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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrantþ
Filed by a party other than the Registranto
Check the appropriate box:
o | Preliminary Proxy Statement | o | Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |||
þ | Definitive Proxy Statement | |||||
o | Definitive Additional Materials | |||||
o | Soliciting Material Pursuant to §240.14a-12 |
ESS TECHNOLOGY, INC.
Payment of Filing Fee (Check the appropriate box):
þ | No fee required. | |
o | Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. | |
(1) | Title of each class of securities to which transaction applies: | |
(2) | Aggregate number of securities to which transactions applies: | |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
(4) | Proposed maximum aggregate value of transaction: | |
(5) | Total fee paid: | |
o | Fee paid previously with preliminary materials. | |
(1) | Amount previously paid: | |
(2) | Form, Schedule or Registration Statement No.: | |
(3) | Filing Party: | |
(4) | Date Filed: | |
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1. To elect directors of the Company, each to serve until the next Annual Meeting, until his or her successor has been elected and qualified, or until his or her earlier resignation or removal; | |
2. To approve changing the Company’s state of incorporation from California to Delaware; | |
3. To approve the amendment and restatement of the 1995 Equity Incentive Plan to extend the termination date of such plan from July 31, 2005 to July 31, 2010; | |
4. To adopt the Acquisition Equity Incentive Plan with 2,000,000 shares reserved for issuance thereunder; | |
5. To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2005; and | |
6. To transact such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof. |
By Order of the Board of Directors | |
JAMES B. BOYD | |
Chief Financial Officer, Senior Vice President and Assistant Secretary |
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Director | ||||||||||
Name of Nominee | Age | Principal Occupation | Since | |||||||
Fred S.L. Chan | 58 | Chairman of the Board of Directors of the Company | 1986 | |||||||
Robert L. Blair | 57 | President and Chief Executive Officer of the Company | 1999 | |||||||
Gary L. Fischer(1) | 54 | President, Chief Operating Officer and Chief Financial Officer of Integrated Silicon Solution, Inc. | 2004 | |||||||
Peter T. Mok(1)(2)(3) | 51 | President and Chief Executive Officer of KLM Capital Management, Inc. | 1993 | |||||||
David S. Lee(1)(2)(3) | 67 | Chairman of the Board for eOn Communications, Cortelco and TAVONNI Technologies Inc. | 2000 | |||||||
Alfred J. Stein(1) | 72 | Director of Advanced Power Technology | 2003 |
(1) | Member of the Audit Committee of the Board. |
(2) | Member of the Compensation Committee of the Board. |
(3) | Member of the Corporate Governance and Nominating Committee of the Board. |
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Governance Principles |
Director Independence |
Code of Ethics |
Shareholder Communications |
Director Attendance at Annual Meetings |
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Executive Sessions |
Board Meetings |
Board Committees |
• | appoint, compensate, oversee, evaluate and replace, if necessary, the independent registered public accounting firm; | |
• | review and approve the scope of the annual internal and external audit; | |
• | review and pre-approve the engagement of the Company’s independent registered public accounting firm to perform audit and non-audit services and the related fees; | |
• | meet independently with the Company’s internal auditing staff, independent registered public accounting firm and senior management; | |
• | review disclosures from the Company’s independent registered public accounting firm regarding Independence Standards Board Standard No. 1; | |
• | review the integrity of the Company’s financial reporting process; | |
• | review the Company’s financial statements and SEC filings and disclosures; | |
• | monitor compliance with the Company’s Code of Ethics; and | |
• | establish procedures for the confidential and anonymous receipt, retention and treatment of complaints regarding the Company’s accounting, internal controls and auditing matters. |
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Quarterly Retainer | $ | 5,000 | |||
Meeting Fee* | $ | 2,000 | |||
Additional Quarterly Committee Retainer: | |||||
Audit Committee Chair | $ | 4,000 | |||
Audit Committee Member | $ | 2,000 | |||
Other Committee Chair | $ | 500 |
* | $1,000 for each meeting attended via conference call. |
Quarterly Retainer | $ | 5,000 | |||
Scheduled Meeting Fee* | $ | 2,000 | |||
Special Meeting Fee** | $ | 500 | |||
Additional Quarterly Committee Retainer: | |||||
Audit Committee Chair | $ | 4,000 | |||
Audit Committee Member | $ | 2,000 | |||
Other Committee Chair | $ | 1,000 | |||
Other Committee Member | $ | 500 |
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* | $1,000 for each scheduled meeting attended via conference call. |
** | For each special meeting, attended in person or via conference call, where board actions are required. |
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• | greater predictability, flexibility and responsiveness of Delaware law to corporate needs; | |
• | enhanced ability of Delaware corporations to attract and retain qualified independent directors; and | |
• | more certainty regarding indemnification and limitation of liability for directors. |
Prominence, Predictability and Flexibility of Delaware Law |
• | the Delaware General Corporation Law, which is generally acknowledged to be the most advanced and flexible corporate statute in the country; | |
• | the Delaware General Assembly, which annually considers and adopts statutory amendments that the Corporation Law Section of the Delaware State Bar Association proposes in an effort to ensure that the corporate statute continues to be responsive to the changing needs of businesses; | |
• | the Delaware Court of Chancery, which handles complex corporate issues with a level of experience and a degree of sophistication and understanding unmatched by any other court in the country, and the highly regarded Delaware Supreme Court; | |
• | the well-established body of case law construing Delaware law, which has developed over the last century and which provides businesses with a greater predictability than most, if not all, other jurisdictions provide; and | |
• | the responsiveness and efficiency of the Division of Corporations of the Secretary of State of Delaware. |
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Enhanced Ability to Attract and Retain Directors |
More Certainty Regarding Indemnification and Limitation of Liability for Directors |
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• | a non-negotiated takeover bid may be timed to take advantage of temporarily depressed stock prices; | |
• | a non-negotiated takeover bid may be designed to foreclose or minimize the possibility of more favorable competing bids; and | |
• | a non-negotiated takeover bid may involve the acquisition of only a controlling interest in the corporation’s stock, without affording all shareholders the opportunity to receive the same economic benefits. |
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Change in Number of Directors |
Cumulative Voting |
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Filling Vacancies on the Board of Directors |
Shareholder Proposal Notice Provisions |
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Shareholder Power to Call Special Shareholders’ Meeting |
Dividends and Repurchase of Shares |
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Classified Board of Directors |
Removal of Directors |
Interested Director Transactions |
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Shareholder Approval of Certain Business Combinations |
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Indemnification and Limitation of Liability |
Limitation of Liability Compare and Contrast |
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Indemnification Compared and Contrasted |
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Inspection of Shareholders’ List |
Approval of Certain Corporate Transactions |
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Class Voting in Certain Corporate Transactions |
Appraisal Rights |
Voting and Appraisal Rights in Certain Reorganizations |
Dissolution |
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Shareholder Derivative Suits |
(a) No gain or loss should be recognized by an ESS California shareholder who exchanges all of such shareholder’s ESS California capital stock for ESS Delaware capital stock in the Merger; |
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(b) The aggregate tax basis of the ESS Delaware capital stock received by an ESS California shareholder in the Merger should be equal to the aggregate tax basis of ESS California capital stock surrendered in exchange therefor; and | |
(c) The holding period of the ESS Delaware capital stock received in the Merger should include the period for which the ESS California capital stock surrendered in exchange therefor was held, provided that the ESS California capital stock is held as a capital asset at the time of the Merger. |
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Fiscal Year | Fiscal Year | ||||||||||
2004 | 2003 | ||||||||||
Audit Fees | $ | 933,200 | $ | 379,950 | |||||||
Audit-Related fees | — | 365,750 | |||||||||
Tax Fees: | |||||||||||
Tax compliance/preparation | 398,725 | 783,265 | |||||||||
Other tax services | 84,950 | 78,200 | |||||||||
