Exhibit 10.30

ACCELERATION AGREEMENT

This Acceleration Agreement (the “Agreement”) is entered into as of _______,
2005 (the “Effective Date”), by and between _______ (the “Optionee”) and ESS
Technology, Inc., a California corporation (the “Company”).

1.   Definitions. The following definitions shall apply for all purposes under
this Agreement:

     (a) Cause. “Cause” means the determination by the Company’s Board of
Directors of any of the following: (i) the Optionee’s willful failure to perform
substantially his or her duties and responsibilities to the Company; (ii) the
Optionee’s commission of any act of fraud, embezzlement, dishonesty or any other
willful misconduct that has caused, or is reasonably expected to result in,
injury to the Company; (iii) the Optionee’s commission of, conviction of, or a
plea of “guilty” or “no contest” to, a felony under the laws of the United
States or any state; (iv) the Optionee’s unauthorized use or disclosure of any
proprietary information or trade secrets of the Company or any other party to
whom the Optionee owes an obligation of nondisclosure as a result of his or her
relationship with the Company; or (v) the Optionee’s material breach of any or
his or her obligations under any written agreement or covenant with the Company.

     (b) Change in Control. “Change in Control” means:

            (i) the occurrence of any of the events described in Section 18.1 of
the 1995 Plan for Covered Options granted thereunder; or

            (ii) a “Change of Control” as defined in Section 2(f) of the 1997
Plan for Covered Options granted thereunder.

     (c) Covered Option. “Covered Option” means any stock option granted to the
Optionee pursuant to one of the Covered Plans, whether such stock option was
granted before, on, or after the Effective Date.

     (d) Covered Plans. “Covered Plans” means the 1995 Equity Incentive Plan (as
amended and restated January 25, 2003) (the “1995 Plan”) or the ESS Technology,
Inc. 1997 Equity Incentive Plan (as amended and restated April 26, 2003) (the
“1997 Plan”).

     (e) Good Reason. “Good Reason” means any one or more of the following,
without the Optionee’s prior written consent: (i) a change in the Optionee’s
position such that he or she is not a corporate officer of the Company or the
assignment to the Optionee of any duties or responsibilities which are
substantially inconsistent with Optionee’s duties and responsibilities to the
Company on the Effective Date; (ii) the relocation of the principal place of the
Optionee’s service to a location that is more than 50 miles from the Optionee’s
principal place of service on the Effective Date, or the imposition of travel
requirements that are substantially more demanding than the travel requirements
existing on the Effective Date; (iii) any failure by the Company to pay, or any
material reduction by the Company of the Optionee’s base salary or bonus
compensation (subject to applicable performance requirements with respect to the
actual amount of bonus compensation earned by the Optionee); (iv) any failure by
the Company to provide the Optionee with the

 

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opportunity to participate, on terms no less favorable than those in effect for
the benefit of any other employee who holds a comparable position with the
Company, in any benefit or compensation plans and programs or other fringe
benefits (or their equivalent) from time to time in effect for the benefit of
any other employee who holds a comparable position with the Company; or (v) the
refusal of any successor or assign of the Company to assume this Agreement.

     (f) Involuntary Termination. “Involuntary Termination” means (i) the
Optionee’s service is terminated by the Company without Cause or (ii) the
Optionee’s resignation for Good Reason.

2.   Benefits.

     (a) Change in Control.

            (i) Notwithstanding anything to the contrary in the Covered Plans or
applicable stock option agreements, in the event of the Optionee’s Involuntary
Termination within 2 months before a Change in Control, the vesting schedule for
all Covered Options that are outstanding as of such Change in Control shall be
accelerated to provide that all such Covered Options shall be immediately vested
upon the effective date of such Change in Control and exercisable in full.

            (ii) Notwithstanding anything to the contrary in the Covered Plans
or applicable stock option agreements, the vesting schedule for all Covered
Options that are outstanding as of the effective date of a Change in Control
shall be accelerated to provide that 50% of the unvested shares subject to such
Covered Options (determined as of the effective date of the Change in Control)
shall vest immediately upon the effective date of such Change in Control and
become exercisable. For purposes of the foregoing provision, the unvested shares
subject to acceleration shall be determined pro rata such that 50% of the shares
that would have otherwise vested on each vesting date absent a Change in Control
shall vest immediately upon the effective date of such Change in Control (e.g.,
if prior to a Change in Control 50 shares vest on each monthly anniversary of
the option grant date and 2 years remain on the vesting schedule, then after a
Change in Control 25 shares will vest on each monthly anniversary of the option
grant date for the 2 years remaining on the vesting schedule). Further, in the
event of the Optionee’s Involuntary Termination within 12 months after a Change
in Control, the balance of the unvested shares subject to the Covered Options
shall vest immediately upon Optionee’s Involuntary Termination and become
exercisable in full.

