the Securities Exchange Act of 1934 (Amendment No. )
It is my pleasure to invite you to STR Holdings, Inc.’s
2016 annual meeting of stockholders to be held on Thursday, November 17, 2016 at 2:00 p.m., Eastern Time at our principal
executive offices, located at 10 Water Street, Enfield, Connecticut 06082. Additional details regarding admission to the meeting
and the business to be conducted are described in the Notice of Annual Meeting of Stockholders and Proxy Statement following this
letter.
Consistent with prior years, as part of our ongoing commitment to
reduce costs and modernize the way we communicate with our stockholders, we have chosen to provide access to our Proxy Statement
and Annual Report over the Internet instead of mailing paper copies to our stockholders. This method saves paper and reduces our
printing and mailing costs. Additionally, we believe that this e-proxy process expedites your receipt of our proxy materials. On
or about October 7, 2016, we will mail to our stockholders of record as of September 28, 2016 (other than those who previously
requested electronic or paper delivery on an ongoing basis) a Notice of Meeting and Important Notice Regarding the Internet Availability
of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our 2015 Annual
Report.
As always, the board of directors feels that it is important to provide
you with information about STR Holdings, Inc. in a way that is easy to understand. We encourage you to access and review all
the information contained in the proxy materials before voting.
Whether or not you plan to attend the meeting, your vote is very
important to us. Prior to the meeting, you may vote your shares over the Internet, via a toll-free telephone number or by mail.
Instructions on how to vote were contained in the notice, e-mail or proxy card you received. They can also be found in this proxy
statement beginning on page 3.
Thank you for supporting STR Holdings, Inc. We look forward
to seeing you at our annual meeting.
PROXY STATEMENT
QUESTIONS AND ANSWERS ABOUT THE PROXY MATERIALS AND THE ANNUAL
MEETING
General Information
Why am I receiving these materials?
This proxy statement
is being furnished to the stockholders of STR Holdings, Inc., a Delaware corporation (“STR” or the “Company”
or “we”), as part of the solicitation of proxies by its Board of Directors (the “Board”) from holders of
its outstanding shares of common stock, par value $.01 per share, for use at the annual meeting of stockholders, which will take
place on Thursday, November 17, 2016. 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
in accordance with the requirements of Section 14A of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)
and the related rules of the Securities and Exchange Commission (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 2015 Annual Report. Included in the 2015 Annual
Report is our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, as filed with the SEC on March
22, 2016, as amended by Form 10-K/A on April 29, 2016 (the “2015 Form 10-K”)..
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 or about October 7, 2016, we will mail to our stockholders of record as of September 28,
2016 (other than those who previously requested electronic or paper delivery on an ongoing basis) a Notice of Meeting and Important
Notice Regarding the Internet Availability of Proxy Materials informing them that our proxy materials are available online and
containing instructions on how to access our proxy materials, including our proxy statement and our 2015 Annual Report.
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.
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Our proxy materials are available on the Investor Relations section
of our website at www.strsolar.com. Your Important Notice Regarding the Internet Availability of Proxy Materials, proxy card or
voting instruction card will contain instructions on how you may request to access proxy materials 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.
10 Water Street
Enfield, CT 06082
E-mail: investorinfo@strsolar.com
(860) 265-1420
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 as directors: Dr. Gokalp Bayramoglu, John A. Janitz, HuiYing (Julia) Ju, Andrew M. Leitch, Xin (Cindy) Lin, Robert
S. Yorgensen and Haiyang (Ocean) Yuan.
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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, 2016.
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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 (the “Board”) recommends that you vote your shares (1) FOR each of the nominees to the
Board and (2) FOR the ratification of the appointment of UHY LLP as our independent registered public accounting firm
for the fiscal year ending December 31, 2016.
Who may vote at the annual meeting?
Each share of STR
common stock has one vote on each matter. Only stockholders of record as of the close of business on September 28, 2016, the
record date for the 2016 annual meeting of stockholders, are entitled to receive notice of, to attend, and to vote 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 18,551,332 shares of common stock issued and 18,550,092 shares outstanding, held by
26 holders of record.
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 Notice.
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. Your broker, bank trustee or nominee then casts the vote with the Company after receiving instructions from
you, the beneficial owner.
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.
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 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 September 28, 2016, 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 the 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 November 17, 2016, 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.
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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 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 Corporate Secretary
at STR Holdings, Inc., 10 Water Street, 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.
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 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.
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. To the extent that they have not received voting instructions, brokers report such number of shares as “non-votes.”
How are shares held by a broker or nominee voted?
