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Registration No. 333-
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As filed with the Securities and Exchange Commission on September 27, 1999
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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SECURITY ASSOCIATES INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 87-0467198
(State or other Jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
2101 SOUTH ARLINGTON HEIGHTS ROAD (847) 956-8650
SUITE 100 (Telephone number, including
ARLINGTON HEIGHTS, ILLINOIS 60005 area code, of registrant's
(Address, including zip code, of principal executive offices)
registrant's principal executive offices)
SECURITY ASSOCIATES INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
MR. JAMES S. BRANNEN
PRESIDENT
SECURITY ASSOCIATES INTERNATIONAL, INC.
2101 SOUTH ARLINGTON HEIGHTS ROAD
SUITE 100
ARLINGTON HEIGHTS, ILLINOIS 60005
(847) 956-8650
(Name, address, including zip code and telephone number,
including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------- ---------------------- ---------------------- ---------------------- ----------------------
Title of each Amount to be Proposed maximum Proposed maximum Amount of
class of securities registered(2) offering price per aggregate offering registration fee(3)
to be registered(1) share(3) price(3)
- -------------------------- ---------------------- ---------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock, par value 350,000 $2.375 $831,250 $231.09
$.001 per share
- -------------------------- ---------------------- ---------------------- ---------------------- ----------------------
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this
registration statement also covers an indeterminate amount of interests to be
offered or sold pursuant to the employee benefit plan described herein.
(2) This Registration Statement includes any additional shares of the
registrant's Common Stock that may be issued pursuant to antidilution provisions
contained in the plan.
(3) Pursuant to Rule 457(h), the registration fee was computed on the basis of
the average of the high and low prices of the registrant's Common Stock on the
American Stock Exchange on September 21, 1999.
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PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by Security
Associates International, Inc. (the "Company") with the Securities and Exchange
Commission (the "Commission"), are incorporated by reference in this
Registration Statement, except to the extent that any statement or information
therein is modified, superseded or replaced by a statement or information
contained in any other subsequently filed document incorporated herein by
reference:
i. the Company's Annual Report on Form 10-K for the year ended December
31, 1998;
ii. the Company's Quarterly Reports on Form 10-Q for the periods ended
March 31, 1999 and June 30, 1999; and
iii. the description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 dated April 22, 1998, as
amended and supplemented.
All documents filed by the Company or the plans pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act after the date hereof, and prior to the
filing of a post-effective amendment which indicates that all securities offered
have been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference herein and to be a part hereof from
the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law, the Company's Amended
and Restated Certificate of Incorporation provides that directors of the Company
shall not be personally
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liable for monetary damages to the Company for certain breaches of their
fiduciary duty as directors, unless they violated their duty of loyalty to the
Company or its stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized illegal dividends or redemptions, or derived an
improper personal benefit from their action as directors. This provision would
have no effect on the availability of equitable remedies or nonmonetary relief,
such as an injunction or rescission for breach of the duty of care. In addition,
the provision applies only to claims against a director arising out of his or
her role as a director and not in any other capacity (such as an officer or
employee of the Company). Further, liability of a director for violations of the
federal securities laws will not be limited by this provision. Directors will,
however, no longer be liable for monetary damages arising from decisions
involving violations of the duty of care which could be deemed grossly
negligent.
The Amended and Restated Certificate of Incorporation provides that
directors and officers of the Company shall be indemnified by the Company to the
fullest extent authorized by Delaware law, against all expenses and liabilities
reasonably incurred in connection with service for or on behalf of the Company.
The Amended and Restated Certificate of Incorporation also authorizes the
Company to enter into one or more agreements with any person which provide for
indemnification greater or different from that provided in the Amended and
Restated Certificate of Incorporation. Insofar as indemnification for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act") may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Exhibit Index which is incorporated herein by reference.
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;
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ii. To reflect in the prospectus any facts or events arising
after the effective date of the registration 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;
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 registration statement is on Form S-3 or Form
S-8, and 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 Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act and each filing of the plans' annual
report pursuant to Section 15(d) of the Exchange Act that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to officers, directors, and
controlling persons of the registrant pursuant to the registrant's
certificate of incorporation or by-laws, or otherwise, the registrant
has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore,
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unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and
will be governed by the final adjudication of such issue.
