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PATRIOT SCIENTIFIC CORPORATION
EXHIBIT 10.13
1996 Stock Option Plan
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PATRIOT SCIENTIFIC CORPORATION
1996 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The purpose of this 1996 Stock Option Plan ("Plan") of Patriot Scientific
Corporation, a Delaware corporation ("Company") is to provide the Company with a
means of attracting and retaining the services of selected employees, directors
and consultants. The Plan is intended to advance the interests of the Company by
affording to selected employees, directors and consultants, upon whose skill,
judgment, initiative and efforts the Company is largely dependent for the
successful conduct of its business, an opportunity for investment in the Company
and the incentives inherent in stock ownership in the Company. For purposes of
this Plan, the term Company shall include subsidiaries, if any, of the Company.
2. LEGAL COMPLIANCE.
It is the intent of the Plan that all options granted under it ("Options") shall
be either "Incentive Stock Options" ("ISOs"), as such term is defined in Section
422 of the Internal Revenue Code of 1986, as amended ("Code"), or non-qualified
stock options ("NQOs"); provided, however, ISOs shall be granted only to
employees of the Company. An Option shall be identified as an ISO or an NQO in
writing in the document or documents evidencing the grant of the Option. All
Options that are not so identified as ISOs are intended to be NQOs. It is the
further intent of the Plan that it conform in all respects with the requirements
of Rule 16b-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended ("Rule 16b-3"). To the extent that any aspect
of the Plan or its administration shall at any time be viewed as inconsistent
with the requirements of Rule 16b-3 or, in connection with ISOs, the Code, as
the same shall be amended from time to time, such aspect shall be deemed to be
modified, deleted, or otherwise changed as necessary to ensure continued
compliance with such provisions. Failure to conform with the requirements of
Rule 16b-3 or the Code, shall not invalidate this Plan or any options granted
pursuant hereto.
3. ADMINISTRATION OF THE PLAN.
3.1 PLAN COMMITTEE.
The Plan shall be administered by a committee ("Committee"). The members of the
Committee shall be appointed from time to time by the Board of Directors of the
Company ("Board") and shall consist of not less than two (2) directors. All of
the members of the Committee shall be disinterested persons. The term
"disinterested person," as used in this Plan, shall mean a director: (i) who was
not during the one (1) year prior to service as an administrator of the Plan
granted or awarded equity securities pursuant to the Plan or any other plan of
the Company or any of its Affiliates entitling the participants therein to
acquire equity securities of the Company or any of its Affiliates except as
permitted by Rule 16b-3(c)(2)(i) ("16b-3(c)(2)(i)") promulgated under the
Securities Exchange Act of 1934, as amended; or (ii) who is otherwise considered
to be a "disinterested person" in accordance with Rule 16b-3(c)(2)(i), or any
other applicable rules, regulations or interpretations of the Securities and
Exchange Commission. Any such persons shall otherwise comply with the
requirements of Rule 16b-3 promulgated under the Exchange Act. Should the Board
not appoint a Committee or for any other reason should a Committee not be
properly appointed or in existence, then the entire Board of Directors shall
constitute the Committee for the purposes of administration of this Plan.
3.2 GRANTS OF OPTIONS BY THE COMMITTEE.
In accordance with the provisions of the Plan, the Committee, by resolution,
shall select those eligible persons to whom Options shall be granted
("Optionees"); shall determine the time or times at which each Option shall be
granted, whether an Option is an ISO or an NQO and the number of shares to be
subject to each Option; and shall fix the time and manner in which the Option
may be exercised, the Option exercise price, and the Option period. The
Committee shall determine the form of option agreement to evidence the foregoing
terms and conditions of each Option, which need not be identical, in the form
provided for in Section 7. Such option agreement may include such other
provisions as the Committee may deem necessary or desirable consistent with the
Plan, the Code and Rule 16b-3.
All options granted under this Plan are subject to, and may not be exercised
before, the approval of this Plan by the holders of a majority of the Company's
outstanding shares on or before the expiration of twelve months from the date of
adoption of this Plan by the Board, and if such approval is not obtained, all
Options previously granted shall be void.
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3.3 COMMITTEE PROCEDURES.
