rule that allows companies to deliver their proxy materials over the Internet. On April 4, 2013, we mailed a one page notice to our stockholders informing them that our proxy materials are available online. The notice contains instructions on how you may request a paper copy of our proxy materials by mail on an ongoing basis.

        Why didn't I receive a notice in the mail about the Internet availability of the proxy materials?     We are providing some of our stockholders, including stockholders who have previously requested to receive paper copies of the proxy materials and some of our stockholders who are living outside the United States, with paper copies of the proxy materials instead of a notice about the Internet availability of the proxy materials.

        In addition, we are providing notice of the availability of proxy materials by e-mail to those stockholders who have previously elected the delivery of the proxy materials electronically. Those stockholders should have received an e-mail containing a link to the website where those materials are available and a link to the proxy voting website.

        How do I access the proxy materials over the Internet?     Your notice about the Internet availability of the proxy materials, proxy card or voting instruction card will contain instructions on how to:

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View our proxy materials for the annual meeting on the Internet; and



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Instruct us to send our future proxy materials to you electronically by e-mail.

        Our proxy materials are available on the Investor Relations section of our website at www.strholdings.com. Your notice of Internet availability of proxy materials, proxy card or voting instruction card will contain instructions on how you may request to access proxy materials

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electronically on an ongoing basis. Choosing to access your future proxy materials electronically will help us reduce the costs of printing and distributing our proxy materials. If you choose to access future proxy materials electronically, you will receive an e-mail with instructions containing a link to the website where those materials are available and a link to the proxy voting website. Your election to access proxy materials by e-mail will remain in effect until you terminate it.

        How may I obtain a paper copy of the proxy materials?     Stockholders receiving a notice about the Internet availability of the proxy materials will find instructions about how to obtain a paper copy of the proxy materials. Stockholders receiving a notice of the availability of the proxy materials by e-mail will find instructions in the e-mail regarding how to obtain a paper copy of the proxy materials. All stockholders who do not receive a notice or an e-mail will receive a paper copy of the proxy materials by mail.

        I share an address with another stockholder, and we received only one paper copy of the proxy materials. How may I obtain an additional copy of the proxy materials?     We have adopted a procedure called "householding" which the SEC has approved. Under this procedure, we are delivering a single set of the proxy materials to multiple stockholders who share the same address unless we received contrary instructions from one or more of the stockholders. This procedure reduces our printing costs, mailing costs and fees. Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written request, we will promptly deliver a separate set of proxy materials to any stockholder at a shared address to which we delivered a single set of any of these documents. To receive a separate set of these proxy materials, stockholders may write, e-mail or call us at the following address:

Investor Relations
STR Holdings, Inc.
1699 King Street, Suite 400
Enfield, CT 06082
E-mail: investorinfo@strholdings.com
(860) 758-7325

        Stockholders who hold shares in street name (as described below) may contact their brokerage firm, bank, broker-dealer or other similar organization to request information about householding.

        What should I do if I receive more than one notice or e-mail about the Internet availability of the proxy materials or more than one paper copy of the proxy materials?     You may receive more than one notice, more than one e-mail or more than one paper copy of the proxy materials, including multiple paper copies of this proxy statement and multiple proxy cards or voting instruction cards. For example, if you hold your shares in more than one brokerage account, you may receive a separate notice, a separate e-mail or a separate voting instruction card for each brokerage account in which you hold shares. If you are a stockholder of record and your shares are registered in more than one name, you may receive more than one notice, more than one e-mail or more than one proxy card. To vote all of your shares by proxy, you must complete, sign, date and return each proxy card and voting instruction card that you receive and vote over the Internet the shares represented by each notice and e-mail that you receive (unless you have requested and received a proxy card or voting instruction card for the shares represented by one or more of those notices or e-mails).

        What items of business will be voted on at the annual meeting?     The items of business scheduled to be voted on at the annual meeting are:

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The election of Dennis L. Jilot, Scott S. Brown, Robert M. Chiste, John A. Janitz, Andrew M. Leitch, Dominick J. Schiano, Susan C. Schnabel and Robert S. Yorgensen as directors;

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The approval of an amendment to our 2009 Equity Incentive Plan (the "2009 Plan") increasing the number of shares reserved under the 2009 Plan from 4.75 million shares to 6.2 million shares; and



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The ratification of the appointment of UHY LLP as STR's independent registered public accounting firm for the fiscal year ending December 31, 2013.