Under
the rules that govern brokers who are voting with respect to shares held in street name, brokers have the discretion to vote such
shares on routine matters but not on non-routine matters. Under New York Stock Exchange (“NYSE”) rules that are applicable
to brokers, one of the proposals before the annual meeting is deemed a “routine” matters, namely the ratification of
the selection of an independent registered public accounting firm (Proposal No. 2), which means that if your shares are held
in street name your bank, broker or other nominee can vote your shares on the proposal if you do not provide timely instructions
for voting your shares. The election of directors (Proposal No. 1) is not considered a “routine” matter. As a result,
if you do not instruct your bank, broker or nominee how to vote with respect to these matters, your bank, broker or nominee may
not vote on these proposals and a broker “non-vote” will occur.
We urge you to promptly provide voting instructions
to your broker to ensure that your shares are voted in these matters.
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 seven nominees for election as a director
shall be elected to the Board if the votes cast for each nominee’s election exceed the votes cast (which includes votes cast
as “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 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” 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 ratify the appointment of UHY LLP as our independent registered public
accounting firm for the year ending December 31, 2016, 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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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 Thomas D.
Vitro, 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.
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 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 Exchange Act for consideration at the Company’s 2017 annual meeting of stockholders, the proposal must be received by
the Corporate Secretary by June 3, 2017 or if the date of the 2017 annual meeting has been changed by more than 30 days from the
date of the 2016 annual meeting, then the deadline is a reasonable time before the Company begins to print and send its proxy materials.
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 Corporate 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 Corporate Secretary of the Company, at its principal executive office, 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
2017 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 Corporate Secretary
not later than the close of business on August 19, 2017, and not earlier than the close of business on July 20, 2017, and comply
with the requirements of the Bylaws.
Notices should be addressed in writing to:
STR Holdings, Inc.
Attn: Corporate Secretary
10 Water Street
Enfield, Connecticut 06082
In the event that we hold our 2017 annual meeting of stockholders
more than 30 days before or more than 60 days after the one-year anniversary date of the 2016 annual meeting, then notice
of a 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.
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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.
Available Information
STR stockholders are invited to visit the “Corporate Governance”
portion of our corporate website located at www.strsolar.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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Charter of the Special Committee of Continuing Directors
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Certificate of Incorporation
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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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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 2015 Annual Report on Form 10-K filed
by the Company, including the financial statements and schedules, 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) 265-1420, by e-mail to investorinfo@strholdings.com,
or by mail to Corporate Secretary, Investor Relations, STR Holdings, Inc., 10 Water Street, Enfield, CT 06082.
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.strsolar.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.
On September 29, 2015, STR was notified by the NYSE that it was not
in compliance with the continued listing standards set forth in Section 802.01B of the NYSE Listed Company Manual due to its failure
to maintain an average global market capitalization over a consecutive 30 trading-day period of at least $15.0 million. The NYSE
informed STR that trading in its common stock has been suspended as of Tuesday, September 29, 2015. On September 30, 2015, STR
began trading on the OTC Pink Marketplace, and on October 5, 2015, STR began trading on the OTCQX Marketplace, which is the highest
tier on the OTC Marketplace.
We have made a determination of independence of our directors under
NYSE standards, solely for purposes of complying with the rules and regulations of the SEC. We are not subject to the independence
requirements, or any other rule or regulation of the NYSE. Further, to the extent we were listed on the NYSE, we would be considered
a controlled company under applicable NYSE rules. Under these rules, a “controlled company” may elect not to comply
with certain corporate governance requirements.
Board Leadership Structure
The Company’s corporate governance documents provide our 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.
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 two 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 a 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 seven directors.
On August 11, 2014, the Company entered into a Stock Purchase Agreement
(the “Purchase Agreement”) with the Zhen Fa New Energy (U.S.) Co., Ltd., a Nevada corporation (the “Zhenfa U.S.”),
an affiliate of Zhenfa Energy Group Co., Ltd., a Chinese limited liability company (“Zhenfa”), pursuant to which the
Company agreed to issue and sell to Zhenfa U.S., and Zhenfa U.S. agreed to purchase from the Company, an aggregate of 9,210,710
shares (the “Purchased Shares”) of its authorized but unissued common stock, par value $0.01 per share, for an aggregate
purchase price of approximately $21.7 million (the “Purchase Price”), or $2.35 per share (the “Zhenfa Transaction”).
The Purchased Shares represented approximately 51% of the Company’s outstanding shares of common stock upon the closing of
the Transaction, which occurred on December 15, 2014 (the “Closing Date”).
Subject in each case to all fiduciary duties of the Board and pursuant
to the terms of the Purchase Agreement, the Company and Zhenfa U.S. have agreed that the Board, until immediately prior to the
2017 annual meeting of stockholders (the “2017 Annual Meeting”), will be comprised of: (i) up to four directors designated
by Zhenfa U.S. and are reasonably acceptable to the Board (the “Zhenfa Directors”), at least two of whom will be independent,
as defined under applicable New York Stock Exchange (“NYSE”) listing standards, and shall be eligible and qualified
to serve on the Audit Committee of the Board and Compensation Committee of the Board, as determined in accordance with the rules
and regulations of the SEC and applicable NYSE listing standards, (ii) one director who is also the President or Chief Executive
Officer of the Company, and (iii) two directors who are independent directors of the Company as of the date of the Purchase Agreement
(include any successors to any such directors who take office after the Closing Date who are nominated, or proposed to the Nominating
and Corporate Governance Committee for nomination, by the Special Committee of Continuing Directors, the "Continuing Directors”).
