SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
Firetector Inc. (File No. 0-17580)
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(3) Filing Party:
(4) Date Filed:
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Firetector Inc.
262 Duffy Avenue
Hicksville, New York 11801
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of the
Stockholders of Firetector Inc., a Delaware corporation ("Firetector") to be
held at Dolgenos Newman & Cronin LLP, 96 Spring Street, 8th Floor, New York, New
York 10012, on April 30, 1997 at 11:00 a.m.
At the meeting you will be asked to consider and vote upon (1)
a Board of Directors' proposal to adopt a Non Qualified Stock Option Plan; (2)
the election of six (6) Directors to Firetector's Board of Directors; (3)
appointment of Moore Stephens, P.C. as Firetector's Auditors for the fiscal year
ending September 30, 1997; and (4) any other business that properly comes before
the meeting or any adjournments or postponements thereof.
Your vote is important. We urge you to complete, sign, date
and return the enclosed proxy card promptly in the accompanying prepaid
envelope. You may, of course, attend the Meeting and vote in person, even if you
have previously returned your proxy card.
Sincerely yours,
Joseph Vitale,
President and Chief
Operating Officer
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Firetector Inc.
262 Duffy Avenue
Hicksville, New York 11801
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To be held on April 30, 1997
To the Stockholders of
Firetector Inc.
Notice is hereby given that the Annual Meeting of Stockholders
of Firetector Inc., a Delaware corporation ("Firetector") will be held at 11:00
a.m., local time, on April 30, 1997 at the offices of Dolgenos Newman & Cronin
LLP, 96 Spring Street, 8th Floor, New York, New York, for the following
purposes:
(1) To consider and vote upon a Board of Directors' proposal
to adopt a Non-Qualified Stock Option Plan;
(2) To consider and vote upon the election of the Board of
Directors consisting of six (6) persons to serve until the next annual meeting
of the stockholders;
(3) To consider and vote upon a proposal to ratify the
selection of Moore Stephens, P.C. as Firetector's independent auditors for the
fiscal year ending September 30, 1997;
(4) To conduct such other business as may properly come before
the Annual Meeting or any adjournments or postponements thereof.
Only record holders of Common Stock at the close of business
on March 14, 1997 are entitled to notice of and to vote at the Annual Meeting
and any adjournments or postponements thereof.
To ensure that your vote will be counted, please complete,
sign, date and return the Proxy in the enclosed prepaid envelope whether or not
you plan to attend the Annual Meeting. You may revoke your proxy by notifying
the secretary of the company in writing at any time before it has been voted at
the Annual Meeting.
By Order of the Board of Directors
Dennis P. McConnell
Secretary, Firetector Inc.
March 18, 1997
Hicksville, New York
YOUR VOTE IS IMPORTANT. PLEASE COMPLETE, SIGN, DATE AND
RETURN THE ENCLOSED PROXY CARD PROMPTLY WHETHER OR NOT YOU PLAN
TO BE PRESENT AT THE ANNUAL MEETING.
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FIRETECTOR INC.
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD APRIL 30, 1997
THE ACCOMPANYING PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF FIRETECTOR INC.
If properly signed and returned and not revoked, the proxy will be
voted in accordance with the instructions it contains. The persons named in the
accompanying proxy will vote the proxy for the Board of Director's slate of
directors and for the other matters listed on the proxy as recommended by the
Board of Directors unless contrary instructions are given. At any time before it
is voted, each proxy granted may be revoked by the stockholder by a later dated
proxy, by written revocation addressed to the Secretary of Firetector Inc. at
the address below or by voting by ballot at the Annual Meeting.
The Company's principal executive offices are located at 262 Duffy
Avenue, Hicksville, New York 11801. This proxy statement and the accompanying
proxy are being sent to stockholders on or about March 18, 1997. ANY PROXY MAY
BE REVOKED IN PERSON AT THE ANNUAL MEETING, BY SUBMITTING A PROXY DATED LATER
THAN THE PROXY TO BE REVOKED OR BY NOTIFYING THE SECRETARY OF THE COMPANY IN
WRITING AT ANY TIME PRIOR TO THE TIME THE PROXY IS VOTED.
VOTING SECURITIES
The Board has fixed the close of business on March 14, 1997 as the
record date (the "Record Date") for determination of stockholders entitled to
receive notice of and to vote at the Annual Meeting or any adjournment thereof.
Only stockholders of record at the close of business on the Record Date will be
entitled to notice of and to vote at the Annual Meeting. At the close of
business on the Record Date, the Company had outstanding 3,523,088 shares of
Common Stock. The Common Stock is entitled to vote on the election of members of
the Board of Directors, ratification of the appointment of independent auditors
and other business as may properly come before the meeting or any adjournment
thereof. The holders of a majority of the Common Stock constitute a quorum for
those portions of the Annual Meeting where action is required of holders of
Common Stock.
ACTION TO BE TAKEN UNDER PROXY
All proxies for holders of Common Stock in the accompanying form that
are properly executed and returned will be voted at the Annual Meeting and any
adjournments thereof in accordance with any specifications thereon or, if no
specifications are made, will be voted for the proposed reverse
recapitalization, the election of the five nominees described herein and for
ratification of the appointment of independent auditors.
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PROPOSAL NO. 1
STOCK OPTION PLAN
The Company has reserved an amount of Common Shares equal to an
aggregate of up to 10% of its issued and outstanding shares from time to time
(such amount to include all shares issuable upon exercise options granted
pursuant to the Company's 1990 Non Qualified Stock Option Plan) for issuance
under its 1997 Non-Qualified Stock Option Plan (the "Plan") to employees,
officers and directors of the Company and its subsidiaries. A Copy of the Plan
is annexed hereto as Appendix A. The Plan is administered by the Company's Board
of Directors, which determines the employees, officers and directors to whom
options ("Options") are to be granted, the number of shares that may be
purchased at the Option price, which may not be less than 100% of the fair
market value of a Common Share at the time the Option is granted. Each Option
granted under the Plan is evidenced by a written Option Agreement. A copy of the
form of Option Agreement (which may be altered in compliance with the Plan) is
annexed hereto as Appendix B.
All Options granted under the plan expire on December 31, 2002, or with
respect to any optionee, 90 days after termination of employment (with certain
exceptions in the case of death or permanent disability of the optionee) or if
an optionee is terminated for cause, upon termination.