The Committee from time to time may adopt such rules and regulations for
carrying out the purposes of the Plan as it may deem proper and in the best
interests of the Company. The Committee shall keep minutes of its meetings and
records of its actions. A majority of the members of the Committee shall
constitute a quorum for the transaction of any business by the Committee. The
Committee may act at any time by an affirmative vote of a majority of those
members voting. Such vote may be taken at a meeting (which may be conducted in
person or by any telecommunication medium) or by written consent of Committee
members without a meeting.
3.4 FINALITY OF COMMITTEE ACTION.
The Committee shall resolve all questions arising under the Plan and option
agreements entered into pursuant to the Plan. Each determination,
interpretation, or other action made or taken by the Committee shall be final
and conclusive and binding on all persons, including, without limitation, the
Company, its shareholders, the Committee and each of the members of the
Committee, and the directors, officers, and employees of the Company, including
Optionees and their respective successors in interest.
3.5 NON-LIABILITY OF COMMITTEE MEMBERS AND OTHERS.
No Committee member, Board member or employee, consultant or advisor of the
Company shall be liable for any action or determination made by him in good
faith with respect to the Plan or any Option granted under it.
4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN.
The Board may, from time to time, make such changes in or additions to the Plan
as it may deem proper and in the best interests of the Company and its
shareholders. The Board may also suspend or terminate the Plan at any time,
without notice, and in its sole discretion.
Notwithstanding the foregoing, no such change, addition, suspension, or
termination by the Board shall (i) materially impair any option previously
granted under the Plan without the express written consent of the optionee; or
(ii) materially increase the number of shares subject to the Plan, materially
increase the benefits accruing to options under the Plan, materially modify the
requirements as to eligibility to participate in the Plan or alter the method of
determining the option exercise price described in Section 8, without
shareholder approval.
5. SHARES SUBJECT TO THE PLAN.
For purposes of the Plan, the Committee is authorized to grant Options to
purchase not more than One Million Five Hundred Thousand (1,500,000) shares of
the Company's common stock, $.00001 par value per share ("Common Stock"), either
treasury or authorized but unissued shares, or the number and kind of shares of
stock or other securities which, in accordance with Section 13, shall be
substituted for such shares of Common Stock or to which such shares shall be
adjusted. The Committee is authorized to grant Options under the Plan with
respect to such shares. Any or all unsold shares subject to an Option which for
any reason expires or otherwise terminates (excluding shares returned to the
Company in payment of the exercise price for additional shares) may again be
made subject to grant under the Plan.
6. OPTIONEES.
ISOs shall be granted only to elected or appointed officers or other key
employees of the Company (as determined by the Committee), whether full-time or
part-time, including, without limitation, members of the Board who are also
officers or key employees at the time of grant. NQOs may be granted to employees
(including officers) and directors of and consultants to the Company. In no
event, however, may a member of the Committee be granted an Option under the
Plan. Any Optionee may hold more than one option to purchase Common Stock,
whether such option is an Option held pursuant to the Plan or otherwise.
7. GRANTS OF OPTIONS.
The Committee shall have the sole discretion to grant Options under the Plan and
to determine whether any Option shall be an ISO or an NQO. The terms and
conditions of Options granted under the Plan may differ from one another as the
Committee, in its absolute discretion, shall determine as long as all Options
granted under the Plan satisfy the requirements of the Plan. Upon determination
by the Committee that an Option is to be granted to an Optionee, a written
option agreement evidencing such Option shall be given to the Optionee,
specifying the number of shares subject to the Option, the Option exercise
price, whether the Option is an ISO or an NQO, and the other individual terms
and conditions of such Option. Such option agreement may incorporate generally
applicable provisions from the Plan, a copy of which shall be provided to all
Optionees at the time of their initial grants under the Plan. The
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Option shall be deemed granted as of the date specified in the grant resolution
of the Committee, and the option agreement shall be dated as of the date of such
resolution.
8. OPTION EXERCISE PRICE.
The price per share to be paid by the Optionee at the time an ISO is exercised
shall not be less than one hundred percent (100%) of the Fair Market Value (as
hereinafter defined) of one share of the optioned Common Stock on the date on
which the Option is granted. No ISO may be granted under the Plan to any person
who, at the time of such grant, owns (within the meaning of Section 424(d) of
the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any parent thereof,
unless the exercise price of such ISO is at least equal to one hundred and ten
percent (110%) of Fair Market Value on the date of grant. The price per share to
be paid by the Optionee at the time an NQO is exercised shall not be less than
eighty-five percent (85%) of the Fair Market Value on the date on which the NQO
is granted, as determined by the Committee.
