As filed with the Securities and Exchange Commission on October 5, 1995
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
The Securities Act of 1933
COMARCO, INC.
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(Exact name of registrant as specified in its charter)
California 95-2088894
- ------------------------------ -------------------
State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
22800 Savi Ranch Parkway, Suite 214
Yorba Linda, California 92808
(714) 282-3832
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(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
1995 EMPLOYEE STOCK OPTION PLAN
-------------------------------
(Full title of the plan)
Thomas P. Baird
Chief Financial Officer
COMARCO, INC.
22800 Savi Ranch Parkway, Suite 214
Yorba Linda, California 92808
(714) 282-3832
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Roger H. Lustberg, Esq.
Riordan & McKinzie
300 South Grand Avenue, 29th Floor
Los Angeles, California 90071
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
class of Amount Maximum Maximum Amount of
securities to to be Offering Price Aggregate Registration
be registered registered Per Share(1) Offering Price(1) Fee
- ------------- ---------- ------------- ----------------- ------------
Common Stock 350,000 $11.00 $3,850,000 $1,327.59
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457, based on the average of the high and low sales prices on
October 3, 1995.
<PAGE>
II-5
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents which have been filed by the Company with the
Commission, as noted below, are incorporated by reference into this Registration
Statement:
(1) The Annual Report of the Company on Form 10-K for the fiscal year
ended January 31, 1995 as filed with the Commission on April 28, 1995;
(2) The Quarterly Report of the Company on Form 10-Q for the quarter ended
April 30, 1995 as filed with the Commission on June 14, 1995;
(3) The Quarterly Report of the Company on Form 10-Q for the quarter ended
July 30, 1995 as filed with the Commission on September 13, 1995; and
(4) Description of the Company's Common Stock contained in Exhibit 3.1 of
Amendment No. 1 to the Quarterly Report of the Company on Form 10-Q
for the quarter ended July 31, 1988, as filed with the Commission on
November 23, 1988.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act, and prior to the filing of a post-effective amendment
to the Registration Statement that indicates that all securities offered hereby
have been sold or that deregisters all such securities remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing such documents. Any statement contained herein or in any
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed to constitute a part of this Prospectus, except
as so modified or superseded.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock offered hereby has been passed upon
for the Company by Riordan & McKinzie, a Professional Law Corporation, Los
Angeles, California.
Item 6. Indemnification of Directors and Officers.
The Company is a California corporation. The Company's Articles of
Incorporation and Bylaws provide for the indemnification of the officers and
directors of the Company to the full extent permitted by law. Section 317 of the
General Corporation Law of the State of California ("GCL") provides that a
California corporation has the power to indemnify its officers and directors in
certain circumstances.
Subdivision (b) of Section 317 of the GCL empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party or
is threatened to be made a party to any proceeding (other than an action by or
in the right of the corporation to procure a judgment in its favor), against
expenses, judgments, fines, settlements, and other amounts actually and
reasonably incurred in connection with the proceeding if such director or
officer acted in good faith and in a manner reasonably believed to be in the
best interests of the corporation and, in the case of a criminal proceeding, had
no reasonable cause to believe the conduct of such director or officer was
unlawful.
Subdivision (c) of Section 317 of the GCL empowers a corporation to indemnify
any director or officer, or former director or officer, who was or is a party or
is threatened to be made a party to any threatened, pending, or completed action
by or in the right of the corporation to procure a judgment in its favor,
against expenses actually and reasonably incurred by such director or officer in
connection with the defense or settlement of the action if such director or
officer acted in good faith, in a manner believed to be in the best interests of
the corporation and its shareholders, except that no indemnification may be made
in respect of any claim, issue or matter as to which such director or officer
shall have been adjudged to be liable to the corporation in the performance of
such director's or officer's duty to the corporation and its shareholders,
unless and only to the extent that the court in which the proceeding is or was
pending shall determine upon application that, in view of all the circumstances
of the case, such director or officer is fairly and reasonably entitled to
indemnity for expenses and then only to the extent that the court shall
determine or of settlement amounts and expenses paid in connection with pending
actions disposed of without court approval. Indemnification under Section 317
may only be made in a specific case upon a determination that the director or
officer has met the applicable standard of conduct.
