EXECUTION COPY
AGREEMENT
AGREEMENT, dated as of the 27th day of April, 2001 (this "Agreement"),
between Guardian International, Inc., a Florida corporation (the "Company"), and
Xxxxxxx Xxxxxxxx ("Xxxxxxxx").
WITNESSETH
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WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is appropriate and in the best interests of the Company and
its stockholders to reinforce and encourage the continued attention and
dedication of members of the Company's Board, including Xxxxxxxx, to their
duties;
WHEREAS, Xxxxxxxx is a party to a Severance Agreement with the Company,
dated as of January 19, 2000, attached as Exhibit A hereto, (the "Severance
Agreement");
WHEREAS, the Company has released Xxxxxxxx from the Severance Agreement
and consented to Xxxxxxxx'x acceptance of the position as Chief Executive
Officer of Protection One, Inc., a Delaware corporation, pursuant to that
certain letter agreement of even date herewith, attached as Exhibit B hereto,
(the "Waiver"); and
WHEREAS, the Company and Xxxxxxxx are parties to that certain Agreement
dated as of November 10, 2000, (the "Lock-up Agreement"), pursuant to which
Xxxxxxxx is bound by certain restrictions on sales or other transfers of capital
stock of the Company as described therein; and
WHEREAS, the Company and Xxxxxxxx desire that the Severance Agreement
be terminated, and that the terms and conditions set forth herein apply to
Xxxxxxxx in connection with his serving as a member of the Board of Directors of
the Company from and after the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and in further consideration of Xxxxxxxx serving as a member of
the Board of Directors of the Company, the Company and Xxxxxxxx do hereby agree
as follows:
1. Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
(a) "Award" shall mean any award granted pursuant to the terms of
the Plan and pursuant to the non-Plan Stock Option Agreement dated
October 15, 1997, including but not limited to stock options, stock
appreciation rights ("SARs") (including Limited SARs), restricted
stock, deferred stock, stock granted as a bonus or in lieu of other
awards, dividend equivalents, and other stock-based awards.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time. References to the Code shall be deemed to include
successor provisions thereto and regulations thereunder.
(c) "Change in Control" shall be deemed to have occurred upon:
(i) the date of the acquisition by any "person" (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act),
excluding the Company or any of its subsidiaries or affiliates or
any employee benefit plan sponsored by any of the foregoing, of
beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of 50% or more of either (x) the then outstanding
shares of common stock of the Company or (y) the then outstanding
voting securities entitled to vote generally in the election of
directors; or
(ii) the date the individuals who constitute the Board as of the
date of this Agreement (the "Incumbent Board") cease for any reason
to constitute at least a majority of the members of the Board,
provided that any individual becoming a director subsequent to the
effective date of this Agreement whose election, or nomination for
election by thc Company's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent
Board (other than any individual whose nomination for election to
Board membership was not endorsed by the Company's management prior
to, or at the time of, such individual's initial nomination for
election) shall be, for purposes of this Agreement, considered as
though such person were a member of the Incumbent Board; or
(iii) the consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of all or a
substantial portion of the Company's assets, a reverse stock split
of outstanding voting securities, the issuance of shares of stock of
the Company in connection with the acquisition of the stock or
assets of another entity, provided, however, that a Change in
Control shall not occur under this clause (iii) if consummation of
the transaction would result in at least 50% of the total voting
power represented by the voting securities of the Company (or, if
not the Company, the entity that succeeds to all or substantially
all of the Company's business) outstanding immediately after such
transaction being beneficially owned (within the meaning of Rule
13d-3 promulgated pursuant to the Exchange Act) by at least 50% of
the holders of outstanding voting securities of the Company
immediately prior to the transaction, with the voting power of each
such continuing holder relative to other such continuing holders not
substantially altered in the transaction.
(d) "Disability" shall mean the permanent and total disability of
Xxxxxxxx as defined in Section 22(e)(3) of the Code.
(e) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time. References to any provision of the
Exchange Act shall be deemed to include rules thereunder and successor
provisions and rules thereto.
(f) "Plan" shall mean the 1999 Stock Option Plan of Guardian
International, Inc.
(g) "Termination for Cause" or "Terminate for Cause" shall mean the
termination of Xxxxxxxx'x employment by, or service to, the Company
because Xxxxxxxx (i) engaged in one or more acts constituting a felony;
(ii) willfully engaged in one or more acts involving actual fraud; or
(iii) willfully misappropriated Company assets or willfully engaged in
misconduct either of which is materially injurious to the Company or
its affiliates. For purposes of this Agreement, the term "willful"
means an act done, or omitted to be done, in bad faith, provided that
Xxxxxxxx knew or reasonably should have known that the act or omission
was not in the best interest of the Company.
(h) "Termination Without Cause" or "Terminate Without Cause" shall
mean that the termination of Xxxxxxxx'x service occurred for a reason
other than Termination for Cause, death or Disability.
2. Termination Without Cause. In the event of the termination of
Xxxxxxxx'x service as a member of the Company's Board other than as a
Termination for Cause (and other than by death or Disability), the Company shall
pay or provide to Xxxxxxxx the following:
(a) a payment calculated as the product of (i) a ratio, the
numerator of which is the number of Xxxxxxxx'x shares subject to the
Lock-up Agreement (i.e., the number of shares not released from the
Lock-up Agreement) at the time of his termination pursuant to this
Section 2 and the denominator of which is 639,596; and (ii) five
hundred fifty thousand dollars ($550,000); such payment to be made in a
lump sum within 30 days following the date of Xxxxxxxx'x termination;
and
(b) with respect to any Award granted to Xxxxxxxx pursuant to the
Plan and/or pursuant to the non-Plan Stock Option Agreement dated
October 15, 1997, which is subject to future vesting and/or other
restrictions regarding the exercisability or full enjoyment of the
Award as of the date of Xxxxxxxx'x termination (if any), then,
notwithstanding the terms of the Plan or the certificate evidencing the
Award thereunder, the continued vesting or lapse of restrictions with
respect to such Award shall not cease with reference to such
termination, but shall continue during the duration of the term of the
Award in accordance with the schedule set forth in the certificate
evidencing such Award as if Xxxxxxxx'x service to the Company had
continued throughout such vesting and/or lapse of restriction period.