Directors may grant options to eligible employees and/or directors at
exercise prices not less than 100% of the fair market value of the common shares
at the time the option is granted.
The Plan provides for anti-dilution protection for optionees in the
case of recapitalizations, stock splits or combinations, and stock
distributions. The standard form of Option Agreement (which may be altered
provides for piggy-back registration of Common Shares issued upon exercise of
Options issued under the Plan. All Options issued under the Plan are
non-transferable (except to an executor or administrator of an optionee's estate
for a limited period) an all Common Shares issuable upon exercise of Options are
restricted securities and may only be sold pursuant to a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), or an
available exemption from the registration requirements of the Securities Act.
Your Board of Directors has determined it is in the Company's best
interests to adopt the plan described above to (i) provide incentive for present
employees, officers and directors of the Company and (ii) to attract individuals
that will benefit the Company in the future.
Your Board of Directors recommends a vote FOR the ratification of the
Stock Option Plan.
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PROPOSAL NO. 2
ELECTION OF DIRECTORS
Six (6) directors will be elected to hold office duly until the next
Annual Meeting of Stockholders and until their successors have been elected and
duly qualified. The persons named on the accompanying proxy will vote all shares
for which they have received proxies for the election of the nominees named
below unless contrary instructions are given. In the event that any nominee
should become unavailable, shares will be voted for a substitute nominee unless
the number of directors constituting a full board is reduced. Directors are
elected by plurality vote.
There were 4 meetings of the Board of Directors of the Company (actions
were taken by unanimous consent) during the fiscal year ended September 30,
1996. All directors attended 75% or more meetings of the Board of Directors.
Directors are not compensated for their service.
NOMINEES
The name, age and position with the Company of each nominee
for director of the Company is listed below, followed by summaries of the
background and principal occupations.
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 37 Chairman, Chief October 1990
Executive Officer,
General Counsel and
Director
Joseph Vitale 50 President, Chief May 1994
Operating Officer
and Director
John A. Poserina 56 Treasurer, Vice January 1997
President, Chief
Financial Officer,
and Director
Dennis P. McConnell 43 Secretary and January 1997
Director
Henry Schnurbach 44 Director October 1988
Richard Axelsen 62 Director October 1988
The Company's Bylaws allow the Board to fix the number of Board members
between one and seven. The number has been fixed, at present, at six, but the
Board can increase the number to seven at anytime without stockholder approval.
Information Concerning Current Directors and Nominees for Director
Mr. Tamkin has a J.D. degree from New York University School of Law and an
A.B. degree from Columbia University. Mr. Tamkin has been Chief Executive
Officer since March 15, 1996, prior to which Mr. Tamkin was Vice President and
General Counsel of the Company from October 1990.
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Also since October 1990, Mr. Tamkin has been a Vice President of Mirtronics and
Executive Vice President of Forum Financial Corporation, a Toronto based
merchant banking organization controlled by a Director of Mirtronics. Since
November 1992, Mr. Tamkin has been a director of Unicap Commercial Corporation,
an Ontario corporation which is registered under the Securities Exchange Act of
1934 (the "Exchange Act"). Mr. Tamkin was associated with Varet & Fink P.C. from
1986 to October 1990 and from October 1990 to January, 1993 was Counsel to that
firm. Mr. Tamkin is presently Counsel to Dolgenos Newman & Cronin LLP, counsel
to the Company.
Mr. Vitale has been active in the fire/communications industry with Casey
since 1982. Mr. Vitale has been President of the Company since March 15, 1996.
Mr. Vitale has been President of Casey since 1993 and has held the positions of
Director of Engineering, Vice President - Engineering and Executive Vice
President. Mr. Vitale holds a Bachelor of Science degree in Engineering from
C.W. Post College and a Master of Science degree in Electrical Engineering from
New York University.
Mr. Poserina joined the Company as Treasurer, Vice President, Chief
Financial Officer and Director as of January 1, 1997. From December 1995 until
he joined the Company, Mr. Poserina was an independent financial consultant.
Also, from July 1996 to September 1996, Mr. Poserina was Chief Financial Officer
of Happiness Express Inc. Mr. Poserina was Chief Financial Officer of Dorne and
Margolin Inc. from November 1994 to December 1995. Prior to that, Mr. Poserina
spent 15 years as Vice President, Treasurer and Chief Financial Officer of
Chryon Corporation, a NYSE listed company registered under the Exchange Act. Mr.
Poserina holds a Bachelor of Science in accounting from the University of Rhode
Island and is a Certified Public Accountant.
Mr. McConnell is associated with Dolgenos Newman & Cronin LLP, counsel to
the Company. Prior to Dolgenos Newman & Cronin, he was associated with Varet &
Fink P.C. from 1989 to March 1993. Mr. McConnell has a J.D. degree from New York
Law School.
Mr. Schnurbach has a Bachelor of Commerce degree from Sir George Williams
University and is a Certified Management Accountant in Ontario. Since October
1991, Mr. Schnurbach has been Chief Executive Officer of Cantar/Polyair
Incorporated, a manufacturer of specialty covers and packaging materials.
Mr. Axelsen has a Bachelor of Science degree from Hofstra University. Mr.
Axelsen was President of Casey from 1982 to 1993 and Chairman of the Company
from 1986 to March 1996. Mr. Axelsen previously served as a Director of the
Automatic Fire Alarm Association of New York and as Co-Chairman of the
Association's advisory committee for new codes and existing codes.
There are no family relationships between any Director or Executive Officer
of Firetector and any other Director or Executive Officer of Firetector.
Directors hold office for a period of one year from the Annual Meeting of
Stockholders at which they are elected or until their successors are duly
elected and qualified. Officers are appointed by the Board of Directors and hold
office at the will of the Board. There is no nominating, auditing or
compensation committee of the Board of Directors nor is there any committee
performing similar functions.
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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During the fiscal year ended September 30, 1996, Marc Palker, an
Officer and Director of the Company during the fiscal year ended September 30,
1996, failed to file with the Securities and Exchange Commission on a timely
basis one required report relating to transactions involving Common Stock owned
by him. During the fiscal year ended September 30, 1996, Joseph Vitale, an
Officer and Director of the Company during the fiscal year ended September 30,
1996, failed to file with the Securities and Exchange Commission on a timely
basis one required report relating to transactions involving Common Stock owned
by him. During the fiscal year ended September 30, 1996, Henry Schnurbach, a
Director of the Company during the fiscal year ended September 30, 1996, failed
to file with the Securities and Exchange Commission on a timely basis one
required report relating to transactions involving Common Stock owned by him. In
making these statements, the Company has relied on the written representations
of its directors, officers and 10% holders and copies of the reports that they
have filed with the Commission.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information known to the Company
regarding beneficial ownership of the Company's outstanding Common Stock at
January 8, 1996 of (i) each beneficial owner of more than five percent of the
Common Stock, (ii) each of the Company's Directors, and (iii) all Officers and
Directors of the Company as a group.
