<PAGE> 1
As filed with the Securities and Exchange Commission on October 24, 1996
Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement Under The Securities Act of 1933
NAPCO SECURITY SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 11-2277818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
333 BAYVIEW AVENUE 11701
AMITYVILLE, NEW YORK (Zip Code)
(Address of Principal Executive Offices)
1992 INCENTIVE STOCK OPTION PLAN
(Full Title of the Plan)
KEVIN S. BUCHEL
Senior Vice President of Operations and Finance
Napco Security Systems, Inc.
333 Bayview Avenue
Amityville, New York 11701
(Name and address of agent for service)
(516) 842-9400
(Telephone number, including area code, of agent for service)
With a copy to:
ANTHONY B. BARTON, ESQ.
Curto Barton & Alesi, P.C.
One Huntington Quadrangle
Melville, NY 11747
(516) 293-1300
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of Securities Amount to be maximum offering maximum aggregate Amount of
to be registered (1) Registered price per share (2) offering price registration fee
- -------------------- ---------- ------------------- -------------- ----------------
<S> <C> <C> <C> <C> <C>
Common Stock,
par value $0.01 814,733 $3.82 $3,112,281 $1,074
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interest to be offered or sold pursuant to the employee benefit plan
described herein.
(2) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457(h) and based on the average of the high and low
prices of the Common Stock of Napco Security Systems, Inc. on the
National Association of Securities Dealers Automated Quotation System
on October 22, 1996.
<PAGE> 2
NAPCO SECURITY SYSTEMS, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
UP TO 814,733 SHARES
PROSPECTUS DATED OCTOBER 24, 1996
This Prospectus relates to up to 814,733 shares of common stock, par
value $0.01 per share (the "Common Stock"), and associated stock options of
Napco Security Systems, Inc., a Delaware corporation (the "Company"), which have
previously been issued or may in the future be issued to certain key employees
of the Company and its subsidiaries pursuant to awards granted under the
Company's 1992 Incentive Stock Option Plan, as amended (the "Plan") to be sold
by the selling stockholders named in "Selling Stockholders" and in Annex I
hereto (the "Selling Stockholders"). The Company will not receive any proceeds
from the sale of the Common Stock, except the option exercise price.
This document constitutes part of a prospectus covering securities that
have been registered under the Securities Act of 1933.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY PRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No person is authorized to give any information or to make any
representations in connection with the offer made in this Prospectus other than
as contained herein and any information or representation not contained herein
must not be relied upon as having been authorized by the Company.
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities) with respect to the Common Stock and
associated stock options pursuant to the Plan and to be sold by the Selling
Stockholders pursuant to this Prospectus (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits thereto.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith filed reports and other information with the Commission.
Reports, proxy statements and other information filed by the Company with the
Commission may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 and at the Commission's New York Regional Office, 7 World Trade
Center, Suite 1300, New York, New York 10048, and Chicago Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material may be obtained at prescribed rates upon written
request addressed to the Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following documents of the Company heretofore filed with the
Commission are hereby incorporated herein by reference:
(1) Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1996, Commission File No. 0-10004;
(2) 1982 Amended and Restated Incentive Stock Option Plan (extended
1992) contained in Exhibit 10(b) of the Registrant's Form 10-K for the fiscal
year ended June 30, 1991; and
(3) Amended and Restated 1992 Incentive Stock Option Plan contained
in Exhibit 4(a) of Part II of the Registrant's Registration Statement on Form
S-8, declared effective on October 24, 1996.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered hereunder have been sold or which deregisters all such securities then
remaining unsold, shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing of such reports and
documents.
2
<PAGE> 4
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any and all of the information incorporated by reference in this
Prospectus (not including exhibits to the information that is incorporated by
reference unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates). Written requests should be
directed to Napco Security Systems, Inc., 333 Bayview Avenue, Amityville, New
York 11701, Attention: Senior Vice President of Operations and Finance.
Telephone requests should be directed to the Senior Vice President of Operations
and Finance (516-842-9400).
THE COMPANY
The term "Company" as used in this Prospectus includes Napco Security
Systems, Inc. and its subsidiaries, unless the context otherwise requires. The
principal executive offices of the Company are located at 333 Bayview Avenue,
Amityville, New York 11701 and its telephone number is (516) 842-9400.
