Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
FIRST ALERT, INC.
(Exact name of issuer as specified in its charter)
Delaware 04-315705
(State of Incorporation) (IRS Employer Identification Number)
3901 Liberty Street, Aurora, Illinois 60504
(Address of Principal Executive Offices)
(708) 851-7330
(Registrant's telephone number, including area code)
FIRST ALERT, INC.
NONQUALIFIED STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
(Full title of the Plan)
Michael J. Riccio, Jr., Esquire
Hutchins, Wheeler & Dittmar
A Professional Corporation
101 Federal Street
Boston, Massachusetts 02110
(617) 951-6600
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(l) Per Share Price Fee(2)
<S> <C> <C> <C> <C>
Common Stock, 8,694 shares $3.969 $34,506 $11.90
par value 91,306 shares 6.50 593,489 204.65
------------- ------- ------
$.01 per share 100,000 shares $650,822 $216.55
</TABLE>
(1) Also registered hereunder are such additional number of shares of Common
Stock, presently indeterminable, as may be necessary to satisfy the antidilution
provisions of the Plan to which this Registration Statement relates.
(2) The registration fee has been calculated with respect to 91,306 of the
shares registered on the basis of the average of the high and low sale prices on
the Nasdaq Stock Market, Inc. ("Nasdaq") on May 17, 1996; and with respect to
the remaining 8,694 shares registered on the basis of the price at which options
may be exercised. <PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Company hereby incorporates by reference the documents listed in
(a) through (c) below. In addition, all documents subsequently filed by the
Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 (prior to 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 in this Registration Statement and to be a part thereof from the date
of filing of such documents.
(a) The Company's latest annual report filed pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 or the latest Prospectus filed
pursuant to Rule 424(b) under the Securities Act of 1933, which contains either
directly or by incorporation by reference, audited financial statements for the
Company's latest fiscal year for which such statements have been filed.
(b) All of the reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Securities Exchange Act of 1934 since the end of the fiscal year
covered by the annual report or the Prospectus referred to in (a) above.
(c) The description of the Company's Common Stock which is contained in
the Registration Statement filed by the Company under the Securities Exchange
Act of 1934, including any amendment or report filed for the purpose of updating
such description.
Item 4. Description of Securities
Inapplicable.
Item 5. Interests of Named Experts and Counsel
The validity of the authorization and issuance of the Common Stock
offered hereby will be passed upon for the Company by Hutchins, Wheeler &
Dittmar, A Professional Corporation, Boston, Massachusetts. As of May 22, 1996,
a total of 11,400 shares of Common Stock were beneficially owned by certain
stockholders of Hutchins, Wheeler & Dittmar, A Professional Corporation.
<PAGE>
Item 6. Indemnification of Directors and Officers
Section 145 of the General Corporation Law of the State of Delaware
provide as follows:
(a) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interest of the
corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person
did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had reasonable cause
to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the corporation to
procure a judgment in its favor by reason of the fact that he is or was
a director, officer, employee or agent of the corporation, or is or was
serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture,
trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall
be made in respect to any claim, issue or matter as to which such
person shall have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or
such other court shall deem proper.
<PAGE>
(c) To the extent that a director, officer, employee or agent
of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsections
(a) and (b) of this section, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsections (a) and (b) of this
section (unless ordered by a court) shall be made by the corporation
only as authorized in specific case upon a determination that
indemnification of the director, officer, employee or agent is proper
in the circumstances because he has met the applicable standard of
conduct set forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by a majority vote of the board of
directors who are not parties to such action, suit or proceeding, even
though less than a quorum, or (2) if there are no such directors, or,
if such directors so direct, by independent legal counsel in a written
opinion, or (3) by the shareholders.
(e) Expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action, suit or proceeding may be paid by the corporation
in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that
he is not entitled to be indemnified by the corporation as authorized
in this section. Such expenses (including attorneys' fees) incurred by
other employees and agents may be so paid upon such terms and
conditions, if any, as the board of directors deems appropriate.
(f) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other subsections of this section shall
not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of shareholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action
in another capacity while holding such office.
(g) A corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer,
employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether
or not the corporation would have the power to indemnify him against
such liability under this section.
<PAGE>
(h) For purposes of this section, references to "the
corporation" shall include, in addition to the resulting corporation,
any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so that any
person who is or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with
respect to any employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a director,
officer, employee, or agent of the corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants or beneficiaries;
and a person who acted in good faith and in a manner he reasonably
believed to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the corporation" as referred to in
this section.
(j) The indemnification and advancement of expenses provided
by, or granted pursuant to, this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a
person.