The Company and Zhenfa U.S. have agreed that, from the Closing Date
until the 2017 Annual Meeting, all vacancies on the Board created by the cessation of service of a Continuing Director or a Purchaser
Director, as the case may be, shall be filled by a nominee proposed to the Nominating and Corporate Governance Committee, the Special
Committee of Continuing Directors or by the remaining Zhenfa Directors or Zhenfa U.S., as the case may be. Any director so nominated
and approved shall be considered a Continuing Director or Zhenfa Director, as applicable. Until the 2017 Annual Meeting, the Nominating
and Corporate Governance Committee will nominate all Continuing Directors and Zhenfa Directors then serving as director for election
as directors at any stockholder meeting called for the election of directors. If, prior to the 2017 Annual Meeting, there is no
Continuing Director then serving on the Board, Zhenfa U.S. and the President or Chief Executive of the Company will cooperate to
identify and elect two new independent directors, who shall be considered Continuing Directors. Additionally, Zhenfa U.S. has agreed
to take all action necessary to vote any shares of common stock then held by it in favor of any nominee for director made pursuant
to the terms of the Purchase Agreement.
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.
As described above, we have made a determination
of independence of our directors under NYSE standards, solely for purposes of complying with the rules and regulations of the SEC.
We are not subject to the independence requirements, or any other rule or regulation of the NYSE. The NYSE listing standards define
specific relationships that would disqualify a director from being independent and further require that for a director to qualify
as “independent,” the board of directors must affirmatively determine that the director has no material relationship
with the Company.
The Board, with the assistance of the Nominating and Corporate Governance
Committee, conducted an evaluation of director independence, based primarily on a review of the responses of the directors and
executive officers to questions regarding employment and compensation history, affiliations and family and other relationships
with the Company, including those relationships described under “Compensation Committee Interlocks and Insider Participation”
and “Certain Relationships” of this proxy statement, and on discussions with the Board.
Our Board affirmatively determined that each of Dr. Gokalp Bayramoglu,
John A. Janitz, Andrew M. Leitch and Haiyang (Ocean) Yuan are independent directors, under the applicable rules of the NYSE. In
addition, each of the current and former members of our Audit Committee listed below, are also independent directors as such term
is defined in Rule 10A-3(b)(1) under the Exchange Act.
Robert S. Yorgensen is not considered independent because he is an
executive officer of the Company. Each of HuiYing (Julia) Ju and Xin (Cindy) Lin are not considered independent because they are
each affiliates of Zhenfa, the Company’s largest stockholder.
Lead Director.
Mr. Janitz has served as our Lead Director
since January 13, 2015. The Lead Director performs the following roles and functions:
|
|
•
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served as a member of the Nominating and Corporate Governance Committee;
|
|
|
|
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|
|
•
|
served as Chair of the Board’s executive sessions of independent directors;
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|
•
|
oversaw the Board’s annual self-evaluation;
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•
|
consulted with each committee with respect to its annual evaluations;
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|
•
|
provided counsel to the Chairman, President and CEO, including provision of appropriate feedback regarding effectiveness of
Board meetings, and otherwise as needed or requested; and
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|
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|
•
|
such other responsibilities as the Board delegated 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.
Director Qualification Standards.
Subject to the terms and
conditions regarding the nomination of directors set forth in the Purchase Agreement, 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 Board delegates the screening process involved in selecting and recommending directors to the Nominating
and Corporate Governance Committee, which considers candidates in light of the qualification standards and Board diversity objectives
discussed below. The Nominating and Corporate 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, appropriate background and biographical information in writing
to the Company’s Corporate Secretary at 10 Water Street, Enfield, Connecticut 06082.
The Board delegates the screening process involved to the Nominating
and Corporate Governance Committee or the Special Committee of Continuing Directors, as the case may be, which considers candidates
to fill newly created directorships or vacancies on the Board, and then consults with the Chairman, 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. Subject to the
terms and conditions regarding the nomination of directors set forth in the Purchase Agreement, 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 that will enhance the Board’s ability to serve the best interests of the Company 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.
Board Diversity.
Subject to the Company’s obligations
under the Purchase Agreement, the Board seeks a diverse group of candidates who 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 Purchase Agreement, 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.
Director Elections.
Subject to the terms and conditions of
the Purchase Agreement, 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, as set forth in its Corporate Governance Guidelines, with
respect to a failure to receive the required vote in an uncontested election are as follows:
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•
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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.
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•
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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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•
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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.