SELLING STOCKHOLDERS
The table attached as Annex I hereto sets forth, as of the date of
this Prospectus or a subsequent date if amended or supplemented, (a) the name of
each Selling Stockholder and his or her relationship to the Company during the
last three years; (b) the number of shares of Common Stock each Selling
Stockholder: (i) owned of record and (ii) to be offered pursuant to this
Prospectus; and (c) the amount and the percentage of the class of Common Stock
that will be owned by each Selling Stockholder after completion of the offering.
The information contained in Annex I may be amended or supplemented.
PLAN OF DISTRIBUTION
Under the Company's 1992 Incentive Stock Option Plan, as amended ("1992
Plan") which was approved by vote of the stockholders of the Company at the 1992
Annual Meeting (extending the 1982 plan for an additional ten years), incentive
stock options to purchase up to an aggregate of 727,933 shares of Common Stock
as adjusted (plus the shares at the time subject to options) or a total of
815,933 shares may be granted at fair market value to key employees during the
ten-year period ending in October 2002. Since June 30, 1992 options for 1,200
shares have been exercised. At June 30, 1996, 738,733 shares were available
for grant under the 1992 Plan. Options to purchase a total of 76,000 shares
of Common Stock were outstanding under the 1992 Plan on June 30, 1996, with
exercise prices of $2.25 to $4.375 per share. The incentive stock options
included in the foregoing tabulation expire five years from the date of grant,
are non-transferable and are exercisable beginning with the date of grant
3
<PAGE> 5
in 20 percent cumulative yearly installments.
Sales of the Common Stock offered hereby may be made NASDAQ or the
over-the-counter market or otherwise at prices and on terms then prevailing or
at prices related to the then current market price, or in negotiated
transactions. In addition, any securities covered by this Prospectus which
qualify for sale pursuant to Rule 144 may be sold under Rule 144 rather than
pursuant to this Prospectus. The Company will not receive any part of the
proceeds of the sales made hereunder except for the option exercise price. All
expenses of registration incurred in connection with this offering are being
borne by the Company, but all selling and other expenses incurred by a Selling
Stockholder will be borne by such stockholder.
The Common Stock may be sold in (a) a block trade in which the broker
or dealer so engaged will attempt to sell the shares as agent but may position
and resell a portion of the block as principal to facilitate the transaction,
(b) purchases by a broker or dealer as principal and resale by such broker or
dealer for its account pursuant to this Prospectus, and (c) ordinary brokerage
transactions and transactions in which the broker solicits purchases. In
effecting sales, brokers or dealers engaged by the Selling Stockholders may
arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from Selling Stockholders in amounts to be
negotiated immediately prior to Sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales.
The Company has informed the Selling Stockholders of the need for
delivery of a copy of this Prospectus in connection with all offers to sell
shares of Common Stock. There is no assurance that any of the Selling
Stockholders will offer for sale or sell any or all of the Common Stock covered
by this Prospectus.
EXPERTS
The consolidated financial statements, incorporated by reference in
this Prospectus and elsewhere in the Registration Statement, have been audited
by Arthur Anderson LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in giving said report.
