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.
1994 STOCK OPTION PLAN
(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>
<CAPTION>
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, 405,870 $8.50 $3,449,895 $1,189.62
par value 25,000 11.0625 276,563 95.37
$.01 per share 35,479 14.75 523,315 180.45
126,000 13.50 1,701,000 586.55
12,000 12.125 145,500 50.17
25,000 6.875 171,875 59.27
214,000 7.9375 1,698,625 585.73
222,500 6.6875 1,487,969 513.09
160,817 6.50 1,045,311 360.45
---------- ----------- --------
1,226,666 $10,500,052 $3,620.71
</TABLE>
<PAGE>
(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 160,817 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 1,065,849 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
provides 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 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 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 of 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.
(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
<PAGE>
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 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 subsections (a) and (b) of this
section. Such determination shall be made (1) by a majority vote of the
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
stockholders.
(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
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.
(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.
(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,
<PAGE>
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.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or indemnification
brought under this section or under any bylaw, agreement, vote of stockholders
or disinterested directors, or otherwise. The Court of Chancery may summarily
determine a corporation's obligation to advance expenses (including attorneys'
fees).
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 stockholders 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 stockholders, (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 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.
<PAGE>
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.
<PAGE>
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 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
<TABLE>
<CAPTION>
Number Description
<S> <C>
4.1 First Alert, Inc. 1994 Stock Option Plan, as amended.
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.
</TABLE>
Item 9. Undertakings
<PAGE>
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:
(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
<PAGE>
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 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.
(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)
FIRST ALERT, INC.
1994 STOCK OPTION PLAN
1. Purpose of the Plan.
This stock option plan (the "Plan") is intended to provide incentives:
(a) to the officers and other employees of First Alert, Inc. (the "Company") and
any present or future subsidiaries of the Company by providing them with
opportunities to purchase stock in the Company pursuant to options granted
hereunder which qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code") ("ISO" or "ISOs"); and
(b) to officers, employees and consultants of the Company and any present or
future subsidiaries by providing them with opportunities to purchase stock in
the Company pursuant to options granted hereunder which do not qualify as ISOs
("Non-Qualified Option" or "Non-Qualified Options"). As used herein, the terms
"parent" and "subsidiary" mean "parent corporation" and "subsidiary
corporation," respectively, as those terms are defined in Section 424 of the
Code and the Treasury Regulations promulgated thereunder (the "Regulations").
2. Stock Subject to the Plan.
(a) The total number of shares of the authorized but unissued shares of
the common stock, $.01 par value, of the Company ("Common Stock") for which
options may be granted under the Plan shall not exceed 1,226,666 shares, subject
to adjustment as provided in Section 11 hereof.
(b) If an option granted hereunder shall expire or terminate for any
reason without having been exercised in full, the unpurchased shares subject
thereto shall again be available for subsequent option grants under the Plan.
(c) Stock issuable upon exercise of an option granted under the Plan may
be subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Committee (as defined in Section 3
below).
3. Administration of the Plan.
(a) The Plan shall be administered by a committee (the "Committee")
consisting of two or more members of the Company's Board of Directors, each of
whom is a disinterested person as defined from time to time in Rule 16b-3
promulgated under the Securities Exchange Act of 1934. The Board of Directors
may from time to time appoint a member or members of the Committee in
substitution for or in addition to the member or members then in office and may
fill vacancies on the Committee however caused. The Committee shall choose one
of its
<PAGE>
members as Chairman and shall hold meetings at such times and places as it shall
deem advisable. A majority of the members of the Committee shall constitute a
quorum and any action may be taken by a majority of those present and voting at
any meeting. Any action may also be taken without the necessity of a meeting by
a written instrument signed by a majority of the Committee. The decision of the
Committee as to all questions of interpretation and application of the Plan
shall be final, binding and conclusive on all persons. The Committee shall have
the authority to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement granted hereunder in the manner and to the
extent it shall deem expedient to carry the Plan into effect and shall be the
sole and final judge of such expediency. No Committee member shall be liable for
any action or determination made in good faith.
