Exhibit 10.4
SOLAR ENERTECH CORP.
NOTICE OF GRANT OF STOCK OPTION
(For Participants Resident in The Peoples Republic of China)
The Participant has been granted an option (the “Option”) to purchase certain
shares of Stock of Solar EnerTech Corp. pursuant to the Solar EnerTech Corp.
2007 Equity Incentive Plan (the “Plan”), as follows:

         
Participant:
                         Employee ID:                     
 
       
Date of Grant:
                          
 
       
Number of Option Shares:
                          
 
       
Exercise Price Per Share:
  $                        
 
       
Vesting Commencement Date:
                          
 
        Option Expiration Date:   The tenth anniversary of the Date of Grant.
 
        Vested Shares:   Except as provided in the Stock Option Agreement and
provided the Participant’s Service has not terminated prior to the applicable
date, the number of Vested Shares (disregarding any resulting fractional share)
as of any date is determined by multiplying the Number of Option Shares by the
“Vested Ratio” determined as of such date as follows:

                      Vested Ratio
 
  Prior to first anniversary of Vesting Commencement Date     0  
 
           
 
  On first anniversary of Vesting Commencement Date (the “Initial Vesting Date”)
    1/4  
 
           
 
  Plus        
 
           
 
  For each additional full month of Participant’s Service from Initial Vesting
Date until the Vested Ratio equals 1/1, an additional     1/48  
 
            Local Law:   The laws, rules and regulations of The Peoples Republic
of China, of which the Participant is a resident.

By their signatures below, the Company and the Participant agree that the Option
is governed by this Grant Notice and by the provisions of the Plan and the Stock
Option Agreement, both of which are attached to and made a part of this
document. The Participant acknowledges receipt of copies of the Plan and the
Stock Option Agreement, represents that the Participant has read and is familiar
with their provisions, and hereby accepts the Option subject to all of their
terms and conditions.

          SOLAR ENERTECH CORP.   PARTICIPANT
 
       
By:
       
 
     
 
      Signature
 
       
Its:
       
 
     
 
      Date
 
       
Address:
     
 
       
 
      Address
 
       
 
       

     
ATTACHMENTS:
  2007 Equity Incentive Plan, as amended to the Date of Grant; Stock Option
Agreement and Exercise Notice

 

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THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
OR QUALIFIED UNDER THE U.S. SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF
ANY STATE OR FOREIGN JURISDICTION AND MAY NOT BE OFFERED OR SOLD IN THE U.S. OR
TO U.S. PERSONS (OTHER THAN DISTRIBUTORS) (AS DEFINED IN REGULATION S
PROMULGATED UNDER THE U.S. SECURITIES ACT OF 1933). THE SECURITIES WHICH ARE THE
SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH DISPOSITION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO, A
DISPOSITION IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, RULE 144,
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR QUALIFICATION IS
NOT REQUIRED UNDER THE U.S. SECURITIES ACT OF 1933 OR ANY STATE AND APPLICABLE
FOREIGN SECURITIES LAWS.
HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE U.S. SECURITIES ACT OF 1933.
THE OPTION ACQUIRED PURSUANT TO THIS AGREEMENT MAY NOT BE EXERCISED BY OR ON
BEHALF OF ANY U.S. PERSON UNLESS REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933 OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
SOLAR ENERTECH CORP.
STOCK OPTION AGREEMENT
(For Participants Resident in The Peoples Republic of China)
     Solar Enertech Corp. has granted to the Participant named in the Notice of
Grant of Stock Option (the “Grant Notice”) to which this Stock Option Agreement
(the “Option Agreement”) is attached an option (the “Option”) to purchase
certain shares of Stock upon the terms and conditions set forth in the Grant
Notice and this Option Agreement. The Option has been granted pursuant to and
shall in all respects be subject to the terms and conditions of the Solar
Enertech Corp. 2007 Equity Incentive Plan (the “Plan”), as amended to the Date
of Grant, the provisions of which are incorporated herein by reference. By
signing the Grant Notice, the Participant: (a) acknowledges receipt of and
represents that the Participant has read and is familiar with the Grant Notice,
this Option Agreement and the Plan, (b) accepts the Option subject to all of the
terms and conditions of the Grant Notice, this Option Agreement and the Plan and
(c) agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Grant
Notice, this Option Agreement or the Plan.