4
<PAGE> 6
ANNEX I*
<TABLE>
<CAPTION>
Shares to be Beneficially
Owned upon Completion of
Shares of Common Offering (1)
Name and Relationship Stock Beneficially Shares -------------------------
to Napco Security Owned as of Offered
Systems, Inc. October 1, 1996 Hereby Number Percent
- ----------------- ------------------ -------- ------ -------
<S> <C> <C> <C> <C>
Employees during
last three years
except where noted
by**
Ayers, E.** 0 1,000 1,000 .02%
Bolton, G. 0 1,000 1,000 .02%
Buccola, C. 200 4,000 4,200 .10%
Buchel, K. 1 15,000 15,001 .35%
Budzioch, E.** 0 1,000 1,000 .02%
Bukofsky, A. 0 1,000 1,000 .02%
Collins, C. 0 2,500 2,500 .06%
Corsale, C. 0 1,000 1,000 .02%
Hanselman, C. 0 1,000 1,000 .02%
Johannson, K. 0 11,500 11,500 .27%
Jones, S. 0 2,000 2,000 .05%
Karl, T. 0 3,000 3,000 .07%
Keel, F. 0 2,000 2,000 .05%
Mahoney, K. 0 1,000 1,000 .02%
Mcbride, G. 450 1,000 1,450 .03%
Mcbride. M. 500 2,000 2,500 .06%
Murray, A. 0 500 500 .01%
Paladino, R. 2,625 7,000 9,625 .22%
Potter, D. 0 1,000 1,000 .02%
Rappaport, J. 0 1,000 1,000 .02%
Russotto, J. 0 2,000 2,000 .05%
Scardino, J. 400 2,000 2,400 .06%
Schettino, R. 0 1,000 1,000 .02%
Schramme, S. 0 1,000 1,000 .02%
Shaw, A. 17,025 4,000 21,025 .48%
Sheffey, D. 2,400 2,000 4,400 .10%
Strom, B. 0 2,500 2,500 .06%
Thomas R. 0 1,000 1,000 .02%
Zambenedetti, R. 0 1,000 1,000 .02%
Future grantees
of stock options 0 738,733 738,733 16.91%
------ ------- ------- ------
Totals 23,601 814,733 838,334 19.19%
====== ======= ======= ======
</TABLE>
- ---------------------
* To be completed by amendment
(1) Assumes that all options are exercised and all shares offered are sold, that
no additional shares will be purchased and that no additional shares will be
sold.
5
<PAGE> 7
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents of the Registrant heretofore filed with the
Securities and Exchange Commission (the "Commission") are hereby incorporated in
this Registration Statement by reference:
(1) The Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1996 Commission File;
(2) 1982 Amended and Restated Incentive Stock Option Plan
(extended 1992) contained in Exhibit 10(b) of the
Registrant's Form 10-K for the fiscal year ended June 30,
1991.
All reports and other documents subsequently filed by the Registrant
pursuant to Sections 13(a) and (c), 14 and 15(d) of the Securities Exchange Act
of 1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered hereunder have been sold or which
deregisters all such securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such reports and documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Under the Company's 1992 Incentive Stock Option Plan, as amended ("1992
Plan") which was approved by vote of the stockholders of the Company at the 1992
Annual Meeting (extending the 1982 plan for an additional ten years), incentive
stock options to purchase up to an aggregate of 727,933 shares of Common Stock
as adjusted (plus the shares at the time subject to options) or a total of
815,933 shares may be granted at fair market value to key employees during the
ten-year period ending in October 2002. Since June 30, 1992 options for 1,200
shares have been exercised. At June 30, 1996, 738,733 shares were available for
grant under the 1992 Plan. Options to purchase a total of 76,000 shares of
Common Stock were outstanding under the 1992 Plan on June 30, 1996, with
exercise prices of $2.25 to $4.375 per share. The incentive stock options
included in the foregoing tabulation expire five years from the date of grant,
are non-transferable and are exercisable beginning with the date of grant in
20 percent cumulative yearly installments.
6
<PAGE> 8
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
The validity of the issuance of the shares of Common Stock offered
pursuant to the Prospectus will be passed on for the Registrant by
Curto Barton & Alesi, P.C., counsel for the Registrant.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware empowers the
Registrant to indemnify, subject to the standards set forth therein,
any person in connection with any action, suit of proceeding brought or
threatened by reason of the fact that the person is or was a director,
officer, employee or agent of the Registrant, or is or was serving as
such with respect to another corporation at the request of the
Registrant. The Registrant indemnifies its directors and officers to
the fullest extent permissible under the General Corporation Law of
Delaware. The General Corporation Law of Delaware also provides that
the Registrant may purchase insurance on behalf of any such director,
officer, employee or agent. The Registrant has purchased insurance on
behalf of its officers and directors.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
4(a) Amended and Restated 1992 Incentive Stock Option
Plan
4(b) Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) of the
Annual Report of the Registrant on Form 10-K for the
fiscal year ended June 30, 1988
4(c) By-laws of the Registrant (incorporated by reference
to Exhibit 3(b) of the Annual Report of the
Registrant on Form 10-K for the fiscal year ended
June 30, 1988)
5(a) Opinion of Curto Barton & Alesi, P.C.
24(a) Consent of Arthur Andersen LLP
24(b) Consent of Curto Barton & Alesi, P.C.
included in Exhibit 5(a))
7
<PAGE> 9
ITEM 9. UNDERTAKINGS.
