Document:

Form of 2004 Employee Stock Purchase Plan

 Exhibit 10.4 
  
 ARCSOFT, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 (Adopted by the Board on                     ,
2004) 

 Table of Contents 
  

					
	 	 	 	  	Page

	 SECTION 1
	 	Purpose Of The Plan	  	1
			
	 SECTION 2
	 	Definitions.	  	1
	 (a)
	 	“Accumulation Period”	  	1
	 (b)
	 	“Board”	  	1
	 (c)
	 	“Code”	  	1
	 (d)
	 	“Committee”	  	1
	 (e)
	 	“Company”	  	1
	 (f)
	 	“Compensation”	  	1
	 (g)
	 	“Corporate Reorganization”	  	1
	 (h)
	 	“Eligible Employee”	  	2
	 (i)
	 	“Exchange Act”	  	2
	 (j)
	 	“Fair Market Value”	  	2
	 (k)
	 	“IPO”	  	2
	 (l)
	 	“Offering Period”	  	3
	 (m)
	 	“Participant”	  	3
	 (n)
	 	“Participating Company”	  	3
	 (o)
	 	“Plan”	  	3
	 (p)
	 	“Plan Account”	  	3
	 (q)
	 	“Purchase Price”	  	3
	 (r)
	 	“Stock”	  	3
	 (s)
	 	“Subsidiary”	  	3
			
	 SECTION 3
	 	Administration Of The Plan	  	3
	 (a)
	 	Committee Composition	  	3
	 (b)
	 	Committee Responsibilities	  	3
			
	 SECTION 4
	 	Enrollment And Participation	  	3
	 (a)
	 	Offering Periods	  	3
	 (b)
	 	Accumulation Periods	  	4
	 (c)
	 	Enrollment	  	4
	 (d)
	 	Duration of Participation	  	4
	 (e)
	 	Applicable Offering Period	  	4
			
	 SECTION 5
	 	Employee Contributions	  	5
	 (a)
	 	Frequency of Payroll Deductions	  	5
	 (b)
	 	Amount of Payroll Deductions	  	5
	 (c)
	 	Changing Withholding Rate	  	5
	 (d)
	 	Discontinuing Payroll Deductions	  	5
	 (e)
	 	Limit on Number of Elections	  	5
			
	 SECTION 6
	 	Withdrawal From The Plan	  	5
	 (a)
	 	Withdrawal	  	5

  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK
PURCHASE PLAN 
  

 -i- 

					
	 (b)
	 	Re-enrollment After Withdrawal	  	6
			
	 SECTION 7
	 	Change In Employment Status	  	6
	 (a)
	 	Termination of Employment	  	6
	 (b)
	 	Leave of Absence	  	6
	 (c)
	 	Death	  	6
			
	 SECTION 8
	 	Plan Accounts And Purchase Of Shares	  	6
	 (a)
	 	Plan Accounts	  	6
	 (b)
	 	Purchase Price	  	6
	 (c)
	 	Number of Shares Purchased	  	7
	 (d)
	 	Available Shares Insufficient	  	7
	 (e)
	 	Issuance of Stock	  	7
	 (f)
	 	Unused Cash Balances	  	7
	 (g)
	 	Stockholder Approval	  	7
			
	 SECTION 9
	 	Limitations On Stock Ownership	  	8
	 (a)
	 	Five Percent Limit	  	8
	 (b)
	 	Dollar Limit	  	8
			
	 SECTION 10
	 	Rights Not Transferable	  	9
			
	 SECTION 11
	 	No Rights As An Employee	  	9
			
	 SECTION 12
	 	No Rights As A Stockholder	  	9
			
	 SECTION 13
	 	Securities Law Requirements	  	9
			
	 SECTION 14
	 	Stock Offered Under The Plan	  	9
	 (a)
	 	Authorized Shares	  	9
	 (b)
	 	Antidilution Adjustments	  	10
	 (c)
	 	Reorganizations	  	10
			
	 SECTION 15
	 	Amendment Or Discontinuance	  	10
			
	 SECTION 16
	 	Execution	  	10

  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK
PURCHASE PLAN 
  

 -ii- 

 ARCSOFT, INC. 
  
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 SECTION 1     Purpose Of The
Plan. 
  
 The Plan was adopted by the Board on August 11,
2004, effective as of the date of the IPO. The purpose of the Plan is to provide Eligible Employees with an opportunity to increase their proprietary interest in the success of the Company by purchasing Stock from the Company on favorable terms and
to pay for such purchases through payroll deductions. The Plan is intended to qualify under section 423 of the Code. 
  
 SECTION 2    Definitions. 
  
 (a) “Accumulation Period” means an approximately six-month period during which contributions may be made
toward the purchase of Stock under the Plan, as determined pursuant to Section 4(b), or such other period as the Committee may determine in its sole discretion. 
  

(b) “Board” means the Board of Directors of the Company, as constituted from time to time. 
  
 (c) “Code” means the Internal Revenue Code of 1986, as
amended. 
  
 (d) “Committee” means a the
Compensation Committee of the Board, as described in Section 3. 
  
 (e) “Company” means ArcSoft, Inc., a Delaware corporation. 
  
 (f) “Compensation” means (i) the compensation paid in cash to a Participant by a Participating Company, including salaries, wages, incentive compensation, bonuses, commissions, overtime pay and shift
premiums, plus (ii) any pre-tax contributions made by the Participant under section 401(k) or 125 of the Code. “Compensation” shall exclude all non-cash items, moving or relocation allowances, cost-of-living equalization payments, car
allowances, tuition reimbursements, imputed income attributable to cars or life insurance, severance pay, fringe benefits, contributions or benefits received under employee benefit plans, income attributable to the exercise of stock options, and
similar items. The Committee shall determine whether a particular item is included in Compensation. 
  
 (g) “Corporate Reorganization” means: 
  
 (i) The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization in
which the Company’s stockholders immediately prior thereto own less than 50% of the voting securities of the Company (or its successor or parent) immediately thereafter; or 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

 -1- 

 (ii) The sale, transfer or other disposition of all or substantially all of the
Company’s assets or the complete liquidation or dissolution of the Company. 
  
 (h) “Eligible Employee” means any employee of a Participating Company whose customary employment is for more than five months per calendar year and for more than 20 hours per week. 
  
 The foregoing notwithstanding, an individual shall not be considered an
Eligible Employee if his or her participation in the Plan is prohibited by the law of any country which has jurisdiction over him or her or if he or she is subject to a collective bargaining agreement that does not provide for participation in the
Plan. 
  
 (i) “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
  
 (j) “Fair Market
Value” with respect to a share of Stock, shall mean the market price of one share of Stock, determined by the Committee as follows: 
  
 (i) If the Stock was traded over-the-counter on the date in question but was not traded on The Nasdaq Stock Market, then the Fair Market
Value shall be equal to the last transaction price quoted for such date by the OTC Bulletin Board or, if not so quoted, shall be equal to the mean between the last reported representative bid and asked prices quoted for such date by the principal
automated inter-dealer quotation system on which the Stock is quoted or, if the Stock is not quoted on any such system, by the Pink Sheets LLC; 
  
 (ii) If the Stock was traded on The Nasdaq Stock Market, then the Fair Market Value shall be equal to the last reported sale price quoted
for such date by The Nasdaq Stock Market; 
  
 (iii) If the Stock was traded on a United States stock exchange on the date in question, then the Fair Market Value shall be equal to the closing price reported for such date by the applicable composite-transactions report; and 

 
 (iv) If none of the foregoing provisions is applicable,
then the Fair Market Value shall be determined by the Committee in good faith on such basis as it deems appropriate. 
  
