<PAGE> 1
As filed with the Securities and Exchange Commission on October 9, 1996
NO. 333-__________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
NORRIS COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE NONE
(State or other jurisdiction of (I. R. S. Employer Identification No.)
incorporation or organization)
12725 STOWE DRIVE
POWAY, CALIFORNIA 92064
(Address of Principal Executive Office)(Zip Code)
CONSULTANT'S STOCK BONUS
(Full title of the plan)
R. GORDON ROOT
12725 STOWE DRIVE
POWAY, CALIFORNIA 92064
(Name and address of agent for service)
(619) 679-1504
(Telephone number, including area code, of agent for service)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
====================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE AMOUNT TO BE REGISTERED OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF REGISTRATION
REGISTERED SHARE (1) PRICE (1) FEE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par
value 200,000 $0.89 $178,000 $ 100.00
- ------------------------------------------------------------------------------------------------------------------------------------
Warrants to purchase 150,000
shares of Common Stock,
$.001 par value 150,000 --- (2) --- (2) ---
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock, $.001 par
value, issuable upon exercise
of warrants (3) 150,000 $0.89 $133,500 $ 100.00
- ------------------------------------------------------------------------------------------------------------------------------------
Total Fee $ 200.00
====================================================================================================================================
</TABLE>
(1) These figures are estimates made solely for the purpose of calculating
the registration fee pursuant to Rule 457(c). The average of the bid
and asked prices for the Common Stock on October 2, 1996, as reported
by NASDAQ, was $0.89.
(2) The Warrants will be issued for nominal consideration.
(3) The exercise price of the Warrants is not presently determinable. The
price is estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) as described in Note (1),
above.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE
SECTION 10(a) PROSPECTUS
The documents containing the information specified in Part I (plan
information and registrant information) will be sent or given to employees as
specified by Rule 428(b)(1). Such documents need not be filed with the
Securities and Exchange Commission either as part of this Registration Statement
or as prospectuses or prospectus supplements pursuant to Rule 424. These
documents and the documents incorporated by reference in this Registration
Statement pursuant to Item 3 of Part II of this form, taken together, constitute
a prospectus that meets the requirements of Section 10(a) of the Securities Act
of 1933.
2
<PAGE> 3
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.
The following documents of Norris Communications, Inc., a
Delaware corporation (the "Company") previously filed with the Commission are
incorporated herein by reference:
1. Annual Report on Form 10-KSB/A for the Company's fiscal
year ended March 31, 1996;
2. Quarterly Reports on Form 10-QSB for the fiscal quarter
ended June 30, 1996;
3. Quarterly Reports on Form 10-QSB/A for the fiscal quarters
ended June 30, 1995, September 30, 1995 and December 31, 1995;
4. Current Reports on Form 8-K dated April 8, 1996, April 12,
1996 and August 29, 1996, respectively; and
5. The description of the Company's Common Stock contained in
the Registration Statement on Form 10 filed with the Securities and Exchange
Commission on December 13, 1992 pursuant to Section 12(g) of the Securities
Exchange Act of 1934 (the "Exchange Act"), together with all amendments or
reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in the Registration Statement and to be a part hereof
from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of
60,000,000 shares of Common Stock, $.001 per share par value and 5,000,000
shares of Preferred Stock, $.001 per share par value. As of October 8, 1996,
there were 22,308,611 shares of Common Stock issued and outstanding. No shares
of Preferred Stock are outstanding.
Common Stock
Holders of shares of Common Stock are entitled to one vote per
share on matters to be voted upon by the stockholders of the Company. Holders of
shares of Common Stock do not have cumulative voting rights; therefore, the
holder of more than 50% of the Common Stock will have the ability to elect all
of the Company's directors. Holders of shares of Common Stock will be entitled
to receive dividends when, as and if declared by the Board of Directors and to
share ratably in the assets
3
<PAGE> 4
of the Company legally available for distribution to its stockholders in the
event of the liquidation, dissolution or winding up of the Company, in each case
subject to the rights of the holders of any shares of Preferred Stock issued by
the Company. Holders of Common Stock have no preemptive, subscription,
redemption or conversion rights.
Warrants
Each Warrant entitles the registered holder to purchase one
share of Common Stock at a price of $0.65625 per share until 2001, subject to
adjustment.
The exercise price of the Warrants and the number and kind of
Common Stock or other securities or property to be obtained upon exercise of the
Warrants are subject to adjustment in certain circumstances, including a stock
split of, or stock dividend on, or a subdivision, combination or
recapitalization of, the Common Stock. The exercise price of the Warrants is
subject to adjustment in the event that the Company issues and sells Common
Stock at a price which is less than the then current market price of the Common
Stock. Additionally, an adjustment would be made upon a merger or consolidation
of the Company into or with another company or the sale of all or substantially
all of the assets of the Company so as to enable Warrantholders to purchase the
kind and number of shares of stock or other securities or property (including
cash) receivable in such event by a holder of the number of shares of Common
Stock that might otherwise have been purchased upon exercise of such Warrants.