(a) 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 Registrant 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; and
(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 (a)(1)(i) and (a)(1)(ii) 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.
(b) The undersigned Registrant hereby undertakes 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
8
<PAGE> 10
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 of 1933 may be permitted to directors, officers and
controlling persons of the Registrant, 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 of 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.
9
<PAGE> 11
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 Amityville, State of New York, on this 22nd day
of October, 1996.
NAPCO SECURITY SYSTEMS, INC.
By:/s/ Kevin S. Buchel
------------------------------
Kevin S. Buchel,
Senior Vice President of
Operations and Finance
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Richard Soloway Chairman of the Board October 22, 1996
- ------------------------ of Directors and
Richard Soloway Secretary, (Co-Principal
Executive Officer) and
Director
/s/ Kenneth Rosenberg President and Treasurer October 22, 1996
- ------------------------ (Co-Principal Executive
Kenneth Rosenberg Officer) and Director
/s/ Randy Blaustein Director October 22, 1996
- ------------------------
Randy Blaustein
/s/ Andrew J. Wilder Director October 22, 1996
- ------------------------
Andrew J. Wilder
/s/ Kevin S. Buchel Senior Vice President October 22, 1996
- ------------------------ of Operations and
Kevin S. Buchel Finance (Principal
Financial and Accounting
Officer)
</TABLE>
10
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Description Page
- ------ ----------- ----
<S> <C>
4(a) Amended and Restated 1992 Incentive
Stock Option Plan ................................... E-1
4(b) Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit 3(a) of the
Annual Report of the Registrant on Form 10-K for the
fiscal year ended June 30, 1988)
4(c) By-laws of the Registrant (incorporated by reference
to Exhibit 3(b) of the Annual Report of the
Registrant on Form 10-K for the fiscal year ended
June 30, 1988
5(a) Opinion and Consent of
Curto Barton & Alesi, P.C. .......................... E-10
24(a) Consent of Arthur Andersen LLP ...................... E-12
24 (b) Consent of Curto Barton & Alesi, P.C.
(included in Exhibit 5(a))
</TABLE>
E-i
<PAGE> 1
EXHIBIT 4(a)
NAPCO SECURITY SYSTEMS, INC.
AMENDED AND RESTATED
1992 INCENTIVE STOCK OPTION PLAN
(Extended 1982 Incentive Stock Option Plan)
1. Purpose of the Plan. This 1992 Incentive Stock Option Plan
(hereinafter referred to as the "Plan"), constituting a ten-year extension of
the 1982 Incentive Stock Option Plan, is intended to encourage ownership of
stock of Napco Security Systems, Inc. (hereinafter referred to as the
"Corporation") by key employees of the Corporation and its subsidiaries, if any,
and to provide additional incentive for them to promote the success of the
business. As used in the Plan the term "subsidiary" shall have the same meaning
as the term "subsidiary corporation" defined in Section 425(f) of the Internal
Revenue Code of 1986, as amended (the "Code").
2. Scope of the Plan. An aggregate of Eight Hundred Fifteen Thousand
Nine Hundred Thirty-Three (815,933) shares (representing Seven Hundred
Twenty-seven Thousand Nine Hundred Thirty-three (727,933) shares for future
options and Eighty-Eight Thousand (88,000) shares for outstanding options) of
the Corporation's Common Stock, par value $.01 per share (hereinafter referred
to as "Common Stock"), shall be available and reserved for issue under the Plan
subject, however, to the provisions of Section 12 hereof. If an option should
expire or terminate for any reason without having been exercised in full, the
unpurchased shares which were subject thereto shall, unless the Plan shall have
terminated, become available for other options under the
E-1
<PAGE> 2
Plan. Common Stock shall not be issued in respect of an option granted under the
Plan unless the exercise of such option and the issuance and delivery of shares
of Common Stock pursuant thereto shall comply with all relevant provisions of
law, including the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, the rules and regulations thereunder, and the
requirements of any stock exchange upon which the Common Stock may then be
listed, and shall be further subject to the approval of the Corporation's
counsel with respect to such compliance.