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     1. Definitions and Construction.
          1.1 Definitions. Unless otherwise defined herein, capitalized terms
shall have the meanings assigned to such terms in the Grant Notice or the Plan.
          1.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement. Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise.
     2. Certain Conditions of the Option.
          2.1 Compliance with Local Law. The Participant agrees that the
Participant will not acquire shares pursuant to the Option or transfer, assign,
sell or otherwise deal with such shares except in compliance with the laws and
regulations of the People’s Republic of China (“Local Law”).
          2.2 Employment Conditions. In accepting the Option, the Participant
acknowledges that:
               (a) Any notice period mandated under Local Law shall not be
treated as Service for the purpose of determining the vesting of the Option; and
the Participant’s right to exercise the Option after termination of Service, if
any, will be measured by the date of termination of the Participant’s active
Service and will not be extended by any notice period mandated under Local Law.
Subject to the foregoing and the provisions of the Plan, the Company, in its
sole discretion, shall determine whether the Participant’s Service has
terminated and the effective date of such termination.
               (b) The Plan is established voluntarily by the Company. It is
discretionary in nature and it may be modified, amended, suspended or terminated
by the Company at any time, unless otherwise provided in the Plan and this
Option Agreement.
               (c) The grant of the Option is voluntary and occasional and does
not create any contractual or other right to receive future grants of Options,
or benefits in lieu of Options, even if Options have been granted repeatedly in
the past.
               (d) All decisions with respect to future Option grants, if any,
will be at the sole discretion of the Company.
               (e) The Participant’s participation in the Plan shall not create
a right to further Service with any Participating Company and shall not
interfere with the ability of any Participating Company to terminate the
Participant’s Service at any time, with or without cause.
               (f) The Participant is voluntarily participating in the Plan.

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               (g) The Option is an extraordinary item that does not constitute
compensation of any kind for Service of any kind rendered to any Participating
Company, and which is outside the scope of the Participant’s employment
contract, if any.
               (h) The Option is not part of normal or expected compensation or
salary for any purpose, including, but not limited to, calculating any
severance, resignation, termination, redundancy, end-of-service payments,
bonuses, long-service awards, pension or retirement benefits or similar
payments.
               (i) In the event that the Participant is not an employee of the
Company, the Option grant will not be interpreted to form an employment contract
or relationship with the Company; and furthermore the Option grant will not be
interpreted to form an employment contract with any other Participating Company.
               (j) The future value of the underlying shares is unknown and
cannot be predicted with certainty. If the underlying shares do not increase in
value, the Option will have no value. If the Participant exercises the Option
and obtains shares, the value of those shares acquired upon exercise may
increase or decrease in value, even below the Exercise Price.
               (k) No claim or entitlement to compensation or damages arises
from termination of the Option or diminution in value of the Option or shares
purchased through exercise of the Option resulting from termination of the
Participant’s Service (for any reason whether or not in breach of Local Law) and
the Participant irrevocably releases the Company and each other Participating
Company from any such claim that may arise. If, notwithstanding the foregoing,
any such claim is found by a court of competent jurisdiction to have arisen
then, by signing this Option Agreement, the Participant shall be deemed
irrevocably to have waived the Participant’s entitlement to pursue such a claim.
          2.3 Data Privacy Consent.
               (a) The Participant hereby explicitly and unambiguously consents
to the collection, use and transfer, in electronic or other form, of the
Participant’s personal data as described in this document by and among the
members of the Participating Company Group for the exclusive purpose of
implementing, administering and managing the Participant’s participation in the
Plan.
               (b) The Participant understands that the Participating Company
Group holds certain personal information about the Participant, including, but
not limited to, the Participant’s name, home address and telephone number, date
of birth, social insurance number or other identification number, salary,
nationality, job title, any shares or directorships held in the Company, details
of all Options or any other entitlement to shares awarded, canceled, exercised,
vested, unvested or outstanding in the Participant’s favor, for the purpose of
implementing, administering and managing the Plan (“Data”). The Participant
understands that Data may be transferred to any third parties assisting in the
implementation, administration and management of the Plan, that these recipients
may be located in the Participant’s country or elsewhere, and that the
recipient’s country may have different data privacy laws and protections

