Exhibit 10.7

STOCK APPRECIATION RIGHTS AGREEMENT

THIS STOCK APPRECIATION RIGHTS AGREEMENT (the “Agreement”) entered into as of
October 1, 2012 (the “Grant Date”) between GelTech Solutions, Inc. (the
“Company”) and __________ (the “Recipient”).

WHEREAS, by action taken by the Board of Directors (the “Board”) it has adopted
the 2007 Equity Incentive Plan (the “Plan”); and

WHEREAS, pursuant to the Plan, it has been determined that in order to enhance
the ability of the Company to attract and retain qualified employees,
consultants and directors, the Company has granted the Recipient the stock
appreciation rights.    

NOW THEREFORE, in consideration of the mutual covenants and promises hereafter
set forth and for other good and valuable consideration, receipt of which is
acknowledged, the parties hereto agree as follows:

1.

Grant of SARs.  The Company irrevocably granted to the Recipient, as a matter of
separate agreement and not in lieu of salary or other compensation for services,
the right to exercise all or any part of 200,000 stock settled stock
appreciation rights into shares of authorized but unissued or treasury common
stock of the Company (the “SARs”) on the terms and conditions herein set forth.
 This Agreement replaces any other agreement or offer letter previously provided
to the Recipient, if any, with respect to these SARs.  The Recipient
acknowledges receipt of a copy of the Plan, as amended.

2.

Price.  The exercise price of the SARs is $0.45 per share.

3.

Vesting - When Exercisable.  

(a)

The SARs shall vest as described on Schedule A of this Agreement, subject to the
Recipient’s continued employment with the Company on each applicable vesting
date.  Any fractional vesting shall be rounded up to the extent necessary.
 Notwithstanding any other provision in this Agreement, the SARs shall vest
immediately on the occurrence of a Change of Control, as defined under the Plan
(a “Triggering Event”); provided, however, that there shall be no immediate
vesting under romanette (ii) of the definition of Change of Control if the
directors serving just prior to the Triggering Event remain the majority of the
Board after the Triggering Event. Additionally, all SARs shall vest immediately
(subject to the preceding sentence) on the date the Company publicly announces,
by press release, by disclosure in a filing with the Securities and Exchange
Commission or otherwise (the “Public Announcement”), its intention to sell
substantially all of the Company’s assets or to enter into a merger or
consolidation as described in clauses (i) and (ii) under the definition of
Change of Control in the Plan.  If the Recipient exercises the SARs within 10
calendar days from the date of the Public Announcement, the Recipient shall be
deemed a record holder of the shares underlying the SARs as of the record date
of the Change of Control.

--------------------------------------------------------------------------------

(b)

Subject to Sections 3(c) and 4 of this Agreement, the vested SARs are
exercisable until 6:00 p.m. New York time for 10 years from the Grant Date (the
“Expiration Date”).  Upon exercise, in whole or in part, the Recipient shall be
entitled to receive from the Company a number of shares of common stock equal to
the excess of the Fair Market Value, as defined under the Plan, (on the date of
exercise) of one share of common stock over the exercise price, multiplied by
the number of SARs being exercised, the product of which shall be divided by the
Fair Market Value. For example: if the Fair Market Value is $1.35 and all of the
SARs are exercised, then the Recipient shall receive 133,333 shares
[($1.35-$0.45)*200,000] / $1.35.  

(c)

Notwithstanding any other provision of this Agreement, at the discretion of the
Board or the Compensation Committee (as defined in the Plan), all SARs, whether
vested or unvested, will be immediately forfeited if any of the following events
occur:

(1)

The Recipient is dismissed as an employee based upon fraud, theft, or
dishonesty, which is reflected in a written or electronic notice given to the
employee;

(2)

The Recipient purchases or sells securities of the Company in violation of the
Company’s insider trading guidelines then in effect;

(3)

The Recipient breaches any duty of confidentiality including that required by
the Company’s insider trading guidelines then in effect;

(4)

The Recipient competes with the Company during a period of one year following
termination of employment by soliciting customers located within or otherwise
where the Company is doing business within any state, or where the Company
expects to do business within three months following termination and, in this
later event, the Recipient has actual knowledge of such plans;