        We will also consider any other business that may properly come before the meeting.

        How does the board of directors recommend that I vote?     Our board of directors recommends that you vote your shares (1) FOR each of the nominees to the board of directors, (2) FOR the amendment of the Plan, and (3) FOR the ratification of the appointment of UHY LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2013.

        What shares may I vote?     Each share of STR common stock issued and outstanding as of the close of business on the record date (March 19, 2013) for the 2013 annual meeting of stockholders is entitled to be voted on all items being voted on at the annual meeting. You may vote all shares owned by you as of the record date, including (1) shares held directly in your name as the stockholder of record, and (2) shares held for you as the beneficial owner in street name through a broker, bank, trustee or other nominee. On the record date, we had 41,684,598 shares of common stock issued and outstanding.

        How many votes am I entitled to per share?     Each holder of shares of common stock is entitled to one vote for each share of common stock held as of the record date.

        What is the difference between holding shares as a stockholder of record and as a beneficial owner?     Most STR stockholders hold their shares as a beneficial owner through a broker or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially.

Stockholder of Record

        If your shares are registered directly in your name with our transfer agent, Broadridge Corporate Issuer Solutions, Inc. ("Broadridge"), you are considered, with respect to those shares, the stockholder of record, and the proxy materials were sent directly to you by STR. As the stockholder of record, you have the right to grant your voting proxy directly to STR or to vote in person at the annual meeting. You may also vote by mail, on the Internet or by telephone. Please follow the voting instructions on the proxy card included with these proxy materials.

Beneficial Owner

        If your shares are held in an account at a brokerage firm, bank, broker-dealer, trust or other similar organization, like the vast majority of our stockholders, you are considered the beneficial owner of shares held in street name and the proxy materials were forwarded to you by that organization. As the beneficial owner, you have the right to direct your broker, bank, trustee or nominee on how to vote your shares, and you are also invited to attend the annual meeting.

        Since a beneficial owner is not the stockholder of record, you may not vote your shares in person at the annual meeting unless you first obtain a "legal proxy" from the broker, bank, trustee or nominee that holds your shares giving you the right to vote the shares at the meeting. If you do not wish to vote in person or you will not be attending the annual meeting, you may vote by proxy. You may vote by proxy over the Internet or by telephone, as described in the Notice and below under the heading "How can I vote my shares without attending the annual meeting?"

        How may I attend the annual meeting?     You are entitled to attend the annual meeting only if you were an STR stockholder as of the record date or you hold a valid proxy for the annual meeting. Since

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seating is limited, admission to the meeting will be on a first-come, first-served basis. If you are not a stockholder of record but hold shares as a beneficial owner in street name, you should provide proof of beneficial ownership as of the record date, such as your most recent account statement demonstrating ownership as of March 19, 2013, a copy of the voting instruction card provided by your broker, bank, trustee or nominee, or other similar evidence of ownership.

        If you do not comply with the procedures outlined above, you may not be admitted to the annual meeting.

        Please let us know if you plan to attend the annual meeting by indicating your plans when prompted if you vote by Internet or telephone, or marking the appropriate box on the enclosed proxy card.

        The meeting will begin promptly at 2:00 p.m., Eastern Time. Check-in will begin at 1:30 p.m. and you should allow ample time for the check-in procedures.

        How may I vote my shares in person at the annual meeting?     Shares held in your name as the stockholder of record may be voted by you in person at the annual meeting. Shares held beneficially in street name may be voted by you in person at the annual meeting only if you first obtain a legal proxy from the broker, bank, trustee or nominee that holds your shares giving you the right to vote the shares. Even if you plan to attend the annual meeting, we recommend that you also submit your proxy or voting instructions as described below so that your vote will be counted if you later decide not to attend the meeting.

        How may I vote my shares without attending the annual meeting?     Whether you hold shares directly as the stockholder of record or beneficially in street name, you may direct how your shares are voted without attending the annual meeting.

