February 25, 2005 To: EST Board of Directors From: Employee/Director Stock Option Committee Subject: Recommendations


February 25, 2005

To: EST Board of Directors

From: Employee/Director Stock Option Committee

Subject: Recommendations

The committee recommends to the Board of Directors that the individual employees anddirectors with no less than three years continuous tenure named herein be granted stockoptions, effective February 25, 2005, in the amounts tabulated and subject to theconditions herein delineated and in accordance with the Electronic Systems TechnologyStock Option Plan for Directors, Officers, and Employees, as ratified by shareholder voteon June 7, 1996.



Option Shares

Melvin Brown Director 25,000
Jon A. Correio Director 25,000
Tom Kirchner Director 25,000
John L. Schooley Director 25,000
Robert Southworth Director 25,000
Alan B. Cook Employee 15,000
Robert N. Croft Employee 15,000
Eric P. Marske Employee 15,000
David B. Strecker Employee 15,000
Gary L. Schmitz Employee 5,000
George M. Stoltz Employee 5,000


Recommended Option Conditions:

1. Each option grant will be at an exercise price per share equal to market price atthe time of grant. Market price will be the mean of bid and ask prices recorded on theNational Daily Quotation Service “pink sheet” for the effective date of theoption grant. If no activity is reported for that date the “pink sheet” withclosest preceding date with recorded activity will establish market price.

2. Each grant must be exercised by the optionee not later than three years (1095) daysfrom the date of the grant.

3. Options will be exercised in minimum blocks of 5,000 shares at any one time. Optionsnot exercised within the three year (1095 day) period from option grant will terminate andnot carry over.

4. Rule 144 of the Securities Act of 1933 as amended will apply to all stock acquiredby exercise of the option grants. Rule 144 prohibits resale for a period of one year afteracquisition and restricts resale quantities for one additional year. Each optionee shallmake an independent inquiry as to all other restrictions.

5. The company shall have the right, but not obligation, to register all or any portionof the optioned shares at any time. The intent of registration is to relieve the Rule 144resale restrictions which may still be in force at the time of registration.

6. In the event of termination of employment or board membership, the optionee shallhave a period of ninety days in which to exercise any options which he has been granted,except under the conditions of paragraph 7 and 8, which shall supersede the provisions ofthis paragraph. Unless otherwise extended by the board, all options terminated at the endof the ninety-day period.

7. If recapitalization and/or similar events result in the change of share unit values,the optionee will receive equivalent shares. If the company is not the surviving entity byvirtue of merger, acquisition, etc., the optionee will have a window of ten days in whichto exercise his option. The last day of the window will be five days prior to the legalconclusion of any such event.

8. In the event of company acquisition, merger, reorganization and other transactionsaltering the company structure any outstanding options then in force must be immediatelyexercised.

9. Option grants are not transferable or assignable except to an employee’s estate inaccordance with the laws of inheritance in the event of optionee’s death.

10. All facets of the stock option program shall be appropriately documented inaccordance with the advice of the company’s legal counsels and shall comply with allrelevant legal requirements in the State of Washington and all Securities and ExchangeCommission rules, regulations, and disclosure requirements.