(5)

The Recipient is unavailable for consultation after termination of the Recipient
if such availability is a condition of any agreement between the Company and the
Recipient;

(6)

The Recipient recruits Company personnel for another entity or business within
24 months following termination of employment;

(7)

The Recipient fails to assign any invention, technology, or related intellectual
property rights to the Company if such assignment is a condition of any
agreement between the Company and the Recipient;

(8)

The Recipient acts in a disloyal manner to the Company; or

(9)

A finding by the Board that the Recipient has acted against the interests of the
Company.

--------------------------------------------------------------------------------

This Section 3(c) and Section 5 shall no longer remain in effect after the
occurrence of a Change of Control.  

4.

Termination of Relationship.

(a)

If for any reason, except death or disability as provided below, the Recipient
ceases to act as an employee of the Company, all vested SARs as of the date of
the termination of employment may be exercised by the Recipient at any time
within three months following termination of employment.

(b)

If the Recipient shall die while an employee of the Company, the Recipient’s
estate or any Transferee, as defined herein, shall have the right to exercise
the Recipient’s vested SARs within the time provided in the Plan subject to
Section 3(c) above.  For the purpose of this Agreement, “Transferee” shall mean
a person to whom such shares are transferred by will or by the laws of descent
and distribution.  

(c)

If the Recipient becomes disabled, within the meaning of Section 22(e)(3) of the
Internal Revenue Code of 1986, while an employee of the Company, the Recipient
shall have the right to exercise the Recipient’s vested SARs within the time
provided in the Plan.

(d)

Notwithstanding anything contained in this Section 4, the SARs may not be
exercised after the Expiration Date.

(e)

Any of the SARs that were not vested immediately prior to termination of
employment shall terminate at that time.

For purposes of this Section 4 “Company” shall include subsidiaries and/or
affiliates of the Company.

5.

Profits on the Sale of Certain Shares; Redemption.  If any of the events
specified in Section 3(c) of this Agreement occur within one year following the
date the Recipient last performed services as an employee of the Company (the
“Termination Date”) (or such longer period required by any written employment
agreement), all profits earned from the sale of the Company’s securities,
including the sale of shares of common stock underlying the SARs, during the
two-year period commencing one year prior to the Termination Date shall be
forfeited and immediately paid by the Recipient to the Company.  Further, in
such event, the Company may at its option redeem shares of common stock acquired
upon exercise of this SAR by payment of the exercise price to the Recipient.  To
the extent that another written agreement with the Company extends the events in
Section 3(c) beyond one year following the Termination Date, the two-year period
shall be extended by an equal number of days.  The Company’s rights under this
Section 5 do not lapse one year from the Termination Date but are a contract
right subject to any appropriate statutory limitation period.

6.

Method of Exercise.  The SARs shall be exercisable by a written notice, in the
form of the attached Notice of Exercise, which shall:

--------------------------------------------------------------------------------

(a)  

state the election to exercise the SARs, the number of shares to be exercised,
the person in whose name the stock certificate or certificates for such shares
of common stock is to be registered, address and social security number of such
person (or if more than one, the names, addresses and social security numbers of
such persons);

(b)  

if applicable, contain such representations and agreements as to the holder’s
investment intent with respect to such shares of common stock as set forth in
Section 11 hereof;

(c)  

be signed by the person or persons entitled to exercise the SARs and, if the
SARs are being exercised by any person or persons other than the Recipient, be
accompanied by proof, satisfactory to counsel for the Company, of the right of
such person or persons to exercise the SARs;

(d)

be accompanied by payment of any amount that the Company, in its sole
discretion, deems necessary to comply with any federal, state or local
withholding requirements for income and employment tax purposes.  If the
Recipient fails to make such payment in a timely manner, the Company may: (i)
decline to permit exercise of the SARs or (ii) withhold and set-off against
compensation and any other amounts payable to the Recipient the amount of such
required payment. Such withholding may be in the shares underlying the SARs at
the sole discretion of the Company.

The certificate or certificates for shares of common stock as to which the SARs
shall be exercised shall be registered in the name of the person or persons
exercising the SARs.

7.

Sale of Shares Acquired Upon Exercise of SARs.  If the Recipient is an officer
(as defined by Section 16(b) of the Securities Exchange Act of 1934 (“Section
16(b)”)) or a director of the Company, any shares of the Company’s common stock
acquired pursuant to the SARs cannot be sold by the Recipient until at least six
months elapse from the Grant Date except in case of death or disability or if
the grant was exempt from the short-swing profit provisions of Section 16(b).

8.

Anti-Dilution Provisions.  The SARs granted hereunder shall have the
anti-dilution rights set forth in the Plan.

9.

Necessity to Become Holder of Record.  Neither the Recipient, the Recipient’s
estate, nor any Transferee shall have any rights as a shareholder with respect
to any of the shares underlying the SARs until such person shall have become the
holder of record of such shares.  No cash dividends or cash distributions,
ordinary or extraordinary, shall be provided to the holder if the record date is
prior to the date on which such person became the holder of record thereof.

10.  

Reservation of Right to Terminate Relationship.  Nothing contained in this
Agreement shall restrict the right of the Company to terminate the relationship
of the Recipient at any time, with or without cause.  

--------------------------------------------------------------------------------

11.  

Conditions to Exercise of SARs.  If a Registration Statement on Form S-8 (or any
other successor form) is not effective as to the shares of common stock issuable
upon exercise of the SARs, the remainder of this Section 11 is applicable as to
federal law.  In order to enable the Company to comply with the Securities Act
of 1933 (the “Securities Act”) and relevant state law, the Company may require
the Recipient, the Recipient’s estate, or any Transferee as a condition of the
exercising of the SARs granted hereunder, to give written assurance satisfactory
to the Company that the shares subject to the SARs are being acquired for such
person’s own account, for investment only, with no view to the distribution of
same, and that any subsequent resale of any such shares either shall be made
pursuant to a registration statement under the Securities Act and applicable
state law which has become effective and is current with regard to the shares
being sold, or shall be pursuant to an exemption from registration under the
Securities Act and applicable state law.

The SARs are further subject to the requirement that, if at any time the Board
shall determine, in its discretion, that the listing, registration, or
qualification of the shares of common stock underlying the SARs upon any
securities exchange or under any state or federal law, or the consent or
approval of any governmental regulatory body, is necessary as a condition of, or
in connection with the issue or purchase of shares underlying the SARs, the SARs
may not be exercised in whole or in part unless such listing, registration,
qualification, consent or approval shall have been effected.  

12.  

Transfer.  No transfer of the SARs by the Recipient by will or by the laws of
descent and distribution shall be effective to bind the Company unless the
Company shall have been furnished with written notice thereof and a copy of the
letters testamentary or such other evidence as the Board may deem necessary to
establish the authority of the estate and the acceptance by the Transferee or
Transferees of the terms and conditions of the SARs.

13.  

Duties of the Company.  The Company will at all times during the term of the
SARs:

(a)  

Reserve and keep available for issue such number of shares of its authorized and
unissued common stock as will be sufficient to satisfy the requirements of this
Agreement;

(b)  

Pay all original issue taxes with respect to the issuance of shares pursuant
hereto and all other fees and expenses necessarily incurred by the Company in
connection therewith;

(c)  

Use its best efforts to comply with all laws and regulations which, in the
opinion of counsel for the Company, shall be applicable thereto.

14.

Parties Bound by Plan.  The Plan and each determination, interpretation or other
action made or taken pursuant to the provisions of the Plan shall be final and
shall be binding and conclusive for all purposes on the Company and the
Recipient and the Recipient’s respective successors in interest.

--------------------------------------------------------------------------------

15.

Severability.  In the event any parts of this Agreement are found to be void,
the remaining provisions of this Agreement shall nevertheless be binding with
the same effect as though the void parts were deleted.

16.

Arbitration.  Any controversy, dispute or claim arising out of or relating to
this Agreement, or its interpretation, application, implementation, breach or
enforcement which the parties are unable to resolve by mutual agreement, shall
be settled by submission by either party of the controversy, claim or dispute to
binding arbitration in Palm Beach County, Florida (unless the parties agree in
writing to a different location), before a single arbitrator in accordance with
the rules of the American Arbitration Association then in effect.  The decision
and award made by the arbitrator shall be final, binding and conclusive on all
parties hereto for all purposes, and judgment may be entered thereon in any
court having jurisdiction thereof.

17.

Benefit.  This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their legal representatives, successors and assigns.

18.

Notices and Addresses.  All notices, offers, acceptance and any other acts under
this Agreement (except payment) shall be in writing, and shall be sufficiently
given if delivered to the addressees in person, by FedEx or similar receipted
delivery, or by facsimile delivery followed by overnight next day delivery, as
follows:

The Recipient:

______________

______________

______________

______________

The Company:

GelTech Solutions, Inc.

1460 Park Lane South, Suite 1

Jupiter, FL 33458

 

Attention: Michael Cordani

Facsimile: (561) 427-6182

with a copy to:

Michael D. Harris, Esq.

 

Nason Yeager Gerson White & Lioce, P.A.

1645 Palm Beach Lakes Blvd., Suite 1200

West Palm Beach, FL 33401

Facsimile: (561) 686-5442

or to such other address as either of them, by notice to the other may designate
from time to time.  The transmission confirmation receipt from the sender’s
facsimile machine shall be evidence of successful facsimile delivery.  Time
shall be counted to, or from, as the case may be, the delivery in person or by
mailing.

--------------------------------------------------------------------------------

19.

Attorney’s Fees.  In the event that there is any controversy or claim arising
out of or relating to this Agreement, or to the interpretation, breach or
enforcement thereof, and any action or proceeding is commenced to enforce the
provisions of this Agreement, the prevailing party shall be entitled to a
reasonable attorney’s fee, costs and expenses.

20.

Governing Law.  This Agreement and any dispute, disagreement, or issue of
construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided herein or performance shall be
governed or interpreted according to the laws of the State of Delaware without
regard to choice of law considerations.  

21.

Oral Evidence.  This Agreement constitutes the entire Agreement between the
parties and supersedes all prior oral and written agreements between the parties
hereto with respect to the subject matter hereof.  Neither this Agreement nor
any provision hereof may be changed, waived, discharged or terminated orally,
except by a statement in writing signed by the party or parties against whom
enforcement or the change, waiver discharge or termination is sought.

22.

Counterparts.  This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.  The execution of this Agreement may be by actual
or facsimile signature.

23.

Section or Paragraph Headings.  Section headings herein have been inserted for
reference only and shall not be deemed to limit or otherwise affect, in any
matter, or be deemed to interpret in whole or in part any of the terms or
provisions of this Agreement.

24.

Stop-Transfer Orders.  

(a)

The Recipient agrees that, in order to ensure compliance with the restrictions
set forth in the Plan and this Agreement, the Company may issue appropriate
“stop transfer” instructions to its duly authorized transfer agent, if any, and
that, if the Company transfers its own securities, it may make appropriate
notations to the same effect in its own records.

(b)

The Company shall not be required (i) to transfer on its books any shares of the
Company’s common stock that have been sold or otherwise transferred in violation
of any of the provisions of the Plan or the Agreement or (ii) to treat the owner
of such shares of common stock or to accord the right to vote or pay dividends
to any purchaser or other Transferee to whom such shares of common stock shall
have been so transferred.

[Signature Page to Follow]

--------------------------------------------------------------------------------

IN WITNESS WHEREOF the parties hereto have set their hand and seals the day and
year first above written.

WITNESSES:

 

GELTECH SOLUTIONS, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECIPIENT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

--------------------------------------------------------------------------------

Schedule A

Stock Appreciation Rights Agreement

(1) 200,000 vest as of the date of the Agreement;

(2) another 200,000 vest upon the Company generating $3,000,000 in revenues in
any 12 month period;

(3) another 200,000 vest upon the Company generating $5,000,000 in revenues in
any 12 month period;

(4) another 200,000 vest upon the Company generating $6,000,000 in revenues in
any 12 month period;

As previously stated in this Agreement, the vesting of the SARs is subject to
continued employment on each applicable vesting date.  

