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Exhibit 10.3

PROTECTION ONE, INC.
1997 LONG-TERM INCENTIVE PLAN
(as amended)

        1.    Purposes.    The purposes of this 1997 Long-Term Incentive Plan
(as from time to time amended, the "Plan") are (i) to align the interests of the
Company's stockholders and the recipients of awards under this Plan by
increasing the proprietary interest of such recipients in the Company's growth
and success, (ii) to advance the interests of the Company by attracting and
retaining for the Company and its Subsidiaries the services of directors,
officers and other key employees, consultants and agents, and (iii) to motivate
such persons to act in the long-term best interests of the Company's
stockholders.

        2.    Definitions.    For purposes of the Plan, the following terms
shall have the meanings set forth below unless a different meaning is plainly
required by the context:

        (a)   "Affiliate" means any entity other than the Company and its
Subsidiaries (i) of which the Company directly or indirectly owns stock having
at least 50% of the combined voting power of all classes of stock of such entity
or, if such entity does not have shares of stock outstanding, at least 50% of
the ownership interests in such entity, and (ii) that is designated by the Board
or the Committee as a participating employer under the Plan.

        (b)   "Award" means any Option, SAR, Restricted Share, Restricted Share
Unit, Performance Award, Dividend Equivalent or Other Share-Based Award granted
to an Eligible Employee or other eligible person under the Plan, or any
combination of the foregoing.

        (c)   "Award Agreement" means the written agreement or evidencing an
Award between the Company and the recipient of such Award.

        (d)   "Beneficiary" means as to any Participant the individual or
individuals, or the trust or trusts, that have been designated by such
Participant in his or her most recent written beneficiary designation filed with
the Company as to receive the benefits specified under the Plan upon the death
of such Participant or, if there is no such designated individual or trust or
surviving designated individual or trust, then the individual or individuals, or
the trust or trusts, entitled by will or the laws of descent and distribution to
receive such benefits.

        (e)   "Board" means the Board of Directors of the Company.

        (f)    "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

        (g)   "Committee" means the Compensation Committee of the Board, such
other Board committee as may be designated by the Board to administer the Plan
or the full Board if no such designation has been made; provided that the
Committee, at any time that it grants an Award to (or certifies that performance
goals or other material terms have been satisfied with respect to) any executive
officer of the Company or person who in the Committee's judgment is likely to be
a "covered employee" within the meaning of Section 162(m) of the Code, shall
consist of two or more directors of the Company, each of whom shall be a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange Act
and an "outside director" within the meaning of Section 162(m) of the Code.

        (h)   "Common Stock" means the common stock, par value $.01 per share,
of the Company.

        (i)    "Company" means Protection One, Inc., a Delaware corporation.

        (j)    "Director" means a member of the Board.

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        (k)   "Dividend Equivalent" means a right granted to a Participant under
Section 5(g) to receive cash, shares of Common Stock or other property equal in
value to dividends paid with respect to a specified number of shares of Common
Stock. Dividend Equivalents may be awarded on a free-standing basis or in
connection with another Award, and may be paid currently or on a deferred basis.

        (l)    "Eligible Employee" means an employee of the Company or any of
its Subsidiaries or Affiliates, including any Director who is an employee.

        (m)  "Exchange Act" means 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 successor provisions thereto and regulations thereunder.

        (n)   "Fair Market Value" means, with respect to shares of Common Stock
or other property, the fair market value of such shares or other property
determined by such methods or procedures as shall be established from time to
time by the Committee. If the shares of Common Stock are quoted on the Nasdaq
National Market System or any other national market system, unless otherwise
determined by the Committee in good faith, the Fair Market Value of the Common
Stock on any date shall be the mean between the high and low selling prices of
the Common Stock on such date (or, if the Common Stock was not traded on that
day, the next preceding day that shares of Common Stock were traded) through
such national market system, as such prices are officially quoted by such
system.

        (o)   "ISO" means any Option intended to be and designated by the
Committee as an "incentive stock option" within the meaning of Section 422 of
the Code.

        (p)   "Non-Employee Director" means a director of the Company that is
not an officers or employee of the Company or any of its Subsidiaries.

        (q)   "NQSO" means any Option that is not an ISO.

        (r)   "Option" means a right granted under Section 5(b) to purchase
shares of Common Stock.

        (s)   "Other Share-Based Award" means a right granted under Section 5(h)
that relates to or is valued by reference to shares of Common Stock.