For purposes of the Plan, the "Fair Market Value" of a share of the Company's
Common Stock as of a given date shall be: (i) the closing price of a share of
the Company's Common Stock on the principal exchange on which shares of the
Company's Common Stock are then trading, if any, on such date, or, if shares
were not traded on such date, then on the next preceding trading day during
which a sale occurred; or (ii) if the Company's Common Stock is not traded on an
exchange but is quoted on NASDAQ or a successor quotation system, (1) the last
sales price (if the Common Stock is then listed as a National Market Issue under
the NASD National Market System) or (2) the mean between the closing
representative bid and asked prices (in all other cases) for the Common Stock on
such date as reported by NASDAQ or such successor quotation system; or (iii) if
the Company's Common Stock is not publicly traded on an exchange and not quoted
on NASDAQ or a successor quotation system, the mean between the closing bid and
asked prices for the Common Stock on such date as determined in good faith by
the Committee; or (iv) if the Company's Common Stock is not publicly traded, the
fair market value established by the Committee acting in good faith. In
addition, with respect to any ISO, the Fair Market Value on any given date shall
be determined in a manner consistent with any regulations issued by the
Secretary of the Treasury for the purpose of determining fair market value of
securities subject to an ISO plan under the Code.
9. CEILING OF ISO GRANTS.
The aggregate Fair Market Value (determined at the time any ISO is granted) of
the Common Stock with respect to which an Optionee's ISOs, together with
incentive stock options granted under any other plan of the Company and any
parent, are exercisable for the first time by such Optionee during any calendar
year shall not exceed $100,000. In the event that an Optionee holds such
incentive stock options that become first exercisable (including as a result of
acceleration of exercisability under the Plan) in any one year for shares having
a Fair Market Value at the date of grant in excess of $100,000, then the most
recently granted of such ISOs, to the extent that they are exercisable for
shares having an aggregate Fair Market Value in excess of such limit, shall be
deemed to be NQOs.
10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.
10.1 OPTION PERIOD.
The option period shall be determined by the Committee with respect to each
Option granted. In no event, however, may the option period exceed ten (10)
years from the date on which the Option is granted, or Five (5) years in the
case of a grant of an ISO to an Optionee who is a ten percent (10%) shareholder
at the date on which the Option is granted as described in Section 8.
10.2 EXERCISABILITY OF OPTIONS AND ACCELERATION OF EXERCISABILITY.
Each Option shall be exercisable in whole or in consecutive installments,
cumulative or otherwise, during its term as determined in the discretion of the
Committee.
10.3 TERMINATION OF OPTIONS.
An Option shall terminate six (6) months after termination of the Optionee's
employment or relationship as a consultant or director with the Company, unless
(i) such termination is due to such person's permanent and total disability,
within the meaning of Section 422(c)(6) of the Code, in which case the Option
may, but need not, provide that it may be exercised at any time within one (1)
year following such termination of employment or relationship as a consultant or
director; or (ii) the Optionee dies while in the employ of or while serving as a
consultant or director to the Company or within not more than six (6) months
after termination of such relationships, in which case the Option may, but need
not, provide that it may be exercised at any time within fifteen (15) months
following the death of the Optionee by the person or persons to whom the
Optionee's rights
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under such Option pass by will or by the laws of descent and distribution; or
(iii) the Option by its terms specifies either (A) that it shall terminate
sooner than six (6) months after termination of the Optionee's employment or
relationship as a consultant or director, or (B) that it may be exercised more
than six (6) months after termination of such relationship with the Company.
This Section 10.3 shall not be construed to extend the term of any Option or to
permit anyone to exercise the Option after expiration of its term, nor shall it
be construed to increase the number of shares as to which any Option is
exercisable from the amount exercisable on the date of termination of the
Optionee's employment or relationship as a consultant or director.
11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.
11.1 WRITTEN NOTICE OF EXERCISE.
An Optionee may elect to exercise an Option in whole or in part, from time to
time, subject to the terms and conditions contained in the Plan and in the
agreement evidencing such Option, by giving written notice of exercise to the
Company, or made by bank wire transfer, at its principal executive office.