Section 317 further provides that to the extent a director or officer of the
corporation has been successful in the defense of any proceeding referred to in
subdivision (b) or (c) or in the defense of any claim, issue, or matter therein,
such director or officer shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith; that indemnification
provided for by Section 317 shall not be deemed exclusive of any additional
rights to which the indemnified party may be entitled; and that the corporation
shall have power to purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against or incurred by
such director or officer in such capacity or arising out of his status as such
whether or not the corporation would have the power to indemnify him against
that liability under Section 317.
The Company's Articles of Incorporation currently provide that the liability
of the director for monetary damages shall be eliminated to the fullest extent
permissible under California law. The Company's Bylaws provide for
indemnification of the officers and directors of the Company to the maximum
extent permitted by law. Subdivision (a)(10) of Section 204 of the GCL, provides
that such exculpation from liability may not be afforded (i) for acts or
omissions that involve intentional misconduct or a knowing and culpable
violation of law, (ii) for acts or omissions that a director believes to be
contrary to the best interests of the corporation or its shareholders or that
involve the absence of good faith on the part of the director, (iii) for any
transaction from which a director derived an improper personal benefit, (iv) for
acts or omissions that show a reckless disregard for the director's duty to the
corporation or its shareholders in circumstances in which the director was
aware, or should have been aware, of a risk of serious injury to the corporation
or its shareholders, (v) for acts or omissions that constitute an unexcused
pattern of inattention that amounts to an abdication of such director's duty to
the corporation or its shareholders, (vi) under Section 310 of the GCL or (vii)
under Section 316 of the GCL.
Item 7. Exemptions from Registration Claimed.
Not applicable.
Item 8. Exhibits.
4.1 Comarco, Inc. 1995 Employee Stock Option Plan.
5.1 Opinion of Riordan & McKinzie as to the legality of the Common Stock
registered hereby.
23.1 Consent of Riordan & McKinzie - contained in the opinion filed as
Exhibit 5.1.
23.2 Consent of KPMG Peat Marwick LLP.
24.1 Power of Attorney (included on Page II-5 hereto).
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided however, that paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) That, for purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Las Vegas, State of Nevada, on this 27th day of
September, 1995.
Comarco, Inc.
By: /s/ Don M. Bailey
-------------------------------------
Don M. Bailey
President and Chief Executive Officer
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Don M. Bailey his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments to this Registration Statement, and to file the same, with
all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
---------- ----- ----
/s/ Don M. Bailey President, Chief Executive September 26, 1995
- --------------------------- Officer and Director
Don M. Bailey
/s/ Gen. Wilbur L. Creech Director September 26, 1995
- ---------------------------
Gen. Wilbur L. Creech
/s/ Gerald D. Griffin Director September 26, 1995
- ---------------------------
Gerald D. Griffin
/s/ Adm. Wesley L. McDonald Director September 26. 1995
- ---------------------------
Adm. Wesley L. McDonald
/s/ Walter V. Sterling Director September 26, 1995
- ---------------------------
Walter V. Sterling
/s/ Paul G. Yovovich Director September 26, 1995
- ----------------------------
Paul G. Yovovich
70693.1
COMARCO, INC.
1995 EMPLOYEE STOCK OPTION PLAN
PLAN DOCUMENT
May 1995
<PAGE>
COMARCO, INC.
1995 EMPLOYEE STOCK OPTION PLAN
Section 1. Description of Plan.
This is the Employee Stock Option Plan, dated May 15, 1995, (the "Plan") of
Comarco, Inc., a California corporation (the "Company"). Under this Plan, key
employees of the Company or of any present or future subsidiaries of the Company
and employee directors, to be selected as set forth below, may be granted
options ("Options" ) to purchase shares of the common stock of the Company
("Common Stock"). For the purposes of the Plan the term "subsidiary" means any
corporation 50% or more of the voting stock of which is owned by the Company or
by a subsidiary (as so defined) of the Company. It is intended that the Options
under the Plan will either qualify for treatment as incentive stock options
under Section 422 of the Internal Revenue Code of 1986 as amended (the "Code"),
and be designated Incentive Stock Options, or not qualify for such treatment and
be designated Nonqualified Stock Options.
Section 2. Purpose of Plan.
The purpose of the Plan and of granting Options to specified employees is to
further the growth, development, and financial success of the Company by
providing additional incentives to certain key employees holding responsible
positions by assisting them to acquire shares of Common Stock and to benefit
directly from the Company's growth, development, and financial success.
Section 3. Eligibility.