Total Tax Fees | 483,675 | 861,465 | |||||||||
All Other Fees | 2,220 | 2,220 | |||||||||
Total | $ | 1,419,095 | $ | 1,609,385 | |||||||
Audit Fees |
Audit-Related Fees |
Tax Fees |
All Other Fees |
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Shares Beneficially | ||||||||||
Owned(1) | ||||||||||
Options | ||||||||||
% of | Exercisable on | |||||||||
Number of | Common | or Before | ||||||||
Name and Address | Shares | Stock | May 14, 2005(1) | |||||||
Fred S.L. Chan, Chairman(2) | 4,052,010 | 10.2% | 523,333 | |||||||
Annie M.H. Chan(2) | 4,052,010 | 10.2% | — |
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Shares Beneficially | |||||||||||
Owned(1) | |||||||||||
Options | |||||||||||
% of | Exercisable on | ||||||||||
Number of | Common | or Before | |||||||||
Name and Address | Shares | Stock | May 14, 2005(1) | ||||||||
FMR Corp.(3) | 4,115,700 | 10.4% | — | ||||||||
82 Devonshire St. Boston, MA 02109 | |||||||||||
Royce & Associates LLC(4) | 3,677,500 | 9.3% | — | ||||||||
1414 Avenue of the Americas New York, NY 10019 | |||||||||||
Robert L. Blair, Director, President and CEO | 461,363 | 1.2% | 439,390 | ||||||||
James B. Boyd, CFO, Senior Vice President and Assistant Secretary | 176,304 | * | 174,167 | ||||||||
Patrick Ang, Former COO and Executive Vice President(5) | — | — | — | ||||||||
Gary L. Fischer, Director | 6,251 | * | 6,251 | ||||||||
c/o Integrated Silicon Solution, Inc. 2231 Lawson Lane Santa Clara, California, 95054 | |||||||||||
David S. Lee, Director | 62,918 | * | 62,918 | ||||||||
c/o TAVONNI Technologies, Inc. 185 Martinvale Lane San Jose, CA 95119 | |||||||||||
Peter T. Mok, Director | 35,001 | * | 35,001 | ||||||||
c/o KLM Capital Management, Inc. 10 Almaden Blvd., Suite 988 San Jose, CA 95113 | |||||||||||
Alfred J. Stein, Director | 29,167 | * | 29,167 | ||||||||
All executive officers and directors as a group(6) | 4,823,014 | 12.1% | 1,270,227 |
* | Less than one percent of the outstanding shares of the Company’s common stock. |
(1) | Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all shares shown as beneficially owned, subject to community property laws where applicable and except as indicated in the other footnotes to this table. As of March 15, 2005, 39,717,248 shares of the Company’s common stock were issued and outstanding. Shares of common stock subject to options that are currently exercisable or exercisable within 60 days after March 15, 2005 are deemed to be outstanding and to be beneficially owned by the person holding such options for the purpose of computing the percentage ownership of such person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. |
(2) | This amount includes options exercisable within 60 days of March 15, 2005 held by Mr. Chan to purchase 523,333 shares of the Company’s common stock. This amount also includes 3,248,677 shares held by the Annie M.H. Chan Living Trust. David Y.W. Chan, Edward Y.C. Chan and Michael Y.J. Chan are sons of Fred S.L. Chan and Annie M.H. Chan. This amount includes 280,000 shares held by a trust for the benefit of Michael Y.J. Chan. This amount does not include shares held in trust for the benefit of Edward Y.C. Chan and shares held in trust for the benefit of David Y.W. Chan, adult children who do not reside with Fred S.L. and Annie M. H. Chan. |
(3) | Information is based solely on Amendment No. 1 to Schedule 13G filed with the SEC on February 14, 2005 and reporting, as of December 31, 2004. Fidelity Management & Research Company (“Fidelity”), a wholly-owned subsidiary of FMR Corp., is the beneficial owner of 4,071,800 shares as a result of acting as investment adviser to various investment companies. The ownership of one investment company, Fidelity Low Priced Stock Fund, amounted to 3,956,700 shares. Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and the funds each has sole power to dispose of the 4,071,800 shares owned by the funds. Neither FMR Corp. nor Edward C. Johnson 3d, Chairman of FMR Corp., has the sole |
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power to vote or direct the voting of the shares owned directly by the Fidelity funds, which power resides with the funds’ Boards of Trustees. Fidelity carries out the voting of the shares under written guidelines established by the funds’ Boards of Trustees. Fidelity Management Trust Company, a wholly-owned subsidiary of FMR Corp., is the beneficial owner of 43,900 shares as a result of its serving as investment manager of the institutional account(s). Edward C. Johnson 3d and FMR Corp., through its control of Fidelity Management Trust Company, each has sole dispositive power over 43,900 shares and sole power to vote or to direct the voting of 43,900 shares owned by the institutional account(s). |
(4) | The Schedule 13G filed by Royce & Associates LLC on January 27, 2005 indicates that Royce & Associates, LLC is the beneficial owner of 3,677,500 shares of the Company’s common stock. |
(5) | Mr. Ang resigned as COO and Executive Vice President effective October 4, 2004 for reasons unrelated to the Company’s business. |
(6) | Includes 280,000 shares held by an entity affiliated with a certain director as described in Note (2). |
Long-Term | |||||||||||||||||||||||
Compensation | |||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||
Securities | |||||||||||||||||||||||
Other Annual | Underlying | All Other | |||||||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Compensation ($)(1) | Options (#) | Compensation ($) | |||||||||||||||||
Fred S.L. Chan | 2004 | 328,000 | (2) | 272 | 400,000 | (3) | 31,500 | (4) | |||||||||||||||
Chairman of the | 2003 | 328,000 | 662,000 | 64 | — | ||||||||||||||||||
Board of Directors | 2002 | 213,830 | — | 1,032 | 140,000 | (3) | |||||||||||||||||
Robert L. Blair | 2004 | 328,000 | (2) | 272 | — | 13,980 | (5) | ||||||||||||||||
President and CEO | 2003 | 328,000 | 150,000 | 64 | 400,000 | ||||||||||||||||||
2002 | 328,756 | — | 828 | 160,000 | (3) | ||||||||||||||||||
James B. Boyd | 2004 | 220,000 | 90,000 | (2) | 272 | 30,000 | (3) | ||||||||||||||||
CFO, Senior Vice | 2003 | 198,333 | 110,000 | 34 | 40,000 | ||||||||||||||||||
President and | 2002 | 184,583 | — | 820 | 30,000 | (3) | |||||||||||||||||
Assistant Secretary | |||||||||||||||||||||||
Patrick Ang | 2004 | 163,503 | — | 227 | 30,000 | ||||||||||||||||||
Former COO and | 2003 | 200,000 | 60,000 | 15 | 40,000 | ||||||||||||||||||
Executive Vice | 2002 | 200,000 | — | 360 | 30,000 | ||||||||||||||||||
President |
(1) | Includes dollar value of annual premiums paid by the Company under the Company’s group term life insurance policy and accidental death and dismemberment policy on behalf of the Named Executive Officers. |
(2) | The Compensation Committee of the Board is scheduled to meet in May 2005 to determine the bonus payments, if any, to the executive officers for their services and performance in 2004. |
(3) | These options were tendered by the executive officers in the Exchange Offer, as defined below. |
(4) | Represents the value of a watch awarded to Mr. Chan as a gift for 20 years of service to the Company at the 20th anniversary celebration of the Company. |
(5) | Represents the value of a watch awarded to Mr. Blair as a gift for 10 years of service to the Company at the 20th anniversary celebration of the Company. |
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Potential | ||||||||||||||||||||
Realizable Value | ||||||||||||||||||||
at Assumed | ||||||||||||||||||||
Individual Grants(1) | Annual Rates of | |||||||||||||||||||
Stock Price | ||||||||||||||||||||
Number of | Appreciation for | |||||||||||||||||||
Securities | Percent of Total | Option | ||||||||||||||||||
Underlying | Options Granted to | Exercise of | Term ($)(2) | |||||||||||||||||
Options | Employees in | Base Price | Expiration | |||||||||||||||||
Name | Granted (#) | Fiscal Year (%)(3) | ($/Sh)(4) | Date | 5% | 10% | ||||||||||||||
Fred S.L. Chan | 400,000 | (5) | 20 | 16.45 | 2014 | N/A | N/A | |||||||||||||
Robert L. Blair | — | — | — | — | — | — | ||||||||||||||
James B. Boyd | 30,000 | (6) | 2 | 10.87 | 2014 | N/A | N/A | |||||||||||||
Patrick Ang | 30,000 | (7) | 2 | 16.45 | 2014 | N/A | N/A |
(1) | No stock appreciation rights were granted to the Named Executive Officers in the last fiscal year. |
(2) | The potential realizable value illustrates value that might be realized upon exercise of the options immediately prior to the expiration of their terms, assuming the specified compounded rates of appreciation of the market price per share for the date of grant to the end of the option term. Actual gains, if any, on stock option exercise are dependent upon a number of factors, including the future performance of the common stock and the timing of option exercises, as well as the optionees’ continued service throughout the vesting period. There can be no assurance that the amounts reflected in this table will be achieved. Potential realizable value is not calculated for options that were canceled during the fiscal year ended 2004. |
(3) | The Company granted stock options representing 1,959,000 shares to employees in the last fiscal year. |
(4) | The exercise price may be paid in cash, in shares of common stock valued at fair market value on the exercise date or through a cashless exercise procedure involving a same-day sale of the purchased shares, to the extent permissible under applicable law. |
(5) | 1/48th of 400,000 shares vest monthly on the 10th day of each month commencing March 10, 2004 through February 10, 2008. These options were tendered in the Exchange Offer, as defined below. |
