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Amended and Restated Executive Employment,
Incentive, and Severance Agreement
 
This Amended and Restated Executive Employment, Incentive, and Severance
Agreement (the "Agreement") is made and entered into as of January 7, 2010 (the
"Effective Date"), by and between Solar Enertech Corp. (“Company”) and Leo S.
Young (the "Executive"). Capitalized terms used in this Agreement shall have the
meanings set forth in Section 5 below.
 
WHEREAS, the purpose of this Agreement is to encourage Executive to remain in
the employ of the Company and to continue to devote Executive's full attention
to the success of the Company, the Company and Executive agree as follows:
 
1.           Duties.  Executive shall serve as the Chief Executive Officer of
the Company and shall perform such duties and responsibilities as are consistent
with Executive’s position, including, without limitation, oversight of all
operations and daily management of the Company and such other duties and
services as may be assigned to Executive form time to time by the Company that
are consistent with the duties and services provided by a Chief Executive
Officer.  Executive agrees that Executive shall faithfully and industriously
perform to the best of Executive’s ability the duties that may be required of
Executive pursuant to the terms of this Agreement.  Executive agrees to devote
as much of his business time, skills and energy to the business of the Company
as needed to properly perform the functions of Chief Executive Officer.
 
2.           Compensation.
 
2.1           Base Salary.  Pursuant to a Board-approved salary increase for
2009 (delayed for 12 months by Executive’s request), Executive’s base salary
shall be $250,000 per annum for 2010.  Salary adjustments for future years shall
be determined by the Board of Directors in its sole and exclusive discretion.
 
2.2           Stock Options. Contingent on achievement of certain operating and
financial metrics to be agreed upon between the Board of Directors and the
Executive, the Company plans to award, subject to Board approval, additional
options to purchase shares of the Company’s common stock to Executive as may be
determined by the Board of Directors in its sole and exclusive discretion.
 
2.3           Restricted stock forfeited by departed or departing management
members.  In connection with a consolidation transaction in August 2008, Mr.
Young contributed to the Company his option to purchase 25.25 million shares of
the Company’s common stock, and a new restricted stock plan was created
providing for the issuance of 25.25 million shares of restricted stock.  The
Board of Directors may grant the Executive from time to time portion(s) of the
forfeited shares as determined by the Board of Directors in its sole and
exclusive discretion.

 
 

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2.4           Personal Travel to USA. The Company will provide 2 weeks of paid
vacation for each 6 month period of employment under this Agreement and for each
6 months period the Company will pay for round trip business class airfare
to/from China and the United States for either the Executive or his spouse.
 
2.5           Other Benefits.  Executive shall be eligible to participate in all
other employee benefit programs as are generally available to similarly situated
employees of the Company, subject to the rules and regulations governing such
benefit programs.  The Company shall not, by virtue of this provision, be under
any obligation to provide or continue to maintain any particular plan or program
or any particular benefit level under any plan or program.
 
3.           Termination by Company for reasons other than Cause or Resignation
by Executive Due to a Diminution of Responsibilities.  In the event of
Executive’s involuntary termination from service (i) for reasons other than
Cause; or (ii) due to a Diminution of Responsibilities, Executive shall receive
the following payments and benefits:
 
3.1           Accrued Salary and Vacation, and Benefits. Executive shall receive
all salary and accrued vacation (less applicable withholding) earned through
Executive's termination date, and the benefits, if any, under Company benefit
plans to which Executive may be entitled pursuant to the terms of such plans.
 
3.2           Stock Award Acceleration. Provided that Executive complies with
Section 7 below, all outstanding stock options granted and restricted stock
issued by the Company to Executive prior to the Change of Control shall become
fully vested and exercisable immediately.
 
3.3           Cash Severance Payment.  Provided that Executive complies with
Section 7 below prior to fiftieth (50th) day following such termination,
Executive shall receive a lump sum cash payment in an amount equal to eighteen
(18) months of Executive's then effective base salary (less applicable
withholding), paid on the first payroll date which is fifty (50) days after the
date of termination.
 
4.           Termination by Company for Cause or Resignation by Executive
without Diminution of Responsibilities.  The provisions set forth in this
Section 4 shall apply in lieu of those in Section 3 in the event of Executive’s
Termination for Cause or Resignation without a  Diminution of
Responsibilities.  In the event of Executive's Termination for Cause or
Resignation without a  Diminution of Responsibilities, Executive shall only be
entitled to receive all salary and accrued vacation (less applicable
withholding) earned through Executive's termination or resignation date, as
applicable, and the benefits, if any, under Company benefit plans to which
Executive may be entitled pursuant to the terms of such plans.

 
 

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5.           Definitions. Capitalized terms used in this Agreement shall have
the meanings set forth in this Section 5.
 
