Exhibit 10.44

 

EXECUTION COPY

 

EQUITY STANDSTILL AGREEMENT

 

EQUITY STANDSTILL AGREEMENT (this “Agreement”), dated as of February 17, 2004,
by and between Protection One, Inc. (“POI”) and POI Acquisition I, Inc., a
Delaware corporation (the “Equity Owner”).

 

RECITALS

 

WHEREAS, pursuant to the purchase agreement dated as of December 23, 2003 (the
“Purchase Agreement”), by and among POI Acquisition, LLC (“Acquisition”), Westar
Industries, Inc. (“WII”) and Westar Energy, Inc., Acquisition agreed to, among
other things, purchase (or cause its designee to purchase) all of WII’s rights,
title and interest in the shares of common stock of POI owned by WII (such
shares, the “Shares” and such transaction, the “Transaction”) and upon the
consummation of the Transaction, the Equity Owner will be the record owner of
the Shares;

 

WHEREAS, in connection with the Transaction, POI desires that the Equity Owner
forbear from exercising certain rights as a shareholder of POI for the period of
time specified below, subject to the terms and conditions set forth in this
Agreement;

 

NOW THEREFORE, in consideration of the premises contained herein and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereby agree as follows:

 

Section 1.  Definitions.

 

(a) “Board of Directors” shall mean the board of directors of POI.

 

(b) “Effective Time” shall mean the Closing (as defined in the Purchase
Agreement).

 

(c) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

(d) “ Qualified Director” shall mean a person who (i) meets the standards for
being “independent” pursuant to Rule 10A-3(b)(1) under the Exchange Act and New
York Stock Exchange Rule 303A(2) and (ii) has qualifications (including
education, training and experience) of a type normally possessed by independent
directors of listed publicly-traded companies.

 

(e) “Special Committee” shall mean the special committee of the Board of
Directors, as formed pursuant to a resolution of the Board of Directors dated
January 21, 2003.

 

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Section 2.  Equity Standstill; Related Matters.

 

2.01   Equity Standstill.

 

(a) For the period beginning on the Effective Time and ending on the Equity
Specified Date (as defined below) (such period, the “Equity Standstill Period”),
subject to the proviso below, the Equity Owner hereby agrees not to exercise any
rights to which it is entitled as a result of its ownership of the Shares,
including, but not limited to, taking part in any vote of shareholders
(including taking any action by written consent), calling any special meeting of
shareholders or taking action to remove any member of the Board of Directors;
provided, that (i) in no event shall the Equity Owner be deemed to waive or
otherwise forego its rights to receive dividends or any other distributions in
respect of the Shares during the Equity Standstill Period and (ii) the Equity
Owner shall vote at the direction of the Board of Directors at any regular or
special meeting of shareholders called by the Board of Directors and held during
the Equity Standstill Period.

 

(b) The Equity Owner agrees during the Equity Standstill Period not to (i)
acquire any direct or indirect beneficial ownership interest (as defined in Rule
13d-3 under the Exchange Act) in any shares of common stock of POI other than
the Shares, (ii) transfer any Shares held by it or (iii) enter into any option
or agreement, or solicit or encourage in any way any other party to perform the
actions prohibited by Section 2.01(b)(i) and (ii).  POI shall have no obligation
to register any transfer of shares in violation of this Section 2.01(b).

 

(c) The Equity Owner, in its capacity as owner of the Shares, hereby agrees to
support the making by POI of all currently contracted payments to its senior
management and executive employees (which payments do not exceed $14,000,000 in
the aggregate), and the continued retention by such individuals of such
payments.

 

2.02.   Termination.  The agreements of the Equity Owner under Section 2.01
shall terminate and be of no further force and effect on the date (the
“Specified Date”) which is the earlier of (i) the date that is ninety (90) days
after the Effective Time or (ii) the occurrence of any of the following (each,
an “Equity Standstill Termination Event”):

 

(a) Any of POI, the Board of Directors or the Special Committee takes or
authorizes any action which has, or will have, a disproportionate, adverse
effect on the Equity Owner (as calculated on a per share basis) relative to
other holders of shares of common stock of POI; or

 

(b) The Board of Directors or the Special Committee nominates any individual for
election as a member of the Board of Directors, or appoints any individual to
the Board of Directors, other than a Qualified Director.

 

Section 3. Miscellaneous.

 

3.01.  Successors and Assigns, Benefit of Agreement.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.  This Agreement is solely for the benefit of the
signatories hereto (and their respective successors and assigns), and, no other
Person shall have any rights under, or because of the existence of, this
Agreement.

 

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3.02.  Severability.  Any provision of this Agreement that is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining provisions of this Agreement or affecting the
validity or enforceability of any provisions of this Agreement in any other
jurisdiction.

 

3.03.  Counterparts; Section Headings.  This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same agreement and any of the parties hereto may execute this Agreement by
signing any such counterpart.  Section or other headings contained in this
Agreement are for reference purposes only and shall not in any way effect the
meaning or interpretation of this Agreement.

 

3.04.  Governing Law.  This Agreement shall be governed by, and construed in
accordance with, the law of the State of New York.

 

3.05.  Effective Time.  The provisions of this Agreement shall take effect
immediately upon the Effective Time.

 

3.06.  Assignment.  This Agreement may not be assigned by either of the parties
without the prior written consent of the other.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above.

 

 

PROTECTION ONE, INC.

 

 

 

 

 

By:

/s/ Richard Ginsburg

 

 

 

Name:

Richard Ginsburg

 

 

 

Title:

President and
Chief Executive Officer

 

 

 

 

 

 

POI ACQUISITION I, INC.

 

 

 

 

 

By:

/s/ David Tanner

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

[Equity Standstill Agreement]

 

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