Article NINTH of the Restated Certificate of Incorporation of the
Company provides as follows:
No director of the Corporation shall be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided that, to the extent provided by applicable law, this provision shall
not eliminate the liability of a director (i) for any breach of the director's
duty of loyalty to the Corporation or its shareholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law of the
State of Delaware, or (iv) for any transaction from which the director derived
an improper personal benefit. No amendment to or repeal of this provision shall
apply to or have any
<PAGE>
effect on the liability or alleged liability of any
director for or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal.
Article 10 of the By-laws of the Company provides as follows:
"ARTICLE 10
INDEMNIFICATION
Section 10.1 Third Party Actions. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorney's fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
Section 10.2 Derivative Actions. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is
or was a Director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless and only to
the extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court of
Chancery or such other court shall deem proper. <PAGE>
Section 10.3 Expenses. To the extent that a Director, officer, employee
or agent of the Corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in Sections 10.1 and 10.2,
or in defense of any claim, issue or matter therein, he shall be indemnified
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection therewith.
Section 10.4 Authorization. Any indemnification under Sections 10.1 and
10.2 (unless ordered by a court) shall be made by the Corporation only as
authorized in the specific case upon a determination that indemnification of the
Director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Sections 10.1 and 10.2.
Such determination shall be made (a) by a majority vote of the Directors who are
not parties to such action, suit or proceeding, even though less than a quorum,
or (b) if there are no such Directors, or if such Directors so direct, by
independent legal counsel in a written opinion, or (c) by the stockholders.
Section 10.5 Advance Payment of Expenses. Expenses incurred by an
officer or Director in defending a civil or criminal action, suit or proceeding
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of such officer or
Director to repay such amount unless it shall ultimately be determined that he
is entitled to be indemnified by the Corporation as authorized in this Article
10. Such expenses incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the Board of Directors deems appropriate.
Section 10.6 Non-Exclusiveness. The indemnification provided by this
Article 10 shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested Directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a Director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
Section 10.7 Insurance. The Corporation shall have power to purchase
and maintain insurance on behalf of any person who is or was a Director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Corporation would have the
power to indemnify him against such liability under the provisions of this
Article 10.
Section 10.8 Constituent Corporations. The Corporation shall have power
to indemnify any person who is or was a director, officer, employee or agent of
a constituent corporation absorbed in a consolidation or merger with this
Corporation or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other
<PAGE>
enterprise, in the same manner as
hereinabove provided for any person who is or was a Director, officer, employee
or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
Section 10.9 Additional Indemnification. In addition to the foregoing
provisions of this Article 10, the Corporation shall have the power, to the full
extent provided by law, to indemnify any person for any act or omission of such
person against all loss, cost, damage and expense (including attorney's fees) if
such person is determined (in the manner prescribed in Section 10.4 hereof) to
have acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interest of the Corporation."
The Company has purchased insurance with respect to, among other
things, the liabilities that may arise under the statutory provisions referred
to above. The directors and officers of the Company also are insured against
certain liabilities, including certain liabilities arising under the Securities
Act of 1933, as amended, which might be incurred by them in such capacities and
against which they are not indemnified by the Company.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
Number Description
4.1 First Alert, Inc. Nonqualified Stock Option Plan for
Non-Employee Directors.
5.1 Opinion of Hutchins, Wheeler & Dittmar, A Professional
Corporation, as to legality of shares being registered and
consent of Hutchins, Wheeler & Dittmar, A Professional
Corporation.
23.1 Consent of Independent Public Accountants.
Item 9. Undertakings
The undersigned Registrant hereby undertakes the following:
(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:
<PAGE>
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the 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)(l)(i) and (a)(l)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes to deliver or
cause to be delivered with the prospectus, to each person to whom the prospectus
is sent or give, the latest annual report to security holders that is
incorporated by reference in the prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X are not set forth in the prospectus, to
deliver, or cause to be delivered to each person to whom the prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the prospectus to provide such interim financial information.
(c) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to section 13(a) or section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated b
<PAGE>
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.
(d) The undersigned registrant hereby undertakes, that, insofar
as indemnification for liabilities arising under the Securities Act of 1933 may
be permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment 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 Act and will be governed by the final adjudication of
such issue.
[Rest of Page Intentionally Left Blank]
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Aurora, Illinois on May 22, 1996.
FIRST ALERT, INC.