        If you are a stockholder of record, you may vote by proxy by using one of the following methods:

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By Internet:   Stockholders who have received a notice of the availability of the proxy materials by mail or e-mail may submit proxies over the Internet at www.proxyvote.com and by following the instructions on the notice or e-mail. Stockholders who have received a paper copy of the proxy card or voting instruction card by mail may submit proxies over the Internet by following the instructions on the proxy card or voting instruction card.



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By Telephone:   Stockholders of record who live in the United States or Canada may submit their proxies by telephone by calling (1-800-690-6903) and following the instructions. Stockholders of record who have received a notice of the Internet availability of the proxy materials by mail or e-mail must have the control number that appears on their notice or e-mail available when voting.



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By Mail:   Complete, sign, date and mail your proxy card in the enclosed postage-prepaid envelope. Your proxy card must be received by Broadridge, STR's mailing agent and tabulator, prior to the commencement of the annual meeting at 2:00 p.m. Eastern Time, on May 14, 2013, unless you attend the meeting, in which event you may deliver your proxy card, or vote by ballot, at the meeting. If you are voting by the Internet or by telephone, please do not return your proxy card.

        If you hold shares beneficially in street name, you may also vote by proxy over the Internet, by telephone or by mail by following the voting instructions provided to you by your broker, bank, trustee or nominee.

        What is the deadline for voting my shares?     If you hold shares as the stockholder of record, or through the STR Holdings,  Inc. 2010 Employee Stock Purchase Plan (the "ESPP"), your vote by proxy must be received before the polls close at the annual meeting. If you are the beneficial owner of shares

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held through a broker, trustee or other nominee, please follow the voting instructions provided by your broker, trustee or nominee.

        May I change my vote?     You may change your vote at any time prior to the taking of the vote at the annual meeting. If you are the stockholder of record, you may change your vote by (1) granting a new proxy bearing a later date (which automatically revokes the earlier proxy) using any of the methods described above (and until the applicable deadline for each method), (2) providing a written notice of revocation to STR's Senior Vice President, General Counsel and Secretary at STR Holdings, Inc., 1699 King Street, Suite 400, Enfield, CT 06082, prior to your shares being voted, or (3) attending the annual meeting and voting in person. Attendance at the meeting will not cause your previously-granted proxy to be revoked unless you specifically so request. For shares you hold beneficially in street name, you may change your vote by submitting new voting instructions to your broker, bank, trustee or nominee following the instructions they provided, or, if you have obtained a legal proxy from your broker, bank, trustee or nominee giving you the right to vote your shares, by attending the annual meeting and voting in person.

        Is my vote confidential?     Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within STR or to third parties, except: (1) as necessary to meet applicable legal requirements, (2) to allow for the tabulation of votes and certification of the vote, and (3) to facilitate a successful proxy solicitation. Occasionally, stockholders provide written comments on their proxy card, which are then forwarded to STR management.

        How many shares must be present or represented to conduct business at the annual meeting?     The quorum requirement for holding the annual meeting and transacting business is that the holders of record of a majority of the voting power of the issued and outstanding shares of common stock of STR entitled to vote at the meeting must be present in person or represented by proxy. Both abstentions and broker non-votes (described below) are counted for the purpose of determining the presence of a quorum.

        How may I vote on each of the proposals?     In the election of directors, you may vote "FOR" all or some of the nominees or your vote may be "WITHHOLD" with respect to one or more of the nominees. For each of the amendment of our 2009 Plan and the ratification of our independent registered public accounting firm, you may vote "FOR", "AGAINST" or "ABSTAIN".

        If you provide specific instructions with regard to certain items, your shares will be voted as you instruct on such items. If no instructions are indicated, the shares will be voted as recommended by the board of directors.

        What is a broker non-vote?     A broker non-vote occurs when a broker, bank or other nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that matter and has not received voting instructions from the beneficial owner.