5.1           "Cause" means Executive's (a) failure to perform any reasonable
and lawful duty of Executive's position or failure to follow the lawful written
directions of the Board of Directors; (b) commission of an act that constitutes
misconduct and is injurious to the Company or any subsidiary; (c) conviction of,
or pleading "guilty" or "no contest" to, a felony under the laws of the United
States or any state thereof; (d) committing an act of fraud against, or the
misappropriation of property belonging to, the Company or any subsidiary; (e)
commission of an act of dishonesty in connection with Executive's
responsibilities as an employee and affecting the business or affairs of the
Company; (f) material breach of any confidentiality, proprietary information or
other agreement between Executive and the Company or any subsidiary; or (g)
failure or refusal to carry out the reasonable directives of the Board of
Directors.
 
5.2           "Company" means Solar Enertech Corp. and any successor or assign
to substantially all the business and/or assets of Solar Enertech Corp.
 
5.3           "Diminution of Responsibilities" means the occurrence of any of
the following conditions, without Executive's written consent which condition(s)
remain(s) in effect twenty (20) days after receipt by Company from the Executive
of a written notice to: (a) a significant diminution in the nature or scope of
Executive's authority, title, function or duties from Executive's authority,
title, function or duties; (b) a ten percent (10%) reduction in Executive's base
salary or a twenty-five percent (25%) reduction in Executive's target bonus
opportunity, if any (in either case, unless such reduction is part of a Company
officer-wide program to reduce expenses); (c) any material breach of the terms
of this Agreement by the Company; or (d) failure of any successor or assignee to
the Company to assume this Agreement. Notwithstanding the foregoing, the
Executive’s continued employment for ninety (90) days following the occurrence
of any condition constituting “Diminution of Responsibilities” without the
Executive providing written notice to the Company shall constitute consent to,
or a waiver of right with respect to, such condition.
 
6.           Federal Excise Tax. If the payments and benefits provided for in
this Agreement constitute "parachute payments" within the meaning of the
Internal Revenue Code of 1986, as amended (the "Code"), but for this Section 6,
would be subject to the excise tax imposed by Section 4999 of the Code, then the
payments and benefits under this Agreement will be payable, at Executive's
election, either in full or in such lesser amount as would result, after taking
into account the applicable federal, state and local income taxes and excise tax
imposed by Section 4999 of the Code, in Executive's receipt on an after-tax
basis of the greatest amount of benefits.

 
 

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7.           Release of Claims. The Company shall condition the payments and
benefits set forth in Sections 3.2 and 3.3 of this Agreement upon the delivery
by Executive of a signed release of claims in a form satisfactory to the
Company.  With respect to the payments provided pursuant to Sections 3 and 4.3,
such Release must become effective in accordance with its terms prior to the
fiftieth (50th) day following the termination date.
 
8.           Agreement Not to Solicit. If Company performs its obligations to
deliver the severance compensation set forth in Sections 3 and 4 of this
Agreement, then for a period of one (1) year after Executive's termination of
employment, Executive will not solicit any employee of the Company to
discontinue that person's employment relationship with the Company.
 
9.           Arbitration.
 
9.1           Procedures.  The parties agree that any controversy, claim or
dispute arising out of or in any way relating to this Agreement, Executive’s
employment by the Company, or the ending of such employment, including, without
limitation, any claim arising under this Agreement, shall be settled by final
and binding arbitration.  Arbitration shall be conducted according to the
Employment Arbitration Rules & Procedures of JAMS in effect at the time a claim
is filed.  The arbitration shall be filed with JAMS and shall be heard on a
confidential and expedited basis in Santa Clara County, California.  California
Code of Civil Procedure Section 1283.05, which provides for certain discovery
rights, shall apply to any arbitration.  In reaching a decision, the arbitrator
shall have no authority to change, extend, modify or suspend any of the terms of
this Agreement but shall have the authority to order injunctive and/or other
equitable relief.  The arbitrator shall render an award and written opinion in
the form typically rendered in employment arbitrations no later than thirty (30)
days from the date the arbitration hearing concludes or the post-hearing briefs
(if requested) are received, whichever is later.  The opinion shall include the
factual and legal basis for the award.  A judgment upon any award rendered by
the arbitrator may be entered in any court having jurisdiction.  Either
Executive or the Company may bring an action in a court of competent
jurisdiction, if necessary, to compel arbitration under this provision, to
obtain preliminary relief in support of claims to be prosecuted in arbitration,
or to enforce an arbitration award.   The Company shall bear the cost of the
arbitrator’s fees and other costs unique to arbitration if it is required to do
so by applicable law.
 
9.2           Claims Not Covered By Arbitration.  This Section 9 does not apply
to or cover the following claims:  (i) claims by Executive for workers'
compensation benefits; (ii) claims by Executive for unemployment compensation
benefits; (iii) claims brought in a court of competent jurisdiction by either
Executive or the Company to compel arbitration under this Section 9, to enforce
an arbitration award or to obtain preliminary injunctive and/or other equitable
relief in support of claims to be prosecuted in an arbitration by either party;
and (iv) claims based upon a pension or benefit plan which contains an
arbitration or other dispute resolution procedure, in which case the provisions
of such plan shall apply.