/s/ Malcolm Candlish
---------------------------------------
Malcolm Candlish
Chairman of the Board, President and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Malcolm Candlish and Gary L. Lederer, and each of
them, with the power to act without the other, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him or in his name, place and stead, in any and all capacities to sign any
and all amendments or 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 attorney-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary 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
attorney-in-fact and agents or either of them, or their or his substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Malcolm Candlish Chairman of the May 22, 1996
- -------------------------------------------
Malcolm Candlish Board, President, Chief
Executive Officer
and Director
(principal executive
officer)
/s/ Gary Lederer Senior Vice President May 22, 1996
- -------------------------------------------
Gary L. Lederer Chief Financial Officer
Secretary and Treasurer
(principal financial
and accounting
officer)
<PAGE>
/s/ David V. Harkins Director May 22, 1996
------------------------------------------
David V. Harkins
/s/ Scott A. Schoen Director May 22, 1996
- -------------------------------------------
Scott A. Schoen
/s/Anthony J. DiNovi Director May 22, 1996
- -------------------------------------------
Anthony J. DiNovi
/s/ John R. Albers Director May 22, 1996
- -------------------------------------------
John R. Albers
/s/ Peter M. Wood Director May 22, 1996
- -------------------------------------------
Peter M. Wood
</TABLE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
to
FORM S-8
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
FIRST ALERT, INC.
(Exact name of registrant as specified in its charter)
<PAGE>
FIRST ALERT, INC.
NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
<PAGE>
FIRST ALERT, INC.
NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I Purpose and Administration
1.1 Purpose................................................................................1
1.2 Administration.........................................................................1
1.3 Participation..........................................................................2
1.4 Stock Subject to the Plan..............................................................2
1.5 Restrictions on Exercise...............................................................2
ARTICLE II Stock Options...................................................................................3
2.1 Grant and Option Price.................................................................3
2.2 Fair Market Value..................................................................... 3
2.3 Stock Option Agreement.................................................................4
2.4 Option Period..........................................................................4
2.5 Exercise of Options....................................................................4
2.6 Non-Transferability of Options.........................................................5
2.7 Termination of Directorship............................................................5
2.8 Issuance of Stock Certificates.........................................................6
3.1 Adjustments Upon Changes in Capitalization.............................................6
3.2 Acceleration...........................................................................8
3.3 Continuation of Directorship...........................................................9
3.4 Amendment..............................................................................9
3.5 Time of Exercise......................................................................10
3.6 Privileges of Stock Ownership and Non-Distributive Intent.............................10
3.7 Effective Date of the Plan............................................................11
3.8 Expiration............................................................................11
3.9 Governing Law.........................................................................11
3.10 Application of Funds..................................................................11
3.11 No Liability for Good Faith Determinations............................................11
3.12 Execution of Receipts and Releases....................................................11
3.13 No Guarantee of Interests.............................................................12
3.14 Payment of Expenses...................................................................12
3.15 Company Records.......................................................................12
3.16 Information.......................................................................... 12
<PAGE>
3.17 No Liability of Company...............................................................12
3.18 Company Action........................................................................12
3.19 Severability..........................................................................12
3.20 Notice............................................................................... 13
3.21 Waiver of Notices.....................................................................13
3.22 Successors............................................................................13
3.23 Headings..............................................................................13
3.24 Word Usage............................................................................14
</TABLE>
<PAGE>
FIRST ALERT, INC.
NONQUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
ARTICLE I
Purpose and Administration
1.1 Purpose. The purpose of the First Alert, Inc. Nonqualified Stock
Option Plan for Non-Employee Directors (the "Plan") is to strengthen First
Alert, Inc. (the "Company") by providing a means of retaining and attracting
competent non-employee personnel to serve on its Board of Directors by extending
such individuals added long-term incentives for high levels of performance and
of unusual efforts designed to improve the financial performance for the
Company. It is intended that this purpose be achieved through the opportunity
for ownership of shares of common stock of the Company (the "Common Stock") at a
price which is fifty percent (50%) (the "Discount") of the fair market value of
such Common Stock at the time of grant of options to purchase shares of Common
Stock to participants hereunder, together with the benefits of stock
appreciation offered under the Plan. In furtherance of this purpose, the Company
will pay fifty percent (50%) of each non-employee director's compensation in the
form of nonqualified stock options.
1.2 Administration. The Plan shall be administered by a committee (the
"Committee") which shall be comprised of members of the Board of Directors of
the Company who are not eligible to participate in the Plan.
Subject to the express provisions of the Plan, the Committee shall have
the authority to construe and interpret the Plan, to define the terms used in
the Plan, to prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, and to make all other determinations
necessary or advisable for the administration of the Plan. The determinations of
the Committee on all matters referred to in this Plan shall be conclusive. No
member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to the Plan or
any transaction under the Plan.
