As filed with the Securities and Exchange Commission on November 18, 1999
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
DETECTION SYSTEMS, INC.
(exact name of registrant as specified in its charter)
NEW YORK 16-0958589
- -------------------------------------- ----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
130 PERINTON PARKWAY, FAIRPORT, NEW YORK 14450
(Address of Principal Executive Offices)
DETECTION SYSTEMS, INC.
1997 STOCK OPTION PLAN
(Full title of the Plan)
---------------------------------------------------------
Karl H. Kostusiak, President
Detection Systems, Inc.
130 Perinton Parkway
Fairport, New York 14450
716-223-4060
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(Name, address, including zip code, and
telephone number, including area code, of agent for service)
Copy to:
Justin P. Doyle, Esq.
Nixon Peabody LLP
Clinton Square, P.O. Box 1051
Rochester, New York 14604
716-263-1000
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount of
Securities to Amount to be Maximum Offering Maximum Aggregate Registration
be registered registered price per share* offering price* fee
Common Stock
$.05 par value
and associated
options 250,000 $9.688 $2,421,875 $673.28
- ---------------
*Inserted solely for the purpose of calculating the registration fee pursuant to
Rule 457(h) under the Securities Act of 1933, as amended, and based upon the
average of the high and low trade prices for the registrant's Common Stock on
The Nasdaq Stock Market on November 16, 1999.
<PAGE>
Explanatory Note
Detection Systems, Inc. (the "Company") filed a Registration Statement on
Form S-8 on August 14, 1998 (Reg. No. 333-61825) (the "Prior Registration
Statement"). On August 20, 1999, the Company's shareholders authorized an
amendment to the Company's 1997 Stock Option Plan ("the Plan") to increase the
shares authorized for options under the Plan from 250,000 to 500,000 shares.
This Form S-8 (the "Registration Statement") registers the additional 250,000
shares authorized for options under the Plan.
The contents of the Prior Registration Statement are incorporated herein
by reference.
Part II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
Item 8. Exhibits.
EXHIBIT
NUMBER DESCRIPTION LOCATION
------- ------------- ----------
4(a) Certificate of Incorporation Incorporated by reference
of Detection Systems, Inc., to Exhibit 3(a) of the
as amended Registrant's Quarterly Report
on form 10-Q for the quarter
ended 9/30/99.
4(b) By-laws of Detection Systems, Inc., Incorporated by reference
as amended to Exhibit 3(b) of the
Registrant's 1997 Annual
Report on Form 10-K
4(c) Detection Systems, Inc. Filed herewith
1997 Stock Option Plan, as amended
5 Opinion of Nixon Peabody LLP Filed herewith
23(a) Consent of PricewaterhouseCoopers LLP Filed herewith
23(b) Consent of Nixon Peabody LLP Included in Exhibit 5
24 Power of Attorney Included on signature page
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, the Company certifies that is 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 Town of Perinton, State of New York, on November 18,
1999.
DETECTION SYSTEMS, INC.
/s/ Karl H. Kostusiak
Karl H. Kostusiak
Chairman, Chief Executive Officer & President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby severally constitutes and appoints Karl H. Kostusiak and Frank J.
Ryan, and each of them, his true and lawful attorneys-in-fact and agents, with
full power of substitution, to sign any and all amendments (including
post-effective 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 attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite or necessary fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their 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.
/s/ Karl H. Kostusiak Chairman, CEO, President and Director 11/18/99
Karl H. Kostusiak (Principal Executive Officer)
/s/ Frank J. Ryan Vice President and Secretary/Treasurer 11/16/99
Frank J. Ryan (Principal Financial Officer)
/s/ Christopher P. Gerace Vice President and Chief Accounting Officer 11/18/99
Christopher P. Gerace (Principal Accounting Officer)
/s/ Donald R. Adair Director 11/16/99
Donald R. Adair
/s/ Mortimer B. Fuller, III Director 11/16/99
Mortimer B. Fuller, III
/s/ David B. Lederer Director 11/17/99
David B. Lederer
/s/ Edward C. McIrvine Director 11/16/99
Edward C. McIrvine
Exhibit 4(c)
DETECTION SYSTEMS, INC.
1997 STOCK OPTION PLAN
(AS AMENDED 2/10/99)
1. PURPOSE
The purpose of the Detection Systems, Inc. ("the Company") 1997 Stock
Option Plan ("the Plan") is to enable eligible key employees and nonemployees of
the Company and its subsidiaries to purchase shares of Common Stock of the
Company by means of incentive stock options and nonqualified stock options
(collectively referred to as "options"). Through the use of such options, the
Company expects to be able to attract and retain the best available talent and
to encourage the highest level of performance of its key personnel.