In addition, with respect to each Award granted to Xxxxxxxx pursuant to
the Plan or pursuant to the non-Plan Stock Option Agreement dated
October 15, 1997, (whether or not fully vested or free of restrictions
at the time of termination or resignation hereunder), the
exercisability and the full enjoyment of such Award shall not terminate
with reference to such termination, but shall be extended for the
duration of the entire term of the Award in accordance with the Plan
and/or non-Plan Stock Option Agreement dated October 15, 1997, and/or
the certificate evidencing such Award as if Xxxxxxxx'x service to the
Company had continued during such entire term, notwithstanding the
terms of the Plan or non-Plan Stock Option Agreement or the certificate
evidencing the Award thereunder;
(c) Notwithstanding the provisions of Sections 2(a) and (b) herein,
Xxxxxxxx shall be entitled to the payments provided for in this Section
2 only if Xxxxxxxx remains a party to the Lock-up Agreement at the time
of the termination of Xxxxxxxx'x service as a member of the Company's
Board for a reason other than Termination for Cause.
3. Termination for Death. In the event of the termination of service by
Xxxxxxxx by reason of his death, no amount shall be payable to Xxxxxxxx'x
designated beneficiary or estate. With respect to any Award granted to Xxxxxxxx
pursuant to the Plan, in the event that such Award is subject to future vesting
or other restrictions regarding the exercisability or full enjoyment of the
Award as of the date of Xxxxxxxx'x death, then, notwithstanding the terms of the
Award Agreement, all restrictions thereon shall immediately lapse, and each such
Award shall be deemed immediately and fully vested and exercisable under the
Plan by Xxxxxxxx'x designated beneficiary or estate, as of the date of such
death, for a period of 365 days from the date of Xxxxxxxx'x death.
4. Termination for Cause or Disability. In the event of Xxxxxxxx'x
Termination for Cause or as a result of Disability, only the benefit set forth
in paragraph (b) of Section 2 shall be given to Xxxxxxxx.
5. Termination or Resignation in connection with a Change in Control.
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(a) Notwithstanding the provisions of Sections 2 and 4, in the event
of the termination of the employment of Xxxxxxxx for any reason other
than death, whether initiated by the Company with or without Cause, or
initiated by Xxxxxxxx, which termination occurs within the one year
period following the date of a Change in Control, then Xxxxxxxx shall
be entitled to receive the amount set forth in Section 2(a) and the
benefit described in Section 2(b).
(b) Notwithstanding the provisions of Section 2, in the event of the
resignation or termination of the employment of Xxxxxxxx for any
reason, and such resignation or termination occurs within the four
month period (i) prior to the date of a Change in Control, (ii)
following commencement (within the meaning of Rule 14d-2 as promulgated
under the Exchange Act) of a "tender offer" for stock of the Company
subject to Section 14(d)(2) of the Exchange Act, which if consummated,
would result in an acquisition described in clause (i) of Section l(c),
(iii) following the execution by the Company of an agreement the
consummation of which would constitute a Change in Control, (iv)
following the solicitation of proxies for the election of directors by
anyone other than the Company, or (v) following the approval by the
Company's stockholders of any transaction described in Section
1(c)(iii), then,
(x) Xxxxxxxx shall be entitled to receive the amounts and
benefits specified in Section 5(a); and
(y) with respect to any Award granted to Xxxxxxxx pursuant to
the Plan or the non-Plan Stock Option Agreement dated October 15,
1997, in the event that such Award is subject to future vesting or
other restrictions regarding the exercisability or full enjoyment of
the Award as of the date of such resignation or termination, then,
notwithstanding the terms of the Award Agreement, the accelerated
vesting and lapse of restriction provisions set forth in Section 4
of the Plan or the non-Plan Stock Option Agreement dated October 15,
1997 shall bc applicable with respect to such Awards as if a Change
in Control had occurred on the date of such resignation or
termination.
Amounts and benefits payable by reason of clause (b)(i) of this Section 5 shall
be paid within ten days following the date of the Change in Control, but shall
be offset by any amounts previously paid pursuant to Section 2.
(c) Notwithstanding the provisions of Sections 5(a) and (b) herein,
Xxxxxxxx shall be entitled to the payments provided for in this Section
5 only if Xxxxxxxx remains a party to the Lock-up Agreement at the time
of the termination of Xxxxxxxx'x service as a member of the Company's
Board in connection with a Change of Control.
6. Certain Taxes. The Company shall have the right to deduct from any
amounts payable under this Agreement an amount necessary to satisfy its
obligation, under applicable laws, to withhold income or other taxes of Xxxxxxxx
attributable to payments made hereunder.
7. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights. Xxxxxxxx shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Xxxxxxxx as the result of employment by another employer after the date of
resignation or termination, or otherwise. The provisions of this Agreement, and
any payment provided for hereunder, shall not reduce any amounts otherwise
payable, or in any way diminish Xxxxxxxx'x existing rights, or rights Xxxxxxxx
may acquire in the future, under any employee incentive plan, employment
agreement or other plan or arrangement.
