EXH 99.1
PROTECTION ONE, INC.
EMPLOYEE STOCK PURCHASE PLAN
(AS AMENDED AND RESTATED EFFECTIVE AS OF APRIL 1, 2000)
1. PURPOSE.
The purpose of this Plan is to provide eligible employees the opportunity to
purchase Common Stock at a discount on a basis that qualifies for the tax
treatment prescribed by Code Section 423.
2. DEFINITIONS.
The following terms, when used in this Plan, shall have the following
meanings:
(a) "Board" or "Board of Directors" means the Board of Directors of the
Company, as constituted from time to time.
(b) "Code" means the Internal Revenue Code of 1986, as amended from
time to time. References to the Code or to a particular section of the
Code shall include references to any related Treasury Regulations and
rulings and to successor provisions.
(c) "Committee" means the Compensation Committee of the Board or such
other committee as may be appointed by the Board of Directors to administer
this Plan pursuant to the provisions of Section 3(a) of this Plan.
(d) "Common Stock" means common stock of the Company.
(e) "Company" means Protection One, Inc., a Delaware corporation, its
successors and assigns.
(f) "Fair Market Value" on a particular date means the average of the
high and low sale prices of the Common Stock in trading on the date in
question as reported by THE WALL STREET JOURNAL or another reputable
source designated by the Committee; provided that if there were no sales
on such date reported as provided above, such prices shall be computed as
of the most recent prior day for which a sale was so reported. If the
foregoing method of determining fair market value should be inconsistent
with Code Section 423, then "Fair Market Value" shall be determined by
the Committee in a manner consistent with such section of the Code and
shall mean the value as so determined.
(g) "General Counsel" means the General Counsel of the Company serving
from time to time.
(h) "Parent" means a parent corporation as defined in Section 424(e) of
the Code, including a corporation which becomes such a parent in the future.
(i) "Plan" means the Protection One, Inc. Employee Stock Purchase Plan
set forth in these pages, as amended from time to time.
(j) "Plan Compensation" means such compensation of a participant as
prescribed by the Committee from time to time for purposes of this Plan
consistent with the requirements of Code Section 423.
(k) "Subsidiary" means a subsidiary as defined in Code Section 424(f),
including a corporation which becomes such a subsidiary in the future.
3. ADMINISTRATION.
(a) The Plan shall be administered by a committee of the Board
consisting of two or more directors of the Company, as appointed from time
to time by the Board.
(b) Subject to the provisions of this Plan, the powers of the Committee
shall include having the authority, in its discretion, to:
(i) define, prescribe, amend and rescind rules, regulations,
procedures, terms and conditions relating to this Plan; and
(ii) make all other determinations necessary or advisable for the
administration of this Plan, including but not limited to interpreting
this Plan, correcting defects, reconciling inconsistencies and
resolving ambiguities.
(c) The interpretation by the Committee of the terms and provisions of
this Plan, and its administration of this Plan, and all action taken by the
Committee, shall be final, binding and conclusive on the Company, its
stockholders, Parent, Subsidiaries, all participants and employees, and
upon their respective successors and assigns, and upon all other persons
claiming under or through any of them.
(d) Members of the Board and members of the Committee acting under
this Plan shall be fully protected in relying in good faith upon the
advice of counsel and shall incur no liability except for gross or willful
misconduct in the performance of their duties.
4. STOCK SUBJECT TO THIS PLAN.
(a) Subject to Section 4(c) of this Plan, the aggregate number of shares
of Common Stock which may be sold under this Plan is 650,000 (six hundred
fifty thousand).
(b) If the number of shares of Common Stock that participating employees
become entitled to purchase is greater than the number of shares of
Common Stock that are offered in a particular offering or that remain
available under this Plan, the available shares of Common Stock shall be
allocated by the Committee among such participating employees in such
manner as it deems fair and equitable consistent with the requirements of
Code Section 423.