Warrantholders, under such circumstances, also may be entitled to receive
additional consideration. The Warrants do not confer upon the holder any voting
or any other rights of a stockholder of the Company.
Each Warrant may be exercised upon surrender of the Warrant
certificate at any time on or prior to the expiration date, if earlier, of such
warrant at the offices of Interwest Transfer Company (the "Warrant Agent"), with
the form of "Election to Purchase" on the reverse side of the Warrant
certificate completed and executed as indicated, accompanied by payment of the
full exercise price (by certified check payable to the order of the Company) for
the number of shares of Common Stock being purchased.
Delaware Anti-Takeover Law
The Company will be governed by the provisions of Section 203
of the General Corporation Law of the State of Delaware, an anti-takeover law.
In general, the law prohibits a public Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in the prescribed
manner. "Business combination" includes merger, asset sales and other
transactions resulting in a financial benefit to the interested stockholder. An
"interested stockholder" is a person who, together with affiliates and
associates, owns (or within three years, did own) 15% or more of the
corporation's voting stock.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
The validity of the securities registered hereunder (the
"Plan") has been passed upon by Higham, McConnell & Dunning. Higham, McConnell &
Dunning will receive the shares of Common Stock and Warrants registered
hereunder.
4
<PAGE> 5
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article TENTH of the Certificate of Incorporation of the
Company provides:
"TENTH: The corporation shall, to the fullest extent
legally permissible under the provisions of the Delaware
General Corporation Law, as the same may be amended and
supplemented, indemnify and hold harmless any and all persons
whom it shall have power to indemnify under said provisions
from and against any and all liabilities (including expenses)
imposed upon or reasonably incurred by him in connection with
any action, suit or other proceeding in which he may be
involved or with which he may be threatened, or other matters
referred to in or covered by said provisions both as to action
in his official capacity and as to action in another capacity
while holding such office, and shall continue as to a person
who has ceased to be a director or officer of the corporation.
Such indemnification provided shall not be deemed exclusive of
any other rights to which those indemnified may be entitled
under any Bylaw, Agreement or Resolution adopted by the
shareholders entitled to vote thereon after notice."
The Company's Bylaws provide that an officer, director,
employee or agent of the Company is entitled to be indemnified for the expenses,
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him by reason of any action, suit or proceeding brought against him by virtue
of his acting as such officer, director, employee or agent, provided he acted in
good faith or in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The Company has directors and officers liability insurance.
The insurance policy covers liability for claims made against directors and
officers for their wrongful acts involving errors, misstatements, misleading
statements or acts or omissions or neglect or breach of duty, while acting in
their individual or collective capacities for any matter claimed against them
solely by reason of their being directors or officers of the Company. The
coverage includes damages, judgment, settlements and costs of legal actions,
claims or proceedings and appeals therefrom but does not include fines or
penalties imposed by law for matters which may be deemed uninsurable under the
law.
If Delaware law and California law are in conflict with regard
to the Company's power or obligation to indemnify, and the issue were to be
contested in the Delaware and/or California, the legal outcome is unpredictable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index appearing at sequentially numbered page 7.
5
<PAGE> 6
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(a)(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement 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.
(2) That, for the purpose of determining any liability under the Securities Act,
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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) 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.
(c) Insofar as indemnification for liabilities arising under the Securities Act
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 Securities Act and will be governed by the final
adjudication of such issue.
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
<S> <C>
4.1 Form of Fee Agreement with Higham, McConnell & Dunning. 9
4.2 Form of Warrant Agreement. 12
5.1 Opinion of Higham, McConnell & Dunning 23
23.1 Consent of Higham, McConnell & Dunning 23
(included in Exhibit 5.1).
23.2 Consent of Ernst & Young, Independent Chartered Public Accountants. 25
</TABLE>
7
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the Registrant 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 Poway, State of California on October 8, 1996.
NORRIS COMMUNICATIONS, INC.
By: /s/ R. Gordon Root
R. Gordon Root, President and Chief
Executive Officer
---------------------------
POWER OF ATTORNEY
Each person whose signature to this Registration Statement
appears below hereby appoints R. Gordon Root and Kathleen E. Terry, and each of
them, as his attorney-in-fact to sign in his behalf individually and in the
capacity stated below and to file all amendments and post-effective amendments
to this Registration Statement as such attorney-in-fact may deem necessary or
appropriate.
---------------------------
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.
Name Position Date
---- -------- ----
/s/ R. Gordon Root President and Chief October 8, 1996
R. Gordon Root Executive Officer
and Director
/s/ Kathleen E. Terry Chief Financial Officer and October 8, 1996
Kathleen E. Terry (principal financial and
accounting officer)
/s/ Elwood G. Norris Director October 8, 1996
Elwood G. Norris
/s/ Robert Putnam Director October 8, 1996
Robert Putnam
/s/ James D. Miller Director October 8, 1996
James D. Miller
8
<PAGE> 1
Exhibit 4.1
HIGHAM, MCCONNELL & DUNNING
28202 Cabot Road, Suite 450
Laguna Niguel, California 92677
Tel: 714/365-5515
Fax: 714/365-5522
September 25, 1996
R. Gordon Root
President
Norris Communications, Inc.