11.2 CASH PAYMENT FOR OPTIONED SHARES.
If an Option is exercised for cash, such notice shall be accompanied by a
cashier's check or personal check, or money order, made payable to the Company
for the full exercise price of the shares purchased.
11.3 STOCK SWAP FEATURE.
At the time of the Option exercise, and subject to the discretion of the
Committee to accept payment in cash only, the Optionee may determine whether the
total purchase price of the shares to be purchased shall be paid solely in cash
or by transfer from the Optionee to the Company of previously acquired shares of
Common Stock, or by a combination thereof. In the event that the Optionee elects
to pay the total purchase price in whole or in part with previously acquired
shares of Common Stock, the value of such shares shall be equal to their Fair
Market Value on the date of exercise, determined by the Committee in the same
manner used for determining Fair Market Value at the time of grant for purposes
of Section 8.
11.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND LEGALITY OF
ISSUANCE.
The receipt of shares of Common Stock upon the exercise of an Option shall be
conditioned upon the Optionee (or any other person who exercises the Option on
his or her behalf as permitted by Section 14) providing to the Committee a
written representation that, at the time of such exercise, it is the intent of
such person(s) to acquire the shares for investment only and not with a view
toward distribution. The certificate for unregistered shares issued for
investment shall be restricted by the Company as to transfer unless the Company
receives an opinion of counsel satisfactory to the Company to the effect that
such restriction is not necessary under then pertaining law. The providing of
such representation and such restrictions on transfer shall not, however, be
required upon any person's receipt of shares of Common Stock under the Plan in
the event that, at the time of grant of the Option relating to such receipt or
upon such receipt, whichever is the appropriate measure under applicable federal
or state securities laws, the shares subject to the Option shall be (i) covered
by an effective and current registration statement under the Securities Act of
1933, as amended, and (ii) either qualified or exempt from qualification under
applicable state securities laws. The Company shall, however, under no
circumstances be required to sell or issue any shares under the Plan if, in the
opinion of the Committee, (i) the issuance of such shares would constitute a
violation by the Optionee or the Company of any applicable law or regulation of
any governmental authority, or (ii) the consent or approval of any governmental
body is necessary or desirable as a condition of, or in connection with, the
issuance of such shares.
11.5 SHAREHOLDER RIGHTS OF OPTIONEE.
Upon exercise, the Optionee (or any other person who exercises the Option on his
behalf as permitted by Section 14) shall be recorded on the books of the Company
as the owner of the shares, and the Company shall deliver to such record owner
one or more duly issued stock certificates evidencing such ownership. No person
shall have any rights as a shareholder with respect to any shares of Common
Stock covered by an Option granted pursuant to the Plan until such person shall
have become the holder of record of such shares. Except as provided in Section
13, no adjustments shall be made for cash dividends or other distributions or
other rights as to which there is a record date preceding the date such person
becomes the holder of record of such shares.
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11.6 HOLDING PERIODS FOR TAX PURPOSES.
The Plan does not provide that an Optionee must hold shares of Common Stock
acquired under the Plan for any minimum period of time. Optionees are urged to
consult with their own tax advisors with respect to the tax consequences to them
of their individual participation in the Plan.
12. SUCCESSIVE GRANTS AND SUBSTITUTION.
12.1. SUCCESSIVE GRANTS.
Successive grants of Options may be made to any Optionee under the Plan.
12.2 OPTIONS IN SUBSTITUTION FOR OTHER OPTIONS.
The Committee may, in its sole discretion, at any time during the term of this
Plan, grant new options to an employee under this Plan or any other stock option
plan of the Company on the condition that such employee shall surrender for
cancellation one or more outstanding options which represent the right to
purchase (after giving effect to any previous partial exercise thereof) a number
of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Options may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Corporation as a result of a merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the Company or an Affiliated Corporation of the assets of the employing
corporation, or the acquisition by the Company or an Affiliated Corporation of
stock of the employing corporation as the result of which such other corporation
becomes an Affiliated Corporation.
