Exhibit 10.1


 


Protection One, Inc.


818 South Kansas Avenue


Topeka, Kansas 66612


 


May 21, 2003


 


 


Westar Energy, Inc.


818 South Kansas Avenue


Topeka, Kansas 66612


Attention: Chief Executive Officer


 


Re: Confidentiality Agreement Side Letter


 


Ladies and Gentlemen:


 


Westar Energy,
Inc. (“Westar”) has informed Protection One, Inc. (the “Company”) that it is
currently exploring the possible divestiture of its indirect equity interest in
the Company in connection with a transaction (the “Transaction”) involving the
acquisition by a still to be determined third party (the “Buyer”) of the
outstanding common stock (the “Common Stock”) of the Company.  Westar has not yet determined the structure
or terms of the divestiture, but it has informed the Company that Westar may
propose a Transaction involving a sale or other disposition of Common Stock not
owned by Westar for which Westar seeks the approval of a special committee of
the Company’s board of directors.  Any
such Transaction is referred to herein as a “Minority Shares Transaction”.


 


In connection with furnishing certain non-public information regarding
the Company to prospective Buyers and their representatives, Westar and
Protection One will require such prospective Buyers to be bound by the terms
and conditions of a confidentiality agreement in substantially the form
mutually agreed upon by the Company and Westar which is attached hereto as Exhibit A (the “Confidentiality
Agreement”).  No non-public information
relating to the Company shall be provided by Westar to any prospective Buyer
unless such prospective Buyer is listed on Exhibit
B, as such list may be modified from time to time by the mutual
agreement of the parties hereto, and unless such prospective Buyer executes a
Confidentiality Agreement.


 


Westar hereby agrees that it shall provide the Company with a copy of
each Confidentiality Agreement entered into by and between itself and any
prospective Buyer in connection with the consideration of a Transaction.  Notwithstanding the foregoing, Westar shall
not agree to any modification, amendment or waiver of any material right that
requires the consent or approval of the Company under the final form of any
such Confidentiality Agreement


 


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attached hereto as Exhibit A
without the prior consent of the Company, which shall be given promptly and
which shall not be withheld unless the Company believes in good faith that such
modification, amendment or waiver will cause financial or competitive harm to
the Company.  Without limiting the
foregoing, Westar agrees to provide the Company with any copies of any
amendment, waiver or modification to any Confidentiality Agreement.


 


Westar agrees that prior to providing any non-public information
relating to the Company (other than that contained in the Descriptive
Memorandum or in the Data Room) to any prospective Buyer, it shall notify the
Company of the identity of the Buyer and a description of the information to be
provided to the Buyer.  Westar further
agrees that it shall promptly furnish the Company with a copy of each document
described below that it has received pursuant to any such Confidentiality
Agreement: (i) any list setting forth the identities of the Buyer’s
representatives who are actively and directly participating in the evaluation
of a Transaction, including any updates to such list to accurately reflect the
identities of such representatives; (ii) any notice advising Westar that the
prospective Buyer does not wish to proceed with a Transaction; (iii) any certification
by any prospective Buyer that it has complied with the paragraph in the
Confidentiality Agreement relating to the destruction or return to Seller of
Proprietary Information and (iv) any other material notice (other than
indications of interest, offer letters or other proposals, which are covered by
the next succeeding paragraph) received by Seller indicating that it is being
provided pursuant to such Confidentiality Agreement.


 


The following paragraph shall govern any Transaction that is a Minority
Shares Transaction.


 


Westar shall provide the Company with a copy of any written materials
or presentations provided to the Board of Directors of Westar (or any committee
or subcommittee thereof that is delegated the authority to review, negotiate or
approve a Minority Shares Transaction ) that summarize or generally describe
the terms of any indications of interest, offer letters or other proposals with
respect to a Minority Shares Transaction provided to Westar or Lehman Brothers
by any prospective Buyer (whether or not listed on Exhibit B) within 5 business days
following the consideration of such materials or presentation by the Board of
Directors of Westar or any such committee or subcommittee.  The Company shall hold any such information
confidential on the same terms as if it were “Proprietary Information” under
the Confidentiality Agreement.  Westar
shall not be obligated to disclose the identity of any prospective Buyer in
connection with its delivery to the Company of a summary or general description
of the terms of any indications of interest, offer letters or other proposals
with respect to a Minority Shares Transaction. 
Not less than one business day prior to: the earliest of (a) the date on
which Westar has executed a term sheet (whether or not binding) in which
exclusivity is provided to a prospective Buyer with respect to a


 


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Minority Shares Transaction, (b) the consideration by the Board of
Directors of Westar (or any committee or subcommittee thereof) of a Minority
Shares Transaction that is recommended for approval by Westar’s CEO or (c) the
date on which a definitive agreement with respect to a Minority Shares
Transaction has been executed by Westar, Westar shall notify the Company of the
identity of the Buyer that is party to any such term sheet, transaction or
definitive agreement.  Westar further
agrees to advise the Company prior to providing permission to any prospective
Buyer that it may contact the Kansas Corporation Commission.


 


This letter agreement may not be amended, waived or modified without
the prior written consent of each of the parties hereto.


 


*     *     *     *


 


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Please acknowledge your agreement with and acceptance of the terms and
conditions of this letter agreement by executing a copy of this letter
agreement where indicated below.


 


 


	
   

  	
  PROTECTION ONE, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:  

  	
  /s/ Darius G. Nevin

  	
   

  
	
   

  	
   

  	
  Name:  Darius G. Nevin

  	 

	
   

  	
   

  	
  Title:    Exec Vice Pres & CFO

  	 

					



 


Attachment


 


 


Accepted and Agreed to this  21st day of May 2003:


 


WESTAR ENERGY, INC.


 


 


	
  By:

  	
  /s/ James S. Haines, Jr.

  	
   

  
	
  Name:  

  	
  JAMES S. HAINES, JR.

  
	
  Title:  

  	
  President/CEO

  
				



 


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