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than the Participant’s country. The Participant understands that he or she may
request a list with the names and addresses of any potential recipients of the
Data by contacting the Participant’s local human resources representative. The
Participant authorizes the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Participant’s participation in the
Plan, including any requisite transfer of such Data as may be required to a
broker or other third party with whom the Participant may elect to deposit any
shares acquired upon exercise of the Option. The Participant understands that
Data will be held only as long as is necessary to implement, administer and
manage the Participant’s participation in the Plan. The Participant understands
that he or she may, at any time, view Data, request additional information about
the storage and processing of Data, require any necessary amendments to Data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Participant’s local human resources representative. The
Participant understands, however, that refusing or withdrawing the Participant’s
consent may affect the Participant’s ability to participate in the Plan. For
more information on the consequences of the Participant’s refusal to consent or
withdrawal of consent, the Participant understands that he or she may contact
the Participant’s local human resources representative.
     3. Administration.
          All questions of interpretation concerning this Option Agreement shall
be determined by the Committee. All determinations by the Committee shall be
final and binding upon all persons having an interest in the Option as provided
by the Plan. Any Officer shall have the authority to act on behalf of the
Company with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
Officer has apparent authority with respect to such matter, right, obligation,
or election.
     4. Exercise of the Option.
          4.1 Right to Exercise. Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 6) in an amount not to exceed
the number of Vested Shares less the number of shares previously acquired upon
exercise of the Option. In no event shall the Option be exercisable for more
shares than the Number of Option Shares, as adjusted pursuant to Section 9.
          4.2 Method of Exercise. Exercise of the Option shall be by means of
electronic or written notice (the “Exercise Notice”) in a form authorized by the
Company. An electronic Exercise Notice must be digitally signed or authenticated
by the Participant in such manner as required by the notice and transmitted to
the Company or an authorized representative of the Company (including a
third-party administrator designated by the Company). In the event that the
Participant is not authorized or is unable to provide an electronic Exercise
Notice, the Option shall be exercised by a written Exercise Notice addressed to
the Company, which shall be signed by the Participant and delivered in person,
by certified or registered mail, return receipt requested, by confirmed
facsimile transmission, or by such other means as the Company may permit, to the
Company, or an authorized representative of the Company (including a third-party
administrator designated by the Company). Each Exercise Notice, whether
electronic or written, must state the Participant’s election to exercise the
Option, the number of whole shares of Stock

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for which the Option is being exercised and such other representations and
agreements as to the Participant’s investment intent with respect to such shares
as may be required pursuant to the provisions of this Option Agreement. Further,
each Exercise Notice must be received by the Company prior to the termination of
the Option as set forth in Section 6 and must be accompanied by full payment of
the aggregate Exercise Price for the number of shares of Stock being purchased.
The Option shall be deemed to be exercised upon receipt by the Company of such
electronic or written Exercise Notice and the aggregate Exercise Price.
          4.3 Payment of Exercise Price.
               (a) Forms of Consideration Authorized. Payment of the aggregate
Exercise Price for the number of shares of Stock for which the Option is being
exercised shall be made (i) provided that at the time of exercise, the offer and
sale of shares of Stock pursuant to the Plan is registered on a then effective
registration statement on Form S-8 under the Securities Act, solely by means of
a Cashless Exercise, as defined in Section 4.3(b)(i), or (ii) at any other time,
solely by means of a Net Exercise, as defined in Section 4.3(b)(ii).
               (b) Limitations on Forms of Consideration.
                    (i) Cashless Exercise. A “Cashless Exercise” means the
delivery of a properly executed notice together with irrevocable instructions to
a broker in a form acceptable to the Company providing for the assignment to the
Company of the proceeds of a sale or loan with respect to some or all of the
shares of Stock acquired upon the exercise of the Option pursuant to a program
or procedure approved by the Company and with the provisions of Regulation T as
promulgated from time to time by the Board of Governors of the Federal Reserve
System.
                    (ii) Net Exercise. A “Net Exercise” means a procedure by
which the Participant will be issued a number of whole shares of Stock upon the
exercise of an Option determined in accordance with the following formula:
                    N = X(A-B)/A, where
“N” = the number of shares of Stock to be issued to the Participant upon
exercise of the Option;
“X” = the total number of shares with respect to which the Participant has
elected to exercise the Option;
“A” = the Fair Market Value of one (1) share of Stock determined on the exercise
date; and
“B” = the exercise price per share (as defined in the Participant’s Award
Agreement)
          4.4 Tax Withholding. Regardless of any action taken by the Company or
any other Participating Company with respect to any or all income tax, social
insurance, payroll tax,

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payment on account or other tax-related withholding (the “Tax Obligations”), the
Participant acknowledges that the ultimate liability for all Tax Obligations
legally due by the Participant is and remains the Participant’s responsibility
and that the Company (a) makes no representations or undertakings regarding the
treatment of any Tax Obligations in connection with any aspect of the Option,
including the grant, vesting or exercise of the Option, the subsequent sale of
shares acquired pursuant to such exercise, or the receipt of any dividends and
(b) does not commit to structure the terms of the grant or any other aspect of
the Option to reduce or eliminate the Participant’s liability for Tax
Obligations. At the time of exercise of the Option, the Participant shall pay or
make adequate arrangements satisfactory to the Company to satisfy all
withholding obligations of the Company and any other Participating Company. In
this regard, at the time the Option is exercised, in whole or in part, or at any
time thereafter as requested by the Company or any other Participating Company,
the Participant hereby authorizes withholding of all applicable Tax Obligations
from payroll and any other amounts payable to the Participant, and otherwise
agrees to make adequate provision for withholding of all applicable Tax
Obligations, if any, by each Participating Company which arise in connection
with the Option. Alternatively, or in addition, if permissible under applicable
law, including Local Law, the Company or any other Participating Company may
(i) sell or arrange for the sale of shares acquired by the Participant to
satisfy the Tax Obligations, and/or (ii) withhold in shares, provided that only
the amount of shares necessary to satisfy the minimum withholding amount
required by applicable law, including Local Law, is withheld. Finally, the
Participant shall pay to the Company or any other Participating Company any
amount of the Tax Obligations that any such company may be required to withhold
as a result of the Participant’s participation in the Plan that cannot be
satisfied by the means previously described. The Company shall have no
obligation to process the exercise of the Option or to deliver shares until the
Tax Obligations as described in this Section have been satisfied by the
Participant.
          4.5 Beneficial Ownership of Shares; Certificate Registration. The
Participant hereby authorizes the Company, in its sole discretion, to deposit
for the benefit of the Participant with any broker with which the Participant
has an account relationship of which the Company has notice any or all shares
acquired by the Participant pursuant to the exercise of the Option. Except as
provided by the preceding sentence, a certificate for the shares as to which the
Option is exercised shall be registered in the name of the Participant, or, if
applicable, in the names of the heirs of the Participant.
          4.6 Restrictions on Grant of the Option and Issuance of Shares. The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of United
States federal or state or Local Law with respect to such securities. The Option
may not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws, including Local Law, or other law or regulations or the requirements of
any stock exchange or market system upon which the Stock may then be listed. In
addition, the Option may not be exercised unless (i) a registration statement
under the Securities Act shall at the time of exercise of the Option be in
effect with respect to the shares issuable upon exercise of the Option or
(ii) in the opinion of legal counsel to the Company, the shares issuable upon
exercise of the Option may be issued in accordance with the terms of an
applicable exemption from the registration requirements of the Securities Act.
THE PARTICIPANT IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE
FOREGOING CONDITIONS ARE

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SATISFIED. ACCORDINGLY, THE PARTICIPANT MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED. The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company’s legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained. As a condition to the
exercise of the Option, the Company may require the Participant to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.
          4.7 Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise of the Option.
     5. Nontransferability of the Option.
          During the lifetime of the Participant, the Option shall be
exercisable only by the Participant or the Participant’s guardian or legal
representative. The Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant’s beneficiary,
except transfer by will or by the laws of descent and distribution. Following
the death of the Participant, the Option, to the extent provided in Section 7,
may be exercised by the Participant’s legal representative or by any person
empowered to do so under the deceased Participant’s will or under the then
applicable laws of descent and distribution.
     6. Termination of the Option.
          The Option shall terminate and may no longer be exercised after the
first to occur of (a) the close of business on the Option Expiration Date,
(b) the close of business on the last date for exercising the Option following
termination of the Participant’s Service as described in Section 7, or (c) a
Change in Control to the extent provided in Section 8.
     7. Effect of Termination of Service.
          7.1 Option Exercisability. The Option shall terminate immediately upon
the Participant’s termination of Service to the extent that it is then unvested
and shall be exercisable after the Participant’s termination of Service to the
extent it is then vested only during the applicable time period as determined
below and thereafter shall terminate.
               (a) Disability. If the Participant’s Service terminates because
of the Disability of the Participant, the Option, to the extent unexercised and
exercisable for Vested Shares on the date on which the Participant’s Service
terminated, may be exercised by the Participant (or the Participant’s guardian
or legal representative) at any time prior to the expiration of twelve (12)
months after the date on which the Participant’s Service terminated, but in any
event no later than the Option Expiration Date.
               (b) Death. If the Participant’s Service terminates because of the
death of the Participant, the Option, to the extent unexercised and exercisable
for Vested Shares on the

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date on which the Participant’s Service terminated, may be exercised by the
Participant’s legal representative or other person who acquired the right to
exercise the Option by reason of the Participant’s death at any time prior to
the expiration of twelve (12) months after the date on which the Participant’s
Service terminated, but in any event no later than the Option Expiration Date.
The Participant’s Service shall be deemed to have terminated on account of death
if the Participant dies within three (3) months after the Participant’s
termination of Service.
               (c) Termination for Cause. If the Participant’s Service is
terminated for Cause or if, following the Participant’s termination of Service
and during any period in which the Option otherwise would remain exercisable,
the Participant engages in any act that would constitute Cause, the Option shall
terminate in its entirety and cease to be exercisable immediately upon such
termination of Service or act.
               (d) Other Termination of Service. If the Participant’s Service
terminates for any reason, except Disability, death or Cause, the Option, to the
extent unexercised and exercisable for Vested Shares by the Participant on the
date on which the Participant’s Service terminated, may be exercised by the
Participant at any time prior to the expiration of three (3) months after the
date on which the Participant’s Service terminated, but in any event no later
than the Option Expiration Date.
          7.2 Extension if Exercise Prevented by Law or Insider Trading Policy.
Notwithstanding the foregoing, other than termination of Service for Cause, if
the exercise of the Option within the applicable time periods set forth in
Section 7.1 is prevented by the provisions of Section 4.6 or a sale of shares
pursuant to a Cashless Exercise of the Option would violate the provisions of
the Insider Trading Policy, the Option shall remain exercisable until thirty
(30) days after the date such exercise or sale, as the case may be, would no
longer be prevented by such provisions, but in any event no later than the
Option Expiration Date.
     8. Effect of Change in Control.
          In the event of a Change in Control, except to the extent that the
Committee determines to cash out the Option in accordance with Section 10.1(c)
of the Plan, the surviving, continuing, successor, or purchasing entity or
parent thereof, as the case may be (the “Acquiror”), may, without the consent of
the Participant, assume or continue in full force and effect the Company’s
rights and obligations under all or any portion of the Option or substitute for
all or any portion of the Option a substantially equivalent option for the
Acquiror’s stock. For purposes of this Section, the Option or any portion
thereof shall be deemed assumed if, following the Change in Control, the Option
confers the right to receive, subject to the terms and conditions of the Plan
and this Option Agreement, for each share of Stock subject to such portion of
the Option immediately prior to the Change in Control, the consideration
(whether stock, cash, other securities or property or a combination thereof) to
which a holder of a share of Stock on the effective date of the Change in
Control was entitled; provided, however, that if such consideration is not
solely common stock of the Acquiror, the Committee may, with the consent of the
Acquiror, provide for the consideration to be received upon the exercise of the
Option, for each share of Stock subject to the Option, to consist solely of
common stock of the Acquiror equal in Fair Market Value to the per share
consideration received by holders of Stock pursuant to the Change in Control.
The Option shall terminate and cease to be outstanding effective as of

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the time of consummation of the Change in Control to the extent that the Option
is neither assumed or continued by the Acquiror in connection with the Change in
Control nor exercised as of the date of the Change in Control.
     9. Adjustments for Changes in Capital Structure.
          Subject to any required action by the stockholders of the Company, in
the event of any change in the Stock effected without receipt of consideration
by the Company, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock
split, reverse stock split, split-up, split-off, spin-off, combination of
shares, exchange of shares, or similar change in the capital structure of the
Company, or in the event of payment of a dividend or distribution to the
stockholders of the Company in a form other than Stock (excepting normal cash
dividends) that has a material effect on the Fair Market Value of shares of
Stock, appropriate and proportionate adjustments shall be made in the number,
Exercise Price and kind of shares subject to the Option, in order to prevent
dilution or enlargement of the Participant’s rights under the Option. For
purposes of the foregoing, conversion of any convertible securities of the
Company shall not be treated as “effected without receipt of consideration by
the Company.” Any fractional share resulting from an adjustment pursuant to this
Section shall be rounded down to the nearest whole number, and the Exercise
Price shall be rounded up to the nearest whole cent. In no event may the
Exercise Price be decreased to an amount less than the par value, if any, of the
stock subject to the Option. The Committee in its sole discretion, may also make
such adjustments in the terms of the Option to reflect, or related to, such
changes in the capital structure of the Company or distributions as it deems
appropriate. All adjustments pursuant to this Section shall be determined by the
Committee, and its determination shall be final, binding and conclusive.
     10. Rights as a Stockholder, Director, Employee or Consultant.
          The Participant shall have no rights as a stockholder with respect to
any shares covered by the Option until the date of the issuance of the shares
for which the Option has been exercised (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company). No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date the shares are issued,
except as provided in Section 9. If the Participant is an Employee, the
Participant understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the
Participant, the Participant’s employment is “at will” and is for no specified
term. Nothing in this Option Agreement shall confer upon the Participant any
right to continue in the Service of a Participating Company or interfere in any
way with any right of the Participating Company Group to terminate the
Participant’s Service as a Director, an Employee or Consultant, as the case may
be, at any time.
     11. Representations and Warranties.
          In connection with the receipt of the Option and any acquisition of
shares upon the exercise thereof (collectively, the “Securities”), the
Participant hereby agrees, represents and warrants as follows:

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          11.1 Investment Intent. The Participant is acquiring the Securities
solely for the Participant’s own account for investment and not with a view to
or for sale in connection with any distribution of the Securities or any portion
thereof and not with any present intention of selling, offering to sell or
otherwise disposing of or distributing the Securities or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act. The Participant further represents that the entire legal and
beneficial interest of the Securities is being acquired, and will be held, for
the account and benefit of the Participant only and neither in whole nor in part
for any other person.
          11.2 Absence of Solicitation. The Participant was not presented with
or solicited by any form of general solicitation or general advertising,
including, but not limited to, any advertisement, article, notice, or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television, radio or similar communications media, or presented
at any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
          11.3 Residence / Not a U.S. Person. The Participant’s principal
residence is located at the address indicated beneath the Participant’s
signature on the Grant Notice. The Participant is not a U.S. person (as defined
in Regulation S promulgated under the Securities Act), and the Option will not
be exercised on behalf of, for the benefit of, or for the account of a U.S.
person.
          11.4 No Exercise within the United States. The Option may not be
exercised within the United States, and the Securities may not be delivered
within the United States upon exercise, unless registered under the Securities
Act or an exemption from such registration is available.
          11.5 Information Concerning the Company. The Participant is aware of
the Company’s business affairs and financial condition and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Securities. The Participant further represents and
warrants that the Participant has discussed the Company and its plans,
operations and financial condition with its Officers, has received all such
information as the Participant deems necessary and appropriate to enable the
Participant to evaluate the financial risk inherent in acquiring the Securities
and has received satisfactory and complete information concerning the business
and financial condition of the Company in response to all inquiries in respect
thereof.
          11.6 Economic Risk. The Participant realizes that his acquisition of
the Securities will be a highly speculative investment and that the Participant
is able, without impairing his or her financial condition, to hold the
Securities for an indefinite period of time and to suffer a complete loss on the
Participant’s investment.
          11.7 Capacity to Protect Interests. The Participant has (i) a
preexisting personal or business relationship with the Company or any of its
Officers, directors, or controlling persons, consisting of personal or business
contacts of a nature and duration to enable the Participant to be aware of the
character, business acumen and general business and financial

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circumstances of the person with whom such relationship exists, or (ii) such
knowledge and experience in financial and business matters as to make the
Participant capable of evaluating the merits and risks of an investment in the
Securities and to protect the Participant’s own interests in the transaction, or
(iii) both such relationship and such knowledge and experience.
          11.8 Restricted Securities. The Participant understands and
acknowledges that:
               (a) The issuance of the Securities to the Participant has not
been registered under the Securities Act, and the Securities must be held
indefinitely unless a transfer of the Securities is subsequently registered
under the Securities Act, the transfer or sale of the securities is in
accordance with Regulation S promulgated under the Securities Act or Rule 144
promulgated under the Securities Act or another exemption from such registration
is available.
               (b) The Company is under no obligation to register the
Securities.
               (c) The Participant hereby agrees not to engage in hedging
transactions with regard to the Securities unless in compliance with the
Securities Act.
               (d) The Company will make a notation in its records of the
aforementioned restrictions on transfer and legends.
          11.9 Disposition Under Rule 144. The Participant understands that any
shares acquired upon exercise of the Option will be restricted securities within
the meaning of Rule 144 promulgated under the Securities Act; that the exemption
from registration under Rule 144 will not be available in any event for at least
one year from the date of acquisition of the shares, and even then will not be
available unless (a) a public trading market then exists for the Common Stock of
the Company, (b) adequate information concerning the Company is then available
to the public, and (c) other terms and conditions of Rule 144 are complied with;
and that any sale of the shares may be made only in limited amounts in
accordance with such terms and conditions. There can be no assurance that the
requirements of Rule 144 will be met, or that the shares will ever be salable.
          11.10 Further Limitations on Disposition. Without in any way limiting
the Participant’s representations and warranties set forth above, the
Participant further agrees that the Participant will in no event make any
disposition of all or any portion of any shares which the Participant acquires
upon exercise of the Option unless:
               (a) There is then in effect a Registration Statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with said Registration Statement; or
               (b) The Participant will have notified the Company of the
proposed disposition and furnished the Company with a detailed statement of the
circumstances surrounding the proposed disposition, and either:

