SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
-----------------
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
(Amendment No. N/A)1
Lifeline Systems, Inc.
- --------------------------------------------------------------------------------
(Name of Issuer)
Common
- --------------------------------------------------------------------------------
(Title of Class of Securities)
532192101
- --------------------------------------------------------------------------------
(CUSIP Number)
John W. Hesse
Executive Vice President
Chief Financial Officer,
and Secretary
Protection One, Inc.
6225 North Highway 161, Suite 400
Irving, Texas 75038
(972) 916-6100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 18, 1998
- --------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
Note. Schedule filed in paper format shall include a signed original
and five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 13 Pages)
- ------------------
1. The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
DAFS01...:\23\68523\0008\2164\SCH0218M.33C
<PAGE>
<TABLE>
<CAPTION>
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CUSIP No. 532192101 13D Page 2 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
<S> <C>
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTERN RESOURCES, INC.
48-0290150
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
KANSAS
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
1,216,971
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
233,700
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,216,971
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.9%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
=============================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
2
<PAGE>
- --------------------------------- -----------------------------
CUSIP No. 532192101 13D Page 3 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTAR CAPITAL, INC.
48-1092416
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
AF
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
KANSAS
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
1,216,971
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
233,700
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,216,971
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.9%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
=============================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
3
<PAGE>
- --------------------------------- -----------------------------
CUSIP No. 532192101 13D Page 4 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
PROTECTION ONE, INC.
IRS NO. 92-1063818
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC, OO
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
1,216,971
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
233,700
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,216,971
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.9%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
=============================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
4
<PAGE>
- --------------------------------- -----------------------------
CUSIP No. 532192101 13D Page 5 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
WESTAR SECURITY, INC.
IRS NO. 48-1169432
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
KANSAS
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
233,700
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
233,700
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
233,700
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
4.0%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
=============================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
5
<PAGE>
- --------------------------------- -----------------------------
CUSIP No. 532192101 13D Page 6 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOHN E. MACK
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
983,271
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
983,271
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.9%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
=============================================================================================
*SEE INSTRUCTIONS BEFORE FILLING OUT!
6
<PAGE>
- --------------------------------- -----------------------------
CUSIP No. 532192101 13D Page 7 of 13 Pages
- --------------------------------- -----------------------------
=============================================================================================
1 NAMES OF REPORTING PERSON
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
JOHN W. HESSE
- ---------------------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- ---------------------------------------------------------------------------------------------
3 SEC USE ONLY
- ---------------------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
OO
- ---------------------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) or 2(e)
[ ]
- ---------------------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
- ---------------------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY
OWNED BY
EACH
REPORTING
PERSON
WITH
-------------------------------------------------------------
8 SHARED VOTING POWER
983,271
-------------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- ---------------------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
983,271
- ---------------------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES*
[X]
- ---------------------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.9%
- ---------------------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
IN
=============================================================================================
</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
7
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This Statement relates to the Common Stock, $.02 par value (the "Shares"), of
Lifeline Systems, Inc., ("Lifeline"), a Massachusetts corporation. Lifeline's
principal executive office is located at 640 Memorial Drive, Cambridge, MA
02139.
ITEM 2. IDENTITY AND BACKGROUND.
This Statement is filed on behalf of Westar Security, Inc., a Kansas corporation
("Westar Security"), Protection One, Inc., a Delaware corporation ("Protection
One"), Westar Capital, Inc., a Kansas corporation ("Westar Capital"), Western
Resources, Inc., a Kansas corporation ("Western Resources"), John E. Mack
("Mack") and John W. Hesse ("Hesse"; together with Westar Security, Protection
One, Westar Capital, Western Resources and Mack, collectively referred to herein
as the "Reporting Persons"). The Reporting Persons (other than Hesse and Mack)
are affiliated companies, and Hesse and Mack are executive officers of
Protection One. The Reporting Persons have entered into a Joint Filing Agreement
which is attached hereto as Exhibit A.