        (t)    "Participant" means an Eligible Employee, a Non-Employee Director
or a consultant or agent of the Company who has been granted an Award.

        (u)   "Performance Award" means a right, granted under Section 5(f) and
contingent upon the attainment of specified performance criteria during a
specified performance period, to receive one share of Common Stock (which may be
a Restricted Share) or, in lieu thereof, the Fair Market Value of such
Performance Share in cash.

        (v)   "Performance Criteria" means the criteria, established by the
Committee, which shall be satisfied or met (i) as a condition to the
exercisability of all or a portion of an Option or SAR or (ii) during the
applicable Restriction Period or Performance Period as a condition to the
holder's receipt, in the case of an Award of Restricted Shares, of the shares of
Common Stock subject to such award, or, in the case of an Award of Restricted
Share Units or a Performance Award, of payment with respect to such Award. Such
criteria may include, but are not limited to, revenues, EBITDA, cash flow,
earnings per share, return on equity, market shares, customer satisfaction goals
or performance against budget (whether applicable to the Company or any relevant
Subsidiary or business unit), comparisons with competitor companies or groups
and with stock market indices, the attainment by a share of Common Stock or a
specified Fair Market Value for a specified period of time, or any combination
thereof. Performance criteria may vary from Participant to Participant and
between groups of Participants.

        (w)  "Restricted Shares" means a grant under Section 5(d) of shares of
Common Stock the rights of ownership of which are subject to restrictions and/or
to a risk of forfeiture prescribed by the Committee.

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        (x)   "Restricted Share Unit" means a grant under Section 5(e) of shares
of Common Stock or cash at the end of a specified deferral period.

        (y)   "Rule 16b-3" means Rule 16b-3 adopted by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as from time to time
in effect and applicable to the Plan and Participants.

        (z)   "SAR" or "Share Appreciation Right" means a right granted under
Section 5(c) that entitles the recipient to receive, upon exercise, the excess
of (1) the Fair Market value of one share of Common Stock on the date of
exercise (or if the Committee shall so determine in the case of any such right,
the Fair Market Value of one share of Common Stock at any time during a
specified period before or after the date of exercise) over (2) the exercise
price of the SAR as determined by the Committee (which, in the case of an SAR
granted in tandem with an Option, shall be equal to the exercise price of the
underlying option).

        (aa) "Subsidiary" means any corporation of which the Company owns,
directly or indirectly, shares possessing at least 80% or more of the total
combined voting power of all classes of stock of such corporation.

        3.    Administration.    

        (a)    Authority of the Committee.    The Plan shall be administered by
the Committee, and the Committee shall have full and final authority to take the
following actions, in each case subject to and consistent with the provisions of
the Plan:

          (i)  to designate Affiliates;

         (ii)  to select Eligible Employees, Non-Employee Directors, consultants
and agents to whom Awards may be granted;

        (iii)  to determine the type or types of Awards to be granted;

        (iv)  to determine as to each Participant the form, amount and timing of
each Award granted to such person and, if applicable, the number of shares of
Common Stock, the number of SARs and/or the number of Restricted Shares,
Performance Shares and Dividend Equivalents subject to such Award, the
applicable exercise price, grant price or purchase price and any basis for
adjusting the same, the time and conditions of exercise or settlement of the
Award (including, if applicable, performance criteria, the restrictions or
conditions, if any (and any schedule for lapse of such restrictions or
conditions) relating to exercisability, transferability or forfeiture of such
Award, and the circumstance under which such restrictions, conditions or
schedules may be accelerated or waived), all other terms and conditions of such
Award and all other matters to be determined in connection with an Award, based
in each case on such considerations as the Committee shall determine;

         (v)  to determine whether, to what extent and under what circumstances
an Award may be settled, or the exercise price of an Award may be paid, in cash,
shares of Common Stock, other Awards or other property;

        (vi)  to prescribe the form of each Award Agreement, which need not be
identical for each Participant;

       (vii)  to adopt, amend, waive, suspend and rescind such rules and
regulations, and appoint such agents, as the Committee may deem necessary or
advisable to administer the Plan;

      (viii)  to correct any defect or supply any omission or reconcile any
inconsistency in the Plan and to construe and interpret the Plan and any Award,
Award Agreement or other instrument or document hereunder,

        (ix)  to accelerate the exercisability or vesting of all or any portion
of any Award or to extend the period during which an Award is exercisable; and

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         (x)  to make all other decisions and determinations as may be required
under the terms of the Plan or as the Committee may deem necessary or advisable
for the administration of the Plan.