8. Indemnification. The Company shall indemnify, retroactively to the
date of the event giving rise to a Proceeding, Xxxxxxxx within 60 days after
receipt of a request therefor against all judgments, fines, settlements,
payments and expenses, including reasonable attorneys' fees, paid or incurred in
connection with any claim, action, suit or proceeding, civil, criminal,
administrative or investigatory ("Proceeding"), to which Xxxxxxxx may be made a
party or with which he may be threatened by reason of his being or having been
an employee, officer or director of the Company or, at the Company's request, an
employee, officer or director of any other corporation, firm, association or
other organization (excluding Western Resources, Inc. and Protection One, Inc.
and any affiliates of those two companies), or by reason of any action or
omission by Xxxxxxxx in such capacity, whether or not Xxxxxxxx continues to hold
such position or act in such capacity at the time of incurring such expenses or
at the time the indemnification is made, other than in connection with actions
taken by Xxxxxxxx which constitute gross negligence in the performance of his
duties for the Company which Xxxxxxxx has undertaken without the reasonable good
faith belief that such actions were in the best interest of the Company. The
foregoing right of indemnification shall not be exclusive of other rights to
which Xxxxxxxx may otherwise be entitled. The Company shall pay the reasonable
expenses (including reasonable attorneys' fees) incurred by Xxxxxxxx in
defending any Proceeding in advance of the final disposition thereof. The
Company shall advance all such expenses by or on behalf of Xxxxxxxx within 15
days after receipt of his request therefor, accompanied or preceded by
reasonable evidence of such expenses. Xxxxxxxx will also be named as an insured
under any directors and officers or similar insurance policy that the Company
may purchase.
9. Successor to the Company. The Company will require any successor or
assign (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substance satisfactory to Xxxxxxxx, expressly,
absolutely and unconditionally to assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession or assignment had taken place. For purposes of
clarity, any failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a material breach of
this Agreement. As used in this Agreement, the term "Company" shall mean the
Company as hereinbefore defined and any successor or assign to its business
and/or assets as aforesaid which executes and delivers the agreement provided
for in this Section 9 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
10. Enforcement.
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(a) This Agreement shall inure to the benefit of and be enforceable
by Xxxxxxxx'x personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If Xxxxxxxx should die while any amounts are still payable to him
hereunder, all such amounts shall be paid in accordance with the terms
of this Agreement to Xxxxxxxx'x estate or beneficiary.
(b) In the event that the Company shall fail or refuse to make
payment of any amounts due Xxxxxxxx hereunder within the appropriate
time period, the Company shall pay to Xxxxxxxx, in addition to the
payment of any other sums provided in this Agreement, interest,
compounded daily, on any amount remaining unpaid from the date payment
is required until paid to Xxxxxxxx, at the rate from time to time
announced by Chase Manhattan Bank as its "prime rate" plus 2%, each
change in such rate to take effect on the effective date of the change
in such prime rate.
(c) The Company shall pay all reasonable fees and expenses
(including attorneys' fees) that Xxxxxxxx may incur as a result of the
Company's contesting the validity, enforceability, or Xxxxxxxx'x
interpretation of, this Agreement (regardless of the outcome of any
litigation to enforce this Agreement).
11. Non-Competition.
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(a) Xxxxxxxx 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
Xxxxxxxx. Accordingly, Xxxxxxxx agrees that, in consideration of this
Agreement and the payments to be received by him hereunder in the event
the occurrence of certain actions as specified herein, Xxxxxxxx will
not (i) from and after the date hereof through the period during which
Xxxxxxxx continues to serve as a member of the Board of Directors of
the Company (the "Service Period"), and (ii) in the event of Xxxxxxxx'x
termination or resignation hereunder pursuant to the provisions set
forth in Sections 2, 4 and 5 hereof, for the one-year period thereafter
(the "Non-Competition Period"), 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 business or organization in any part of the
United States in which the Company sells products or provides services,
which Competes with the Company (as hereinafter defined), except with
the Company's prior written consent. Notwithstanding the provisions in
this paragraph, this Section 11 shall not prohibit Xxxxxxxx'x
Participation at or with Protection One, Inc, a Delaware corporation
("Protection One"), or an affiliate of Protection One in any capacity.
For purposes of this Agreement, a business or organization shall be
deemed to "Compete with the Company" if such business or entity is
engaged in the residential and/or commercial security business, and the
residential and/or commercial security business constitutes the
majority of such business or organization's business operations;
provided, however, that with respect to a business or organization in
which the residential and/or commercial security business constitutes
less than the majority of such business or organization's business
operations, Xxxxxxxx shall be prohibited hereunder from Participating
in the division, segment or other portion of such business or entity
which is engaged in the residential and/or commercial security business
during the Non-Competition Period. Nothing in this paragraph shall
prohibit Xxxxxxxx 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, provided that there shall be no
limitation on the percentage of ownership of the Company or any
successor thereto that may be owned by Xxxxxxxx hereunder.
Notwithstanding anything which may be to the contrary herein, Xxxxxxxx
shall not be required to cease Participation in any business or
organization which begins to Compete with the Company subsequent to the
time when Xxxxxxxx commences such Participation, provided that such
business or organization began to Compete with the Company through no
action, assistance, or plan of Xxxxxxxx.
(b) It is the desire and intent of the parties that the provisions
of Section 11 of this Agreement shall be enforced under the laws and
public policies applied in each jurisdiction in which enforcement is
sought. Accordingly, if any particular provision of Section 11 of this
Agreement 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.