--------------------------------------------------------------------------------

NOTICE OF EXERCISE

To:

__________________________

__________________________

__________________________

Attention _________, _______________

Facsimile: (____) _____-______

Please be advised that I hereby elect to exercise my option to exercise
___________ shares of Stock Appreciation Rights, pursuant to the Stock
Appreciation Rights Agreement dated ____________, 2012.  Please contact me as
soon as possible to discuss the possible payment of withholding taxes and any
other documents we may require.   

Name of Holder (Please Print): ________________________________

Address of Holder

________________________________________________________________

Telephone Number of Holder:

________________________________

Social Security Number of Holder:

________________________________

If the certificate is to be issued to person other than the Holder, please
provide the following for such person:

________________________________

(Name)

________________________________

(Address)

________________________________

________________________________

________________________________

(Telephone Number)

________________________________

(Social Security Number)

--------------------------------------------------------------------------------

In connection with the issuance of the Common Stock, if the Common Stock may not
be immediately publicly sold, I hereby represent to the Company that I am
acquiring the Common Stock for my own account for investment and not with a view
to, or for resale in connection with, a distribution of the shares within the
meaning of the Securities Act of 1933 (the “Securities Act”).

I am______ am not ______ [please initial one] an accredited investor for at
least one of the reasons on the attached Exhibit A.  If the SEC has amended the
rule defining the definition of accredited investor, I acknowledge that as a
condition to exercise the securities, the Company may request updated
information regarding the Holder’s status as an accredited investor.  My
exercise of the securities shall be in compliance with the applicable exemptions
under the Securities Act and applicable state law.

________________________________

Dated: _________________

Signature of Holder

--------------------------------------------------------------------------------

Exhibit A

To Notice of Exercise of Stock Appreciation Rights Agreement

For Individual Investors Only:

1.

A person who has an individual net worth, or a person who with his or her spouse
has a combined net worth, in excess of $1,000,000. For purposes of calculating
net worth under this paragraph (1), (i) the primary residence shall not be
included as an asset, (ii) to the extent that the indebtedness that is secured
by the primary residence is in excess of the fair market value of the primary
residence, the excess amount shall be included as a liability, and (iii) if the
amount of outstanding indebtedness that is secured by the primary residence
exceeds the amount outstanding 60 days prior to exercising the securities, other
than as a result of the acquisition of the primary residence, the amount of such
excess shall be included as a liability.

2a.

A person who had individual income (exclusive of any income attributable to the
person’s spouse) of more than who has $200,000 in each of the two most recently
completed years and who reasonably expects to have an individual income in
excess of $200,000 this year.

2b.

Alternatively, a person, who with his or her spouse, has joint income in excess
of $300,000 in each applicable year.

3.

A director or executive officer of the Company.

Other Investors:

4.

Any bank as defined in Section 3(a)(2) of the Securities Act of 1933
(“Securities Act”) whether acting in its individual or fiduciary capacity; any
broker or dealer registered pursuant to section 15 of the Securities Exchange
Act of 1934; insurance company as defined in Section 2(13) of the Securities
Act; investment company registered under the Investment Company Act of 1940 or a
business development company as defined in Section 2(a)(48) of that Act; Small
Business Investment Company licensed by the U.S. Small Business Administration
under Section 301(c) or (d) of the Small Business Investment Act of 1958; any
plan established and maintained by a state, its political subdivisions, or any
agency or instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of $5,000,000;
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in excess of
$5,000,000, or if a self-directed plan, with investment decisions made solely by
persons that are accredited investors.

5.

A private business development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.

--------------------------------------------------------------------------------

6.

An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of $5,000,000.  

7.

A trust, with total assets in excess of $5,000,000, not formed for the specific
purpose of acquiring the securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of the Securities Act.

8.

An entity in which all of the equity owners are accredited investors.