2. ADMINISTRATION
The Plan shall be administered by a Stock Option Committee (the
"Committee") consisting of not fewer than three members appointed by the Board
of Directors of the Company, each of whom, to the extent feasible, shall be a
director meeting the definition as a "non-employee director" and an "outside
director," respectively, under regulations promulgated under Section 16(b) of
the Securities Exchange Act of 1934, as amended (the Exchange Act"), and Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), or
comparable provisions as in effect from time to time. The Board shall fill any
vacancy on the Committee.
Subject to the provisions of the Plan, the Committee shall possess the
authority, in its discretion, (a) to determine from among those persons who
perform services to the Company to whom, and the time or times at which, options
will be awarded, the number of shares included in the option and any other terms
and conditions that may apply to such option; (b) to determine whether the
options shall be incentive or nonqualified options; (c) to interpret the Plan;
(d) to make and amend rules and regulations relating thereto; (e) to prescribe
the form and conditions of the option agreements; and (f) to make all other
determinations necessary or advisable for the administration of the Plan. The
Committee's determinations shall be conclusive and binding upon the Company, the
participants and all other persons.
3. ELIGIBILITY
Options may be awarded under the Plan only to key employees and key
nonemployees of the Company and its subsidiaries (which shall include all
corporations of which at least fifty percent of the voting stock is owned by the
Company directly or through one or more corporations at least fifty percent of
the voting stock of which is so owned). Notwithstanding the foregoing, any
director who is not an officer or employee of the Company or one of its
subsidiaries shall not be eligible to participate in this Plan.
4. SHARES AVAILABLE
An aggregate of 500,000 shares of the Common Stock (par value $.05 per share)
of the Company (subject to substitution or adjustment as provided in Section 8
hereof) shall be available for options under the Plan. Such shares may be
authorized and unissued shares or may be treasury shares. If an option expires,
terminates or is canceled without being exercised, new options may be thereafter
granted covering such shares. In order to meet the requirements of Code Section
162(m), which section limits the Company's tax deduction for compensation paid
to certain officers to $1 million per year, the Plan limits to 100,000 the
aggregate number of options that may be awarded to any one employee. No stock
option may be granted more than ten years after the effective date of the Plan.
5. TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS
Incentive stock options may be granted only to employees of the Company and
its subsidiaries. Each incentive stock option granted under the Plan to an
employee shall be designated as such and shall be evidenced by an incentive
stock option agreement in such form as the Committee shall approve from time to
time, which agreement shall conform with this Plan and which shall contain the
following terms and conditions:
(A) NUMBER OF SHARES. The option agreement shall specify the number of
shares to which it pertains.
(B) PURCHASE PRICE. The purchase price for each option shall be not less
than the fair market value of the stock at the time such option is granted.
The Committee shall determine the purchase price. If an option is granted
to an employee who at the time of grant owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company (a "10-percent Shareholder"), the purchase price shall be at least
110% of the fair market value of the stock subject to the option.
(C) DURATION OF OPTION. Each stock option by its terms shall not be
exercisable after the expiration of ten years from the date such option is
granted. In the case of an incentive stock option granted to a 10-percent
Shareholder, the option by its terms shall not be exercisable after the
expiration of five years from the date such option is granted.
(D) OPTIONS NONTRANSFERABLE. Each option by its terms shall not be
transferable by the optionee otherwise than by will or the laws of descent
and distribution, and shall be exercisable during his lifetime, only by the
optionee, the optionee's guardian or the optionee's legal representative.
(E) EXERCISE PERIOD. Subject to the restriction in Section 5(f), the
exercise of each option shall be subject to such conditions as may be
imposed by the Committee and specified in the option agreement. The
Committee may, among other things, specify a minimum length of employment
and may stagger the period of exercise by providing that only a certain
percentage of options may be exercised each year.
(F) PAYMENT OF OPTION PRICE. An option shall be exercised upon written
notice to the Company accompanied by payment in full for the shares being
acquired. The payment shall be made in cash, check or wire transfer; by
delivery of shares of Common Stock of the Company registered in the name of
the optionee, endorsed in blank, the value of which will be deemed equal to
the closing market price of such shares on the date of exercise; or, at the
discretion of the Committee, by a so-called "cashless exercise" transaction
that affords the optionee the opportunity to sell immediately some or all
of the shares underlying the exercise portion of the option in order to
generate sufficient cash to pay the option exercise price and/or to satisfy
withholding tax obligations related to the option.
(G) MAXIMUM VALUE OF SHARES. No incentive option shall be granted to an
employee under this Plan or any other incentive stock option plan of the
Company or its subsidiaries to purchase shares as to which the aggregate
fair market value (determined as of the date of grant) of the Common Stock
which first become exercisable by the employee in any calendar year exceeds
$100,000.