3. Administration of the Plan. The Plan shall be administered by the
Board of Directors or a Stock Option Committee (hereinafter sometimes referred
to as the "Committee") of the Board of Directors of the Corporation. Directors
of the Corporation who are either eligible for options or to whom options have
been granted may vote on any matters affecting the administration of the Plan or
the granting of options under the Plan; provided, however, that no option may be
granted to a director under the Plan except by:
(a) The Committee at a meeting at which a majority of its
members are disinterested persons; or
(b) The Board of Directors at a meeting at which the majority
of directors present and a majority of the directors voting on
a grant, are disinterested persons.
For purposes of this Section 3, a "disinterested person" is a person
who, at a given meeting of the Committee or the Board of Directors, is not being
considered to receive a grant of stock options under the Plan or any other stock
option plan of the Corporation or its subsidiaries.
E-2
2
<PAGE> 3
Without limiting the generality of the foregoing, the Board of
Directors shall have full and final authority in its discretion, but subject to
the express provisions of the Plan, to determine the fair market value of the
Common Stock covered by each option; to select the key employees of the
Corporation and its subsidiaries to whom, and the time or times at which,
options shall be granted; to determine the manner in which options may be
exercised; to determine the number of shares to be covered by each option and
the consideration, if any, to flow to the Corporation for each option; to
interpret the Plan; to prescribe, amend, and rescind rules and regulations
relating to the Plan; to determine the terms and provisions of each option
granted under the Plan (which need not be identical); to accelerate any exercise
date of any option; to waive restrictions imposed with respect to the
transferability of stock acquired on exercise of options granted under the Plan;
to cancel an option previously granted to an optionee and issue a new option to
such optionee at a lower price, provided that such optionee's consent is first
obtained; to authorize any person to execute on behalf of the Corporation an
option agreement with respect to an option previously granted by the Board of
Directors; and to make all other determinations deemed necessary or advisable
for the administration of the Plan.
4. Eligibility. Options may be granted only to valued employees
(including officers and directors who are employees) of the Corporation
or any subsidiary; provided, however, that no option shall be granted
hereunder to any person in whose hands such option is not an "incentive
stock option" within the meaning of Section 422 of the Code by reason
E-3
3
<PAGE> 4
of the stock ownership test set forth in Section 422(b)(6) of the Code. However,
options may be granted to such persons under the Plan if such options would
qualify as incentive stock options by virtue of meeting the option price and
term requirements set forth in Section 422(c)(5) of the Code. In selecting the
individuals to whom options shall be granted, as well as in determining the
number of shares subject to each option, the Board of Directors may take into
consideration the recommendation of the members of the Board of Directors who
are also employees of the Corporation or a subsidiary and such factors as it
shall deem relevant in connection with accomplishing the purposes of the Plan.
An individual who has been granted an option may, if he is otherwise eligible,
be granted an additional option or options.
5. Option Price. The purchase price to be paid for Common Stock
transferred pursuant to the exercise of any option granted under the Plan shall
be not less than the fair market value of such stock on the date the option is
granted as provided in Section 14 hereof (but in no event less than the par
value of the Common Stock), and shall not thereafter be subject to reduction
except as provided in Section 12 hereof; provided, however, that the purchase
price to be paid for Common Stock issued pursuant to an option granted to an
individual 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
Corporation or its subsidiaries, as described in Section 422(b)(6) of the Code,
shall, as provided by Section 422(c)(5) of the Code, be not less than 110% of
the fair market value of the Common Stock. For purposes of the Plan the fair
market value of the Common Stock on any
E-4
4
<PAGE> 5
date shall be determined by the Board of Directors. The proceeds of sale of
Common Stock subject to option are to be added to the general funds of the
Corporation and used for such corporate purposes as the Board of Directors may
determine.
6. Term of Options. The term of each option granted under the
Plan shall be not more than five years from the date of the granting
thereof, subject to its earlier termination as hereinafter provided.
7. Non-Transferability of Options. An option granted under the Plan
shall by its terms not be transferable and an option may be exercised, during
the lifetime of the holder of the option, only by such holder. More
particularly, but without limiting the generality of the foregoing, an option
may not be assigned, transferred, pledged, or hypothecated in any way (whether
by operation of law or otherwise), and will not be subject to execution,
attachment or similar process. Any attempted assignment, transfer, pledge,
hypothecation or other disposition of any option contrary to the provisions of
the Plan, and any levy of any attachment or similar process upon an option will
be null and void and without effect, and the Board of Directors may, in its
discretion, upon the happening of any such event, terminate an option forthwith.