(c) In the event of a breach or threatened breach by Xxxxxxxx of the
provisions of Section 1 l(a), in addition to other remedies available
to the Company at law (the amount of which shall be limited by this
Section 11 (c)) or in equity, the Company shall be entitled to a
temporary or permanent injunction or injunctions, or temporary
restraining orders or orders to prevent breaches thereof, in each case,
without the need to post any security or bond. All remedies available
for breach of this Agreement are cumulative, and the pursuit of any
remedy shall not be construed as an election of such remedy or as
prohibiting the Company from or limiting the Company in pursuing any
other remedies available for any breach or threatened breach of this
Agreement. The parties hereto agree and stipulate in advance that in
any action brought by or on behalf of the Company to recover damages
against Xxxxxxxx for a breach of the provisions of Section 11(a)
hereof, the maximum damages that may be awarded in the event that
Xxxxxxxx is ultimately adjudged to have breached such provisions shall
be limited to Xxxxxxxx'x most recent annual salary multiplied by a
fraction, the numerator of which shall be the number of full months
that Xxxxxxxx was finally adjudged to have been in breach of this
covenant, and the denominator of which shall be twelve.
12. Confidentiality.
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(a) Xxxxxxxx acknowledges that the Company will be engaged in a
business involving Confidential Information (as hereinafter defined)
that is proprietary to the Company. In addition, Xxxxxxxx acknowledges
that through his services as a member of the Board of Directors of the
Company, he will have access to, and will acquire or assist in the
development of, Confidential Information regarding the Company and its
technologies, customers and plans, the disclosure of which to others
would cause the Company to suffer substantial damage. In consideration
of the obligations undertaken by the Company as set forth herein,
Xxxxxxxx will not, at any time during or after the Service Period,
publish, disclose or use, or authorize any other person or entity to
publish, disclose or use, any Confidential Information of or about the
Company of which Xxxxxxxx has already become, or becomes, aware or
informed during his services with the Company, whether or not developed
by him, except (i) as required by law (including but not limited to
judicial or administrative process), (ii) in the performance of
Xxxxxxxx'x duties for the Company, or (iii) in the event that the
Confidential Information becomes generally known to the public through
no actions (either directly or indirectly) of Xxxxxxxx. For purposes
hereof, the term "Confidential Information" shall include, without
limitation, matters of a technical nature, "know-how," formulas, secret
processes, works of authorship, computer programs, materials, patent
applications, new product plans, technical improvements, test data,
progress reports and research projects, and matters of a business
nature, such as business plans, prospects, financial information,
marketing plans and strategies, proprietary information about costs,
profits, markets, sales, lists of customers and suppliers of the
Company, procurement and promotional information, credit and financial
data concerning customers or suppliers of the Company, information
relating to the management and operation of the Company, and other
information of a similar nature to the extent not available to the
public.
13. Non-Solicitation. During (a) the Service Period, and (b) in the
event of Xxxxxxxx'x termination or resignation hereunder pursuant to the
provisions set forth in Sections 2, 4 and 5 hereof, for the two-year period
thereafter (the "Non-Solicitation Period"), Xxxxxxxx shall not, directly or
indirectly (i) solicit, entice or induce any individual that currently (i.e.,
currently at the time of any such restricted action during the Non-Solicitation
Period) is an employee of the Company to become employed by any individual,
business or entity other than the Company, or (ii) approach any such employee
for such purpose.
14. Termination of All Prior Severance and Employment Agreements. All
prior Severance and Employment Agreements between Xxxxxxxx and the Company are
hereby terminated, and shall be considered null and void as of the date first
above written.
15. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company:
Guardian International, Inc.
0000 X. 00xx Xxxxxxx
Xxxxxxxxx, XX 00000
If to Xxxxxxxx:
Xxxxxxx Xxxxxxxx
XX Xxx 000000
Xxxxx, XX 00000-0000
or 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.
16. Modifications and Waivers. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by any party hereto
at any time 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 to be a waiver of similar or dissimilar provision or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
17. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
[Signature pages follow]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
GUARDIAN INTERNATIONAL, INC.
By: /s/ XXXXXX X. XXXXX
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President and Chief Financial
Officer
XXXXXXX XXXXXXXX
/s/ XXXXXXX XXXXXXXX
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EXHIBIT A
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EXECUTION COPY
SEVERANCE AGREEMENT
SEVERANCE AGREEMENT, dated as of the 19th day of January, 2000 (this
"Agreement"), among Guardian International, Inc., a Florida corporation (the
"Company"), and Xxxxxxx Xxxxxxxx (the "Executive").
WITNESSETH
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WHEREAS, the Board of Directors of thc Company (the "Board") has
determined that it is appropriate and in the best interests of the Company and
its stockholders to reinforce and encourage the continued attention and
dedication of members of the Company's management, including the Executive, to
their assigned duties; and
WHEREAS, the Executive is a party to the "Employment Agreement" with
the Company, dated as of October 21, 1997 (the "Prior Employment Agreement");
and
WHEREAS, the Company and the Executive desire that the Prior Employment
Agreement be terminated, and that the terms and conditions set forth herein
apply to the Executive in connection with his employment with the Company from
and after the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained and in further consideration of services to be performed by the
Executive for the Company, the Company and the Executive do hereby agree as
follows:
1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Award" shall mean any award granted pursuant to the terms
of the Plan and pursuant to the non-Plan Stock Option Agreement dated
October 15, 1997, including but not limited to stock options, stock
appreciation rights ("SARs") (including Limited SARs), restricted
stock, deferred stock, stock granted as a bonus or in lieu of other
awards, dividend equivalents, and other stock-based awards.
