EXHIBIT 99.8
INCENTIVE STOCK OPTION AGREEMENT
THIS INCENTIVE STOCK OPTION AGREEMENT ("Agreement") is made by and
between Patriot Scientific Corporation, a Delaware corporation, (the
"Corporation"), and _________________ (the "Optionee").
NOW, THEREFORE, in consideration of the mutual benefit to be derived
herefrom, the Corporation and Optionee agree as follows:
1. Grant of Option. The Corporation hereby grants to Optionee, subject
to all the terms and provisions of the Patriot Scientific Corporation, 2003
Stock Option Plan dated __________, 2003, as such Plan may be hereinafter
amended, a copy of which is attached hereto and incorporated herein by this
reference (the "Plan"), the right, privilege and option ("Option") to purchase
________ shares of its common stock ("Stock") at _______ per share, in the
manner and subject to the conditions provided hereinafter and in the Plan and
any amendments thereto and any rules and regulations thereunder.
2. Time of Exercise of Option. The Option shall vest in Optionee and
may be exercised by Optionee as set forth on Exhibit "A" hereto. Any exercise
may be with respect to any part or all of the shares then exercisable pursuant
to such Option. Except as otherwise provided in the Plan, such Option must be
exercised within the earlier of (i) 5 years after the date of the grant, or (ii)
three months after Optionee's termination of employment with either the
Corporation, or a Parent or Subsidiary thereof; provided, however, such rights
shall be extended as more fully set forth in Section 3.3 of the Plan in the case
of Optionee's death. In no event shall the Corporation be required to transfer
fractional shares to Optionee or those entitled to Optionee's rights herein.
3. Method of Exercise. The Option shall be exercised by Optionee as set
forth in Sections 5.4 and 5.5 of the Plan.
4. Restrictions on Exercise and Delivery. The exercise of each Option
shall be subject to the condition that, if at any time the Committee shall
determine, in its sole and absolute discretion,
(a) the satisfaction of any withholding tax or other
withholding liabilities, is necessary or desirable as
a condition of, or in connection with, such exercise
or the delivery or purchase of Stock pursuant
thereto,
(b) the listing, registration, or qualification of any
shares deliverable upon such exercise is desirable or
necessary, under any state or federal law, as a
condition of, or in connection with, such exercise or
the delivery or purchase of shares pursuant thereto,
or
(c) the consent or approval of any regulatory body is
necessary or desirable as a condition of, or in
connection with, such exercise or the delivery or
purchase of shares pursuant thereto,
then in any such event, such exercise shall not be effective unless such
withholding, listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the
Committee. Optionee shall execute such documents and take such other actions as
are required by the Committee to enable it to effect or obtain such withholding,
listing, registration, qualification, consent or approval. Neither the
Corporation nor any officer or director, or member of the Committee, shall have
any liability with respect to the non-issuance or failure to sell shares as the
result of any suspensions of exercisability imposed pursuant to this Section.
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5. Termination of Option. Except as otherwise provided in this
Agreement or the Plan, to the extent not previously exercised, the Option shall
terminate upon the first to occur of any of the following events:
(a) the dissolution or liquidation of the Corporation;
(b) the expiration of 5 years from the date of the grant
of the Option hereunder;
(c) the breach by Optionee of any provision of this
Agreement;
(d) as more fully set forth in Section 3.2 of the Plan,
three months after termination of employment;
(e) as more fully set forth in Section 3.3 of the Plan,
six months after an Optionee's death;
(f) as more fully set forth in Section 6.2 of the Plan,
in the event of a Capital Transaction.
6. Nonassignability. Options may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of intestate
succession, and may be exercised during the lifetime of Optionee only by
Optionee. Any transfer by Optionee of any Option granted under the Plan or this
Agreement shall void such Option and the Corporation shall have no further
obligation with respect to such Option. No Option shall be pledged or
hypothecated in any way, nor shall any Option be subject to execution,
attachment or similar process.