     (b) Death. Notwithstanding Section 2(a) of this Agreement or anything to
the contrary in the Covered Plans or applicable stock option agreements, in the
event of the Optionee’s death at any time on or after the Effective Date, the
vesting schedule for all Covered Options that are outstanding as of the
Optionee’s death shall be accelerated to provide that all such Covered Options
shall be immediately vested and exercisable in full.

     (c) Conditions. All benefits provided under this Section 2 are conditioned
on (i) the Optionee’s continuing compliance with this Agreement, any employment
agreement and the Company’s policies and by-laws, and (ii) the Optionee’s
execution of a general release of all claims in a form prescribed by the
Company.

 

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     (d) Excise Taxes. In the event that any benefit received by Optionee
pursuant to this Agreement would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise
Tax”), then Optionee shall be entitled to either the full amount of the benefits
or such lesser amount that would result in no portion of the benefits being
subject to the Excise Tax, whichever of the foregoing amounts results in the
receipt by Optionee, on an after-tax basis, of the greater benefit. Unless the
Company and Optionee agree otherwise in writing, any calculation required under
this Section 2(d) shall be made in writing by independent public accountants
agreed to by the Company and Optionee, whose calculation shall be conclusive and
binding upon the Company and Optionee for all purposes. The Company and Optionee
shall furnish to the accountants such information and documents as the
accountants may reasonably request in order to make a determination under this
Section 2(d). All fees and expenses of the accounting firm shall be borne solely
by the Company.

3.   Successors.

     (a) Company’s Successors. Any successor to all or substantially all of the
Company’s business and/or assets (whether direct or indirect and whether by
purchase, lease, merger, consolidation, liquidation or otherwise), shall be
obligated to perform this Agreement in the same manner and to the same extent as
the Company would be required to perform it in the absence of a succession.

     (b) Optionee’s Successors. This Agreement and all rights of the Optionee
hereunder shall inure to the benefit of, and be enforceable by, the Optionee’s
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

4.   Miscellaneous Provisions.

     (a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Optionee, mailed
notices shall be addressed to him or her at the home address which he or she
most recently communicated to the Company in writing. In the case of the
Company, mailed notices shall be addressed to its corporate headquarters, and
all notices shall be directed to the attention of its Chief Financial Officer.

     (b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Optionee and by an authorized officer of the Company (other
than the Optionee). No waiver by either party of any breach of, or of compliance
with, any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision or of the same condition
or provision at another time.

     (c) Whole Agreement. This Agreement contains all the legally binding
understandings and agreements between Optionee and the Company pertaining to the
subject matter of this Agreement and supersedes all such agreements, whether
oral or in writing, previously entered into between the parties. Any and all
stock option agreements regarding the Covered Options are hereby modified and
amended as necessary to comport with this Agreement. To the extent that any

 

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such stock option agreement is inconsistent with this Agreement or conflicts
with this Agreement, then the terms of this Agreement shall control.

     (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without regard to the conflicts of laws principles thereof.

     (e) Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.

     (f) No Assignment. The rights of the Optionee to benefits under this
Agreement shall not be made subject to option or assignment, either by voluntary
or involuntary assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor’s process, and any action
in violation of this subsection (f) shall be void.

     (g) Retention Rights. This Agreement does not give the Optionee the right
to be retained by the Company in any capacity. The Company reserves the right to
terminate Optionee’s engagement at any time and for any reason.

5.  Term of Agreement. This Agreement shall continue in effect until the Company
shall have given the Optionee written notice of cancellation. This Agreement
shall terminate automatically in the event the Optionee ceases to provide
services to Company prior to a Change in Control or Optionee’s death.
Notwithstanding the foregoing, this Agreement shall remain effective in the
event of Optionee’s Involuntary Termination within 2 months before a Change in
Control.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.

            Optionee

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Company

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      By:         As Its: