Exhibit 10.22
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of August, 2001 by
and between Protection One, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. Xxxxx ("Executive").
W I T N E S S E T H
WHEREAS, the Board (as defined in Section 1) has determined that it is
in the best interests of the Company and its stockholders to secure Executive's
services; and
WHEREAS, the Company also recognizes that the possibility of a change
in control could arise which may result in the distraction of Executive to the
detriment of the Company and its shareholders, and it is important that
Executive be able to advise the Board whether a proposed change in control would
be in the best interests of the Company and its shareholders and to take action
regarding such proposal as the Board directs, without being influenced by the
uncertainties of Executive's own situation; and
WHEREAS, the Board has authorized the Company to enter into this
Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (i) the willful and continued failure
of Executive to perform substantially his duties with the Company (other than
any such failure resulting from Executive's incapacity due to physical or mental
illness or any such failure subsequent to Executive being delivered a Notice of
Termination without Cause by the Company or Executive delivering a Notice of
Termination for Good Reason to the Company) that is not remedied within 30 days
after a written demand for substantial performance is delivered to Execu-
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tive by the Chairman of the Board which specifically identifies the manner in
which Executive has not substantially performed Executive's duties, or (ii) the
willful engaging by Executive in illegal conduct which is demonstrably and
materially injurious to the Company. For purposes of this paragraph (b), no act
or failure to act by Executive shall be considered "willful" unless done or
omitted to be done by Executive in bad faith and without reasonable belief that
Executive's action or omission was in, or not opposed to, the best interests of
the Company.
(c) "Change in Control" means the occurrence of any one
of the following events:
(i) individuals who, on August 1, 2001,
constitute the Board (the "Incumbent Directors") cease for any reason
to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to August 1, 2001, whose election
or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a
specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; PROVIDED,
HOWEVER, that no individual initially elected or nominated as a
director of the Company as a result of an actual or threatened election
contest with respect to directors or as a result of any other actual or
threatened solicitation of proxies or consents by or on behalf of any
person other than the Board shall be deemed to be an Incumbent
Director; PROVIDED, FURTHER, that if any individual is appointed to the
Board with the consent of Westar at such time as Westar is the direct
or indirect beneficial owner or has direct or indirect control over the
voting of 40% or more of the Company voting securities, that individual
shall be deemed to be an Incumbent Director;
(ii) any "person" (as such term is defined in
Section 3(a)(9) of the Securities Exchange Act of 1934 (the "Exchange
Act") and as used in Sections 13(d)(3) and 14(d)(2) of
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the Exchange Act) is or becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing more than 40% of the combined
voting power of the Company's then outstanding securities eligible to
vote for the election of the Board (the "Company Voting Securities");
PROVIDED, HOWEVER, that the event described in this paragraph (ii)
shall not be deemed to be a Change in Control by virtue of any of the
following acquisitions: (A) by the Company, Westar, or any of their
subsidiaries, (B) by any employee benefit plan (or related trust)
sponsored or maintained by the Company, Westar, or any of their
subsidiaries, (C) by any underwriter temporarily holding securities
pursuant to an offering of such securities, (D) pursuant to a
Non-Qualifying Transaction (as defined in paragraph (iii)), (E)
pursuant to any acquisition by Executive or any group of persons
including Executive (or any entity controlled by Executive or any group
of persons including Executive), or (F) any event in which Westar
continues to be directly or indirectly the beneficial owner of a
greater number of shares of the Company than that held by any person as
a result of the event described in this paragraph (ii) or has the right
to direct the vote of a greater number of voting securities for
directors (or the equivalent) of the Company than any person as a
result of the event described in this paragraph (ii);
(iii) the consummation of a merger, consolidation,
statutory share exchange or similar form of corporate transaction
involving the Company or Protection One Alarm Monitoring, Inc. (a
"Business Combination"), unless immediately following such Business
Combination: (A) more than 40% of the total voting power of (x) the
corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of 100% of the
voting securities eligible to elect directors (or the equivalent) of
the Surviving Corporation (the
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"Parent Corporation"), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting
Securities were converted pursuant to such Business Combination), and
such voting power among the holders thereof is in substantially the
same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business
Combination; (B) no person (other than Westar or any employee benefit
plan (or related trust) sponsored or maintained by Westar, the
Surviving Corporation or the Parent Corporation) is or becomes the
beneficial owner, directly or indirectly, of more than 40% or more of
the total voting power of the outstanding voting securities eligible to
elect directors (or the equivalent) of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation); and (C) at
least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination
were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Business
Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a
"Non-Qualifying Transaction");
(iv) a "Change in Control" as that term is
defined in this Agreement occurs at Westar Industries, Inc. (treating
Westar Industries, Inc. as if it were the "Company" for purposes of
such definition), provided that any spin-off, split-off or other
distribution of Westar Industries, Inc. shall not be a Change in
Control.