        (b)    Manner of Exercise of Committee Authority.    The Committee shall
have sole discretion in exercising its authority under the Plan. Action of the
Committee with respect to the Plan shall be final, conclusive and binding on all
persons, including the Company, its Subsidiaries and Affiliates, Eligible
Employees and other persons eligible to participate in the Plan, Participants,
any person claiming any rights under the Plan from or through a Participant and
stockholders of the Company. The express grant of any specific power to the
Committee, and the taking of any action by the Committee, shall not be construed
as limiting such or any other power or authority of the Committee.

        The Committee may delegate to officers or managers of the Company or any
Subsidiary or Affiliate, subject to such terms as the Committee shall determine,
the performance of the administrative functions of the Committee hereunder. In
addition, the Committee may delegate some or all of its power and authority
hereunder to the Chief Executive Officer and President and/or such other
executive officer or officers of the Company as the Committee deems appropriate;
provided, however, that the Committee may not delegate its power and authority
with regard to (i) the selection for participation in the Plan of (A) the Chief
Executive Officer of the Company (or any employee who is acting in such
capacity), one of the four most highly compensated officers of the Company other
than the Chief Executive Officer, or another person deemed to be a "covered
employee" within the meaning of Section 162(m) of the Code or who, in the
Committee's judgment, is likely to be a covered employee at any time during the
period an Award to such employee would be outstanding or (B) an officer or other
person subject to Section 16 of the Exchange Act, or (ii) decisions concerning
the type, form, amount, pricing or timing of an Award to such an officer,
employee or other person who is, or who in the Committee's judgment is likely to
be, a covered employee.

        (c)    Limitation of Liability.    Each member of the Committee and each
other person to whom the Committee delegates any of its power and authority
hereunder shall be entitled to rely or act, in good faith, upon any report or
other information furnished to him or her by any officer or other employee of
the Company or any Subsidiary or Affiliate, the Company's independent certified
public accountants or legal counsel, or other professional retained by the
Company to assist in the administration of the Plan. No member of the Committee,
and no person acting on behalf of the Committee, shall be personally liable for
any action, determination or interpretation taken or made in good faith with
respect to the Plan, and all members of the Committee and any person acting on
behalf of the Committee shall, to the maximum extent permitted by law, be fully
indemnified, reimbursed and otherwise protected by the Company with respect to
any such action, determination or interpretation or any claim, loss, damage or
expense (including, but not limited to, attorneys' fees) arising therefrom.

        4.    Shares Subject to the Plan.    

        (a)   Subject to adjustment as provided in Section 4(c) hereof and to
the limitations set forth below, the total number of shares of Common Stock as
to which Awards may be granted shall be 4,200,000. Such number of shares shall
be reduced by the sum of (i) the aggregate number of shares of Common Stock that
are issued as Restricted Shares or as "bonus stock" under Section 5(h), and
(ii) the aggregate number of shares of Common Stock that become subject to
outstanding Options, outstanding SARs not granted in tandem with an Option, and
outstanding Performance Awards. If and to the extent that shares of Common Stock
subject to an outstanding Award are not issued or delivered by reason of the
expiration, surrender, cancellation, forfeiture or other termination of that
Award, the settlement of such Award in cash or the delivery or withholding of
shares of Common Stock to pay all or a portion of the exercise price of an Award
or to satisfy all or a portion of the tax withholding obligations relating to an
Award, then such shares of Common Stock shall again be available for Awards
under the Plan.

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        (b)   Shares of Common Stock to be issued or delivered under this Plan
shall be authorized and unissued shares, treasury shares or shares acquired by
purchase in the open market or in one or more private transactions.

        (c)   If and to the extent that the Committee shall determine that any
share dividend, share split or reverse split, recapitalization, reorganization,
merger, consolidation, combination, separation (including a spin-off or other
distribution of stock or property), repurchase or share exchange or other
corporate transaction or event affects the outstanding shares of Common Stock
such that an adjustment in outstanding Awards is appropriate to reflect such
change and to prevent dilution or enlargement of the rights of Participants
under the Plan, then the Committee shall make such equitable changes or
adjustments in the Plan and outstanding Awards as the Committee deems
appropriate, including, but not limited to, by adjusting any or all of (i) the
number and kind of shares that may thereafter be issued under the Plan, (ii) the
number and kind of shares, other securities, cash or other consideration issued
or issuable in respect of outstanding Awards, and (iii) the exercise price,
grant price or purchase price relating to any Award; provided, however, that,
with respect to ISOs, such adjustment shall be made in accordance with
Section 424(h) of the Code unless the Committee determines otherwise. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of (including, but not limited to, the performance objectives
included in) Awards in recognition of unusual or non-recurring events
(including, without limitation, events described in the immediately preceding
sentence) affecting the Company or any Subsidiary or Affiliate or the financial
statements of the Company or any Subsidiary or Affiliate, or in response to
changes in applicable laws, rules, regulations or accounting principles;
provided, further, that if an Award Agreement specifically so provides, the
Committee shall not have discretion to increase the amount of compensation
payable under the Award to the extent such an increase would cause the Award to
lose its qualification as performance-based compensation for purposes of
Section 162(m) of the Code.

