| Patriot Scientific Intends to Vigorously Dispute Former CFO's `Without Merit' Termination Arbitratio |
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| Saturday, 29 October 2005 | |
Patriot Scientific Intends to Vigorously Dispute Former CFO's `Without Merit' Termination ArbitrationSAN DIEGO, CA, (NAMC) - Patriot Scientific Corporation (OTC Bulletin Board: PTSC.OB) a high-tech intellectual properties company that specializes in developing high-performance ultra-low power microprocessor technology, announced in an 8-K filed with the Securities and Exchange Commission on October 18 that it intends to vigorously defend itself against the substantial, beyond employment contract financial demands of recently terminated CFO Lowell Giffhorn, according to Patriot's Chairman, President and CEO, David Pohl. Giffhorn, who remains a member of Patriot's Board until the next annual shareholder meeting, has filed for arbitration demanding an unprecedented and - to Patriot - an unjustified $1.5 million dollar severance package, an amount that represents roughly 25% of the company's entire current cash available for use in operations. "In our opinion this claim is entirely without merit," Pohl explained, "and we will defend ourselves on principle - to the fullest extent necessary - in order to be vindicated. The Board and Executive Committee at Patriot Scientific have an obligation to preserve our investors' assets, and we cannot meet this fiduciary responsibility while caving in to these unreasonable demands for unearned and unjustifiable compensation. We have asked our attorneys to advise us as to potential counterclaims the Company may have and the extent to which, following our anticipated vindication, we may seek compensatory payments from Giffhorn for all direct and indirect costs of these actions which he has instigated." Giffhorn, who had served as CFO for more than five years - a period in which the now-profitable Patriot had consistently lost millions of dollars per year- filed a formal demand in late September for an award of $1.5 million in severance payments through the American Arbitration Association. The two parties are now seeking arbitrators. "Executive officers of Patriot Scientific serve at the pleasure of the Board," Pohl explained. "They work under contracts that spell out the terms of any severance packages that may be due at the time of separation. While an officer, Mr. Giffhorn had certified in public filings that his employment contract provided for severance payments equal to 4 months of his salary in the event his employment was terminated by the Company. "Earlier this year," Pohl said, "the Executive Committee of the Board determined that the company's management team was operating in a fashion that was at odds with the direction the majority of the Board had set for the company. Because of that, in June of 2005, the two senior members of that management team were removed by the Board and replaced. The departure of one of these executives went relatively smoothly, and the executive agreed to accept a severance package that the Executive Committee deemed reasonable in relation to his employment contract. "The one exception," Pohl noted, "is former CFO Lowell Giffhorn, who has filed for arbitration demanding over 30 times more in severance payments than is called for in his employment contract. This demand in our opinion is unreasonable, unjustified and unwarranted, and the other members of Patriot's Board have determined that we will not be pressured into granting this unearned windfall to a former officer who was removed from office. It is puzzling that he has filed this demand and yet still remains a member of the Board." The full text of the 8-K can be found below: On September 23, 2005, Lowell Giffhorn, a former executive officer and a current director of Patriot Scientific Corporation (the "Company"), submitted a demand for arbitration with the American Arbitration Association related to the termination of Mr. Giffhorn's employment with the Company. Mr. Giffhorn asserts that the termination of his employment with the Company was unlawful, retaliatory, wrongful, violated public policy, violated the covenant of good faith and fair dealing and violated securities laws. Mr. Giffhorn demands damages of $1,500,000, which amount constitutes approximately 25% of the Company's current cash reserves. The Company intends to vigorously defend itself with regard to these claims. The parties are currently in the process of selecting arbitrators. About Patriot Scientific Patriot Scientific (OTC Bulletin Board: PTSC.OB) has emerged as an effective and dynamic intellectual property company, developing and marketing innovative and proprietary semiconductor technologies. The company's portfolio of proprietary designs encompasses what is believed to be fundamental ultra-low-power array microprocessor technology, as well as pending patents designed to protect Patriot's proprietary technology and architecture. Detailed information about Patriot Scientific can be found on the website www.ptsc.com. Copies of Patriot Scientific press releases, current price quotes, stock charts and other valuable information for investors may be found at www.hawkassociates.com and www.americanmicrocaps.com. An investment profile on Patriot Scientific may be found at http://www.hawkassociates.com/patriot/profile.htm Safe Harbor statement under the Private Securities Litigation Reform Act of 1995: Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the products markets, variations in the company's cash flow, market acceptance risks, technical development risks, seasonality and other risk factors detailed in the company's Securities and Exchange Commission filings. Contact: |
