UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Information To Be Included in Statements Filed Pursuant to § 240.13d-1(a) and
Amendments Thereto Filed Pursuant to § 240.13d-2(a)
NAPCO SECURITY TECHNOLOGIES, INC.
(Name of Issuer)
Common Stock, par value $0.01 per share
(Title of Class of Securities)
630402105
(CUSIP Number)
Richard L. Soloway
333 Bayview Avenue
Amityville, NY 11701
+1-631-842-9400
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
December 15, 2020
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because off §§ 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.
| * | The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. |
The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
| CUSIP No. 630402105 | 13D |
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NAME OF REPORTING PERSONS
Richard L. Soloway
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨
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SEC USE ONLY
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SOURCE OF FUNDS
PF
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CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e)
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CITIZENSHIP OR PLACE OF ORGANIZATION
United States
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NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
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SOLE VOTING POWER
3,674,831
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SHARED VOTING POWER
0
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SOLE DISPOSITIVE POWER
3,674,831
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SHARED DISPOSITIVE POWER
0
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,674,831
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CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.0% (1)
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TYPE OF REPORTING PERSON
IN
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(1) Based upon 18,347,351 shares of Common Stock, par
value $0.01 per share (“Common Stock”) of the Issuer (as defined below) outstanding as of November 30, 2020,
as reported in the Issuer’s prospectus supplement filed pursuant to Rule 424(b)(7) with the Securities and Exchange Commission
(the “Commission”) on December 11, 2020.
Item 1. Security and Issuer
This Schedule 13D (“Schedule 13D”) relates to shares of Common Stock of NAPCO Security Technologies, Inc. (the “Issuer”), whose principal executive offices are located at 333 Bayview Avenue, Amityville, NY 11701.
Item 2. Identity and Background
(a) This Schedule 13D is being filed by Richard L. Soloway (the “Reporting Person”).
(b) The business/residence address for the Reporting Person is 333 Bayview Avenue, Amityville, NY 11701.
(c) The present principal occupation of the Reporting Person is Chairman of the Board, President and Chief Executive Officer of the Issuer.
(d) During the last five years, the Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors).
(e) During the last five years, the Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws.
(f) The Reporting Person is a citizen of the United States.
Item 3. Source and Amount of Funds or Other Consideration
The information set forth in Item 4 hereof is hereby incorporated by reference into this Item 3, as applicable. The Reporting Person is a founder of the Issuer and has beneficially owned shares of Common Stock since prior to the initial public offering of the predecessor of the Issuer. The shares of Common Stock owned by the Reporting Person (such shares, the “Shares”) consist of Shares owned prior to such initial public offering and additional Shares acquired since the initial public offering in the open market and upon the exercise of stock options granted to him under the Issuer’s stock option plans as compensation for his services as an executive officer and director of the Issuer.
Item 4. Purpose of Transaction
Since the approval of listing of Common Stock on NASDAQ in 1981, the Reporting Person has beneficially owned more than 5% of issued and outstanding shares of Common Stock. On December 10, 2020, the Reporting Person entered into an Underwriting Agreement (the “Underwriting Agreement”) with the Issuer and B. Riley Securities, Inc. and Needham & Company, LLC as underwriters (the “Underwriters”), pursuant to which the Underwriters purchased an aggregate of 2,233,071 shares of Common Stock at a price of $24.70 per share (the “Firm Shares”), in connection with a registered public secondary offering (the “Secondary Offering”) of the Shares at a public offering price of $26.00 per share. The sale of Firm Shares closed on December 15, 2020. In addition, the Reporting Person granted the Underwriters an option to purchase up to 334,961 additional shares of his Common Stock at the same price (the “Option Shares”), exercisable by the Underwriters at any time and from time to time during the 30-day period from December 10, 2020. The Underwriters exercised such option on December 17, 2020 and the sale of Option Shares closed on December 21, 2020. The foregoing description of the Underwriting Agreement does not purport to be complete and is qualified in its entirety by reference to such agreement, which is attached as Exhibit 1 hereto and is incorporated herein by reference.
Except as set forth above, including, without limitation, the Secondary Offering, the Reporting Person has no present plans or proposals which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a)-(b) As of the date hereof, the Reporting Person may be deemed to be the beneficial owner of 3,674,831 shares of Common Stock, representing approximately 20.0% of the Issuer’s issued and outstanding shares of Common Stock, based upon 18,347,351 shares of Common Stock outstanding as of November 30, 2020, as reported in the Issuer’s prospectus supplement filed pursuant to Rule 424(b)(7) with the Commission on December 11, 2020. The Reporting Person has sole power to vote, or direct the voting of, and to dispose of or direct the disposition of, an aggregate of 3,674,831 shares of Common Stock.