(d) "Date of Termination" means (i) if Executive's
employment is to be terminated for Disability, 30 days after Notice of
Termination is given (provided that Executive shall not have returned to the
performance of Executive's duties on a full-time basis
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during such 30 day period); (ii) if Executive's employment is to be terminated
by the Company for Cause or by Executive for Good Reason, the date specified in
the Notice of Termination; (iii) if Executive's employment is to be terminated
by the Company for any reason other than Cause, the date specified in the Notice
of Termination, which shall be 90 days after the Notice of Termination is given,
unless an earlier date has been expressly agreed to by Executive in writing;
(iv) if Executive's employment terminates by reason of death, the date of death
of Executive; (v) if Executive's employment is terminated by Executive in a
Non-Qualifying Termination, the date specified in Executive's Notice of
Termination, but not more than 30 days after the Notice of Termination is given,
unless expressly agreed to by the Company in writing; or (vi) in the event of a
Change in Control, the date of the Change in Control.
(e) "Disability" means termination of Executive's
employment by the Company due to Executive's absence from Executive's duties
with the Company on a full-time basis for at least one hundred eighty
(180)consecutive days as a result of Executive's incapacity due to physical or
mental illness, unless within 30 days after Notice of Termination is given to
Executive following such absence Executive shall have returned to the full-time
performance of Executive's duties.
(f) "Good Reason" shall mean termination based on any of
the following events:
(i) any change in the duties or responsibilities
(including reporting responsibilities) of Executive that is
inconsistent in any material and adverse respect (which may be
cumulative) with Executive's position(s), duties,
responsibilities or status with the Company (including any
adverse diminution of such duties or responsibilities),
PROVIDED, HOWEVER, that Good Reason shall not be deemed to
occur upon a change in duties or responsibilities (other than
reporting responsibilities) that is solely and directly due to
the Company no longer being a publicly traded entity as a
result of a purchase of the Company's publicly traded
securities by Westar if no other event set forth in this
paragraph (f) has occurred;
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(ii) the failure to reappoint or reelect
Executive to any position held by Executive without
Executive's consent;
(iii) a reduction by the Company in Executive's
base salary;
(iv) the appointment by the Board of a Chief
Operating Officer, Chief Financial Officer or President of the
Company over Executive's written objection; or
(v) the Company's ceasing to be a publicly
traded entity (other than as a result of a purchase of the
Company's publicly traded shares by Westar).
Executive must provide notice of termination of employment
within one hundred eighty (180) days following Executive's
knowledge of an event or facts constituting Good Reason (or
the last of such events or facts if cumulative) or such event
or facts shall not constitute Good Reason under this
Agreement.
(g) "Non-Qualifying Termination" means a
termination of Executive's employment prior to the end of the Term of
this Agreement under any circumstances not qualifying as a Qualifying
Termination, including without limitation any termination by the
Company for Cause, any termination by Executive without Good Reason or
for no reason at all or any termination on account of death, Disability
or Retirement.
