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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9/A
AMENDMENT NO.1
TO
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14 (d) (4)
OF THE SECURITIES EXCHANGE ACT OF 1934
FIRST ALERT, INC.
(Name of Subject Company)
FIRST ALERT, INC.
(Name of Person Filing Statement)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
CUSIP NO. 31846N 10 2
(CUSIP Number of Class of Securities)
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B. Joseph Messner
President and Chief Executive Officer
First Alert, Inc.
3901 Liberty Street Road
Aurora, Illinois 60504
(630) 851-7330
(Name, address and telephone number of person
authorized to receive notice and communications
on behalf of the person filing statement)
With copy to:
David C. Chapin, Esq.
Ropes & Gray
One International Place
Boston, MA 02110
(617) 951-7000
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This Amendment No. 1 to the Solicitation / Recommendation Statement on
Schedule 14D-9 ("Amendment No. 1") amends and supplements the Solicitation /
Recommendation Statement on Schedule 14D-9 of First Alert, Inc., a Delaware
corporation, originally filed on March 6, 1998 (the "Schedule 14D-9"), filed
pursuant to Section 14(d)(4) of the Securities and Exchange Act of 1934 (the
"Exchange Act") with the Securities and Exchange Commission. Capitalized terms
used herein and not defined herein shall have the meanings ascribed to them in
the Schedule 14D-9.
Item 3. Identity and Background.
Item 3(b) is hereby amended and supplemented as follows:
The first paragraph of the section entitled "Agreements with Affiliates
- -- Stock Sale Agreement" is amended by restating the first sentence to read as
follows:
"On February 28, 1998, Thomas H. Lee Equity Partners, L.P, ML-Lee
Acquisition Fund II, L.P., ML-Lee Acquisition Fund (Retirement Accounts) II,
L.P., State Street Bank and Trust Company of Connecticut, National Association,
as successor Trustee of the 1989 Thomas H. Lee Nominee Trust, John W. Childs,
David Harkins, Thomas R. Shepherd, Thomas R. Shepherd - IRA, Glenn H. Hutchins,
Scott A. Schoen, C. Hunter Boll, Steven G. Segal, Anthony J. DiNovi, Thomas M.
Hagerty, Joseph Incandela, Warren C. Smith, Glenn A. Hopkins, Charles W. Robins,
Steven Zachary Lee Irrevocable Trust dated 1988, Adam L. Suttin, Wendy L.
Masler, Andrew D. Flaster and SGS Family Limited Partnership (collectively, the
"Major Stockholders") and Parent entered into a Stock Sale Agreement (the "Stock
Sale Agreement")."
Item 3(b) is hereby further amended and supplemented as follows:
The first paragraph of the section entitled "Agreements with Affiliates
- -- Shareholders' Agreement and Registration Rights Agreement" is amended by
adding the following sentence after the first sentence
"The Initial Shareholders were as follows: Thomas H. Lee Equity
Partners, L.P., John W. Childs, David V. Harkins, Pittway Intellectual Property
Corporation, Pittway Corporation, ML-Lee Acquisition Fund, II, L.P., ML-Lee
Acquisition Fund (Retirement Accounts) II, L.P., Glenn H. Hutchins, C. Hunter
Boll, Steven G. Segal, Anthony J. DiNovi, Thomas M. Hagerty, Joseph J.
Incandela, Warren C. Smith, Jr., Glenn Hopkins, Charles W. Robins, Adam L.
Suttin, Wendy L. Masler, State Street Bank and Trust Company of Connecticut,
N.A., not individually, but as successor trustee for the 1989 Thomas H. Lee
Nominee Trust, dated 9/29/89, as amended, Andrew D. Flaster, Steven Zachary Lee
1988 Irrevocable Trust, Shearson Lehman Brothers, Custodian for IRA F/B/O Thomas
R. Shepherd, Donald J. Conti, Gerald J. Carrino, Gary Lederer, Andrew J.
Saarnio, Gerald Seyler, Richard
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F. Timmons, William K. Brouse, Carlos Moros, Chris Foley, James T. Hind, James
Henderson, Nick Bellavia, John Strauss, Peter Pang, David Buddingh, Elizabeth
Gleason, Gary Olson, MLPF&S Cust. FBO Donald J. Conti IRA FBO Donald J. Conti,
MLPF&S Cust. FBO Andrew J. Saarino IRA FBO Andrew J. Saarino, MLPF&S Cust. FBO
David Brynteson IRA FBO David Brynteson, MLPF&S Cust. FBO Gerard Seyler IRA FBO
Gerard Seyler, MLPF&S Cust. FBO Tomas Garcia IRA FBO Tomas Garcia, MLPF&S Cust.