7. Restrictions on Transfer of Shares Acquired. Optionee represents and
warrants to the Corporation that Optionee understands that, as of the date of
this Agreement, (a) the Stock issuable upon exercise of the Option has not been
registered under the Securities Act of 1933, as amended (the "Act") or qualified
under any applicable state securities laws and the Stock must be held
indefinitely unless subsequently registered and qualified thereunder or an
exemption from registration and qualification is available, (b) the Corporation
has made no agreements, covenants or undertakings whatsoever (i) to register
under the Act or any applicable securities laws the Stock issuable upon exercise
of this Option, or (ii) about the availability of any exemption under the Act
(including Rule 144 of the Act) or applicable state securities laws and (c)
there is no public market for the Stock of the Corporation and that such a
market may never develop. Optionee further represents and warrants to the
Corporation that he will not transfer the Stock in violation of the provisions
of any applicable securities statute or regulation.
8. Representation Letter. Upon the grant of the Option and execution of
this Agreement, the Optionee will deliver to the Corporation the grant
representation letter set forth on Exhibit "A" of the Plan, as such Exhibit may
be amended by the Committee from time to time. Upon exercise of the Option, the
Optionee will deliver to the Corporation the exercise representation letter set
forth on Exhibit "B" of the Plan, as such Exhibit may be amended by the
Committee from time to time. Optionee also agrees to make such other
representations as are deemed necessary or appropriate by the Corporation and
its counsel.
9. Restrictive Legends. Each certificate evidencing the shares acquired
hereunder, including any certificate issued to any transferee thereof, shall be
imprinted with legends substantially in the form set forth in the Plan.
10. Rights as Shareholder. Neither Optionee nor his executor,
administrator, heirs or legatees, shall be, or have any rights or privileges of
a shareholder of the Corporation in respect of the Stock unless and until
certificates representing such Stock shall have been issued in Optionee's name.
11. No Right of Employment. Neither the grant nor exercise of any
Option nor anything in the Plan or this Agreement shall impose upon the
Corporation or any other corporation any obligation to employ or continue to
employ any Optionee. The right of the Corporation and any other corporation to
terminate any employee shall not be diminished or affected because an Option has
been granted to such employee.
12. Mandatory Arbitration. In the event of any dispute between the
Corporation and Optionee regarding this Agreement or the Plan, the dispute and
any issue as to the arbitrability of such dispute, shall be settled to the
exclusion of a court of law, by arbitration in San Diego, California, by a panel
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of three arbitrators (each party shall choose one arbitrator and the third shall
be chosen by the two arbitrators so selected) in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. The
decision of a majority of the arbitrators shall be final and binding upon the
parties. All costs of the arbitration and the fees of the arbitrators shall be
allocated between the parties as determined by a majority of the arbitrators, it
being the intention of the parties that the prevailing party in such a
proceeding be made whole with respect to its expenses.
13. Definitions. Capitalized terms shall have the meaning set forth in
the Plan unless otherwise defined herein.
14. Notices. Any notice to be given under the terms of this Agreement
shall be addressed to the Corporation in care of its Secretary at its principal
office, and any notice to be given to Optionee shall be addressed to such
Optionee at the address maintained by the Corporation for such person or at such
other address as the Optionee may specify in writing to the Corporation.
15. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of Optionee, his heirs and successors, and of the Corporation, its
successors and assigns.
16. Governing Law. This Agreement shall be governed by the laws of the
State of California.
17. Descriptive Headings. Titles to Sections are solely for information
purposes.
18. Application of Plan. The Corporation has delivered and the Optionee
hereby acknowledges receipt of a copy of the Plan. The parties agree and
acknowledge that the Option granted hereunder is granted pursuant to the Plan
and subject to the terms and provisions thereof, and the rights of the Optionee
are subject to modifications and termination in certain events as provided in
the Plan.
IN WITNESS WHEREOF, this Agreement is effective as of, and the date of
grant shall be, ____________, 2003.
PATRIOT SCIENTIFIC CORPORATION, a Delaware corporation
By:
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Its:
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OPTIONEE
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EXHIBIT "A"
VESTING SCHEDULE
TO
INCENTIVE STOCK OPTION AGREEMENT
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