(h) "Notice of Termination" means a written
notice of termination of employment given by one party to the other
party pursuant to Section 15(b).
(i) "Qualifying Termination" means a termination
of Executive's employment prior to the end of the Term of this
Agreement (i) by the Company other than for Cause; (ii) by Executive
for Good Reason; or (iii) upon the date of a Change in Control.
Termination of Executive's employment on account of death, Disability
or Retirement shall not be treated as a Qualifying Termination.
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(j) "Retirement" means Executive's termination
of his employment on or after his attainment of age 65.
(k) "Subsidiary" means any corporation or other
entity in which the Company has a direct or indirect ownership interest
of 50% or more of the total combined voting power of the then
outstanding securities or interests of such corporation or other entity
entitled to vote generally in the election of directors or in which the
Company has the right to receive 50% or more of the distribution or
profits or 50% or more of the assets upon liquidation or dissolution.
(l) "Westar" means Westar Industries, Inc., a
Kansas corporation, or any parent entity, or any of their majority
owned subsidiaries.
2. EMPLOYMENT AND DUTIES.
(a) TERM OF EMPLOYMENT. The Company agrees to
employ Executive, and Executive agrees to enter into employment with
the Company, in accordance with the terms and provisions of this
Agreement, for the Term of this Agreement, unless such employment is
sooner terminated by the Company or Executive in a Qualifying
Termination or Non-Qualifying Termination. In the event that there is a
Change in Control during the Term of this Agreement, Executive's
employment under this Agreement shall terminate on the date of such
Change in Control. Upon termination of Executive's employment
(regardless of whether such termination constitutes a Qualifying or
Non-Qualifying Termination), Executive shall be relieved of any
obligation to continue to perform the duties described in Section 2(b)
effective as of the Date of Termination. The termination of the
employment relationship by either party for any reason or for no reason
at all shall not constitute a breach of this Agreement, but certain
obligations and benefits shall survive such termination of employment
as set forth in Section 18.
(b) DUTIES. During the period of Executive's
employment under this Agreement, Executive shall serve as Executive
Vice President and Chief Financial Officer of the Company. Executive
shall devote Executive's full business time and attention to the
affairs of the Company and his duties as its Executive Vice President
and Chief Financial Officer. Executive shall have such duties as are
appropriate to Executive's position as Executive Vice
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President and Chief Financial Officer, and shall have such authority as
required to enable Executive to perform these duties. Consistent with
the foregoing, Executive shall comply with all reasonable instructions
of the Board of Directors of the Company. Executive shall report
directly to the Chief Executive Officer. Executive may continue to
reside in the State of Florida or in any location that he wishes as
long as he is able to effectively carry out the duties contemplated by
this Agreement. During the period of Executive's employment under this
Agreement, Executive shall serve as an officer and/or director of a
Subsidiary or Subsidiaries if requested to do so by the Board.
3. TERM OF AGREEMENT. This Agreement shall continue
until terminated by the Company or Executive in a Qualifying or Non-Qualifying
Termination. Certain obligations and benefits shall survive the expiration of
the Term as set forth in Section 18.
4. BASE SALARY AND BENEFITS.
(a) BASE SALARY. During the period of
Executive's employment under this Agreement, the Company shall pay
Executive an annual base salary at an annual rate equal to no less than
$220,000, which shall be reviewed annually by the Compensation
Committee of the Board for the purpose of considering increases
thereof. Executive's base salary shall be paid in accordance with the
standard practices for other senior corporate executives of the
Company.
(b) BONUSES. Beginning with calendar year 2001,
Executive shall be eligible to receive annually or otherwise any bonus
awards, whether payable in cash, shares of common stock of the Company
or otherwise, which the Company, the Compensation Committee of the
Board or such other authorized committee of the Board determines to
award or grant.