(c) Except as described in this Schedule 13D, there have been no transactions in the shares of Common Stock effected by the Reporting Person during the past 60 days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
In connection with the Secondary Offering referred to in Item 4 above, (i) the Issuer, the Underwriters and the Reporting Person entered into the Underwriting Agreement (see Item 4), which is listed as Exhibit 1 hereto, attached as Exhibit 1.1 to the Issuer’s Form 8-K filed with the Commission on December 14, 2020 and is incorporated herein by reference and (ii) the Reporting Person and the Underwriters entered into a Lock-up Agreement dated as of December 4, 2020, which is attached as Exhibit 2 hereto and is incorporated herein by reference.
Except as set forth herein, the Reporting Person does not have any contracts, arrangements, understandings or relationships (legal or otherwise) with any person with respect to any securities of the Issuer, including but not limited to any contracts, arrangements, understandings or relationships concerning the transfer or voting of such securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.
Item 7. Materials to Be Filed as Exhibits
[The remainder of this page intentionally left blank]
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.
Date: December 28, 2020
| /s/ Richard L. Soloway | ||
| Name: | Richard L. Soloway | |
Exhibit 2
Lock-up Agreement
December 4, 2020
B. Riley Securities, Inc.
299 Park Avenue, 21st Floor
New York, NY 10171
Re: NAPCO Security Technologies, Inc. (the “Company”) - Restriction on Stock Sales
This letter agreement is delivered to you pursuant to the Underwriting Agreement (the “Underwriting Agreement”) to be entered into by the Company, Richard L. Soloway, as selling stockholder, and B. Riley Securities, Inc., representative of the underwriters (the “Representative”). Upon the terms and subject to the conditions of the Underwriting Agreement, the Underwriters intend to effect a public offering of shares of Common Stock, $0.01 par value per share, of the Company (the “Shares”), as described in and contemplated by the registration statement of the Company on Form S-3, File No. 333-248078 (the “Registration Statement”), initially filed with the Securities and Exchange Commission (the “SEC”) on August 17, 2020 and declared effective by the SEC on August 24, 2020 (the “Offering”). Terms used herein, but not defined, shall have the meaning ascribed to them in the Underwriting Agreement.
The undersigned recognizes that it is in the best financial interests of the undersigned, as an officer or director, or an owner of Common Stock, options, warrants, performance units or other securities convertible into or exchangeable for Common Stock of the Company (the “Company Securities”), that the undersigned not sell Company Securities in the public market for a reasonable period following the Offering.
The undersigned further recognizes that the Company Securities held by the undersigned are, or may be, subject to certain restrictions on transferability, including those imposed by United States federal securities laws. Notwithstanding these restrictions, the undersigned has agreed to enter into this letter agreement to further assure the Underwriters that the Company Securities of the undersigned, now held or hereafter acquired, will not enter the public market at a time that might impair the underwriting effort.
Therefore, as an inducement to the Underwriters to execute the Underwriting Agreement, the undersigned hereby acknowledges and agrees that the undersigned will not, without the prior written consent of the Representative, (1) offer, sell, contract to sell, pledge, grant any option to purchase or otherwise dispose of (collectively, a “Disposition”) any Company Securities or any securities convertible into or exercisable or exchangeable for, or any rights to purchase or otherwise acquire, any Company Securities held by the undersigned or acquired by the undersigned after the date hereof, or that may be deemed to be beneficially owned by the undersigned (collectively, the “Lock-Up Shares”), pursuant to the Rules and Regulations promulgated under the Securities Act of 1933, as amended (the “Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for a period commencing on the date hereof and ending 60 days after the date of the Underwriting Agreement, inclusive (the “Lock-Up Period”), (2) during the Lock-Up Period, exercise or seek to exercise or effectuate in any manner any rights of any nature that the undersigned has or may have hereafter to require the Company to register under the Act the undersigned’s Disposition of any of the Lock-Up Shares held by the undersigned, (3) otherwise participate as a selling securityholder in any manner in any registration of Lock-Up Shares effected by the Company under the Act, except with respect to the Lock-Up Shares registered under the Registration Statement in connection with the Offering, during the Lock-Up Period, or (4) engage in any hedging, collar (whether or not for any consideration) or other transaction that is designed to or reasonably expected to lead to or result in a Disposition of Lock-Up Shares during the Lock-Up Period, even if such Lock-Up Shares would be disposed of by someone other than such holder, and such prohibited hedging or other transactions would include any short sale or any purchase, sale or grant of any right (including any put or call option or reversal or cancellation thereof) with respect to any Lock-Up Shares or with respect to any security (other than a broad-based market basket or index) that includes, relates to or derives any significant part of its value from Lock-Up Shares.