8. Annual Limitation on Options Granted. To the extent that the
aggregate fair market value of stock with respect to which incentive stock
options (determined without regard to this subsection) are exercisable for the
first time by any individual during any calendar year (under all plans of the
individual's employer corporation and its parent and subsidiary corporations)
exceeds One Hundred Thousand
E-5
5
<PAGE> 6
($100,000) Dollars, such options shall be treated as options which are not
incentive stock options.
9. Exercise of Options. Except as hereinafter provided in this Section
9 and in Sections 3 and 11, options may be exercised within the year of grant
(as the Board of Directors, in its discretion, shall determine) with respect to
no more than twenty percent (20%) of the total number of shares of Common Stock
subject to such grant. Thereafter, during each succeeding year beginning on an
anniversary date, options with respect to an additional twenty percent (20%) of
the total number of shares subject to a grant may be exercised. However, no
option shall be exercisable after the expiration of the term thereof as provided
in Section 6. Moreover, an option shall not be exercisable unless the holder
thereof shall, at the time of exercise, be an employee of the Corporation or a
subsidiary.
The purchase price of any shares as to which an option shall be
exercised shall be paid in full at the time of exercise. The holder of an option
shall not have any of the rights of a stockholder with respect to the shares
covered by his option until such shares shall have been issued to him (as
evidenced by the appropriate entry on the books of a duly authorized transfer
agent of the Corporation) upon the purchase of such shares upon exercise of the
option.
10. Consideration. The Board of Directors shall determine the
nature of the consideration flowing to the Corporation in respect of
each option granted under the Plan as well as the conditions, if any,
which it may deem appropriate to assure that such consideration shall
be received by, or shall accrue to, the Corporation. The consideration
E-6
6
<PAGE> 7
specified in any option may be different from the consideration specified in any
other option, whether granted at the same or a different time.
11. Exercise Upon Cessation of Relationship With Corporation. The right
of a holder of an option to exercise such option shall terminate immediately
upon voluntary termination of service as an employee or dismissal, disability,
retirement, death or otherwise. Option agreements may contain such provisions as
the Board of Directors shall approve with reference to the effect of approved
leaves of absence, provided, however, that all options shall terminate not more
than five years after the date of grant.
12. Adjustments. Options granted under the Plan shall contain such
uniform provisions as the Board of Directors shall, in its sole judgment,
determine for adjustment of the number and class of shares covered thereby, or
of the option prices (but not below the par value of the Common Stock), or both,
to reflect a stock dividend, stock split-up, share combination, exchange of
shares, recapitalization, merger, consolidation, acquisition or disposition of
property or shares, reorganization, liquidation, or other similar changes or
transactions, of or by the Corporation. In any such event the aggregate number
and class of shares available for issuance under the Plan shall be appropriately
adjusted and all the provisions of the Plan with respect to the number and class
of shares so available shall likewise be adjusted.
13. Effectiveness of the Plan. The Plan shall become effective
on October 8, 1992, but shall be subject to approval by the holders of
E-7
7
<PAGE> 8
Common Stock at a meeting of stockholders of the Corporation duly called and
held no later than twelve months after the date of adoption of the Plan by the
Board of Directors.
14. Time of Granting Options. The date of grant of an option under the
Plan shall, for all purposes, be the date on which the Board of Directors makes
the determination granting such option; and no grant shall be deemed effective
under the Plan prior to such date. Notice of the determination shall be given to
each employee to whom an option is so granted within a reasonable time after the
date of such grant.
15. Termination and Amendment of the Plan. The Plan shall terminate ten
(10) years from the date on which it is adopted by the Board of Directors or the
date on which it is approved by the stockholders, whichever is earlier. Prior
thereto, the Board of Directors may terminate the Plan at any time; provided,
however, that any such termination shall not affect any options then outstanding
under the Plan. No options under the Plan may be granted after termination of
the Plan.