 
 

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9.3           Knowing and Voluntary Consent.  Executive acknowledges that he has
carefully read and understands this Section 9 and agrees to be bound by and
comply with all of its terms.  Executive acknowledges that he has voluntarily
agreed to arbitrate claims and understands and acknowledges that by signing this
arbitration agreement, the Company and Executive are giving up the right to a
jury trial and to a trial in a court of law.
 
10.         Conflict in Benefits; Effect of Agreement. This Agreement shall
supersede all prior arrangements, whether written or oral, and understandings
regarding incentive compensation and severance compensation and shall be the
exclusive agreement for the determination of any severance compensation due upon
Executive's termination of employment.
 
11.         Confidentiality.  In the course of Executive’s employment with the
Company, Executive has acquired and will acquire access to confidential and
proprietary information about the Company including, but not limited to, trade
secrets, methods, access to files, financial information, records, software
programs, plans, budgets, practices, concepts, strategies, methods of operation,
financial and business projections of the Company, and other information not
generally available to third parties, which, if known to them, may put the
Company at a competitive disadvantage.  The foregoing shall collectively be
referred to as “Confidential Information.”  Executive agrees that Executive will
not at any time, whether during his employment or thereafter, disclose to anyone
Confidential Information, or utilize such Confidential Information for
Executive’s own benefit, or for the benefit of third parties.  Executive agrees
that the foregoing restrictions shall apply whether or not such information is
marked “Confidential.”  Executive agrees that the remedy at law for any breach
or threatened breach of this Section 11 will be inadequate and that the Company,
in addition to any remedy at law, shall be entitled to seek appropriate
injunctive relief (without posting of any bond or security) in case of any such
breach or threatened breach.
 
12.         Intellectual Property.  Executive acknowledges and agrees that all
results and proceeds arising out of or resulting from Executive’s services
performed for the Company (“Company Materials”) and all Confidential Information
are the exclusive property of the Company and hereby irrevocably assigns to the
Company in perpetuity all right, title and interest, if any, which Executive may
have in and to all Company Materials and Confidential Information.

 
 

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13.         Miscellaneous.
 
13.1         Successors of the Company. The Company will require any successor
or assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place.
 
13.2         No Employment for a Specified Term. This Agreement does not alter
Executive's at-will employment status or obligate the Company to continue to
employ Executive for any specific period of time, or in any specific role or
geographic location.  Upon termination of Executive at any time, severance to
which Executive may be entitled is limited as specifically provided for herein.
 
13.3         Modification of Agreement. This Agreement may be modified, amended
or superseded only by a written agreement signed by Executive and the Chairman
of the Board of Directors.
 
13.4         Governing Law. This Agreement shall be interpreted in accordance
with and governed by the laws of the State of California and each party agrees
to be exclusively bound to the terms and jurisdiction agreed upon in Section 9,
and shall not bring any claim against the other in any other place or forum.
 
13.5         Application of Section 409A.
 
(a)   Notwithstanding anything set forth in this Agreement to the contrary, no
amount payable pursuant to this Agreement which constitutes a “deferral of
compensation” within the meaning of the Treasury Regulations issued pursuant to
Section 409A of the Code (the “Section 409A Regulations”) shall be paid unless
and until Executive has incurred a “separation from service” within the meaning
of the Section 409A Regulations.  Furthermore, to the extent that Executive is a
“specified employee” within the meaning of the Section 409A Regulations as of
the date of Executive’s separation from service, no amount that constitutes a
deferral of compensation which is payable on account of Executive’s separation
from service shall paid to Executive before the date (the “Delayed Payment
Date”) which is first day of the seventh month after the date of Executive’s
separation from service or, if earlier, the date of Executive’s death following
such separation from service.  All such amounts that would, but for this
Section, become payable prior to the Delayed Payment Date will be accumulated
and paid on the Delayed Payment Date.
 
(b)   The Company intends that income provided to Executive pursuant to this
Agreement will not be subject to taxation under Section 409A of the Code.  The
provisions of this Agreement shall be interpreted and construed in favor of
satisfying any applicable requirements of Section 409A of the Code.  However,
the Company does not guarantee any particular tax effect for income provided to
Executive pursuant to this Agreement.  In any event, except for the Company’s
responsibility to withhold applicable income and employment taxes from
compensation paid or provided to Executive, the Company shall not be responsible
for the payment of any applicable taxes on compensation paid or provided to
Executive pursuant to this Agreement.

 
 

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13.6         Independent Legal Advice.  Executive hereby acknowledges that
Executive has acted for himself in the preparation and negotiation of this
Agreement and acknowledges that Executive has been advised to seek independent
legal counsel to review this Agreement, and in particular tax counsel, prior to
its execution.

 
 

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IN WITNESS WHEREOF the parties have executed the Agreement effective January 7,
2010.
 
EXECUTIVE
 
SOLAR ENERTECH CORP.
     
  /s/ Leo Shi Young
 
By:
/s/ Steve Mao Ye
LEO S. YOUNG
 
Name: Steve Mao Ye
   
Title: Chief Financial Officer

 
 

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