 In all cases, the determination of Fair Market Value by the Committee shall be conclusive and binding on all persons. 
  
 (k) “IPO” means the initial offering of Stock to the public
pursuant to a registration statement filed by the Company with the Securities and Exchange Commission. 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE
STOCK PURCHASE PLAN 
  

 -2- 

 (l) “Offering Period” means an approximately 24-month period with respect to which the
right to purchase Stock may be granted under the Plan, as determined pursuant to Section 4(a), or such other period as the Committee may determine in its sole discretion. 
  
 (m) “Participant” means an Eligible Employee who elects to participate in the Plan, as provided in Section
4(c). 
  
 (n) “Participating Company” means (i)
the Company and (ii) each present or future Subsidiary designated by the Board or the Committee as a Participating Company. 
  
 (o) “Plan” means this ArcSoft, Inc. 2004 Employee Stock Purchase Plan, as it may be amended from time to time. 
  
 (p) “Plan Account” means the account established for each
Participant pursuant to Section 8(a). 
  
 (q) “Purchase
Price” means the price at which Participants may purchase Stock under the Plan, as determined pursuant to Section 8(b). 
  
 (r) “Stock” means the Common Stock of the Company. 
  
 (s) “Subsidiary” means any corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company, if 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 of the other corporations in such
chain. 
  
 SECTION
3     Administration Of The Plan. 
  
 (a) Committee Composition. The Plan shall be administered by the Committee. The Committee shall consist exclusively of one or more directors of the Company, who shall be appointed by the Board. 
  
 (b) Committee Responsibilities. The Committee shall interpret the Plan
and make all other policy decisions relating to the operation of the Plan. The Committee may adopt such rules, guidelines and forms as it deems appropriate to implement the Plan. The Committee’s determinations under the Plan shall be final and
binding on all persons. 
  
 SECTION
4    Enrollment And Participation. 
  
 (a) Offering Periods. While the Plan is in effect, two Offering Periods shall commence in each calendar year. The Offering Periods shall consist of 24-month periods, unless otherwise determined by the Committee, commencing on May 5
and November 5 of each year, except that the first Offering Period shall commence on the date of the IPO and end on November 4, 2006, unless otherwise determined by the Committee. The next Offering Period 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

 -3- 

 shall commence on May 5, 2005 and will end on May 4, 2007. Employees may participate in only one Offering Period at a
time. 
  
 (b) Accumulation Periods. While the Plan is in
effect, two Accumulation Periods shall commence in each calendar year. The Accumulation Periods shall consist of the six-month periods commencing on May 5 and November 5, except that the first Accumulation Period shall commence on the date of the
IPO and end on May 4, 2005, unless otherwise determined by the Committee. 
  
 (c) Enrollment. Any individual who, on the day preceding the first day of an Offering Period (other than the initial Offering Period), qualifies as an Eligible Employee may elect to become a Participant in the
Plan for such Offering Period by executing the enrollment form prescribed for this purpose by the Committee. The enrollment form shall be filed with the Company at the prescribed location not later than 15 days prior to the commencement of such
Offering Period. All Eligible Employees shall be automatically enrolled in the initial Offering Period under the Plan. 
  
 (d) Duration of Participation. Once enrolled in the Plan, a Participant shall continue to participate in the Plan until he or she ceases to be an
Eligible Employee, withdraws from the Plan under Section 6(a) or reaches the end of the Offering Period in which his or her employee contributions were discontinued under Section 5(d) or Section 9(b). A Participant who discontinued employee
contributions under Section 5(d) or withdrew from the Plan under Section 6(a) may again become a Participant, if he or she then is an Eligible Employee, by following the procedure described in Subsection (c) above. A Participant whose employee
contributions were discontinued automatically under Section 9(b) shall automatically resume participation at the beginning of the earliest Offering Period ending in the next calendar year, if he or she then is an Eligible Employee. 
  
 (e) Applicable Offering Period. For purposes of calculating the
purchase price under Section 8(b), the applicable Offering Period shall be determined as follows: 
  
 (i) Once a Participant is enrolled in the Plan for an Offering Period, such Offering Period shall continue to apply to him or her until
the earliest of: (A) the end of such Offering Period; (B) the end of his or her participation under Subsection (d) above; and (C) re-enrollment in a subsequent Offering Period under Paragraph (ii) below. 
  
 (ii) In the event that the Fair Market Value of Stock on the
first trading day of the Offering Period in which the Participant is enrolled is higher than on the first trading day of any subsequent Offering Period, the Participant shall automatically be re-enrolled for such subsequent Offering Period.

  
 (iii) When a Participant reaches the end of
an Offering Period but his or her participation is to continue, then such Participant shall automatically be re-enrolled for 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

 -4- 

 the Offering Period that commences immediately after the end of the prior Offering Period. 
  
 SECTION 5    Employee
Contributions. 
  
 (a) Frequency of Payroll
Deductions. A Participant may purchase shares of Stock under the Plan solely by means of payroll deductions; provided, however, that in the initial Accumulation Period, Participants may also purchase shares of Stock by making a lump sum cash
payment at the end of the Accumulation Period. Payroll deductions, as designated by the Participant pursuant to Subsection (b) below, shall occur on each payday during participation in the Plan. 
  
 (b) Amount of Payroll Deductions. An Eligible Employee shall designate
on the enrollment form the portion of his or her Compensation that he or she elects to have withheld for the purchase of Stock. Such portion shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than
15%. During the initial Accumulation Period, no payroll deduction will be made unless a Participant timely files the proper form with the Company after a registration statement covering the Stock is filed and effective under the Securities Act of
1933, as amended. 
  
 (c) Changing Withholding Rate. If a
Participant wishes to change the rate of payroll withholding, he or she may do so by filing a new enrollment form with the Company at the prescribed location at any time. The new withholding rate shall be effective as soon as reasonably practicable
after such form has been received by the Company. The new withholding rate shall be a whole percentage of the Eligible Employee’s Compensation, but not less than 1% nor more than 15%. 
  
 (d) Discontinuing Payroll Deductions. If a Participant wishes to
discontinue employee contributions entirely, he or she may do so by filing a new enrollment form with the Company at the prescribed location at any time. Payroll withholding shall cease as soon as reasonably practicable after such form has been
received by the Company. In addition, employee contributions may be discontinued automatically pursuant to Section 9(b). A Participant who has discontinued employee contributions may resume such contributions by filing a new enrollment form with the
Company at the prescribed location. Payroll withholding shall resume as soon as reasonably practicable after such form has been received by the Company. 
  
 (e) Limit on Number of Elections. The Committee may limit the number of elections that a Participant may make under Subsection (c) or (d) above
during any Accumulation Period. 
  
 SECTION
6    Withdrawal From The Plan. 
  
 (a) Withdrawal. A Participant may elect to withdraw from the Plan by filing the prescribed form with the Company at the prescribed location at any time before the last day of an 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

 -5- 

 Accumulation Period. In addition, in the initial Accumulation Period, Participants may be deemed to withdraw from the
Plan by declining or failing to remit timely payment to the Company for the shares of Stock. As soon as reasonably practicable thereafter, payroll deductions shall cease and the entire amount credited to the Participant’s Plan Account shall be
refunded to him or her in cash, without interest. No partial withdrawals shall be permitted. 
  