        How are shares held by a broker or nominee voted?     Under New York Stock Exchange ("NYSE") rules, the ratification of the selection of an independent registered public accounting firm (Proposal No. 3), is considered a "routine" matter, and brokers generally may vote on behalf of beneficial owners who have not furnished voting instructions, subject to the rules of the NYSE concerning transmission of proxy materials to beneficial owners, and subject to any proxy voting policies and procedures of those brokerage firms. However, brokers may not vote on the other proposals contained in this proxy statement which are considered "non-routine" proposals, unless they have received voting instructions from the beneficial owner. To the extent that they have not received voting instructions, brokers report such number of shares as "non-votes".

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What is the voting requirement to approve each of the proposals?

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With respect to Proposal No. 1 , the election of directors, under our Bylaws, we have adopted a "majority voting" standard for the election of directors. Under this standard, each of the eight nominees for election as a director shall be elected to the board of directors if the votes cast for each nominee's election exceed the votes cast (which includes votes "WITHHOLD") against each nominee's election; provided, however, that directors shall be elected by a plurality of the votes to be cast at any meeting of stockholders for which the election of the directors is "contested" by one or more stockholders, as specified in our Bylaws. Our Corporate Governance Guidelines describe the policies and procedures that the board of directors will follow if one or more nominee fails to receive the required vote in an uncontested director election. See "Corporate Governance—Director Elections". Proxies' marked "WITHHOLD" authority for the election of any director nominee will be included in the tally of "votes cast" with respect to that nominee for purposes of our majority voting Bylaw. Accordingly, a vote to withhold authority for the election of any director nominee will have the same effect as a negative vote with respect to the nominee(s). Broker non-votes are not counted in the determination of votes cast, and, thus, do not have a direct effect on the outcome of voting for directors.



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With respect to Proposal No. 2 , to approve an amendment to our 2009 Equity Incentive Plan, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter will be required to ratify the proposal. Abstentions will, therefore, have the same effect as negative votes.



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With respect to Proposal No. 3 , to ratify the appointment of UHY LLP as our independent registered public accounting firm, the affirmative vote of a majority of the voting power of the shares present in person or represented by proxy at the meeting and entitled to vote on the matter will be required to ratify the proposal. Abstentions will, therefore, have the same effect as negative votes.

        NYSE rules do not allow brokers discretionary authority to vote in the election of directors or the amendment of our 2009 Equity Incentive Plan. Therefore, if you hold your shares in street name and do not provide voting instructions to your broker, your shares will not be voted in the election of directors or the amendment of our 2009 Equity Incentive Plan. We urge you to promptly provide voting instructions to your broker to ensure that your shares are voted in these matters.

        Is cumulative voting permitted for the election of directors?     No. You may not cumulate your votes for the election of directors.

        What happens if additional matters are presented at the annual meeting?     Other than the items of business described in this proxy statement, we are not aware of any other business to be acted upon at the annual meeting. If you grant a proxy, the persons named as proxy holders, Robert S. Yorgensen and Joseph C. Radziewicz, or either of them, will have the discretion to vote your shares on any additional matters properly presented for a vote at the meeting. If for any reason any of the nominees is not available as a candidate for director, the persons named as proxy holders will vote your proxy for such other candidate or candidates as may be nominated by the board of directors.

        Who will serve as inspector of elections?     The inspector of elections will be a representative from an independent firm, Broadridge.

        Who will bear the cost of soliciting votes for the annual meeting?     STR will pay the entire cost of preparing, assembling, printing, mailing and distributing these proxy materials. If you access the proxy materials and/or vote over the Internet, you are responsible for Internet access charges you may incur. If you choose to vote by telephone, you are responsible for telephone charges you may incur. We have

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engaged Broadridge to assist us in the distribution of proxy materials described above for a service fee and the reimbursement of customary out-of-pocket disbursements.

        Where can I find the voting results of the annual meeting?     We intend to announce preliminary voting results at the annual meeting and publish final results in a Current Report on Form 8-K filed not later than four (4) business days following the date of the annual meeting. We also plan to disclose the preliminary vote results and the final vote results on the Investor Relations section of our website not later than four (4) business days after the annual meeting.

        What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?     If a stockholder intends to present any proposal for inclusion in the Company's proxy statement in accordance with Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended, for consideration at the Company's 2014 annual meeting of stockholders, the proposal must be received by the Senior Vice President, General Counsel and Secretary of the Company by December 5, 2013. Such proposal must also meet the other requirements of the rules of the SEC relating to stockholder proposals.