Westar Security is engaged in the business of providing security alarm
monitoring services and the sale, installation, and servicing of security alarm
systems for residential and business subscribers, and is a holding company for
other security companies. Westar Security is a wholly owned subsidiary of
Protection One. The principal executive offices of Westar Security are located
at 6225 N. State Highway 161, 4th Floor, Irving, Texas 75063.
Protection One, is a holding company engaged through its direct and indirect
wholly owned subsidiaries in the business of providing security alarm monitoring
services and the sale, installation, and servicing of security alarm monitoring
services and systems for residential and business subscribers. The principal
executive offices of Protection One are located at 6011 Bristol Parkway, Culver
City, California 90230. More than 80% of the voting stock of Protection One,
Inc. is held by Westar Capital, Inc.
Westar Capital is a holding company that has investments in the energy-related
and monitored security industries, and is a wholly owned subsidiary of Western
Resources. The principal executive offices of Westar Capital are located at 818
S. Kansas Ave., Topeka, Kansas 66612. Western Resources, Inc. is engaged in the
production, purchase, transmission, distribution and sale of electricity, and,
through its subsidiaries and investments, the delivery and sale of natural gas,
energy-related products, and the provision of electronically monitored security
services. The principal executive offices of Western Resources are located at
818 S. Kansas Ave., Topeka, Kansas 66612.
Each director and each executive officer of each Reporting Person that is a
corporation is, to the knowledge of such Reporting Person, and each Reporting
Person that is a natural person is, a citizen of the United States of America.
The name, business address, present principal
8
<PAGE>
occupation or employment (including the name and principal business address of
any corporation or other organization in which such employment is conducted) of
each director and executive of each Reporting Person that is corporation and of
each Reporting Person that is a natural person are set forth in Exhibit B to
this Schedule 13D, and which is incorporated herein by reference.
During the last five years, none of the Reporting Persons, nor, to the knowledge
of the Reporting Persons that are corporations, any of their respective
directors or executive officers have been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which any of the Reporting Persons or such director or officer
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to Federal or
State securities laws, or funding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUND OR OTHER CONSIDERATION.
The Westar Security Shares (as defined in Item 5) were acquired with working
capital.
On October 18, 1998, pursuant to an Agreement and Plan of Contribution and
Merger by and among Protection One, Inc., Protection One Acquisition Holding
Corporation, a Delaware corporation and wholly owned subsidiary of Protection
One ("Holding"), P-1 Merger Sub, Inc., a Massachusetts corporation and wholly
owned subsidiary of Holding ("Merger Sub I"), P-1 Merger Sub, Inc., a Delaware
corporation and wholly owned subsidiary of Holding ("Merger Sub II"), and
Lifeline, which agreement was amended and restated as of October 28, 1998 (the
"Merger Agreement"), a copy of which is attached hereto as Exhibit C, Lifeline
executed a Stock Option Agreement (herein so called), a copy of which is
attached hereto as Exhibit D, which granted Protection One an option to purchase
up to 1,159,410 Shares (the "Option Shares"), upon the occurrence of certain
events which have not yet occurred. Furthermore, pursuant to the Merger
Agreement, each of Everett N. Baldwin, Heather E. Edelman, Ronald Feinstein,
John D. Gugliotta, Dennis M. Hurley, Joseph E. Kasputys, Thomas E. Loper,
Richard M. Reich, Carolyn C. Roberts, L. Dennis Shapiro, Donald G. Strange,
Gordon C. Vineyard and Susan Bailis, executed a Voting Agreement with Protection
One (each, a "Voting Agreement"), each of which is attached hereto as Exhibits
E-1 through E-13, that appointed Mack and Hesse, their true and lawful proxy and
attorney-in-fact to vote any and all of their respective shares at a special
meeting called in regard to the Lifeline Merger (as defined in Item 4).
ITEM 4. PURPOSE OF TRANSACTION.