FBO Robert Bleau IRA FBO Robert Bleau, MLPF&S Cust. FBO William K. Brouse IRA
FBO William K. Brouse, MLPF&S Cust. FBO Murray Craig IRA FBO Murray Craig,
MLPF&S Cust. FBO Ron Hejnal IRA FBO Ron Hejnal, MLPF&S Cust. FBO Carlos Moros
IRA FBO Carlos Moros, MLPF&S Cust. FBO Ted Waffa IRA FBO Ted Waffa, MLPF&S Cust.
FBO David Buddingh IRA FBO David Buddingh, MLPF&S Cust. FBO Michael Gipson IRA
FBO Michael Gipson, MLPF&S Cust. FBO John Buckley IRA FBO John Buckley, and
Robert Michalak."
Item 4. The Solicitation or Recommendation.
Item 4(a) is hereby amended as follows:
The reference to "Exhibits 6 and 7, respectively" in the parenthetical
in the last sentence of the second paragraph is deleted and replaced with the
words: "Exhibits 18 and 7, respectively".
Item 4(c)(v) is hereby amended as follows:
The reference to "Exhibits 6 and 7, respectively" in the parenthetical
in the second sentence is deleted and replaced with the words: "Exhibits 18 and
7, respectively".
Item 6. Recent Transactions and Intent with Respect to Securities.
Item 6(a) is hereby amended and restated as follows:
To the knowledge of the Company, with the exception of (i) the award of
options to purchase 10,824 shares of Common Stock on January 2, 1998 to each of
John R. Albers and Albert L. Prillaman, (ii) the award of options to purchase
25,000, 40,000, 100,000, 25,000, 25,000 and 40,000 shares of Common Stock on
February 5, 1998 to Messrs. Devine, Kellam, Messner, Rohl, Tyranski and Welch,
respectively, and (iii) the purchase of 40,000 shares of Common Stock by Mr.
Albers on January 29, 1998 (following the sale on December 18, 1997 of 40,000
shares of Common Stock) for which transactions Mr. Albers paid the Company
$3,125 for short swing profits on January 30, 1998, no transactions in the
Common Stock have been effected during the past 60 days by the Company or by any
executive officer, director, affiliate or subsidiary of the Company. The sales
by Mr. Albers on December 18 consisted of 10,000 shares of Common Stock at $2
5/16 per share, 10,000 shares of Common Stock at $2 1/4 per share and 20,000
shares of Common Stock at $2 1/8 per share. The purchases by Mr. Albers on
January 29,1998 consisted of 25,000 shares of Common Stock at $2 1/8 per share,
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7,500 shares of Common Stock at $2 3/16 per share and 7,500 shares of Common
Stock at $2 1/4 per share.
Item 8. Additional Information to be Furnished.
Item 8 is hereby amended and supplemented by adding the following
paragrph after the first paragraph:
"Sunbeam Corporation and the Company filed their Notification and
Report Forms with respect to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") on March 6, 1998 and March
11, 1998, respectively. The waiting period under the HSR Act with respect to the
Offer expired at 11:59 p.m., New York City time, on March 20, 1998."
Item 9. Material to be filed as Exhibits.
Item 9 is hereby amended to add the following exhibit:
Exhibit 18 -- Opinion of Salomon Smith Barney dated February 28, 1998. (To
replace Exhibit 6 to the Schedule 14D-9)(1)
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(1) This revised opinion shall be deemed to replace, in all references
in the Schedule 14D-9 (including the full text of the opinion as it appears in
Annex I), the opinion of Salomon Smith Barney dated February 28, 1998 which was
filed as Exhibit 6 to the Schedule 14D-9.
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
First Alert, Inc.
By: /s/ B. Joseph Messner
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B. Joseph Messner
President and Chief Executive Officer
Dated March 27, 1998
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Annex II
Information Statement Pursuant to Section 14(f) of
the Securities Exchange Act of 1934 and Rule 14f-1
The Section entitled "Pension Plans" is amended as follows:
The fourth sentence of the third paragraph is deleted and replaced with
the following sentence: "As of the time they left the Company's employ, Messrs.
Brouse and Timmons each had 4 years of credited service under the Pension Plan."