12725 Stowe Drive
Poway, California 92064
Re: Engagement Letter/Service Agreement
Dear Bob:
We are pleased that you have asked Higham, McConnell & Dunning to provide you
with corporate legal services. This letter is written to confirm our
arrangements concerning the payment of legal fees and certain other costs which
may arise in connection with our representation. We ask that you review it, sign
the enclosed copy, and return the signed copy in the enclosed envelope.
Fees for our services will be charged on an hourly basis for all time actually
expended on your behalf. The hourly rates assigned to those providing legal
services vary according to the expertise and level of experience of the
individual attorney. The hourly rates presently range from $80.00 for paralegals
to $250.00 for the more senior attorneys in our office. Hourly rates are
reviewed periodically, and when appropriate, are occasionally adjusted. Such
adjustments are ordinarily made on an annual basis, effective as of the
beginning of each calendar year, though they may occur at other times. We do not
generally send any notice of a change in hourly rates. Depending on the scope of
the project, we may also request a retainer prior to performing a substantial
amount of work.
With respect to your corporate reorganization, related matters and certain other
designated matters, on the basis of the work performed and to be performed in
connection therewith, we have agreed to accept in payment of our fees up to
$200,000 in common stock valued at the closing bid price as of the date of
issuance, together with warrants to purchase up to 150,000
<PAGE> 2
Norris Communications, Inc.
September 25, 1996
Page 2
shares of common stock with an exercise price equal to the closing bid price as
of the date hereof, such stock and warrants to be registered on Form S-8, with
the remainder to be paid in cash.
I anticipate that I will be the attorney principally involved in this matter.
However, we always attempt to provide quality, timely legal services at the most
economical hourly rates and, accordingly, may utilize others if appropriate.
In addition to the fees for legal services rendered, you will be responsible for
all out-of-pocket expenses which we incur on your behalf, such as filing fees,
reproduction and telecommunication charges, word processing charges, secretarial
overtime, travel, parking, messenger charges and long distance telephone
charges. In the event the amount of any costs are substantial, it is the firm's
policy to obtain payment directly by the client, and we will request checks in
advance for these amounts as required.
Normally, you will receive monthly statements which will set forth an itemized
list of the work performed and all out-of-pocket expenses advanced, if any,
during the previous month. However, if we perform minimal services in a
particular billing period, we may send a statement covering more than one
billing period. All statements will be payable within 10 days following receipt.
All balances which remain unpaid 30 days after the statement date will accrue
interest at the rate of 1% per month.
If you disagree with our fee as shown in any statement, please call me.
Typically, we resolve such disagreements to the satisfaction of both sides with
little inconvenience or formality. If we are not able to resolve a fee dispute,
you have the right to request arbitration under supervision of the California
State Bar Association. We agree to participate fully in that process.
From time to time you may wish to ask me for estimates of the fees and costs of
the work which we will perform for you. I will be happy to provide you with such
estimates but they will be just that--estimates. I cannot guarantee that the
actual fees and costs will not be higher than estimated amounts, because
complicated business transactions often involve unexpected difficulties which
take time and effort to resolve.
This letter agreement will continue in effect according to its terms, unless
terminated by us or by you in writing. Either party may send to the other a
written notice of termination at any time. If either party terminates this
Agreement, we will stop all work for you consistent with ethical requirements.
If you do not pay any invoice promptly on or before the 30th day following the
date of our statement, we will not have any further duty to represent you,
regardless of the status of the matter at the time of non-payment. Following
termination, we
2
<PAGE> 3
Norris Communications, Inc.
September 25, 1996
Page 3
will promptly bill you for all outstanding services and costs incurred through
the termination date. If a dispute arises, the prevailing party will be entitled
to recover fees and costs of counsel.
Generally, we keep each client's legal files for 10 years after we close the
file. After 10 years, we destroy those files unless the client tells us
otherwise.
If the foregoing is agreeable to you, please indicate your agreement by
executing the enclosed copy of this letter and returning it to me in the
enclosed return envelope which is provided for your convenience.
My partners and I look forward to working with you.
Very truly yours,
HIGHAM, McCONNELL & DUNNING
/s/ Curt C. Barwick
Curt C. Barwick
CCB:mhc
Enclosure
The undersigned hereby agrees to the foregoing.
Dated: September 25, 1996
NORRIS COMMUNICATIONS, INC.
By: /s/ Kathleen E. Terry
-------------------------
Title: Chief Financial Officer
3
<PAGE> 1
EXHIBIT 4.2
NORRIS COMMUNICATIONS, INC.
STOCK PURCHASE WARRANT
OCTOBER ___, 1996
FOR VALUE RECEIVED, NORRIS COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), hereby certifies that HIGHAM, MCCONNELL & DUNNING is the
registered owner of 150,000 warrants (each, a "Warrant"), each of which
represents the right to purchase from the Company, at any time or from time to
time, on or after the date which is sixty (60) days after the date hereof and on
or before 5:00 P.M., California time, on the date which is five years after the
date hereof (the "Exercise Period"), initially one share of the common stock,
par value $.001 per share, of the Company ("Common Stock") at the price of
$.65625 per share, subject to the terms and conditions hereof.