 (b) Re-enrollment After Withdrawal. A former Participant who has withdrawn from the Plan shall not be a Participant until he or she re-enrolls in the Plan under Section 4(c). Re-enrollment may be effective only
at the commencement of an Offering Period. 
  
 SECTION 7    Change In Employment Status. 
  
 (a) Termination of Employment. Termination of employment as an Eligible Employee for any reason, including death, shall be treated as an automatic withdrawal from the Plan under Section 6(a). A transfer from
one Participating Company to another shall not be treated as a termination of employment. 
  
 (b) Leave of Absence. For purposes of the Plan, employment shall not be deemed to terminate when the Participant goes on a military leave, a sick leave or another bona fide leave of absence, if the leave was
approved by the Company in writing. Employment, however, shall be deemed to terminate 90 days after the Participant goes on a leave, unless a contract or statute guarantees his or her right to return to work. Employment shall be deemed to terminate
in any event when the approved leave ends, unless the Participant immediately returns to work. 
  
 (c) Death. In the event of the Participant’s death, the amount credited to his or her Plan Account shall be paid to a beneficiary designated by him or her for this purpose on the prescribed form or, if
none, to the Participant’s estate. Such form shall be valid only if it was filed with the Company at the prescribed location before the Participant’s death. 
  
 SECTION 8    Plan Accounts And Purchase Of Shares. 
  
 (a) Plan Accounts. The Company shall maintain a Plan Account on its
books in the name of each Participant. Whenever an amount is deducted from the Participant’s Compensation under the Plan, such amount shall be credited to the Participant’s Plan Account. Amounts credited to Plan Accounts shall not be trust
funds and may be commingled with the Company’s general assets and applied to general corporate purposes. No interest shall be credited to Plan Accounts. 
  
 (b) Purchase Price. The Purchase Price for each share of Stock purchased at the close of an Accumulation Period shall be the lower of: 

 
 (i) 85% of the Fair Market Value of such share on the
last trading day in such Accumulation Period; or 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK
PURCHASE PLAN 
  

 -6- 

 (ii) 85% of the Fair Market Value of such share on the first trading day of the
applicable Offering Period (as determined under Section 4(e)) or, in the case of the first Offering Period under the Plan, 85% of the price at which one share of Stock is offered to the public in the IPO. 
  
 (c) Number of Shares Purchased. As of the last day of each
Accumulation Period, each Participant shall be deemed to have elected to purchase the number of shares of Stock calculated in accordance with this Subsection (c), unless the Participant has previously elected to withdraw from the Plan in accordance
with Section 6(a). The amount then in the Participant’s Plan Account shall be divided by the Purchase Price, and the number of shares that results shall be purchased from the Company with the funds in the Participant’s Plan Account. The
foregoing notwithstanding, no Participant shall purchase more than [            ] shares of Stock with respect to any Accumulation Period nor more than the amounts of Stock set forth
in Section 9(b) and Section 14(a). Any fractional share, as calculated under this Subsection (c), shall be rounded down to the next lower whole share. For each Accumulation Period, the Committee shall have the authority to establish additional
limits on the number of shares purchasable by each Participant or by all Participants in the aggregate. 
  
 (d) Available Shares Insufficient. In the event that the aggregate number of shares that all Participants elect to purchase during an Accumulation
Period exceeds the maximum number of shares remaining available for issuance under Section 14(a), then the number of shares to which each Participant is entitled shall be determined by multiplying the number of shares available for issuance by a
fraction, the numerator of which is the number of shares that such Participant has elected to purchase and the denominator of which is the number of shares that all Participants have elected to purchase. 
  
 (e) Issuance of Stock. Certificates representing the shares of Stock
purchased by a Participant under the Plan shall be issued to him or her as soon as reasonably practicable after the close of the applicable Accumulation Period, except that the Committee may determine that such shares shall be held for each
Participant’s benefit by a broker designated by the Committee (unless the Participant has elected that certificates be issued to him or her). Shares may be registered in the name of the Participant or jointly in the name of the Participant and
his or her spouse as joint tenants with right of survivorship or as community property. 
  
 (f) Unused Cash Balances. An amount remaining in the Participant’s Plan Account that represents the Purchase Price for any fractional share shall be carried over in the Participant’s Plan Account to
the next Accumulation Period. Any amount remaining in the Participant’s Plan Account that represents the Purchase Price for whole shares that could not be purchased by reason of Subsection (c) above, Section 9(b) or Section 14(a) shall be
refunded to the Participant in cash, without interest. 
  
 (g)
Stockholder Approval. Any other provision of the Plan notwithstanding, no shares of Stock shall be purchased under the Plan unless and until the Company’s stockholders have approved the adoption of the Plan. 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  

 -7- 

 SECTION 9    Limitations On Stock Ownership.

  
 (a) Five Percent Limit. Any other provision of the
Plan notwithstanding, no Participant shall be granted a right to purchase Stock under the Plan if such Participant, immediately after his or her election to purchase such Stock, would own stock possessing 5% or more of the total combined voting
power or value of all classes of stock of the Company or any parent or Subsidiary of the Company. For purposes of this Subsection (a), the following rules shall apply: 
  
 (i) Ownership of stock shall be determined after applying the attribution rules of section 424(d) of the
Code; 
  
 (ii) Each Participant shall be deemed
to own any stock that he or she has a right or option to purchase under this or any other plan; and 
  
 (iii) Each Participant shall be deemed to have the right to purchase up to the maximum number of shares of Stock that may be purchased by
a Participant under this Plan under the individual limit specified in Section 8(c) with respect to each Accumulation Period. 
  
 (b) Dollar Limit. Any other provision of the Plan notwithstanding, no Participant shall purchase Stock with a Fair Market Value in excess of the
following limit: 
  
 (i) In the case of Stock
purchased during an Offering Period that commenced in the current calendar year, the limit shall be equal to (A) $25,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased in the current calendar year (under this
Plan and all other employee stock purchase plans of the Company or any parent or Subsidiary of the Company). 
  
 (ii) In the case of Stock purchased during an Offering Period that commenced in the immediately preceding calendar year, the limit shall
be equal to (A) $50,000 minus (B) the Fair Market Value of the Stock that the Participant previously purchased (under this Plan and all other employee stock purchase plans of the Company or any parent or Subsidiary of the Company) in the current
calendar year and in the immediately preceding calendar year. 
  
 (iii) In the case of Stock purchased during an Offering Period that commenced in the second preceding calendar year, the limit shall be equal to (A) $75,000 minus (B) the Fair Market Value of the Stock that the
Participant previously purchased (under this Plan and all other employee stock purchase plans of the Company or any parent or Subsidiary of the Company) in the current calendar year and in the two preceding calendar years. 
  

 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK PURCHASE PLAN 
  
 -8- 

 For purposes of this Subsection (b), the Fair Market Value of Stock shall be determined in each case as
of the beginning of the Offering Period in which such Stock is purchased. Employee stock purchase plans not described in section 423 of the Code shall be disregarded. If a Participant is precluded by this Subsection (b) from purchasing additional
Stock under the Plan, then his or her employee contributions shall automatically be discontinued and shall resume at the beginning of the earliest Accumulation Period ending in the next calendar year (if he or she then is an Eligible Employee).

  
 SECTION
10    Rights Not Transferable. 
  