13. ADJUSTMENTS.
If the outstanding Common Stock shall be hereafter increased or decreased, or
changed into or exchanged for a different number or kind of shares or other
securities of the Company or of another corporation, by reason of a
recapitalization, reclassification, reorganization, merger, consolidation, share
exchange, or other business combination in which the Company is the surviving
parent corporation, stock split-up, combination of shares, or dividend or other
distribution payable in capital stock or rights to acquire capital stock,
appropriate adjustment shall be made by the Committee in the number and kind of
shares for which options may be granted under the Plan. In addition, the
Committee shall make appropriate adjustment in the number and kind of shares as
to which outstanding and unexercised options shall be exercisable, to the end
that the proportionate interest of the holder of the option shall, to the extent
practicable, be maintained as before the occurrence of such event. Such
adjustment in outstanding options shall be made without change in the total
price applicable to the unexercised portion of the option but with a
corresponding adjustment in the exercise price per share.
In the event of the dissolution or liquidation of the Company, any outstanding
and unexercised options shall terminate as of a future date to be fixed by the
Committee.
In the event of a Reorganization (as hereinafter defined), then,
a. If there is no plan or agreement with respect to the Reorganization
("Reorganization Agreement"), or if the Reorganization Agreement does
not specifically provide for the adjustment, change, conversion, or
exchange of the outstanding and unexercised options for cash or other
property or securities of another corporation, then any outstanding and
unexercised options shall terminate as of a future date to be fixed by
the Committee; or
b. If there is a Reorganization Agreement, and the Reorganization
Agreement specifically provides for the adjustment, change, conversion,
or exchange of the outstanding and unexercised options for cash or
other property or securities of another corporation, then the Committee
shall adjust the shares under such outstanding and unexercised options,
and shall adjust the shares remaining under the Plan which are then
available for the issuance of options under the Plan if the
Reorganization Agreement makes specific provisions therefor, in a
manner not inconsistent with the provisions of the Reorganization
Agreement for the adjustment, change, conversion, or exchange of such
options and shares.
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The term "Reorganization" as used in this Section 13 shall mean any
reorganization, merger, consolidation, share exchange, or other business
combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or lease
of all or substantially all of the assets of the Company. Nothing herein shall
require the Company to adopt a Reorganization Agreement, or to make provision
for the adjustment, change, conversion, or exchange of any options, or the
shares subject thereto, in any Reorganization Agreement which it does adopt.
The Committee shall provide to each Optionee then holding an outstanding and
unexercised Option not less than thirty (30) calendar days' advanced written
notice of any date fixed by the Committee pursuant to this Section 13 and of the
terms of any Reorganization Agreement providing for the adjustment, change,
conversion, or exchange of outstanding and unexercised Options. Except as the
Committee may otherwise provide, each Optionee shall have the right during such
period to exercise his Option only to the extent that the Option was exercisable
on the date such notice was provided to the Optionee.
Any adjustment to any outstanding ISO pursuant to this Section 13, if made by
reason of a transaction described in Section 424(a) of the Code, shall be made
so as to conform to the requirements of that Section and the regulations
thereunder. If any other transaction described in Section 424(a) of the Code
affects the Common Stock subject to any unexercised ISO theretofore granted
under the Plan (hereinafter for purposes of this Section 13 referred to as the
"old options"), the Board of Directors of the Company or of any surviving or
acquiring corporation may take such action as it deems appropriate, in
conformity with the requirements of that Code Section and the regulations
thereunder, to substitute a new option for the old option, in order to make the
new option, as nearly as may be practicable, equivalent to the old option, or to
assume the old option.
No modification, extension, renewal, or other change in any option granted under
the Plan may be made, after the grant of such option, without the optionee's
consent, unless the same is permitted by the provisions of the Plan and the
option agreement. In the case of an ISO, optionees are hereby advised that
certain changes may disqualify the ISO from being considered as such under
Section 422 of the Code, or constitute a modification, extension, or renewal of
the ISO under Section 424(h) of the Code.
All adjustments and determinations under this Section 13 shall be made by the
Committee in good faith in its sole discretion.
14. NON-TRANSFERABILITY OF OPTIONS.
An Option shall be exercisable only by the Optionee, or in the event of his
disability, by his guardian(s), conservator(s), or other legal
representative(s), during the Optionee's lifetime. In the event of the death of
the Optionee, an Option shall be exercisable by his legal representative(s),
legatee(s), or heir(s), as the case may be, or by such person(s) as he may
designate as his beneficiary or beneficiaries in a signed statement included as
a part of the option agreement.
An ISO shall not be transferable by the Optionee, either voluntarily or
involuntarily, except by will or the laws of descent and distribution. An NQO
shall not be transferable by the Optionee, either voluntarily or involuntarily,
except by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act, or the rules thereunder. Any attempt to
exercise, transfer or otherwise dispose of an interest in an Option in
contravention of the terms and conditions of the Plan, or of the option
agreement for the Option, shall immediately void the Option.
15. CONTINUED EMPLOYMENT.
As determined in the sole discretion of the Committee at the time of grant and
if so stated in a writing signed by the Company, each Option may have as a
condition the requirement of an Optionee who is an employee of the Company (an
"Employee Optionee") to remain in the employ of the Company, or of its
affiliates, and to render to it his or her service, at such compensation as may
be determined from time to time by it, for a period not to exceed the term of
the Option, except for earlier termination of employment by or with the express
written consent of the Company or on account of disability or death. The failure
of any Employee Optionee to abide by such agreement as to any Option under the
Plan may result in the termination of all of his or her then outstanding Options
granted pursuant to the Plan.
Neither the creation of the Plan nor the granting of Option(s) under it shall be
deemed to create a right in an Employee Optionee to continued employment with
the Company, and each such Employee Optionee shall be and
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shall remain subject to discharge by the Company as though the Plan had never
come into existence. Except as specifically provided by the Committee in any
particular case, the loss of existing or potential profit in options granted
under this Plan shall not constitute an element of damages in the event of
termination of the employment of an employee even if the termination is in
violation of an obligation of the Company to the employee by contract or
otherwise.
16. TAX WITHHOLDING.
The exercise of any option granted under the Plan is subject to the condition
that if at any time the Company shall determine, in its discretion, that the
satisfaction of withholding tax or other withholding liabilities under any
federal, state or local law is necessary or desirable as a condition of, or in
connection with, such exercise or a later lapsing of time or restrictions on or
disposition of the shares of Common Stock received upon such exercise, then in
such event, the exercise of the option shall not be effective unless such
withholding shall have been effected or obtained in a manner acceptable to the
Company.
17. TERM OF PLAN.
17.1 EFFECTIVE DATE.
Subject to shareholder approval, as provided in Section 3.2, the Plan shall
become effective on March 25, 1996, the date of its adoption by the Board.
17.2 TERMINATION DATE.
Except as to options previously granted and outstanding under the Plan, the Plan
shall terminate at midnight on March 24, 2006 and no Option shall be granted
after that time. Options then outstanding may continue to be exercised in
accordance with their terms. The Plan may be suspended or terminated at any
earlier time by the Board within the limitations set forth in Section 4.
18. NON-EXCLUSIVITY OF THE PLAN.
Nothing contained in the Plan is intended to amend, modify, or rescind any
previously approved compensation plans, programs or options entered into by the
Company. This Plan shall be construed to be in addition to and independent of
any and all such other arrangements. Neither the adoption of the Plan by the
Board nor the submission of the Plan to the shareholders of the Company for
approval shall be construed as creating any limitations on the power or
authority of the Board to adopt, with or without shareholder approval, such
additional or other compensation arrangements as the Board may from time to time
deem desirable.
19. GOVERNING LAW.
The Plan and all rights and obligations under it shall be construed and enforced
in accordance with the laws of the State of California.
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By signature below, the undersigned officers of the Company hereby certify that
the foregoing is a true and correct copy of the 1996 Stock Option Plan of the
Company.
DATED: March 25, 1996
PATRIOT SCIENTIFIC CORPORATION
By /s/ ELWOOD G. NORRIS
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Elwood G. Norris, President and CEO
By /s/ ROBERT PUTNAM
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Robert Putnam, Secretary
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CERTIFICATION OF PLAN ADOPTION
I, the undersigned Secretary of this Corporation, hereby certify that the
foregoing 1996 Incentive Stock Option Plan was duly approved by the requisite
number of holders of the issued and outstanding common stock of this corporation
as of the below date.
Date of Shareholder Approval: May 17, 1996.
/s/ ROBERT PUTNAM
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Robert Putnam, Secretary
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