Common Stock Beneficially Owned At February 4, 1997
Number of Shares Percent of Shares
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Mirtronics Inc.(1) 4,369,250 61.7%
First Corporate Capital Inc.(2) 500,000 12.4%
Daniel S. Tamkin (3) 363,200 9.4%
Joseph Vitale (4, 5) 23,875 nil
Richard H. Axelsen (4, 5) 12,500 nil
Henry Schnurbach (2, 5) 8,250 nil
John A. Poserina (4, 5) 13,500 nil
Dennis P. McConnell (6) 0 nil
All Executive Officers and
Directors as a Group (6 Persons) 421,325 10.8%
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(1) Includes 3,528,000 shares of Common Stock issuable upon conversion of
preferred stock, exercise of presently exercisable options held by Mirtronics
and conversion of debt owed to Mirtronics and convertible into shares of Common
Stock. See ITEM 12, "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS". Address is
106 Avenue Road, Toronto, Ontario.
(2) Includes 400,000 shares of Common Stock issuable upon exercise of
presently exercisable options. Address is 106 Avenue Road, Toronto, Ontario.
(3) Includes 303,200 shares of Common Stock issuable upon exercise of
presently exercisable options. Of these options, 12,500 were granted by the
Company and 290,700 were acquired from Mirtronics. Address is 106 Avenue Road,
Toronto, Ontario.
(4) Address is 262 Duffy Avenue, Hicksville, NY.
(5) Issuable upon exercise of presently exercisable options.
(6) Address is 96 Spring Street, New York, NY.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As at September 30, 1996 Firetector and its affiliates were indebted to
Mirtronics and its subsidiaries for materials, loans and miscellaneous advances
in the amount of $149,000. In addition, the Company is indebted to First
Corporate Equity Ltd., an affiliate of a Director of Mirtronics, in the
aggregate amount of $204,500. Firetector and Casey also have granted Mirtronics
a pledge of all assets to secure any indebtedness which may, from time to time,
be owing by Firetector or Casey or any subsidiaries to Mirtronics or its
subsidiaries. The Company had a receivable from Mirtronics and its subsidiaries
in the amount of $413,000 and $297,000 at September 30, 1996 and 1995,
respectively.
In July 1994, in consideration of Mirtronics extending the term of a letter
of credit that supported a prior credit facility and making further advances,
Firetector restated the price, terms and conditions of the conversion rights and
options previously granted to Mirtronics and granted Mirtronics 500,000
additional options giving Mirtronics, as at September 30, 1996, the right to
acquire up to an aggregate of 1,840,000 shares of Common Stock at a price of
$.30 per share. Mirtronics has the right to designate a member of Firetector's
Board of Directors and has certain standard lender covenant protections against
material changes and transactions as long as the foregoing debt and options
remain outstanding.
In March 1995 the Company entered into a Debt/Equity Agreement with
Mirtronics, whereby Mirtronics will have the right until December 31, 1999, to
convert all or part of the Company's debt to Mirtronics into shares of Class A,
Series 1 Preferred Stock, at the conversion price of $1.00 per share, or one
share of Preferred Stock for each dollar of debt converted. The Preferred Stock
may be converted into Common Stock at the rate of two Common shares for one
share of Preferred.
In March 1995, Mirtronics converted $425,000 of debt into 425,000 shares
of Class A, Series 1 Preferred Stock and in May 1995, Mirtronics converted an
additional $250,000 of debt into 250,000 shares of Class A, Series 1 Preferred
Stock.
First Corporate Capital Inc., an Ontario corporation ("FCC") has provided
the bank under the Credit Facility with an income guaranty (see Item 6,
"MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION") in consideration of
which Firetector has granted to FCC options to purchase 500,000 shares of
Firetector Common Stock at $.30 per share through December 31, 1999. In July
1996, FCC exercised 100,000 of these options at $.30 per share. Mark Litwin, the
President and a Director of Mirtronics is also President and a Director of FCC.
In 1985, Casey entered into a royalty agreement with Joseph Vitale, prior
to his becoming the President and Chief Operating Officer of the Company. The
agreement pays Mr. Vitale a royalty on certain systems marketed and serviced by
Casey. In fiscal year ended September 30, 1996, Casey paid $61,000 pursuant to
the terms of the agreement.
As discussed in Notes to Consolidated Financial Statements, "Note 2.
Transactions With Related Parties", as of January 1, 1997, pursuant to the terms
of an employment agreement between the Company and Richard H. Axelsen, a
Director of the Company, Firetector repurchased 25,312 shares of its Common
Stock from Mr. Axelsen.
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Management believes each of the foregoing transactions was entered into on
terms at least as favorable as could be obtained from unrelated parties
negotiating at arms-length.
MANAGEMENT
The following table sets forth certain information with respect to the
Executive Officers of the Company:
DATE SERVICE
NAME AGE OFFICE COMMENCED
Daniel S. Tamkin 37 Chairman, Chief October 1990
Executive Officer,
General Counsel and
Director
Joseph Vitale 50 President, Chief May 1994
Operating Officer
and Director
Henry Schnurbach 44 Vice President and October 1988
Director
John A. Poserina 56 Treasurer, Vice January 1997
President, Chief
Financial Officer,
and Director
Dennis P. McConnell 43 Secretary and January 1997
Director
Mr. Tamkin biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Vitale biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Poserina biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. Schnurbach biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
Mr. McConnell biographical information is included under "Information
Concerning Current Directors and Nominees for Directors" in this Proxy
Statement.
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EXECUTIVE COMPENSATION
The following table sets forth certain information with respect to
compensation paid or accrued by the Company for services rendered to it for each
of the three fiscal years ended September 30, 1996, as to Daniel S. Tamkin, the
Company's present Chief Executive Officer and Richard H. Axelsen, the Company's
former Chief Executive Officer; none of the Company's other Executive Officers
had aggregate remuneration in excess of $100,000.