        The Company's Bylaws contain an advance notice of stockholder business and nominations requirement (Article II, Sections 9 and 10 of the Bylaws), which generally prescribes the procedures that a stockholder of the Company must follow if the stockholder intends, at an annual or special meeting of stockholders, to nominate a person for election to the Company's board of directors or to propose other business to be considered by stockholders. These procedures include, among other things, that the stockholder give timely notice to the Senior Vice President, General Counsel and Secretary of the Company of the nomination or other proposed business, that the notice contain specified information, and that the stockholder comply with certain other requirements. Generally, in the case of an annual meeting of stockholders, a stockholder's notice, in order to be timely, must be delivered in writing to the Senior Vice President, General Counsel and Secretary of the Company, at its principal executive offices, not later than the close of business on the 90th day, nor earlier than the close of business on the 120th day prior to the first anniversary of the date of the immediately preceding year's annual meeting. As specified in the Bylaws, different notice deadlines apply in the case of a special meeting, or when the date of an annual meeting is more than 30 days prior to or delayed 60 days after the first anniversary of the preceding year's meeting. If a stockholder's nomination or proposal is not in compliance with the procedures set forth in the Bylaws, the Company may disregard such nomination or proposal.

        Accordingly, if a stockholder of the Company intends, at the Company's 2014 annual meeting of stockholders, to nominate a person for election to the Company's board of directors or to propose other business, the stockholder must deliver a notice of such nomination or proposal to the Company's Senior Vice President, General Counsel and Secretary not later than the close of business on February 13, 2014, and not earlier than the close of business on January 14, 2014, and comply with the requirements of the Bylaws.

        Notices should be addressed in writing to:

STR Holdings, Inc.
Attn: Senior Vice President, General Counsel and Secretary
1699 King Street, Suite 400
Enfield, Connecticut 06082

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not earlier than the close of business on January 14, 2014, and



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not later than the close of business on February 13, 2014.

        In the event that we hold our 2014 annual meeting of stockholders more than 30 days before or more than 60 days after the one-year anniversary date of the 2013 annual meeting, then notice of a

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stockholder proposal that is not intended to be included in our proxy statement must be received not later than the close of business on the earlier of the following two dates:

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the 10th day following the day on which notice of the meeting date is mailed, or



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the 10th day following the day on which public disclosure of the meeting date is made.

        If a stockholder who has notified us of his or her intention to present a proposal at an annual meeting does not appear to present his or her proposal at such meeting, we are not required to present the proposal for a vote at such meeting.

        May I nominate candidates for director?     You may propose director candidates for consideration by our nominating and corporate governance committee. Any such recommendations should include the nominee's name, qualifications for membership on our board of directors and should be directed to the Senior Vice President, General Counsel and Secretary of STR at the address set forth above. For additional information regarding stockholder recommendations for director candidates, see "Corporate Governance" and "Nominating and Corporate Governance Committee".

        In addition, our Bylaws permit stockholders to nominate directors for election at an annual meeting of stockholders. To nominate a director, the stockholder must provide the information required by our Bylaws. In addition, the stockholder must give timely notice to our Senior Vice President, General Counsel and Secretary in accordance with our Bylaws, which, in general, require that the notice be received by our Senior Vice President, General Counsel and Secretary within the time periods described above under "What is the deadline to propose actions for consideration at next year's annual meeting of stockholders or to nominate individuals to serve as directors?" for stockholder proposals that are not intended to be included in our proxy statement.

        Where can I find a copy of STR's Bylaws?     A copy of our Bylaws is available in the Investor Relations section of our website at www.strholdings.com. You may also contact our Senior Vice President, General Counsel and Secretary at our principal executive offices for a copy of the relevant Bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

Available Information

        STR stockholders are invited to visit the "Corporate Governance" portion of our corporate website located at www.strholdings.com on the "Investor Relations" page under the link "Corporate Governance". At this page, we have provided copies of the following documents:

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Charter of the Audit Committee



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Charter of the Compensation Committee



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Charter of the Nominating and Corporate Governance Committee



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Certificate of Incorporation



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Bylaws



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Corporate Governance Guidelines



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Code of Business Conduct and Ethics



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Code of Ethics for the CEO, CFO and Other Senior Officers



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Regulation FD Policy



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Related Person Transaction Policy



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Complaint Procedures for Accounting and Auditing Matters

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        Information contained on any of the Company's websites is not deemed to be a part of this proxy statement.