1.3 Participation. All members of the Board of Directors of the Company
who are not employed by any of the following shall be eligible and shall
participate in the Plan: the Company, any Affiliate (as defined below), the
Thomas H. Lee Company or any investment fund affiliated with the Thomas H. Lee
Company (the "Non-Employee Directors"). For purposes of the Plan, the term
"Affiliate" shall mean any entity in which the Company directly or through
intervening subsidiaries owns twenty-five percent (25%) or more of the total
combined voting power or value of all classes of stock or, in the case of an
unincorporated entity, a twenty-five percent (25%) or more interest in the
capital and profits.
1.4 Stock Subject to the Plan. Subject to adjustment as provided in
Section 3.1 hereof, the stock to be offered under the Plan shall be treasury
shares or shares of the Company's authorized but unissued Common Stock
(hereinafter collectively called "Stock"). The aggregate number of shares of
Stock to be issued upon exercise of all options granted under the Plan shall not
exceed 100,000 shares, subject to adjustments as set forth in Section 3.1 and
3.2 hereof. If any option granted hereunder shall lapse or terminate for any
reason without having been fully exercised, the shares subject thereto shall
again be available for purposes of the Plan.
1.5 Restrictions on Exercise. No option granted hereunder may be
exercised until a registration statement under the Securities Act of 1933, as
amended (the "Act"), relating to the Stock issuable upon exercise of such option
has been filed with, and declared effective by, the Securities and
Exchange Commission (the "Commission"), and there is available for delivery a
prospectus meeting the requirement of Section 10 of the Act, or until the
Committee has determined that the issuance of Stock upon such exercise is exempt
from the registration and prospectus delivery requirements of the Act.
ARTICLE II
Stock Options
2.1 Grant and Option Price. On February 9, 1996 and, thereafter, on
January 2 of each calendar year (each of such dates being herein referred to as
the "Grant Date"), commencing with January 2, 1997, each Non-Employee Director
on such date shall be granted an option to purchase that number of shares of
Stock computed by dividing: (a) one-half of the sum of the annual retainer fee
for Non-Employee Directors payable for such calendar year plus one-half of the
projected aggregate meeting fees payable for such calendar year to such
Non-Employee Director for attending meetings of the Board of Directors and any
committee thereof on which such Non-employee Director served as a member; by (b)
the product of (i) the Discount, multiplied by (ii) the Fair Market Value (as
such term is defined in Section 2.2) of a share of Stock on the Grant Date;
provided, however, that solely with respect to options with a Grant Date of
February 9, 1996, the number of shares of Stock issuable upon exercise of such
options shall be reduced to one-half the number computed pursuant to the
preceding formula. The exercise price per share of Stock for options granted
hereunder shall be equal to the product of (i) the Discount multiplied by (ii)
the Fair Market Value of a share of Stock on the Grant Date.
2.2 Fair Market Value. The "Fair Market Value" of a share of
Stock shall be determined as of the Grant Date in the following manner:
<PAGE>
(a) if the shares of Common Stock are then listed on any
national securities exchange or on The Nasdaq National Market (each a "National
Exchange"), Fair Market Value shall be (i) the mean between the high and low
sales prices on the National Exchange with the highest sales volume on the Grant
Date or (ii) if there were no sales on any National Exchange on the Grant Date,
the weighted average of the means between the highest and lowest sales prices on
the National Exchange with the highest sales volume on the nearest date before
and the nearest date after the Grant Date on which any sales of Common Stock
occurred, in accordance with Treasury Regulations Section 25.2512-2; or
(b) if the shares of Common Stock are not then listed on any
National Exchange, Fair Market Value shall be (i) the mean between the Closing
"Bid" and the Closing "Ask" prices on the Grant Date, as reported on The Nasdaq
Stock Market or (ii) if there were no "Bid" and "Ask" prices reported for the
Grant Date, the weighted average of the means between the highest and the lowest
reported sales prices on The Nasdaq Stock Market for the nearest date before and
nearest date after the Grant Date on which any sales of Common Stock occurred,
in accordance with Treasury Regulations Section 25.2512-2; or
(c) if the shares of Common Stock are not then listed on any
National Exchange or reported on The Nasdaq Stock Market, Fair Market Value
shall be (i) the mean between the average of the "Bid" and "Ask" prices as
reported on the National Daily Quotation Service for the Grant Date or (ii) if
there were no "Bid" and "Ask" prices reported for the Grant Date, the weighted
average of the means between the highest and lowest sales reported in the
National Daily Quotation Service on the nearest date before and the nearest date
after the Grant Date on which any sales of Common Stock occurred, in accordance
with Treasury Regulations Section 25.2512- 2; or
(d) if Fair Market Value cannot be determined under the
preceding clauses (a) through (c), Fair Market Value shall be determined in good
faith by the Board of Directors.