 The rights of any Participant under the Plan, or any Participant’s interest in any Stock or moneys to which he or she may be entitled under the Plan, shall not be transferable by voluntary or involuntary assignment or by operation of
law, or in any other manner other than by beneficiary designation or the laws of descent and distribution. If a Participant in any manner attempts to transfer, assign or otherwise encumber his or her rights or interest under the Plan, other than by
beneficiary designation or the laws of descent and distribution, then such act shall be treated as an election by the Participant to withdraw from the Plan under Section 6(a). 
  
 SECTION 11    No Rights As An Employee. 
  
 Nothing in the Plan or in any right granted under the Plan shall confer upon
the Participant any right to continue in the employ of a Participating Company for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Participating Companies or of the Participant, which rights are
hereby expressly reserved by each, to terminate his or her employment at any time and for any reason, with or without cause. 
  
 SECTION 12    No Rights As A Stockholder. 
  
 A Participant shall have no rights as a stockholder with respect to any
shares of Stock that he or she may have a right to purchase under the Plan until such shares have been purchased on the last day of the applicable Offering Period. 
  
 SECTION 13    Securities Law Requirements. 
  
 Shares of Stock shall not be issued under the Plan unless the issuance and
delivery of such shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and
regulations, and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. 
  
 SECTION 14    Stock Offered Under The Plan. 
  
 (a) Authorized Shares. The maximum aggregate number of shares of
Stock available for purchase under the Plan is [                    ] shares, plus an annual increase to be added on the first day of the
Company’s fiscal years beginning January 1, 2006 through and including January 
  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK
PURCHASE PLAN 
  

 -9- 

 1, 2014, in an amount equal to the lesser of (i)
[                    ] shares, (ii) [    %] of the outstanding shares of stock on the last day of the immediately
preceding fiscal year, or (iii) an amount determined by the Board. The aggregate number of shares available for purchase under the Plan shall at all times be subject to adjustment pursuant to Section 14. 
  
 (b) Antidilution Adjustments. The aggregate number of shares of Stock
offered under the Plan, the individual Participant share limitation described in Section 8(c) and the price of shares that any Participant has elected to purchase shall be adjusted proportionately by the Committee for any increase or decrease in the
number of outstanding shares of Stock resulting from a subdivision or consolidation of shares or the payment of a stock dividend, any other increase or decrease in such shares effected without receipt or payment of consideration by the Company, the
distribution of the shares of a Subsidiary to the Company’s stockholders or a similar event. 
  
 (c) Reorganizations. Any other provision of the Plan notwithstanding, immediately prior to the effective time of a Corporate Reorganization, the
Offering Period then in progress shall terminate and shares shall be purchased pursuant to Section 8, unless the Plan is assumed by the surviving corporation or its parent corporation pursuant to the plan of merger or consolidation. The Plan shall
in no event be construed to restrict in any way the Company’s right to undertake a dissolution, liquidation, merger, consolidation or other reorganization. 
  

SECTION 15    Amendment Or Discontinuance. 
  
 The Board shall have the right to amend, suspend or terminate the Plan at
any time and without notice. Except as provided in Section 14, any increase in the aggregate number of shares of Stock to be issued under the Plan shall be subject to approval by a vote of the stockholders of the Company. In addition, any other
amendment of the Plan shall be subject to approval by a vote of the stockholders of the Company to the extent required by an applicable law or regulation. 
  
 Section 16    Execution. 
  
 To record the adoption of the Plan by the Board, the Company has caused its authorized officer to execute the same.

  

			
	ARCSOFT, INC.
		
	 By
	 	  

	 Name
	 	  

	 Title
	 	  

  
 ARCSOFT, INC. 
 2004 EMPLOYEE STOCK
PURCHASE PLAN 
  

 -10-Amended and Restated Executive Employment Agreement

 Exhibit 10.5 
  
 AMENDED AND RESTATED 
 EXECUTIVE EMPLOYMENT AGREEMENT 
  
 This Amended and Restated Executive Employment Agreement (the “Agreement”) is entered into as of July 1, 2002 (the “Effective Date”) by and between ArcSoft, Inc., a California corporation
(“ArcSoft”), as the employer; and Mr. Michael Hui Deng, an individual (“Executive”), as the employee. ArcSoft and Executive may be referred to collectively in this Agreement as the “Parties”.

  
 RECITALS 
  
 A. ArcSoft and Executive entered into an Executive Employment Agreement dated January 1, 1998
(the “Original Agreement”); 
  
 B. Executive is the co-founder of
ArcSoft and has served as its Chief Executive Officer, President and Board member since 1994; 
  
 C. The non-management directors of ArcSoft have noted the unique and singular contribution that the Executive has made to ArcSoft. They have also noted that paramount to ArcSoft’s interest is insuring the
Executive’s retention and securing that his skills and abilities remain focused on the continued growth and leadership of ArcSoft. They noted that the vision and energetic commitment that the Executive has demonstrated during his tenure as the
above positions has been and continues to be a fundamental and essential asset of ArcSoft. They noted the efforts of the Executive are recognized as profoundly and positively impacting on the long-term value of the shareholders’ interests in
ArcSoft. The Executive has left an indelible mark on ArcSoft’s culture and its values. In particular, the directors have also made note of management’s ability to achieve the performance expectations for ArcSoft in both positive and
negative market conditions during the past eight years. 
  
 D. In recognition of
these accomplishments and in order to continue to achieve ambitious goals for the performance of ArcSoft, the Parties modified certain terms of the Original Agreement and added certain other terms to the Original Agreement. 
  
 Therefore, in consideration of the promises and the mutual covenants and
agreements set forth herein, the Parties agree to enter into this Amended and Restated Employment Agreement as follows: 
  
 TERMS AND CONDITIONS 
  

	1.	Position, Authorities and Responsibilities 

  
 (a) Executive shall be employed by ArcSoft as its Chief Executive Officer and President, and member of Board of Directors (“Board”). Executive
shall report directly and solely to ArcSoft’s Board. The Board agrees to nominate Executive for election to the Board as a member at each annual shareholders’ meeting. Executive agrees to serve on the Board if elected. 
  

 1 

 (b) As Chief Executive Officer and President, Executive shall have duties and responsibilities that are
customary to such offices and positions in a California corporation, including general supervision, direction, and control of the business and officers of ArcSoft, subject to the supervision of the Board and its committees (if any, and to the extent
the Board has delegated authorities to such committees), and the Bylaws of ArcSoft and California Corporate Law. 
  
 (c) All other executive officers and employees of ArcSoft and its subsidiaries shall report directly to Executive or his designees. 
  
 (d) Executive shall also have right to appoint or employ and remove or
terminate the personnel described in Section 1(c). 
  
 (e)
Executive acknowledges and agrees that Executive owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests of Arc Soft, and not to do any act which would injure the business, interests, or reputation of
ArcSoft or any of its subsidiaries. 
  

	2.	Termination of Original Agreement 

  
 The Original Agreement shall be terminated and be of no further force and effect as of the Effective Date of this Agreement. 
  

	3.	Term 

  
 The Term of this Agreement and Executive’s employment under this Agreement shall be effective as of the Effective Date and shall continue for a Term ending on June 30, 2006. This Agreement and
Executive’s employment shall automatically continue for successive one-year period at the end of the Term, unless either party gives written notice to the other party of its intent to terminate this Agreement and Executive’s employment no
later than 180 days prior to the commencement of any such one-year renewal period. 
  