         The Company is subject to the reporting requirements of the Securities Exchange Act of 1934 and files an Annual Report on Form 10-K with the SEC, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other required reports and information. Additional copies of the 2012 Annual Report on Form 10-K filed by the Company, including the financial statements and schedule, but without exhibits, will be mailed to any stockholder upon written request without charge. The exhibits are obtainable from the Company upon payment of the reasonable cost of copying such exhibits. Stockholders may request this information by phone at 860-758-7325, by e-mail to investorinfo@strholdings.com, or by mail to Joseph C. Radziewicz, Investor Relations, STR Holdings, Inc., 1699 King Street, Suite 400, Enfield, CT 06082.

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CORPORATE GOVERNANCE

Overview

        STR is committed to maintaining the highest standards of business conduct and corporate governance which we believe are essential to running our business efficiently, serving our stockholders well and maintaining our integrity in the marketplace. We have adopted a code of business conduct and ethics for directors, officers and employees, known as the STR Code of Business Conduct and Ethics. We have also adopted Corporate Governance Guidelines, which, in conjunction with our certificate of incorporation, Bylaws and board committee charters, form the framework for STR's corporate governance. The STR Code of Business Conduct and Ethics and our Corporate Governance Guidelines are available at www.strholdings.com on the "Investor Relations" page under the link "Corporate Governance". Any amendments to the STR Code of Business Conduct and Ethics, or any waivers of its requirements, will be disclosed on our website.

Board Leadership Structure

        The Company's corporate governance documents provide our Board of Directors ("Board") with flexibility to select the appropriate leadership structure for the Company. In making leadership structure determinations, the Board considers many factors, including specific needs of the business and what is in the best interest of the Company's stockholders.

        Our leadership structure changed on July 18, 2012. Mr. Dennis L. Jilot retired as Executive Chairman of the Company and currently serves as Chairman of the Board of Directors. Ryan M. Sprott did not seek re-election at the Company's annual meeting of stockholders in May 2012 due to time constraints associated with other business commitments. In addition, Dr. Uwe Krueger is not seeking re-election at the Company's upcoming annual meeting of stockholders in May 2013 due to time constraints with other business commitments. Each of Mr. Sprott's decision to not seek re-election and Dr. Krueger's decision not to seek re-election did not involve a disagreement with the Company or any matter relating to the Company's operations, policies and or practices. The Company's Nominating and Corporate Governance Committee recommended to the Board that each such directorship not be filled due to the recent reduction in the size of the Company's business.

        STR's leadership structure also includes an independent director serving as the Lead Director and strong, active, independent directors. Each of the standing committees of the Board is chaired by an independent director and each of our standing committees is comprised entirely of independent directors under NYSE rules. The audit committee is comprised of three directors, all of whom are independent in accordance with the NYSE and SEC rules applicable to audit committee members. The Board believes this structure provides very well-functioning and effective balance between strong Company leadership and appropriate safeguards and oversight by independent directors.

Board Structure and Committee Composition

        Composition.     Our business and affairs are managed under the direction of our Board. Our Bylaws provide that our Board will consist of between three and fifteen directors. Our Board is currently composed of nine directors, but will consist of eight directors following the 2013 Annual Meeting of Stockholders. Each of our executive officers has been appointed by our Board and will serve until his or her successor is duly appointed and qualified.

        Independence.     Our Board affirmatively determined that Messrs. Brown, Chiste, Janitz, Krueger, Leitch, Schiano and Ms. Schnabel are independent directors under the applicable rules of the NYSE and that Messrs. Brown, Leitch and Schiano are also independent directors as such term is defined in Rule 10A-3(b)(1) under the Exchange Act.