Officers and key employees of the Company or any of its subsidiaries and those
directors who are also key employees, shall be eligible to receive grants of
Options under the Plan. A person who holds an Option is herein referred to as an
"Optionee". More than one Option may be granted to any one Optionee.
For incentive stock options, the aggregate fair market value (determined at the
time the option is granted) of the stock with respect to which incentive stock
options are exercisable for the first time by such individuals during any
calendar year (under all such plans of the individual's employer corporation and
its parent and subsidiary corporations) shall not exceed $100,000 plus any
"unused limit carryover" to such year as such term is defined in Section 422 of
the Code. Under the Plan, the maximum number of Options that may be granted to
any one Optionee shall be 350,000 shares.
Section 4. Administration.
The Plan shall be administered by a committee (the "Committee") to be composed
of at least two "disinterested" (as such term is used in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934) members of the Board of Directors of
the Company (the "Board"). Members of the Committee shall be appointed, both
initially and as vacancies occur, by the Board, to serve at the pleasure of the
Board. The Board may serve as the Committee, if by the terms of the Plan all
Board members are otherwise eligible to serve on the Committee. The Committee
shall meet at such times and places as it determines and may meet through a
telephone conference call. A majority of its members shall constitute a quorum,
and the decision of a majority of those present at any meeting at which a quorum
is present shall constitute the decision of the Committee. A memorandum signed
by all of its members shall constitute the decision of the Committee without
necessity, in such event, for holding an actual meeting.
The Committee is authorized and empowered to administer the Plan and, subject to
the provisions of the Plan (a) to select the Optionees, to specify the number of
shares of Common Stock with respect to which Options are granted to each
Optionee, to specify the grant date, Option Price and the terms and conditions
of the Options, which terms and conditions need not be identical as to the
various Options granted; (b) to interpret the Plan; (c) to prescribe, amend, and
rescind rules relating to the Plan; (d) to accelerate the time during which an
Option may be exercised, notwithstanding the provisions in the Option Agreement
(as defined in Section 12) stating the time during which it may be exercised;
(e) to determine, subject to Sections 3 and 6 hereof, whether Options will be
Incentive Stock Options or Nonqualified Stock Options; and (f) to determine the
rights and obligations of Optionees under the Plan. All questions of
interpretation of the terms and provisions of the Plan or of any Options granted
under the Plan shall be determined by the Committee, and such determinations and
decisions shall be final, conclusive, and binding upon all persons having an
interest in the Plan and/or any Options. No member of the Committee shall be
liable for any action or determination made in good faith with respect to the
Plan or any Option granted under it.
Section 5. Shares Subject to the Plan.
The number of shares of Common Stock which may be purchased pursuant to the
exercise of Options granted under the Plan shall not exceed 350,000 shares,
subject to adjustment under Section 10 hereof to reflect all stock splits, stock
dividends or similar capital changes. Upon the expiration or termination for any
reason of an outstanding Option which shall not have been exercised in full, any
shares of Common Stock then remaining unissued which shall have been reserved
for issuance upon such exercise shall again become available for the granting of
additional Options under the Plan.
Section 6. Option Price.
Except as provided in Section 11, the purchase price per share (the "Option
Price") of the shares of Common Stock underlying each Option shall not be less
than the fair market value of such shares on the date the Option is granted;
provided, however, that if an Incentive Stock Option is granted to an Optionee
who is a 10-percent shareholder of the Company as defined in Code Section
422(b)(6) at the time such Incentive Stock Option is granted, the Option Price
shall be not less than 110 percent of said fair market value. Such fair market
value shall be determined by the Committee on the basis of the average of the
reported closing bid and asked prices on such date. In the absence of reported
bid and asked prices, the Committee shall determine such fair market value on
the basis of the best available evidence.
Section 7. Exercise of Options.
Subject to all other provisions of the Plan, each Option shall be exercisable
for the full number of shares of Common Stock subject thereto, or any part
thereof, in such installments and at such intervals as the Committee may
determine in granting such an Option, provided that no Option may be exercisable
(a) in the case of Optionees subject to Section 16 of the Securities Exchange
Act of 1934, prior to six months following the grant of the Option (except in
the case of an exercise or surrender of such Option pursuant to Section 10
hereof) or (b) subsequent to its termination date. To the extent it is then
vested, an Option, or any exercisable portion thereof, shall be exercised by
delivery to the Company of all of the following prior to the time when such
Option becomes unexercisable.