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•
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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 Corporate 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 Corporate Secretary. The
Corporate 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 Chair of the Nominating and Corporate Governance Committee, 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. Effective December 15, 2014, our President and CEO, Robert S. Yorgensen, was appointed Chairman. Prior to Mr.
Yorgensen’s appointment, the Company has operated with separate Chairman and Chief Executive Officer roles.
Committees of the Board.
Our Board has the authority to appoint
committees to perform certain management and administration functions. Our Board currently has, and pursuant to the terms and conditions
of the Purchase Agreement, will maintain through the 2017 Annual Meeting, four standing committees: the Audit Committee, the Compensation
Committee, the Nominating and Corporate Governance Committee and the Special Committee of Continuing Directors. 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.strsolar.com on the “Corporate Governance” page, under the respective committee charter links.
The following table shows the membership of these committees as of
the date of this Proxy Statement:
|
Name
|
|
Audit
|
|
Compensation
|
|
Nominating and
Corporate Governance
|
|
Special Committee of
Continuing Directors (1)
|
|
Robert S. Yorgensen
|
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|
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|
|
Dr. Gokalp Bayramoglu
|
|
X
|
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X
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|
X
|
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John Janitz
|
|
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X, Chair
|
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X, Chair
|
|
X
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|
HuiYing (Julia) Ju
|
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|
|
|
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Andrew M. Leitch
|
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X, Chair
|
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X
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|
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|
X
|
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Xin (Cindy) Lin
|
|
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|
|
|
|
|
|
|
Haiyang (Ocean) Yuan
|
|
X
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|
|
|
X
|
|
|
______________________
|
(1)
|
|
There is no chair of the Special Committee of Continuing Directors.
|
In accordance with the terms of the Purchase Agreement, any additional
committee established by the Board will be comprised of at least one Continuing Director.
Pursuant to the terms and conditions of the Purchase Agreement, each
of the Audit Committee and Nominating and Corporate Governance Committee shall be comprised of three members, one of whom shall
be a Continuing Director, and two of whom shall be independent Zhenfa Directors. The Compensation Committee shall be comprised
of two members, at least one of whom shall be a Continuing Director and one of whom shall be an independent Purchaser Director.
In the event there is not a sufficient number of independent Zhenfa Directors or Continuing Directors to effect the composition
of the committees as described herein, the Board will exercise its discretion to make the appropriate appointment. The Special
Committee of Continuing Directors is comprised of the Continuing Directors.
Audit Committee.
Our Audit Committee currently consists of
Messrs. Leitch and Yuan and Dr. Bayramoglu, with Mr. Leitch serving as Chair of the Audit Committee. Eugene Cha and Andrew
Africk each served as a member of the Audit Committee until their resignation from the Board effective March 14, 2016 and June
27, 2016, respectively. Mr. Janitz was appointed to fill one of the vacancies on the Audit Committee on July 12, 2016 and served
until September 27, 2016. Mr. Yuan and Dr. Bayramoglu were appointed to replace Mr. Janitz and to fill a vacancy on the Audit Committee
on September 27, 2016. The Audit Committee has responsibility for, among other things:
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•
|
overseeing management’s design and maintenance of the Company’s internal control over financial reporting and disclosure
controls and procedures;
|
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|
|
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|
|
•
|
overseeing management’s establishment and maintenance of processes to assure our compliance with applicable laws, regulations
and corporate policy;
|
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|
|
|
|
|
•
|
engaging independent counsel and other advisers as the Audit Committee deems necessary;
|
|
|
|
|
|
|
•
|
reviewing our annual and quarterly financial statements prior to their filing and prior to the release of earnings;
|
|
|
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•
|
reviewing and assessing the adequacy of a formal written charter on an annual basis;
|
|
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•
|
preparing the Audit Committee report required by SEC rules to be included in our annual report;
|
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•
|
reviewing and approving all related person transactions, other than transactions with Zhenfa, for potential conflict of interest
situations on an ongoing basis;
|
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•
|
appointing, evaluating, compensating, overseeing the work of, and if appropriate, terminating the appointment of the independent
auditor, and approving, in advance, any non-audit services proposed to be performed by the independent accountants and the effects
of such services; and
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•
|
handling such other matters that are specifically delegated to the Audit Committee by our Board from time to time.
|
Our Board affirmatively determined that Messrs. Leitch and Yuan
and Dr. Bayramoglu meet the definition of “independent directors” for purposes of serving on an Audit Committee under
applicable SEC and NYSE rules. In addition, our Board has determined that each member of our Audit Committee is financially literate
and Mr. Leitch qualifies as our “Audit Committee financial expert”. Mr. Leitch currently serves on the Audit
Committee of three public companies (including us).
Compensation Committee.
Our Compensation Committee currently
consists of Messrs. Janitz and Leitch and Dr. Bayramoglu, with Mr. Janitz serving as the Chair of the Compensation Committee. Mr.