The options and proxies described in Item 3 were acquired to facilitate the
consummation of the transactions contemplated in the Merger Agreement. The
Westar Security Shares were originally acquired in the open market for
investment purposes. Pursuant to the Merger
9
<PAGE>
Agreement, upon the effective time (as set forth therein), (i)(A) Merger Sub I
will be merged with and into Lifeline, with Lifeline being the surviving
corporation (the "Lifeline Merger"), and (B) the Shares held by all of the
stockholders of Lifeline, except Holding, will be converted into the right to
receive a number of shares of common stock, $0.01 par value per share, of
Holding ("Holding Common Stock"), as determined by a formula in the Merger
Agreement, and the right to receive cash or, at the election of such
stockholders, additional shares of Holding Common Stock in lieu of all or a
portion of such cash, (ii)(A) Merger Sub II will be merged with and into
Protection One with Protection One being the surviving corporation, and (B) all
outstanding shares of common stock, par value $0.01 per share, of Protection
held by all of the stockholders of Protection One, except Holding, will be
converted into the right to receive shares of Holding Common Stock, whereby
Protection One will be a wholly owned subsidiary of Holding. Through its
ownership of Lifeline, Holding will have the power to take any action which
would result in the occurance of any of the items listed in clauses (a) - (j) of
the instructions for Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF ISSUER.
(a) As of the date hereof, (i) Protection One, Western Resources and Westar
Capital beneficially own in the aggregate 1,216,971 Shares, which represent
approximately 20.9% of the Shares believed to be outstanding, (ii) Westar
Security beneficially owns in the aggregate 233,700 Shares, which represent
approximately 4.0% of the Shares believed to be outstanding (the "Westar
Security Shares"), and Mack and Hesse beneficially own, in the aggregate,
983,271 Shares (the "Proxy Shares"), which represent approximately 16.9% of the
Shares believed to be outstanding. Pending the occurrence of certain triggering
events, which have not occurred, solely after which the option to purchase the
Option Shares will become exercisable, the Reporting Persons will beneficially
own the Option Shares; however, the Reporting Persons currently disclaim
beneficial ownership of the Option Shares.
(b) Each of Mack and Hesse has the power to vote the Proxy Shares at a special
meeting of the stockholders called to approve the Lifeline Merger. As executive
officers of Protection One, Hesse and Mack intend to vote the Proxy Shares as
directed by Protection One. Accordingly, Protection One has shared power with
respect to the voting of the Proxy Shares. Westar Capital owns in excess of 80%
of the voting stock of Protection One. Westar Capital is wholly owned by Western
Resources. Western Resources and Westar Capital, through majority control of
Protection One, have the right to direct Protection One's instructions to Hesse
and Mack regarding the exercise of the proxy. Accordingly, both Westar Capital
and Western Resources have shared voting power with respect to the Proxy Shares.
Westar Security has the shared voting and dispositive power of the Westar
Security Shares through its direct ownership of the Western Security Shares.
Westar Security is a wholly owned subsidiary of Protection One. Therefore
Western Resources and Westar Capital, through their majority control of
Protection One, and Protection One through its majority
10
<PAGE>
control of Westar Security, have the shared power to direct the voting and
disposition of the Westar Security Shares.
(c) Other than the execution of the Voting Agreements, no transaction in the
class of securities reported on has been effected during the past 60 days by any
person named in Item 5(a).
(d) Each of the stockholders of Lifeline party to a Voting Agreement has the
power to direct the receipt of dividends from, or the proceeds from the sale of,
his or her respective Proxy Shares. L. Dennis Shapiro, as the owner of 684,333
Proxy Shares, has the right to direct such dividends and proceeds of more than
5% of the outstanding shares. Westar Security, through direct ownership, and
Western Resources, Westar Security and Protection One, through their majority
control Westar Security, have the power to direct dividends from and the
proceeds from the Westar Security Shares.