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        Lead Director.     Annually, the Board shall appoint from among its independent members an individual to serve as Lead Director. Susan C. Schnabel currently serves as our Lead Director. The Lead Director performs the following roles and functions:

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serve as a member of the nominating and corporate governance committee;



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serve as Chair of the Board's executive sessions of independent directors;



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oversee the Board's annual self-evaluation;



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consult with each committee with respect to its annual evaluations;



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provide counsel to the President and CEO, including provision of appropriate feedback regarding effectiveness of Board meetings, and otherwise as needed or requested; and



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such other responsibilities as the Board may delegate from time to time.

        Executive Sessions of Independent Directors.     The independent directors of the Board will hold at least two regularly scheduled executive sessions each year without non-independent directors present, with the Lead Director presiding as Chair.

        Director Qualification Standards.     The Board is responsible for selecting its own members and in recommending them for election by the stockholders. Stockholders may also nominate directors in accordance with the Company's Bylaws. The nominating and governance committee considers recommendations for Board candidates submitted by stockholders using the same criteria it applies to recommendations from the committee, directors or members of management. Stockholders may submit recommendations by providing the person's name and appropriate background and biographical information in writing to the Senior Vice President, General Counsel and Secretary of STR at: 1699 King Street, Suite 400, Enfield, Connecticut 06082.

        The Board delegates the screening process involved to the nominating and corporate governance committee, which considers candidates to fill newly created directorships or vacancies on the Board, and then consults with the President and CEO after which it provides recommendations to the full Board. These recommendations are reviewed and approved by the full Board before an invitation is extended to the candidate.

        The nominating and corporate governance committee is responsible for reviewing with the Board, on an annual basis, the appropriate criterion that directors are required to fulfill, including the specific experience, qualifications, attributes and skills in light of the Company's business and structure. The Board seeks directors with diverse business and relevant professional backgrounds, relevant technical skills, industry knowledge and experience, financial expertise, local or community ties and minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company's business and industry, independence of thought and an ability to work collegially, and such other skills and experience as will enhance the Board's ability to serve the best interests of STR and its stockholders. The nominating and corporate governance committee also may consider the extent to which the candidate would fill a present need on the Board. The invitation to join the Board is extended by the Board via the Chairman of the Board and the Chairman of the nominating and corporate governance committee. The Board does not believe it should establish term limits for directors.

        Confidentiality Agreements.     In August 2012, the Board approved the adoption of a policy addressing the protection of confidential information by members of the Board. Specifically, the policy requires Board members to keep confidential certain Company information as well as certain information disclosed during Board meetings or other Board deliberations. In connection with such policy, directors were required to sign contingent resignation letters which resignation may be accepted

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by the Board in the event it is determined that a member of the Board has breached the Company's confidentiality policy.

        Board Diversity.     The Board seeks a diverse group of candidates who at a minimum possess the background, skills, expertise and time to make a significant contribution to the Board, the Company and its stockholders. The nominating and corporate governance committee makes recommendations to the Board concerning the composition of the Board and its committees including size and qualifications for membership. The nominating and corporate governance committee evaluates prospective nominees against the standards and qualifications set forth in the Company's Corporate Governance Guidelines, as well as other relevant factors as it deems appropriate, including: the need for the Board, as a whole, to be diverse and consist of individuals with various and relevant career experience, relevant technical skills, industry knowledge and experience, financial expertise, local or community ties and minimum individual qualifications, including strength of character, mature judgment, familiarity with the Company's business and industry, independence of thought and an ability to work collegially. The nominating and corporate governance committee also may consider the extent to which the candidate would fill a present need on the Board.

        Our directors and nominating and corporate governance committee consider these criteria each year as they determine the slate of directors to recommend to the Board for election at our annual meeting and also consider these criteria each time a new director is recommended for election to the Board. The Board believes that its implementation of this policy is effective in considering the diversity of the members of the Board. Each of our Board members possesses the appropriate skills in general finance, strategic planning, corporate governance and leadership. The following table lists the specialized talents that each of our directors provides to the Board as a whole.