(a) Notice in writing signed by the Optionee or other person
entitled to exercise such Option, stating that such Option or
portion thereof is exercised, such notice complying with all
applicable rules established by the Committee;
(b) Payment in full for the Shares with respect to which such
Option or portion is thereby exercised either (i) in cash
(including check, bank draft or money order) or (ii), without
limitation and at the sole discretion of the Board, by
delivering shares of the Company's Common Stock already owned
by the Optionee, or by a combination of cash and Common Stock;
or in such other lawful means as the Committee in its sole
discretion may permit; and
(c) Such representations and documents (including, without
limitation, those contemplated by Section 8 hereof) as the
Committee shall, in its absolute discretion deem necessary.
Section 8. Issuance of Common Stock.
The Company's obligation to issue shares of its Common Stock upon exercise of an
Option is expressly conditioned upon the completion by the Company of any
registration or other qualification of such shares under any state and/or
federal law or rulings and regulations of any government regulatory body or the
making of such investment representations or other representations and
undertakings by the Optionee (or his legal representative, heir or legatee, as
the case may be), and the taking of such actions by the Company as may be
necessary, in order to comply with the requirements of any exemption from any
such registration or other qualification of such shares which the Company in its
sole discretion shall deem necessary or advisable. Such required representations
and undertakings may include representations and agreements that such Optionee
(or his legal representative, heir or legatee): (a) is purchasing such shares
for investment and not with any present intention of selling or otherwise
disposing thereof; and (b) agrees to have a legend placed upon the face and
reverse of any certificates evidencing such shares ( or, if applicable, an
appropriate entry made in the ownership records of the Company) setting forth
(i) any representations and undertakings which such Optionee has given to the
Company or a reference thereto, and (ii) that, prior to effecting any sale or
other disposition of any such shares, the Optionee must furnish to the Company
an opinion of counsel, satisfactory to the Company and its counsel, to the
effect that such sale or disposition will not violate the applicable
requirements of state and federal laws and regulatory agencies. The inability of
the Company to obtain, from any regulatory body having jurisdiction,
registration, qualification or other necessary authorization, or the
unavailability of any exemption from registration or qualification obligation,
deemed by the Company's counsel to be necessary for the lawful issuance and sale
of any shares hereunder shall suspend the Company's obligation to permit the
exercise of any affected Option or to issue any shares thereupon and shall
relieve the Company of any liability with respect to the non-issuance or sale of
such shares as to which such requisite authority or exemption shall not have
been obtained. In the event that exercisability of an Option shall be suspended
as provided in this Section, the term of such Option shall be extended until the
thirtieth day after the date on which the Company shall have given notice that
such Option may be exercised; provided that in no event may an Incentive Stock
Option be exercised after (i) the expiration, if applicable of the
post-employment exercise period specified in Section 14 of the Plan, or (ii) the
tenth anniversary of the date of its grant.
Section 9. Nontransferability.
No Option shall be assignable or transferable, except that an Option may be
transferable by will or by the applicable laws of descent and distribution
provided such Option Agreement (as contemplated in Section 12 hereof) explicitly
so provides. During the lifetime of an Optionee, only he may exercise an Option
granted to him, or any portion thereof. After the death of the Optionee, any
exercisable portion may be exercised prior to its termination as provided in
Section 14(b) only by his legal representative, his legatee, or by a person
empowered to do so under the deceased Optionee's will or under the then
applicable laws of descent and distribution.
Section 10. Recapitalization, Reorganization, Merger or Consolidation.
If the outstanding shares of Common Stock are increased, decreased or exchanged
for different securities through a reorganization, merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, or like capital
adjustment, a proportionate adjustment shall be made by the Committee (a) in the
aggregate number of shares of Common Stock which may be purchased pursuant to
the exercise of Options granted under the Plan, as provided in Section 5, and,
(b) in the number, price, and kind of shares subject to any outstanding Option
granted under the Plan; provided that no fractional shares (or cash in lieu
thereof) will be issuable upon exercise of any Option as so adjusted.
Upon (i) the dissolution, liquidation or sale of all or substantially all of the
assets of the Company or (ii) upon any reorganization, merger or consolidation
in which the Company does not survive, or (iii) upon any reorganization, merger,
or consolidation in which the Company does survive and in which the stockholders
of the Company have the opportunity to receive cash, securities of another
entity or other property in exchange for their shares in the Company, the Plan
and each outstanding Option shall terminate; provided that in such event: (a)
each Optionee who is not tendered a substitute Option in accordance with all the
terms of provision (b) immediately below shall have the right until five days
before the effective date of such dissolution, liquidation, sale,
reorganization, merger or to exercise any unexpired Option or Options issued to
him to the extent that such Options are then exercisable pursuant to the
installment provisions of said Option and of Section 7 above; provided, however,
that should the Committee so elect in its sole and absolute discretion said
Optionee may be given (i) the option to exercise, in whole or in part, any
unexpired Option, without regard to said installment provisions or (ii) the
option to surrender such Option or Options to the Company for a price (which may
be payable, in the sole discretion of the Committee, in cash or in securities of
the Company, or in a combination thereof), equal to the difference between the
aggregate exercise price of the Option or Options without regard to said
installment provisions, and the aggregate fair market value (as determined in
the manner provided in Section 6 above) of the shares subject to such Option or
Options on the date one day before the effective date of such dissolution,
liquidation, reorganization, merger or consolidation, or (b), in its sole and
absolute discretion, the surviving entity (which may be the Company) or the
entity that has acquired all or substantially all the Company's assets may, but
shall not be so obligated, tender to any Optionee an option or options to
purchase shares at equity interests in such entity, and such new option or
options shall contain such terms and provisions as shall be required to
substantially preserve the rights and benefits of any Option then outstanding
under the Plan with any reasonable changes to take into account the
circumstances of the surviving entity.
To the extent that the foregoing adjustments relate to stock or securities of
the Company, such adjustments shall be made by the Committee, whose
determination in that respect shall be final, binding, and conclusive. Except as
expressly provided in this Section 10, the Optionee shall have no rights by
reason of any subdivision or consolidation of shares of stock of any class or
the payment of any stock dividend or any other increase or decrease in the
number of shares of stock of any class, and the number or price of shares of
Common Stock subject to any Option shall not be affected by, and no adjustment
shall be made by reason of, dissolution, liquidation, reorganization, merger or
consolidation or any issuance by the Company of shares of stock of any class, or
rights to purchase or subscribe for stock of any class, or securities
convertible into shares of stock of any class.
The grant of any Option under the Plan shall not affect in any way the right or
power of the Company to make adjustments, reclassifications or changes in its
capital or business structures or to merge, consolidate, dissolve, or liquidate
or to sell or transfer all or any part of their business or assets.
Section 11. Substitute Options.
If the Company at any time should succeed to the business of another enterprise
through a merger or consolidation, or through the acquisition of stock, equity
interests, or assets of such enterprise, Options may be granted under the Plan
to those employees of such enterprise or its subsidiaries who, in connection
with such succession, become employees of the Company or its subsidiaries, in
substitution for options to purchase stock or equity interests of such
enterprise held by them at the time of succession. The Committee, in its sole
and absolute discretion, shall determine the extent to which such substitute
Options shall be granted (if at all), the person or persons to receive such
substitute Options (who need not be all Optionees of such enterprise), the
number and type of such Options to be received by each such person, the Option
Price of such Option (which may be determined without regard to Section 6) and
the terms and conditions of such substitute Options; provided, however, that the
Option Price of each such substituted Option shall be an amount such that, in
the sole and absolute judgment of the Committee (and with respect to a
substitute Option that is an Incentive Stock Option, in compliance with Section
424(a) of the Code), the economic benefit provided by such Option is not greater
than the economic benefit represented by the option in the acquired enterprise
as of the date of the Company's acquisition of such enterprise. Notwithstanding
anything to the contrary herein, no Option shall be granted, nor any action
taken, permitted, or omitted, which would cause the Plan, or any Options granted
hereunder as to which Rule 16b-3 under the Securities Exchange Act of 1934 may
apply, not to comply with such Rule.
Section 12. Option Agreement.
Each Option granted under the Plan shall be evidenced by a written stock option
agreement ("Option Agreement") executed by the Company and accepted by the
Optionee, which (a) shall contain each of the provisions and agreements herein
specifically required to be contained therein, (b) shall indicate whether such
Option is to be an Incentive Stock Option or a Nonqualified Stock Option, and if
it is to be an Incentive Stock Option such Option Agreement shall contain terms
and conditions permitting such Option to qualify for treatment as an incentive
stock option under Section 422 of the Code, (c) may contain the agreement of the
Optionee to remain in the employ of, and render services to, the company or any
of its subsidiaries for a period of time to be determined by the Committee, and
(d) may contain such other terms and conditions as the Committee deems desirable
and which are not inconsistent with the Plan.