(b) Subject to the terms of the Plan, the Committee shall have the
authority to (i) determine the employees of the Company and its subsidiaries
(from among the class of employees eligible under Section 4 to receive ISOs) to
whom ISOs may be granted, and to determine (from the class of individuals
eligible under Section 4 to receive Non-Qualified Options) to whom Non-Qualified
Options may be granted; (ii) determine the time or times at which options may be
granted; (iii) determine the option price of shares subject to each option which
price shall not be less than the minimum price specified in Section 6; (iv)
determine whether each option granted shall be an ISO or a Non-Qualified Option;
(v) determine (subject to Section 9) the time or times when each option shall
become exercisable and the duration of the exercise period; and (vi) determine
whether restrictions such as repurchase options are to be imposed on shares
subject to options and the nature of such restrictions.
4. Eligibility.
Options designated as ISOs may be granted only to officers and other
employees of the Company or any subsidiary. Non-Qualified Options may be granted
to any officer, employee, or consultant of the Company or of any of its
subsidiaries.
Directors who are not otherwise employees of the Company or a subsidiary
shall not be eligible to be granted an option pursuant to the Plan.
In determining the eligibility of an individual to be granted an option,
as well as in determining the number of shares to be optioned to any individual,
the Committee shall take into account the position and responsibilities of the
individual being considered, the nature and value to the Company or its
subsidiaries of his or her service and accomplishments, his or her present and
potential contribution to the success of the Company or its subsidiaries, and
such other factors as the Committee may deem relevant.
<PAGE>
No option designated as an ISO shall be granted to any employee of the
Company or any subsidiary if such employee owns, immediately prior to the grant
of an option, stock representing more than 10% of the voting power or more than
10% of the value of all classes of stock of the Company or a parent or a
subsidiary, unless the purchase price for the stock under such option shall be
at least 110% of its fair market value at the time such option is granted and
the option, by its terms, shall not be exercisable more than five years from the
date it is granted. In determining the stock ownership under this paragraph, the
provisions of Section 424(d) of the Code shall be controlling. In determining
the fair market value under this paragraph, the provisions of Section 6 hereof
shall apply.
The maximum number of shares of Common Stock with respect to which an
Option may be granted to any employee in any taxable year of the Company shall
not exceed 30,000 shares.
5. Option Agreement.
Each option shall be evidenced by an option agreement (the "Agreement")
duly executed on behalf of the Company and by the optionee to whom such option
is granted, which Agreement shall comply with and be subject to the terms and
conditions of the Plan. The Agreement may contain such other terms, provisions
and conditions which are not inconsistent with the Plan as may be determined by
the Committee, provided that options designated as ISOs shall meet all of the
conditions for ISOs as defined in Section 422 of the Code. The date of grant of
an option shall be as determined by the Committee. More than one option may be
granted to an individual.
6. Option Price.
The option price or prices of shares of the Company's Common Stock for
options designated as Non-Qualified Options shall be as determined by the
Committee, but in no event shall the option price be less than the minimum legal
consideration required therefor under the laws of the State of Delaware or the
laws of any jurisdiction in which the Company or its successors in interest may
be organized. The option price or prices of shares of the Company's Common Stock
for ISOs shall be the fair market value of such Common Stock at the time the
option is granted as determined by the Committee in accordance with the
Regulations promulgated under Section 422 of the Code. If such shares are then
listed on any national securities exchange, the fair market value shall be the
mean between the high and low sales prices, if any, on such exchange on the
business day immediately preceding the date of the grant of the option or, if
none, shall be determined by taking a weighted average of the means between the
highest and lowest sales prices on the nearest date before and the nearest date
after the date of grant in accordance with Treasury Regulations Section
25.2512-2. If the shares are not then listed on any such exchange, the fair
market value of such shares shall be
<PAGE>
the mean between the high and low sales prices, if any, as reported in the
National Association of Securities Dealers Automated Quotation System National
Market System ("NASDAQ/NMS") for the business day immediately preceding the date
of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the shares are not then either
listed on any such exchange or quoted in NASDAQ/NMS, 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
business day immediately preceding the date of the grant of the option, or, if
none, shall be determined by taking a weighted average of the means between the
highest and lowest sales prices on the nearest date before and the nearest date
after the date of grant in accordance with Treasury Regulations Section
25.2512-2. If the fair market value cannot be determined under the preceding
three sentences, it shall be determined in good faith by the Committee.