	4.	Compensation 

  
 In consideration of, and in exchange for, the services to be provided by Executive, Executive shall receive the amounts and benefits set for in this
Section 4 as of Effective Date of this Agreement unless otherwise specified: 
  
 (a) Base Salary Executive’s annual Base Salary shall be $250,000 paid semi-monthly, on ArcSoft’s regular payday (15th and the last day of each month), less all applicable taxes, social security payments and other items that ArcSoft is required by law to withhold or deduct
therefrom. The Base Salary shall be subject to annual review by the Board or its Compensation Committee and may be increased in light of the size and performance of ArcSoft. After any such change, Executive’s new level of Base Salary shall be
Executive’s Base Salary for purpose of this Agreement. 
  
 (b) Incentive Bonus During the Term of this Agreement, Executive shall receive an Incentive Bonus for each of ArcSoft’s fiscal years ending on June 30th in an amount equal to 40% of the Base Salary (or the adjusted Base Salary as described in this Section 4(a)). The Incentive Bonus shall be paid within
60 days following the close of each fiscal year. The 

  

 2 

 
amount payable under this Section 4(b) shall not be subject to the further discretion of ArcSoft Board or its Compensation Committee and shall not be reduced
except as specifically provided in this Section 4, or as otherwise mutually agreed by the Parties in writing. 
  
 (c) Stock Option Executive shall be eligible to participate in the Stock Option Plans of ArcSoft and any additional or successor plans including
any equity plans. 
  
 (i) Option Grant Upon execution of
this Agreement, in addition to the options Executive now has under the Original Agreement, Executive shall be granted an additional option to purchase ArcSoft’s common stock (the “Stock Option” or “Option”) for a number of
equal to 4% of the shares of ArcSoft, on the date of Effective Date of this Agreement, calculated on a fully-diluted basis assuming convertibility of all other forms of security into common stock, including but not limited to the shares owned or
controlled by ArcSoft and the amount expected to set aside for option pool for its employees, directors and consultant, pursuant to ArcSoft Stock Option Plan and its amendment, estimated at 31,164,625 shares. The estimated number to be granted to
Executive accordingly shall be 1,246,585 shares. 
  
 (ii)
Option Price The Option shall have an exercise price of 110% of the Fair Market Value of ArcSoft’s stock option price set forth by the Board as of the Effective Date of this Agreement to be qualified as Incentive Stock Option, as long as
Executive is still a 10% and more shareholder of ArcSoft. 
  
 (iii) Vesting The Option shall be vested in the following schedule, provided that Executive maintains the status of full-time employee of ArcSoft during the Term of this Agreement: 
  

	 	•	50% of the Option shall become vested and fully exercisable on and after the Effective Date of this Agreement; 

  

	 	•	12.5% of the Option shall become vested and fully exercisable on and June 30, 2003; 

  

	 	•	12.5% of the Option shall become vested and fully exercisable on and June 30, 2004; 

  

	 	•	12.5% of the Option shall become vested and fully exercisable on and June 30, 2005; 

  

	 	•	12.5% of the Option shall become vested and fully exercisable on and June 30, 2006. 

  
 ArcSoft shall provide financial aid to Executive to subsidize the exercise of all the options that Executive now has under
the Original Agreement and the Option under this Agreement, and any option that may be granted to him thereafter. 
  
 (iv) Repurchase By mutual written consent, ArcSoft or its successor in the event of Change of Control as defined hereunder will have the right to
repurchase the Option and other options Executive now has and may be granted thereafter (and any shares acquired upon exercise of the Option and other options) by paying Executive the Fair Market Value (at the time of repurchase) of the stock
covered by the Option, minus the exercise price otherwise paid or payable. 
  
 (v) Additional Grants Executive shall also be entitled to additional option grants from time to time upon approval of Board. 
  

	5.	Other Benefits 

  

 3 

 During the Term of this Agreement and for services rendered hereunder, Executive shall also be entitled
to receive all other benefits which are, and may be in the future, generally available to members of ArcSoft’s senior management, including but not limited to the followings: 
  
 (a) Group Insurance Executive shall be automatically covered by ArcSoft group insurance programs including Health,
Dental, Vision, Disability, and Life. Executive’s spouse and children under 18 (or otherwise determined by the plans) can join the insurance programs subject to ArcSoft policies and applicable laws. The premium of such insurance program(s)
shall be paid by ArcSoft. 
  
 (b) 401(k) and Other Retirement
Plans Executive shall be eligible to participate in employee benefit plans maintained by ArcSoft and in other benefits provided by ArcSoft to its employees and senior executives, now and in the future, including 401(k) and other retirement
plans, deferred compensation and similar benefits subject to change from time to time at the reasonable discretion of ArcSoft. 
  
 (c) Other Benefits Executive shall also be entitled to other benefits provided by ArcSoft to its employees and senior executives from time to time,
including but not limited to annual vacation, paid holiday, sick leave, and other similar benefits. Executive shall be entitled to paid vacation up to 4 weeks per calendar year. 
  
 (d) Executive Term Life Insurance ArcSoft has purchased and shall continue maintain during the Term of this Agreement
a key person term insurance on Executive’s life in the face amount of at least $1,000,000 in the event that Executive dies or becomes Permanently Disabled defined under Section 8(b) during the Term of this Agreement and Executive’s
employment hereunder. ArcSoft and the beneficiaries designated by Executive shall each receive half of the proceeds (50%), and ArcSoft shall bear the expense of such insurance policy and be the holder and owner of such policy. 
  
 (e) Reimbursement of Other Business Related Expenses ArcSoft agrees to
reimburse Executive membership dues and related ongoing costs of appropriate professional organizations. 
  
 ArcSoft agrees to make a favorable tax treatment for any tax consequences imposed on Executive in association with any of the benefits described above
under the Internal Revenue Code of 1986, as amended (the “Code”), or provide a “Gross-up” payment to cover such taxes. ArcSoft shall borne the charges by an accountant for services thereof. 
  

	6.	Obligations and Restrictive Covenants 

  
 (a) Obligations During the Term of this Agreement and Executive’s employment hereunder, Executive shall devote his substantial business effort
and time to ArcSoft and its subsidiaries or affiliates, or through such personnel he shall designate in accordance with the Bylaws of ArcSoft and the laws of California. Executive agrees, during the Term of this Agreement and Executive’s
employment hereunder, not to actively engage in any other employment, occupation or consulting activity for any direct or indirect remuneration without prior approval of the Board. This obligation shall not preclude Executive from (i) serving in any
capacity with any professional, community, industry, civic, educational or charitable 

  

 4 

 
organization; (ii) serving as a member of corporate boards of directors, provided that the Board has consented (which consent shall not be unreasonably
withheld or delayed), so long as these activities or services do not materially interfere or conflict with Executive’s responsibilities to, or ability to perform his duties of employment by ArcSoft under this Agreement. 
  