Africk served as a member of the Compensation Committee until his resignation from the Board effective June 27, 2016. Mr. Leitch
was appointed to fill the vacancy on the Compensation Committee on July 12, 2016. Mr. Bayramoglu was appointed to the Compensation
Committee on September 27, 2016. The Compensation Committee has responsibility for, among other things:
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•
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establishing and reviewing the objectives of the Company’s management compensation programs and its basic compensation
policies;
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|
|
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|
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•
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reviewing and approving the engagement of compensation consultants to provide advice on executive or director compensation
and review the nature of other services provided;
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•
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recommending to our Board for consideration the compensation and benefits of our executive officers and key employees;
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•
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administering our stock and other incentive compensation plans and programs and preparing recommendations and periodic reports
to the Board concerning these matters;
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•
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recommending to our Board with respect to the frequency of say-on-pay;
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•
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reviewing risks relating to the Company’s compensation policies and practices;
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•
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preparing recommendations and periodic reports to the Board as appropriate; and
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•
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handling such other matters that are specifically delegated to the Compensation Committee by our Board from time to time.
|
Nominating and Corporate Governance Committee.
Our Nominating
and Corporate Governance Committee currently consists of Messrs. Janitz and Yuan and Dr. Bayramoglu, with Mr. Janitz serving as
the Chair of the Nominating and Corporate Governance Committee. Mr. Africk served as a member of the Compensation Committee until
his resignation from the Board effective June 27, 2016. Mr. Leitch was appointed to fill the vacancy on the Nominating and Corporate
Governance Committee on July 12, 2016 and served until September 27, 2016. Mr. Yuan and Dr. Bayramoglu were appointed to replace
Mr. Leitch and to fill a vacancy on the Audit Committee on September 27, 2016. The Nominating and Corporate Governance Committee
has responsibility for, among other things:
|
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•
|
recommending persons to be selected by our Board as nominees for election as directors and to fill any vacancies on the Board;
|
|
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|
|
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•
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reviewing annually Board composition, including independence, judgment, business specialization, technical skills, diversity
and other desired qualities;
|
|
|
|
|
|
|
•
|
considering and recommending to our Board qualifications for the position of director and policies concerning the composition
of the Board;
|
|
|
|
|
|
|
•
|
monitoring our performance in meeting our obligations of fairness in internal and external matters and our principles of corporate
governance;
|
|
|
|
|
|
|
•
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considering and recommending to our Board other actions relating to corporate governance; and
|
|
|
|
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•
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handling such other matters that are specifically delegated to the Nominating and Corporate Governance Committee by our Board
from time to time.
|
Special Committee of Continuing Directors.
Our Special Committee
of Continuing Directors currently consists of Messrs. Janitz and Leitch. The Special Committee of Continuing Directors has responsibility
for, among other things:
|
|
•
|
enforcing all matters under the Purchase Agreement, and the related transaction agreements, and to take all other actions required
or permitted under the terms of the Purchase Agreement and the related transaction agreements with respect to the interests and
rights of the Company;
|
|
|
|
|
|
|
|
|
•
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reviewing and evaluating compliance by Zhenfa U.S. and any other person that is an affiliate or related party of Zhenfa or
Zhenfa U.S. other than a person that would be deemed an affiliate or related party of Zhenfa U.S. or Zhenfa solely as a result
of Zhenfa U.S. or Zhenfa’s direct or indirect control of the Company or any of its subsidiaries (collectively, the “Zhenfa
Related Parties”) with the terms and conditions to the Purchase Agreement and the related transaction agreements;
|
|
|
|
|
|
|
•
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subject to certain conditions, review, evaluate and approve, on behalf of the Company (or any of its subsidiaries), the enforcement
or waiver of any of the terms and conditions of the Purchase Agreement or any related transaction agreements;
|
|
|
|
|
|
|
•
|
review, evaluate and approve, on behalf of the Company (or any of its subsidiaries), any proposed waivers to the standstill
provision applicable to the Zhenfa Related Parties, as set forth in the Purchase Agreement;
|
|
|
|
|
|
|
•
|
until the 2017 Annual Meeting, to review, evaluate and approve, on behalf of the Company (or any of its subsidiaries), any
other proposed transaction(s), arrangement(s) or contract(s), and any amendment, modification or waiver, between the Company or
any of its subsidiaries and any Zhenfa Related Party, including the Purchase Agreement and the related transaction agreements;
and
|
|
|
|
|
|
|
•
|
to authorize, by and on behalf of the Company, the taking of any action or the execution and delivery of any documents in connection
with any of the foregoing.
|
Director Attendance.
In 2015, the full Board met 11 times;
the Audit Committee met eight times, the Compensation Committee met four times, and the Nominating and Corporate Governance committee
met three times. Directors are strongly encouraged, but not required, to attend the annual meeting of stockholders. At our 2015
annual meeting of stockholders, all directors serving at the time were present. All of the directors attended at least 75% of the
total of all the meetings of the Board and Board committees on which he or she served during fiscal year 2015.