SUMMARY COMPENSATION TABLE
LONG
ANNUAL COMPENSATION TERM COMPENSATION
All Other
Year Salary ($) Bonus($) Other($) Option/SAR Compensation
- - -----------------------------------------------------------------------------
Daniel S. Tamkin
1996 $69,000 -- -- -- --
1995 $65,000 -- -- --
1994 $65,000 -- -- 8,750(1) --
Richard H. Axelsen
1996 $85,000 -- -- -- --
1995 $110,000 -- -- --
1994 $137,000 -- -- 3,750(2) --
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(1) Options to purchase 8,750 shares of Common Stock, at a price of $1.00 per
share, were issued to Mr. Tamkin in May, 1994.
(2) Options to purchase 3,750 shares of Common Stock, at a price of $1.00 per
share, were issued to Mr. Axelsen in May, 1994.
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In December 1995, the Board of Directors voted to institute a 401(k) plan
for nonunion employees to be effective January 1, 1996. The plan includes a
profit sharing provision based on a determination of the Board of Directors.
Directors do not receive any compensation for their service. Out-of-pocket
expenses for travel, meals and miscellaneous expenses incurred in the course of
the Director's activities on behalf of the Company are reimbursed at cost.
The Company adopted its 1990 Non-Qualified Stock Option Plan (the "Plan")
and has reserved 175,000 Common Shares for issuance under the Plan to employees
and officers of the Company and its subsidiaries. The Plan is administered by
the Company's Board of Directors, which determines the officers and employees to
whom options ("Options") are to be granted, the number of shares that may be
purchased at the Option price, which may not be less than 100% of the fair
market value of a Common Share at the time the Option is granted. Each Option
granted under the Plan is evidenced by a written Option Agreement. All Options
granted under the Plan expire on May 24, 1999, or with respect to any optionee,
90 days after termination of employment (with certain exceptions in the case
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of death or permanent disability of the optionee) or if an optionee is
terminated for cause, upon termination. Directors may grant options to eligible
employees at exercise prices not less than 100% of the fair market value of the
common shares at the time the option is granted. The Plan provides for
anti-dilution protection for optionees in the case of recapitalizations, stock
splits or combinations, and stock distributions. The standard form of Option
Agreement (which may be altered) provides for piggy-back registration of Common
Shares issued upon exercise of Options issued under the Plan. All Options issued
under the Plan are non-transferable (except to an executor or administrator of
an optionee's estate for a limited period) and all Common Shares issuable upon
exercise of Options are restricted securities and may only be sold pursuant to a
registration statement under the Act, or an available exemption from the
registration requirements of the Act.
The Company currently has issued and outstanding options to purchase
103,750 shares of its Common Stock, at an exercise price of $1.00 and 71,250 at
an exercise price of $1.25, to certain of its officers, Directors and employees.
See Item 12, "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT."
Daniel S. Tamkin, Chairman, Chief Executive Officer and General Counsel of
Firetector, is also an officer of a company controlled by a Director of
Mirtronics, Firetector's largest stockholder. Mr. Schnurbach, a Director of the
Company, is a Director of Mirtronics.
PROPOSAL NO. 3
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors of Firetector selected Moore Stephens, P.C. as
auditors for the fiscal year ending September 30, 1997, subject to stockholder
approval by ratification. Moore Stephens has been since October 1996, the
independent auditors for Firetector. A representative of Moore Stephens is
expected to be present at the Annual Meeting, at which time he or she will be
afforded an opportunity to make a statement, and will be available to respond to
questions.
For the fiscal year ended September 30, 1995, the accounting firm of Moore
Stephens L.L.P. (now Moore Stephens, P.C.) was engaged as the principal
accountant to audit the Company's financial statements, replacing the firm of
Ernst & Young LLP.
In connection with the audit of the two most recent fiscal years and any
subsequent interim period, there were no disagreements with Ernst & Young LLP on
any matter of accounting principles or practices, financial statement
disclosure, or auditing scope and procedures which, if not resolved to the
satisfaction of Ernst & Young LLP would have caused Ernst & Young LLP to make
reference to the matter in their report.
The Board of Directors of Firetector may, in its discretion, direct
appointment of new independent auditors at any time during the fiscal year if
the Board believes such change would be in the best interests of Firetector and
its stockholders. No such change is anticipated.
The Board of Directors of Firetector recommends a vote FOR the ratification
of Moore Stephens for the fiscal year ending September 30, 1997.
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OTHER BUSINESS
The proxy confers discretionary authority on the proxies with respect to
any other business which may come before the Annual Meeting. The Board of
Directors of Firetector knows of no other matters to be presented at the Annual
Meeting. The persons named in the proxy will vote the shares for which they hold
proxies according to their best judgment if any matters not included in this
Proxy properly come before the meeting, unless the contrary is indicated.
STOCKHOLDER PROPOSALS
Any stockholder proposal to be included in the proxy statement and form of
proxy relating to the 1998 Annual Meeting of Firetector Stockholders must be
received by the close of business on November 10, 1997 and must comply in all
other respects with the rules and regulations of the Securities and Exchange
Commission. Proposals should be addressed to: Corporate Secretary, Firetector
Inc., 262 Duffy Avenue, Hicksville, New York 11801.
10
SHARES FIRETECTOR INC. PROXY NO.
262 Duffy Avenue, Hicksville, New York 11801
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel S. Tamkin and Dennis P. McConnell as
Proxies, each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated below and on the reverse hereof,
all shares of common stock of Firetector Inc. ("Firetector") held of record by
the undersigned on March 14, 1997 at the annual meeting of stockholders of
Firetector to be held on April 30, 1997 or any adjournments thereof. The
undersigned hereby revokes any proxies heretofore given to vote said shares.
The undersigned hereby acknowledges receipt of Firetector's Annual Report
for 1996 and of the Notice of Annual Meeting of Stockholders and attached Proxy
Statement dated March 18, 1997.
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted FOR Proposals 1, 2 and 3.
Please sign exactly as your name appears to the left hereof. When signing
as corporate officer, partner, attorney, administrator, trustee or guardian,
please give your full title as such. Dated , 1997
Authorized Signature
----------------------------------
Title
Please mark boxes on reverse hereof in blue or black ink. Please date,
sign and return this Proxy Card promptly using the enclosed envelope.