        5.     Specific Terms of Awards.

        (a)    General.    Awards may be granted on the terms and conditions set
forth in this Section 5. In addition, the Committee may impose on any Award or
the exercise or settlement thereof, at the date of grant or thereafter (subject
to Section 9(d)), such additional terms and conditions not inconsistent with the
provisions of the Plan as the Committee shall determine, including terms
regarding forfeiture of Awards or continued exercisability of Awards in the
event of termination of employment by the Participant.

        (b)    Options.    The Committee is authorized to grant Options, which
may be NQSOs or ISOs, to Participants on the following terms and conditions:

          (i)  Number of Shares and Exercise Price. The number of shares of
Common Stock subject to an Option and the exercise price per share of Common
Stock purchasable upon exercise of such Option shall be determined by the
Committee, and the Committee may, without limitation, set an exercise price that
is based upon achievement of performance criteria if deemed appropriate by the
Committee.

         (ii)  Time and Method of Exercise; Other Terms. The Committee shall
determine the time or times at which an Option may be exercised in whole or in
part (including, without limitation, upon achievement of performance criteria if
deemed appropriate by the Committee), the method or methods by which such
exercise price may be paid or deemed to be paid (including, without limitation,
broker-assisted exercise arrangements), the form of such payment (including,
without limitation, cash, shares of Common Stock, notes or other property), and
the methods by which shares of Common Stock will be delivered or deemed to be
delivered to holders of Options.

        (iii)  ISOs. The terms and conditions of any ISO granted under the Plan
shall comply in all respects with the provisions of Section 422 of the Code,
including but not limited to the requirements that (A) ISOs be granted only to
Eligible Employees; (B) the exercise price of

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each ISO not be less than 100% of the Fair Market Value of the Common Stock on
the date the ISO is granted; provided further, that if an ISO shall be granted
to any person who, at the time such option is granted, owns capital stock
possessing more than ten percent of the total combined voting power of all
classes of capital stock of the Company (or of any parent or Subsidiary) (a "Ten
Percent Holder"), the purchase price per share of Common Stock shall be the
price (currently 110% of Fair Market Value) required by the Code in order to
constitute an ISO; (C) if an ISO shall be granted to a Ten Percent Holder, such
Option shall not be exercised later than five years after its date of grant; and
(D) to the extent that the aggregate Fair Market Value (determined as of the
grant date) of the shares of Common Stock with respect to which ISOs granted to
any Participant are exercisable for the first time during any calendar year
(under the Plan and all other stock option plans of the Company) exceeds
$100,000, such excess portion shall be treated as a NQSO.

        (c)    SARs.    The Committee is authorized to grant SARs to
Participants on the following terms and conditions:

          (i)  Number of Shares, Exercise Price and Nature. The Committee shall
determine at the time an Award of SARs is granted, (A) the number of SARs
subject to the Award, (B) the exercise price of such SARs, (C) whether each such
SAR entitles the holder thereof to receive, upon exercise, the excess of (1) the
Fair Market value of one share of Common Stock on the date of exercise or the
Fair Market Value of one share of Common Stock at any time during a specified
period before or after the date of exercise over (2) the exercise price of the
SAR, and (D) whether such SAR is free-standing or in tandem with an Option or
other Award.

         (ii)  Other Terms. The Committee shall determine, at the time of grant
of an SAR or thereafter, the time or times at which the SAR may be exercised in
whole or in part (provided, however, that no SAR granted in tandem with an
Option my be exercised later than the expiration, cancellation, forfeiture or
other termination of such Option), the method of exercise, the method of
settlement, the form of consideration to be paid upon exercise (which may
consist of cash, shares of Common Stock (which may, but need not be, Restricted
Shares) or other property), the method by which shares of Common Stock or other
consideration will be delivered or deemed to be delivered to the holder the SAR,
and all other terms and conditions of the SAR. Unless the Committee determines
otherwise, a SAR (a) granted in tandem with an NQSO may be granted at the time
of grant of the related NQSO or at any time thereafter, and (b) granted in
tandem with an ISO may only be granted at the time of grant of the related ISO.