For the purposes of this Agreement: (i) the common stock of the
Company, together with any other equity securities which may be issued by the
Company in substitution therefor, is referred to as the "Common Stock"; (ii) the
shares of the Common Stock purchasable hereunder are referred to as the "Warrant
Shares"; (iii) the aggregate exercise price payable for all of the Warrant
Shares is referred to as the "Aggregate Exercise Price"; and (iv) the price
payable hereunder for each of the Warrant Shares is referred to as the "Per
Share Exercise Price". The Per Share Exercise Price, the Aggregate Exercise
Price and the number of Warrant Shares are subject to adjustment as hereinafter
provided.
1. EXERCISE OF WARRANT.
1.1 GENERAL TERMS. This Warrant may be exercised, in whole or
in part, at any time or from time to time, during the Exercise Period by the
holder of this Warrant (the "Holder") by the surrender of this Warrant (with the
subscription form at the end hereof duly executed) at the principal office of
the Company, which is currently located at 12725 Stowe Drive, Poway, California
92064, together with proper payment of the Per Share Exercise Price for each of
the Warrant Shares as to which the Warrant is being exercised. Any such payment
of the Per Share Exercise Price is to be: (i) in cash, (ii) by certified or
official bank or bank cashier's check (or by wire transfer) payable to the order
of the Company; (iii) by tender of shares of Common Stock (which may be shares
of Common Stock to be received by the Holder pursuant to a concurrent exercise
of Warrants), valued as hereinafter set forth, or (iv) by any combination of the
foregoing. For purposes of the payment of the Per Share Exercise Price, each
share of Common Stock tendered by the Holder in payment of the Per Share
Exercise Price shall be deemed to have a value equal to the average of the
closing per share sales prices of a
<PAGE> 2
share of Common Stock on The NASDAQ (Small Cap) Stock Market ("NASDAQ") during
the ten (10) trading days immediately preceding the Exercise Date (as defined
herein) (the "Market Value"). In the event that the Holder elects to pay the Per
Share Exercise Price through the delivery of shares of Common Stock to be
received by the Holder pursuant to the concurrent exercise of Warrants (the
"Cashless Exercise Shares"), the Holder shall not be obligated to pay the Per
Share Exercise Price for any such Cashless Exercise Shares and the value of each
such Cashless Exercise Share, for purposes of the payment of the Per Share
Exercise Price for the shares of Common Stock to be delivered to and retained by
the Holder, shall be an amount equal to the Market Value minus the Per Share
Exercise Price. If at the time of any valuation of shares of Common Stock, the
shares of Common Stock are not then listed on NASDAQ, the Market Value shall be
the average of the closing per share sales price of a share of Common Stock on
the principal United States securities exchange registered under the Exchange
Act (as defined herein) on which the shares of Common Stock are then listed
during the ten (10) trading days immediately preceding the Exercise Date, or if
shares of Common Stock are not then listed on any such stock exchange, the
average of the bid and asked prices with respect to a share of Common Stock for
such ten (10) trading days, as furnished by a member of the New York Stock
Exchange regularly making a market in the Common Stock selected by the Holder,
or if no such member firm is then making a market in Common Stock, the fair
market value of a share of Stock on the date of issuance as determined by an
appraisal of the Company (an "Appraisal"). An "Appraisal" shall be prepared by a
mutually acceptable investment banking firm (the "Appraiser"). If the Holder and
the Company cannot agree on an Appraiser within ten (10) days following written
notice from either the Holder or the Company, each of the Holder and the Company
shall appoint an appraiser within ten (10) days following expiration of such
period. If the Holder or the Company fails to timely appoint their respective
Appraiser, the timely appointed Appraiser shall be the sole Appraiser. Those two
(2) appraisers shall jointly appoint a third appraiser within ten (10) days
after their appointment. All three (3) Appraisers shall deliver their appraisal
to the Company within thirty (30) days following the appointment of the last
Appraiser and the middle appraisal shall be the value of the Common Stock. The
costs, fees and expenses of each appointed Appraiser shall be paid by the
appointing party. The cost, fees and expenses of the third appraiser or the
mutually agreed upon Appraiser shall be shared equally by the Holder and the
Company.
1.2 ADDITIONAL PROVISIONS.
(a) If this Warrant is exercised in part, this Warrant must be
exercised for a number of whole shares of the Common Stock and the Company shall
execute a new Warrant of the same tenor and covering the number of Warrant
Shares with respect to which this Warrant has not been exercised, which Warrant
shall be registered in such name or names as may be directed in writing by the
Holder, and the Company shall deliver such Warrant to the person or entity to
receive the same, subject to the limitations set forth herein.