Section 13. Rights as a Shareholder.
An Optionee or a transferee of an Option shall have no rights as a shareholder
with respect to any shares covered by this Option until exercise thereof;
provided, however, that no Optionee or transferee of an Option shall be able to
vote any shares covered by this Option until the issuance of a stock
certificate(s) to him for such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the exercise
date, except as expressly provided in Section 10.
Section 14. Termination of Options.
Each Option Agreement representing an Option granted under the Plan shall set
forth a termination date thereof, which shall be not later than ten years from
the date such Option is granted, except that in the case of an Incentive Stock
Option grant to a 10-percent stockholder of the Company, the expiration date
shall not be more than five years from the date of the grant. In any event, all
Options shall terminate and expire upon the first to occur of the following
events:
(a) the expiration of one year from the date of an Optionee's termination of
employment if an Optionee is disabled (within the meaning of Section 22(e)(3) of
the Code) on the date of termination; or
(b) the expiration of one year from the date of the death of an Optionee if his
death occurs while he is, or not later than three months after he ceases to be
employed by the Company or any of its subsidiaries; or
(c) the termination of the Option pursuant to Section 10 of the Plan; or
(d) the termination date set forth in the Option Agreement; or
(e) the expiration of three months from the date of termination of employment
other than by reason of death or disability.
Except as provided for above, the termination of employment of an Optionee by
death or otherwise shall not accelerate or otherwise affect the number of shares
with respect to which an Option may be exercised, and the Option may only be
exercised with respect to that number of shares which could have been purchased
under the Option had the Option been exercised by the Optionee on the date of
such termination. In no event shall the post employment exercise periods
provided in this Section 14 extend the time during which any Option may be
exercised in whole or in part beyond the termination date that would otherwise
be applicable thereto pursuant to the Option Agreement or the Plan.
Section 15. Withholding of Taxes.
The Company may deduct and withhold from the wages, salary, bonus and other
compensation paid by the Company to the Optionee the requisite tax upon the
amount of taxable income, if any, recognized by the Optionee in connection with
the exercise in whole or in part of any Option or the sale of Common Stock
issued to the Optionee upon exercise of the Option, as may be required from time
to time under any federal or state laws and regulations. This withholding of tax
shall be made from the Company's concurrent or next payment of wages, salary,
bonus or other income to the Optionee or by payment to the Company by the
Optionee of the required withholding tax, as the Committee may determine.
Section 16. Effectiveness and Termination of the Plan.
The Plan shall be effective on the date on which it is adopted by the Committee
and the Board, provided however that no Option shall be exercised pursuant to
the Plan until the Plan has been approved by the shareholders of the Company;
and provided further that no Option shall be granted hereunder on or after the
tenth anniversary of the effective date of the Plan. The Plan shall terminate
when all Options granted hereunder either have been fully exercised, and all
shares of Common Stock which may be purchased pursuant to the exercise of such
Options have been so purchased, or have expired; provided, however, that the
Board may in its absolute discretion terminate the Plan at any time. No such
termination, other than as provided for in Section 10 hereof, shall in any way
adversely affect any Option then outstanding except as specifically provided for
in the Plan.
Section 17. Time of Granting Options.
Except with respect to the provisions of Section 21, the date of grant of an
Option shall, for all purposes, be the date on which the Committee makes the
determination granting such an Option. Notice of the determination shall be
given to each Optionee to whom an Option is so granted within a reasonable time
after the date of such grant.
Section 18. Amendment of Plan.
The Board or the Committee may make such amendments to the Plan and, with the
consent of each Optionee affected, make such changes in the terms and conditions
of granted Options as it shall deem advisable; provided that such amendments and
changes may not, without the written consent or approval of the holders of a
majority of the voting stock of the Company which is represented and is entitled
to vote at a duly held shareholders' meeting, (a) increase the maximum number of
shares subject to Options, except pursuant to Section 10 hereof, (b) decrease
the Option Price requirement contained in Section 6 hereof (except as
contemplated by Section 10 or 11 hereof) applicable to Incentive Stock options,
(c) change the designation of the class of persons eligible to receive Options,
(d) modify the limits set forth in Section 3 hereof regarding the value of
Common Stock for which any Optionee may be granted Incentive Stock Options,
unless provided for under Section 422(d) of the Code, or (e) in any manner
materially increase the benefits accruing to participants under the Plan.