1. Adoption of a non-qualified Stock Option plan for the compensation of
employees, officers and directors of the Company.
For Against Abstain
2. Election of Directors.For all nominees Withhold Authority
listed below (except as to vote for all
marked to the contrary nominees listed below
below)
(Instruction: To withhold authority to vote for any individual nominee strike a
line through the nominee's name below.)
Richard Axelsen Dennis P. McConnell Henry Schnurbach
Daniel S. Tamkin Joseph Vitale John A. Poserina
3.To ratify the appointment of Moore Stephens, P. C. as independent public
accountants for Firetector for the fiscal year ending September 30, 1997.
For Against Abstain
APPENDIX A
FIRETECTOR INC.
1997 NON-QUALIFIED STOCK OPTION PLAN
Purpose. The purpose of the 1997 Stock Option Plan (the "Plan") of
Firetector Inc. (the "Company") is to secure for the Company and its
stockholders the benefits that flow from providing corporate officers, directors
and key employees with the incentive, inherent in the ownership of the Company's
Common Stock par value $.001 per share (the "Common Stock"), to contribute to
the success and growth of the business of the Company and its subsidiaries and
to help the Company and its subsidiaries secure and retain the services of such
employees. For purposes of the Plan, the terms "parent" and "subsidiary" shall
mean "parent corporation" and "subsidiary corporation," respectively, as such
terms are defined in section 425(e) and (f) of the Internal Revenue Code of
1986, as from time to time, amended (the "Code").
2. Stock Option Committee.
2.1 Administration. The Plan shall be administered by the Board of
Directors or by a Stock Option Committee (the "Committee") of not less than
three members of the Board of Directors. The appointment of a Committee,
however, shall not preclude the Board of Directors from granting options and
otherwise exercising its powers with respect to the Plan. As used herein, the
term "Committee" shall be deemed to include the Board of Directors, whether or
not a Committee shall have been appointed.
2.2 Interpreation; Procedures. The Committee is authorized to interpret the
provisions of the Plan and shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of its meetings and the administration
of the Plan. A majority of the whole Committee shall constitute a quorum, and
the act of a majority of the members of the Committeee present at which a quorum
is present shall be the act of Committee. Any member of the Committee may be
removed at any time either with or without cause by resolution adopted by the
Board of Directors of the Company, and any vacancy on the Committee may at any
time be filled by resolution adopted by the Board of Directors.
3. Shares Subject to Options.
3.1 Number of Shares. Subject to the provisions of paragraph 12 (relating
to adjustments upon changes in capitalization), the number of shares of Common
Stock subject at any one time to options granted under the Plan, plus the number
of shares of Common Stock theretofore issued or delivered pursuant to the
exercise of options granted under the Plan, shall not exceed an aggregate of up
to 10% of its issued and outstanding shares from time to time (such amount to
include all shares issuable upon exercise options granted pursuant to the
Company's 1990 Non Qualified Stock Option Plan); provided that if and to the
extent that options granted under the Plan terminate, expire or are cancelled
without having been exercised, new options may be granted under the Plan with
respect to the shares of Common Stock covered by such terminated, expired or
cancelled options.
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3.2 Character of Shares. Common Stock delivered upon the exercise of
options granted under the Plan may be authorized and unissued Common Stock,
issued Common Stock held in the Company's treasury, or both.
3.3 Reservation of Shares. There shall be reserved at all times for sale
under the Plan a number of shares of Common Stock (authorized and unissued
Common Stock, issued Common Stock held in the Company's treasury, or both) equal
to the maximum number of shares which may be purchased pursuant to options
granted or that may be granted under the Plan.
4. Grant of Options. The Committee shall determine, within the limitations
of the Plan, the officers, directors and employees of the Company and its
subsidiaries to whom options are to be granted, the number of shares that may be
purchased under each option and the option price. Each option granted under the
Plan shall be evidenced by a written agreement (an "Option Agreement") between
the Company and the Optionee (as hereinafter defined) in such form, not
inconsistent with the provisions of the Plan, as the Committee shall provide.
5. Employees Eligible. Options may be granted under the Plan to any
officer, director or key employee or prospective officer, director or key
employee (conditioned upon, and effective not earlier than, his becoming an
officer or employee) of the Company and its subsidiaries. Employees who are also
officers or directors of the Company or its subsidiaries shall not by reason of
such offices be ineligible to receive options under the Plan, but members of the
Committee shall not be eligible to receive options unless granted by the Board
of Directors. An officer, director or employee receiving any option under the
Plan is hereinafter referred to as an "Optionee." Any reference herein to the
employment of an Optionee by the Company shall include his employment by the
Company, its parent or any of its subsidiaries.
6. Price. Subject to paragraph 12, the option price of each Common Stock
purchasable under any option granted under the Plan shall be not less than 100%
of the fair market value thereof at the time the option is granted (which time,
in the case of the grant of an option to a prospective officer or key employee,
shall be deemed to be the time of effectiveness of such grant). 7. Expiration.
Termination and Amendment of the Plan.
7.1 General. Options may be granted under the Plan at any time and from
time to time on or prior to September 30, 2002, on which date the Plan will
expire except as to options then outstanding under the Plan. Such options shall
remain in effect until they have been exercised, terminated or have expired. The
Plan may be terminated, modified or amended by the Board of Directors at any
time on or prior to December 1, 2002, except with respect to any options then
outstanding under the Plan; provided that any increase in the maximum number of
shares subject to options, as specified in paragraph 3, or any change in the
class of employees eligible for the grant of options hereunder, shall be subject
to approval by the Company's stockholders, unless made pursuant to the
provisions of paragraph 12.
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7.2 Modification of Options. No modification, extension, renewal or other
change in any option granted under the Plan shall be made after the grant of
such option, unless the same is consistent with the provisions of the Plan.
8. Exercisability and Duration of Options.
8.1 Determination of Committee; Acceleration. Each option granted under the
Plan shall be exercisable at such time or times, or upon the occurrence of such
event or events, and in such amounts, as the Committee may provide upon the
granting thereof. Subsequent to the grant of an option which is not immediately
exercisable in full, the Committee, at any time before complete termination of
such option, may accelerate the time or times at which such option may be
exercised in whole or in part. Any option granted under the Plan shall be
exercisable upon the death of the Optionee or upon the termination of the
Optionee's employment by the Company by reason of his illness or disability only
to the extent such option was exercisable by the Optionee immediately prior to
such event, unless otherwise expressly provided in the option at the time it is
granted.