(6) | 1/12th of 5,000 shares vest monthly on the 3rd day of each month commencing on July 3, 2005 through June 3, 2006; 1/12th of 15,000 shares vest monthly on the 3rd day of each month commencing on July 3, 2006 through June 3, 2007; 1/12th of 10,000 shares vest monthly on the 3rd day of each month commencing on July 3, 2007 through June 3, 2008. These options were tendered in the Exchange Offer, as defined below. |
(7) | The options were granted on February 10, 2004. The unvested portions of these options were forfeited on October 4, 2004, the date on which Mr. Ang resigned as our COO and Executive Vice President; the vested portions of these options expired 90 days thereafter. |
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Number of | ||||||||||||||||||||||||
Securities Underlying | Value of Unexercised | |||||||||||||||||||||||
Unexercised Options at | In-the-Money Options at | |||||||||||||||||||||||
Shares | Fiscal Year-End (#) | Fiscal Year-End ($)(2) | ||||||||||||||||||||||
Acquired on | Value | |||||||||||||||||||||||
Name | Exercise (#) | Realized ($)(1) | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Fred S.L. Chan | — | — | 485,333 | 104,167 | 1,085,837 | 232,813 | ||||||||||||||||||
Robert L. Blair | — | — | 392,056 | 264,000 | 641,825 | 12,666 | ||||||||||||||||||
James B. Boyd | — | — | 158,333 | 51,667 | 340,838 | 39,113 | ||||||||||||||||||
Patrick Ang | — | — | 162,083 | — | — | — |
(1) | “Value Realized” represents the fair market value of the shares of common stock underlying the option on the date of exercise less the aggregate exercise price of the option. |
(2) | These values, unlike the amounts set forth in the column entitled “Value Realized,” have not been, and may never be, realized and are based on the positive spread between the respective exercise prices of outstanding options and the closing price of the Company’s common stock as reported on the Nasdaq National Market on December 31, 2004, the last day of trading for the fiscal year 2004. |
Equity Compensation Plan Information(1) | |||||||||||||
Number of | Number of Securities | ||||||||||||
Securities to be Issued | Weighted-Average | Remaining Available for Future | |||||||||||
Upon Exercise of | Exercise Price of | Issuance Under Equity | |||||||||||
Outstanding Options, | Outstanding Options, | Compensation Plans | |||||||||||
Warrants and Rights | Warrants and Rights | (excluding securities reflected | |||||||||||
Plan Category | (a)(#)(2) | (b)($) | in column (a))(c)(#) | ||||||||||
Equity compensation plans approved by security holders | 5,164,023 | 7.20 | 6,389,726 | (3)(4) | |||||||||
Equity compensation plans not approved by security holders | 398,098 | 8.37 | 1,588,072 | ||||||||||
Total | 5,562,121 | (5) | 7.29 | 7,977,798 | |||||||||
(1) | Includes only options outstanding under ESS’ stock option plans, as no stock warrants or rights were outstanding as of December 31, 2004. |
(2) | In addition, 26,146 outstanding options assumed in connection with the acquisition of Platform Technologies, Inc. These assumed options have a weighted average exercise price of $0.03 per share. No additional options may be granted under the Platform Technologies plan. |
(3) | A maximum of 334,363 of such shares are available for issuance pursuant to future restricted stock awards under the 1995 Equity Incentive Plan. |
(4) | Includes 451,903 shares of common stock reserved for future issuance under the 1995 Employee Stock Purchase Plan. |
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(5) | Pursuant to the Company’s Exchange Offer, as defined below, options to purchase an aggregate of 3,705,449 shares of ESS common stock were tendered to the Company as of December 27, 2004, the expiration date of the Exchange Offer, for exchange and cancellation. Eligible employees who tendered options for exchange will be entitled to receive on or after June 29, 2005 an equivalent number of Replacement Options under the Company’s stock option plans. |
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AUDIT COMMITTEE | |
Gary L. Fischer, Chairman | |
David S. Lee | |
Peter T. Mok | |
Alfred J. Stein |
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Length of Original | ||||||||||||||||||||
Number of Securities | Exercise Price | Option Term | ||||||||||||||||||
Underlying Options | at Time of | New | Remaining at | |||||||||||||||||
Repriced or | Repricing or | Exercise | Date of Repricing | |||||||||||||||||
Name | Date(1) | Amended (#) | Amendment ($) | Price ($) | or Amendment(3) | |||||||||||||||
Fred S.L. Chan | 12/27/04 | 21,030 | 14.267 | (2 | ) | 1.84 years | ||||||||||||||
12/27/04 | 118,970 | 12.970 | (2 | ) | 1.84 years | |||||||||||||||
12/27/04 | 400,000 | 16.450 | (2 | ) | 8.62 years | |||||||||||||||
Robert L. Blair | 12/27/04 | 17,000 | 15.000 | (2 | ) | 4.01 years | ||||||||||||||
12/27/04 | 15,420 | 12.970 | (2 | ) | 6.85 years | |||||||||||||||
12/27/04 | 3,750 | 12.250 | (2 | ) | 3.01 years | |||||||||||||||
12/27/04 | 11,250 | 12.250 | (2 | ) | 3.01 years | |||||||||||||||
12/27/04 | 144,580 | 12.970 | (2 | ) | 6.85 years | |||||||||||||||
12/27/04 | 154,666 | 15.000 | (2 | ) | 4.01 years | |||||||||||||||
James B. Boyd | 12/27/04 | 30,000 | 14.020 | (2 | ) | 6.85 years | ||||||||||||||
12/27/04 | 30,000 | 10.870 | (2 | ) | 8.93 years | |||||||||||||||
Patrick Ang | — | — | — | — | — |
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(1) | The date on which options were tendered into the Exchange Offer. |
(2) | The new exercise price of the options shall be the fair market price of the Company’s common stock on the date of issuance of the Replacement Options, which will be on or after June 29, 2005. |
(3) | Length of term remaining was determined based on June 29, 2005, the current anticipated issuance date of the Replacement Option. |
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COMPENSATION COMMITTEE | |
David S. Lee, Chairman | |
Peter T. Mok |
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DATE | 12/99 | 3/00 | 6/00 | 9/00 | 12/00 | 3/01 | 6/01 | 9/01 | 12/01 | 3/02 | 6/02 | 9/02 | 12/02 | 3/03 | 6/03 | 9/03 | 12/03 | 3/04 | 6/04 | 9/04 | 12/04 | |||||||||||||||||||||||||||||||||||||||||
ESS TECHNOLOGY, INC. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Value | 100.00 | 78.87 | 65.35 | 64.51 | 23.10 | 25.91 | 47.77 | 48.07 | 100.00 | 97.55 | 82.50 | 28.93 | 29.58 | 28.03 | 45.86 | 50.70 | 80.10 | 68.95 | 50.37 | 32.22 | 33.44 | |||||||||||||||||||||||||||||||||||||||||
NASDAQ STOCK MARKET (U.S.) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Value | 100.00 | 112.21 | 105.78 | 90.50 | 72.62 | 60.40 | 60.88 | 39.17 | 50.23 | 46.52 | 37.92 | 30.98 | 29.12 | 26.32 | 33.03 | 40.42 | 44.24 | 48.07 | 47.04 | 43.70 | 47.16 | |||||||||||||||||||||||||||||||||||||||||
RDG TECHNOLOGY COMPOSITE | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Value | 100.00 | 122.06 | 112.74 | 100.34 | 69.88 | 47.03 | 52.66 | 34.58 | 48.14 | 43.82 | 29.80 | 21.19 | 26.35 | 25.92 | 31.61 | 35.59 | 39.98 | 41.76 | 42.68 | 38.84 | 43.08 | |||||||||||||||||||||||||||||||||||||||||
* | $100 invested on 12/31/99 in stock or index — including reinvestment of dividends. Fiscal year ending December 31. |
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By Order of the Board of Directors | |
JAMES B. BOYD | |
Chief Financial Officer, Senior Vice President and Assistant Secretary |
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1. Appoint the independent accountants and approve the compensation of and oversee the independent accountants. | |
2. Engage outside counsel and other advisors to advise the Audit Committee, and approve the compensation of and directly oversee such outside counsel and other advisors. | |
3. Review the plan for and the scope of the audit and related services at least annually. | |
4. Confirm that the proposed audit engagement team for the independent public accountants complies with the applicable accountant rotation rules. | |
5. Pre-approve all audit services and permitted non-audit services to be provided by the independent accountants as required by the Exchange Act. | |
6. Inquire of Finance management of the Company and the independent accountants about significant risks or exposures and assess the steps management has taken to minimize such risk to the Company. | |
7. Review with Finance management any significant changes to GAAP, SEC and other accounting policies or standards that will impact or could impact the financial reports under review. | |
8. Review with Finance management and the independent accountants at the completion of the annual audit: |
a. The Company’s annual financial statements and related footnotes; | |
b. The independent accountant’s audit of the financial statements; | |
c. Any significant changes required in the independent accountant’s audit plan; | |
d. Any serious difficulties or disputes with management encountered during the course of the audit; and | |
e. Other matters related to the conduct of the audit which are to be communicated to the Committee under generally accepted auditing standards. |
9. Ensure the receipt of, and review, a report from the independent accountant required by Section 10A of the Exchange Act. | |
10. Ensure the receipt of, and review, a written statement from the Company’s independent accountants delineating all relationships between the accountants and the Company, consistent with Independence Standards Board Standard 1. | |
11. Review with the Company’s independent accountants any disclosed relationship or service that may impact the objectivity and independence of the accountant. | |
12. Take, or recommend that the Board take, appropriate action to oversee the independence of the outside accountants. | |