(e) Not Applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
See Items 3, 4 and 5, which are incorporated herein by reference.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
See Item 3 for the descriptions of Exhibits C, D and E-1 through E-13,
which is incorporated herein by reference.
11
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
WESTAR SECURITY, INC.
By: /s/ John W. Hesse
---------------------------------------
Name: John W. Hesse
Title: Executive Vice President
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
PROTECTION ONE, INC.
By: /s/ John W. Hesse
---------------------------------------
Name: John W. Hesse
Title: Executive Vice President
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
WESTERN RESOURCES, INC.
By: /s/ Richard D. Terrill
---------------------------------------
Name: Richard D. Terrill
Title: Vice President, Law and Corporate
Secretary
12
<PAGE>
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
WESTAR CAPITAL, INC.
By: /s/ Marilyn K. Dalton
---------------------------------------
Name: Marilyn K. Dalton
Title: Secretary & Treasurer
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
/s/ John E. Mack
-------------------------------------------
John E. Mack
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true and correct.
October 28, 1998
-------------------------------------------
(Date)
/s/ John W. Hesse
-------------------------------------------
John W. Hesse
13
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------- -----------
A Joint Filing Agreement
B List of Executive Officers and Directors of Westar Security,
Inc., Protection One, Inc. Westar Capital, Inc. and Western
Resources, Inc.
C Amended and Restated Agreement and Plan of Contribution
and Merger
D Stock Option Agreement
E 1 - 13 Voting Agreements
EXHIBIT A
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, as amended, the persons named below agree to the joint filing on behalf
of each of them of a statement on Schedule 13D (including amendments thereto)
with respect to the shares of Common Stock, par value $0.02 per share, of
Lifeline Systems, Inc., a Massachusetts corporation, and further agree that this
Joint Filing Agreement be included as an exhibit to such joint filing.
IN WITNESS WHEREOF, the undersigned have executed this Joint Filing
Agreement as of the 28th , day of October, 1998.
WESTAR SECURITY, INC.
By: /s/ John W. Hesse
------------------------------------
Name: John W. Hesse
Title: Executive Vice President
Date: October 28 , 1998
WESTAR CAPITAL, INC.
By: /s/ Marilyn K. Dalton
------------------------------------
Name: Marilyn K. Dalton
Title: Secretary and Treasurer
Date: October 28 , 1998
PROTECTION ONE, INC.
By: /s/ John W. Hesse
------------------------------------
Name: John W. Hesse
Title: Executive Vice President
Date: October 28 , 1998
DAFS01...:\23\68523\0008\2164\SCH0218M.33C
<PAGE>
WESTERN RESOURCES, INC.
By: /s/ Richard D. Terrill
------------------------------------
Name: Richard D. Terrill
Title: Vice President, Law and Corporate
Secretary
Date: October 28 , 1998
Date: October 28 , 1998 /s/ John E. Mack
---------------------------------------
John E. Mack
Date: October 28 , 1998 /s/ John W. Hesse
---------------------------------------
John W. Hesse
EXHIBIT B
Executive Officers and Directors of
Westar Security, Inc., Protection One, Inc.
Westar Capital, Inc. and Western Resources, Inc.
<TABLE>
<CAPTION>
Name Title Address and Principal Occupation
- ---- ----- --------------------------------
<S> <C> <C>
Westar Security, Inc.:
John W. Hesse Secretary/Treasurer and Executive Vice President, Chief
Director Financial Officer and Secretary
Protection One, Inc.
6225 N. State Highway 161
4th Floor
Irving, TX 75063 USA
John E. Mack Director Executive Vice President,
Business Development and
Assistant Secretary
Protection One, Inc.
6011 Bristol Parkway
Culver City, CA 90230 USA
Steven A. Millstein President and Director Executive Vice President,
New Market Development
Protection One, Inc.
6225 N. State Highway 161
4th Floor
Irving, TX 75063 USA
Thomas K. Rankin Vice President Executive Vice President,
Business Operations
Protection One, Inc.