SIGNATURES
THE REGISTRANT. 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 Village of Arlington Heights, State of Illinois, on the
23rd day of September, 1999.
Security Associates International, Inc.
By: /s/ James S. Brannen
----------------------------------
James S. Brannen, President and
Chief Executive Officer
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POWER OF ATTORNEY
Know all men by these presents, that each person whose signature appears
below constitutes and appoints James S. Brannen and Howard S. Schickler, and
each of them singly, his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities (including his capacity as a director and/or
officer of Security Associates International, Inc.) to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
IN WITNESS WHEREOF, the undersigned have executed this power of attorney on
the 23rd day of September, 1999.
/s/ James S. Brannen /s/ Douglas Oberlander
- ------------------------------- -----------------------------------
James S. Brannen Douglas Oberlander
/s/ Ronald I. Davis /s/ Thomas J. Salvatore
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Ronald I. Davis Thomas J. Salvatore
/s/ Michael B. Jones
- -------------------------------
Michael B. Jones
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Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in their
respective capacities on this 23rd day of September, 1999.
Signature Title
--------- -----
President, Chief Executive Officer
/s/ James S. Brannen and Director
- -------------------------------- (Principal Executive Officer)
James S. Brannen
Senior Vice President and
Chief Financial Officer (Principal
/s/ Daniel S. Zittman Financial and Accounting Officer)
- --------------------------------
Daniel S. Zittman
/s/ Ronald I. Davis Director
- --------------------------------
Ronald I. Davis
/s/ Thomas J. Salvatore Director
- --------------------------------
Thomas J. Salvatore
/s/ Douglas Oberlander Director
- --------------------------------
Douglas Oberlander
/s/ Michael B. Jones Director
- --------------------------------
Michael B. Jones
7
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THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
Security Associates International, Inc. Employee Stock Purchase Plan has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Village of Arlington Heights,
State of Illinois, on the 23rd day of September, 1999.
Security Associates International, Inc.
By: /s/ James S. Brannen
-----------------------------------
James S. Brannen, President
Chief Executive Officer and Director
(Principal Executive Officer)
Its: Plan Administrator
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
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<S> <C>
4.1 Amended and Restated Certificate of Incorporation of Security
Associates International, Inc.1
4.2 By-Laws of Security Associates International, Inc., as amended to
date 1
4.3 Security Associates International, Inc. Employee Stock Purchase Plan
5 Opinion of Sachnoff & Weaver, Ltd.
23 Consent of Arthur Andersen, LLP
24 Powers of Attorney (contained on the signature page hereto)
</TABLE>
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1 Incorporated by reference from the Company's Registration Statement on Form
S-1 filed April 22, 1998, as amended and supplemented.
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EXHIBIT 4.3
SECURITY ASSOCIATES INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
1. PURPOSE
The purpose of the Security Associates International, Inc. Employee Stock
Purchase Plan is to provide eligible Employees of Security Associates
International, Inc., and its Affiliates with an opportunity to acquire a
proprietary interest in the Company through the purchase of Common Stock of the
Company on a payroll deduction basis. It is believed that participation in the
ownership of the Company will be to the mutual benefit of the eligible Employees
and the Company. It is intended that this Plan shall constitute an "employee
stock purchase plan" within the meaning of Section 423 of the Internal Revenue
Code of 1986, as amended. The provisions of the Plan shall, accordingly, be
construed so as to extend and limit participation in a manner consistent with
the requirements of Code Section 423.
2. DEFINITIONS
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Plan, have the following meanings. Wherever
appropriate, words used in the singular shall be deemed to include the plural
and vice versa, and the masculine gender shall be deemed to include the feminine
gender.
(a) ACCOUNT means the funds accumulated with respect to an Employee as a
result of deductions from his paycheck for the purpose of purchasing Common
Stock under the Plan. The funds allocated to an Employee's Account shall
remain the property of the Employee at all times prior to the purchase of
the Common Stock, but may be commingled with the assets of the Company and
used for general corporate purposes. Except as otherwise set forth herein,
no interest shall be paid or accrued on any funds accumulated in the
Accounts of Employees.
(b) AFFILIATE means a corporation, as defined in Section 424(f) of the
Code, that is a parent or subsidiary of the Company, direct or indirect.