13. Review with Finance management and the independent accountants at least annually the Company’s application of critical accounting policies and its consistency from period to period, and the compatibility of these accounting policies with generally accepted accounting principles (“GAAP”), and (where appropriate) the Company’s provisions for future occurrences which may have a material impact on the financial statements of the Company. | |
14. Consider and approve, if appropriate, significant changes to the Company’s accounting principles and financial disclosure practices as suggested by the independent accountants and Finance management. Review with the independent accountants and Finance management, at appropriate |
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intervals, the extent to which any changes or improvements in accounting or financial practices, as approved by the Committee, have been implemented. | |
15. Review and discuss with Finance management all material off-balance sheet transactions, arrangements, obligations (including contingent obligations) and other relationships of the Company with unconsolidated entities or other persons, that may have a material current or future effect on financial condition, changes in financial condition, results of operations, liquidity, capital resources, capital reserves or significant components of revenues or expenses. | |
16. Oversee the adequacy of the Company’s system of internal accounting controls. Obtain from the independent accountants management letters or summaries on such internal accounting controls. Review any related significant findings and recommendations of the independent accountants together with management’s responses thereto. | |
17. Oversee the effectiveness of the internal audit function and obtain from the officers that certify the Company’s financial reports an assessment of the internal controls, a report of any fraud in connection with the preparation of reports and any other reports required by applicable laws, rules or regulations. | |
18. Oversee the Company’s compliance with the Foreign Corrupt Practices Act. | |
19. Oversee the Company’s compliance with SEC requirements for disclosure of accountant’s services and Audit Committee members and activities. | |
20. Oversee the Company’s finance function, which may include the adoption from time to time of a policy with regard to the investment of the Company’s assets. | |
21. Review and approve all related party transactions other than compensation transactions. | |
22. Review the periodic reports of the Company with Finance management and the independent accountants prior to filing of the reports with the SEC. | |
23. In connection with each periodic report of the Company, review: |
a. Management’s disclosure to the Committee under Section 302 of the Sarbanes-Oxley Act; | |
b. The contents of the Chief Executive Officer and the Chief Financial Officer certificates to be filed under Sections 302 and 906 of the Act. |
24. Periodically discuss with the independent accountants, without Management being present, (i) their judgments about the quality, appropriateness, and acceptability of the Company’s accounting principles and financial disclosure practices, as applied in its financial reporting, and (ii) the completeness and accuracy of the Company’s financial statements. | |
25. Review and discuss with Finance management the Company’s earnings press releases (including the use of “pro forma” or “adjusted” non-GAAP information) as well as financial information and earnings guidance provided to analysts. | |
26. Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters. | |
27. Establish procedures for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. | |
28. Conduct assessment of the effectiveness of the Audit Committee. |
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I. | Authority: |
A. Review and make recommendations to the Board regarding Board structure, compensation and protections, including without limitation: |
(1) the size of the Board and each standing committee; | |
(2) retirement policies for directors; and | |
(3) Board and committee compensation and benefits for non-employee directors. |
B. Establish criteria for membership on the Board of Directors. The Board should be composed of: |
(1) directors chosen with a view to bringing to the Board a variety of experience and background; | |
(2) directors who will form a central core of business executives with financial expertise and at least one director who meets the criteria for an “audit committee financial expert” as defined by rules of the Securities and Exchange Commission (“SEC”); | |
(3) directors who have substantial experience outside the business community — in the public, academic or scientific communities, for example; | |
(4) directors who are free of any conflict of interest; | |
(5) directors who will represent the balanced, best interests of the shareholders as a whole; | |
(6) directors who have sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director; | |
(7) a majority of directors who are independent as defined by and to the extent required by the Rules of the National Association of Securities Dealers, Inc. (“NASD”) and the SEC and the Sarbanes-Oxley Act of 2002; and | |
(8) directors who are also key members of the Company’s management. |
C. Nominate candidates as follows: the Committee identifies nominees by first evaluating the current members of the Board who are willing to continue in service. Current members of the Board with skills and experience that are relevant to the Company’s business and who are willing to continue in service are first considered for re-nomination. If any member of the Board does not wish to continue in service, the Board decides not to re-nominate a member for re-election or the Board decides to expand the size of the Board, the Committee will identify the desired skills and experience of a new nominee in light of the guidelines set forth above. Current members of the Committee are polled for suggestions as to individuals meeting the guidelines of the Committee. To the extent it deems necessary or appropriate, the Committee may retain a search firm to be used to identify director candidates. The Committee shall have sole authority to retain and disengage any such search firm, including sole authority to approve the firm’s fees and other retention terms. The Committee shall also have authority, to the extent it deems necessary |
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or appropriate, to retain other advisors. The Company will provide for appropriate funding, as determined by the Committee, for payment of compensation to any search firm or other advisors employed by the Committee. | |
D. Seek out possible candidates for director and otherwise aid in attracting highly qualified candidates as directors. | |
E. Consider candidates submitted by directors, officers, employees, shareholders and others. The Committee considers properly submitted shareholder nominees for director in the same manner as nominees for director from other sources. | |
F. Maintain a list of possible candidates. | |
G. Review at least annually the current composition of the Board and the performance of incumbent directors; evaluate proposed candidates against the established criteria. | |
H. Recommend to the Board nominees to fill vacancies as they occur among directors and, prior to each annual meeting of shareholders, a slate of nominees for election or reelection as directors by the shareholders at the annual meeting. | |
I. Recommend to the Board the names of persons to be appointed as the members and Chair of each Board committee. | |
J. Assure an effective management succession plan and measure progress in achieving that plan, including receiving periodically from the chief executive officer his recommendations regarding his successor, the development of other executive talent and the executive management needs of the Company. | |
K. Review the chief executive officer’s nomination of corporate officers in the context of the management succession plan and make recommendations to the Board of the persons to be elected officers by the Board. | |
L. Recommend formally to the Board a successor to the chief executive officer when a vacancy occurs. | |
M. Develop and recommend to the Board of Directors for its approval a set of corporate governance guidelines. The Committee shall review the guidelines on an annual basis, or more frequently if appropriate, and recommend changes as necessary. | |
N. Develop and recommend to the Board of Directors for its approval an annual self-evaluation process of the Board and its committees. The Committee shall oversee the annual self-evaluations. | |
O. Review this Charter on an annual basis and make recommendations to the Board with respect to its contents. | |
P. Perform such other functions as may be assigned by the Board from time to time. | |
Q. Review and approve the shareholder communication process periodically to ensure effective communication between shareholders and directors. | |
R. Develop and recommend to the Board of Directors for its approval stockholder access procedures and requirements. |
II. | Composition and Meetings: |
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(a) Adoption and approval of this Agreement and the Merger by the stockholders of each Constituent Corporation in accordance with the applicable requirements of the Delaware General Corporation Law and the California General Corporation Law; |