(b) Upon surrender of this Warrant in conformity with the
foregoing provisions, the Company (or the Acquiring Company in the case of a
Transaction) shall transfer
-2-
<PAGE> 3
to or upon the written order of the Holder, appropriate evidence of ownership of
any shares of Common Stock or other securities or property and any money to
which the Holder is entitled, registered or otherwise placed in, or payable to
the order of, such name or names as may be directed in writing by the Holder,
and shall deliver such evidence of ownership and any money to the person or
persons entitled to receive the same, together with an amount in cash in lieu of
any fraction of a share as hereinafter provided in paragraph (e) below.
(c) A Warrant shall be deemed to have been exercised or sold
immediately prior to the close of business on the date of the surrender for such
exercise or sale of the Warrant (the "Exercise Date") and, for all purposes
hereof the person entitled to receive any shares of Common Stock or other
securities or property (including any money) deliverable upon such exercise or
sale shall, as between such person and the Company (or the Acquiring Company in
the case of a Transaction), be deemed to be the holder of such shares of Common
Stock or other securities or property (including any money) of record as of the
close of business on such date and shall be entitled to receive, and the Company
shall deliver to such person, the shares of Common Stock or other securities or
property (including any money) to which such Holder would have been entitled had
such Holder been the record holder of such Common Stock on such date.
(d) Without limiting the foregoing, if, on any Exercise Date,
the transfer books for the shares of Common Stock or other securities
purchasable upon the exercise of the Warrants shall be closed, the certificates
for the shares of Common Stock or other securities in respect of which such
Warrants are then exercised, shall be transferred when such transfer book shall
next be opened (whether on or after the 5th anniversary of the date hereof), and
until such date the Company (or the Acquiring Company in the case of a
Transaction) shall be under no duty to deliver any certificates for such shares
of Common Stock or other securities; provided, however, that the transfer books
of record, unless required by law, shall not be closed at any time for a period
longer than 20 days.
(e) Notwithstanding anything to the contrary contained herein,
the Company shall not be required to issue any fraction of a share of Common
Stock or to distribute stock certificates that evidence fractional shares of
Common Stock. If any fraction of a share of Common Stock would, except for the
provisions of this paragraph (e), be issuable on the exercise of any Warrant or
Warrants, the Company shall purchase such fraction for an amount in cash equal
to such fraction of the then current Market Value. The Holder, by its acceptance
of this Warrant, expressly waives its right to receive any fraction of a share
of Common Stock or a stock certificate representing a fraction of a share of
Common Stock. Notwithstanding the foregoing, the Company shall issue Warrants
representing a fractional interest of a Warrant; provided that, the exercise of
such fractional Warrant shall be subject to the provisions of this paragraph
(e).
1.3 COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS. Before taking any action
that would cause an adjustment reducing the Per Share Exercise Price below the
then par value
-3-
<PAGE> 4
of any of the shares of Common Stock issuable upon exercise of the Warrants, the
Company will take any corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and non-assessable shares of such Common Stock at such adjusted Per Share
Exercise Price.
The Company covenants that if any federal or state law or any
rule or regulation of any national securities exchange requires that the shares
of Common Stock reserved for issuance upon exercise of the Warrants be
registered with or approved by any governmental authority or listed on any
national securities exchange before such shares may be issued upon exercise, the
Company will in good faith and as expeditiously as possible endeavor to cause
such shares to be duly registered, approved or listed, as the case may be.
1.4 RIGHTS UPON DISSOLUTION OR LIQUIDATION. Notwithstanding any other
provisions of this Warrant, in the event that, at any time after the date hereof
and prior to the expiration hereof and the termination of the rights of the
Holder hereof as provided in this Section 1, there shall be a voluntary or
involuntary dissolution, liquidation or winding up of the Company, then the
Company shall give notice by first class mail to the Holder at such Holder's
address as it appears on the books and records of the Company at the earliest
practicable time (and, in any event, not less than 20 days before any date set
for definitive action), of the date on which such dissolution, liquidation or
winding up shall take place. Such notice shall also specify the date as of which
the holders of the shares of record of Common Stock or other securities
underlying the Warrants shall be entitled to exchange their shares for
securities, money or other property deliverable upon such dissolution,
liquidation or winding up, on which date the Holder shall receive the
securities, cash or other property which it would have been entitled to receive
had the Warrants been exercisable and exercised immediately prior to such
dissolution, liquidation or winding up (net of the then applicable Per Share
Exercise Price), and the rights to exercise the Warrants shall terminate.
1.5 RIGHTS UPON A CHANGE IN CONTROL. Notwithstanding any other
provisions of this Warrant, in the event that, at any time after the date hereof
and prior to the expiration hereof and the termination of the rights of the
Holder hereof as provided in this Section 1, there shall have been a change in
control of the Company of a nature that would be required to be reported in
response to item 6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), at a price
less than $___________ per share (or the pro rata equivalent in the case of the
acquisition of assets), then the Holder shall be entitled to receive a payment
equal to the difference between the acquisition price per share (or the pro rata
equivalent in the case of the acquisition of assets) and $______________
multiplied by the number of unexercised or unexpired Warrants. For purposes of
this section, a "change in control" will be deemed to have occurred if any
"person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act)
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of (i) securities of the Company
representing 25% or more of the combined voting power of the Company's then
outstanding securities, or (ii) assets of the Company representing 25% or more
of the Company's
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<PAGE> 5
assets. The sales price per share shall be adjusted upon the occurrence of, and
in a manner consistent with, the events specified in Section 3.2 and 3.3.