7. Manner of Payment; Manner of Exercise.
(a) Options granted under the Plan may provide for the payment of the
exercise price by delivery of (i) cash or a check payable to the order of the
Company in an amount equal to the exercise price of such options, (ii) shares of
Common Stock of the Company owned by the optionee having a fair market value
equal in amount to the exercise price of the options being exercised, or (iii)
any combination of (i) and (ii), provided, however, that payment of the exercise
price by delivery of shares of Common Stock of the Company owned by such
optionee may be made only under such circumstances and on such terms as may from
time to time be established by the Committee and only if provided for in the
Agreement. The fair market value of any shares of the Company's Common Stock
which may be delivered upon exercise of an option shall be determined by the
Committee in accordance with Section 6 hereof. Payment may also be made by
delivery of a properly executed exercise notice to the Company, together with a
copy of irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds to pay the exercise price if provided for in
the Agreement. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.
(b) To the extent that the right to purchase shares under an option has
accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal office of the Company to the person or persons exercising the option
at such time, during ordinary business hours, after ten business days from the
date of receipt of the notice by the Company,
<PAGE>
as shall be designated in such notice, or at such time, place and manner as may
be agreed upon by the Company and the person or persons exercising the option.
8. Exercise of Options.
Subject to the provisions of paragraphs 9 through 11, each option
granted under the Plan shall be exercisable as follows:
(a) Vesting. The option shall either be fully exercisable on the date of
grant or shall become exercisable thereafter in such installments as the
Committee may specify.
(b) Full Vesting of Installments. Once an installment becomes exercisable
it shall remain exercisable until expiration or termination of the option,
unless otherwise specified by the Committee.
(c) Partial Exercise. Each option or installment may be exercised at any
time or from time to time, in whole or in part, for up to the total number of
shares with respect to which it is then exercisable.
(d) Acceleration of Vesting. The Committee shall have the right to
accelerate the date of exercise of any installment or any option; provided that
the Committee shall not, without the consent of an optionee, accelerate the
exercise date of any installment of any option granted to any employee as an ISO
if such acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code.
Notwithstanding the foregoing, in the case of any Change in Control (as
hereinafter defined) of the Company, the exercisability of any options,
notwithstanding any limitations in this Plan or in the Agreement, will
automatically and fully vest upon the occurrence of such Change in Control. Upon
such acceleration, any options or portion thereof originally designated as
incentive stock options that no longer qualify as ISOs under Section 422 of the
Code as a result of such acceleration shall be redesignated as non-qualified
stock options. A "Change in Control" shall be deemed to have occurred if any
person, or any two or more persons acting as a group, and all affiliates of such
person or persons, who prior to such time owned less than fifty percent (50%) of
the then outstanding Common Stock of the Company, shall acquire such additional
shares of the Company's Common Stock in one or more transactions, or series of
transactions, such that following such transaction or transactions, such person
or group and affiliates beneficially own fifty percent (50%) or more of the
Company's Common Stock outstanding.
9. Term of Options; Exercisability.
<PAGE>
(a) Term.
(1) Each option shall expire not more than ten (10) years from
the date of the granting thereof, but shall be subject to earlier termination as
herein provided.
(2) Except as otherwise provided in this Section 9, an option
granted to any employee optionee who ceases to be an employee of the Company or
one of its subsidiaries shall terminate as follows: to the extent the option is
vested and exercisable, it shall terminate thirty days following the date such
optionee ceases to be an employee of the Company or one of its subsidiaries, or
on the date on which the option expires by its terms, whichever occurs first,
and to the extent the option is not so vested and exercisable, it shall
terminate immediately upon such termination of employment.