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(b) The satisfaction or waiver of all of the conditions precedent to the consummation of the Merger as specified in this Agreement; and | |
(c) The filing with the Secretary of State of Delaware of an executed Certificate of Merger or an executed counterpart of this Agreement meeting the requirements of the Delaware General Corporation Law. |
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(a) Qualify to do business as a foreign corporation in the State of California and irrevocably appoint an agent for service of process as required under the provisions of Section 2105 of the California General Corporation Law. | |
(b) File any and all documents with the California Franchise Tax Board necessary for the assumption by ESS Delaware of all of the franchise tax liabilities of ESS California; and | |
(c) Take such other actions as may be required by the California General Corporation Law. |
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ESS Technology, Inc., a Delaware corporation |
Robert L. Blair | |
President and Chief Executive Officer | |
ESS Technology, Inc., a California corporation |
Robert L. Blair | |
President and Chief Executive Officer |
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ESS Technology, Inc. 48401 Fremont Blvd. Fremont, CA 94538 |
Peter Cohn, Incorporator |
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Page | |||||||
ARTICLE I — CORPORATE OFFICES | F-1 | ||||||
1.1 | Registered Office | F-1 | |||||
1.2 | Other Offices | F-1 | |||||
ARTICLE II — MEETINGS OF STOCKHOLDERS | F-1 | ||||||
2.1 | Place of Meetings | F-1 | |||||
2.2 | Annual Meeting | F-1 | |||||
2.3 | Special Meeting | F-2 | |||||
2.4 | Notice of Stockholder’s Meetings; Affidavit of Notice | F-2 | |||||
2.5 | Advance Notice of Stockholder Nominees and Other Stockholder Proposals | F-2 | |||||
2.6 | Quorum | F-3 | |||||
2.7 | Adjourned Meeting; Notice | F-3 | |||||
2.8 | Organization; Conduct of Business | F-4 | |||||
2.9 | Voting | F-4 | |||||
2.10 | Waiver of Notice | F-4 | |||||
2.11 | Stockholder Action By Written Consent Without A Meeting | F-4 | |||||
2.12 | Record Date For Stockholder Notice; Voting; Giving Consents | F-5 | |||||
2.13 | Proxies | F-5 | |||||
2.14 | Inspectors of Election | F-6 | |||||
ARTICLE III — DIRECTORS | F-6 | ||||||
3.1 | Powers | F-6 | |||||
3.2 | Number of Directors | F-6 | |||||
3.3 | Election, Qualification and Term of Office of Directors | F-6 | |||||
3.4 | Resignation and Vacancies | F-7 | |||||
3.5 | Place of Meetings; Meetings by Telephone | F-7 | |||||
3.6 | Regular Meetings | F-7 | |||||
3.7 | Special Meetings; Notice | F-7 | |||||
3.8 | Quorum | F-8 | |||||
3.9 | Waiver of Notice | F-8 | |||||
3.10 | Board Action by Written Consent Without a Meeting | F-8 | |||||
3.11 | Fees and Compensation of Directors | F-8 | |||||
3.12 | Approval of Loans to Officers | F-9 | |||||
3.13 | Removal of Directors | F-9 | |||||
3.14 | Chairman of the Board of Directors | F-9 | |||||
ARTICLE IV — COMMITTEES | F-9 | ||||||
4.1 | Committees of Directors | F-9 | |||||
4.2 | Committee Minutes | F-9 | |||||
4.3 | Meetings and Action of Committees | F-9 | |||||
ARTICLE V — OFFICERS | F-10 | ||||||
5.1 | Officers | F-10 | |||||
5.2 | Appointment of Officers | F-10 | |||||
5.3 | Subordinate Officers | F-10 |
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5.4 | Removal and Resignation of Officers | F-10 | |||||
5.5 | Vacancies in Offices | F-10 | |||||
5.6 | Chairman of the Board | F-10 | |||||
5.7 | Chief Executive Officer | F-10 | |||||
5.8 | President | F-11 | |||||
5.9 | Vice Presidents | F-11 | |||||
5.10 | Secretary | F-11 | |||||
5.11 | Chief Financial Officer | F-11 | |||||
5.12 | Representation of Shares of Other Corporations | F-12 | |||||
5.13 | Authority and Duties of Officers | F-12 | |||||
ARTICLE VI — INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS | F-12 | ||||||
6.1 | Indemnification of Directors and Officers | F-12 | |||||
6.2 | Indemnification of Others | F-12 | |||||
6.3 | Payment of Expenses in Advance | F-12 | |||||
6.4 | Indemnity Not Exclusive | F-13 | |||||
6.5 | Insurance | F-13 | |||||
6.6 | Conflicts | F-13 | |||||
ARTICLE VII — RECORDS AND REPORTS | F-13 | ||||||
7.1 | Maintenance and Inspection of Records | F-13 | |||||
7.2 | Inspection by Directors | F-14 | |||||
ARTICLE VIII — GENERAL MATTERS | F-14 | ||||||
8.1 | Checks | F-14 | |||||
8.2 | Execution of Corporate Contracts And Instruments | F-14 | |||||
8.3 | Stock Certificates; Partly Paid Shares | F-14 | |||||
8.4 | Special Designation on Certificates | F-14 | |||||
8.5 | Lost Certificates | F-15 | |||||
8.6 | Construction; Definitions | F-15 | |||||
8.7 | Dividends | F-15 | |||||
8.8 | Fiscal Year | F-15 | |||||
8.9 | Seal | F-15 | |||||
8.10 | Transfer of Stock | F-15 | |||||
8.11 | Stock Transfer Agreements | F-15 | |||||
8.12 | Registered Stockholders | F-16 | |||||
8.13 | Facsimile Signatures | F-16 | |||||
ARTICLE IX — AMENDMENTS | �� | F-16 |
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(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. | |
(b) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent (including consent by electronic mail or other electronic transmission as permitted by law) is delivered to the Corporation. | |
(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. |
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(a) ascertain the number of shares outstanding and the voting power of each; | |
(b) determine the number of shares represented at the meeting and the validity of proxies and ballots; | |
(c) count all votes and ballots; | |
(d) determine and retain for a reasonable period a record of the disposition of any challenges made to any determination by the inspectors; | |
(e) certify their determination of the number of shares represented at the meeting, and their count of all votes and ballots; and | |
(f) do any other acts that may be proper to conduct the election or vote with fairness to all stockholders. |
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(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director. | |
(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected. |
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(a) That it would be inconsistent with a provision of the Certificate of Incorporation, these Bylaws, a resolution of the stockholders or an agreement in effect at the time of the accrual of the alleged cause of the action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or | |
(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement. |
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(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to Indemnitee with respect to proceedings or claims initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute or law or otherwise as required under Section 145 of the Delaware General Corporation Law, but such indemnification or advancement of expenses may be provided by the Company in specific cases if the Board of Directors finds it to be appropriate; | |
(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by Indemnitee in such proceeding was not made in good faith or was frivolous; | |
(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any type whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes or penalties, and amounts paid in settlement) to the extent such expenses or liabilities have been paid directly to Indemnitee by an insurance carrier under a policy of officers’ and directors’ liability insurance maintained by the Company; or | |
(d) Claims under Section 16(b). To indemnify Indemnitee for expenses or the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute. |
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ESS Technology, Inc. | |
By: | |
Title: |
Address: | 48401 Fremont Blvd. |
Fremont, CA 94538 | |
Fax Number: |
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(a) construe and interpret this Plan, any Award Agreement and any other agreement or document executed pursuant to this Plan; |
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(b) prescribe, amend and rescind rules and regulations relating to this Plan; | |
(c) select persons to receive Awards; | |
(d) determine the form and terms of Awards; | |
(e) determine the number of Shares or other consideration subject to Awards; | |
(f) determine whether Awards will be granted singly, in combination with, in tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any other incentive or compensation plan of the Company or any Parent, Subsidiary or Affiliate of the Company; | |
(g)��grant waivers of Plan or Award conditions; | |
(h) determining the vesting, exercisability and payment of Awards; | |
(i) correct any defect, supply any omission or reconcile any inconsistency in this Plan, any Award or any Award Agreement; | |
(j) determine whether an Award has been earned; and | |
(k) make all other determinations necessary or advisable for the administration of this Plan. |
5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced by an Award Agreement which will expressly identify the Option as an ISO or an NQSO(“Stock Option Agreement”), and will be in such form and contain such provisions (which need not be the same for each Participant) as the Committee may from time to time approve, and which will comply with and be subject to the terms and conditions of this Plan. | |
5.2 Date of Grant. The date of grant of an Option will be the date on which the Committee makes the determination to grant such Option, unless otherwise specified by the Committee. The Stock Option Agreement and a copy of this Plan will be delivered to the Participant within a reasonable time after the granting of the Option. | |