(c) In the event of any change in the Common Stock, through
recapitalization, merger, consolidation, stock dividend or split,
combination or exchange of shares, spin off or otherwise, the Committee
may make such equitable adjustments in this Plan and the then outstanding
offerings as it deems necessary and appropriate including, but not limited
to, changing the number of shares of Common Stock reserved under this Plan,
and the price of the current offering; provided that any such adjustments
shall be consistent with Code Sections 423 and 424.
(d) Shares of Common Stock which may be delivered under this Plan may be
obtained by the Company from its treasury, by purchases in the open market
or from private sources, or by issuing authorized but unissued shares of
its Common Stock. Shares of authorized, but unissued Common Stock, may not
be delivered under this Plan if the purchase price thereof is less than the
par value (if any) of the Common Stock at the time. The Committee may (but
need not) provide at any time, or from time to time (including without
limitation upon or in contemplation of a change in control), for a number
of shares of Common Stock equal in number to the number of shares then
subject to options under this Plan, or expected to be subject to options
under this Plan in the then pending offering(s), to be issued or
transferred to, or acquired by, a trust (including but not limited to a
grantor trust) for the purpose of satisfying the Company's obligations
under such options, and, unless prohibited by applicable law, such shares
held in trust shall be considered authorized and issued shares with full
dividend and voting rights, notwithstanding that the options to which such
shares relate might not be exercisable at the time. No fractional shares of
Common Stock may be issued or sold under this Plan.
5. ELIGIBILITY.
All employees of the Company, and any designated Parent and any designated
United States Subsidiary, in each case, designated by appropriate written
resolution of the Committee from time to time, will be eligible to participate
in this Plan, in accordance with and subject to such rules and regulations as
the Committee may prescribe; provided, however, that (a) such rules shall
neither permit nor deny participation in this Plan contrary to the requirements
of the Code (including but not limited to Code Section 423(b)(3), (4) and
(8) thereof), (b) no employee shall be eligible to participate in this Plan if
his or her customary employment is 20 hours or less per week or for not more
than 5 months in any calendar year, unless the Committee determines otherwise on
a uniform and nondiscriminatory basis, (c) no employee may be granted an option
under this Plan if such employee, immediately after the option is granted, owns
stock possessing 5% or more of the total combined voting power or value of all
classes of stock of his or her employer corporation or any Parent or Subsidiary
corporation (within the meaning of Code Section 423(b)(3)), and (d) no employee
represented by a particular bargaining unit may be granted an option under this
Plan if the applicable bargaining unit representative has declined the
opportunity for the bargaining unit to participate in this Plan. For purposes of
the preceding sentence, the rules of Code Section 424(d) shall apply in
determining the stock ownership of an employee, and stock which the employee may
purchase under outstanding options (whether or not such options qualify for the
special tax treatment afforded by Code Section 421(a)) shall be treated as stock
owned by the employee.
6. OFFERINGS; PARTICIPATION.
The Company may make offerings of up to 27 months' duration each, to
eligible employees to purchase Common Stock under this Plan, until all shares
authorized to be delivered under this Plan have been exhausted or until this
Plan is sooner terminated by the Board. Subject to the preceding sentence, the
duration and commencement date of any offering under this Plan shall be
determined by the Committee in its sole discretion. Subject to such rules,
procedures and forms as the Committee may prescribe and to the requirements of
Code Section 423 and other applicable law, an eligible employee may participate
in an offering at such time(s) as the Committee may permit by authorizing a
deduction from his or her Plan Compensation for such purpose, provided that the
aggregate of all such deductions and any lump-sum contribution during an
offering period may not exceed such maximum amount and/or percentage of Plan
compensation as the Committee may designate. The Committee may at any time
suspend or accelerate the completion of an offering if required by law or deemed
by the Committee to be in the best interests of the Company, including in the
event of a change in ownership or control of the Company, its Parent or any
Subsidiary. The Company's obligation to sell and deliver Common Stock under this
Plan shall be subject to the approval of any governmental authority whose
approval the General Counsel determines is necessary or advisable to obtain in
connection with the authorization, issuance or sale of such Common Stock.