8.2 Automatic Termination. The unexercised portion of any option granted
under the Plan shall automatically and without notice terminate and become null
and void at the time of the earliest to occur of the following:
(a) The expiration of five years from the date of such option was
granted;
(b) The expiration of ninety days from the termination date of
termination of the Optionee's employment by the Company (other than a
termination described in subparagraph (c), (d) or (e) below); provided that
if the Optionee shall die during such ninety day period, the time of
termination of the unexercised portion of any such option shall be
determined under the provisions of subparagraph (d) below;
(c) The expiration of one year from the date of termination of the
employment of an Optionee who is permanently and totally disabled (other
than a termination described in subparagraph (e) below);
(d) The expiration of six months following the issuance of letters
testamentary or letters of administration to the executor or administrator
of a deceased Optionee, if the Optionee's death occurs either during his
employment by the Company or during the three-month period following the
date of termination of such employment (other than a termination described
in subparagraph (e) below, but not later than one year after Optionee's
death;
(e) The termination of the Optionee's employment by the Company if
such termination constitutes or is attributable to a breach by the Optionee
of an employment agreement with the Company, its parent, if any, or any of
its subsidiaries, if any, or if the Optionee is discharged for cause. The
Committee shall have the right to determine whether the Optionee has been
discharged for cause and the date of such discharge, and such determination
of the Committee shall be final and conclusive; or
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(f) The expiration of such period of time of the occurrence of such
event as the Committee in its discretion may provide upon the granting
thereof.
9. Exercise of Options; Certain Legal and Other Restrictions.
9.1 Exercise. Options granted under the Plan -------- shall be exercised by
the Optionee (or by its executors or administrators, as provided in paragraph
10) as to all or part of the shares covered thereby, by the giving of written
notice of exercise to the Company, specifying the number of shares to be
purchased, accompanied by payment of the full purchase price for the shares
being purchased. Payment of such purchase price shall be made (a) by check
payable to the Company or (b) with the consent of the Committee, by delivery of
Common Stock having a fair market value (determined as of the date such option
is exercised) equal to all or part of the purchase price and if applicable, of a
check payable to the Company for any remaining portion of the purchase price.
Such notice of exercise, accompanied by such payment, shall be delivered to the
Company at its principal business office or such other office as the Committee
may from time to time direct, and shall be in such form, containing such further
provisions consistent with the provisions of the Plan, as the Committee may from
time to time prescribe. The Company shall effect the transfer of the shares so
purchased to the Optionee (or such other person exercising the option pursuant
to paragraph 10) as soon as practicable, and within a reasonable time
thereafter, such transfer shall be evidenced on the books of the Company. No
Optionee or other person exercising an option shall have any of the rights of a
stockholder of the Company with respect to shares subject to an option granted
under the Plan until certificates for such shares shall have been issued
following the exercise of such option. No adjustment shall be made for cash
dividends or other rights for which the record date is prior to the date of such
issuance. In no event may any option granted hereunder be exercised for a
fraction of a share.
9.2 Restrictions on Delivery of Shares. Each award granted under the Plan
is subject to the conditions that if at any time the Committee, in its
discretion, shall determine that the listing, registration or qualification of
the shares covered by such award upon any securities exchange or under any state
or federal law is necessary or desirable as a condition of or in connection with
the granting of such option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to the exercise of the option may be
withheld unless and until such listing, registration or qualification shall have
been effected. The Committee may require, as a condition of exercise of any
option, that the Optionee represent, in writing, that the shares received upon
exercised of the option are being acquired for investment and not with a view to
distribution, provided that the Committee may thereafter waive such
representation, subject to such restrictions as it may determine if, in the
opinion of counsel to the Company, the offer of such shares by the Company
pursuant to such option and the resale of such shares by the Optionee, or either
of such acts, is pursuant to an applicable effective registration statements
under the Securities Act of 1933, as amended (the "Securities Act"), or is
exempt from such registration. The Company may endorse on certificates
representing shares issued upon the exercise of an option such legends referring
to the foregoing representations or any applicable restrictions on resale as the
Company, in its discretion, shall deem appropriate.
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10. Non-Transferability of Options. No option granted under the Plan or any
right evidenced thereby shall be transferable by the Optionee other than by will
or by the laws of descent and distribution, and an option may be exercised,
during the lifetime of an Optionee, only by him.
In the event of an Optionee's death during his employment by the Company,
its parent or a subsidiary of the Company, or during the three-month period
following the date of termination of such employment, his option shall
thereafter be exercisable, during the period specified in paragraph 8.2 (d), by
his executors or administrators.
11. Right to Terminate Employment. Nothing in the Plan or in any option
granted under the Plan shall confer upon any Optionee the right to continue in
the employment or affect the right of the Company, its parent or any of its
subsidiaries to terminate the Optionee's employment at any time, subject,
however, to the provisions of any agreement of employment between the Company,
its parent or any of its subsidiaries and the Optionee.
12. Adjustment Upon Changes in Capitalization, etc. In the event of any
stock split, stock dividend, reclassification, recapitalization, reorganization,
merger, consolidation, combination, exchange or the like which changes the
character or amount of the Company's outstanding Common Stock while any portion
of any option theretofore granted under the Plan is outstanding but unexercised,
the Committee or the Board of Directors of the Company or any surviving or
acquiring corporation shall make such adjustments in the character and number of
shares subject to such options and in the option price and to take such other
actions (including, without limitation, the assumption of the existing option or
the substitution of a new option) as shall be equitable and appropriate in order
to make each such option, as nearly as may be practicable, equivalent to such
option immediately prior to such change; provided that no such adjustment shall
give the Optionee any additional benefits under his option .
If any such change or transaction shall occur, the number and kind of
shares for which options may thereafter be granted under the Plan shall be
adjusted to give effect thereto.
13. Registration Rights; Form S-8 Registration. The Board of Directors may
grant to any Optionee "Piggy Back Registration Rights" relating to Common Stock
acquired under the Plan. The terms of such rights shall be specified in the
Option Agreement. The Board of Directors may also elect to cause the Company to
register the Common Stock acquired (or which may be acquired) under the Plan
pursuant to a Form S-8 Registration Statement under the Securities Act.
14. Effective Date of Plan. The plan shall be effective as of the date of
its original adoption by the Stockholders of the Company.