5.3 Exercise Period. Options will be exercisable within the times or upon the events determined by the Committee as set forth in the Stock Option Agreement governing such Option;provided,however, that no Option will be exercisable after the expiration of ten (10) years from the date the Option is granted; andprovided further that no ISO granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary of the Company(“Ten Percent Stockholder”) will be exercisable after the |
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expiration of five (5) years from the date the ISO is granted. The Committee also may provide for the exercise of Options to become exercisable at one time or from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as the Committee determines. | |
5.4 Exercise Price. The Exercise Price of an Option will be determined by the Committee when the Option is granted and may be not less than 85% of the Fair Market Value of the Shares on the date of grant; provided that: (i) the Exercise Price of an ISO will be not less than 100% of the Fair Market Value of the Shares on the date of grant; and (ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than 110% of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased may be made in accordance with Section 8 of this Plan. | |
5.5 Method of Exercise. Options may be exercised only by delivery to the Company of a written stock option exercise agreement (the“Exercise Agreement”)in a form approved by the Committee (which need not be the same for each Participant), stating the number of Shares being purchased, the restrictions imposed on the Shares purchased under such Exercise Agreement, if any, and such representations and agreements regarding Participant’s investment intent and access to information and other matters, if any, as may be required or desirable by the Company to comply with applicable securities laws, together with payment in full of the Exercise Price for the number of Shares being purchased. | |
5.6 Termination. Notwithstanding the exercise periods set forth in the Stock Option Agreement, exercise of an Option will always be subject to the following: |
(a) If the Participant is Terminated for any reason except death or Disability, then the Participant may exercise such Participant’s Options only to the extent that such Options would have been exercisable upon the Termination Date no later than three (3) months after the Termination Date (or such shorter or longer time period not exceeding five (5) years as may be determined by the Committee, with any exercise beyond three (3) months after the Termination Date deemed to be an NQSO), but in any event, no later than the expiration date of the Options. | |
(b) If the Participant is Terminated because of Participant’s death or Disability (or the Participant dies within three (3) months after a Termination other than because of Participant’s death or disability), then Participant’s Options may be exercised only to the extent that such Options would have been exercisable by Participant on the Termination Date and must be exercised by Participant (or Participant’s legal representative or authorized assignee) no later than twelve (12) months after the Termination Date (or such shorter or longer time period not exceeding five (5) years as may be determined by the Committee, with any such exercise beyond (a) three (3) months after the Termination Date when the Termination is for any reason other than the Participant’s death or Disability, or (b) twelve (12) months after the Termination Date when the Termination is for Participant’s death or Disability, deemed to be as NQSO), but in any event no later than the expiration date of the Options. |
5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of Shares that may be purchased on any exercise of an Option, provided that such minimum number will not prevent Participant from exercising the Option for the full number of Shares for which it is then exercisable. | |
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date of grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant during any calendar year (under this Plan or under any other incentive stock option plan of the Company or any Affiliate, Parent or Subsidiary of the Company) will not exceed $100,000. If the Fair Market Value of Shares on the date of grant with respect to which ISOs are exercisable for the first time by a Participant during any calendar year exceeds $100,000, then the Options for the first $100,000 worth of Shares to become exercisable in such calendar year will be NQSOs. In the event that the Code or the regulations promulgated thereunder are amended after the Effective Date of this Plan to provide for a different limit of the Fair Market Value of Shares permitted to be subject to ISOs, such different limit will be |
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automatically incorporated herein and will apply to any Options granted after the effective date of such amendment. | |
5.9 Modification, Extension or Renewal. The Committee may modify, extend or review outstanding Options and authorize the grant of new Options in substitution therefor, provided that any such action may not, without the written consent of a Participant, impair any of such Participant’s rights under any Option previously granted. Any outstanding ISO that is modified, extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the Code. The Committee may reduce the Exercise Price of outstanding Options without the consent of Participants affected by a written notice to them; provided, however, that the Exercise Price may not be reduced below the minimum Exercise Price that would be permitted under Section 5.4 of this Plan for Options granted on the date the action is taken to reduce the Exercise Price. | |
5.10 No Disqualification. Notwithstanding any other provision in this Plan, no term of this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of the Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422 of the Code. |
6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award made pursuant to this Plan will be evidenced by an Award Agreement(“Restricted Stock Purchase Agreement”) that will be in such form (which need not be the same for each Participant) as the Committee will from time to time approve, and will comply with and be subject to the terms and conditions of this Plan. The offer of Restricted Stock will be accepted by the Participant’s execution and delivery of the Restricted Stock Purchase Agreement and full payment for the Shares to the Company within thirty (30) days from the date the Restricted Stock Purchase Agreement is delivered to the person. If such person does not execute and deliver the Restricted Stock Purchase Agreement along with full payment for the Shares to the Company within thirty (30) days, then the offer will terminate, unless otherwise determined by the Committee. | |
6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted Stock Award will be determined by the Committee and will be at least 85% of the Fair Market Value of the Shares on the date the Restricted Stock Award is granted, except in the case of a sale to a Ten Percent Stockholder, in which case the Purchase Price will be 100% of the Fair Market Value. Payment of the Purchase Price may be made in accordance with Section 8 of this Plan. | |
6.3 Restrictions. Restricted Stock Awards will be subject to such restrictions (if any) as the Committee may impose. The Committee may provide for the lapse of such restrictions in installments and may accelerate or waive such restrictions, in whole or in part, based on length of service, performance or such other factors or criteria as the Committee may determine. |
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(a) by cancellation of indebtedness of the Company to the Participant; | |
(b) by surrender of shares that either: (1) have been owned by Participant for more than six (6) months and have been paid for within the meaning of SEC Rule 144 (and, if such shares were purchased from the Company by use of a promissory note, such note has been fully paid with respect to such shares); or (2) were obtained by Participant in the public market; | |
(c) by tender of a full recourse promissory note having such terms as may be approved by the Committee and bearing interest at a rate sufficient to avoid imputation of income under Sections 483 and 1274 of the Code;provided,however, that Participants who are not employees or directors of the Company will not be entitled to purchase Shares with a promissory note unless the note is adequately secured by collateral other than the Shares; | |
(d) by waiver of compensation due or accrued to the Participant for services rendered; | |
(e) with respect only to purchases upon exercise of an Option, and provided that a public market for the Company’s stock exists: |
(1) through a “same day sale” commitment from the Participant and a broker-dealer that is a member of the National Association of Securities Dealers (an“NASD Dealer”) whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay for the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or |
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(2) through a “margin” commitment from the Participant and a NASD Dealer whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the NASD Dealer in a margin account as security for a loan from the NASD Dealer in the amount of the Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company; or |
(f) by any combination of the foregoing. |
(a) the election must be made on or prior to the applicable Tax Date; | |