Section 19. Not an Employment Agreement.
Nothing contained in the Plan or in any Option Agreement shall confer on any
Optionee any right to be continued in the employ of the Company or one of its
subsidiaries.
Section 20. Transfers and Leaves of Absence.
For purposes of the Plan (a) a transfer of an Optionee's employment, without an
intervening period from the Company to a subsidiary or, or vice versa, or from
one subsidiary to another shall not be deemed a termination of employment and
(b) an Optionee who is granted in writing a leave of absence shall be deemed to
have remained in the employ of the Company during such leave of absence.
Section 21. Acceleration of Options.
(a) Notwithstanding any provisions to the contrary contained in any agreement
evidencing an Option granted under the Plan, each outstanding Option shall
become immediately and fully exercisable during the periods specified in
subsection (c) below upon the occurrence of any of the following events:
(i) Any person, including a group defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended, shall become
the beneficial owner of shares of the Company, with respect to
which 20% or more of the total number of votes for the
election of the Board may be cast;
(ii) As a result of, or in connection with, any cash tender offer,
exchange offer, merger or other business combination, sale of
assets or contested election, or combination of the foregoing,
the persons who were directors of the Company just prior to
such event shall cease to constitute a majority of the Board;
(iii) The stockholders of the Company shall approve an agreement
providing either for a transaction in which the Company will
cease to be an independently owned public corporation, or for
a sale or other disposition of all or substantially all the
assets of the Company; or
(iv) A tender offer or exchange offer is made for shares of the
Company's Common Stock (other than one made by the Company)
and shares of said Common Stock are acquired thereunder (an
"Offer").
(b) No Option granted to an officer of the Company shall become exercisable as a
result of the acceleration of exercisability of Options provided for in
subsection (a) of this Section 21 within six months of the date of its grant.
(c) In the event of the acceleration of the exercisability of Options as the
result of the occurrence of an event specified in Section 21 (a) above, each
outstanding Option shall become exercisable in full for a period of thirty days
from and after the date of the occurrence of such event after which period the
Option shall, subject to Section 10 of the Plan, again be exercisable only to
the extent and at the times provided in the Option Agreement relating thereto.
Section 22. Applicable Law.
This Plan shall be administered in such a manner as to not be in conflict with
the laws of the state in which the company is incorporated.
Section 23. Other Plans.
This Plan is not intended to and shall not preclude the establishment or
operation the Company or any subsidiary of any thrift, savings and investment,
achievement award, stock purchase, employee recognition or other benefit plan or
arrangement for any employees and any such other plan may be authorized and
payments made thereunder independently of this Plan.
EXHIBIT 5.1
October 4, 1995
File No. 03-020-018
Comarco, Inc.
22800 Savi Ranch Parkway
Suite 214
Yorba Linda, California 92808
Ladies and Gentlemen:
You have requested our opinion with respect to 350,000 shares of the Common
Stock (the "Shares") of Comarco, Inc., a California corporation (the "Company"),
which Shares are to be issued upon the exercise of stock options (the "Options")
to be granted pursuant to the terms of the Company's 1995 Employee Stock Option
Plan (the "Plan"). The Shares are the subject of a Registration Statement on
Form S-8 (the "Registration Statement"), to which this opinion is attached as an
exhibit, to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.
We have examined the Company's Restated Articles of Incorporation, Bylaws
and the Plan. We have also examined the records of corporate proceedings taken
in connection with the adoption of the Plan.
Based upon the foregoing examinations and upon the applicable laws, we are
of the opinion that the shares of Common Stock, when offered, sold and paid for
pursuant to the exercise of options granted under the Plan, will be duly
authorized, validly issued, fully paid and non-assessable.
We hereby consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
RIORDAN & McKINZIE
73523.1
EXHIBIT 23.2
Consent of Independent Accountants
The Board of Directors
COMARCO, Inc.:
We consent to the use of our report dated March 28, 1995 incorporated herein by
reference, which report appears in the January 31, 1995 annual report on Form
10-K of COMARCO, Inc.
KPMG Peat Marwick LLP
McLean, Virginia
October 4, 1995