(b) "Cause" shall mean: (i) the willful and continued failure
by the Executive to substantially perform his duties for the Company
(other than any such failure resulting from the Executive's incapacity
due to physical or mental illness, or any such actual or anticipated
failure after the Executive announces his intention to resign for Good
Reason), and such failure is not cured by the Executive within seven
days from the date the Company notifies the Executive thereof, (ii) the
willful engaging by the Executive in misconduct which is materially and
financially injurious to the Company, or (iii) the Executive's
conviction of a felony. No act, or failure to act, on the Executive's
part shall be considered "willful" unless done, or omitted to be done,
by him not in good faith and without reasonable belief that his action
or omission was in the best interest of the Company.
(c) "Change in Control" shall be deemed to have occurred upon:
(i) the date of the acquisition by any "person"
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act), excluding the Company or any of its
subsidiaries or affiliates or any employee benefit plan
sponsored by any of the foregoing, of beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of
50% or more of either (x) the then outstanding shares of
common stock of the Company or (y) the then outstanding voting
securities entitled to vote generally in the election of
directors; or
(ii) the date the individuals who constitute the
Board as of the date of this Agreement (the "Incumbent Board")
cease for any reason to constitute at least a majority of the
members of the Board, provided that any individual becoming a
director subsequent to the effective date of this Agreement
whose election, or nomination for election by thc Company's
stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board (other than
any individual whose nomination for election to Board
membership was not endorsed by the Company's management prior
to, or at the time of, such individual's initial nomination
for election) shall be, for purposes of this Agreement,
considered as though such person were a member of the
Incumbent Board; or
(iii) the consummation of a merger, consolidation,
recapitalization, reorganization, sale or disposition of all
or a substantial portion of the Company's assets, a reverse
stock split of outstanding voting securities, the issuance of
shares of stock of the Company in connection with the
acquisition of the stock or assets of another entity,
provided, however, that a Change in Control shall not occur
under this clause (iii) if consummation of the transaction
would result in at least 50% of the total voting power
represented by the voting securities of the Company (or, if
not the Company, the entity that succeeds to all or
substantially all of the Company's business) outstanding
immediately after such transaction being beneficially owned
(within the meaning of Rule 13d-3 promulgated pursuant to the
Exchange Act) by at least 50% of the holders of outstanding
voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing
holder relative to other such continuing holders not
substantially altered in the transaction.
(d) "Disability" shall mean the Executive's incapacity due to
physical or mental illness to substantially perform his duties on a
full-time basis for six consecutive months; provided, however, that if
the Executive shall not agree with a determination to terminate him
because of Disability, the question of the Executive's Disability shall
be subject to the certification of a qualified medical doctor agreed to
by the Company and the Executive or, in the event of the Executive's
incapacity to designate a doctor, the Executive's legal representative.
In the absence of agreement between the Company and the Executive (or
the Executive's representative, as the case may be), each party shall
nominate a qualified medical doctor and the two doctors shall select a
third doctor, who shall make the determination as to Disability.
(e) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time. References to any provision of the
Exchange Act shall be deemed to include rules thereunder and successor
provisions and rules thereto.
2
(f) "Good Reason" shall mean (i) the assignment to the
Executive by the Company of duties inconsistent with the Executive's
position, duties, responsibilities and status with the Company as in
effect on the date of this Agreement or such later date on which the
Executive agrees in writing to a change in such position, duties,
responsibilities and/or status, or any removal of the Executive from or
any failure to reelect the Executive to any of such positions; or (ii)
any reduction by the Company in the Executive's base salary as in
effect on thc date hereof or as the same may be increased from time to
time; or (iii) any failure by the Company to continue in effect as to
the Executive, without a substantially comparable replacement, any
material compensation or benefit plan or program in which the Executive
was participating; or (iv) any attempted relocation of the Executive's
place of employment to a location more than 50 miles from the location
of such employment on the date of such attempted relocation; or (v) any
material breach by the Company of any provision of this Agreement. The
Executive shall not be deemed to have resigned for Good Reason
hereunder without (i) written notice by the Executive to the Company
setting forth the reasons for the Executive's intention to resign for
Good Reason, and (ii) an opportunity for the Company to cure the
reasons which give rise to such claim within seven (7) after the date
of such written notice.
(g) "Plan" shall mean the 1999 Stock Option Plan of Guardian
International, Inc.