(b) once made, then except as provided below, the election will be irrevocable as to the particular Shares as to which the election is made; | |
(c) all elections will be subject to the consent or disapproval of the Committee; | |
(d) if the Participant is an Insider and if the Company is subject to Section 16(b) of the Exchange Act: (1) the election may not be made within six (6) months of the date of grant of the Award, except as otherwise permitted by SEC Rule 16b-3(e) under the Exchange Act, and (2) either (A) the election to use stock withholding must be irrevocably made at least six (6) months prior to the Tax Date (although such election may be revoked at any time at least six (6) months prior to the Tax Date) or (B) the exercise of the Option or election to use stock withholding must be made in the ten (10) day period beginning on the third day following the release of the Company’s quarterly or annual summary statement of sales or earnings; and | |
(e) in the event that the Tax Date is deferred until six (6) months after the delivery of Shares under Section 83(b) of the Code, the Participant will receive the full number of Shares with respect to which the exercise occurs, but such Participant will be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date. |
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“Affiliate” means any corporation that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another corporation, where “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to cause the direction of the management and policies of the corporation, whether through the ownership of voting securities, by contract or otherwise. |
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“Award” means any award under this Plan, including any Option, Restricted Stock or Stock Bonus. | |
“Award Agreement” means, with respect to each Award, the signed written agreement between the Company and the Participant setting forth the terms and conditions of the Award. | |
“Board” means the Board of Directors of the Company. | |
“Code” means the Internal Revenue Code of 1986 as amended. | |
“Committee” means the committee appointed by the Board to administer this Plan, or if no such committee is appointed, the Board. | |
“Company” means ESS Technology, Inc., a corporation organized under the laws of the State of California, or any successor corporation. | |
“Disability” means a disability, whether temporary or permanent, partial or total, within the meaning of Section 22(e)(3) of the Code, as determined by the Committee. | |
“Disinterested Person” means a director who has not, during the period that person is a member of the Committee and for one year prior to commencing service as a member of the Committee, been granted or awarded equity securities pursuant to this Plan or any other plan of the Company or any Parent, Subsidiary or Affiliate of the Company, except in accordance with the requirements set forth in Rule 16b-3(c)(2)(i) (and any successor regulation thereto) as promulgated by the SEC under Section 16(b) of the Exchange Act, as such rule is amended from time to time and as interpreted by the SEC. | |
“Exchange Act” means the Securities Exchange Act of 1934, as amended. | |
“Exercise Price” means the price at which a holder of an Option may purchase the Shares issuable upon exercise of the Option. | |
“Fair Market Value” means, as of any date, the fair market value of the Common Stock, as determined by the Committee in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Common Stock as reported in theWall Street Journal for the applicable date. | |
“Insider” means an officer or director of the Company or any other person whose transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act. | |
“Outside Director” means any director who is not, (a) a current employee of the Company or any Parent, Subsidiary or Affiliate of the Company; (b) a former employee of the Company or any Parent, Subsidiary or Affiliate of the Company who is receiving compensation for prior services (other than benefits under a tax-qualified pension plan); (c) a current or former officer of the Company or any Parent, Subsidiary or Affiliate of the Company; or (d) currently receiving compensation for personal services in any capacity, other than as a director, from the Company or any Parent, Subsidiary or Affiliate of the Company;provided,however, that at such time as the term “Outside Director,” as used in Section 162(m) of the Code is defined in regulations promulgated under Section 162(m) of the Code, “Outside Director” will have the meaning set forth in such regulations, as amended from time to time and as interpreted by the Internal Revenue Service. | |
“Option” means an award of an option to purchase Shares pursuant to Section 5. | |
“Parent” means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if at the time of the granting of an Award under this Plan, each of such corporations other than the Company owns stock possessing 50% or more of the total combined vesting power of all classes of stock in one of the other corporations in such chain. | |
“Participant” means a person who receives an Award under this Plan. |
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“Plan” means this ESS Technology, Inc. 1995 Equity Incentive Plan, as amended from time to time. | |
“Restricted Stock Award” means an award of Shares pursuant to Section 6. | |
“SEC” means the Securities and Exchange Commission. | |
“Securities Act” means the Securities Act of 1933, as amended. | |
“Shares” means shares of the Company’s Common Stock reserved for issuance under this Plan, as adjusted pursuant to Sections 2 and 18, and any successor security. | |
“Stock Bonus” means an award of Shares, or cash in lieu of Shares, pursuant to Section 7. | |
“Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company it, at the time of granting of the Award, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or the other corporations in such chain. | |
“Termination” or“Terminated” means, for purposes of this Plan with respect to a Participant, that the Participant has for any reason ceased to provide services as an employee, director, consultant, independent contractor or advisor to the Company or a Parent, Subsidiary or Affiliate of the Company;except in the case of sick leave, military leave, or any other leave of absence approved by the Committee, provided that such leave is for a period of not more than ninety (90) days, or reinstatement upon the expiration of such leave is guaranteed by contract or statute. The Committee will have sole discretion to determine whether a Participant has ceased to provide services and the effective date on which the Participant ceased to provide services (the“Termination Date”). |
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(a) “Administrator”means the Board or its Committee appointed pursuant to Section 4 of the Plan. | |
(b) “Affiliate”means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity. | |
(c) ��Applicable Laws”means all applicable U.S. federal, state and local laws, rules and regulations, and the applicable laws, rules and regulations of any other country or jurisdiction where Options are granted under the Plan or where Participants reside or provide services to the Company or any Parent, Subsidiary or Affiliate, as such laws, rules, regulations and requirements shall be in place from time to time. | |
(d) “Board”means the Board of Directors of the Company. | |
(e) “Cause”for termination of a Participant’s Continuous Service Status will exist (unless otherwise defined in an applicable agreement) if the Participant is terminated for any of the following reasons: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time as provided in Section 5(d) below, and the term “Company” will be interpreted to include any Subsidiary, Parent, Affiliate or successor thereto, if appropriate. | |
(f) “Change of Control”means a sale of all or substantially all of the Company’s assets, or any merger or consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such transaction. | |
(g) “Code”means the Internal Revenue Code of 1986, as amended. | |
(h) “Committee”means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below. |
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(i) “Common Stock”means the Common Stock of the Company. | |
(j) “Company”means ESS Technology, Inc., a California corporation. | |
(k) “Consultant”means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and any director of the Company whether compensated for such services or not. | |
(l) “Continuous Service Status”means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status. | |
(m) “Corporate Transaction”means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation and includes a Change of Control. | |
(n) “Director”means a member of the Board. | |
(o) “Employee”means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company. | |
(p) “Exchange Act”means the Securities Exchange Act of 1934, as amended. | |
(q) “Fair Market Value”means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in theWall Street Journal for the applicable date. | |
(r) “Incentive Stock Option”means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement. | |
(s) “Named Executive”means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer). Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act. | |
(t) “Nonstatutory Stock Option”means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement. | |
(u) “Option”means a stock option granted pursuant to the Plan. | |
(v) “Option Agreement”means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice. | |
(w) “Optioned Stock”means the Common Stock subject to an Option. | |