        Director Elections.     In accordance with the Company's Bylaws, if none of our stockholders provides the Company notice of an intention to nominate one or more candidates to compete with the Board's nominees in an election for directors, or if our stockholders have withdrawn all such nominations not later than the day before the Company mails its notice of meeting to our stockholders, a director election is not "contested" and a majority voting standard applies, whereby a nominee must receive more votes cast for than against his or her election or re-election in order to be elected or re-elected to the Board. For purposes of this policy, the term "votes cast" includes votes to withhold authority and excludes abstentions with respect to that director's election. The policies of the Company with respect to a failure to receive the required vote in an uncontested election are as follows:

•

the Board shall nominate for election or re-election as director only candidates who agree to tender, promptly following the meeting at which they are elected or re-elected as director, irrevocable resignations that will be effective upon (i) the failure to receive the required vote at the next meeting at which they face re-election and (ii) Board acceptance of such resignation.



•

in addition, the Board shall fill director vacancies and new directorships only with candidates who agree to tender, promptly following their appointment to the Board, the same form of resignation tendered by other directors described above.

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•

if an incumbent director fails to receive the required vote for re-election, the nominating and corporate governance committee will act on an expedited basis to determine whether to accept the director's resignation and will submit such recommendation for prompt consideration by the Board. The Board expects the director whose resignation is under consideration to abstain from participating in any direction regarding that resignation. The nominating and corporate governance committee and the Board may consider any factors they deem relevant in deciding whether to accept a director's resignation, including the director's qualifications, the director's past and expected future considerations to the Company, the overall composition of the Board and whether accepting the tender resignation would cause the Company to fail to meet any applicable rule or regulation (including securities exchange listing requirements and federal securities laws). The Board will act on the tender resignation, and publicly disclose its decision and rationale, within 90 days following certification of the stockholder vote, in a press release and through the filing of a Form 8-K with the SEC.



•

if no directors receive the requisite vote in an uncontested election, the incumbent Board will nominate a new slate of director candidates and hold a special meeting for the purpose of electing those nominees within 180 days after the certification of the stockholder vote unless the incumbent directors determine that holding such election is not in the best interests of the Company and its stockholders. If such a special meeting is held in accordance with the preceding sentence, the incumbent directors shall resign with their resignations to be effective at the time that new directors are elected and qualified.

        The foregoing policies are subject to change if the directors believe changes to the policy are in the best interests of the Company and its stockholders.

        Communications with Directors.     Interested persons may communicate directly with any director, the independent directors as a group or the Board as a whole by sending such communication by fax, telephone or regular mail to the Company, attention: Senior Vice President, General Counsel and Secretary, who will forward the communication to the intended recipient. Communications may also be sent via electronic mail to the following e-mail address: STR.Board@strholdings.com, which is accessible via a link at the Company's corporate website. Such communications may also be forwarded to them by mail in a sealed envelope addressed to an individual director, the non-management directors or the Board c/o the Company's Senior Vice President, General Counsel and Secretary. The Senior Vice President, General Counsel and Secretary will deliver the envelope unopened (1) if addressed to a director, to the director, (2) if addressed to the Board, to the Chairman of the Board who will report thereon to the Board, or (3) if addressed to the non-employee directors, to the Lead Director who will report thereon to the non-employee directors.

        Selection of Chairman and CEO.     The Board will determine whether the positions of Chairman and CEO should be held by the same person based on what it reasonably determines to be in the Company's best interests at a given point in time. Therefore, the Board does not have a policy on whether or not the role of the Chairman and CEO should be separate and, if it is to be separate, whether the Chairman should be selected from the non-employee directors or be an employee. Mr. Jilot retired as our Executive Chairman on July 18, 2012 and was appointed to serve the Company as Chairman of the Board. Since January 1, 2012, the Company has operated with separate Chairman and CEO roles.

        Committees of the Board.     Our Board has the authority to appoint committees to perform certain management and administration functions. Our Board has three committees: the audit committee, the compensation committee and the nominating and corporate governance committee. Each Board committee operates pursuant to a written charter. Copies of the committee charters are available on the Investor Relations section of STR's website at www.strholdings.com on the "Corporate Governance" page under the respective committee charter links.

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        The following table shows the membership of these committees: