EMPLOYMENT AGREEMENT

Exhibit 10.1

EMPLOYMENT AGREEMENT

between
DayStar Technologies, Inc.

and

William Steckel

EMPLOYMENT AGREEMENT ("Agreement"), executed as of June 25, 2008 ("Commencement Day") between William Steckel ("Executive"), an individual currently residing in Noblesville, IN, and DayStar Technologies, Inc., a Delaware corporation (the "Company"), having its principal office at 2972 Stender Way, Santa Clara, CA 95054.

WHEREAS, the Company desires to obtain the services of Executive as its Chief Financial Officer, and to enter into an employment agreement embodying the terms of such relationship; and

WHEREAS, Executive is willing to accept such employment by the Company upon the terms and conditions as hereinafter set forth; and

WHEREAS, the Company and Executive desire to enter into this Agreement in order to reflect the terms and conditions of Executive's employment by the Company,

NOW, THEREFORE, in consideration of the agreements and covenants contained herein, the Executive and the Company hereby agree as follows:

ARTICLE I Employment and Term

Section 1.01 Position; Responsibilities.

(a) The Company hereby employs Executive as its Chief Financial Officer upon the terms and conditions hereinafter set forth.

(b) Executive shall at all times hold the position described above or other senior management level positions as determined by the Board of Directors of the Company (the "Board") or its designee, and perform the duties, responsibilities and authorities customarily associated with such positions or such other senior management level duties as determined by the Board or its designee, so long as such other duties are consistent with the Executive's skills. Executive shall report directly to the Chief Executive Officer.

Section 1.02 Performance of Duties/Other Commitments and Activities.

(a) Executive shall at all times endeavor to perform duly and faithfully all of his duties hereunder to the best of his abilities.

(b) Executive shall devote his full business time, best efforts and business judgment, skill and knowledge to the advancement of the Company's interests and to the discharge of his duties and responsibilities hereunder; provided, however, that nothing herein shall be construed as preventing Executive from engaging in any of the activities described in clauses (i), (ii), (iii) and/or (iv) below so long as such activities do not impair his ability to fulfill his duties and responsibilities under this Agreement or violate any other agreements between Executive and the Company:

(i) investing his assets in such form or manner as shall not require any material services on his part in the operations or affairs of the companies or the other entities in which such investments are made;

(ii) serving on the board of directors of any company; provided that he obtains the prior written approval of a majority of the Board of Directors and shall not be required to render any material services with respect to the operations or affairs of any such company;

(iii) engaging in religious, charitable, educational or other community or nonprofit activities; or

(iv) serving in such capacities as may be reasonably necessary for Executive to maintain his active professional licensing as a member of any professional organization that reasonably relates to his employment with and the business of the Company .

(c) Executive's base of operations under this Agreement shall be the Company's headquarters offices which is currently located in the San Francisco, California bay area .

Section 1.03 Term . Executive's term of employment under this Agreement (the "Term") shall commence on the Commencement Day and shall expire on the third anniversary of the Commencement Day; provided, however, that the Term shall be automatically extended for an additional one (1) year period on the third anniversary of the Commencement Day, and annually thereafter (each such anniversary of the Commencement Day, commencing with the third anniversary, the "Anniversary Date") unless the Executive or the Company has received a written Notice of Non-Renewal delivered no later than thirty (30) days prior to the Anniversary Date , pursuant to Section 6.01 below . Executive's rights to compensation upon his separation from service with the Company, including but not limited to upon the non-renewal of this Agreement, are as set forth in Article 3 below.

Section 1.04 Representations and Warranty of Executive. Executive hereby represents and warrants to the Company that he is not aware of any presently existing fact, circumstance or event (including, but without limitation, any health condition or legal constraint) which would preclude or restrict him from providing to the Company the services contemplated by this Agreement, or which would give rise to any breach of any term or provision hereof, or which could otherwise result in the termination of his employment hereunder for Cause or Good Reason (as such terms are defined in Article 3). Any and all agreements between Executive and any prior employer as well as any agreements to which Executive is a party containing any restriction upon Executive's ability to use or disclose confidential information or engages in any business activity are listed in Appendix "A" and shall be promptly made available to the Company upon request.

Section 1.05 Representations and Warranty of Company. The Company hereby represents and warrants to Executive that it has received all authorizations and has taken all actions, necessary or appropriate for the due execution, delivery and performance of this Agreement.

ARTICLE II Compensation

Section 2.01 General. The Company shall compensate Executive for all of his services under this Agreement, as set forth herein.

Section 2.02 Basic Compensation. Executive's initial salary ("Base Salary") when annualized shall be at the rate of $240,000 and shall be payable in bi-weekly or other installments in accordance with the Company's normal payment schedule for senior management (but not less frequently than monthly). The Executive's performance and compensation shall be subject to annual review (generally on or around each July 1 ^st , or such other time as applicable to executive officers generally) following the first anniversary of the Commencement Day thereafter.

Section 2 . 03 Incentive Compensation. Executive shall be eligible to participate in an annual Management Incentive Program for senior management of the Company currently offered or as subsequently modified by the Board from time to time in its discretion ("Management Incentive Program"). The Executive and the Company agree that Executive's performance goals pursuant to the Management Incentive Program shall consist of the Company's annual performance goals and other specific performance goals for the Executive, as determined by the Board (or a duly authorized committee thereof) in its discretion. The target incentive compensation payment (the "Incentive Payment") for meeting all such goals shall be a percentage of the Base Salary, as deemed appropriate by the Board (or a duly authorized committee thereof).

Section 2.04 Other Benefits.

(a) During the Term, Executive shall be entitled to participate in all employee benefit plans, including retirement programs, if any, group health care plans, and all fringe benefit plans, of the Company, subject to the terms and conditions of such plans. Such plans shall at all times be comparable to those made available to the senior-most management of the Company.

(b) In addition, the Company shall provide Executive with the following benefits during the Term: (i) Reimbursement for Company business travel (including overnight accommodations as reasonably deemed necessary by Executive); (ii) Company paid cell phone and home office communication equipment (fax, internet access, etc. without any requirement to maintain records of specific use); and (iii) Reimbursement for reasonable out-of-pocket home office expenses.

(c) During the Term, Executive shall be entitled to 15 days per year of paid vacation in accordance with the Company's Vacation Policy and calculations as set forth in the Company Employee Handbook. After four (4) years of service Executive shall be entitled to accrue up to an additional 5 days of paid vacation in each calendar year. With respect to all unused vacation time, unless otherwise approved by the Board of Directors and the Compensation Committee of such Board, Executive shall carry over unused vacation time for periods prior to the calendar year in accordance with the Company's Employee Handbook or supplemental written policies, as determined from time to time.

(d) Executive shall also be entitled to such paid holidays and paid sick leave as shall be authorized by the Company for its senior-most officers pursuant to its written policies, as determined from time to time.

Section 2.05 Expense Reimbursements. The Company shall reimburse Executive for all proper expenses incurred by him in the performance of his duties hereunder, in accordance with the policies and procedures of the Company as in effect from time to time.

Section 2.06 Excise Tax. Notwithstanding any other provision of this Agreement, if the aggregate present value of the "parachute payments" to the Executive, determined under Section 280G(b) of the Internal Revenue Code of 1986, as amended (the "Code") would be, but for this Section 2.06, at least three times the "base amount" determined under such Section 280G, then the parachute payments otherwise payable under this Agreement (and any other amount payable hereunder or any other severance plan, program, policy or obligation of the Company) shall be reduced so that the aggregate present value of the parachute payments to the Executive determined under Section 280G, does not exceed 2.99 times the base amount. In no event, however, shall any benefit provided hereunder be reduced to the extent such benefit is specifically excluded from treatment under Section 280G of the Code as a "parachute payment" or as an "excess parachute payment ". Any decisions regarding the requirement or implementation of such reductions shall be made by the tax counsel and accounting firm retained by the Company. If a reduced amount is to be paid, (i) Executive shall have no rights to any additional payments and/or benefits constituting the payments, and (ii) reduction in payments and/or benefits shall occur in the following order: (1) reduction of cash payments; (2) cancellation of accelerated vesting of stock awards other than stock options; (3) cancellation of accelerated vesting of stock options; and (4) reduction of other benefits (if any) paid to Executive. In the event that acceleration of compensation from Executive's stock awards is to be reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant.

Section 2.07 Withholding. The Base Salary and all other payments and benefits provided to Executive in connection with his services to the Company shall be subject to all withholding and deductions required by federal, state or other law (including those authorized by Executive but not otherwise required by law), including but not limited to state, federal and local income taxes, unemployment tax, Medicare and FICA, together with such deductions as Executive may from time to time specifically authorize under any employee benefit program which may be adopted by the Company for the benefit of its senior executives or Executive.

ARTICLE III Termination of Employment

Section 3.01 Right to Terminate . Executive's employment hereunder is "at will" and shall be terminable by either party at any time, with or without Cause or Good Reason, and any such termination shall not constitute a breach of this Agreement, provided the notice set forth in subsection 3.02 is provided . Upon any termination of Executive's employment, Executive will have no rights to receive any compensation from the Company except as set forth in this Article III.

Section 3.02 Notice. Executive shall give the Company at least sixty (60 ) days' advance written notice prior to any termination by Executive.

Section 3.03 Termination for Good Reason . The Executive may terminate employment for Good Reason or without Good Reason. "Good Reason" means, without the consent of the Executive:

1. 1. 1. 1. any material reduction in Executive's base pay and bonus target amount that is not remedied by the Company within sixty (60) days after receipt of written notice thereof from the Executive;
         2. the assignment to the Executive of any duties or any other action by the Company that results in a material diminution in the Executive's authority, duties, or responsibilities inconsistent with Section 1.01(b) of this Agreement that is not remedied by the Company within sixty (60) days after receipt of written notice thereof from the Executive;
         3. any material breach by the Company of Section 2 of this Agreement that is not remedied by the Company within sixty (60) days after receipt of written notice thereof from the Executive;
         4. any failure of the Company under Section 6.10 below to use its best efforts to maintain directors' and officers' liability insurance coverage for Executive that is not remedied by the Company within sixty (60) days after receipt of written notice thereof from the Executive.

Notwithstanding the foregoing, Good Reason shall not exist unless the Executive provides notice of any condition described in (i)-(iv) above within ninety (90) days of the initial existence of the condition and the effective date of Executive's termination, following the Company's failure to reasonably cure such condition, is not later than the one hundred and twentieth (120 ^th ) day after the Company received notice of the condition.

Section 3.04 Procedure for Termination for Good Reason. A termination of employment by the Executive for Good Reason shall be effectuated by giving the Company written notice ("Notice of Termination for Good Reason") of the termination, setting forth in reasonable detail the specific conduct of the Company that constitutes Good Reason and the specific provision(s) of this Agreement on which the Executive relies. A termination of employment by the Executive for Good Reason shall be effective on the sixtieth (60 ^th ) day following the date when the Notice of Termination for Good Reason is received by the Company, unless the act or admission that constitutes the Good Reason is cured prior to the expiration of said period and the Executive is given written notice thereof, the Notice of Termination for Good Reason sets forth a later date (as provided in Section 3.03 above) for the effectiveness of the termination or the Company accepts the Executive's termination for Good Reason on an earlier date.

Section 3.05 Termination for Cause. The Company shall have the right to terminate Executive's employment hereunder for Cause. For purposes hereof, "Cause" shall be defined as the Board's good faith determination that the Executive has : (i) been convicted of or entered a plea of nolo contendere with respect to a criminal offense constituting a felony; (ii) committed one or more acts or omissions constituting fraud, embezzlement or breach of a fiduciary duty to the Company; (iii) committed one or more acts constituting gross negligence or willful misconduct ; (iv) habitually abused alcohol or any controlled substance or reported to work under the influence of alcohol or any controlled substance (other than a controlled substance which Executive is properly taking under a current prescription), (v) engaged in harassment of any employee or customer of the Company in violation of Company policy; (vii) committed a material violation of any Company policy; (viii) been insubordinate or dishonest; (ix) engaged in self-dealing or in any act constituting a conflict of interest; (ix ) exposed the Company to criminal liability through negligence or wrongdoing of any kind; (x) disclosed the Company's confidential information in violation of his obligations under this Agreement; or (xi ) failed, after written warning specifying in reasonable detail the breach(es) complained of, to substantially perform his duties under this Agreement.

Notwithstanding the foregoing in the event of a Change of Control, a termination by the Company of the Executive for any reason during the twelve (12) month period immediately following the Change of Control, other than an intentional and malicious act or omission that is reasonably likely to result in material injury to the business or reputation of the Company, shall be deemed to be a termination without Cause for all purposes under this Agreement.

Section 3.06 Procedure for Termination for Cause. A termination of the Executive's employment for Cause shall be effected in accordance with the following procedures. The Company shall give the Executive written notice ("Notice of Termination for Cause") of its intention to terminate the Executive's employment for Cause, setting forth in reasonable detail the specific conduct of the Executive that it considers to constitute Cause and the specific provision(s) of this Agreement on which it relies and stating the date, time and place of the Special Board Meeting. The "Special Board Meeting" means a meeting of the Board called and held specifically for the purpose of considering the Executive's termination for Cause that takes place not less than thirty (30) and not more than sixty (60) days after the Executive receives the Notice of Termination for Cause. The Executive shall be given an opportunity, together with counsel, to be heard at the Special Board Meeting. The Executive's termination for Cause shall be effective when and if a resolution is duly adopted at the Special Board Meeting, stating that, in the good faith opinion of the Board, the Executive is guilty of the conduct described in the Notice of Termination for Cause, such conduct constitutes Cause under this Agreement and in the case of a termination for Cause as defined in subsection 3.05(xi), such conduct has not ceased or been cured between the date the Executive received the Notice of Termination for Cause and the date of the meeting.