7. PAYROLL DEDUCTIONS; LUMP-SUM CONTRIBUTION.
(a) The Company will maintain accounts on its books for all
participating employees. All employee contributions shall be credited to
such accounts. Employee contributions credited to the accounts of
participating employees need not be segregated from other corporate funds
and may be used for any corporate purpose.
(b) At such times as the Committee may permit and subject to such rules,
procedures and forms as the Committee may prescribe, an employee may
increase, decrease or suspend his or her payroll deduction during an
offering, or may withdraw the balance of the account maintained under the
Plan for such employee and thereby withdraw from participation in an
offering.
(c) In addition to payroll deductions, a participating employee may
elect at any time during an offering period to make a single lump-sum
contribution to the account maintained under the Plan for such employee,
subject to such rules, procedures and forms as the Committee may
prescribe. The limit on payroll deductions set forth in Section 6 above
shall apply to lump-sum contributions as well, so that the total
contributed to the account maintained under the Plan for the employee,
whether by payroll deduction or by lump-sum contribution, shall not in the
aggregate exceed such maximum amount and/or percentage of Plan
Compensation as the Committee may designate pursuant to Section 6 of this
Plan.
(d) The Committee shall determine from time to time in its sole
discretion whether, and if so at what rate and under what circumstances,
payroll deductions and/or lump sum contributions contributed to the account
shall accrue interest.
(e) No employee shall be permitted to make any elective contribution or
employee contribution to this Plan for a period of 12 months after the
payment to such employee of a hardship distribution (as described in
Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4)) from a plan of the
Company or a related party within the provisions of Code Section 414(b),
(c), (m) or (o) containing a cash or deferred arrangement under Code
Section 401(k). The foregoing sentence shall not apply if and to the extent
the General Counsel determines it is not necessary to qualify any such plan
as a cash or deferred arrangement under Code Section 401(k).
(f) Any balance remaining in any employee's account at the end of an
offering period will be carried forward into the account maintained under
the Plan for the employee for the following offering period. In no event
will the balance carried forward be equal to or greater than the purchase
price of one share of Common Stock as determined under Section 8(c) of
this Plan. Any excess shall be refunded to the participant. Upon
termination of this Plan, all amounts in the accounts of participating
employees shall be carried forward into their accounts under a successor
plan, if any, or refunded to them, as the Committee may decide.
(g) In the event of the termination of a participating employee's
employment for any reason, his or her participation in any offering under
this Plan shall cease, no further amounts shall be deducted pursuant to
this Plan and the balance in the employee's account shall be paid to the
employee, or, in the event of the employee's death, to the employee's
beneficiary. For purposes of this Plan, a participating employee's
beneficiary shall be his or her beneficiary under applicable state payroll
laws.
8. PURCHASE; LIMITATIONS.
(a) Within the limitations of Section 8(d) of this Plan, each employee
participating in any offering under this Plan will be granted an option,
upon the effective date of such offering, for as many full shares of Common
Stock as the amount of his or her account (including any contribution made
by means other than payroll deductions) at the end of the offering can
purchase.
(b) As of the last day of the offering period, the account of each
participating employee shall be totaled. Subject to the provisions of
Sections 7(b) and 8(d) of this Plan, if such account contains sufficient
funds as of that date to purchase one or more full shares of Common Stock
at the price determined under Section 8(c) of this Plan, the employee
shall be deemed to have exercised an option to purchase the largest number
of full shares of Common Stock at the price determined under Section 8(c)
of this Plan that the balance of the account maintained under the Plan for
the employee will permit; such employee's account will be charged for the
amount of the purchase and for all purposes under this Plan the employee
will be deemed to have acquired the shares on that date; and either a
stock certificate representing such shares will be issued to him or her, or
the Company's registrar will make an entry on its books and records
evidencing that such shares have been duly issued or transferred as of that
date, as the Committee may direct. Notwithstanding any provision of this
Plan to the contrary, the Committee may but need not permit fractional
shares to be purchased under this Plan provided no certificates may be
issued for fractional shares.