(3) If the employment of the employee optionee is terminated by
the Company without Cause (as defined in the Shareholders' Agreement between the
Company and its shareholders dated as of July 31, 1992), any option granted to
such optionee shall terminate as follows: to the extent the option is vested and
exercisable, it shall terminate on the last day of the sixth month from the date
of such termination, or on the date on which the option expires by its terms,
whichever occurs first, and to the extent the option is not so vested and
exercisable, it shall terminate immediately upon such termination of employment.
(4) If such termination of employment is because the optionee
has become permanently disabled (within the meaning of Section 22(e)(3) of the
Code), such option shall terminate as follows: to the extent the option is
vested and exercisable, it shall terminate on the last day of the sixth month
from the date such optionee ceases to be an employee, or on the date on which
the option expires by its terms, whichever occurs first, and to the extent the
option is not so vested and exercisable, it shall terminate immediately upon
such termination of employment.
(5) In the event of the death of any optionee, any option
granted to such optionee shall terminate as follows: to the extent the option is
vested and exercisable, it shall terminate on the last day of the sixth month
from the date of death, or on the date on which the option expires by its terms,
whichever occurs first, and to the extent the option is not so vested and
exercisable, it shall terminate immediately upon such termination of employment.
(b) Exercisability. An option granted to an employee optionee who ceases
to be an employee of the Company or one of its subsidiaries shall be exercisable
only to the extent that the right to purchase shares under such option has
accrued and is in effect on the date such optionee ceases to be an employee of
the Company or one of its subsidiaries.
10. Options Not Transferable.
<PAGE>
Options granted under the Plan and the right of any optionee to exercise
any option granted to him or her shall not be assignable or transferable by such
optionee otherwise than by will or the laws of descent and distribution, or
(solely with respect to Non-Qualified Options) pursuant to a qualified domestic
relations order, as defined by the Code or Title I of the Employee Retirement
Income Security Act, or the rules thereunder, and any such option shall be
exercisable during the lifetime of such optionee only by him. Any option granted
under the Plan shall be null and void and without effect upon the any attempted
assignment or transfer, except as herein provided, including without limitation
any purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition, attachment, divorce, except as provided
above with respect to Non-Qualified Options, trustee process or similar process,
whether legal or equitable, upon such option.
11. Adjustments. Upon the occurrence of any of the following events, an
optionee's rights with respect to options granted to him or her hereunder shall
be adjusted as hereinafter provided, unless otherwise specifically provided in
the written agreement between the optionee and the Company relating to such
option:
(a) Stock Dividends and Stock Splits. If the shares of Common Stock shall
be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
(b) Consolidations or Mergers. If the Company is to be consolidated with or
acquired by another entity in a merger, sale of all or substantially all of the
Company's assets or otherwise (an "Acquisition"), the Committee or the board of
directors of any entity assuming the obligations of the Company hereunder (the
"Successor Board"), shall, as to outstanding options, either (i) make
appropriate provision for the continuation of such options by substituting on an
equitable basis for the shares then subject to such options the consideration
payable with respect to the outstanding shares of Common Stock in connection
with the Acquisition; (ii) upon written notice to the optionees, provide that
all options must be exercised, to the extent then exercisable, within a
specified number of days of the date of such notice, at the end of which period
the options shall terminate; or (iii) terminate all options in exchange for a
cash payment equal to the excess of the fair market value of the shares subject
to such options (to the extent then exercisable) over the exercise price
thereof.
(c) Recapitalization or Reorganization. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph (b) above) pursuant to which securities of the Company or of
another corporation are issued with respect
<PAGE>
to the outstanding shares of Common Stock, an optionee upon exercising an option
shall be entitled to receive for the purchase price paid upon such exercise the
securities he would have received if he had exercised his option prior to such
recapitalization or reorganization.
(d) Modification of ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs (a), (b) or (c) with respect to ISOs shall be
made only after the Committee, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424 of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Committee
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments.
(e) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, each option will terminate immediately prior to the
consummation of such proposed action or at such other time and subject to such
other conditions as shall be determined by the Committee.