 (b) Non-Competition; Non-Solicitation The Parties hereto recognize
that Executive’s services are unique and the Restrictive Covenants on Executive set forth in this Section 6 are essential to protect the business (including trade secret and other confidential information disclosed by ArcSoft to, learned or
developed by Executive during the course of employment by ArcSoft) and good will of ArcSoft. As part of the consideration for the compensation and benefits to be paid to Executive hereunder, Executive agrees that during the Term of this Agreement
and employment hereunder, and for a period of 12 months thereafter (the “Covenant Period”), Executive shall not: 
  
 (i) Engage in any business similar or related to or competitive with the business conducted by ArcSoft or any of its subsidiaries or affiliates described
from time to time in ArcSoft Annual Report to its shareholders and Board (the “Core Business of ArcSoft”); 
  
 (ii) Render advice or services to, or otherwise assist, any other person, association, or entity that is engaged, directly or indirectly, in any business
similar or related to or competitive with the Core Business of ArcSoft; 
  
 (iii) Transact any business in any manner pertaining to suppliers or customers of ArcSoft or any of its subsidiaries affiliates which, in any manner, would have, or is likely to have, an adverse effect upon the Core
Business of ArcSoft or any of its subsidiaries affiliates; 
  
 (iv) Induce any employee of ArcSoft or any of its subsidiaries affiliates to terminate his or her employment with ArcSoft or any of its subsidiaries affiliates, or hire or assist in the hiring of any such employee by any person or entity
not affiliated with, ArcSoft. 
  
 For purposes of this Agreement,
“affiliate” shall mean any entity which owns or controls, is owned or controlled by, or is under common ownership or control, with ArcSoft. 
  
 Notwithstanding the foregoing, if ArcSoft abandons a particular aspect of the Core Business, that is, ceases such aspect of its business with the
intention to permanently refrain from such aspect of its business, then this post-employment non-competition covenant shall not apply to such former aspect of ArcSoft’s business. 
  

	7.	Confidentiality 

  
 Executive acknowledges that it is the policy of ArcSoft and its subsidiaries or affiliates to maintain as secret and confidential all valuable and unique
information herebefore or hereafter acquired, developed or used by ArcSoft and its subsidiaries relating to the business, operations, employees and customers of ArcSoft and its subsidiaries or affiliates, which information gives ArcSoft and its
subsidiaries or affiliates a competitive advantage in the industry, and which information includes technical knowledge, know-how or trade secrets and information concerning the operations, sales, personnel, suppliers, customers, costs, profits,
markets, pricing policies, and other confidential materials (the “Confidential Information”). 
  

 5 

 (a) Non-Disclosure Executive recognizes that the services to be performed by Executive are special
and unique, and that by reason of his duties he will acquire or learn Confidential Information. Executive recognizes that all such Confidential Information is the sole and exclusive property of ArcSoft and its subsidiaries or affiliates. As part of
consideration of the compensation and benefits to be paid to Executive under this Agreement, Executive agrees not to disclose the Confidential Information to anyone outside ArcSoft, either during or after the employment by ArcSoft, except as
authorized by ArcSoft in connection with performance of the duties set forth in this Agreement, or other duties assigned by ArcSoft from time to time. 
  
 (b) Return of Confidential Information Executive agrees to deliver promptly upon termination of employment with ArcSoft, or at any time requested
by ArcSoft, all memos, notes, records, reports, manuals, drawings, and any other documents containing any Confidential Information, including all copies of such materials which Executive may then possess or have under his control. 
  
 (c) Injunctive Relief Executive acknowledges that any breach or
violation of the provisions of this section of the Agreement will result in immediate and irreparable harm to ArcSoft and its subsidiaries or affiliates for which ArcSoft and its subsidiaries or affiliates would have no adequate remedy at law. In
the event of a breach by Executive of any of such provisions, in addition to any and all other rights and remedies it may have under this Agreement or otherwise, ArcSoft and its subsidiaries or affiliates may immediately seek any judicial action
deemed necessary, including, without limitation, temporary and preliminary injunctive relief. 
  
 (d) Ownership of Trade Secrets; Assignment of Rights Excluding those brought to ArcSoft and its subsidiaries or affiliates by Executive and disclosed by Executive in ArcSoft standard Employee Confidentiality
Agreement executed as of the Effective Date, Executive agrees that all know-how, documents, reports, plans, proposals, marketing and sales plans, client lists, client files and materials made by him or by ArcSoft and its subsidiaries (the “Work
Product”) are the property of ArcSoft and its subsidiaries and shall not be used by him in any way adverse to the interests of ArcSoft and its subsidiaries or affiliates. Executive assigns to ArcSoft and its subsidiaries any rights which
Executive may have in any such Work Product; provided, however, that such assignment does not apply to any right which qualifies fully under California Labor Code Section 2870. This paragraph shall survive any termination of the employment
relationship. Executive shall not deliver, reproduce or in any way allow such documents or things to be delivered or used by any third party without specific direction or consent of the Board. Executive assigns to ArcSoft and its subsidiaries or
affiliates any rights, which he may have in any such trade secret or proprietary information. Likewise, Executive shall not disclose to ArcSoft and its subsidiaries or affiliates, use in ArcSoft and its subsidiaries or affiliates business, or cause
ArcSoft and its subsidiaries or affiliates to use, any information or material that is a trade secret of others. 
  

	8.	Termination 

  
 Notwithstanding any other term or provision contained in this Agreement, this Agreement and the employment hereunder may be terminated prior to the
expiration under the following circumstances: 
  

 6 

 (a) Upon Executive’s death. 
  
 (b) Disability Upon Executive becoming “Permanently Disabled”, which, for purposes of this Agreement, shall
mean Executive’s incapacity due to physical or mental illness or cause, which results in the Executive being unable to perform his duties on a fulltime basis for 6 consecutive months in a period of 12 months. 
  
 (c) Termination by ArcSoft for Cause ArcSoft may terminate this
Agreement with notice, for Cause, which, for purpose of this Agreement, shall mean termination by action of the Board because of Executive’s: 
  
 (i) Willful refusal without proper legal cause to perform (other than reason of physical or mental disability or death) the duties set forth in this
Agreement or delegated in writing by the Board from time to time, which remains uncorrected for 30 days following written notice to Executive by ArcSoft; 
  
 (ii) Willfully engaging in conduct that Executive knows or should know may be materially injurious to ArcSoft or its subsidiaries or affiliates;

  
 (iii) Fraud, dishonesty or material misappropriation of
ArcSoft business and assets that is intended to result in substantial personal benefits of Executive and harming the business of ArcSoft and its subsidiaries or affiliates; 
  
 (iv) Conviction of a felony or entry into a plea of guilty with all appeal exhausted that negatively reflects on
Executive’s fitness to perform the duties or harms ArcSoft’s reputation or business; 
  
 (v) Any willful violation of this Agreement and other material employment policy of ArcSoft. 
  
 (d) Termination by ArcSoft without Cause In sole discretion of the Board, with notice, this Agreement and
Executive’s employment hereunder may be terminated without any Cause. 
  
 (e) Termination by Executive with Good Reason Executive shall also have the right to terminate this Agreement and the employment hereunder, with notice to ArcSoft, within 180 days after occurrence of the
following “Good Reason”: 
  
 (i) Material reduction
without Executive’s prior written consent in the nature of Executive’s title, duties, authorities and responsibilities set forth in this Agreement and delegated by the Board in writing from time to time; 
  
 (ii) Reduction without Executive’s prior written consent in the nature
of Executive’s compensation as established in Sections 4 and 5 of this Agreement and any other benefits thereafter provided to Executive from time to time including subsequent increases. This Section 8(e)(ii) does not apply to any reduction by
ArcSoft with respect to a general readjustment of all executive officers’ compensation level for reasonable business purposes; 
  
 (iii) Failure to provide any benefits at least equal to those provided to other senior executives; 
  
 (iv) Change in reporting structure without prior written consent by
Executive requiring that (A) Executive no longer reports directly and solely to the Board, (B) the executive officers and employees of ArcSoft and its subsidiaries are no longer required to report directly to Executive or through his designees;

  

 7 

 (v) Failure to obtain Executive’s nomination to be elected as a member of the Board; 
  
 (vii) A material breach by ArcSoft of any material sections of this
Agreement which remains uncorrected for 30 days after following written notice of by Executive to ArcSoft; 
  
 (viii) Failure of ArcSoft to obtain assumption of this Agreement by any successor of ArcSoft upon Change of Control (as defined in Section 10) or other
form of transactions as a result of which ArcSoft is not the surviving company, unless Executive remains in a comparable position with the new company and this Agreement is assumed in its entirety. 
  