2. Termination Without Cause or Resignation with Good Reason. In
the event of (i) the termination of the employment of the Executive without
Cause (for any reason other than by death or Disability) or (ii) the resignation
of the Executive from the Company for Good Reason, the Company shall pay or
provide to the Executive the following:
(a) any earned and accrued but unpaid installment of base
salary through the date of the Executive's resignation or termination
at the rate in effect at the time of such resignation or termination
(or, if greater, immediately prior to the occurrence of an event that
constitutes Good Reason) and all other unpaid amounts to which the
Executive is entitled as of such date under any compensation plan or
program of the Company, including, without limitation, all accrued
vacation time; such payments to be made in a lump sum within 30 days
following the date of resignation or termination; and
(b) in lieu of any further salary payments to the Executive
for periods subsequent to his date of resignation or termination, an
amount equal to the sum of (i) the greater of two hundred thousand
dollars ($200,000) or the Executive's annual base salary in effect
immediately prior to the occurrence of an event that constitutes Good
Reason, and (ii) the average of the annual bonus amounts that were
earned by the Executive as bonus compensation from the Company for the
most recent three years in which bonuses were paid to the Executive
which occurred prior to the year in which the Executive's resignation
or termination occurred; such payment to be made in a lump sum within
30 days following the date of Executive's resignation or termination;
and
(c) the Company shall maintain in full force and effect for
one year following the date of the Executive's resignation or
termination, for the continued benefit of the Executive, all employee
welfare benefit plans and perquisite programs in which the Executive
was entitled to participate immediately prior to the Executive's
resignation or termination, provided that the Executive's continued
participation is possible under the general terms and provisions of
such plans and programs. In the event that the Executive's
participation in any such plan or program is barred, the Company shall,
at its sole cost and expense, arrange to provide the Executive with
benefits substantially similar to those which the Executive would
otherwise have been entitled to receive under such plans and programs
from which his continued participation is barred; and
3
(d) with respect to any Award granted to the Executive
pursuant to the Plan and/or pursuant to the non-Plan Stock Option
Agreement dated October 15, 1997, which is subject to future vesting
and/or other restrictions regarding the exercisability or full
enjoyment of the Award as of the date of the Executive's resignation or
termination (if any), then, notwithstanding the terms of the Plan or
the certificate evidencing the Award thereunder, the continued vesting
or lapse of restrictions with respect to such Award shall not cease
with reference to such termination or resignation, but shall continue
during the duration of the term of the Award in accordance with the
schedule set forth in the certificate evidencing such Award as if the
Executive's employment with the Company had continued throughout such
vesting and/or lapse of restriction period. In addition, with respect
to each Award granted to the Executive pursuant to the Plan or pursuant
to the non-Plan Stock Option Agreement dated October 15, 1997, (whether
or not fully vested or free of restrictions at the time of termination
or resignation hereunder), the exercisability and the full enjoyment of
such Award shall not terminate with reference to such termination or
resignation, but shall be extended for the duration of the entire term
of the Award in accordance with the Plan and/or non-Plan Stock Option
Agreement dated October 15, 1997, and/or the certificate evidencing
such Award as if the Executive's employment with the Company had
continued during such entire term, notwithstanding the terms of the
Plan or non-Plan Stock Option Agreement or the certificate evidencing
the Award thereunder.
3. Termination for Death. In the event of the termination of the
employment of the Executive by reason of his death, the Company shall pay to the
Executive's designated beneficiary or estate the amounts set forth in paragraphs
(a) and (b) of Section 2 above, pursuant to which the date of the Executive's
death shall be considered the date of his termination thereunder. In addition,
with respect to any Award granted to the Executive pursuant to the Plan, in the
event that such Award is subject to future vesting or other restrictions
regarding the exercisability or full enjoyment of the Award as of the date of
the Executive's death, then, notwithstanding the terms of the Plan or the Award
Agreement thereunder, all restrictions thereon shall immediately lapse, and each
such Award shall be deemed immediately and fully vested and exercisable under
the Plan, as of the date of such death.
4. Termination for Cause or Disability or Resignation without
Good Reason. In the event of the Executive's termination of employment for Cause
or Disability or his resignation without Good Reason, only the amount set forth
in paragraph (a) of Section 2 shall be payable to the Executive, except that, in
the case of the Executive's termination for Disability hereunder, the Executive
shall also receive the benefits set forth in Section 2(d) hereof. Other than in
the case of the Executive's conviction of a felony, the Executive shall not be
deemed to have been terminated for Cause by the Company hereunder without (i)
notice to the Executive setting forth the reasons for the Company's intention to
terminate the Executive for Cause, (ii) an opportunity for the Executive,
together with his counsel, to be heard before the Board, and (iii) delivery to
the Executive of written notice from the Board finding that in the reasonable
good faith opinion of the Board, the Executive was guilty of conduct set forth
in the definition of Cause in Section 1 hereof, and specifying the particulars
thereof in detail.
5. Termination or Resignation in connection with a Change in
Control.
4
(a) Notwithstanding the provisions of Sections 2 and 4, in the
event of the termination of the employment of the Executive for any
reason other than death, whether initiated by the Company with or
without Cause, or initiated by the Executive with or without Good
Reason, which termination occurs within the one year period following
the date of a Change in Control, then, in lieu of the amounts and
benefits specified in Sections 2 and 4, the Executive shall be entitled
to receive (i) the amount set forth in Section 2(a), (ii) the amount
set forth in Section 2(b), and (iii) the benefits provided for in
Section 2(c).
(b) Notwithstanding the provisions of Section 2, in the event
of the resignation or termination of the employment of the Executive
for any reason specified therein, and such resignation or termination
occurs within the four month period (i) prior to the date of a Change
in Control, (ii) following commencement (within the meaning of Rule
14d-2 as promulgated under the Exchange Act) of a "tender offer" for
stock of the Company subject to Section 14(d)(2) of the Exchange Act,
which if consummated, would result in an acquisition described in
clause (i) of Section l(b), (iii) following the execution by the
Company of an agreement the consummation of which would constitute a
Change in Control, (iv) following the solicitation of proxies for the
election of directors by anyone other than the Company, or (v)
following the approval by the Company's stockholders of any transaction
described in Section 1(b)(iii), then, in lieu of the amounts and
benefits specified in Section 2:
(x) the Executive shall be entitled to receive the amounts and
benefits specified in Section 5(a), and
(y) with respect to any Award granted to the Executive
pursuant to the Plan or the non-Plan Stock Option Agreement
dated October 15, 1997, in the event that such Award is
subject to future vesting or other restrictions regarding the
exercisability or full enjoyment of the Award as of the date
of such resignation or termination, then, notwithstanding the
terms of the Plan or the Award Agreement thereunder, the
accelerated vesting and lapse of restriction provisions set
forth in Section 4 of the Plan or the non-Plan Stock Option
Agreement dated October 15, 1997 shall bc applicable with
respect to such Awards as if a Change in Control had occurred
on the date of such resignation or termination.
