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.


 

















 


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.


 


2

















 


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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