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(c) STOCK OPTIONS. There shall be granted to
Executive on the date of this Agreement, pursuant to action of the
Compensation Committee of the Board, an option under the Company's 1997
Long-Term Incentive Plan (the "LTIP") to purchase 220,000 shares of the
Company's common stock at an exercise price per share equal to the
average of the closing prices of the Company's common stock as quoted
on the New York Stock Exchange over the period of 5 trading days ending
on the grant date. Such option shall become exercisable as follows: (i)
1/3 on the first anniversary of the date of grant if Executive is
employed by the Company on that anniversary date, (ii) an additional
1/3 on the second anniversary of the date of grant if Executive is
employed by the Company on that anniversary date, and (iii) the
remaining 1/3 on the third anniversary of the date of grant if
Executive's employment has not terminated prior to the last day of the
Term of this Agreement, provided, however, that the exercisability of
such option shall be accelerated in the event of a Qualifying
Termination as described in Section 5(a)(iii) or in the event of an
acquisition of Company Voting Securities by Executive or any group of
persons including Executive (or any entity controlled by Executive or
any group of persons including Executive) that would have been a
"Change in Control" pursuant to Section 1(c)(ii) but for the exclusion
set forth in Section 1(c)(ii)(E). Such option shall have a term of 10
years from the date of grant, subject to earlier termination in the
event of termination of Executive's employment. The provisions of
Executive's option dealing with termination of employment shall be
those set forth in Sections. 1.5 through 1.8 of the form of option
agreement attached hereto as Exhibit A.
(d) BENEFIT PROGRAMS. During the period of
Executive's employment under this Agreement, Executive shall be
eligible to participate in all employee benefit plans and programs of
the Company from time to time in effect for the benefit of senior
executives of the Company (subject to meeting generally applicable
participation requirements under the applicable plan or program),
including, but not limited to, 401(k) plans, group life insurance,
hospitalization and surgical and major medical coverages, sick leave,
employee stock purchase plans, car allowances, vacations and holidays,
long-term disability, and such other benefits as are or may be made
available from time to time to senior ex-
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ecutives of the Company. If Executive elects not to be covered by the
Company's medical plan by reason of COBRA continuation coverage under a
prior employer's medical plan, the Company shall reimburse Executive
for the lesser of: (i) the amount payable by Executive for such COBRA
continuation coverage or (ii) the amount of the premiums that the
Company would have paid (net of any required employee contributions)
for the benefits Executive would have received under the Company's
medical plan if Executive had not elected not to be covered.
(e) BUSINESS EXPENSES AND PERQUISITES. Executive
shall be reimbursed for all reasonable expenses incurred by Executive
in connection with the conduct of the business of the Company, provided
Executive properly accounts therefor in accordance with the Company's
policies. The parties hereto acknowledge that Executive's employment
will entail substantial travel away from Executive's residence and that
Executive's reimbursable business expenses will include reasonable
travel expenses, including without limitation reasonable costs of air
travel (including use of American Airlines AAirpass or equivalent),
weekly travel to and from Florida, parking, rental cars, and hotel
accommodations incurred in travel to and from his residence and other
travel associated with the performance of his duties hereunder. During
the period of Executive's employment under this Agreement, Executive
shall also be entitled to such other perquisites as are customary for
senior executives of the Company.
(f) OFFICE AND SERVICES FURNISHED. During the
period of Executive's employment under this Agreement, the Company
shall make available to Executive office space at the Company's
headquarters in Topeka, Kansas (to the extent needed while he is at the
Company's headquarters), secretarial assistance and such other
facilities and services as shall be suitable to Executive's position
and adequate for the performance of Executive's duties hereunder.
(g) TEMPORARY HOUSING, CAR. For a period of up
to 6 months following the date of this Agreement, the Company will make
available to Executive temporary housing in Topeka, Kansas at the
Company's expense. Executive shall not be required to be in Topeka,
Kansas except as he may determine necessary for him to effec-
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tively carry out the duties contemplated by this Agreement. In
addition, the Company will make available to Executive temporary use of
a Company car for periods while he is working in Topeka, Kansas.
5. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) QUALIFYING TERMINATION. If the employment of
Executive shall terminate pursuant to a Qualifying Termination, then:
(i) the Company shall provide to
Executive his base salary as described in Section 4(a) of this
Agreement for the balance of the Term of this Agreement at the
times such salary would have been payable if his employment
had not terminated;
(ii) the Company shall continue for
twelve (12) months after the Date of Termination to provide
Executive (and Executive's dependents, if applicable) with the
same level of medical, dental, and life insurance benefits
upon substantially the same terms and conditions as Executive
would have been entitled to receive if he had continued in
employment; PROVIDED, THAT, if Executive cannot continue to
participate in the Company plans providing such benefits, the
Company shall otherwise provide such benefits on the same
basis as if continued participation had been permitted.
Notwithstanding the foregoing, in the event Executive becomes
reemployed with another employer and becomes eligible to
receive benefits from such employer, the benefits described
herein shall be secondary to such benefits during the period
of Executive's eligibility, but only to the extent that the
Company reimburses Executive for any increased cost and
provides any additional benefits necessary to give Executive
the benefits provided hereunder; and
(iii) the stock options granted to
Executive pursuant to Section 4(c) shall become fully vested
and immediately exercisable.
(b) NON-QUALIFYING TERMINATION. If during the
Term of this Agreement the employment of Executive
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shall terminate in a Non-Qualifying Termination, then the Company shall
pay to Executive within ten (10) days following the Date of
Termination, a lump-sum cash amount equal to the sum of (1) Executive's
base salary through the Date of Termination and (2) any accrued
vacation pay and accumulated sick leave, in each case to the extent not
theretofore paid. The Company may make such additional payments, and
provide such additional benefits, to Executive as the Company and
Executive may agree in writing. Executive shall not be in breach of
this Agreement by reason of his terminating employment in a
Non-Qualifying Termination, provided that Executive will remain subject
to the obligations set forth in Sections 6, 7, 8 and 9.
6. NON-COMPETITION. Executive hereby acknowledges that
the services which he will perform for the Company are of a special and unique
nature, and that the Company would find it extremely difficult or impossible to
replace Executive. Accordingly, Executive agrees that, in consideration of this
Agreement and the payments to be received by him hereunder, from and after the
date hereof through the period during which Executive continues to be employed
by the Company and following termination of Executive's employment for any
reason until the later of (i) the second anniversary of such termination of
employment or (ii) the last day through which base salary is payable to
Executive pursuant to Section 5(a)(i) or 5(b), whichever is applicable (the
"Non-Competition Period"), Executive shall not, directly or indirectly, own,
manage, operate, join, control or participate in the ownership, management,
operation or control of, or be connected as a director, officer, employee,
partner, lender, consultant or otherwise ("Participate" or a "Participation")
with any Competitor (as hereinafter defined), except with the Company's prior
written consent. For purposes of this Agreement, the term "Competitor" shall
mean ADT Security Services, Brinks Home Security, Inc., Honeywell Inc. and their
respective subsidiaries, affiliates and successors. Nothing in this paragraph
shall prohibit Executive from owning for investment purposes an aggregate of up
to 3% of the publicly traded securities of any corporation listed on the New
York or American Stock Exchange or whose securities are quoted on the NASDAQ
National Market. Notwithstanding anything which may be to the contrary herein,
(i) Executive shall not be required to cease Participation in any business or
organization which begins to compete with the Company subsequent to the time
when Executive commences such Participation, provided that such business or
organization began to compete with the Company through no action, assistance, or
plan of Executive, (ii) Ex-
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ecutive may continue to serve as a member of the Board of Directors of Guardian
International, Inc. and may continue to hold shares in Guardian International,
Inc., and (iii) following termination of Executive's employment with the Company
for any reason, none of the restrictions in this Section 6 shall apply to
Executive's Participation in any capacity with Guardian International, Inc.
It is the desire and intent of the parties that the provisions of this
Section 6 shall be enforced under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Section 6 is adjudicated to be invalid or unenforceable or
shall for any reason be held to be excessively broad as to duration, geographic
scope, activity or subject, it shall be construed by limiting and reducing it,
so as to be enforceable to the extent compatible with applicable law and such
provision shall be deemed modified and amended to the extent necessary to render
such provision enforceable in such jurisdiction.
If Executive challenges the enforceability of the provisions of this
Section 6 in whole or in part as to any Competitors, Executive shall,
immediately upon such challenge, forfeit any right to any payments and benefits
under Section 5(a) that he has not already received.
7. CONFIDENTIAL INFORMATION. Executive acknowledges that: (i) the
business of the Company and its Subsidiaries and affiliates is intensely
competitive and that Executive's engagement by the Company requires that
Executive have access to and knowledge of confidential information of the
Company and its Subsidiaries and affiliates, including, but not limited to, the
identify of customers, the identity of the representatives of customers with
whom the Company and its Subsidiaries and affiliates have dealt, the kinds of
services provided by the Company and its Subsidiaries and affiliates to
customers and offered to be performed for potential customers, the manner in
which such services are performed or offered to be performed, the service needs
of actual or prospective customers, pricing information, information concerning
the creation, acquisition or disposition of products and services, customer
maintenance listings, computer software applications and other programs,
personnel information and other trade secrets (the "Confidential Information");
(ii) the direct or indirect disclosure of such Confidential Information to
existing or potential competitors of the Company and its Subsidiaries and
affiliates would place the Company and its Subsidiaries and affiliates at a
competitive disadvantage and would do damage,
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monetary or otherwise, to the business of the Company and its Subsidiaries and
affiliates; and (iii) the engaging by Executive in any of the activities
prohibited by this Section 7 may constitute improper appropriation and/or use of
such information and trade secrets. Notwithstanding the foregoing, Confidential
Information shall not include information which (x) is or becomes part of the
public domain through a source other than Executive, (y) is or becomes available
to Executive from a source independent of the Company and its Subsidiaries and
affiliates, or (z) constitutes general industry knowledge possessed by Executive
by virtue of Executive's employment with the Company. Executive expressly
acknowledges the trade secret status of the Confidential Information and that
the Confidential Information constitutes a protectable business interest of the
Company and its Subsidiaries and affiliates. Accordingly, the Company and
Executive agree as follows:
(a) During the Non-Competition Period, Executive
shall not, directly or indirectly, whether individually, as a director,
stockholder, owner, partner, employee, principal or agent of any
business, or in any other capacity, make known, disclose, furnish, make
available or use any of the Confidential Information, other than in the
proper performance of the duties contemplated herein or as required by
law or by a court of competent jurisdiction or other administrative or
legislative body; provided, however, that prior to disclosing any of
the Confidential Information to a court or other administrative or
legislative body, Executive shall promptly notify the Company so that
the Company may seek a protective order or other appropriate remedy.
The provisions of this subsection (a) do not apply to Executive's
Participation (as defined in Section 6) in any capacity with Guardian
International, Inc.
(b) Executive agrees to return all Confidential
Information, including all photocopies, extracts and summaries thereof,
and any such information stored electronically on tapes, computer disks
or in any other manner to the Company at anytime upon request of the
Chairman of the Board of the Company and upon the termination of
Executive's employment for any reason.
8. NONSOLICITATION. During the Non-Competition Period,
Executive shall not, directly or indirectly, solicit, interfere with, hire,
offer to hire or induce any person who is an employee of the Company or any of
its Subsidiaries or affiliates and whose salary is in excess of $50,000 to
discontinue his or her relationship with the Company or any of its Subsidiaries
or af-
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filiates and accept employment by, or enter into a business relationship with,
Executive or any other person or entity; PROVIDED, HOWEVER, that this provision
shall not apply to solicitation of any person who was an employee of Guardian
International, Inc. as of the date of this Agreement and who becomes an employee
of the Company or any of its Subsidiaries or affiliates during the period of
Executive's employment under this Agreement.
9. ANTIDISPARAGEMENT.
(a) Unless otherwise required by a court of
competent jurisdiction, pursuant to any recognized subpoena power or by
any applicable law, rule or regulation, Executive agrees and promises
that Executive shall not make any oral or written statements or reveal
any information to any person, company or agency which (i) is
materially negative, disparaging or damaging to the name, reputation or
business of the Company or any of its Subsidiaries or affiliates, or
any of their shareholders, directors, officers or employees, or (ii)
has or would have a materially negative financial impact, whether
directly or indirectly, on the Company or any of its Subsidiaries and
affiliates, or any of their shareholders, directors, officers or
employees; provided that this subsection (ii) shall not be deemed to
have been violated by statements or releases of information by
Executive during the period of his employment under this Agreement
which Executive believes to be truthful and which are made in the
performance of his duties under this Agreement.
(b) Unless otherwise required by a court of
competent jurisdiction, pursuant to any recognized subpoena power or by
any applicable law, rule or regulation, the Company agrees and promises
that neither it nor any of its Subsidiaries and affiliates shall make
any oral or written statements or reveal any information to any person,
company or agency which (i) is materially negative, disparaging or
damaging to the name, reputation or business of Executive or (ii) has
or would have a negative financial impact, whether directly or
indirectly, on Executive.
10. INJUNCTIVE RELIEF.
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(a) Executive acknowledges that a breach of the
undertakings in Sections 6, 7, 8, or 9(a) of this Agreement would cause
irreparable damage to the Company and its Subsidiaries and affiliates,
the exact amount of which shall be difficult to ascertain, and that
remedies at law for any such breach would be inadequate. Executive
agrees that, if Executive breaches or attempts or threatens to breach
any of the undertakings in Sections 6, 7, 8, or 9(a) of this Agreement,
then the Company shall be entitled to injunctive relief without posting
bond or other security, in addition to any other remedy or remedies
available to the Company at law or in equity.
(b) The Company acknowledges that a breach of
the undertakings in Section 9(b) of this Agreement would cause
irreparable damage to Executive, the exact amount of which shall be
difficult to ascertain, and that remedies at law for any such breach
would be inadequate. The Company agrees that, if the Company or any of
its Subsidiaries or affiliates breaches or attempts or threatens to
breach any of the undertakings in Section 9(b) of this Agreement, then
Executive shall be entitled to injunctive relief, without posting bond
or other security, in addition to any other remedy or remedies
available to Executive at law or in equity.
11. WITHHOLDING TAXES. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required
to withhold therefrom. Executive has represented that he is and will continue to
be a resident of the State of Florida for all purposes.
12. DIRECTORS AND OFFICERS INSURANCE; INDEMNITY. The
Company shall take all steps necessary to ensure that Executive is covered under
any directors and officers liability insurance policy in effect from time to
time for current and former directors and officers of the Company. In addition,
the Company shall hold harmless and indemnify Executive against any and all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by Executive in connection with any
threatened, pending, or completed action, suit, or proceeding whether civil,
criminal, administrative, or investigative (including an action by or in the
right of the corporation) to which Executive is, was, or at anytime becomes a
party, or is threatened to be made a party, by reason of the fact that Executive
is, was, or at anytime be
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comes a director, officer, employee, or agent of the Company, or is, or was
serving, or at anytime serves at the request of the Company as a director,
officer, employee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise; or otherwise to the fullest extent as may be
provided to Executive by the Company under the provisions of Article IX of the
Bylaws of the Company and Article VII of The Articles of Incorporation of the
Company and Delaware law.