(x) “Optionee”means an Employee or Consultant who receives an Option. |
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(y) “Parent”means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision. | |
(z) “Participant”means any holder of one or more Options, or the Shares issuable or issued upon exercise of such Options, under the Plan. | |
(aa) “Plan”means this Acquisition Equity Incentive Plan. | |
(bb) “Reporting Person”means an officer, Director, or greater than ten percent (10%) shareholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act. | |
(cc) “Rule 16b-3”means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision. | |
(dd) “Share”means a share of the Common Stock, as adjusted in accordance with Section 11 of the Plan. | |
(ee) “Stock Exchange”means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time. | |
(ff) “Subsidiary”means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision. | |
(gg) “Ten Percent Holder”means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary. |
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(i) to determine the Fair Market Value of the Common Stock, in accordance with Section 2(q) of the Plan, provided that such determination shall be applied consistently with respect to Participants under the Plan; | |
(ii) to select the Employees and Consultants to whom Options may from time to time be granted; | |
(iii) to determine whether and to what extent Options are granted; | |
(iv) to determine the number of Shares to be covered by each award granted; | |
(v) to approve the form(s) of agreement(s) used under the Plan; | |
(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option, Optioned Stock or restricted stock issued upon exercise of an Option, based in each case on such factors as the Administrator, in its sole discretion, shall determine; | |
(vii) to determine whether and under what circumstances an Option may be settled in cash under Section 8(c) instead of Common Stock; | |
(viii) to adjust the vesting of an Option held by an Employee or Consultant as a result of a change in the terms or conditions under which such person is providing services to the Company; | |
(ix) to construe and interpret the terms of the Plan and awards granted under the Plan, which constructions, interpretations and decisions shall be final and binding on all Participants; and | |
(x) in order to fulfill the purposes of the Plan and without amending the Plan, to modify grants of Options to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs. |
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(i) In the case of an Incentive Stock Option |
(A) granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or | |
(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. |
(ii) In the case of a Nonstatutory Stock Option, the per share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. | |
(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction. | |
(iv) In no event may the exercise price of any outstanding Option be directly or indirectly reduced, whether by amendment to decrease the exercise price, by exchange of an outstanding Option for an Option with a lower exercise price, or otherwise. |
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(i) Termination other than Upon Disability or Death or for Cause. In the event of termination of an Optionee’s Continuous Service Status other than under the circumstances set forth in subsections (ii), (iii), or (iv) below, such Optionee may exercise an Option for ninety (90) days following such termination to the extent the Optionee was entitled to exercise it at the date of such termination. | |
(ii) Disability of Optionee. In the event of termination of an Optionee’s Continuous Service Status as a result of his or her disability (including a disability within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any time within twelve (12) months following such termination to the extent the Optionee was entitled to exercise it at the date of such termination. |
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(iii) Death of Optionee. In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within three (3) months following termination of Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve (12) months following the date of death, but only to the extent of the right to exercise that had accrued at the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated. | |
(iv) Termination for Cause. In the event of termination of an Optionee’s Continuous Service Status for Cause, any Option (including any exercisable portion thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status. If an Optionee’s employment or consulting relationship with the Company is suspended pending an investigation of whether the Optionee shall be terminated for Cause, all the Optionee’s rights under any Option likewise shall be suspended during the investigation period and the Optionee shall have no right to exercise any Option. |
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PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
ESS TECHNOLOGY, INC.
2005 ANNUAL MEETING OF SHAREHOLDERS
The undersigned shareholder of ESS Technology, Inc., a California corporation, hereby acknowledges receipt of the Notice of Annual Meeting of Shareholders and Proxy Statement, each dated April 29, 2005, and hereby appoints Robert L. Blair and James B. Boyd, and each of them, with full power to each of substitution, as proxies and attorneys-in-fact, on behalf and in the name of the undersigned, to represent the undersigned at the Annual Meeting of Shareholders of ESS Technology, Inc. to be held on June 16, 2005 at 3:30 p.m. local time, at The Fremont Marriott, located at 46100 Landing Parkway, Fremont, CA 94538, and at any adjournments or postponements thereof, and to vote all shares of common stock which the undersigned would be entitled to vote if then and there personally present, on the matters set forth on the reverse side.
The Proxy will be voted as directed or, if no contrary direction is indicated, will be voted as follows: (1) “FOR” the election of directors in the manner described in the Proxy Statement, (2) “FOR” the approval of changing the Company’s state of incorporation from California to Delaware, (3) “FOR” the approval of the amendment and restatement of the 1995 Equity Incentive Plan, (4) “FOR” the adoption of the Acquisition Equity Incentive Plan with 2,000,000 shares reserved for issuance thereunder, (5) “FOR” the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2005, and as the proxy holders deem advisable on other matters that may come before the Annual Meeting, as the case may be, with respect to the item not marked.
(Continued, and to be signed on reverse side)
Address Change/Comments (Mark the corresponding box on the reverse side)
You can now access your ESS Technology, Inc. account online.
Access your ESS Technology, Inc. shareholder/stockholder account online via Investor ServiceDirect ® (ISD).
Mellon Investor Services LLC, Transfer Agent for ESS Technology, Inc., now makes it easy and convenient to get current information on your shareholder account.
• View account status | • View payment history for dividends | |
• View certificate history | • Make address changes | |
• View book-entry information | • Obtain a duplicate 1099 tax form | |
• Establish/change your PIN |
Visit us on the web at http://www.melloninvestor.com
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
Investor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
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THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S). THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3, 4 and 5. | Mark Here for Address Change or Comments | o | ||
SEE REVERSE SIDE |
FOR | WITHHELD | FOR | AGAINST | ABSTAIN | ||||||||||||||||||||||||||||||
1. Election of Directors Nominees: | o | o | 3. | To approve the amendment and restatement of the 1995 Equity Incentive Plan to extend the termination date of such plan from July 31, 2005 to July 31, 2010. | o | o | o | |||||||||||||||||||||||||||
01 Fred S.L. Chan | 04 David S. Lee | |||||||||||||||||||||||||||||||||
02 Robert L. Blair 03 Gary L. Fischer | 05 Peter T. Mok 06 Alfred J. Stein | 4. | To adopt the Acquisition Equity Incentive Plan with 2,000,000 shares reserved for issuance thereunder. | o | o | o | ||||||||||||||||||||||||||||
For all nominees except as noted below: | ||||||||||||||||||||||||||||||||||
5. | To ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm of the Company for the fiscal year ending December 31, 2005. | o | o | o | ||||||||||||||||||||||||||||||
FOR | AGAINST | ABSTAIN | ||||||||||||||||||||||||||||||||
2. To approve changing the Company’s state of incorporation from California to Delaware. | o | o | o | And, in their discretion, the proxies are authorized to vote on such other business as may properly come before the Annual Meeting or any adjournment thereof. |
|
Signature | Signature | Date: |
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5Detach here from proxy voting card5
Vote by Internet or Telephone or Mail
Internet and telephone voting is available through 11:59 PM EST
the day prior to annual meeting day.
Your telephone or Internet vote authorizes the named proxies to vote your shares in the same manner
as if you marked, signed and returned your proxy card.
Internet http://www.proxyvoting.com/ESST Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Telephone 1-866-540-5760 Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet or by telephone,
you do NOT need to mail back your proxy card.
You can view the Annual Report and Proxy Statement
on the internet at: http://www.esstech.com