        (d)    Restricted Shares.    The Committee is authorized to grant
Restricted Shares to Participants on the following terms and conditions:

          (i)  Issuance and Restrictions. Restricted Shares shall be issued to a
Participant upon payment of consideration by the Participant if any, as the
Committee shall determine at the date of grant, and during the restriction
period established by the Committee (the "Restriction Period") shall be subject
to such restrictions on transferability and other restrictions, if any, as the
Committee may impose, which restrictions may lapse separately or in combination
at such times, under such circumstances (including, without limitation, upon
achievement of performance criteria if deemed appropriate by the Committee), in
such installments or otherwise, as the Committee may determine. The performance
criteria may be of various types, may differ as to various Participants or
classes or categories of Participants, and may include the attainment of certain
performance criteria by the individual Participants, the Company, a department
or division of the Company and/or a group or class of Participants.

         (ii)  Forfeiture. Except as otherwise determined by the Committee at
the date of grant or thereafter, in the event a Participant ceases employment
during the Restriction Period or in the event performance criteria attributable
to an Award of Restricted Shares, if any, are not achieved, Restricted Shares on
such shares shall be forfeited.

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        (iii)  Certificates for Shares. Restricted Shares granted under the Plan
may be evidenced in such manner as the Committee shall determine. Except to the
extent otherwise set forth in the applicable Award Agreement, if certificates
representing Restricted Shares are registered in the name of the Participant,
such certificates shall bear an appropriate legend referring to the restrictions
and other terms and conditions applicable to such Restricted Shares, and the
Company shall retain physical possession of the certificate, together with a
stock power or other instrument of assignment endorsed in blank, until the
completion of the Restriction Period and the satisfaction of all performance
criteria, if any.

        (iv)  Stockholder Rights. Except to the extent otherwise set forth in
the applicable Award Agreement, a Participant granted Restricted Shares shall
have all of the rights of a stockholder of the Company, including, without
limitation, the right to vote the Restricted Shares and the right to receive
dividends thereon. Not without the foregoing, dividends or Dividend Equivalents
paid on Restricted Shares shall be either paid at the dividend payment date or
deferred for payment to such date as determined by the Committee, in cash or in
shares of Common Stock having a Fair Market Value equal to the amount of such
dividend or Dividend Equivalents. Shares of Common Stock distributed in
connection with a stock split or stock dividend, and all other property
distributed as a dividend or Dividend Equivalents, if any, shall, to the extent
distributed with respect to Restricted Shares, be subject to restrictions and
risk of forfeiture to the same extent as the Restricted Shares with respect to
which such Shares or other property has been distributed.

        (e)    Restricted Share Units.    The Committee is authorized to grant
Restricted Share Units to Participants, subject to the following terms and
conditions:

          (i)  Award and Restrictions. Delivery of shares of Common Stock or
cash, as the case may be, will occur upon expiration of the deferral period
specified for Restricted Share Units by the Committee (or, if permitted by the
Committee, as elected by the Participant). In addition, Restricted Share Units
shall be subject during such deferral period to such restrictions on transfer
and other restrictions as the Committee may impose, if any (including, without
limitation, the achievement of performance criteria if deemed appropriate by the
Committee), which restrictions may lapse at such time, separately or in
combination, in installments or otherwise, as the Committee may determine.

         (ii)  Forfeiture. Except as otherwise determined by the Committee at
the date of grant or thereafter, upon termination of employment (as determined
under criteria established by the Committee) during the applicable Restriction
Period, or upon failure to satisfy any other condition precedent to the delivery
of shares of Common Stock or cash to which such Restricted Share Units relate,
all Restricted Share Units that are at that time subject to restriction shall be
forfeited.

        (f)    Performance Awards.    The Committee is authorized to grant
Performance Awards to Participants on the following terms and conditions:

          (i)  Number of Performance Shares, Performance Period and Performance
Criteria. Upon grant of a Performance Award, the Committee shall determine
(a) the nature, length and starting date of the performance period for such
Performance Award ("Performance Period"), (b) the performance criteria to be
used in valuing the Performance Award and determining the extent to which such
Performance Award has been earned, and (c) the number of shares of Common Stock
(which may, but need not, be Restricted Shares), the range of dollar values or a
combination thereof, to be received by the Participant at the end of the
Performance Period if and to the extent that the relevant performance criteria
for such Performance Award are achieved.