 (f) Termination by Executive without Good Reason Executive may, with
notice, terminate this Agreement and resign from Executive’s employment hereunder without any Good Reason by written notice to ArcSoft. 
  
 (g) Notice of Termination If ArcSoft or Executive desires to terminate this Agreement and Executive’s employment hereunder prior to the
expiration of the Term of this Agreement, pursuant to this Section 8 (b) through (f) respectively, a written notice shall be given to the other party stating the effective date and reason (if any) for such termination 30 days prior to the stated
effective date. ArcSoft shall consult in good faith with Executive and provide a reasonable opportunity for Executive to be heard prior to the effective date of termination of the employment hereunder for Cause. It is expressly understood and agreed
that the decision as to whether Cause exists for termination of this Agreement and the employment hereunder by ArcSoft is delegated to the Board for determination subject the Bylaws of ArcSoft and the laws of California, and in accordance with the
requirements set forth below. 
  
 Notwithstanding the foregoing,
Executive shall not be deemed to have been terminated for Cause without any of (A) advance written notice set forth in this Section 8, (B) an opportunity for Executive, together with his counsel, to be heard before the Board at least 10 days prior
to the proposed date of termination after the giving of Notice of Termination, (C) a duly adopted resolution of the Board with written determination described in the next subsection (D) of this Section 8 stating the actions of Executive constituted
Cause and the basis thereof, and (D) a written determination by the Board made by the affirmative vote of at least a super majority (2/3) of all of the members of the Board (other than Executive). 
  

	9.	Severance Benefits 

  
 Upon termination of this Agreement and Executive’s employment hereunder, Executive will receive payment for all salary and vacation accrued but
unpaid as of the date of termination, and the benefits will be continued under the terms of such plans and policies in accordance with applicable law. Notwithstanding, Executive shall be entitled to receive severance benefits described below:

  
 (a) Termination by ArcSoft for Cause If this Agreement
and Executive’s employment hereunder is terminated by ArcSoft before the expiration of the Term for Cause pursuant to Sections 8(c) and (g), Executive shall not entitled to any additional payments or benefits hereunder, other than, including
but not limited to: 
  
 (i) Executive’s then Base Salary
paid as of the date of termination; and 
  

 8 

 (ii) Any then vested Stock Option and other options as of the date of termination; and 
  
 (iii) Vacation accrued but unpaid as of the date of termination; and

  
 (iv) Continuance of group insurance program in accordance
with COBRA; and 
  
 (v) Any unreimbursed business expenses or
dues described in this Agreement. 
  
 (b) Termination by
ArcSoft without Cause; Termination by Executive with Good Reason If this Agreement and Executive’s employment hereunder is terminated by ArcSoft before the expiration of the Term without Cause pursuant to Section 8 (d), or any reason
other than with Cause, or by Executive for Good Reason as defined in Section 8 (e), within 5 business days after the end of Notice of Termination period, Executive shall receive: 
  
 (i) Any vacation accrued but unpaid; 
  
 (ii) The earned but unpaid Bonus for the preceding fiscal year before the date of termination, and Bonus for the current
fiscal year; 
  
 (iii) A single lump sum severance payment equal
to 4 full years of Executive’s then Base Salary; 
  
 (iv)
Any forfeiture provision of any Restricted Stock (if any) shall lapse and such Restricted Stock shall become fully vested; 
  
 (v) Acceleration of the vesting and exercisability of all unvested or unexercisable Stock Options, including any option Executive has under this Agreement
and the Original Agreement, and any options granted to him thereafter, that shall become fully vested and immediately exercisable for 24 months from the date of termination; 
  
 (vi) Continuance coverage and premium payment by ArcSoft under ArcSoft’s group insurance programs for Executive and his
family members for the greater term of (A) 24 months after the date of termination, (B) the remainder of the Term of this Agreement; 
  
 (vii) Any unreimbursed business expenses or dues described in this Agreement; 
  
 (viii) Financial aids to subsidize the exercise of all options Executive has under this Agreement and the Original
Agreement, and any options granted to him thereafter. 
  
 (c)
Termination by Executive without Good Reason If this Agreement and Executive’s employment hereunder is terminated by Executive without any Good Reason pursuant to Section 8(f) by written notice to ArcSoft before the expiration of the
Term pursuant to Section 8(g), Executive shall receive: 
  
 (i)
Executive’s then Base Salary paid as of the date of termination; and 
  
 (ii) A single lump sum severance payment equal to the greater amount of (A) Executive’s then Base Salary for 2 full years, (B) Executive’s then Base Salary for the remainder Term of this Agreement; and

  
 (iii) 50% of any then unvested Stock Options including
Options under this Agreement and Original Agreement, and any further grants thereafter, for 12 months after the date of termination. Any forfeiture provisions of any Restricted Stocks (if any) shall lapse immediately; and 
  
 (iv) Financial aids to subsidize the exercise of all options Executive has
under this Agreement and the Original Agreement, and any options granted to him thereafter; and 
  
 (v) Any earned but unpaid Bonus for the preceding fiscal year; and 
  
 (vi) Vacation accrued but unpaid as of the date of termination; and 
  
 (vii) Continuance coverage and premium payment by ArcSoft under
ArcSoft’s group insurance programs for Executive and his family members for 6 months; and 
  

 9 

 (viii) Any unreimbursed business expenses or dues described in this Agreement. 
  
 (d) Termination because of Death and Disability of Executive ArcSoft
shall pay to the Executive’s surviving spouse, children and/or family trust (or estate, if none), in the event of the death of Executive, pay to Executive in the event of Disability, the payment described under Section 9 (b). Executive’s
rights under the benefit plans of ArcSoft shall be determined under the provisions of the plans. 
  
 (e) No Mitigation; No Setoff Executive shall not be required to seek other employment or otherwise mitigate the value of any severance benefits
described under this Agreement. The amounts payable hereunder shall not be subject to setoff, counterclaim, defense or other right which ArcSoft may have against Executive. 
  

	10.	Change of Control 

  
 (a) Change of Control For purposes of this Agreement, Change of Control shall mean: 
  
 (i) ArcSoft merges or consolidates with any other corporation (other than one of ArcSoft’s wholly owned subsidiaries),
as a result of which ArcSoft is not the surviving company, or the shares of ArcSoft voting stock outstanding immediately prior to such transaction do not constitute, become exchanged for or converted into more than 50% of the Voting Shares of the
merged or consolidated company (as defined below); 
  
 (ii)
Through transactions other than a merger or consolidation, as a result of which ArcSoft is not the surviving company, or the shares of ArcSoft voting stock outstanding immediately prior to such transaction do not constitute, become exchanged for or
converted into more than 50% of the Voting Shares of the new surviving company; 
  
 (ii) ArcSoft sells or disposes all or substantially all of its assets to any other person or entity; 
  
 (iii) The approval by ArcSoft’s shareholders of a plan of complete liquidation of ArcSoft; 
  
 (iv) Any third person or entity together with its affiliates and associates
shall become directly or indirectly the Beneficial Owner, as defined by Rule 13(d)-3 under Securities Exchange Act of 1934, of at least 35% of the Voting Shares of ArcSoft’s then outstanding voting securities. 
  