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                    (i) The Participant will have furnished the Company with an
opinion of the Participant’s own counsel to the effect that such disposition
will not require registration of such shares under the Securities Act or any
state and applicable foreign securities laws, and such opinion of the
Participant’s counsel will have been concurred in by counsel for the Company and
the Company will have advised the Participant of such concurrence; or
                    (ii) The disposition is made in compliance with Rule 144 or
Regulation S after the Participant has furnished the Company such detailed
statement and after the Company has had a reasonable opportunity to discuss the
matter with the Participant.
               11.11 Reliance by Company. The Participant understands that the
Option and any shares acquired upon exercise of the Option have not been
qualified under the Corporate Securities Law of 1968, as amended, of the State
of California by reason of a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of the Participant’s
representations as expressed herein. The Participant understands that the
Company is relying on the Participant’s representations and warrants that the
Company is entitled to rely on such representations and that such reliance is
reasonable.
     12. Legends.
          12.1 The Company may at any time place legends referencing any
applicable federal, state or foreign securities law, including Local Law,
restrictions on all certificates representing shares of stock subject to the
provisions of this Option Agreement. The Participant shall, at the request of
the Company, promptly present to the Company any and all certificates
representing shares acquired pursuant to the Option in the possession of the
Participant in order to carry out the provisions of this Section.
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, TRANSFERRED, ASSIGNED,
HYPOTHECATED OR SOLD IN THE U.S. OR TO U.S. PERSONS (OTHER THAN DISTRIBUTORS)
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE U.S. SECURITIES ACT OF 1933),
UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH REGULATION S OR RULE 144, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY,
STATING THAT SUCH DISPOSITION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
DELIVERY REQUIREMENTS OF SUCH ACT OR ANY STATE AND APPLICABLE FOREIGN SECURITIES
LAWS. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE U.S. SECURITIES ACT OF 1933.”
          12.2 The Participant is hereby on notice that the Company may refuse
to register on the books of the Company (or on the records of a duly authorized
transfer agent of the

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Company) any transfer, sale, assignment or hypothecation of the Securities not
made in accordance with (i) registration under the Securities Act (ii) pursuant
to Regulation S under the Securities Act, (iii) Rule 144 under the Securities
Act or (iv) another available exemption from registration under the Securities
Act.
     13. Miscellaneous Provisions.
          13.1 Termination or Amendment. The Committee may terminate or amend
the Plan or the Option at any time; provided, however, that except as provided
in Section 8 in connection with a Change in Control, no such termination or
amendment may adversely affect the Option or any unexercised portion hereof
without the consent of the Participant unless such termination or amendment is
necessary to comply with any applicable law or government regulation. No
amendment or addition to this Option Agreement shall be effective unless in
writing.
          13.2 Further Instruments. The parties hereto agree to execute such
further instruments and to take such further action as may reasonably be
necessary to carry out the intent of this Option Agreement.
          13.3 Binding Effect. Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
          13.4 Delivery of Documents and Notices. Any document relating to
participation in the Plan or any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery, electronic delivery at the e-mail
address, if any, provided for the Participant by a Participating Company, or
upon deposit in the U.S. Post Office or foreign postal service, by registered or
certified mail, or with a nationally recognized overnight courier service, with
postage and fees prepaid, addressed to the other party at the address of such
party set forth in the Grant Notice or at such other address as such party may
designate in writing from time to time to the other party.
               (a) Description of Electronic Delivery. The Plan documents, which
may include but do not necessarily include: the Plan, the Grant Notice, this
Option Agreement, the Plan Prospectus, and any reports of the Company provided
generally to the Company’s stockholders, may be delivered to the Participant
electronically. In addition, the Participant may deliver electronically the
Grant Notice and Exercise Notice called for by Section 4.2 to the Company or to
such third party involved in administering the Plan as the Company may designate
from time to time. Such means of electronic delivery may include but do not
necessarily include the delivery of a link to a Company intranet or the Internet
site of a third party involved in administering the Plan, the delivery of the
document via e-mail or such other means of electronic delivery specified by the
Company.
               (b) Consent to Electronic Delivery. The Participant acknowledges
that the Participant has read Section 13.4(a) of this Option Agreement and
consents to the electronic delivery of the Plan documents and the delivery of
the Grant Notice and Exercise