Amounts and benefits payable by reason of clause (b)(i) of this Section 5 shall
be paid within ten days following the date of the Change in Control, but shall
be offset by any amounts previously paid pursuant to Section 2.
6. Certain Taxes. The Company shall have the right to deduct from
any amounts payable under this Agreement an amount necessary to satisfy its
obligation, under applicable laws, to withhold income or other taxes of the
Executive attributable to payments made hereunder.
7. No Obligation to Mitigate Damages: No Effect on Other
Contractual Rights. The Executive shall not be required to mitigate damages or
the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the date of resignation or
termination, or otherwise. The provisions of this Agreement, and any payment
provided for hereunder, shall not reduce any amounts otherwise payable, or in
any way diminish the Executive's existing rights, or rights the Executive may
acquire in the future, under any employee benefit plan, incentive plan,
employment agreement or other contract, plan or arrangement.
5
8. Indemnification. The Company shall indemnify the Executive
within 60 days after receipt of a request therefor against all judgments, fines,
settlements, payments and expenses, including reasonable attorneys' fees, paid
or incurred in connection with any claim, action, suit or proceeding, civil,
criminal, administrative or investigatory ("Proceeding"), to which the Executive
may be made a party or with which he may be threatened by reason of his being or
having been an employee, officer or director of the Company or, at the Company's
request, an employee, officer or director of any other corporation, firm,
association or other organization, or by reason of any action or omission by the
Executive in such capacity, whether or not the Executive continues to hold such
position or act in such capacity at the time of incurring such expenses or at
the time the indemnification is made, other than in connection with actions
taken by the Executive which constitute gross negligence in the performance of
his duties for the Company which the Executive has undertaken without the
reasonable good faith belief that such actions were in the best interest of the
Company. The foregoing right of indemnification shall not be exclusive of other
rights to which the Executive may otherwise be entitled. The Company shall pay
the reasonable expenses (including reasonable attorneys' fees) incurred by the
Executive in defending any Proceeding in advance of the final disposition
thereof. The Company shall advance all such expenses by or on behalf of the
Executive within 15 days after receipt of his request therefor, accompanied or
preceded by reasonable evidence of such expenses. The Executive will also be
named as an insured under any directors and officers or similar insurance policy
that the Company may purchase.
9. Successor to the Company. The Company will require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to the
Executive, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or assignment had
taken place. For purposes of clarity, any failure of the Company to obtain such
agreement prior to the effectiveness of any such succession or assignment shall
be a material breach of this Agreement and shall entitle the Executive to
terminate the Executive's employment for Good Reason. As used in this Agreement,
the term "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid which executes
and delivers the agreement provided for in this Section 9 or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
10. Enforcement.
(a) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If the Executive should die while any amounts are still
payable to him hereunder, all such amounts shall be paid in accordance
with the terms of this Agreement to the Executive's estate or
beneficiary.
(b) In the event that the Company shall fail or refuse to make
payment of any amounts due the Executive hereunder within the
appropriate time period, the Company shall pay to the Executive, in
addition to the payment of any other sums provided in this Agreement,
interest, compounded daily, on any amount remaining unpaid from the
date payment is required until paid to the Executive, at the rate from
time to time announced by Chase Manhattan Bank as its "prime rate" plus
2%, each change in such rate to take effect on the effective date of
the change in such prime rate.
6
(c) The Company shall pay all reasonable fees and expenses
(including attorneys' fees) that the Executive may incur as a result of
the Company's contesting the validity, enforceability, or the
Executive's interpretation of, this Agreement (regardless of the
outcome of any litigation to enforce this Agreement).
11. Non-Competition.
(a) The 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 the Executive. Accordingly, the Executive agrees that, in
consideration of this Agreement and the payments to be received by him
hereunder in the event the occurrence of certain actions as specified
herein, the Executive will not (i) from and after the date hereof
through the period during which the Executive continues to be employed
by the Company (the "Employment Period"), and (ii) in the event of the
Executive's termination or resignation hereunder pursuant to the
provisions set forth in Sections 2 and 4 hereof, for the one-year
period thereafter (the "Non-Competition Period"), 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 business or organization
in any part of the United States in which the Company sells products or
provides services, which Competes with the Company (as hereinafter
defined), except with the Company's prior written consent. For purposes
of this Agreement, a business or organization shall be deemed to
"Compete with the Company" if such business or entity is engaged in the
residential and/or commercial security business, and the residential
and/or commercial security business constitutes the majority of such
business or organization's business operations; provided, however, that
with respect to a business or organization in which the residential
and/or commercial security business constitutes less than the majority
of such business or organization's business operations, the Executive
shall be prohibited hereunder from Participating in the division,
segment or other portion of such business or entity which is engaged in
the residential and/or commercial security business during the
Non-Competition Period. Nothing in this paragraph shall prohibit the
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, provided that there shall be no limitation on
the percentage of ownership of the Company or any successor thereto
that may be owned by the Executive hereunder. Notwithstanding anything
which may be to the contrary herein, the 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 the
Executive commences such Participation, provided that such business or
organization began to Compete with the Company through no action,
assistance, or plan of the Executive.
(b) It is the desire and intent of the parties that the
provisions of Section 11 of this Agreement shall be enforced under the
laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision of
Section 11 of this Agreement 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.