2. RESERVATION OF WARRANT SHARES. The Company agrees that, prior to the
expiration of this Warrant, the Company will at all times have authorized and in
reserve, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the shares of the Common Stock and other securities
and properties as from time to time shall be receivable upon the exercise of
this Warrant.
3. ADJUSTMENTS.
3.1 DISTRIBUTION WITH RESPECT TO COMMON STOCK. If, at any time
or from time to time after the date of this Warrant, the Company shall
distribute to the holders of the Common Stock, without payment therefor: (i)
securities (including, without limitation, options, warrants, rights and
convertible or exchangeable securities), other than shares of the Common Stock;
or (ii) property, other than cash, with respect to the Common Stock, then, and
in each such case, subject to Section 3.5 hereof, the Holder, upon the exercise
of this Warrant, shall be entitled to receive the securities and properties
which the Holder would hold on the date of such exercise if, on the date of such
distribution, the Holder had been the holder of record of the number of shares
of the Common Stock subscribed for upon such exercise and, during the period
from the date of such distribution to and including the date of such exercise,
had retained such shares and the securities and properties receivable by the
Holder during such period.
3.2 STOCK SPLITS, ETC. If, at any time or from time to time
after the date of this Warrant, the Company shall issue to the holders of the
Common Stock shares of the Common Stock by way of a stock dividend or stock
split or increase the number of shares of Common Stock outstanding by
reclassification of its Common Stock, then, and in each such case, the Per Share
Exercise Price shall be adjusted, or further adjusted, to a price (to the
nearest whole cent) determined by dividing: (i) an amount equal to the number of
shares of the Common Stock outstanding immediately prior to such issuance
multiplied by the Per Share Exercise Price as it existed immediately prior to
such issuance; by (ii) the total number of shares of the Common Stock
outstanding immediately after such issuance. Upon each such adjustment in the
Per Share Exercise Price, the number of Warrant Shares shall be adjusted by
dividing the Aggregate Exercise Price by the Per Share Exercise Price in effect
immediately after such adjustment.
3.3 REVERSE SPLITS, ETC. If, at any time or from time to time
after the date of this Warrant, the number of shares of Common Stock outstanding
is decreased by way of combination of shares or reverse split or
reclassification of Common Stock, then, and in each such case, the Per Share
Exercise Price shall be adjusted, or further adjusted, to a price (to the
nearest whole cent) determined by dividing: (i) an amount equal to the number of
shares of the Common Stock outstanding immediately prior to such event
multiplied by the Per Share Exercise Price as it existed immediately prior to
such event; by (ii) the total number of shares of the Common Stock outstanding
immediately after such event. Upon each such adjustment in the Per
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<PAGE> 6
Share Exercise Price, the number of Warrant Shares shall be adjusted by dividing
the Aggregate Exercise Price by the Per Share Exercise Price in effect
immediately after such adjustment.
3.4 SALE OF STOCK. If, at any time or from time to time after
the date of this Warrant, the Company shall sell any shares of Common Stock for
a consideration per share less than the Per Share Exercise Price, then, and
thereafter, upon each further sale, the Per Share Exercise Price shall be
correspondingly adjusted to reduce the Per Share Exercise Price to match such
lower sale price.
3.5 CHANGES IN COMMON STOCK. If the Company shall be a party
to any transaction (including, without limitation, a merger, consolidation, sale
of all or substantially all of the Company's assets, or recapitalization of the
Common Stock) in which the previously outstanding Common Stock shall be changed
into or exchanged for different securities of the Company or common stock or
other securities of another corporation or interests in a non-corporate entity
or other property (including cash) or any combination of the foregoing (each
such transaction being herein called a "Transaction") then, as a condition of
the consummation of the Transaction, the Company, in the case of the
recapitalization of the Common Stock, or such other corporation or entity, in
the case of a merger, consolidation or such sale (the "Acquiring Company", and
the common stock or equivalent equity interests of the Acquiring Company, the
"Acquirer's Common Stock"), shall make lawful and adequate provision so that,
upon the exercise thereof at any time on or after the consummation of the
Transaction, the Holder shall be entitled to receive and each Warrant shall
represent the right to receive, in lieu of the Common Stock issuable upon such
conversion prior to such consummation, the securities or other property
(including cash) to which the Holder would have been entitled upon consummation
of the Transaction if the Holder had exercised such Warrant immediately prior
thereto, subject to adjustments from and after the consummation date as nearly
equivalent as possible to the adjustments provided for in this Section 3. The
Company shall not effect any Transaction unless prior to the consummation
thereof each corporation or entity (other than the Company) which may be
required to deliver any securities or other property upon the exercise of the
Warrants as provided herein shall assume, by written instrument delivered to the
Holder, the obligation to deliver to the Holder such securities or other
property as in accordance with the foregoing provisions the Holder may be
entitled to receive. The foregoing provisions of this Subsection 3.5 shall
similarly apply to successive mergers, consolidations, sales of assets,
liquidations and recapitalizations.