Board’s Role in Risk Oversight
Our Board has discussions with the Company’s management to
understand opportunities and threats to the Company’s objectives and long-term vitality. Such discussions entail a detailed
review of the current business environment, financial results and the overall competitive landscape. The Board also discusses with
management, the Company’s policies and procedures regarding risk assessment, risk appetite and overall risk management. The
Board also discusses the processes management has established to monitor, manage and communicate such exposures.
Risk management is an integral part of Board and committee deliberations
throughout the year. As a part of its oversight function, the Board monitors how management manages the Company including its enterprise
risk management program. When making any decisions and approving strategies, the Board considers, among other things, the risks
and vulnerabilities the Company faces, including operational and regulatory risks, their relative magnitude and management’s
plan for mitigating these risks. The Audit Committee considers risk issues associated with the Company’s overall financial
reporting, disclosure process and legal compliance. In addition to its regularly-scheduled meetings, the Audit Committee meets
with the Vice President, Chief Financial Officer and Chief Accounting Officer and the independent registered public accounting
firm in executive sessions at least quarterly. The Nominating and Corporate Governance Committee discusses legal compliance risks
and issues at its regularly-scheduled meetings and may meet with outside counsel and officers of the Company from time to time,
including during such meetings. The Compensation Committee oversees our compensation programs to mitigate individuals taking unreasonable
risks that could result in having a materially adverse effect on the Company and its stockholders. The Board reviews the primary
operational and regulatory risks facing the Company, their relative magnitude and management’s plan for mitigating these
risks. In addition, the Board discusses risks related to the Company’s business strategy at periodic strategic planning meetings
and at other meetings, as appropriate.
We determined our current Board leadership structure is appropriate
and helps ensure proper risk oversight for the Company. Currently, our Chairman and CEO positions are combined. Robert S. Yorgensen,
our current President and CEO serves as our Chairman. His prior experience with the Company’s operations and continued service
on the Board makes him best positioned to lead productive board meetings and determine the time allocated to each agenda item during
discussions of the Company’s short- and long-term objectives.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth certain information with respect to
compensation for the years ended December 31, 2015 and 2014 earned by or paid to our Chief Executive Officer, the Chief Financial
Officer during 2015 and one former executive officer who would have been one of our most highly compensated executive officers
but for the fact that he was not serving as an executive officer at the end of 2015.
Joseph C. Radziewicz served as the Company’s Vice President,
Chief Financial Officer and Chief Accounting Officer until his resignation on December 31, 2015. On January 1, 2016, Mr. Thomas
D. Vitro was appointed Vice President, Chief Financial Officer and Chief Accounting Officer. As such, compensation information
for Mr. Vitro is not included in this proxy statement.
|
Name and Principal Position
|
|
Year
|
|
Salary
($)(1)
|
|
Option
Awards
$(2)(3)
|
|
All Other
Compensation
($)(4)
|
|
Total
($)
|
|
Robert S. Yorgensen
|
|
|
2015
|
|
|
$
|
493,269
|
|
|
$
|
650,100
|
|
|
$
|
37,550
|
|
|
$
|
1,180,919
|
|
|
Chairman, President and CEO
|
|
|
2014
|
|
|
$
|
475,000
|
|
|
$
|
315,407
|
|
|
$
|
226,609
|
|
|
$
|
1,017,016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan N. Forman
|
|
|
2015
|
|
|
$
|
123,274
|
|
|
$
|
207,900
|
|
|
$
|
16,339
|
|
|
$
|
347,513
|
|
|
Former Senior Vice President, General
|
|
|
2014
|
|
|
$
|
305,250
|
|
|
$
|
171,221
|
|
|
$
|
251,495
|
|
|
$
|
727,966
|
|
|
Counsel and Secretary (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph C. Radziewicz
|
|
|
2015
|
|
|
$
|
261,916
|
|
|
$
|
165,000
|
|
|
$
|
8,979
|
|
|
$
|
435,895
|
|
|
Former Vice President, Chief Financial
|
|
|
2014
|
|
|
$
|
241,100
|
|
|
$
|
135,174
|
|
|
$
|
188,636
|
|
|
$
|
564,910
|
|
|
Officer and Chief Accounting Officer (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
______________________
|
(1)
|
The amounts reported in this column reflect the amounts paid in 2015 pursuant to each executive’s employment agreement,
except for Mr. Radziewicz who did not have an employment agreement, and take into account salary increases. For more information
regarding these arrangements, see “Employment Agreements”.
|
|
(2)
|
The amounts reported in this column represent the aggregate grant date fair value of option awards computed in accordance with
FASB ASC Topic 718 as of the grant date. The grant date fair value of the stock option awards granted to Messrs. Yorgensen, Forman
and Radziewicz in 2015 was $0.99 per share. The assumptions used to calculate the amount recognized for these option awards are
set forth in Note 18 to the Company’s audited financial statements contained in the 2015 Form 10-K. For purposes of the table
above, the effects of estimated forfeitures are excluded.
|
|
(3)
|
The option awards granted in 2014 were cancelled in connection with the approval of the Zhenfa Transaction in November 2014.
The option awards granted to Messrs. Forman and Radziewicz in 2015 were cancelled as of the dates of their respective resignations.
|
|
(4)
|
The amounts reported in this column for 2015 represent 401(k) and profit sharing contributions to eligible employees, our Section
125 cafeteria plan, term life insurance, disability insurance, long-term care insurance and other personal benefits. The amounts
included in that column are included in the table below.
|
|
Name
|
|
401(k)
Match(a)
|
|
Section 125
Plan(b)
|
|
Term Life
Insurance(c)
|
|
Disability
Insurance(c)
|
|
Long-Term
Care
Insurance(c)
|
|
Robert S. Yorgensen
|
|
$
|
6,250
|
|
|
$
|
29,519
|
|
|
$
|
930
|
|
|
$
|
522
|
|
|
$
|
329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alan N. Forman
|
|
$
|
3,082
|
|
|
$
|
12,514
|
|
|
$
|
388
|
|
|
$
|
218
|
|
|
$
|
137
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joseph C. Radziewicz
|
|
$
|
6,233
|
|
|
$
|
1,000
|
|
|
$
|
895
|
|
|
$
|
522
|
|
|
$
|
329
|
|
______________________
|
(a)
|
|
Reflects amounts of contributions paid to such executive in each fiscal year under
401(k) matching plan for eligible employees.
|
|
(b)
|
|
We maintain a Section 125 cafeteria plan that allows our employees to set aside
pre-tax dollars to pay for certain benefits. This amount represents payments made by us on the employee’s behalf towards
a Section 125 cafeteria benefits plan.
|
|
(c)
|
|
Represents premiums paid by us for applicable insurance policies.
|
|
(5)
|
|
Alan N. Forman resigned from the Company and relinquished all officers and positions
held with the Company effective May 10, 2015.
|
|
(6)
|
|
Joseph C. Radziewicz resigned from the Company and relinquished all officers and positions
held with the Company effective December 31, 2015.
|
Outstanding Equity Awards at Fiscal Year End
The following table sets forth certain information with respect to
outstanding equity awards of our named executive officer as of December 31, 2015.
|
|
|
Option Awards
|
|
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable (1)
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Robert S. Yorgensen
|
|
|
—
|
|
|
|
656,667
|
|
|
|
1.52
|
|
|
|
2/6/2025
|
|
______________________
|
(1)
|
|
The options vest one-third on each of the anniversaries of the date of grant, which
was February 5, 2015.
|
Pension Benefits
In the year ended December 31, 2015, our named executive officers
received no pension benefits and had no accumulated pension benefits.
Nonqualified Deferred Compensation
The Company had no deferred compensation arrangement as of December
31, 2015.
Severance Agreements
The Company entered into severance agreements, dated as of October 1,
2012 (the “Severance Agreements”), with certain members of management, including each of Robert S. Yorgensen, Alan
N. Forman and Joseph C. Radziewicz, setting forth certain payments and benefits in the event of termination of employment. With
respect to Mr. Yorgensen, his Severance Agreement will remain in effect until October 1, 2017 and will automatically renew for
one year periods unless the Company or the executive provides notice of termination as provided for in the Severance Agreement.
However, the term of each Severance Agreement will not expire before a date that is 18 months after a Change of Control that
occurs during the term of the Severance Agreements. To the extent applicable, the Severance Agreements supersede and replace the
severance provisions set forth in any executive’s employment agreement with the Company.
The Severance Agreements provide, among other things, that, if the
executive is terminated for any reason, the executive is entitled to his full base salary through the date of termination at the
rate in effect immediately prior to such termination date, as well as all compensation and benefits due to the executive under
the terms of the Company’s benefit plans, programs and arrangements in effect immediately prior to the termination date.
If an executive (other than Mr. Yorgensen) is terminated by
the Company without “cause” (as such term is defined in the Severance Agreement) or if he terminates his employment
with “good reason” (as such term is defined in the Severance Agreement), other than during a “change in control
severance period” (as such term is defined in the Severance Agreement), the executive is entitled to receive the payments
described above plus (i) the sum of 1.0 times his base salary; (ii) a pro rata portion of any bonus payment he would
have been eligible to receive for the performance year during which the termination date occurs; (iii) up to 12 months
of payments in the amount required for continuation of COBRA plans and other benefits; (iv) prepayment of all life insurance
premiums for 12 months plus the transfer of ownership of all rights of ownership of such arrangements; (v) payments for
reasonable outplacement services for up to 12 months; and (vi) the reimbursement of reasonable legal fees and expenses
incurred by the executive in disputing in good faith issues relating to the termination of employment or obtaining or enforcing
any benefit provided under the Severance Agreement. Mr. Yorgensen is entitled to the same benefits described above, except
he is eligible to receive a sum of 2.0 times his base salary in such event and the continuation of COBRA benefits, life insurance
benefits and outplacement services for up to 24 months.
