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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
X Annual report pursuant to Section 15(d) of the Securities Exchange Act of
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For the fiscal year ended December 31, 1999
or
Transition report pursuant to Section 15(d) of the Securities Exchange
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For the transition period from to
Commission file number
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A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
Security Associates International, Inc. Employee Stock Purchase Plan.
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
SECURITY ASSOCIATES INTERNATIONAL, INC.
2101 South Arlington Heights Road, Suite 100
Arlington Heights, Illinois 60005-4142
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REQUIRED INFORMATION
The following financial statements are being furnished for the plan:
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Administrative Committee of the
Security Associates International, Inc.
Employee Stock Purchase Plan:
We have audited the accompanying statement of net assets of the SECURITY
ASSOCIATES INTERNATIONAL, INC. EMPLOYEE STOCK PURCHASE PLAN as of December 31,
1999, and the related statement of changes in net assets for the period from
inception (April 1, 1999) through December 31, 1999. These financial statements
are the responsibility of the Plan's Administrative Committee. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets of the Plan as of December 31, 1999, and
the changes in net assets for the period from inception (April 1) through
December 31, 1999, in conformity with generally accepted accounting principles.
Arthur Andersen LLP
Chicago, Illinois
March 10, 2000
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SECURITY ASSOCIATES INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF NET ASSETS
AS OF DECEMBER 31, 1999
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ASSETS:
Due from Security Associates International, Inc. $83,940
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NET ASSETS AVAILABLE $83,940
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The accompanying notes are an integral part of this statement.
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SECURITY ASSOCIATES INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
STATEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD FROM INCEPTION (APRIL 1, 1999) THROUGH DECEMBER 31, 1999
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PLAN ASSETS AVAILABLE, beginning of period $ 0
ADDITIONS:
Participant contributions 119,244
DEDUCTIONS:
Participant withdrawals (35,304)
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PLAN ASSETS AVAILABLE, end of period $ 83,940
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The accompanying notes are an integral part of this statement.
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SECURITY ASSOCIATES INTERNATIONAL, INC.
EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
1. THE PLAN
The Security Associates International, Inc. ("SAI") Employee Stock Purchase
Plan (the "Plan") was created on April 1, 1999, to give eligible employees,
wishing to do so, a convenient means of purchasing SAI shares through payroll
deductions. Employees of SAI or any subsidiary that has adopted the Plan on
behalf of its employees who work more than 20 hours per week and were employed
prior to April 1, 1999, are eligible to participate in the Plan. As of December
31, 1999, 54 employees were participating in the Plan.
The Plan allows employees to make payroll deductions of up to 15% after tax
for a 27-month period. SAI common stock will be issued to all participants on
July 1, 2001, at 85% of the market price on April 1, 1999. The price of SAI
common stock on April 1, 1999, was $3.25 per share. If a participant withdraws
from the Plan they are entitled to receive all of their contributions plus
interest at a 3.5% annual rate.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. The transactions of the Plan are accounted for on the accrual basis of
accounting.
b. Expenses incurred by the Plan are paid by SAI.
c. The preparation of the Plan's financial statements requires the
Administrative Committee to make certain estimates and assumptions required
under generally accepted accounting principles which may differ from actual
results.
3. FEDERAL INCOME TAXES
TAX STATUS OF THE PLAN
The Plan does not qualify for tax-exempt status under Section 501 of the
Internal Revenue Code. However, the Plan incurs no tax liability since all Plan
income is distributed to the participants.
TAX STATUS OF EACH PARTICIPANT
The Plan qualifies as an "employee stock purchase plan" under Section 423 of the
Internal Revenue Code. Participants realize income upon disposition of shares
acquired under the Plan. If the shares are held for the minimum holding period
as defined under Section 423, the participant may realize capital gain income at
the time the shares are sold.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustee (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
Security Associates International, Inc.
Employee Stock Purchase Plan.
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(Name of Plan)
Date March 27, 2000 /s/ James S. Brannen
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James S. Brannen
Administrator
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EXHIBIT INDEX
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EXHIBIT
NUMBER DESCRIPTION
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23 Consent of Arthur Andersen LLP
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EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of
our report included in this Form 11-K, into the Security Associates
International, Inc. Employee Stock Purchase Plan.
/s/ Arthur Andersen LLP
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Arthur Andersen LLP
Chicago, Illinois
March 27, 2000