(H) RIGHTS AS A SHAREHOLDER. The optionee shall have no rights as a
shareholder with respect to any shares for which he is granted an option
until the date of issuance to him of a stock certificate for such shares
and no adjustment shall be made for any dividends or other rights the
record date for which is prior to the date such stock certificate is
issued.
(I) GENERAL RESTRICTION. Each option shall be subject to the requirement
that, if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
subject to such option upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental regulatory
body, is necessary or desirable as a condition of, or in connection with,
the granting of such option or the issuance or purchase of shares
thereunder, such option may not be exercised in whole or in part unless
such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to the
Board of Directors.
6. TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS
Options other than incentive stock options may be granted under this Plan
to both eligible employees and eligible nonemployees. Each such nonqualified
option shall be evidenced by a nonqualified stock option agreement, shall be
designated as a "nonqualified stock option," and shall conform to the foregoing
provisions of Section 5 except the purchase price requirements of Section 5(b),
the 10-percent Shareholder restriction of Section 5(c), the prohibition on
transferability of Section 5(d) to the extent provided in the nonqualified stock
option agreement, and the maximum value of grants of Section 5(g). The Committee
may include, in its discretion, any terms or conditions in addition to those
specified in Section 5. To the extent an option exceeds the limitations of
Section 5(g), it shall be deemed a nonqualified option and shall otherwise
remain in full force and effect. A nonqualified option may have a duration of 10
years and one day from the date such option is granted.
7. TERMINATION OF EMPLOYMENT - EFFECT ON OPTIONS
If the employment of an optionee terminates for any reason other than death
or disability, an option may be exercised by him at any time prior to the
earlier of the expiration date of the option or the expiration of three months
after the date of termination, but only if, and to the extent that, he was
entitled to exercise the option at the date of such termination. Notwithstanding
the foregoing, an option may not be exercised after termination of employment if
the Committee determines that the termination of employment of such optionee
resulted from willful acts, or failure to act, by the optionee detrimental to
the Company or any of its subsidiaries. The Committee shall determine whether an
authorized leave of absence shall constitute a termination of employment for
purposes of this Plan.
If an optionee's employment terminates by reason of disability (within the
meaning of Section 105 (d)(4) of the Internal Revenue Code) or death, his option
may be exercised at any time prior to the earlier of the expiration of the
option or the expiration of one year following the date employment terminated
due to disability or death.
If employment of the optionee terminates for any reason other than
disability, retirement or death, any unpaid balance remaining on any promissory
note used in the purchase of stock shall become due and payable upon not less
than three months' notice from the Company, which notice may be given at any
time after such termination; provided, however, that such unpaid balance on such
promissory note shall become due and payable five years from the date of such
termination, unless the note has an earlier due date. In the case of termination
due to death, any unpaid balance remaining on such note on the date of death
shall become due and payable one year from such date. "Retirement" shall mean
early or normal retirement as defined in the Company's retirement plan or, in
the event there is no such plan, age 65.
8. ADJUSTMENT OF SHARES
In the event of any change in the Common Stock of the Company by reason of
any stock dividend, recapitalization, reorganization, merger, consolidation,
split-up, combination, or exchange of shares, or rights offering to purchase
Common Stock at a price substantially below fair market value, or of any similar
change affecting the Common Stock, the number and kind of shares which
thereafter may be optioned and sold under the Plan and the number and kind of
shares subject to option in outstanding option agreements and the purchase price
per share thereof shall be appropriately adjusted consistent with such change in
such manner as the Committee may deem equitable to prevent substantial dilution
or enlargement of the rights granted to, or available for, participants in the
Plan.
9. NO EMPLOYMENT RIGHTS
Neither the Plan nor any options granted under it shall confer upon any
recipient any right with respect to continuance of employment by the Company or
any subsidiary, nor shall they interfere in any way with the right of the
Company or any subsidiary by which a recipient is employed to terminate his
employment at any time.
10. WITHHOLDING TAXES
Whenever the Company proposes or is required to issue or transfer shares of
Common Stock under the Plan to an employee pursuant to the exercise of a
nonqualified stock option, the Company shall have the right to require the
recipient to remit to the Company an amount sufficient to satisfy any federal,
state or local withholding tax requirements prior to the delivery of any
certificate or certificates for such shares. To the extent provided in the
nonqualified stock option agreement, the amount of such withholding tax
requirements may be satisfied by delivery of shares of the Common Stock of the
Company registered in the name of the optionee, duly assigned to the Company.
Any shares so delivered shall be deemed to have a value equal to the fair market
value of the shares on such date.