        Performance Periods may overlap and Participants may participate
simultaneously with respect to Performance Awards for which different
Performance Periods are prescribed.

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         (ii)  Payment. The earned portion of a Performance Award may be paid
currently or on a deferred basis with such interest or earning equivalents as
may determined by Committee.

        (iii)  Significant Events. If during the course of a Performance Period
there shall occur significant events as determined by the Committee that the
Committee expects to have a substantial effect on a performance objective during
such period, the Committee may revise such objective; provided, however, that,
if an Award Agreement so provides, the Committee shall not have any discretion
to increase the amount of compensation payable under the Award to the extent
such an increase would cause the Award to lose its qualification as
performance-based compensation for purposes of Section 162(m)(4)(C) of the Code
and the regulations thereunder.

        (iv)  Forfeiture. Except as otherwise determined by the Committee at the
date of grant or thereafter, upon termination of employment during the
applicable Performance Period, a Performance Award shall be forfeited.

        (g)    Dividend Equivalents.    The Committee is authorized to grant
Dividend Equivalents to Participants on the following terms and conditions:

          (i)  The Committee shall determine, at the time of the Award, the
number of shares of Common Stock to which such Award relates. Dividend
Equivalents may be awarded on a free-standing basis or in connection with
another Award, and may be paid currently or on a deferred basis.

         (ii)  The Committee may provide, at the date of grant or thereafter,
that Dividend Equivalents shall be paid or distributed when accrued or shall be
deemed to have been reinvested in additional shares of Common Stock, or other
investment vehicles as the Committee may specify, provided that Dividend
Equivalents (other than freestanding Dividend Equivalents) shall be subject to
all conditions and restrictions of the underlying Awards to which such Dividend
Equivalents relate.

        (h)    Other Share-Based Awards.    The Committee is authorized, subject
to limitations under applicable law, to grant to Participants such other Awards
as may be denominated or payable in, valued in whole or in part by reference to,
or otherwise based on, or related to, shares of Common Stock as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, shares of Common Stock awarded purely as a "bonus" that are not
subject to any restriction period or performance criteria, other rights
convertible or exchangeable into shares of Common Stock, purchase rights for
shares of Common Stock, Awards with a value and payment of which is contingent
upon performance of the Company or any other factor or factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares of Common Stock
delivered pursuant to an Award in the nature of a purchase right granted under
this Section 5(h) shall be purchased for such consideration, paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
shares of Common Stock, notes or other property, as the Committee shall
determine. Cash awards, as an element of or supplement to any other Award under
the Plan, shall also be authorized pursuant to this Section 5(h).

        6.    Certain Provisions Applicable to Awards.    

        (a)    Stand-Alone, Additional, Tandem and Substitute Awards.    Awards
granted under the Plan may, in the discretion of the Committee, be granted to
Participants either alone or in addition to, in tandem with, or in exchange or
substitution for, any other Award granted under the Plan or any award granted
under any other plan or agreement of the Company, any Subsidiary or Affiliate,
or any business entity to be acquired by the Company or a Subsidiary or
Affiliate, or any other right of a Participant to receive payment from the
Company or any Subsidiary or Affiliate. The per Share exercise price of any
Option, the grant price of any SAR, or the purchase or settlement price of any
other Award conferring a right to purchase shares of Common Stock that is
granted

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in connection with the substitution of one or more awards granted under any
other plan or agreement of the Company or any Subsidiary or Affiliate or any
business entity to be acquired by the Company or any Subsidiary or Affiliate
shall be determined by the Committee, in its discretion. Upon the exercise of
any Award granted in tandem with any other Award, such related Award shall be
canceled to the extent of the number of shares of Common Stock as to which the
Award is exercised.

        (b)    Form of Payment Under Awards.    Subject to the terms of the Plan
and any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, exercise or settlement of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, shares of Common Stock, or
other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The Committee may make rules relating to
installment or deferred payments with respect to Awards, including the rate of
interest to be credited with respect to such payments.

        (c)    Non-transferability.    Unless otherwise set forth by the
Committee in an Award Agreement, Awards shall not be transferable by a
Participant except by will or the laws of descent and distribution (except
pursuant to a Beneficiary designation) and shall be exercisable during the
lifetime of a Participant only by such Participant or his or her guardian or
legal representative. A Participant's rights under an Award and the Plan may not
be pledged, mortgaged or otherwise encumbered, and shall not be subject to
claims of the Participant's creditors.