(c) The Committee shall determine before the first day of any offering
period under this Plan the purchase price of shares of Common Stock which
may be sold under the respective offering, subject to the conditions set
forth in Section 8(c) of this Plan and Code Section 423. The purchase
price of shares of Common Stock which may be sold under this plan shall be
no less than (i) an amount not less than 85% (eighty-five percent) of the
Fair Market Value as of the first day of the offering period, or if such
day is not a day for which Fair Market Value is available, then the next
succeeding day on which such Fair Market Value is available, (ii) an amount
not less than 85% (eighty-five percent) of the Fair Market Value as of the
last day of the offering period, or if such day is not a day for which Fair
Market Value is available, then the next succeeding day on which such Fair
Market Value is available, (iii) the lesser of the amounts described in
Sections 8(c)(i) and 8(c)(ii) of this Plan, or (iv) the minimum amount that
complies with Code Section 423.
(d) In addition to any other limitations set forth in, or authorized by
the Committee under, this Plan, (i) no employee may purchase in any
offering period under this Plan more than the number of shares of Common
Stock determined by dividing the lesser of the employee's Plan Compensation
as of the first day of the offering period or $25,000 by the Fair Market
Value of a share of Common Stock on that day, and (ii) no employee may be
granted an option under this Plan which permits his or her rights to
purchase stock under this Plan, and any other stock purchase plan of his or
her employer corporation and its parent and subsidiary corporations that is
qualified under Code Section 423, to accrue at a rate which exceeds $25,000
of Fair Market Value of such stock (determined at the time such option is
granted) for each calendar year in which the option is outstanding at any
time. The Committee may further limit the amount of Common Stock which may
be purchased by any employee during an offering period in accordance with
Code Section 423(b)(5).
9. NO TRANSFER.
(a) No option, right or benefit under this Plan may be transferred by a
participating employee, whether by will, the laws of descent and
distribution, or otherwise, and all options, rights and benefits under
this Plan may be exercised during the participating employee's lifetime only
by such employee.
(b) Book entry accounts and certificates for shares of Common Stock
purchased under this Plan may be maintained or registered, as the case may
be, only in the name of the participating employee or, if such employee so
indicates on his or her payroll deduction authorization form, in his or her
name jointly with a member of his or her family, with right of
survivorship.
10. EFFECTIVE DATE OF AMENDMENT AND RESTATEMENT OF THE DURATION OF THE PLAN.
The amendment and restatement of the Plan as set forth herein shall be
effective as of April 1, 2000, subject to the approval of such amendment and
restatement by the shareholders of the Company. The Plan, as so amended and
restated (and as it may hereafter be amended), shall remain in effect until all
shares authorized to be issued or transferred hereunder have been exhausted or
until this Plan is sooner terminated by the Board of Directors, and may continue
in effect thereafter with respect to any options outstanding at the time of such
termination if the Board of Directors so provides.
11. AMENDMENT AND TERMINATION OF THE PLAN.
The Plan may at any time be amended in any respect or terminated by written
resolution of the Board of Directors without shareholder approval, unless
shareholder approval is required under Section 423 of the Code.
12. GENERAL PROVISIONS.
(a) Nothing contained in this Plan shall be deemed to confer upon any
person any right to continue as an employee of or to be associated in any
other way with the Company for any period of time or at any particular rate
of compensation.
(b) No person shall have any rights as a stockholder of the Company with
respect to any shares optioned under this Plan until such shares are issued
or transferred to him or her.
(c) All expenses of adopting and administering this Plan shall be borne
by the Company, and none of such expenses shall be charged to any
participant.
(d) The Plan shall be governed by and construed under the laws of the
State of Delaware, without giving effect to the principles of conflicts of
laws of that State.
(e) The Plan and each offering under this Plan are intended to qualify
as an "employee stock purchase plan" within the meaning of Code
Section 423. Every provision of this Plan shall be administered,
interpreted and construed to carry out those intentions, and any provision
that cannot be so administered, interpreted and construed shall to that
extent be disregarded.