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EXHIBIT INDEX
Exhibit No. Description
* 1 Agreement and Plan of Merger, dated as of February 28, 1998, among the
Company, Parent and the Purchaser.
* 2 The Company's Proxy Statement on Schedule 14A, filed on April 7, 1997.
* 3 Letter to stockholders of the Company dated March 6, 1998.
* 4 Confidentiality Agreement, dated as of February 16, 1998, between the
Company and Parent.
* 5 Stock Sale Agreement, dated as of February 28, 1998, among Parent and
certain stockholders of the Company listed on the signature pages thereto.
* 6 Opinion of Salomon Smith Barney dated February 28, 1998.
* 7 Opinion of NationsBanc Montgomery Securities dated February 28, 1998.*
* 8 Employment Agreement, dated September 18, 1996, between B. Joseph
Messner and the Company.
* 9 Employment Agreement, dated January 1, 1997, between Malcolm Candlish
and the Company.
* 10 Noncompetition Agreement, dated February 27, 1998, between B. Joseph
Messner and the Company.
* 11 Noncompetition Agreement, dated February 27, 1998, between Michael A.
Rohl and the Company.
* 12 Letter Agreement, dated April 15, 1997, between Douglas H. Kellam and
the Company.
* 13 Letter Agreement, dated February 27, 1998, between Mark A. Devine and
the Company.
* 14 Letter Agreement, dated February 27, 1998, between Mark K. Welch and
the Company.
* 15 Letter Agreement, dated February 27, 1998, between Edward J.
Tyranski and the Company.
* 16 Termination Benefits Agreement, dated July 5, 1995, between BRK
Brands, Inc. and Michael A. Rohl, as amended by an agreement dated
September 26, 1997.
* 17 Press Release issued by the Company dated March 2, 1998.
18 Opinion of Salomon Smith Barney dated February 28, 1998. (To replace
Exhibit 6 to the Schedule 14D-9)
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* Previously filed.
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Exhibit 18
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SALOMON SMITH BARNEY 212-816-6000
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A Member of TravelersGroup
February 28, 1998
Board of Directors
First Alert, Inc.
3901 Liberty Street Road
Aurora, Illinois 60504-8122
Members of the Board:
You have requested our opinion as investment bankers as to the fairness, from a
financial point of view, to the holders of shares of common stock, par value
$0.01 per share (the "Company Common Stock"), of First Alert, Inc. (the
"Company") of the consideration to be received by such holders in the proposed
acquisition of the Company by Sunbeam Corporation ("Acquiror") pursuant to the
Agreement and Plan of Merger, dated as of February 28, 1998 (the "Agreement"),
by and among the Company, Acquiror and Sentinel Acquisition Corp., a wholly
owned subsidiary of Acquiror ("Acquisition Corp.").
As more specifically set forth in the Agreement, Acquisition Corp. will commence
a tender offer (the "Proposed Tender Offer") to purchase all of the outstanding
shares of Company Common Stock for a price of $5.25 per share in cash (the
"Offer Price"). Following consummation of the Proposed Tender Offer, Acquisition
Corp. will be merged with and into the Company (the "Proposed Merger" and,
together with the Proposed Tender Offer, the "Proposed Transaction") and each
then outstanding share of Company Common Stock (other than shares held by
Acquiror, Acquisition Corp. or any of their subsidiaries or shares as to which
appraisal rights have been properly exercised under applicable law) will be
converted in the Proposed Merger into the right to receive, in cash, the Offer
Price (or such higher price as may be paid for each share of Company Common
Stock in the Proposed Tender Offer). We understand that certain holders of
Company Common Stock have agreed to surrender to Acquiror any amount received
upon a sale of shares of Company Common Stock in excess of the Offer Price.
In connection with rendering our opinion, we have reviewed and analyzed material
bearing upon the financial and operating condition and prospects of the Company
including, among other things, the following: (i) a draft version of the
Agreement; (ii) certain publicly available information concerning the Company,
including the Annual Reports on Form 10-K of the Company for each of the years
in the three year period ended December 31, 1996 and the Quarterly Reports on
Form 10-Q of the Company for the quarters ended March 31, 1997, June 30, 1997
and September 30, 1997, respectively; (iii) certain other internal information,
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Board of Directors
First Alert, Inc.