        (d)    Agreement.    Each award under this Plan shall be evidenced by an
Agreement setting forth the terms and conditions applicable to such award. No
award shall be valid until an Agreement is executed by the Company and the
recipient of such award and, upon execution by each party and delivery of the
Agreement to the Company, such award shall be effective as of the effective date
set forth in the Agreement.

        7.     Change of Control Provisions.

        (a)    Acceleration of Exercisability and Lapse of Restrictions;
Cash-Out of Awards.    In the event of a Change of Control, the following
acceleration and cash-out provisions shall apply unless otherwise provided by
the Committee at the time of the Award grant:

          (i)  All outstanding Awards pursuant to which the Participant may have
rights the exercise of which is restricted or limited, shall become fully
exercisable; unless the right to lapse of restrictions or other limitations is
waived or deferred by a Participant prior to such lapse, all restrictions and
other limitations (including risks of forfeiture and deferrals) on outstanding
Awards subject to restrictions or other limitations under the Plan shall lapse;
and all performance criteria and other conditions to payment of Awards under
which payments of cash, shares of Common Stock or other property are subject to
conditions shall be deemed to be achieved or fulfilled and shall be waived by
the Company.

         (ii)  For a period of up to 60 days following a Change in Control, the
Participant may elect to surrender any outstanding Award and to receive, in full
satisfaction therefor, a cash payment equal to the value of such Award
calculated on the basis of the Change of Control Price of any shares of Common
Stock or the Fair Market Value of any property other than shares of Common Stock
relating to such Award; provided, however, that in the case of an ISO, or a
Stock Appreciation Right granted in tandem therewith, the cash payment shall be
based upon the Fair Market Value of shares of Common Stock on the date of
exercise. In the event that an Award is granted in tandem with another Award
such that the Participant's right to payment for such Award is an alternative to
payment of another Award, the Participant electing to surrender any such tandem
Award shall surrender all alternative Awards related thereto and shall receive
that payment for the Award that produces the highest payment to the Participant.
Except as provided in Section 8(a)(iii), in no event will an Award be
surrendered or a Participant have the right to receive cash under this
Section 7(a)(ii) with respect to an Award if the Participant is subject to
Section 16 of the Exchange Act and at

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least six months shall not have elapsed from the date on which the Participant
was granted the Award before the date of the Change of Control (unless this
restriction is not at such time required to cause the receipt of such cash to be
exempt from the provision of Rule 16b-3).

        (iii)  In the event that any Award is subject to limitations under
Section 8(a)(ii) at the time of a Change of Control, then solely for the purpose
of determining the rights of the Participant with respect to such Award, a
Change of Control shall be deemed to occur at the close of business on the first
business day following the date on which the Award could be sold without
liability under Section 16 of the Exchange Act.

        (b)    Definitions of Certain Terms.    For purposes of this Section 7,
the following definitions, in addition to those set forth in Section 2, shall
apply:

          (i)  "Change of Control" means, and a Change of Control shall be
deemed to have occurred, if (i) there occurs any transaction or other event or
circumstance that results in less than 50% of the total Voting Securities of the
Company outstanding immediately after such transaction being beneficially owned
by Western Resources, Inc., a Kansas corporation ("Western Resources"), or an
affiliate of Western Resources, or (ii) all or substantially all of the assets
of the Company are sold and less than 50% of the total assets owned by the
Company immediately prior to such transaction are owned by a person other than
Western Resources and its affiliates.

         (ii)  "Change of Control Price" means, with respect to a Share, the
higher of (A) the highest reported sales price of shares of Common Stock on the
Nasdaq National Market during the 30 calendar days preceding a Change of
Control, or (B) the highest price paid or offered in a transaction that either
(1) results in a Change of Control, or (2) would be consummated but for another
transaction which results in a Change of Control and, if it were consummated,
would result in a Change of Control. With respect to clause (B) of the
immediately preceding sentence, the "price paid or offered" will be equal to the
sum of (i) the face amount of any portion of the consideration consisting of
cash or cash equivalents and (ii) the Fair Market Value of any portion of the
consideration consisting of real or personal property other than cash or cash
equivalents, as established by an independent appraiser selected by the
Committee.

        (iii)  "Voting Securities or Security" means any securities of the
Company that carry the right to vote generally in the election of directors.

        8.    General Provisions.    

        (a)    Compliance with Legal and Trading Requirements.    The Plan, the
grant, exercise and settlement of Awards thereunder, and the other obligations
of the Company under the Plan and any Award Agreement shall be subject to all
applicable federal and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required by applicable law.
The Company, in its discretion, may postpone the issuance or delivery of shares
of Common Stock under any Award until completion of such stock exchange or
market system listing or registration or qualification of such shares of Common
Stock under applicable securities laws or other required action under any state
or federal law, rule or regulation as the Company may consider appropriate, and
may require any Participant to make such representations and furnish such
information as the Committee may consider appropriate in connection with the
issuance or delivery of shares of Common Stock in compliance with applicable
laws, rules and regulations. No provisions of the Plan shall be interpreted or
construed to obligate the Company to register any shares of Common Stock under
federal or state securities laws.

        (b)    No Right to Continued Employment or Service.    Neither the Plan
nor any action taken thereunder shall be construed as giving any employee,
officer, director or other person the right to be retained in the employ or
service of the Company or any of its Subsidiaries or Affiliates, nor shall it
interfere in any way with the right of the Company or any of its Subsidiaries or
Affiliates to terminate any such employment or service at any time.

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        (c)    Taxes.    The Company or any Subsidiary or Affiliate is
authorized to withhold from any Award granted, any payment relating to an Award
under the Plan, including from a distribution of shares of Common Stock, or any
payroll or other payment to a Participant, amounts of withholding and other
taxes due in connection with any transaction involving an Award, and to take
such other action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive shares of Common Stock or other property and to
make cash payments in respect thereof in satisfaction of a Participant's tax
obligations.

        (d)    Changes to the Plan and Awards.    The Board may amend or
otherwise alter, suspend, discontinue or terminate the Plan or the Committee's
authority to grant Awards under the Plan as the Board deems advisable without
the consent of stockholders of the Company or Participants except as may be
otherwise required by applicable law, rule or regulation, including Rule 16b-3
under the Exchange Act and Section 162(m)(4)(c) of the Code; provided, however,
no such amendment or other alteration, suspension, discontinuation or
termination of the Plan may impair the rights of the holder of an outstanding
Award without the consent of such holder.

        (e)    No Rights to Awards; No Shareholder Rights.    No person shall
have any right or claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of eligible persons and Participants. No
Award shall confer on any Participant any of the rights of a stockholder of the
Company.

        (f)    Unfunded Status of Awards.    The Plan is intended to constitute
an "unfunded" plan for incentive compensation. With respect to any payment not
yet made to a Participant pursuant to an Award, nothing contained in the Plan or
any Award shall give any such Participant any rights that are greater than those
of a general creditor of the Company; provided, however, that the Committee may
authorize the creation of trusts or make other arrangements to meet the
Company's obligations under the Plan to deliver cash, shares of Common Stock,
other Awards or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.

        (g)    Non-exclusivity of the Plan.    Neither the adoption of the Plan
by the Board nor its submission to the stockholders of the Company for approval
shall be construed as creating any limitations on the power of the Board to
adopt such other incentive arrangements as the Board may deem desirable,
including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

        (h)    Not Compensation for Benefit Plans.    No Award payable under
this Plan shall be deemed salary or compensation for the purpose of computing
benefits under any benefit plan or other arrangement of the Company for the
benefit of its employees or directors unless the Company shall determine
otherwise.

        (i)    No Fractional Shares of Common Stock.    No fractional shares of
Common Stock shall be issued or delivered pursuant to the Plan or any Award.
Cash shall be paid in lieu of such fractional shares.

        (j)    Governing Law.    The validity, construction, and effect of the
Plan any rules and regulations relating to the Plan, and any Award Agreement
shall be determined in accordance with the laws of Delaware without giving
effect to principles of conflict of laws.

        (k)    Effective Date; Time Limitation on Future Grants, Plan
Termination.    The Plan shall become effective as of October 24, 1997 (the
"Effective Date"), the date on which the Plan was adopted by the Board subject
to approval of the Plan by the Company's stockholders. No Award shall be granted
under the Plan after the 10th anniversary of the Effective Date. In the event
that

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this Plan is not approved by the stockholders of the Company, this Plan and any
awards hereunder shall be void and of no force or effect.

        (l)    Titles and Headings.    The titles and headings of the Sections
and subsections in the Plan are for convenience of reference only. In the event
of any conflict, the text of the Plan, rather than such titles or headings,
shall control.

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PROTECTION ONE, INC. 1997 LONG-TERM INCENTIVE PLAN (as amended)