(c) BOARD means the Board of Directors of the Company.
(d) CODE means the Internal Revenue Code of 1986, as amended.
(e) COMMITTEE means the committee to which the Board delegates the power
to act under or pursuant to the provisions of the Plan, or the Board if no
committee is selected.
(f) COMMON STOCK means the shares of common stock of the Company, $.001
par value.
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(g) COMPANY means Security Associates International, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of the Company.
(h) COMPENSATION means the compensation paid to an Employee by the Company
during a payroll period for federal income tax purposes, as reported on an
Employee's Form W-2 (or comparable reporting form) for income tax
withholding purposes.
(i) EFFECTIVE DATE means the date the Plan is adopted by, and made
effective by, the Board, subject to the limitations of Section 16.
(j) EMPLOYEE means any person who is employed by the Company or an
Affiliate on a regular full-time or part-time basis. A person shall be
considered employed on a regular full-time or part-time basis if he is
customarily employed for more than twenty (20) hours per week.
(k) OFFERING DATE means the date on which the Committee grants Employees
the option to purchase shares of Common Stock.
(l) OFFERING PERIOD means the period between the Offering Date and the
Purchase Date.
(m) PURCHASE DATE means the date on which the Committee purchases the
shares of Common Stock, which date shall be the last day of an Offering
Period.
(n) PARTICIPANT means an Employee who elects to participate in the Plan.
(o) PLAN means the Security Associates International, Inc. Employee Stock
Purchase Plan.
3. ELIGIBILITY
All Employees of the Company and, if designated by the Board, any Affiliate, who
are employed by the Company and/or such designated Affiliate shall be eligible
to participate in the Plan on the first Offering Date coincident with or next
following the Employee's first day of employment with the Company or an
Affiliate.
4. ADMINISTRATION
The Plan shall be administered by the Committee, which shall consist of not less
than two (2) members of the Board. Subject to the provisions of the Plan, the
Committee shall be vested with full authority to make, administer, and interpret
such rules and regulations as it deems necessary to administer the Plan, and any
determination, decision, or action of the Committee in connection with the
construction, interpretation, administration, and application of the Plan shall
be final, conclusive, and binding upon all Participants and any and all persons
claiming under or through any Participant. Notwithstanding anything to the
contrary in the Plan, the Committee shall have the discretion to modify the
terms of the Plan with respect to Participants who reside outside of the United
States or who are employed by a subsidiary of the Company that has been formed
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under the laws of any foreign country, if such modification is necessary in
order to conform such terms to the requirements of local laws.
5. STOCK
(a) The Common Stock to be sold to Participants under the Plan may, at the
election of the Company, be either treasury shares, shares acquired on the
open market, and/or shares originally issued for such purpose. The
aggregate number of shares of Common Stock that shall be made available for
purchase under the Plan shall not exceed three hundred and fifty thousand
(350,000) shares, subject to adjustment upon changes in capitalization of
the Company as provided in subparagraph (b) below. In the event any
purchase right granted under the Plan expires or terminates for any reason
without having been exercised in full or ceases for any reason to be
exercisable in whole or in part, the unpurchased shares subject thereto
will again be available for purchase by Employees upon the exercise of
purchase rights. If the total number of shares that otherwise would have
been acquired under the Plan on any Purchase Date exceeds the number of
shares of Common Stock then available under the Plan, the Company shall
make a pro rata allocation of the shares remaining available in as nearly a
uniform manner as shall be practicable and as it shall determine to be
equitable. In such event, the payroll deductions to be made pursuant to the
Participants' authorizations shall be reduced accordingly, or refunded to
the Participants, as the case may be, and the Company shall give written
notice of such reduction or refund to each affected Participant.
(b) Appropriate adjustments in the aggregate number of shares of Common
Stock that shall be made available for purchase under the Plan shall be
made to give effect to any stock splits, stock dividends, or other similar
changes in the capitalization of the Company occurring after the Effective
Date. The establishment of the Plan shall not affect in any way the right
or power of the Company to make adjustments, reclassifications,
reorganizations, or changes in its capital or business structure or to
merge, consolidate, dissolve, liquidate, sell, or otherwise transfer all or
any part of its business or assets. Adjustments under this Section 5 shall
be made in the sole discretion of the Committee, and its decision shall be
binding and conclusive.
(c) A Participant shall not have any interest in shares covered by his
authorized payroll deduction until shares of Common Stock are acquired for
his Account.
6. PARTICIPATION
(a) Each Employee may become a Participant in the Plan by authorizing a
payroll deduction on a form provided by the Committee. Such authorization
shall become effective on the Offering Date following the delivery of the
authorization form to the Committee (or its designated representative);
provided, (i) that the Employee is eligible under Section 3 to participate
in the Plan on such day and (ii) that if the authorization form is
delivered to the Committee later than 4:00 P.M. C.S.T. on the last business
day prior to the first day of the Offering Date, it shall not be effective
and a new authorization form must be delivered to elect to participate in a
subsequent Offering Period.
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(b) At the time an Employee files his authorization for a payroll
deduction, he shall elect to have deductions made from each paycheck that
he receives, such deductions to continue until the Participant withdraws
from the Plan or otherwise becomes ineligible to participate in the Plan.
Authorized payroll deductions shall be for a minimum of one percent (1%)
and a maximum of fifteen percent (15%) of the Participant's Compensation.
The deduction rate so authorized shall continue in effect through the
Offering Period and each succeeding Offering Period, subject to the
following: (i) a Participant may, at any time during any Offering Period,
reduce his rate of payroll deduction by filing a new authorization form
with the Company, which shall become effective as soon as practicable after
it is filed; and (ii) a Participant may increase the rate of his payroll
deduction effective as of any subsequent Offering Date by filing a new
authorization form with the Committee by 4:00 p.m. C.S.T. on the last
business day prior to the next Offering Date.
(c) All Compensation deductions made for a Participant shall be credited
to this Account. Except as may otherwise be provided by the Committee under
Section 4, a Participant may not make any separate cash payment into his
Account.
7. PURCHASE OF SHARES
(a) On the date when a Participant's authorization form for a deduction
becomes effective, and on each Offering Date thereafter, he shall be deemed
to have been granted an option to purchase as many full shares of Common
Stock as he will be able to purchase with the Compensation deductions
credited to his Account during the payroll periods within the applicable
Offering Period for which the Compensation deductions are made.
(b) The purchase price for the shares of Common Stock to be purchased with
payroll deductions from the Participant shall be equal to eighty-five
percent (85%) (or such other amount as the Committee shall authorize, but
in no event less than eighty-five percent (85%)) of the "fair market value"
of a share of Common Stock on the Offering Date. Fair market value shall be
defined as the closing sales price of the Common Stock on the largest
national securities exchange on which such Common Stock is listed on the
Offering Date. If the Common Stock is not then listed on any such exchange,
the fair market value shall be the closing sales price if such is reported
or otherwise the mean between the closing "Bid" and the closing "Ask"
prices, if any, as reported in the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") for the date of valuation, or
if none, on the most recent trade date thirty (30) days or less prior to
the date of valuation for which such quotations are reported. If the Common
Stock is not then listed on any such exchange or quoted in NASDAQ, the fair
market value shall be the mean between the average of the "Bid" and the
average of the "Ask" prices, if any, as reported in the National Daily
Quotation Service for the date of valuation, or, if none, for the most
recent trade date thirty (30) days or less prior to the date of valuation
for which such quotations are reported. If the fair market value cannot be
determined under the preceding three sentences, it shall be determined in
good faith by the Committee.
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8. TIME OF PURCHASE
From time to time, the Committee shall grant to each Participant an option to
purchase shares of Common Stock in an amount equal to the number of shares of
Common Stock that the accumulated payroll deductions to be credited to his
Account during the Offering Period may purchase at the applicable purchase
price. Each Offering Period shall be for a period of twenty-seven (27) months'
duration. Each Participant who elects to purchase shares of Common Stock
hereunder shall be deemed to have exercised his option automatically on such
date of purchase. Administrative and commission costs on purchases shall be paid
by the Company. The Committee shall cause to be delivered periodically to each
Participant a statement showing his aggregate Compensation deductions for the
Offering Period, the price per share paid for the shares of Common Stock
purchased for him during the Offering Period, and the amount of cash, if any,
remaining in his Account at the end of the Offering Period.
As soon as practicable following the Purchase Date, the Company shall deliver to
the Participant a certificate representing the number of shares of Common Stock
purchased for the Participant's Account. All of the cash deposits in his Account
shall be paid to him promptly after receipt of notice of withdrawal, with
interest at the rate of 3-1/2%, compounded annually. Shares of Common Stock to
be delivered to a Participant under the Plan shall be registered in the name of
the Participant or, if the Participant so directs in writing to the Committee,
in the name of the Participant and such person(s) as may be designated by the
Participant, to the extent permitted by applicable law, and delivered to the
Participant as soon as practicable after the request for a withdrawal.
9. CESSATION OF PARTICIPATION
A Participant may cease participation in the Plan at any time by notifying the
Committee in writing of his intent to cease his participation. If such notice is
received by the Committee the Company shall distribute to the Participant all of
his accumulated payroll deductions, with interest at the rate of 3-1/2%,
compounded annually. If any Participant ceases participation in the Plan, no
further Compensation deductions shall be made on his behalf after the effective
date of his cessation, except in accordance with a new authorization form filed
with the Committee as provided in Section 6. Upon ceasing participation in the
Plan, a Participant shall not be permitted to reenter the Plan until six (6)
months have elapsed from the date his cessation becomes effective.
10. INELIGIBILITY
An Employee must be employed by the Company or an Affiliate on the Purchase Date
in order to participate in the purchase for that Offering Period. If an option
expires without first having been exercised, all funds credited to the
Participant's Account shall be refunded, with interest at the rate of 3-1/2%,
compounded annually. If a Participant becomes ineligible to participate in the
Plan at any time, all Compensation deductions made on behalf of the Participant
that have not been used to purchase shares of Common Stock shall be paid to the
Participant within sixty (60) days after the Committee determines that the
Participant is not eligible to participate in the Plan.
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11. DESIGNATION OF BENEFICIARY
A Participant may file a written designation of a beneficiary who shall receive
any shares of Common Stock (or remaining Compensation deductions) credited to
the Participant's Account under the Plan in the event of such Participant's
death prior to delivery to him of the certificates for such shares (or remaining
Compensation deductions). The designation of a beneficiary may be changed by the
Participant at any time by written notice given in accordance with rules and
procedures established by the Committee. Upon the death of a Participant, and
upon receipt by the Company of proof of the identity and existence, at the
Participant's death, of a beneficiary validly designated by him under the Plan,
the Company shall deliver such shares of Common Stock (or remaining Compensation
deductions) to such beneficiary. In the event of the death of the Participant,
and in the absence of a beneficiary validly designated under the Plan who is
living at the time of such Participant's death, the Company shall deliver such
shares (or remaining Compensation deductions) to the executor or administrator
of the estate of the Participant, or if no such executor or administrator has
been appointed, the Company, in its sole discretion, may deliver such shares (or
remaining Compensation deductions) to the Participant's spouse or to any one or
more dependents or relatives of the Participant, or to such other person or
persons as the Company may designate on behalf of the estate of such deceased
Participant.
12. TRANSFERABILITY
Neither Compensation deductions credited to a Participant's Account nor any
rights with regard to Plan participation or the right to purchase shares of
Common Stock under the Plan may be assigned, transferred, pledged, or otherwise
disposed of in any way by a Participant other than by will or the laws of
descent and distribution; provided, however, that shares of Common Stock
purchased on behalf of a Participant and left in his Account shall be subject to
his absolute control. Any attempted assignment, transfer, pledge, or other
disposition shall be void and without effect.
13. AMENDMENT OR TERMINATION
The Board may, without further action on the part of the stockholders of the
Company, at any time amend the Plan in any respect, or terminate the Plan,
except that it may not:
(a) Permit the sale of more shares of Common Stock than are authorized
under Section 5;
(b) Change the class of Affiliates whose Employees are eligible to
participate in the Plan; or
(c) Effect a change inconsistent with Section 423 of the Code or the
regulations issued thereunder.
14. NOTICES
All notices or other communications by a Participant under or in connection with
the Plan shall be deemed to have been duly given when received in writing by the
Chief Financial Officer of
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the Company or when received in the form specified by the Committee at the
location and by the person designated by the Committee for the receipt thereof.