7
(c) In the event of a breach or threatened breach by the
Executive of the provisions of Section 1 l(a), in addition to other
remedies available to the Company at law (the amount of which shall be
limited by this Section 11 (c)) or in equity, the Company shall be
entitled to a temporary or permanent injunction or injunctions, or
temporary restraining orders or orders to prevent breaches thereof, in
each case, without the need to post any security or bond. All remedies
available for breach of this Agreement are cumulative, and the pursuit
of any remedy shall not be construed as an election of such remedy or
as prohibiting the Company from or limiting the Company in pursuing any
other remedies available for any breach or threatened breach of this
Agreement. The parties hereto agree and stipulate in advance that in
any action brought by or on behalf of the Company to recover damages
against the Executive for a breach of the provisions of Section 11(a)
hereof, the maximum damages that may be awarded in the event that the
Executive is ultimately adjudged to have breached such provisions shall
be limited to the Executive's most recent annual salary multiplied by a
fraction, the numerator of which shall be the number of full months
that the Executive was finally adjudged to have been in breach of this
covenant, and the denominator of which shall be twelve.
12. Confidentiality. The Executive acknowledges that the Company
will be engaged in a business involving Confidential Information (as hereinafter
defined) that is proprietary to the Company. In addition, the Executive
acknowledges that through employment with the Company, he will have access to,
and will acquire or assist in the development of, Confidential Information
regarding the Company and its technologies, customers and plans, the disclosure
of which to others would cause the Company to suffer substantial damage. In
consideration of the obligations undertaken by the Company as set forth herein,
the Executive will not, at any time during or after the Employment Period,
publish, disclose or use, or authorize any other person or entity to publish,
disclose or use, any Confidential Information of or about the Company of which
the Executive has already become, or becomes, aware or informed during his
employment with the Company, whether or not developed by him, except (i) as
required by law (including but not limited to judicial or administrative
process), (ii) in the performance of the Executive's duties for the Company, or
(iii) in the event that the Confidential Information becomes generally known to
the public through no actions (either directly or indirectly) of the Executive.
For purposes hereof, the term "Confidential Information" shall include, without
limitation, matters of a technical nature, "know-how," formulas, secret
processes, works of authorship, computer programs, materials, patent
applications, new product plans, technical improvements, test data, progress
reports and research projects, and matters of a business nature, such as
business plans, prospects, financial information, marketing plans and
strategies, proprietary information about costs, profits, markets, sales, lists
of customers and suppliers of the Company, procurement and promotional
information, credit and financial data concerning customers or suppliers of the
Company, information relating to the management and operation of the Company,
and other information of a similar nature to the extent not available to the
public.
8
13. Non-Solicitation. During (a) the Employment Period, and (b) in
the event of the Executive's termination or resignation hereunder pursuant to
the provisions set forth in Sections 2 and 4 hereof, for the two-year period
thereafter (the "Non-Solicitation Period"), the Executive shall not, directly or
indirectly (i) solicit, entice or induce any individual that currently (i.e.,
currently at the time of any such restricted action during the Non-Solicitation
Period) is an employee of the Company to become employed by any individual,
business or entity other than the Company, or (ii) approach any such employee
for such purpose, or authorize or participate or assist with the taking of such
actions by any other individual, business or entity.
14. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If to the Company:
Guardian International, Inc.
0000 X. 00xx Xxxxxxx
Xxxxxxxxx, XX 00000
If to the Executive:
Xxxxxxx Xxxxxxxx
XX Xxx 000000
Xxxxx, XX 00000-0000
or 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.
15. Modifications and Waivers. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing signed by the parties hereto. No waiver by any party
hereto at any time 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 to be a waiver of similar or dissimilar provision or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida.
16. Validity. The invalidity or unenforceability of any provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
17. Termination of Prior Severance Agreement. The Prior Employment
Agreement is hereby terminated, and shall be considered null and void as of the
date first above written.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
GUARDIAN INTERNATIONAL, INC.
By: /s/ XXXXXX XXXXXXXX
Name: Xxxxxx Xxxxxxxx
-------------------------
Title: Chairman of the Board
-----------------------
XXXXXXX XXXXXXXX
/s/ XXXXXXX XXXXXXXX
--------------------
9
EXHIBIT B
---------
27 April 2001
Xxxxxxx Xxxxxxxx
Guardian International, Inc.
0000 X. 00xx Xxxxxxx
Xxxxxxxxx, XX 00000
Re: Non-competition provision of Severance Agreement
Dear Xxxxxxx:
This is to confirm that Guardian International, Inc. ("Guardian") is releasing
you from the terms of Section 11, Non-Competition, of your Severance Agreement
(copy attached). This waiver/release is expressly limited to your employment
with Protection One, Inc. and is conditioned upon receipt of the following
executed documents:
1. a new Severance Agreement between you and Guardian of even
date herewith in connection with your service on the Board of
Directors of Guardian;
2. Articles of Amendment to the Articles of Incorporation
authorizing the Series E 7% Cumulative Preferred Stock
("Series E");
3. Share Exchange Agreement for the exchange of 8,000 shares of
Series C 7% Cumulative Preferred Stock for 8,000 shares of
Series E preferred stock;
4. Consent of Xxxxxx Financial, Inc. for items 1 and 2 above;
5. Opinion of Xxxxxx Xxxxxxxx LLP that the Series E can be
classified as equity; and
6. Option or warrant agreement permitting Guardian to buy 250,000
shares of Protection One, Inc. common stock on the same terms
as granted to you in your option agreement with Protection
One.
Please sign below acknowledging the terms of this letter.
Xxxxxxx Xxxxxxxx
27 April 2001
page 2 of 2
Guardian's Board of Directors wishes to express its heartfelt best wishes for
your success in this new position.
Sincerely,
/s/ XXXXXX X. XXXXX
Xxxxxx X. Xxxxx
Chief Financial Officer
enclosure
I acknowledge receipt of and accept of the terms of this letter.
/s/ XXXXXXX XXXXXXXX 4/27/2001
------------------------------------ ------------------
Xxxxxxx Xxxxxxxx Date
