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EXHIBIT 10.7
AMENDED AND RESTATED
SEVERANCE COMPENSATION AGREEMENT
Dated as of June 11,
2007
COMARCO, Inc. corporation
(the “Company”)
and
Peggy L. Vessell Eoff (the
“Executive”)
The Company’s Board of
Directors (the “Board”) has determined that it is
appropriate to reinforce and encourage the continued attention and
dedication of members of the Company’s management, including
the Executive, to their assigned duties without distraction in
potentially disturbing circumstances arising from the possibility
of a change in control of the Company.
This Agreement sets forth the
severance compensation which the Company agrees it will pay to the
Executive if the Executive’s employment with the Company
terminates under one of the circumstances described herein
following a “Change in Control” of the Company (as
defined in Section 2).
l. Term . The term
(“Term”) of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to
Section 3(b), 3(c) or 3(d) hereof, shall end three
(3) years following the date on which notice of non-renewal or
termination of this Agreement is given by either the Company or the
Executive to the other. Thus, this Agreement shall be renewable
automatically on a daily basis so that the outstanding Term is
always three (3) years following any effective notice of
non-renewal or of termination given by the Company or the
Executive.
2. Change in Control .
No compensation shall be payable under this Agreement unless and
until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and
(b) the Executive’s employment by the Company terminates
in the circumstances specified in Section 3(a). For purposes
of this Agreement, a “Change in Control” of the Company
shall be deemed to have occurred if (i) there shall be
consummated (x) any consolidation or merger of the Company
(whether or not the Company is the continuing or surviving entity)
other than a consolidation or merger of the Company in which the
holders of the Company’s Common Stock immediately prior to
the consolidation or merger continue to have proportionate
ownership of at least 50.1% of capital stock of the surviving
corporation eligible to vote in the election of directors
immediately after the consolidation or merger, or (y) any
sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of
the assets of the Company other than to a corporation in which the
holders of the Company’s Common Stock immediately prior to
such transaction continue to have proportionate ownership of at
least 50.1% of the capital stock of such corporation eligible to
vote in the election of directors, or (ii) the stockholders of
the Company approve any plan or proposal for the liquidation
or
dissolution of the Company, or
(iii) any person (as such term is used in Section l3(d) and
l4(d)(2) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)), shall become the beneficial owner
(within the meaning of Rule 13d-3 under the Exchange Act) of more
than 25% of the Company’s outstanding shares of Common Stock,
or (iv) during any period of two consecutive years during the
term of this Agreement, individuals who at the beginning of the two
year period constituted the entire Board do not for any constitute
a majority thereof unless the election, or the nomination for
election by the Company’s stockholders, of each new director
was approved by a vote of at least a majority of the directors then
still in office who were directors at the beginning of the period
or who were elected or nominated for election in the manner
provided herein.
3. Termination Following
Change in Control.
(a) Termination . If a
Change in Control of the Company shall have occurred while the
Executive is still an employee of the Company, the Executive shall
be entitled to the compensation provided in Section 4 upon the
subsequent termination of the Executive’s employment with the
Company within twenty-four (24) months of such Change in
Control, whether requested by the Executive or by the Company,
unless such termination is as a result of (i) the
Executive’s death; (ii) the Executive’s Disability
(as defined in Section (3)(b) below); (iii) the
Executive’s Retirement (as defined in Section 3(c)
below); (iv) the Executive’s decision to terminate
employment other than for Good Reason (as defined in
Section 3(e) below).
(b) Death or
Disability . If, as a result of the Executive’s
incapacity due to physical or mental illness, the Executive is
absent from his duties with the Company on a full-time basis for
six months, the Company may elect to terminate the Executive for
“Disability’ by written notice to the Executive and
without liability to the Executive pursuant to this Agreement;
provided, however, that any such termination shall be effective
only at the end of thirty (30) days following the delivery of
such notice and only if the Executive fails to return to the
full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in
the event of the death of the Executive occurring at any time
during the Term hereof, and in such event the Company shall have no
liability by reason of such termination.
(c) Retirement . The
Executive shall be deemed terminated automatically, without
liability to Executive pursuant to this Agreement, upon Retirement
(as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. “Retirement” as
used in this Agreement shall be deemed to occur upon the
Executive’s having reached such age as shall have been fixed
in any arrangement mutually established by the Company and the
Executive.