2.3 Stock Option Agreement. Each option granted pursuant to the Plan
shall be evidenced by a Stock Option Agreement ("Option Agreement"), in such
form as the Committee shall require, between the Company and the Non-Employee
Director to whom the option has been granted (the "Optionee").
2.4 Option Period. Except as otherwise provided herein, each option and
all rights or obligations thereunder shall expire on the tenth anniversary of
the Grant Date (the "Expiration Date"), and shall be subject to earlier
termination as hereinafter provided.
<PAGE>
2.5 Exercise of Options.
(a) Vesting. Each option shall vest and become exercisable
with respect to all Vested Shares (as defined below) on the Vesting Date (as
defined below) if the Optionee is serving on the Board of Directors on the
Vesting Date. The "Vesting Date" shall be the first anniversary of the Grant
Date, except with respect to options with a Grant Date of February 9, 1996, for
which the Vesting Date shall be July 26, 1996. The number of shares issuable
upon exercise of an option granted hereunder (the "Vested Shares") on and after
the Vesting Date, but not later than ten (10) years from the Grant Date, shall
be equal to the number of shares of Stock specified in the Option Agreement
executed and delivered with respect to such grant, subject to reduction if the
Optionee attends less than the Required Number of Meetings (as defined below).
In the event the Optionee attends less than the Required Number of Meetings, the
number of Vested Shares shall be permanently reduced by a number equal to the
quotient of (A) divided by (B), where (A) is equal to the product of (x)
one-half the fee payable for each meeting attended by a member of the Board of
Directors during the vesting period of the option multiplied by (y) the
difference between the Required Number of Meetings and the actual number of
meetings of the Board of Directors attended during such period by the Optionee,
and where (B) is equal to the exercise price for such options determined
pursuant to Section 2.1. The term "Required Number of Meetings" means, for all
options other than options with a Grant Date of February 9, 1996, the lesser of
(i) four (4) meetings of the Company's Board of Directors during the calendar
year of the Grant Date and (ii) the number of meetings of the Company's Board of
Directors duly called and held during such period. The term "Required Number of
Meetings" means, for options with a Grant Date of February 9, 1996 for the
period July 26, 1995 through December 31,1995 the lesser of (i) two (2)
meetings of the Company's Board of Directors during the period from February 10,
1996 to July 26, 1996, and (ii) the number of meetings of the Company's Board of
Directors duly called and held during such period.
(b) Payment of Purchase Price. The purchase price of the Stock
purchased upon exercise of an option shall be paid in full in cash or by check
at the time of each exercise of an option or by such other consideration as may
be provided for in the Option Agreement by the Committee; provided, however,
that if the Option Agreement so provides and upon receipt of all regulatory
approvals, the person exercising the option may deliver in payment of a portion
or all of the purchase price certificates for Common Stock of the Company, which
shall be valued at the Fair Market Value of such Stock on the date of exercise
in respect of whole shares of Stock.
2.6 Non-Transferability of Options. An option granted under the Plan
shall, by its terms, be non-transferable by the Optionee other than by will or
by the laws of descent and distribution, and shall be exercisable during the
Optionee's lifetime only by the Optionee or by the Optionee's duly appointed
guardian or personal representative.
2.7 Termination of Directorship. If the directorship of the Optionee is
terminated for any reason other than (i) Disability (as hereinafter defined) of
the Optionee, (ii) death of the Optionee, or (iii) on account of any action of
fraud or intentional misrepresentation or embezzlement, misappropriation or
conversion of assets or opportunities of the Company or any Affiliate, an option
shall be exercisable by the Optionee at any time prior to the Expiration Date of
the option or within ninety (90) days after the date of such termination of the
directorship, whichever is the shorter period; otherwise the option rights of
such Optionee under any then outstanding option shall terminate immediately. In
the event that the Optionee's directorship is terminated by reason of
Disability, an option shall be exercisable by the Optionee at any time period
prior to the Expiration Date of the option or within one hundred eighty (180)
days after the date of such termination, whichever is the shorter period. As
used herein, the term "Disability" shall mean permanently and totally disabled
within the meaning of Section 22(e) of the Internal Revenue Code of 1986, as
amended. An individual shall not be considered disabled unless he furnishes
proof of the existence thereof in such form and manner, and at such times, as
the Committee may require. In the event of the death of an Optionee while
serving as a member of the Board of Directors of the Company or during either
the 90-day period or 180-day period described above, the option shall be
exercisable by the person or persons entitled to do so under the Optionee's
will, or if the Optionee shall fail to make testamentary disposition of said
option or shall die intestate, by the Optionee's legal representation or
representatives, at any time prior to the Expiration Date of the Option or
within one hundred eighty (180) after the date of such death, whichever is the
shorter period. The option of a Non-Employee Director shall automatically
terminate as of the date his or her directorship is terminated, if the
directorship is terminated on account of any act of (a) fraud or intentional
misrepresentation, or (b) embezzlement, misappropriation or conversion of assets
or opportunities of the Company or any Affiliate.
