The board of directors at Electronics for Imaging apparently batted 1.000 at the company’s annual meeting Friday when all the directors were reelected and all the proposals the board submitted to its shareholders for a vote passed.

But the perfect record obscured the fact that the board decided at the last minute to pull a proposal asking shareholders to approve a one-time “fair-value” option exchange program for the company’s top executives, according to a filing the company made with the SEC Monday.

The exchange would have allowed the officers to turn in underwater stock option grants in exchange for a lesser number of restricted shares. A similar proposal for all other employees remained on the agenda and was OK’d by shareholders.

Was the exchange program for the top brass pulled because the early proxy voting indicated it would be voted down? We asked the company, but failed to get a response.

Perhaps investors, having seen EFI’s stock price lose value over each of the last three years—it dived 57 percent in 2008 alone—were not in a giving mood when it came to the company’s leaders.

NetApp asked its shareholders to approve a proposal to allow a “one-time option exchange” for its employees at a special meeting held April 21. The measure was approved, according to a filing May 5 that detailed the terms of the exchange program. What wasn’t known until today was just how close the company came to losing that vote.

In its annual 10-K filing with the SEC Wednesday, the Sunnyvale supplier of data storage systems and services revealed the vote totals. The number of shares voted in favor of the option repricing was 129,568,703, which represented 50.3 percent of the total shares voted. The number of shares voted against the proposal was 1127,715,080, which represented 49.6 percent. The number of shares that voted to abstain on the matter was 75,253, which represented 0.03 percent.

As shareholder votes go, it doesn’t get much closer than this. In its argument in favor of the measure, NetApp’s board said that 95% of its employees hold stock options which are underwater as the end of February, making them unable to “provide the retention or incentive value” they were designed for.” Shareholders holding a significant amount of NetApp stock didn’t seem to care.

LeapFrog Enterprises, the maker of technology based educational toys, changed its bylaws at its annual shareholder meeting held June 4 to allow shareholders to fill vacancies that occur on the company’s board of directors.

The proposal, to which the board took no position either pro or con, was submitted by Mollusk Holdings, an entity controlled by Oracle founder and Chief Executive Larry Ellison. Through Mollusk, Ellison owns some 16.1 million LeapFrog shares, or 52.4 percent of its outstanding stock.

When the bylaw change takes effect, Ellison will be able to name whomever he likes to replace any vacancies on the board created by directors who “resign or otherwise depart” or to fill “newly created directorships.”

Ellison also wants the company to cease being governed by a part of corporate law in Delaware, where LeapFrog is incorporated, which restricts “business combinations and certain other transactions between us and any holder of 15% or more of (LeapFrog’s) outstanding voting stock.”

When that change takes effect after a 12-month waiting period, who knows what Ellison might have in mind for LeapFrog. Whatever it is it will no doubt be, as always, educational.

Ellison also wanted the right of any shareholder holding “at least 25% of the voting power” of LeapFrog’s outstanding stock to call a special shareholder meeting. In addition to Ellison, the only other shareholder who could meet that hurdle is one-time junk-bond financier, felon and philanthropist, Michael Milkin, who owns a 31 percent stake in LeapFrog.

There’s no way of knowing whether acceptance of these measures by the board was a quid pro quo in return for a special meeting called for August at which shareholders will be asked to approve an option repricing plan that would apply to all employees, executives and directors included.

Shares of LeapFrog, which have lost value every year since 2004, are down 22 percent more so far in 2009. Ellison’s stake, which was worth more than $750 million when LeapFrog shares closed at their all-time high of $46.54, were worth $44 million today when LeapFrog shares closes at $2.72.

Atmel CEO Steve Laub told employees of the San Jose chip maker that its board has agreed to ask shareholders to approve a “one-time” stock option exchange program at its annual meeting scheduled for May 20 that would commence sometime within 12 months following the vote.

“(L)ike many other companies in the technology industry, (Atmel) has recently experienced a substantial decline in its stock price,” the board explains in its proposal for the exchange. The company cites in its proxy the same forces named by other companies that have initiated option exchanges: the drop in global demand for chips along with the industry’s excess manufacturing capacity.

However, in the interests of full disclosure, the company adds that “stockholders should be aware that in fall 2008 an unsolicited joint proposal to acquire the Company was made by two of our competitors, which was subsequently withdrawn. One of those competitors later announced its intention to elect a board slate at Atmel’s 2009 Annual Meeting of Stockholders, and subsequently withdrew its slate of directors and terminated its consideration of a potential transaction with Atmel.”

In October, Atmel’s board turned down an unsolicited proposal from Microchip Technology and ON Semiconductor to buy it for $5 a share, saying at the time the offer was “inadequate in multiple respects, including value, conditionality and complexity, and is not in the best interests of Atmel’s stockholders.”

Since then, Atmel’s shares have traded at an average of $3.49 and as low as $2.54.

Details of the exchange have yet to be devised, including whether or not the old options were to be replaced by a lesser number of new options or restricted stock, the method preferred by Zoran, another local chip company that also announced an options exchange proposal today.

Sunnyvale chip-maker Zoran’s board of directors last week approved a plan to exchange shares held in underwater options for a lesser number of shares of restricted stock, according to a preliminary proxy filing the company made today in advance of its June 26 annual meeting, where it will ask shareholders to approve the plan.

“Like many semiconductor companies, our stock price has experienced a significant decline driven primarily by the impact the worldwide economic downturn has had on our business,” says the company in its presentation of the proposal “As a result, many of our employees
hold options with exercise prices significantly higher than the current market price of our common stock.”

Of the 8.4 million shares covered by all the outstanding options at Zoran as of April 23, 2.1 million had exercise prices ranging from $16.22 per share to $29.13 per share, while the closing price of Zoran’s stock that day was $9.03. “These ‘out-of-the-money’ options are no longer effective as performance and retention incentives,” the company argues.

The company is limiting the options that may be exchanged to those that were granted more than two years before the exchange commences and that will have a remaining term of life of more than two years as of that date, as that will also be the vesting period for the newly issued stock units.

The exchange will also be limited to options with an exercise price higher than the highest closing price of Zoran’s stock during the previous 52 weeks. Currently, that is $15.81, the closing price on June 5, 2008.

Glu Mobile, the San Mateo maker of games for mobile phones, filed details today of its plan to offer its employees the opportunity to trade in their underwater options for new ones priced to reflect the stocks current trading value, which as of Wednesday’s close was 59 cents per share.

Glu is offering to exchange options for any employee in the U.S. and the United Kingdom — except for its executive officers and directors on its board — that are priced at $1.25 or more.

For options priced from $1.25 to $1.99, the company is offering a one-for-one exchange for shares to be priced in about a month. The exchange ratio gets progressively smaller as the option strike price grows higher, up to a one-for-four exchange on any options priced at $5.95 or more.

In December, Glu Mobile reported that it’s chief executive, Greg Ballard, had requested a 25 percent cut in his $375,000 salary, which basically undid the pay raise he’d received the year before. The news was delivered the same day the company announced it would be making an unspecified cut in the number of its employees. Glu had 550 employees as of Feb. 28, up from 417 the year before.

Part of that increase came from Glu’s $38.8 million acquisition of mobile-game publisher Superscape in March 2008. Glu wrote off all of the goodwill related to that transaction at the end of December.

ShoreTel, the Sunnyvale telecommunications company, filed news today of a “restructuring plan to lower its cost structure and improve efficiencies by reducing its worldwide workforce by approximately 9 percent.” That would be equal to about 33 employees based on the company’s last published headcount of 365 as of June 30. The company expects the terminations, which are to be completed by the end of this quarter, to cost between $400,000 and $600,000, which will be charged to its recently ended fiscal 2009 third quarter ended March 31.

No word on how many of the employees being let go took part in an option exchange program completed in Feburary that let them trade in some underwater options for new options priced at $4.82. But all five of the company’s top executives participated. About the same time those same executives were also offered “retention incentive agreements” that promised certain “termination benefits” that replaced their existing severance agreements.

Intel grabbed headlines today announcing its first-ever option exchange program that helped balance its implementation of an across-the-board salary freeze. But joining Intel today in announcing a plan to reprice employee stock option plan was NetApp, the Sunnyvale provider of network storage appliances, which is asking its shareholders to vote on a plan to reprice options with exercise prices of $22 or higher.

In its argument in favor of the measure, NetApp’s board said that 95% of its employees hold stock options which are underwater as the end of February, making them unable to “provide the retention or incentive value” they were designed for.

NetApp and Intel join more than 100 other companies, including Silicon Valley names such as Advanced Micro Devices and eBay, in asking shareholders to allow for the repricing of existing options, according to Bloomberg. With a growing number of companies enacting exchanges it becomes easier to believe NetApp’s claim that “the market for key employees remains extremely competitive, notwithstanding the current economy.”

Add eBay to the list of  technology company seeking to rescue its employees underwater options. Last week, the online auctioneer’s board of directors approved putting two proposals before shareholders at the company’s annual meeting on April 29 that would facilitate the exchange of underwater options for a smaller number of restricted shares  that will retain value as long as eBay’s stock price does.

“Like many companies, we have experienced a significant decline in our stock price over  the last year in light of the current global financial and economic crisis,” states the board in its extensive argument in favor of the plans.

However,  while eBay shares have indeed fallen over the last year, hitting a 52-week low of $9.91 on Friday,  the company’s stock price has been under pressure for years now since peaking at $58.17 at the end of 2004. They lost 26 percent in 2005, 30 percent in 2006, gained gained 10 percent in 2007, and fell 58 percent in 2008. So far this year they are down another 26 percent.

This may explain the shaken belief in the stock option as a reliable instrument of compensation, and why the board has opted to replace stock options with restricted stock, which, “provides value to our employees even if current economic conditions continue and our stock price fails to increase further.”

The company’s top executives, who’ve been getting restricted stock in addition to stock options for years now, won’t get to exchanged any of their underwater options for restricted stock, “because we believe that their compensation should remain at greater risk based on our stock price.”

Risk taking on the part of the executives named in the company’s compensation table later in the same filing seems a bit less risky when you consider that they were granted among them some $23 million in salary, bonus payments, restricted stock and other perks, along with options valued at another $23 million, that are also underwater.

Starbucks, which wants to enact a “one-time stock option exchange” in light of its shares losing about three-quarters of their value over the last couple of years, decided to delete one sentence from its 2005 stock plan following “discussions with (shareholder advisor) RiskMetrics Group in connection with its review” of the shareholder approval it is seeking at the coffee retailer’s annual meeting next month.

You can read the offending sentence for yourself, but the gist is, shares of stock in option grants that were returned by exercisers to satisfy taxes used to go back into the stock option kitty, and thereby could be issued again.

After a meeting of the compensation committee of Starbuck’s board yesterday, that will no longer be the case.

Starbucks is seeking to exchange millions of underwater options with newly priced ones. The company had 84.5 million shares tied up in outstanding options as of Dec. 5 which had a weighted average exercise price of $17.48. Its shares closed today at $9.58.