3901 Liberty Street Road
Aurora, Illinois 60504-8122
Page 2
primarily financial in nature (including projections, forecasts and analyses
prepared by or on behalf of the Company's management), concerning the business
and operations of the Company furnished to us by the Company for purposes of our
analysis; (iv) certain publicly available information concerning the trading of,
and the trading market for, the Company Common Stock; (v) certain publicly
available information with respect to certain other companies that we believe to
be comparable to the Company and the trading markets for certain of such other
companies' securities; and (vi) certain publicly available information
concerning the nature and terms of certain other transactions that we consider
relevant to our inquiry. We have also considered such other information,
financial studies, analyses, investigations and financial, economic and market
criteria that we deemed relevant. We have also met with certain officers and
employees of the Company to discuss the foregoing as well as other matters we
believe relevant to our inquiry.
In our review and analysis and in arriving at our opinion, we have assumed and
relied upon the accuracy and completeness of all of the financial and other
information provided to us or publicly available and have neither attempted
independently to verify nor assumed any responsibility for verifying any of such
information and have further relied upon the assurances of members of management
of the Company that they are not aware of any facts that would make any of such
information inaccurate or misleading. We have not conducted a physical
inspection of any of the properties or facilities of the Company, nor have we
made or obtained or assumed any responsibility for making or obtaining any
independent evaluations or appraisals of any of such properties or facilities,
nor have we been furnished with any such evaluations or appraisals. With respect
to projections, we have, upon the advice and consent of management of the
Company, assumed that such projections were reasonably prepared on bases
reflecting the best currently available estimates and judgment of the Company's
management as to the future financial performance of the Company and we express
no view with respect to such projections or the assumptions on which they were
based. We have also assumed that the definitive Agreement will not, when
executed, contain any terms or conditions that differ materially from the terms
and conditions contained in the draft of such document we have reviewed and that
the Proposed Acquisition will be consummated in a timely manner and in
accordance with the terms of the Agreement.
In conducting our analysis and arriving at our opinion as expressed herein, we
have considered such financial and other factors as we have deemed appropriate
under the circumstances including, among others, the following: (i) the
historical and current financial position and results of operations of the
Company; (ii) the business prospects of the Company; (iii) the historical and
current market for the Company Common Stock and for the equity securities of
certain other companies that we believe to be comparable to the Company; and
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Board of Directors
First Alert, Inc.
3901 Liberty Street Road
Aurora, Illinois 60504-8122
Page 3
(iv) the nature and terms of certain other acquisition transactions that we
believe to be relevant. We have also taken into account our assessment of
general economic, market and financial conditions as well as our experience in
connection with similar transactions and securities valuation generally. Our
opinion necessarily is based upon conditions as they exist and can be evaluated
on the date hereof and we assume no responsibility to update or revise our
opinion based upon circumstances or events occurring after the date hereof. Our
opinion is, in any event, limited to the fairness, from a financial point of
view, of the consideration to be received by the holders of the Company Common
Stock in the Proposed Transaction and does not address the Company's underlying
business decision to effect the Proposed Transaction or constitute a
recommendation to any holder of Company Common Stock as to whether such holder
should tender shares of the Company Common Stock in the Proposed Tender Offer or
as to how such holder should vote with respect to the Proposed Merger, if such a
vote is taken.
As you are aware, Salomon Brothers Inc and Smith Barney Inc. (collectively doing
business as "Salomon Smith Barney"), are acting as financial advisor to the
Independent Committee of the Board of Directors of the Company in connection
with the Proposed Transaction and will receive a fee for their services, a
substantial portion of which is contingent upon consummation of the Proposed
Transaction. In addition, in the ordinary course of our business, Salomon Smith
Barney may actively trade the debt and equity securities of the Company for its
own account and for the accounts of customers and, accordingly, may at any time
hold a long or short position in such securities. Salomon Smith Barney and its
affiliates (including Travelers Group Inc.) may have other business
relationships with the Company or Acquiror.
This opinion is intended for the benefit and use of the Company (including its
management and directors) in considering the transaction to which it relates and
may not be used by the Company for any other purpose or reproduced,
disseminated, quoted or referred to by the Company at any time, in any manner or
for any purpose, without the prior written consent of Salomon Smith Barney.
Based upon and subject to the foregoing, we are of the opinion as investment
bankers that the consideration to be received by the holders of the Company
Common Stock in the Proposed Transaction is fair, from a financial point of
view, to such holders.
Very truly yours,
/s/ SALOMON SMITH BARNEY
SALOMON SMITH BARNEY
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