15. LIMITATIONS
Notwithstanding any other provisions of the Plan:
(a) The Company intends that this Plan shall constitute an employee stock
purchase plan within the meaning of Section 423 of the Code. Any provisions
required to be included in the Plan under said Section, and under
regulations issued thereunder, are hereby included as though set forth in
the Plan at length.
(b) No Employee shall be entitled to participate in the Plan if,
immediately after the grant of an option hereunder, the Employee would own
stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or an Affiliate. For
purposes of this Section 15, stock ownership shall be determined under the
rules of Section 424(d) of the Code and stock that the Employee may
purchase under outstanding options shall be treated as stock owned by the
Employee.
(c) No Employee shall be permitted to purchase Common Stock hereunder if
his right and option to purchase Common Stock under this Plan and under all
other employee stock purchase plans (as defined in Section 423 of the Code)
of the Company or any Affiliates would result in an entitlement to purchase
Common Stock in any one (1) calendar year in excess of a fair market value
of $25,000 (determined at the time of grant).
(d) All Employees shall have the same rights and privileges under the
Plan, except that the amount of Common Stock that may be purchased pursuant
to the Plan shall bear a uniform relationship to an Employee's
Compensation. All rules and determinations of the Committee shall be
uniformly and consistently applied to all persons in similar circumstances.
(e) Nothing in the Plan shall confer upon any Employee the right to
continue in the employment of the Company or any Affiliate or affect the
right that the Company or any Affiliate may have to terminate the
employment of such Employee.
(f) No Participant shall have any right as a stockholder unless and until
certificates for shares of Common Stock are issued to him or allocated to
his Account.
(g) If under any provision of the Plan that requires a computation of the
number of shares of Common Stock to be purchased, the number so computed is
not a whole number of shares of Common Stock, such number of shares of
Common Stock shall be rounded down to the next whole number.
(h) The Plan is intended to provide shares of Common Stock for investment
and not for resale. The Company does not, however, intend to restrict or
influence any Participant in the conduct of his own affairs. A Participant,
therefore, may sell shares of
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<PAGE> 8
Common Stock purchased under the Plan at any time he chooses, subject to
compliance with any applicable federal or state securities laws or any
applicable Company restriction or blackout periods; provided, however, that
because of certain federal tax requirements, each Participant shall agree,
by entering the Plan:
(i) promptly to give the Company notice of any shares of Common
Stock disposed of within two (2) years after the date of grant of the
applicable option, or within one (1) year of the Purchase Date, and
the number of such shares disposed of (a "disqualifying disposition");
(ii) that the Company may withhold, pursuant to Code ss.ss. 3102,
3301, and 3402, from his wages and other cash compensation paid to him
in all payroll periods following in the same calendar year, any
additional taxes the Company may become liable for in respect of
amounts includable in his income as additional compensation as a
result of a disqualifying disposition of Common Stock acquired under
the Plan, or as a result of the acquisition of Common Stock under the
Plan; and
(iii) that he shall repay the Company any amount of additional taxes
the Company may become liable for in respect of amounts includable in
his income as additional compensation as a result of a disqualifying
disposition of Common Stock acquired under the Plan, or as a result of
the acquisition of Common Stock under the Plan, that cannot be
satisfied by withholding from the wages and other cash compensation
paid to him by the Company.
(i) This Plan is intended to comply in all respects with applicable law
and regulations, including with respect to Participants who are officers or
directors for purposes of Section 16 of the Securities Exchange Act of
1934, as amended from time to time, Rule 16b-3 of the Securities and
Exchange Commission. In case any one or more provisions of this Plan shall
be held invalid, illegal, or unenforceable in any respect under applicable
law and regulations (including Rule 16b-3), the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby and the invalid, illegal, or unenforceable provision
shall be deemed null and void; however, to the extent permitted by law, any
provision that could be deemed null and void shall first be construed,
interpreted, or revised retroactively to permit this Plan to be construed
in compliance with all applicable law (including Rule 16b-3), so as to
further the intent of this Plan. Notwithstanding anything herein to the
contrary, with respect to Participants who are officers and directors for
purposes of Section 16(b) of the Securities Exchange Act of 1934, as
amended from time to time, and if required to comply with the rules
promulgated thereunder, such Participants shall not be permitted to direct
the sale of any Common Stock purchased hereunder until at least six (6)
months have elapsed from the date of a purchase, unless the Committee
determines that the sale of the Common Stock otherwise satisfies the then
current Rule 16b-3 requirements.