11. CHANGE IN CONTROL
Upon acquisition of thirty percent or more of the Company's outstanding
shares of stock having general voting rights by an unaffiliated person, entity
or group, the Committee shall notify, in writing, each holder of an outstanding
option of such change in control. Notwithstanding any other provision of this
Plan or any option agreement, all options shall become fully exercisable on
receipt of such notice.
12. AMENDMENT AND DISCONTINUANCE
This Plan may be amended, modified or terminated by the shareholders of the
Company or by the Board of Directors, except that the Board may not, without
approval of the shareholders, materially increase the benefits accruing to
participants under the Plan, increase the maximum number of shares as to which
options may be granted under the Plan, change the minimum option price, change
the class of eligible employees, extend the period for which options may be
granted or exercised, or withdraw the authority to administer the Plan from a
Committee consisting of directors not eligible to receive options under the
Plan. Notwithstanding the foregoing, to the extent permitted by law, the
Committee may amend the Plan without the approval of shareholders, to the extent
it deems necessary to cause options granted under the Plan to be exempt from
Section 16(b) of the Exchange Act and deductible compensation under Section
16s(m) of the Code. Except as required by law, no amendment, modification, or
termination of the Plan may, without the written consent of a participant to
whom any option shall theretofore have been awarded, adversely affect the rights
of such participant under such option.
13. EFFECTIVE DATE
The effective date of this amended Plan is August 12, 1999, provided that
the amendment is approved by the shareholders of the Company on that date. The
original plan was adopted on August 20, 1997.
14. GOVERNING LAW
To the extent not inconsistent with the provisions of the Internal Revenue
Code that relate to incentive stock options and nonqualified stock options, this
Plan and any option agreement adopted pursuant to it shall be construed under
the laws of the State of New York.
Exhibit 5
Nixon Peabody LLP
Attorneys and Counselors at Law
Clinton Square, Post Office Box 1051
Rochester, New York 14603-1051
Phone: (716) 263-1000, Fax: (716) 263-1600
November 18, 1999
Detection Systems, Inc.
130 Perinton Parkway
Fairport, New York 14450
Gentlemen:
We have acted as counsel to Detection Systems, Inc. (the "Company") in
connection with the Registration Statement on form S-8 filed by the Company with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, (the "Act") relating to the issuance of up to 250,000 shares of Common
Stock of the Company, par value $.05 per share, pursuant to the Company's 1997
Stock Option Plan (the "Plan").
We have examined the originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company, and such other documents, certificates and other
corporate records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein, including (i) the Certificate of Incorporation of the
Company, as amended to the date hereof, (ii) the By-laws of the Company, as
amended to the date hereof, (iii) copies of certain resolutions duly adopted by
the Board of Directors and shareholders of the Company and (iv) the Plan.
Based upon and subject to the foregoing, and after (a) the
above-referenced Registration Statement becomes effective with the Securities
and Exchange Commission under the Act and assuming that such effectiveness
remains in effect throughout the period during which shares of Common Stock are
offered and sold pursuant to the Plan, (b) the shares of Common Stock to be
offered and sold pursuant to the Plan have, if required, been duly qualified or
registered, as the case may be, for sale under applicable state securities laws
and all applicable securities laws are complied with, (c) all necessary action
by the Board of Directors or Compensation Committee of the Board of Directors of
the Company shall have been taken to duly authorize the offer, issuance and sale
of Common Stock to be offered and sold pursuant to the Plan, and (d) the shares
of Common Stock to be offered and sold pursuant to the Plan have been delivered
pursuant to and in accordance with the terms of the Plan and related agreements
and instruments, we are of the opinion that the 250,000 shares of Common Stock
to be offered and sold pursuant to the Plan will have been duly authorized,
validly issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement. In giving this consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act or the rules and regulations of the Commission
thereunder.
This opinion is intended solely for your benefit in connection with the
transactions described above and, except as provided in the immediately
preceding paragraph, may not be otherwise communicated to, reproduced, filed
publicly or relied upon by, any other person or entity for any other purpose
without our express prior written consent. This opinion is limited to the
matters stated herein, and no opinion or belief is implied or may be inferred
beyond the matters expressly stated herein. The opinions expressed herein are
rendered as of the date hereof, and we disclaim any undertaking to advise you of
changes in law or fact which may affect the continued correctness of any of our
opinions as of a later date.
Very truly yours,
/s/ Nixon Peabody LLP
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 24, 1999, relating to the
consolidated financial statements of Detection Systems, Inc., which appears as
Exhibit 13 of the Detection Systems, Inc. Form 10-K for the year ended March 31,
1999.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Rochester, New York
November 18, 1999