(d) Cause . The
Company may terminate the Executive, without liability to the
Executive pursuant to this Agreement, if the Executive’s
employment with the Company is terminated for Cause. For purposes
solely of determining whether the Company may terminate the
Executive pursuant to this Section 3(d) without liability to
the Executive, the Executive shall be deemed to have been
terminated for “Cause” only if
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the Executive (1) has engaged in
fraud, misappropriation or embezzlement involving the Company,
(2) is convicted of or admits a felony or other offense
involving dishonesty or moral turpitude, or (3) willfully
refuses to carry out a lawful written instruction of the Board that
is consistent with the Executive’s position and duties, which
refusal continues for a period of 30 days after the Executive has
received a written notice describing in reasonable detail the
circumstances deemed by the Board to constitute such refusal.
Notwithstanding the foregoing, the Executive shall not be deemed,
for purposes of this Agreement, to have been terminated for Cause
unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not
less than majority of the entire membership of the Company’s
Board at a meeting of the Board called and held for that purpose
(after reasonable notice to the Executive and an opportunity for
the Executive, together with the Executive’s counsel, to be
heard before the Board), finding that in the good faith opinion of
the Board the Executive engaged in the conduct set forth in the
second sentence of this Section 3(d) and specifying the
particulars thereof in reasonable detail.
(e) Good Reason . The
Executive may terminate the Executive’s employment for Good
Reason at any time after a Change in Control during the Term. For
purposes of this Agreement, “Good Reason” shall mean
any of the following:
(i) The Company has
materially changed the Executive’s position, duties,
responsibilities, status, or offices as in effect immediately prior
to a Change in Control of the Company, or has removed the Executive
from or failed to reelect the Executive to any of such
positions;
(ii) A reduction by the
Company in the Executive’s base salary as in effect on the
date hereof or as the same may be increased from time to time
during the Term;
(iii) Any failure by the
Company to continue in effect any benefit plan or arrangement
(including, without limitation, the Company’s life insurance,
accident, disability and health insurance plans, 40l(k) and bonus
plans, stock options, and all other similar plans which are from
time to time made generally available to senior executives/officers
of the Company) and in which the Executive is participating at the
time of a Change in Control of the Company, unless there are
substituted therefore plans or arrangements providing the Executive
with essentially equivalent benefits (hereinafter referred to as
“Benefit Plans”), or the taking of any action by the
Company which would adversely affect the Executive’s
participation in or materially reduce the Executive’s
benefits under any such Benefit Plan or deprive the Executive of
any material fringe benefit enjoyed by the Executive at the time of
a Change in Control of the Company;
(iv) Any failure by the
Company to continue in effect any incentive plan or arrangement
(including, without limitation, the Company’s plans
enumerated in subparagraph (iii) above and similar incentive
compensation benefits) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are
substituted therefore plans or arrangements providing the Executive
with
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essentially equivalent benefits
(hereinafter referred to as “Incentive Plans”), or
taking of any action by the Company which would adversely affect
the Executive’s participation in any such Incentive Plan or
reduce the Executive’s potential benefits under any such
Incentive Plan, expressed as a percentage of his base salary, by
more than 10 percentage points in any fiscal year as compared to
the immediately preceding fiscal year;
(v) Any failure by the
Company to continue in effect any plan or arrangement to receive
securities of the Company (including, without limitation, the
Company’s stock option and purchase plans and any other plan
or arrangement to receive the exercise stock options, stock
appreciation rights, restricted stock or grants thereof) in which
the Executive is participating at the time of a Change in Control
of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent
benefits (hereinafter referred to as “Securities
Plans”), or the taking of any action by the Company which
would adversely affect the Executive’s participation in or
materially reduce the Executive’s benefits under any such
Securities Plan;
(vi) The Executive’s
relocation to a principal office more than 25 miles from the
location at which the Executive performed the Executive’s
duties prior to a Change in Control of the Company, except for
required travel by the Executive on the Company’s business to
an extent substantially consistent with the Executive’s
business travel obligations during the 12 months immediately
preceding a Change of
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