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APPENDIX B
NON-QUALIFIED STOCK OPTION AGREEMENT
This OPTION AGREEMENT is made as of the [DATE], by and between FIRETECTOR
INC., a Delaware corporation, having an office at 262 Duffy Avenue, Hicksville,
New York 11801 (the "Corporation") and [OPTIONEE] having an office at 262 Duffy
Avenue, Hicksville, New York 11801 (the "Optionee").
Recital
The Corporation desires to afford the Optionee an opportunity to purchase
its common stock, $0.001 per share (the "Common Stock") in accordance with the
terms of the 1997 Non-Qualified Stock Option Plan (the "Plan"), as approved by
the Corporation's Directors and as approved or subsequently ratified by the
Corporation's stockholders. Capitalized terms not otherwise defined in this
Option Agreement shall have the same meaning as in the Plan.
Terms
1. Grant of Option. The Corporation hereby grants to the Optionee the right
and option (the "Option") to purchase all or any part of an aggregate of
[______] shares of Common Stock (such number being subject to adjustment as
provided in Section 7 of this Option Agreement) (the "Option Shares") on the
terms and conditions set forth in this Option Agreement.
2. Nature of the Option. The Option is a non-statutory, non-qualified stock
option and is not intended to qualify for any special tax benefits to the
Optionee.
3. Exercise Price. Except as provided in Section 7, the purchase price of
the Option Shares covered by the Option shall be $[PRICE] per share (the
"Purchase Price").
4. Limit on Exercise of the Option. Subject to the termination provisions
under the Plan, this Option shall vest on the basis of 20% of the total number
of Option Shares purchasable hereunder (as adjusted from time to time pursuant
to Section 7) vesting on the day prior to each anniversary date of this Option
Agreement. Except as otherwise provided in this Option Agreement, the Option
shall first become exercisable on the date this Option Agreement is made. The
term of the Option shall be for a period of five years from the date this Option
Agreement is made. The "vested" portion of this Option may be exercised within
the above time limitations, at any time or from time to time, in whole or in
part (but not for a fraction of a share of Common Stock). The Purchase Price of
the underlying Option Shares as to which the Option shall be exercised shall be
paid in full in cash or by certified or bank check (made payable to the order of
the Corporation) at the time of exercise. The Optionee shall not have any of the
rights of a stockholder of the Corporation with respect to the underlying Option
Shares covered by the Option, except to the extent that one or more certificates
for such Option Shares shall be delivered to him upon the due exercise of the
Option.
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5. Nontransferability. The Option shall not be transferable otherwise than
by will or by applicable laws of descent and distribution. While the Optionee is
alive, the Option may be exercised only by the Optionee. More particularly (but
without limiting the generality of the foregoing), the Option (a) may not be
assigned, transferred (except as provided above), pledged, or hypothecated in
any way, (b) shall not be assignable by operation of law, and (c) shall not be
subject to execution, attachment, or similar process. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of the Option contrary to
the provisions of this Option Agreement, and the levy of any execution,
attachment, or similar process upon the Option, shall be null and void and
without any effect.
6. Disclosure and Risk. The Optionee represents and warrants to the
Corporation as follows:
(a) Investment. The Option and the underlying Option Shares will be
acquired by the Optionee for Optionee's own account, for investment and not
with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act of 1933,
as amended (the "Securities Act").
(b) No Registration. The Optionee understands that: (i) at time of
grant and exercise, the Option and the underlying Option Shares covered by
the Option have not been, and probably will not have been, registered under
the Securities Act by reason of those underlying Option Shares being issued
in a transaction exempt from the registration and prospectus delivery
requirements of the Securities Act; (ii) the underlying Option Shares must
be held by the Optionee as an investment indefinitely; (iii) the Optionee
must bear the economic risk, if any, of such investment indefinitely,
unless a subsequent disposition thereof is registered under the Securities
Act or is exempt from registration under that act; (iv) the Rule 144
exemption from registration is only available under certain limited
circumstances and only after the satisfaction of certain specific
requirements; and (v) it is likely that it will be necessary that the
Option Shares underlying the Option be sold pursuant to another exemption
from registration, which exemption and its requirements may be difficult to
satisfy.
(c) Optionee Information. That as a result (i) of the optionee's
position with the Corporation; (ii) of inquiries made by the Optionee; and
(iii) of information furnished to the Optionee by the Corporation, the
Optionee has at the date of the grant of the Option, and will have as of
the date of the Option's exercise, reviewed all information necessary to
make an informed investment decision.
(d) Tax Consequences. The Optionee understands that, under certain
conditions, disposition of the Option Shares underlying the Option could
result in adverse tax consequences because of failure to meet prescribed
holding period requirements.
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(e) Legend. The Optionee understands that each certificate
representing the Option Shares underlying the Option shall be endorsed with
the following legend:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, and may not be sold, pledged
or otherwise transferred or disposed of except (i) in accordance with the
provisions of the Securities Act of 1933, as amended, and any applicable
state law and (ii) in accordance with the terms and provisions of a certain
Option Agreement, dated as of March 15, 1996, by and between Firetector
Inc. and Optionee."
(f) Transfer Restrictions. Except as provided in Section 9, the
Corporation need not register any transfer of any of the Option Shares not
in compliance with applicable Federal and State securities laws. In such
event, the Corporation may instruct its transfer agent not to register
transfer of any of the Option Shares. Any legend endorsed on a certificate
pursuant to the foregoing language and the stop-transfer instructions with
respect to such Option Shares, shall be removed, and the Corporation shall
promptly issue a certificate without such legend to the holder of such
Option Shares, if such Option Shares are registered under the Securities
Act and a prospectus meeting the requirements of the Securities Act is
available or if such holder establishes in a manner reasonably satisfactory
to the Corporation, that such legend may be removed and such stop-transfer
instructions may be rescinded.