 For purposes of this Agreement, Voting Shares shall mean the combined voting
securities entitled to vote in election of directors of a corporation, including ArcSoft, the merged or consolidated, or the new surviving company. 
  
 (b) Severance for Termination by Executive upon Change of Control Executive shall have the right to terminate this Agreement and his employment
hereunder with notice upon occurrence of any event set forth in Section 10 (a), provided that a comparable position is secured with and this Agreement is assumed by the surviving or new company and Executive elects not to take it. Executive shall
receive the followings upon such termination: 
  
 (i) On the date
of such Change of Control, 50% of any remaining unvested shares subject to the Stock Option and other equity plans shall be immediately vested and 

  

 10 

 
exercisable for 12 months, and any forfeiture provisions of any Restricted Stocks (if any) shall lapse immediately; 
  
 (ii) Financial aids to subsidize the exercise of the above exercisable
options; 
  
 (iii) A single lump sum severance payment equal to
the greater amount of (A) Executive’s then Base Salary for 2 full years, (B) Executive’s then Base Salary for the remainder Tenn of this Agreement; 
  

(iv) Any earned but unpaid Bonus for the preceding fiscal year; 
  
 (v) Any accrued but unpaid vacation; 
  
 (vi) Continuance coverage and premium payment by ArcSoft or the surviving company under the group insurance programs of
ArcSoft or the surviving company for Executive and his family members for 6 months; 
  
 (vii) Any unreimbursed business expenses or dues described in this Agreement. 
  
 (c) Termination and Constructive Termination upon Change of Control Executive shall have the right to terminate this Agreement and his employment
hereunder with notice upon occurrence of any event set forth in Section 10 (a), if ArcSoft fails to obtain a comparable position with the surviving or new company, and/or it does not assume this Agreement in its entirety. And, if ArcSoft or the
surviving or new company elects to terminate this Agreement and Executive’s employment hereunder upon occurrence of any event set forth in Section 10 (a), Executive shall receive the followings upon such termination: 
  
 (i) Any vacation accrued but unpaid; 
  
 (ii) The earned but unpaid Bonus for the preceding fiscal year before the
date of termination, and Bonus for the current fiscal year; 
  
 (iii) A single lump sum severance payment equal to 4 full years of Executive’s then Base Salary; 
  
 (iv) Any forfeiture provision of any Restricted Stock (if any) shall lapse and such Restricted Stock shall become fully vested; 
  
 (v) Acceleration of the vesting and exercisability of all unvested or
unexercisable Stock Options and any options he has under this Agreement or the Original Agreement, or granted to him thereafter, that shall become fully vested and immediately exercisable for 24 months from the date of termination; 
  
 (vi) Financial aids to subsidize the exercise of the above exercisable
options; 
  
 (vii) Continuance coverage by the surviving or new
company under its group insurance programs for Executive and his family members for the greater term of (A) 24 months after the date of termination, (B) the remainder of the Term; 
  
 (viii) Any unreimbursed business expenses or dues described in this Agreement. 
  
 If all or any portion of the amounts payable to Executive on his behalf under
this Agreement or otherwise subject to any tax imposed by the Code (or similar state tax and/or assessment), ArcSoft or its successor shall pay Executive an amount necessary to place him in the same after-tax position as he would have been in had no
such excise tax been imposed. The amount payable pursuance to the preceding sentence shall be increased to the extent necessary to pay income and excise taxes due on such amount. The determination of the amount of any such tax equalization shall be
made by the independent accounting firm employed by ArcSoft or its successor. ArcSoft or its successor shall be responsible for all charges of any Accountant or alike. 
  

 11 

	11.	Liability Insurance 

  
 (a) Directors and Officers Liability Insurance ArcSoft shall maintain a directors and officers liability insurance in the amount of no less than $5
Million to cover Executive both during and, while potential liability exists, after the Term of this Agreement in the same amount and to the same extent, as ArcSoft covers its other officers and directors. 
  
 (b) Indemnification ArcSoft shall during and after the Term of this
Agreement indemnify and hold harmless Executive to the fullest extent permitted by applicable law with regard to actions or inactions taken by Executive in performance his duties as an officer, director and employee of ArcSoft and its subsidiaries
or affiliates or as a fiduciary of any benefit plan of ArcSoft and its subsidiaries or affiliates. 
  

	12.	Arbitration 

  
 (a) Agreement The Parties agree that any dispute or controversy arising out of, relating to, or in connection with this Agreement, or the
interpretation, validity, construction, performance, breach, or termination thereof, shall be settled by confidential, final and binding arbitration conducted in Santa Clara, California or such other location agreed by the Parties hereto, in
accordance with the National Rules for the Resolution of Employment Disputes then in effect of the American Arbitration Association. The decisions of the arbitrator shall be final, conclusive and binding on the Parties to the arbitration. Judgment
may be entered on the arbitrator’s decision in any court having jurisdiction. The Parties will be entitled to reasonable discovery of essential matters as determined by the arbitrator. In the arbitration, the Parties will be entitled to all
remedies that would have been available if the matter were litigated in a court of law. 
  
 (b) Governing Law The arbitrator shall apply California law to the merits of dispute or claim, without reference to rules of conflicts of law. 
  
 (c) Costs and Fees of Arbitration The Parties hereby agree that all of the fees, if any, and expenses of such
arbitration, and Executive’s expenses, including attorneys’ fees, incurred in connection with the arbitration regardless of the final outcome, shall be borne by ArcSoft. The Parties further agree that the prevailing party may seek court
judgment to enforce the arbitral decision against the other party and the other party shall bear the costs and fees incurred hereof. 
  

	13.	Miscellaneous 

  
 (a) Entire Agreement This Agreement represents the entire understanding and agreement between ArcSoft and Executive concerning Executive’s
employment relationship with ArcSoft, and supersedes and replaces any and all prior agreements and understanding concerning Executive’s employment relationship with ArcSoft entered into prior to the date hereof. This Agreement may not be
amended or modified except in writing by the Parties. 
  
 (b)
Notices Any notices or other communications under this Agreement shall be in writing, signed by the party making the same, and shall be delivered by personally or sent by certified or registered mail, postage prepaid, addressed as follows:

  

 12 

			
	If to Executive:	 	At the last residential address known by ArcSoft
		
	If to ArcSoft:	 	 ArcSoft, Inc.
 46601 Fremont Blvd.
 Fremont, CA 94538
 Attn.: Chairman of Board

  
 (c)
Severability In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision.

  
 (d) Governing Law This Agreement shall be interpreted
and enforced in accordance with the laws of the State of California, except that any arbitration shall be governed by the Federal Arbitration Act. 
  
 IN WITNESS WHEREOF, the undersigned have executed this Agreement. 
  

									
	 ARCSOFT, INC.
	 	 	 	 EXECUTIVE

					
	By:	 	 /s/ David C. Nagel
	 	 	 	By:	 	 /s/ Michael Hui Deng

	 	 	 David C. Nagel, Chairman of Board
	 	 	 	 	 	Michael Hui Deng
					
	 	 	 	 	 	 	 Address:
	 	 5465 Ridgewood Drive
 Fremont, CA
94555

  

 13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]