(f) Issuances of Securities. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
(g) Fractional Shares. No fractional share shall be issued under the Plan
and the optionee shall receive from the Company cash in lieu of such fractional
shares.
(h) Adjustments. Upon the happening of any of the events described in
subparagraphs (a), (b) or (c) above, the class and aggregate number of shares
set forth in Section 2 hereof that are subject to options which previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events described in such subparagraphs. The Committee or
the Successor Board shall determine the specific adjustments to be made under
this paragraph 11 and, subject to Section 3, its determination shall be
conclusive.
If any person or entity owning restricted Common Stock obtained by exercise
of an option made hereunder receives shares or securities or cash in connection
with a corporate transaction described in subparagraphs (a), (b) or (c) above as
a result of owning such restricted Common Stock, such shares or securities or
cash shall be subject to all of the conditions and restrictions applicable to
the restricted Common Stock with respect to which such shares or securities or
cash were issued, unless otherwise determined by the Committee or the Successor
Board.
<PAGE>
12. No Special Employment Rights.
Nothing contained in the Plan or in any option granted under the Plan
shall confer upon any option holder any right with respect to the continuation
of his employment by the Company (or any subsidiary) or interfere in any way
with the right of the Company (or any subsidiary), subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the option holder from
the rate in existence at the time of the grant of an option. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Committee at the
time.
13. Withholding.
The Company's obligation to deliver shares upon the exercise of any
Option granted under the Plan shall be subject to the option holder's
satisfaction of all applicable Federal, state and local income, excise,
employment and any other tax withholding requirements. The Company and employee
may agree to withhold shares of Common Stock purchased upon exercise of an
option to satisfy the above-mentioned withholding requirements. The option
holder may satisfy the foregoing condition by electing to have the Company
withhold from delivery shares having a value equal to the amount of tax to be
withheld in the manner set forth in the Agreement and in compliance with such
rules and regulations as determined by the Committee from time to time,
including rules and regulations relating to compliance with Rule 16b-3 under the
Securities Exchange Act of 1934. The Committee shall also have the right to
require that shares be withheld from delivery to satisfy such condition.
14. Restrictions on Issue of Shares.
(a) Notwithstanding the provisions of Section 7, the Company may delay
the issuance of shares covered by the exercise of an option and the delivery of
a certificate for such shares until one of the following conditions shall be
satisfied:
(i) The shares with respect to which such option has been exercised
are at the time of the issue of such shares effectively registered or
qualified under applicable Federal and state securities acts now in force
or as hereafter amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld, that such shares
are exempt from registration and qualification under applicable Federal and
state securities acts now in force or as hereafter amended.
<PAGE>
(b) It is intended that all exercises of options shall be effective, and
the Company shall use its best efforts to bring about compliance with the above
conditions within a reasonable time, except that the Company shall be under no
obligation to qualify shares or to cause a registration statement or a
post-effective amendment to any registration statement to be prepared for the
purpose of covering the issue of shares in respect of which any option may be
exercised, except as otherwise agreed to by the Company in writing.
15. Purchase for Investment; Rights of Holder on Subsequent
Registration.
Unless the shares to be issued upon exercise of an option granted under
the Plan have been effectively registered under the Securities Act of 1933, as
now in force or hereafter amended, the Company shall be under no obligation to
issue any shares covered by any option unless the person who exercises such
option, in whole or in part, shall give a written representation and undertaking
to the Company which is satisfactory in form and scope to counsel for the
Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued pursuant to such
exercise of the option for his or her own account as an investment and not with
a view to, or for sale in connection with, the distribution of any such shares,
and that he or she will make no transfer of the same except in compliance with
any rules and regulations in force at the time of such transfer under the
Securities Act of 1933, or any other applicable law, and that if shares are
issued without such registration, a legend to this effect may be endorsed upon
the securities so issued. In the event that the Company shall, nevertheless,
deem it necessary or desirable to register under the Securities Act of 1933 or
other applicable statutes any shares with respect to which an option shall have
been exercised, or to qualify any such shares for exemption from the Securities
Act of 1933 or other applicable statutes, then the Company may take such action
and may require from each optionee such information in writing for use in any
registration statement, supplementary registration statement, prospectus,
preliminary prospectus or offering circular as is reasonably necessary for such
purpose and may require reasonable indemnity to the Company and its officers and
directors and controlling persons from such holder against all losses, claims,
damages and liabilities arising from such use of the information so furnished
and caused by any untrue statement of any material fact therein or caused by the
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
under which they were made.