13. SCOPE OF AGREEMENT. Nothing in this Agreement shall
be deemed to entitle Executive to continued employment with the Company or its
Subsidiaries or shall require Executive to continue the employment relationship
against his wishes; PROVIDED, HOWEVER, that any termination of Executive's
employment during the Term of this Agreement shall be subject to all of the
provisions of this Agreement as provided in Section 18.
14. SUCCESSORS; BINDING AGREEMENT. (a) This Agreement
shall not be terminated by any sale, merger or other business combination. In
the event of any such sale, merger or other business combination, the provisions
of this Agreement shall be binding upon the surviving corporation, and such
surviving corporation shall be treated as the Company hereunder.
(b) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive shall die while any amounts would be payable to Executive hereunder
had Executive continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to such
person or persons appointed in writing by Executive to receive such amounts or,
if no person is so appointed, to Executive's estate.
15. NOTICE. (a) For purposes of this Agreement, all
notices and other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or five (5)
days after deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
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If to the Company:
Protection One, Inc.
000 X. Xxxxxx Xxxxxx
Xxxxxx, Xxxxxx 00000
Attention: Chairman of the Board
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination
by the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated, and (iii) specify the Date of
Termination. The failure by Executive or the Company to set forth in such notice
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude
Executive or the Company from asserting such fact or circumstance in enforcing
Executive's or the Company's rights hereunder.
16. FULL SETTLEMENT; RESOLUTION OF DISPUTES. The
Company's obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall be in lieu and in full
settlement of all other severance payments to Executive under any other
severance or employment agreement between Executive and the Company, and any
severance plan of the Company. In no event shall Executive be obligated to seek
other employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement and except as
otherwise provided in Section 5(a)(ii), such amounts shall not be reduced
whether or not Executive obtains other employment. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Wilmington, Delaware by three arbitrators in accordance with
the rules of the American Arbitration Association then in effect. Judgment may
be entered on the arbitrators' award in any court having jurisdiction. The
arbitrators shall determine the allocation of the costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section based on the
arbitrators' assessment of the merits of the positions of the parties.
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17. EMPLOYMENT WITH SUBSIDIARIES. Employment with the
Company for purposes of this Agreement shall include employment with any
Subsidiary.
18. SURVIVAL. The respective obligations and benefits
afforded to the Company and Executive as provided in Sections 5, 6, 7, 8, 9, 10,
11, 12, 14, 16, 19 and 21 shall survive the termination of this Agreement.
19. GOVERNING LAW; VALIDITY. THE INTERPRETATION,
CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
DELAWARE WITHOUT REGARD TO THE PRINCIPLE OF CONFLICTS OF LAWS. THE INVALIDITY OR
UNENFORCEABILITY OF ANY PROVISION OF THIS AGREEMENT SHALL NOT AFFECT THE
VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISION OF THIS AGREEMENT, WHICH OTHER
PROVISIONS SHALL REMAIN IN FULL FORCE AND EFFECT.
20. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute one and the same instrument.
21. MISCELLANEOUS. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in writing
and signed by Executive and by a duly authorized officer of the Company. No
waiver by either party hereto at anytime of any breach by the other party hereto
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. Failure
by Executive or the Company to insist upon strict compliance with any provision
of this Agreement or to assert any right Executive or the Company may have
hereunder, including without limitation, the right of Executive to terminate
employment for Good Reason, shall not be deemed to be a waiver of such provision
or right or any other provision or right of this Agreement. Except as otherwise
specifically provided herein, the rights of, and benefits payable to, Executive,
his estate or his beneficiaries pursuant to this Agreement are in addition to
any rights of, or benefits payable to, Executive, his estate or his
beneficiaries under any other employee benefit plan or compensation program of
the Company.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has executed
this Agreement as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
/s/ Xxxxxx X. Xxxxx
----------------------
Xxxxxx X. Xxxxx