3.6 NOTICE OF ADJUSTMENT. Whenever the Per Share Exercise
Price and the number of shares of Common Stock and other property, if any,
purchasable upon exercise of Warrants is adjusted, in accordance with this
Section 3, as herein provided, the Company shall mail to the Holder at its
address as it appears in the warrant register established under Section 6, a
copy of a certificate of the Chief Financial Officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated and specifying the Per Share Exercise
Price and the number of shares of Common
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<PAGE> 7
Stock and other property, if any, purchasable upon exercise of Warrants after
giving effect to such adjustment.
3.7 NOTICE OF CERTAIN CORPORATE ACTION. If the Company shall
propose to take any of the actions specified in Sections 3.1, 3.2, 3.3, 3.4 or
3.5 hereof, the Company shall give to the Holder a notice of such proposed
action to be mailed to the Holder at its address in the warrant register, which
shall specify the date on which a record is to be taken for the purpose of such
dividend, distribution or right, or the date such issuance is to take place and
the date of participation therein by the holders of Common Stock, if any such
date is to be fixed, and shall indicate the effect of such action on the Common
Stock and the number and kind of any other shares of stock and other property,
if any, and the Per Share Exercise Price after giving effect to any adjustment
which will be required as a result of such transaction. Such notice shall be so
given in the case of any action covered by Section 3.1, 3.2, 3.3 or 3.4 at least
30 days prior to the record date for determining holders of the Common Stock for
purposes of such action.
3.8 STATEMENTS ON WARRANT. The form of this Warrant need not
be changed because of any adjustment made pursuant to this Section 3, and any
Warrant issued after such adjustment may state the same Per Share Exercise Price
and the same number of shares of Common Stock as are stated in this Warrant.
3.9 NO IMPAIRMENT. While this Warrant is outstanding, the
Company shall not, by amendment of its Certificate of Incorporation or through a
Transaction, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed under this Warrant by the Company, but shall
at all times in good faith assist in carrying out all of the provisions of this
Section 3 and in taking all such action as may be necessary or appropriate to
protect (but not increase) the Holder's rights hereunder against impairment.
4. FULLY PAID STOCK; TAXES. The Company agrees that the shares of the
Common Stock represented by each and every certificate for Warrant Shares
delivered on the exercise of this Warrant shall, at the time of such delivery,
be validly issued and outstanding, fully paid and non-assessable. The Company
further covenants and agrees that it will pay, when due and payable, any and all
federal and state stamp, original issue or similar taxes which may be payable in
respect of the issue of any Warrant Share or certificate therefor; provided,
however, that the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance of any certificate
for Warrant Shares in a name other than that of the Holder upon any exercise of
this Warrant.
5. TRANSFER PROCEDURE. The Holder may transfer all or any part of this
Warrant by executing and delivering to the Company the Assignment Form attached
hereto.
6. WARRANT REGISTER. This Warrant is transferable only upon the books
of the Company which it shall cause to be maintained for such purpose. The
Company may treat the
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<PAGE> 8
registered holder of this Warrant as he, she or it appears on the Company's
books at any time as the Holder for all purposes, notwithstanding the Company's
receipt of any notice to the contrary.
7. LOSS, ETC., OF WARRANT. Upon receipt of evidence satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant, and of
indemnity reasonably satisfactory to the Company, if lost, stolen or destroyed,
and upon surrender and cancellation of this Warrant if mutilated, and upon
reimbursement of the Company's reasonable incidental expenses, the Company shall
execute and deliver to the Holder a new Warrant of like date, tenor and
denomination. Each substitute Warrant executed and delivered pursuant to this
Section in lieu of any lost, stolen, destroyed, or mutilated Warrant shall
represent an additional contractual obligation of the Company and shall be
entitled to the benefits of this Warrant equally and proportionately with any
and all other Warrants duly executed and delivered by the Company pursuant
hereto.
8. WARRANT HOLDER HAS NO SHAREHOLDER RIGHTS. This Warrant does not
confer upon the Holder any right to vote or to consent or to receive notice as a
shareholder of the Company, as such, with respect to any matters whatsoever, or
any other rights or liabilities as a shareholder, prior to the exercise hereof.
9. COMMUNICATION. Any notice required or permitted to be given
hereunder shall be in writing and shall be given personally, via commercial
overnight courier service or by deposit in the United States mail, postage
prepaid, registered or certified, return receipt requested, addressed to each
party in the following manner:
To the Company: Norris Communications, Inc.
12725 Stowe Drive
Poway, California 92064
Attention: President
To the Holder: Higham, McConnell & Dunning
28202 Cabot Road, Suite 450
Laguna Niguel, CA 92677
Attention: Curt C. Barwick
Notices shall be deemed given upon the earliest to occur of: (i)
receipt; (ii) the day after delivery to a commercial overnight courier service;
or (iii) five (5) days after deposit in the United States mail. The Company and
the Holder may change the address to which such notices are to be addressed to
them by giving the other party notice in the manner set forth herein.