16. Loans.
The Company may make loans to optionees to permit them to exercise
options. If loans are made, the requirements of all applicable Federal and state
laws and regulations regarding such loans must be met.
<PAGE>
17. Modification of Outstanding Options.
The Committee may authorize the amendment of any outstanding option with
the consent of the optionee when and subject to such conditions as are deemed to
be in the best interests of the Company and in accordance with the purposes of
this Plan.
18. Approval of Shareholders.
The Plan shall be subject to approval by the vote of shareholders
holding at least a majority of the voting stock of the Company present, or
represented, and entitled to vote at a duly held shareholders' meeting, or by
written consent of shareholders holding at least a majority of the voting stock
of the Company, within twelve (12) months after the adoption of the Plan by the
Board of Directors and shall take effect as of the date of adoption by the Board
of Directors upon such approval. The Committee may grant options under the Plan
prior to such approval, but any such option shall become effective as of the
date of grant only upon such approval and, accordingly, no such option may be
exercisable prior to such approval.
19. Termination and Amendment.
Unless sooner terminated as herein provided, the Plan shall terminate
ten (10) years from the date upon which the Plan was duly adopted by the Board
of Directors of the Company. The Board of Directors may at any time terminate
the Plan or make such modification or amendment thereof as it deems advisable;
provided, however, that except as provided in this Section 19, the Board of
Directors may not, without the approval of the shareholders of the Company
obtained in the manner stated in Section 18, increase the maximum number of
shares for which options may be granted or change the designation of the class
of persons eligible to receive options under the Plan, or make any other change
in the Plan which requires shareholder approval under applicable law or
regulations, including any approval requirement which is a prerequisite for
exemptive relief under Section 16 of the Securities Exchange Act of 1934. The
Committee may grant options to persons subject to Section 16(b) of the
Securities and Exchange Act of 1934 after an amendment to the Plan by the Board
of Directors requiring shareholder approval under Section 19, but any such
option shall become effective as of the date of grant only upon such approval
and, accordingly, no such option may be exercisable prior to such approval. The
Committee may terminate, amend or modify any outstanding option without the
consent of the option holder, provided, however, that, except as provided in
Section 11, without the consent of the optionee, the Committee shall not change
the number of shares subject to an option, nor the exercise price thereof, nor
extend the term of such option.
20. Compliance with Rule 16b-3.
<PAGE>
It is intended that the provisions of the Plan and any option granted
hereunder to a person subject to the reporting requirements of Section 16(a) of
the Securities Exchange Act of 1934 (the "Act") shall comply in all respects
with the terms and conditions of Rule 16b-3 under the Act, or any successor
provisions. Any agreement granting options shall contain such provisions as are
necessary or appropriate to assure such compliance. To the extent that any
provision hereof is found not to be in compliance with such Rule, such provision
shall be deemed to be modified so as to be in compliance with such Rule, or if
such modification is not possible, shall be deemed to be null and void, as it
relates to a recipient subject to Section 16(a) of the Act.
21. Reservation of Stock.
The Company shall at all times during the term of the Plan reserve and
keep available such number of shares of stock as will be sufficient to satisfy
the requirements of the Plan and shall pay all fees and expenses necessarily
incurred by the Company in connection therewith.
22. Limitation of Rights in the Option Shares.
An optionee shall not be deemed for any purpose to be a shareholder of
the Company with respect to any of the options except to the extent that the
option shall have been exercised with respect thereto and, in addition, a
certificate shall have been issued theretofore and delivered to the optionee.
23. Notices.
Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business,
attention: President, and, if to an optionee, to the address as appearing on the
records of the Company.
<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 1994 Stock Option Plan
(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
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>