Section 3.07 Death. In the event that the Executive dies while employed under this Agreement, the Company's obligations to Executive under this Agreement shall immediately cease and Executive shall have no rights to receive the severance package set forth in Section 3.09 below. All benefits accrued to the date of death, including vested securities, health and disability benefits shall inure to the benefit of Executive's heirs and assigns.

Section 3.08 Disability. In the event that the Board determines in its sole discretion that Executive has been disabled from substantially performing his duties for any one hundred and twenty (120) days within any twelve (12) month period while employed under this Agreement, the Company may terminate Executive's employment for Cause (including in any period following a Change of Control) and Executive shall have no rights to receive the severance package set forth in Section 3.09 below.

Section 3.09 Severance Package.

(a) Change of Control Severance Package. In the event Executive's employment is terminated during the Term in a manner that constitutes a "separation from service" (as such term is defined in Treasury Regulation Section 1.409A-1(h)) on or after a Change of Control (as defined below) and prior to the date that is thirty (30) days immediately following the first anniversary of the Change of Control, by the Company other than for Cause or by Executive for Good Reason, and other than as a result of a timely Notice of Non-Renewal or Executive's death or disability (as determined under Section 3.08), then, subject to the satisfaction of the conditions set forth in Section 3.09(d) below, Executive's change of control severance package ("Change of Control Severance Package") shall be as follows:

(i) , Executive shall receive two hundred percent (200%) of the aggregate of (x) Executive's annual Base Salary for the year in which such termination occurs, and (y) the target (i.e., at 100% goal attainment) amount of any Incentive Payment payable to Executive for the year in which such termination occurs under the Management Incentive Program applicable to Executive. Such amount shall be paid ratably in accordance with the Company's normal salary payment schedule for senior management (but not less frequently than monthly) over the eighteen (18) month period following the date of the Executive's separation from service (except as set forth in Section 3.09(d) and (g) below). The foregoing payment is referred to herein as the "Change of Control Severance Pay".

(ii) During the 18 month period immediately following the termination of employment, the Company shall also pay the premium for continued medical and any other applicable health insurance coverage under COBRA for Executive (and if applicable, his family) subject to Executive's timely election of such COBRA coverage, the continued eligibility for participation by Executive and his family, and subject to COBRA's terms, conditions and restrictions ; and

(iii) All unvested compensatory equity awards (including any stock options and restricted stock awards) then held by Executive, if any, shall vest automatically effective as of the effective date of the Termination Agreement.

(b) Definition of Change in Control.

"Change in Control" shall mean the occurrence of any of the following events: ( A ) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or which contemplates that all or substantially all of the business and/or assets of the Company shall be controlled by another corporation , in either case where the continuing, surviving or other corporation both (i) is not directly or indirectly owned by holders of at least 50% of the combined voting power of the Company's securities outstanding immediately prior to such consolidation or merger and (ii) does not have a board of directors approved by or consisting of more than one-half of the Company's Board members as the Board was constituted immediately prior to the transaction, (B) a recapitalization (including an exchange of Company equity securities by the holders thereof), in either case, in which any "Person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company's then outstanding securities having the right to vote in the election of directors and the Company does not have a board of directors approved by or consisting of more than one-half of the Company's Board members as the Board was constituted immediately prior to the transaction; (C ) any sale, lease, exchange or transfer (in one transaction or in a series of related transactions) of all or substantially all of the assets of the Company and its subsidiaries; D ) approval by the shareholders of the Company of any plan or proposal for the liquidation or dissolution of the Company, unless such plan or proposal is abandoned within 60 days following such approval; or ( E ) any "Person" (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange Act) shall become the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of securities of the Company representing more than 50% of the combined voting power of the Company's then outstanding securities having the right to vote in the election of directors .

(c) Regular Severance Package. In the event Executive's employment is terminated during the Term in a manner that constitutes a "separation from service" by the Company other than for Cause or by Executive for Good Reason, in either case other than on or within the period ending on the 30 ^th day following the first anniversary of a Change of Control, and in all cases other than as a result of a timely Notice of Non-Renewal or Executive's death or disability (as determined under Section 3.08), then, subject to the satisfaction of the conditions set forth in subsection 3.09(d) below, Executive's regular severance package ("Regular Severance Package") shall be as follows:

(i) Executive shall