7. Antidilution Provisions. The option is subject to the following terms
and conditions during its term:
(a) Stock Distributions and Splits. If (i) the Corporation's
outstanding Common Stock shall be subdivided into a greater number of
shares, (ii) a dividend in Common Stock or other voting stock shall be paid
in respect of the Corporation's Common Stock or (iii) there shall be any
other distribution on the Corporation's Common Stock payable otherwise than
out of earnings, retained earnings or earned surplus, the Purchase Price
per underlying Option Share in effect immediately prior to such subdivision
or at the record date of such dividend or distribution shall simultaneously
with the effectiveness of such subdivision or immediately after the record
date of such dividend or distribution be proportionately reduced; and,
conversely, if outstanding Common Stock of the Corporation shall be
combined into a smaller number of shares thereof, the Purchase Price per
underlying Option Share in effect immediately prior to such combination
shall simultaneously with the effectiveness of such combination, be
proportionately increased. If there shall be a distribution described in
subparagraph (iii) of this Section 7(a) the Purchase Price per underlying
Option Share in effect immediately prior to such distribution shall be
reduced by an amount equal to the fair value of such distribution per
Common Stock of the Corporation. Any dividend paid or distributed on the
Corporation's Common Stock in stock of any other class or securities
convertible into Common Stock shall be
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treated as a dividend paid in Common Stock of the Corporation to the extent
that those Common Stock are issuable upon the conversion thereof and such
Common Stock shall be deemed to have been issued without consideration.
(b) Adjustment of Number of Underlying Shares. Whenever the Purchase
Price per underlying Option Share is adjusted as provided in Section 7(a)
above, the number of the underlying Option Shares purchasable upon exercise
of the Option immediately prior to such adjustment shall be adjusted,
effective simultaneously with such adjustment, to equal the product
obtained (calculated to the nearest full share) by multiplying such number
of the underlying Option Shares by a fraction, the numerator of which is
the Purchase Price per underlying Option Share in effect immediately prior
to such adjustment and the denominator of which is the Purchase Price per
underlying Option Share in effect upon such adjustment, which adjusted
number of the underlying Option Shares shall thereupon be the number of the
underlying Option Shares purchasable upon exercise of the Option until
adjusted again as provided herein, if necessary and appropriate.
(c) Reorganizations. If (i) the Corporation or its successor
corporation shall be recapitalized by reclassifying its outstanding Common
Stock into a stock with a different par value or by changing its
outstanding Common Stock with par value to Common Stock without par value
or vice versa, or (ii) the Corporation or its successor corporation shall
be a party to a consolidation or merge with, or sell or convey all, or
substantially all, of its (or any successor corporation's) assets to any
other entity or entities, then as a condition of that reorganization,
consolidation, merger, sale or conveyance lawful and adequate provisions
shall be made whereby the Optionee shall have the right to purchase, upon
the terms and conditions specified in this Option Agreement, in lieu of the
underlying Option Shares theretofore purchasable upon the exercise of the
Option, the kind and amount of shares (or other securities and property)
receivable upon such recapitalization, consolidation, merger, sale or
conveyance by such holder of the number of shares of Common Stock which the
Optionee might have purchased immediately prior to such recapitalization,
consolidation, merger, sale or conveyance.
(d) Notice of Change of Purchase Price. Whenever the Purchase Price
per underlying Option Share or the kind or amount of securities purchasable
under the Option shall be adjusted pursuant to any of the provisions of
this Option Agreement, the Corporation shall forthwith thereafter cause to
be sent to the Optionee, a certificate setting forth the adjustments in the
Purchase Price per underlying Option Share and/or the number of underlying
Option Shares then purchasable, and also setting forth in detail the facts
requiring such adjustments including, without limitation, a statement of
the consideration
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received or deemed to have been received by the Corporation for any
additional Common Stock issued by it.
(e) Notice of Record Date. In the event of (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend payable out of earned surplus of the
Corporation) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of any class or any other securities or
property, or to receive any other right, (ii) any capital reorganization of
the Corporation, or any reclassification or recapitalization of the capital
stock of the Corporation, or any transfer of all or substantially all of
the assets of the Corporation to or consolidation or merger of the
Corporation with or into any other person, or (iii) any voluntary or
involuntary dissolution or liquidation of the Corporation, then, and in
each such event, the Corporation will mail or cause to be mailed to the
Optionee a notice specifying not only the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution, or right,
but also the date on which any such reorganization, reclassification,
recapitalization, transfer, consolidation, merger, dissolution, liquidation
or winding-up is to take place, and the time, if any, as of which the
holders of record of the Corporation's Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable
upon such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding-up. Such notice
shall be mailed immediately upon determination of such record date and no
less than ten (10) calendar days prior to the proposed record date therein
specified.
8. Method Of Exercising the Option. Subject to the terms and conditions of
this Option Agreement, the Option may be exercised by written notice to the
Corporation, at its principal office. Such notice shall state the election to
exercise the Option and the number of Option Shares in respect of which it is
being exercised, and shall be signed by the person or persons so exercising the
Option. Such notice shall: (a) be accompanied by payment of the full purchase
price of such Option Shares, in which event the Corporation shall deliver a
certificate or certificates representing such shares as soon as practicable
after the notice shall be received; or (b) fix a date (not less than five nor
more than ten business days from the date such notice shall be received by the
Corporation) for the payment of the full purchase price of such Option Shares at
the principal office of the Corporation, against delivery of a certificate or
certificates representing such Option Shares. The certificate or certificates
for the Option Shares as to which the Option shall have been so exercised shall
be registered in the name of the person or persons so exercising the Option and
shall be delivered as provided above to or upon the written order of the person
or persons exercising the Option. In the event the Option shall be exercised by
any person or persons other than the Optionee, such notice shall be accompanied
by appropriate proof of the right of such person or persons to exercise the
Option. All Option Shares that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.
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9. General. The Corporation shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Option Agreement, shall pay
all original issue and transfer taxes with respect to the issue and transfer of
Option shares pursuant hereto and all other fees and expenses necessarily
incurred by the Corporation in connection therewith, and will from time to time
use its best efforts to comply with all laws and regulations which, in the
opinion of counsel for the Corporation, shall be applicable thereto.
10. Taxation Upon Exercise of Option. The Optionee understands that, upon
exercise of this Option, he or she will recognize income for tax purposes in an
amount equal to the excess of the then fair market value of the Option Shares
over the exercise price. Upon a resale of such Option Shares by the Optionee,
any difference between the sale price and the fair market value of the shares on
the date of exercise of the Option will be treated as taxable gain.
IN WITNESS WHEREOF, the Corporation has caused this Option Agreement to be
duly executed by its officers thereunto duly authorized, and the Optionee has
executed this Agreement, all as of the date and year first above written.
FIRETECTOR INC.
By:
----------------------------
Joseph Vitale
Title: President
--------------------------------
[__________], Optionee
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