If an executive (other than Mr. Yorgensen) is terminated by
the Company without cause or if he terminates his employment with good reason during a change in control severance period, he is
entitled to (i) the sum of 1.25 times his base salary; (ii) his target bonus for the performance year during which the
termination date occurs; and (iii) the continued COBRA benefits, life insurance benefits, and outplacement services for up
to 15 months and legal fees described above. Mr. Yorgensen is entitled to the same benefits described above for the other
executives, except he is eligible to receive a sum of 2.0 times his base salary and target bonus in such event and the continuation
of COBRA benefits, life insurance benefits and outplacement services for up to 24 months. The change of control severance period
is the period commencing 90 days prior to a change in control (as such term is defined in the Severance Agreement) and ending
one year following a change in control.
All of the benefits under Messrs. Forman’s and Radziewicz’s
Severance Agreements terminated upon their resignations from the Company. Under the terms of their Severance Agreements, each was
entitled to his full base salary through the date of termination at the rate in effect immediately prior to such termination date,
as well as all compensation and benefits due to the executive under the terms of the Company’s benefit plans, programs and
arrangements in effect immediately prior to the termination date.
Employment Agreements
Robert S. Yorgensen.
We entered into an employment agreement
with Mr. Yorgensen, our Vice President and President of STR Solar, in connection with our acquisition by DLJMB and its co-investors
on June 15, 2007. On December 7, 2011, we entered into a new employment agreement with Mr. Yorgensen, effective
January 1, 2012, in connection with his appointment as the Company’s President and Chief Executive Officer. Pursuant
to the new agreement, his annual base salary is $475,000 subject to annual discretionary increases, and he will be eligible to
participate in the Company’s (i) management incentive plan with an annual performance bonus target of at least 80% of
his annual base salary and (ii) long-term incentive plan awards in each case based upon performance goals set by our Board
for a particular fiscal year.
Alan N. Forman.
We entered into an employment agreement with
Mr. Forman, our former Senior Vice President, General Counsel and Secretary on May 3, 2010. Pursuant to Mr. Forman’s
employment agreement, he was paid a base salary, subject to annual increases, and was eligible to receive an annual performance
bonus based upon performance goals set by our Board for a particular fiscal year. For the 2015 fiscal year, Mr. Forman’s
annual base salary was $305,250, of which a pro-rated amount of $123,274 was paid to him as of the date of his resignation, and
was eligible to receive a target bonus equal to 45% of his base salary. For 2015, Mr. Forman was not paid a bonus. The Employment
Agreement terminated in connection with Mr. Forman’s resignation from the Company.
Non-Competition and Non-Solicitation
Each of our named executive officers, entered into non-competition
and non-solicitation agreements with us. Pursuant to such agreements, each such executive agreed not to compete with us for a specified
period of time following such executive’s date of termination. In addition, each named executive may not solicit any of our
employees during the term of his non-competition period. The non-competition and non-solicitation period is 24 months, nine
months and 12 months for each of Messrs. Yorgensen, Forman and Radziewicz, respectively. Mr. Forman is no longer subject to any
restrictions set forth in his non-competition and non-solicitation agreement with us. We have the option to extend Mr. Yorgensen’s
non-competition and non-solicitation period for an additional year. If we extend the non-competition and non-solicitation period
for Mr. Yorgensen, we must provide six months’ notice to him, pay him his annual base salary, payable over 12 months,
and extend his participation in our health, life insurance, and retirement plans through the extended period.
Indemnification of Officers and Directors
Our Bylaws provide that we will indemnify our directors and officers
to the fullest extent permitted by Delaware General Corporation Law (“DGCL”). We have established directors’
and officers’ liability insurance that insures such persons against the costs of defense, settlement or payment of a judgment
under certain circumstances.
In addition, our certificate of incorporation provides our directors
will not be liable for monetary damages for breach of fiduciary duty, except for liability relating to any breach of the director’s
duty of loyalty, acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, violations
under Section 174 of the DGCL or any transaction from which the director derived an improper personal benefit.
In addition, prior to the completion of our initial public offering,
we entered into indemnification agreements with each of our executive officers and directors. We also entered into indemnification
agreements with each of our officers and directors that joined the Company after the initial public offering. The indemnification
agreements provide the executive officers and directors with contractual rights to indemnification, expense advancement and reimbursement
to the fullest extent permitted under the DGCL.
There is no pending litigation or proceeding naming any of our directors
or officers for which indemnification is being sought, and we are not aware of any pending or threatened litigation that may result
in claims for indemnification by any director or executive officer.