THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

(ENER)

10/17/2005 Proxy Information

Chevron Corporation. In December 2004, in consideration of the expansion of the scope of licenses to Cobasys, the 50-50 joint venture between Ovonic Battery and Chevron, ECD received through its Ovonic Battery subsidiary an option to purchase 4,376,633 shares of ECD Common Stock owned by a subsidiary of Chevron at $4.55 per share. The option was exercised in May 2005 for a total purchase price of $19,913,680 and the shares acquired were cancelled and returned to authorized and unissued status. ECD received $4,675,000 restructuring payment from Chevron in December 2004 in connection with the transfer to ECD of Chevron's interest in Ovonic Hydrogen Systems.

Ovonic Hydrogen Systems (formerly known as Texaco Ovonic Hydrogen Systems). In December 2004, a subsidiary of Chevron transferred its 50% interest in Ovonic Hydrogen Systems to ECD in consideration of relieving Chevron of any continuing funding obligation. Stanford R. Ovshinsky and Robert C. Stempel, directors of ECD, are members of the Management Committee of Ovonic Hydrogen Systems. For the year ended June 30, 2005, ECD recorded revenues of $4,089,000 from Ovonic Hydrogen Systems during the period it was co-owned and funded by Chevron primarily for advanced product development work.

Cobasys. Stanford R. Ovshinsky and Robert C. Stempel, directors of ECD and Ovonic Battery, are members of the Management Committee of Cobasys. For the year ended June 30, 2005, Ovonic Battery recorded revenue of $2,112,000 from Cobasys primarily for advanced product development work.

Ovonyx. Stanford R. Ovshinsky and Robert C. Stempel, directors of ECD, are directors of Ovonyx. ECD owns 41.7% of Ovonyx. ECD recorded revenues of $272,000 from Ovonyx for the year ended June 30, 2005 for services provided to Ovonyx. ECD made a $100,000 payment to Ovonyx in fiscal year 2005 under a license from Ovonyx.

Other Arrangements. Herbert Ovshinsky, Stanford R. Ovshinsky's brother, is employed by ECD as Director of the Production Technology and Machine Building Division working principally in the design of manufacturing equipment. He received $200,013 in salary during the fiscal year ended June 30, 2005.

Benjamin Ovshinsky, Stanford R. Ovshinsky's son, is employed by ECD as its business representative for the Western United States. He received compensation of $85,010 during the fiscal year ended June 30, 2005.