16. EFFECTIVE DATE AND APPROVALS
The Plan shall become effective at a time when:
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(a) the Plan has been adopted by the Board; and
(b) a registration statement on Form S-8 under the Securities Act of 1933,
as amended, has become effective with respect to the Plan; and
(c) the Committee has notified the eligible Employees that they may
commence participation in the Plan; and
(d) the Plan is approved by the holders of a majority of the outstanding
shares of Common Stock of the Company, which approval must occur within the
period ending twelve (12) months after the date the Plan is adopted by the
Board. In the event such stockholder approval is not obtained, the Plan
shall terminate and have no further force or effect, and all amounts
collected from the Participants during any initial Offering Period(s)
hereunder shall be refunded.
Unless sooner terminated by the Board, or as set forth above, the Plan shall
terminate upon the earlier of (i) the tenth (10th) anniversary of the adoption
of the Plan by the Board, or (ii) the date on which all shares available for
issuance under the Plan shall have been sold under the Plan.
17. APPLICABLE LAW
All questions pertaining to the validity, construction, and administration of
the Plan shall be determined in conformity with the laws of Illinois, to the
extent not inconsistent with Section 423 of the Code and the regulations
thereunder.
Adopted the 13th day of November, 1998.
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<PAGE> 1
EXHIBIT 5
[LETTERHEAD OF SACHNOFF & WEAVER, LTD.]
September 24, 1999
Security Associates International, Inc.
2101 South Arlington Heights Road
Suite 100
Arlington Heights, IL 60005
RE: REGISTRATION STATEMENT ON FORM S-8
SECURITY ASSOCIATES INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN
Gentlemen:
We have acted as counsel for Security Associates International, Inc. (the
"COMPANY") in connection with the Registration Statement on Form S-8 filed by
the Company with the Securities and Exchange Commission to effect the
registration, pursuant to the Securities Act of 1933, of 350,000 shares of
common stock, $0.001 par value (the "COMMON STOCK"), which may be offered by the
Company under the above-referenced plan (the "PLAN").
In connection with this opinion, we have relied as to matters of fact,
without investigation, upon certificates of public officials and others and upon
affidavits, certificates and statements of directors, officers and employees of,
and the accountants for, the Company. We also have examined originals or copies,
certified or otherwise identified to our satisfaction, of such corporate and
other instruments, documents and records as we have deemed relevant and
necessary to examine for the purpose of this opinion, including the Plan. In
addition, we have reviewed such questions of law as we have considered necessary
and appropriate for the purposes of this opinion.
We have assumed the accuracy and completeness of all documents and records
that we have reviewed, the genuineness of all signatures, the due authority of
the parties signing such documents, the authenticity of all documents submitted
to us as originals, the conformity to original documents of all the documents
submitted to us as certified or photostatic copies and the authenticity of the
originals of such latter documents.
<PAGE> 2
Security Associates Internationl, Inc.
Septemeber 24, 1999
Page 2
Based upon and subject to the foregoing, we advise you that, in our
opinion, the shares of Common Stock proposed to be offered by the Company as set
forth in the Registration Statement have been duly authorized for issuance and,
when issued and sold in accordance with the Security Associates International,
Inc. Employee Stock Purchase Plan referred to in the Registration Statement,
such shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement. In giving this consent, we do not
hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act of 1933 or the rules and regulations of
the Securities and Exchange Commission.
We express no opinions as to matters under or involving any laws other than
the laws of the State of Illinois, the federal laws of the United States of
America, and the General Corporation Law of the State of Delaware.
Very truly yours,
/s/ SACHNOFF & WEAVER, LTD.
SACHNOFF & WEAVER, LTD.
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 28, 1999
included in Security Associates International, Inc. Annual Report on Form 10-K
for the year ended December 31, 1998 and to all references to our Firm included
in this registration statement.
/s/ Arthur Andersen LLP
-----------------------
Arthur Andersen LLP
Chicago, Illinois
September 22, 1999
