exv10w3



 





Exhibit 10.3




SOLAR ENERTECH CORP.

NOTICE OF GRANT OF STOCK OPTION

(For U.S. Participant)



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.
	 
	 	 	 	 
	Tax Status of Option:	 	Nonstatutory Stock Option
	 
	 	 	 	 
	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	 





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 ENTERTECH CORPORATION	 	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






 









 




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 SALE OR
DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.




SOLAR ENERTECH CORP.

STOCK OPTION AGREEMENT

(For U.S. Participant)




     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.



     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. Tax Status of Option.



          This Option is intended to be a Nonstatutory Stock Option and shall not be treated as an
incentive stock option within the meaning of Section 422(b) of the Code.




     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




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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 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. Except as otherwise provided below, payment of the
aggregate Exercise Price for the number of shares of Stock for which the Option is being exercised
shall be made (i) in cash or by check or cash equivalent, (ii) if permitted by the Company and
subject to Section 4.3(b)(i), by tender to the Company, or attestation to the ownership, of whole
shares of Stock owned by the Participant having a Fair Market Value not less than the aggregate
Exercise Price, (iii) subject to Section 4.3(b)(ii), by means of a Cashless Exercise, (iv) by means
of a Net Exercise, as defined in Section 4.3(b)(iii), or (v) by any combination of the foregoing.



               (b) Limitations on Forms of Consideration.



                    (i) Tender of Stock. Notwithstanding the foregoing, the Option may not be exercised by tender
to the Company, or attestation to the ownership, of shares



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of Stock to the extent such tender or attestation would constitute a violation of the
provisions of any law, regulation or agreement restricting the redemption of the Company’s stock.
If required by the Company, the Option may not be exercised by tender to the Company, or
attestation to the ownership, of shares of Stock unless such shares either have been owned by the
Participant for more than six (6) months or such other period, if any, required by the Company (and
not used for another option exercise by attestation during such period) or were not acquired,
directly or indirectly, from the Company.



               (ii) 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. The Cashless Exercise program is
available only if, 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.
The Company reserves, at any and all times, the right, in the Company’s sole and absolute
discretion, to establish, decline to approve or terminate any such program or procedure, including
with respect to the Participant notwithstanding that such program or procedures may be available to
others.



               (iii) 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)


The Company reserves, at any and all times, the right, in the Company’s sole and absolute
discretion, to establish, decline to approve or terminate any such program or procedure, including
with respect to the Participant notwithstanding that such program or procedures may be available to
others.




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          4.4 Tax Withholding.




               (a) In General. At the time the Option is exercised, in whole or in part, or at any time
thereafter as requested by the Company, the Participant hereby authorizes withholding from payroll
and any other amounts payable to the Participant, and otherwise agrees to make adequate provision
for (including by means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding obligations of the
Participating Company Group, if any, which arise in connection with the Option. The Company shall
have no obligation to deliver shares of Stock until the tax withholding obligations of the
Participating Company Group have been satisfied by the Participant.



               (b) Withholding in Shares. The Company may permit or require the Participant to satisfy all
or any portion of a Participating Company’s tax withholding obligations upon exercise of the Option
by deducting from the shares of Stock otherwise issuable to the Participant upon such exercise a
number of whole shares having a fair market value, as determined by the Company as of the date of
exercise, not in excess of the amount of such tax withholding obligations determined by the
applicable minimum statutory withholding rates. Any adverse consequences to the Participant
resulting from the procedure permitted under this Section, including, without limitation, tax
consequences, shall be the sole responsibility of 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 federal, state or foreign 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 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 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




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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 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



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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. 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, the Option shall remain
exercisable until thirty (30) days after the date such exercise 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 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.




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     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:




          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




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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 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. The Participant’s principal residence is located at the address indicated
beneath the Participant’s signature on the Grant Notice.




          11.4 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.




          11.5 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.




          11.6 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 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.




          11.7 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 or an exemption from such registration is
available, and that the Company is under no obligation to register the Securities;



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               (b) The Company will make a notation in its records of the aforementioned restrictions on
transfer and legends.



          11.8 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.




          11.9 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:



                    (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, 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 Rule 701 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.



          11.10 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.




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     12. Legends.



          The Company may at any time place legends referencing any applicable federal, state or foreign
securities 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. Unless otherwise specified by the Company, legends placed on such certificates may
include, but shall not be limited to, the following:





“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR
HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE
ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE
COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT
FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH 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, including, but not limited
to, Section 409A. 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




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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 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 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.




          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 Cash:
	 	$	                    	 
	 
	 	 	 	 
	TM Check:
	 	$	                    	 
	 
	 	 	 	 
	TM Tender of Company Stock:
	 	Contact Plan Administrator
	 
	 	 	 	 
	TM Net Exercise:
	 	Contact Plan Administrator






     4. Tax Withholding. I authorize payroll withholding and otherwise will make adequate
provision for the federal, state, local and foreign tax withholding obligations of the Company, if
any, in connection with the Option. I enclose payment in full of my withholding taxes, if any, as
follows:



(Contact Plan Administrator for amount of tax due.)




	 	 	 	 	 
	TM Cash:
	 	$	                    	 
	 
	 	 	 	 
	TM Check:
	 	$	                    	 
	 
	 	 	 	 
	TM Tender of Company Stock:
	 	Contact Plan Administrator
	 
	 	 	 	 
	TM Net Exercise:
	 	Contact Plan Administrator






 









 






     5. Participant Information.



	 	 	 	 	 
	 

	 	My address is:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 





	 	 	 	 	 
	 

	 	       My Social Security Number is:	 	 
	 

	 	 	 	 





     6. 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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