The Board of Directors from time to time may make such modifications or
amendments of the Plan and, with the consent of the holder of an option, of the
terms and conditions of his option, as it shall deem advisable, but may not,
without further approval of the stockholders of the Corporation, except as
provided in Section 12 hereof (a) increase the maximum number of shares which
shall be available and reserved for issue under the Plan, or (b) change the
employees or class of employees eligible to receive options, or (c) extend the
term of the Plan beyond the period provided in this
E-8
8
<PAGE> 9
paragraph.
Neither the termination nor any modification or amendment of the Plan
shall, without the consent of the holder of an option theretofore granted under
the Plan, adversely affect the rights of such holder with respect to such
option.
16. Termination of Right of Action. Every right of action arising out
of or in connection with the Plan by or on behalf of the Corporation or a
subsidiary or by any stockholder of the Corporation or a subsidiary against any
past, present or future employee, or by an employee (past, present or future)
against the Corporation shall, irrespective of the place where an action may be
brought and irrespective of the place of residence of any such stockholder or
employee, cease and be barred by the expiration of three years from the date of
the act or omission in respect to which such right of action is alleged to have
arisen.
17. Registration Rights. If in the future the Corporation
registers additional shares with the Securities and Exchange
Commission, the Corporation will also register the shares subject to
the options of this Plan.
Date: October 8, 1992
NAPCO SECURITY SYSTEMS, INC.
By: /s/ Kenneth Rosenberg
-------------------------
President
ATTEST:
By:/s/ Richard Soloway
--------------------------------------
Secretary
E-9
9
<PAGE> 1
EXHIBIT 5(a)
CURTO BARTON & ALESI, P.C.
One Huntington Quadrangle
Melville, NY 11747
(516-293-1300
(516) 293-1380
October 22, 1996
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Napco Security Systems, Inc.
Registration Statement on Form S-8
Ladies and Gentlemen:
We are attorneys-at-law duly licensed to practice law in the State of
New York and counsel to Napco Security Systems, Inc. (the "Company"). We have
acted as legal counsel to the Company in connection with the preparation and
filing with the Securities and Exchange Commission of the Company's Registration
Statement on Form S-8 (the "Registration Statement") covering the 814,733 shares
of common stock, $0.01 par value (the "Common Stock"), and associated stock
options of the Company pursuant to its 1992 Incentive Stock Compensation Plan,
as amended (the "Plan") and the preparation of the prospectus related to the
Registration Statement to be delivered to participants in the Plan (the
"Prospectus").
As such counsel, we have examined the Registration Statement, the
Prospectus, the Plan, the Company's definitive Proxy Statement for the 1996
Annual Meeting of Stockholders, and such other documents, and have obtained such
certificates and assurances from public officials and from officers and
representatives of the Company, as we have deemed necessary for the purpose of
rendering this opinion. We have assumed the genuineness of all signatures on,
and the authenticity of, all documents and instruments submitted to me as
originals, and the conformity to original documents of all documents submitted
to me as copies.
E-10
<PAGE> 2
Securities and Exchange Commission
October 22, 1996
Page 2
We have also examined the proceedings heretofore taken, and we are
familiar with the proceedings proposed to be taken by the Company in connection
with the authorization, reservation, issuance and sale of the shares of Common
Stock and, in reliance thereon, we assume for purposes of this opinion that the
Company will not grant any award under the Plan pursuant to which shares of
Common Stock could be issued for consideration that is not adequate in form or
amount to support the issuance of fully paid stock under applicable state law.
Based upon the foregoing and in reliance thereon, we are of the opinion
that the shares of Common Stock to be issued by the Company pursuant to awards
granted under the Plan will, when issued and paid for in accordance with the
Plan and any agreements pursuant to which such shares are issued, be validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an exhibit to the
Registration Statement and further consent to the use of our firm's name under
the caption "Interests of Named Experts and Counsel" in the Registration
Statement.
Very truly yours,
CURTO BARTON & ALESI, P.C.
By:/s/ Anthony B. Barton, V.P.
------------------------------------------
ABB:cs
E-11
11
<PAGE> 1
EXHIBIT 24(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent
to the incorporation by reference in this Form S-8 registration statement
of our report dated September 20, 1996 included in the Napco Security
Systems, Inc. Form 10-K for the year ended June 30, 1996 and to all
references to our Firm included in this Form S-8 registration statement.
ARTHUR ANDERSEN LLP
Melville, New York
October 23, 1996
E-12