2.8 Issuance of Stock Certificates. Upon exercise of an option, but
subject to the provisions of Section 3.6 of the Plan, the person exercising the
option shall be entitled to one (1) stock certificate evidencing the shares
acquired upon such exercise; provided, however, that any person who tenders
Common Stock of the Company in payment of a portion or all of the purchase price
of Stock purchased upon exercise of the option shall be entitled to receive a
separate certificate representing the number of shares purchased in
consideration of the tender of such Common Stock.
ARTICLE III
Other Provisions
3.1 Adjustments Upon Changes in Capitalization. In the event that a
dividend or stock split shall be declared after the date of adoption of the Plan
upon the Common Stock of the Company payable in shares of Common Stock of the
Company, the number of shares of Common Stock then subject to any such option
and the number of shares reserved for issuance pursuant to the Plan but not yet
covered by an option shall be adjusted by adding to each such share the number
of shares which would be distributable thereon if such share had been
outstanding on the date fixed for determining the stockholders entitled to
receive such stock dividend or stock split. In the event that the outstanding
shares of the Common Stock of the Company shall be changed into or exchanged for
a different number or kind of shares of stock or other securities of the Company
or of another corporation, whether through reorganization, recapitalization,
stock split, combination of shares, merger or consolidation, then there shall be
substituted for each share of Common Stock subject to any such option and for
each share of Common Stock reserved for issuance pursuant to the Plan but not
yet covered by an option, the number and kind of shares of stock or other
securities into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged. In the event there shall be any
change, other than as specified above in this Section 3.1, in the number or kind
of outstanding shares of Common Stock of the Company or of any stock or other
securities into which Common Stock shall have been changed or for which it shall
have been exchanged, then if the Committee shall in its sole discretion
determine that such change equitably requires an adjustment in the number or
kind of shares theretofore reserved for issuance pursuant to the Plan but not
yet covered by an option and of the shares then subject to an option or options,
such adjustment shall be made by the Committee and shall be effective and
binding for all purposes of the Plan and of each Option Agreement. In the case
of any such substitution or adjustment as provided for in this Section, the
option price in each Option Agreement for each share covered thereby prior to
such substitution or adjustment will be the option price for all shares of stock
or other securities which shall have been substituted for such share or to which
such adjustment provided for in this Section 3.1 shall be made. No adjustment or
substitution provided for in this Section 3.1 shall require the Company pursuant
to any Option Agreement to sell a fractional share, and the total substitution
or adjustment with respect to each Option Agreement shall be limited
accordingly.
3.2 Acceleration. A "Change in Control" for purposes of this Plan shall
mean (i) the acquisition by a single entity or group of affiliated entities of
more than 50% of the Common Stock of the Company issued and outstanding
immediately prior to such acquisition; or (ii) the dissolution or liquidation of
the Company or the consummation of any merger or consolidation of the Company or
any sale or other disposition of all or substantially all of its assets, if the
stockholders of the Company immediately before such transaction own, immediately
after consummation of such transaction, equity securities (other than options
and other rights to acquire equity securities) possessing less than 50% of the
voting power of the surviving or acquiring corporation.
(a) Change of Control with Provision Being Made Therefor.
If provision be made in writing in connection with a Change of
Control for the assumption and
<PAGE>
continuance of any option granted under the Plan, or the substitution
for such option of a new option covering the shares of the successor
corporation, with appropriate adjustment as to number and kind of
shares and prices, the option granted under the Plan, or the new option
substituted therefor, as the case may be, shall continue in the manner
and under the terms provided.