10. HEADINGS. The headings of this Warrant have been inserted as a
matter of convenience and shall not affect the construction hereof.
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<PAGE> 9
11. ADVICE OF COUNSEL. Each party hereto acknowledges that it has been
advised to seek independent legal counsel for advice regarding the effect of the
terms and provisions hereof, and has either obtained such advice of independent
legal counsel, or has voluntarily and without compulsion elected to enter into
and be bound by the terms of this Agreement without such advice of independent
legal counsel.
12. SEVERABILITY. If any provision of this Warrant is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
13. APPLICABLE LAW. This Warrant shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without giving
effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, this Warrant has been duly executed as of the date
first above written.
NORRIS COMMUNICATIONS, INC.
By:________________________
Its:_______________________
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<PAGE> 10
FORM OF ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto___________________ the right to purchase_____ shares of Common Stock
evidenced by the within Warrant, and hereby appoints__________________________
to transfer the same on the books of NORRIS COMMUNICATIONS, INC. with full power
of substitution in the premises.
Date:________________, 19__
_______________________
(Signature)
Note: Signature must
conform in all respects
to the name of the
Warrant Holder as
specified on the face
of this Warrant in
every particular,
without alteration or
enlargement or any
change whatsoever.
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<PAGE> 11
EXERCISE FORM
TO: NORRIS COMMUNICATIONS, INC.
The undersigned (_____________________________)
Please insert Social Security or other identifying
number of Holder
hereby irrevocably elects to exercise the right of purchase represented by the
within Warrant for, and to purchase thereunder, shares of Common Stock provided
for therein and tenders payment herewith the Per Share Exercise Price for each
such share of Common Stock. The undersigned requests that certificates for such
shares of Common Stock be issued as follows:
Name: _________________________________
Address: ______________________________
Deliver to: ___________________________
Address: ______________________________
Date: ___________________, 19__
_______________________
(Signature)
Note: Signature must
conform in all respects
to the name of the
Warrant Holder as
written upon the face
of this Warrant in
every particular,
without alteration or
enlargement or any
change whatsoever.
The undersigned represents and warrants to NORRIS COMMUNICATIONS, INC. that the
undersigned is acquiring the shares referred to above solely for its own account
and not as a nominee for any other person or entity and not with a view toward
the resale or distribution thereof except in compliance with applicable
securities laws.
_______________________
(Signature)
_______________________
(Date)
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<PAGE> 1
EXHIBIT 5.1
[HIGHAM, MCCONNELL & DUNNING LETTERHEAD]
October 9, 1996
NORRIS COMMUNICATIONS, INC.
12725 Stowe Drive
Poway, California 92064
Gentlemen:
We have examined the Registration Statement on Form S-8 (the
"Registration Statement") filed by Norris Communications, Inc., a Delaware
corporation (the "Company"), with the Securities and Exchange Commission on
October 9, 1996 in connection with the registration under the Securities Act of
1933, as amended, of 200,000 shares of Common Stock, $.001 par value per share,
of the Company (the "Shares"), Warrants for the purchase of 150,000 shares of
Common Stock (the "Warrants") and 150,000 shares of Common Stock issuable upon
the exercise of the Warrants (the "Warrant Shares"), which the Company has
agreed to issue pursuant to the Company's Consultant Stock Bonus Plan (the
"Plan").
We have examined the proceedings heretofore taken and are familiar with
the additional proceedings proposed to be taken by the Company in connection
with the authorization and issuance of the Shares, the Warrants and the Warrant
Shares pursuant to the Plan as set forth in the Plan.
Based upon such examination and subject to compliance with applicable
state securities and "blue sky" laws, it is our opinion that:
1. The Shares and the Warrant Shares, when issued pursuant to the
provisions of the Plan, will constitute legally issued and outstanding shares of
the Company's Common Stock, fully paid and nonassessable.
2. The Warrants, when issued pursuant to the provisions of the Plan,
will be legally issued, fully paid and nonassessable.
<PAGE> 2
NORRIS COMMUNICATIONS, INC.
October 9, 1996
Page 2
We consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
HIGHAM, MCCONNELL & DUNNING
CCB:mhc
Enclosures
<PAGE> 1
EXHIBIT 23.2
CONSENT OF
INDEPENDENT CHARTERED ACCOUNTANTS
We consent to the incorporated by reference in the Registration Statement (Form
S-8) pertaining to the Consultant's Stock Bonus of Norris Communications, Inc.
of our report dated May 24, 1996 (except as to Note 16[b] which is as of June 7,
1996), with respect to the consolidated financial statements of Norris
Communications, Inc. (formerly Norris Communications Corp.) included in its
Annual Report (Form 10-KSB/A) for the year ended March 31, 1996 filed with the
Securities and Exchange Commission.
Vancouver, Canada, /s/ Ernst & Young
October 9, 1996 Chartered Accountants