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Notice, as described in Section 13.4(a). The Participant acknowledges that he or
she may receive from the Company a paper copy of any documents delivered
electronically at no cost to the Participant by contacting the Company by
telephone or in writing. The Participant further acknowledges that the
Participant will be provided with a paper copy of any documents if the attempted
electronic delivery of such documents fails. Similarly, the Participant
understands that the Participant must provide the Company or any designated
third party administrator with a paper copy of any documents if the attempted
electronic delivery of such documents fails. The Participant may revoke his or
her consent to the electronic delivery of documents described in Section 13.4(a)
or may change the electronic mail address to which such documents are to be
delivered (if Participant has provided an electronic mail address) at any time
by notifying the Company of such revoked consent or revised e-mail address by
telephone, postal service or electronic mail. Finally, the Participant
understands that he or she is not required to consent to electronic delivery of
documents described in Section 13.4(a).
          13.5 Integrated Agreement. The Grant Notice, this Option Agreement and
the Plan, together with any the Superseding Agreement, if any, shall constitute
the entire understanding and agreement of the Participant and the Participating
Company Group with respect to the subject matter contained herein and supersede
any prior agreements, understandings, restrictions, representations, or
warranties among the Participant and the Participating Company Group with
respect to such subject matter. To the extent contemplated herein, the
provisions of the Grant Notice, the Option Agreement and the Plan shall survive
any exercise of the Option and shall remain in full force and effect.
          13.6 Applicable Law. This Option Agreement shall be governed by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California. For purposes of litigating any dispute that arises directly or
indirectly from the relationship of the parties as evidenced by this Option
Agreement, the parties hereby submit to and consent to the jurisdiction of the
State of California and agree that such litigation shall be conducted only in
the courts of the County of Santa Clara, California, or the federal courts of
the United States for the Northern District of California, and no other courts,
where this Option Agreement is made and/or performed.
          13.7 Counterparts. The Grant Notice may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

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Participant:                    
Date:                    
STOCK OPTION EXERCISE NOTICE
Solar Enertech Corp.
Attention: Stock Administration
Ladies and Gentlemen:
     1. Option. I was granted an option (the “Option”) to purchase shares of the
common stock (the “Shares”) of Solar Enertech Corp. (the “Company”) pursuant to
the Company’s 2007 Equity Incentive Plan (the “Plan”), my Notice of Grant of
Stock Option (the “Grant Notice”) and my Stock Option Agreement (the “Option
Agreement”) as follows:

         
Date of Grant:
                          
 
       
Number of Option Shares:
                          
 
       
Exercise Price per Share:
  $                       

     2. Exercise of Option. I hereby elect to exercise the Option to purchase
the following number of Shares, all of which are Vested Shares in accordance
with the Grant Notice and the Option Agreement:

         
Total Shares Purchased:
                          
 
       
Total Exercise Price (Total Shares X Price per Share)
  $                       

     3. Payments. I enclose payment in full of the total exercise price for the
Shares in the following form(s), as authorized by my Option Agreement:

         
TM Cashless Exercise:
  Contact Plan Administrator
 
       
TM Net Exercise:
  Contact Plan Administrator

     4. Tax Withholding. I authorize payroll withholding and otherwise will make
adequate provision for the Tax Obligations, as described in the Option
Agreement. I elect to pay the Tax Obligations, if any, as follows:
(Contact Plan Administrator for amount of tax due.)

         
TM Check:
  $                               
 
       
TM Payroll Withholding:
  Contact Plan Administrator
 
       
TM Cashless Exercise:
  Contact Plan Administrator
 
       
TM Share Withholding:
  Contact Plan Administrator

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     5. Participant Information.

         
 
  My address is:    
 
       
 
       
 
       

         
 
         My Tax Identification Number is:    
 
       

     6. Not a U.S. Person. I certify that I am not a U.S. person (as defined in
Regulation S promulgated under the Securities Act of 1933, as amended) and the
Option is not being exercised on behalf of a U.S. person.
     7. Binding Effect. I agree that the Shares are being acquired in accordance
with and subject to the terms, provisions and conditions of the Grant Notice,
the Option Agreement and the Plan, to all of which I hereby expressly assent.
This Agreement shall inure to the benefit of and be binding upon my heirs,
executors, administrators, successors and assigns.

     
 
  Very truly yours,
 
   
 
   
 
  (Signature)

          Receipt of the above is hereby acknowledged.    
 
        SOLAR ENERTECH CORP.    
 
       
By:
       
 
 
 
   
Title:
       
 
 
 
   
Dated:
       
 
 
 
   

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