(b) Change of Control Without Provision Being Therefor. In the
event provision is not made in connection with a Change of Control for
the continuance and assumption of the option granted under the Plan or
for the substitution of any option covering the shares of the successor
corporation, then the holder of any such option shall be entitled,
prior to the effective date of any such Change of Control, to purchase
the full number of shares not previously exercised under such option if
(and only if) such option has not at that time expired or been
terminated, failing which purchase, any unexercised portion shall be
deemed canceled as of the effective date of such Change of Control.
(c) All adjustments under this Section shall be made by the
Committee, whose determination as to what adjustments shall be
made and the extent thereof, shall be final, binding and
conclusive for all purposes of the Plan and of each Option
Agreement.
3.3 Continuation of Directorship. Nothing contained in the Plan (or in
any option granted pursuant to the Plan) shall confer upon any Non-Employee
Director any right to continue as a member of the Board of Directors of the
Company or constitute any contract or agreement or interfere in any way with the
right of the Company to terminate such Non-Employee Director from the
Board of Directors. Nothing contained herein or in any Option Agreement shall
affect any other contractual rights of a Non-Employee Director.
3.4 Amendment. The Committee may at any time amend the Plan as it shall
deem advisable without further action on the part of the stockholders of the
Company; provided, that the Committee may not amend any provision of the Plan
relating to the amount and price of Stock subject to the options granted
hereunder or the timing of grants hereunder more than once every six months,
other than to comport with changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder; and provided further,
that any amendment to the Plan must be approved by the stockholders of the
Company if the amendment would (a) materially increase the aggregate number of
shares of Stock which may be issued pursuant to options granted under the Plan,
(b) materially modify the requirements as to eligibility for participation in
the Plan, or (c) materially increase the benefits accruing to holders of options
under the Plan.
3.5 Time of Exercise. An option shall be deemed to be exercised when
the Secretary of the Company receives written notice of such exercise from the
person entitled to exercise the option together with payment of the purchase
price made in accordance with Section 2.4 of this Plan.
3.6 Privileges of Stock Ownership and Non-Distributive Intent. The
holder of an option shall not be entitled to the privilege of stock ownership as
to any shares of Stock not actually issued and delivered to the holder. Subject
to the provisions of Section 1.5 above, upon exercise of an option for Stock at
a time when there is not in effect under the Act a registration statement
relating to the Stock issuable upon exercise thereof or not available for
delivery a prospectus meeting the requirements of Section 10 of the Act,
the holder of the option shall execute a stock purchase agreement in which he
shall represent and warrant in writing to the Company that, inter alia, the
shares of Stock purchased are being acquired for investment and not with a view
to the resale or distribution thereof. No shares of Stock shall be issued upon
the exercise of any option unless and until there shall have been compliance
with any then applicable requirements of the Commission, other regulatory
agencies having jurisdiction and any exchanges upon which securities subject to
the option may be listed.
3.7 Effective Date of the Plan. The Plan shall be effective upon
approval by the affirmative vote of the holders of a majority of the outstanding
shares of Common Stock present and entitled to vote at a meeting duly held or by
the written consent of the holders of a majority of the Common Stock entitled to
vote.
3.8 Expiration. Unless previously terminated or extended by the Board,
the Plan shall expire at the close of business on the date which is the last day
of the ten (10) year period beginning on the date on which the stockholders
approve the Plan, and no option shall be granted under it thereafter, but such
expiration shall not affect any option theretofore granted.
3.9 Governing Law. The Plan and the options issued hereunder shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware applicable to contracts made and performed within that State.
3.10 Application of Funds. The proceeds received by the Company from
the sale of shares pursuant to options shall be used for general corporate
purposes.
3.11 No Liability for Good Faith Determinations. Neither the members
of the Board of Directors of the Company nor any member of the Committee shall
be liable for any act,
<PAGE>
omission or determination taken or made in good faith with respect to the Plan
or any option granted under it.
3.12 Execution of Receipts and Releases. Any payment or any issuance or
transfer of shares of Stock to the Optionee, or to his legal representative,
heir, legatee or distributee, in accordance with the provisions hereof, shall,
to the extent thereof, be in full satisfaction of all claims of such persons
hereunder. The Board of Directors of the Company may require any Optionee, legal
representative, heir, legatee or distributee, as a condition precedent to such
payment, to execute a release and receipt therefor in such form as it shall
determine.
3.13 No Guarantee of Interests. Neither the Board of Directors nor the
Company guarantees the Stock of the Company from loss or depreciation.
3.14 Payment of Expenses. All expenses incident to the administration,
termination or protection of the Plan, including, but not limited to, legal and
accounting fees, shall be paid by the Company.
3.15 Company Records. Records of the Company and any Affiliate
regarding the Optionee's period of service, termination of service and the
reason therefor, leaves of absence, and other matters shall be conclusive for
all purposes hereunder, unless determined by the Board of Directors to be
incorrect.
3.16 Information. The Company and any Affiliate shall, upon request or
as may be specifically required hereunder, furnish or cause to be furnished all
of the information or documentation which is necessary or required by the Board
of Directors to perform its duties and functions under the Plan.
<PAGE>
3.17 No Liability of Company. The Company assumes no obligation or
responsibility to the Optionee or his personal representatives, heirs, legatees
or distributees for any act of, or the failure to act on the part of, the Board
of Directors or the Committee.
3.18 Company Action. Any action required of the Company shall be by
resolution of its Board of Directors or by a person or committee authorized to
act by Board resolution.
3.19 Severability. In the event any provision of this Plan shall be
held to be illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions hereof, but shall be fully severable and the
Plan shall be construed and enforced as if the illegal or invalid provision had
never been included herein.
3.20 Notice. Whenever any notice is required or permitted hereunder,
such notice must be in writing and personally delivered or sent by mail. Except
as otherwise provided in Section 3.5 of this Plan, any notice required or
permitted to be delivered hereunder shall be deemed to be delivered on the date
on which it is personally delivered or, whether actually received or not, on the
third (3rd) business day after it is deposited in the United States mail,
certified or registered, postage pre-paid, addressed to the person who is to
receive it at the address which such person has theretofore specified by written
notice delivered in accordance herewith. The Company or an Optionee may change,
at any time and from time to time, by written notice to the other, the address
which it or he had theretofore specified for receiving notices. Until it is
changed in accordance herewith, the Company and each Optionee shall specify as
its and his address for receiving notices the address set forth in the Option
Agreement pertaining to the shares to which such notice relates.
3.21 Waiver of Notices. Any person entitled to notice hereunder may
waive such notice.
<PAGE>
3.22 Successors. The Plan shall be binding upon the Optionee, his
heirs, legatees and legal representatives, upon the Company, its successors and
assigns and upon the Board of Directors and its successors.
3.23 Headings. The titles and headings of sections and paragraphs are
included for convenience of reference only and are not to be considered in
construction of the provisions hereof.
3.24 Word Usage. Words used in the masculine shall apply to the
feminine where applicable and, wherever the context of this Plan dictates, the
plural shall be read as the singular and the singular as the plural.
<PAGE>
May 22, 1996
First Alert, Inc.
3901 Liberty Street Road
Aurora, IL 60504
Gentlemen:
We are general counsel to First Alert, Inc. a Delaware corporation (the
"Company"), and as such counsel we are familiar with the corporate proceedings
taken in connection with the adoption of the Company's Nonqualified Stock Option
Plan for Non-Employee Directors (the "Plan"). We are also familiar with the
registration statement to which a copy of this opinion will be attached as an
exhibit.
As such counsel, we have examined the corporate records of the Company,
including the Articles of Organization, By-laws, stock records, minutes of
meetings of its Board of Directors and stockholders and such other documents as
we have deemed necessary as a basis for the opinions herein expressed.
Based upon the foregoing, and having regard for such legal
considerations as we deem relevant, we are of the opinion that:
1. The Company is duly organized and validly existing under the
laws of the State of Delaware;
2. The Company has authorized the issuance of 30,000,000 shares of
common stock, $.01 par value per share, and 1,000,000 shares of Preferred Stock,
par value $.01 per share.
3. The outstanding common stock of the Company has been duly authorized,
constitutes validly issued, fully paid and non-assessable shares of capital
stock of the Company and no personal liability attaches to any of the shares;
and
<PAGE>
First Alert, Inc.
May 22, 1996
Page 2
4. The shares of common stock issuable pursuant to the Plan, when issued
in accordance with the terms thereof, will be validly issued, fully paid and
non-assessable shares of capital stock of the Company to which no personal
liability will attach.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 and to the reference to us under the caption
"Interests of Named Experts and Counsel" in the Registration Statement.
Very truly yours,
HUTCHINS, WHEELER & DITTMAR
A Professional Corporation
MJR/WBD/kjm
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S- 8 of our report dated January 31, 1996, which appears on
page 30 of the 1995 Annual Report to Shareholders of First Alert, Inc. which is
incorporated by reference in First Alert, Inc.'s Annual Report on Form 10-K for
the year ended December 31, 1995. We also consent to the incorporation by
reference of our report on the Financial Statement Schedule, which appears on
page 17 of such Annual Report on Form 10-K.
Price Waterhouse LLP
Chicago, Illinois
May 22, 1996
<PAGE>