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Notwithstanding the agreement not to make any Disposition during the Lock-Up Period, the Underwriters have agreed that the foregoing restrictions shall not apply to:
| (1) | any Disposition or transfer of Lock-Up Shares to a family member, trust, or entity in which more than fifty percent of the voting interests are owned by the undersigned or the undersigned’s immediate family members (as defined in General Instruction A.1(a)(5) to Form S-8 under the Act); |
| (2) | any bona fide gift; |
| (3) | any Disposition or transfer of Lock-Up Shares by will, intestate succession or by operation of law pursuant to a qualified domestic order or in connection with a divorce settlement; |
| (4) | any transfer of Lock-Up Shares solely to cover applicable withholding taxes due upon the vesting of stock-based awards under the Company’s equity compensation plans; |
| (5) | the conversion or exchange of convertible or exchangeable Company Securities outstanding as of the date of this letter agreement; |
| (6) | the forfeiture or surrender to the Company of Lock-Up Shares for failure to achieve vesting requirements associated with such Lock-Up Shares; |
| (7) | Dispositions or forfeiture of Lock-Up Shares of the undersigned or the retention of Lock-Up Shares by the Company (A) to satisfy tax withholding obligations in connection with the exercise of options to purchase Shares, the vesting of restricted stock units or performance shares or the settlement of deferred stock units of the Company or (B) in payment of the exercise or purchase price with respect to the exercise of options to purchase Shares, the vesting of restricted stock units or performance shares or the settlement of deferred stock units of the Company; |
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| (8) | the establishment of a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of Lock-Up Shares; |
| (9) | the Disposition or transfer of Lock-Up Shares pursuant to a trading plan established pursuant to Rule 10b5-1 under the Exchange Act prior to the date of this letter agreement; |
| (10) | any Disposition or transfer of Lock-Up Shares pursuant to a bona fide third-party tender offer, merger, consolidation or other similar transaction that is approved by the board of directors of the Company, made to all holders of the Company Securities involving a Change of Control (as defined below) (including any support or voting agreement entered into in connection therewith), provided that in the event that the tender offer, merger, consolidation or other such transaction is not completed, the Lock-up Shares of the undersigned shall remain subject to the restrictions contained in this letter agreement; or |
| (11) | any Disposition or transfer of Lock-Up Shares registered under the Registration Statement pursuant to and in connection with the Offering; |
provided that in the case of any transfer, gift or other disposition pursuant to the immediately preceding clauses (1) or (2), except in the case of a bona fide gift to a charitable or non-profit organization, the transferee, trust, donee or other recipient agrees to be bound in writing by the terms of this letter agreement prior to such transfer and no filing by any party (donor, donee, transferor or transferee) under the Exchange Act shall be required or shall be voluntarily made in connection with such transfer (other than required filings under Section 16(a) and Section 13(d) or 13(g) of the Exchange Act and any filings made after the expiration of the Lock-Up Period). For purposes of clause (10) above, “Change of Control” shall mean any bona fide third-party tender offer, merger, amalgamation, consolidation or other similar transaction the result of which would be that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of more than 50% of the total voting power of the voting stock of the Company.
Furthermore, the undersigned may, during the Lock-Up Period, sell shares of Common Stock purchased by the undersigned on the open market following the closing of the Offering if and only if (i) such sales are not required to be reported in any public report or filing under the Exchange Act and (ii) the undersigned does not otherwise voluntarily effect any public report or filing regarding such sales.
It is understood that, if the Underwriting Agreement (other than the provisions thereof that survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, the obligations under this letter agreement shall automatically terminate. Further, this letter agreement is only authorized to be delivered if the Underwriting Agreement referred to herein is dated on or before February 15, 2021.
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In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of Lock-Up Shares if such transfer would constitute a violation or breach of this letter agreement. This letter agreement shall be binding on the undersigned and the respective successors, heirs, personal representatives and assigns of the undersigned. Capitalized terms used but not defined herein have the respective meanings assigned to such terms in the Underwriting Agreement.
| Very truly yours, | |
| s/Richard L Soloway | |
| Print Name: Richard Soloway |
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