EXHIBIT 99.1
INTEGRATED ALARM SERVICES GROUP, INC.
December 20, 2006
Xxxxxxx X. May
0000 XX 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Transitional Service Agreement (the "Agreement")
Dear Chick:
This letter sets forth our agreement regarding the terms of your employment by
Integrated Alarm Services Group, Inc. ("IASG") and certain other obligations of,
and undertakings by, IASG and you.
1. Conditions to Obligations. IASG, Protection One, Inc. ("PI") and Xxxx
Acquisition Corp. ("Xxxx") propose to enter into a transaction agreement
("Transaction Agreement") on December 20, 2006 or such other date as the parties
thereto may agree, pursuant to which, among other things, IASG shall be merged
with Xxxx and become a wholly-owned subsidiary of P1. The transactions
contemplated by the Transaction Agreement are scheduled to close prior to May
31, 2007 or such other date as may be agreed to by the parties to the
Transaction Agreement (the "Closing Date"). This Agreement shall be effective
only upon the completion on the Closing Date of the transactions contemplated by
the Transaction Agreement and upon your continued employment with IASG until the
Closing Date, and if such transactions are not consummated or if you are not
employed by IASG as of the Closing Date, this Agreement shall be void ab initio
and without any force or effect.
2. Term of Employment. Your employment with IASG pursuant to this Agreement
shall commence on the Closing Date and shall end on the date that is three
months after the Closing Date (the "Transition Period"). In consideration of the
performance by you of the Employment Obligations (as defined below), IASG agrees
to continue your employment during the Transition Period, it being understood
that IASG may not involuntarily terminate your employment prior to the end of
the Transition Period, other than for Cause. For purposes of this Agreement,
Cause shall mean (i) your failure to perform your duties hereunder or follow the
reasonable directions of the person to whom you report, (ii) fraud,
embezzlement, misappropriation or any willful misconduct by you in connection
with your employment hereunder, (iii) activities which, in the reasonable
judgment of IASG, could have a significant adverse effect on the reputation or
business of IASG, or (iv) your habitual use of alcohol, drugs, or other
controlled substances in such a manner as to materially interfere with the
performance of your duties to IASG.
3. Duties. During the Transition Period, you shall continue to perform the
functions you performed for IASG prior to the Closing Date and such other duties
as are consistent with the foregoing as may be reasonably and in good faith
requested by IASG from time to time (collectively, the "Employment
Obligations"). Notwithstanding the foregoing, your performance of the Employment
Obligations shall be limited to two days per week, or such lesser amount of time
as determined by IASG.
4. Compensation. In consideration of the performance by you of the Employment
Obligations, IASG shall pay to you during the Transition Period $35,000 per
month. In addition, IASG shall pay to you a guaranteed bonus in an amount equal
to $105,000, payable in a lump sum within 30 days after the end of the
Transition Period. In the event that you are terminated for Cause as provided in
Section 2 or that you resign prior to the end of the Transition Period, you
shall not be entitled to the monthly payments or the guaranteed bonus provided
pursuant to this Section 4.
5. Entire Agreement; Supersedes Previous Agreements. This Agreement contains the
entire agreement and understanding of the parties hereto with respect to the
matters covered herein and shall supersede any and all previous contracts and
understandings between you and IASG, including, without limitation, the
agreement between you and IASG dated May 2, 2006. This Agreement may not be
altered, modified or amended except by written instrument signed by the parties
hereto.
6. Compliance with Section 409A. Anything in this Agreement notwithstanding,
IASG shall, in its sole discretion, amend this Agreement to the extent necessary
or desirable to ensure that this Agreement complies with Section 409A of the
Internal Revenue Code of 1986, as amended (the "Code") and that any payments or
benefits under this Agreement are not subject to interest and penalties under
Section 409A of the Code.
7. Notices. All notices, requests, demands and other communications which are
required or may be given under this
Agreement shall be in writing and shall be deemed effective (i) when delivered
personally, upon receipt, (ii) when sent by facsimile or electronic mail, upon
confirmation of receipt by the sender of such transmission, (iii) one day after
deposit with a commercial overnight courier with written verification of
receipt, or (iv) three days after deposit in the United States mail by certified
mail postage prepaid. All communications will be sent to the party to whom they
are directed at the address set forth below:
(a) If to IASG:
c/o Protection One, Inc.
0000 X. 0xx Xx.
Xxxxx 000
Xxxxxxxx, XX 00000
(b) If to you:
Xxxxxxx X. May
0000 XX 0xx Xxxxx
Xxxx Xxxxx, XX 00000
8. Counterparts. This agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, applicable to contracts to be
performed entirely within such State.
* * * * *
If you are in agreement with the foregoing, please indicate your
acceptance by signing below.
Integrated Alarm Services Group, Inc.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director and Compensation
Committee Chairman
/s/ Xxxxxxx X. May
-----------------------------------------
Signature
Xxxxxxx X. May