6011 Bristol Parkway
Culver City, CA 90230 USA
Protection One, Inc.:
James M. Mackenzie, Jr. President, Chief Executive Officer, 6011 Bristol Parkway
and Director Culver City, CA 90230 USA
Peter C. Brown Director President
AMC Entertainment, Inc.
106 W. 14th Street
Box 419615
Kansas City, MO 64141-6615
<PAGE>
Robert M. Chefitz Director Managing Director
Patricof & Co. Ventures, Inc.
445 Park Ave., 11th Floor
New York, NY 10022
Howard A. Christensen Director President and Chief Executive Officer
Christensen & Associates
One McCormick Place
9725 N. 90th Place, Suite 200
Scottsdale, AZ 85258-5061
Ben M. Enis Director Professor of Marketing
University of California
4097 Robin Hill Rd.
La Canada, CA 91011
Joseph J. Gardner Director President
Condev Properties
2487 Aloma Avenue Winter Park,
FL 32792
William J. Gremp Director Senior Vice President and Managing
Director
First Union Capital Markets Group
301 South College Street
Charlotte, NC 28288-0735
Steven L. Kitchen Director Executive Vice President and Chief
Financial Officer
Western Resources, Inc.
818 Kansas Avenue
Topeka, KS 66612
Carl M. Koupal, Jr. Director Executive Vice President and Chief
Administrative Officer
Western Resources, Inc.
818 Kansas Avenue
Topeka, KS 66612
John C. Nettels, Jr. Director Partner
Morrison & Hecker L.L.P.
150 N. Main Street, Suite 600
Wichita, KS 67202-1320
Jane Dresner Sadaka Director Consultant
Kellner, DiLeo & Co.
895 Park Avenue, Apt. 6B
New York, NY 10021
James Q. Wilson Director 6011 Bristol Parkway
Culver City, CA 90230 USA
<PAGE>
John W. Hesse Executive Vice President, Chief 6225 N. State Highway 161
Financial Officer, and Secretary 4th Floor
Irving, TX 75063 USA
John E. Mack Executive Vice President, Business 6011 Bristol Parkway
Development Culver City, CA 90230 USA
Thomas K. Rankin Executive Vice President, Business 6011 Bristol Parkway
Operations Culver City, CA 90230 USA
George A. Weinstock Executive Vice President 6011 Bristol Parkway
Culver City, CA 90230 USA
Steven A. Millstein Executive Vice President 6225 N. State Highway 161
New Market Development 4th Floor
Irving, TX 75063 USA
Westar Capital, Inc.:
Leroy P. Wages Director, Chairman and President 818 Kansas Avenue Topeka, KS
66612 USA
Carl M. Koupal, Jr. Director Executive Vice President and Chief
Administrative Officer
Western Resources, Inc.
818 Kansas Avenue
Topeka, KS 66612 USA
Douglas T. Lake Director Executive Vice President and Chief
Strategic Officer
Western Resources, Inc.
818 Kansas Avenue
Topeka, KS 66612 USA
Marilyn K. Dalton Secretary and Treasurer 818 Kansas Avenue
Topeka, KS 66612 USA
Western Resources, Inc.:
Frank J. Becker Director Becker Investments, Inc.
4840 W. 15th, Suite 1011
Lawrence, KS 66049-3862
Charles Q. Chandler Director Chairman of the Board
Intrust Financial Corp.
105 N. Main Street
Wichita, KS 67202
Thomas R. Clevenger Director 818 Kansas Avenue
Topeka, KS 66612 USA
<PAGE>
John C. Dicus Director Chairman
Capitol Federal Savings
700 South Kansas Avenue
Topeka, KS 66603
John E. Hayes, Jr. Director, Chairman of the Board 818 Kansas Avenue
Topeka, KS 66612 USA
David H. Hughes Director 818 Kansas Avenue
Topeka, KS 66612 USA
Russell W. Meyer, Jr. Director Chairman & Chief Executive Officer
Cessna Aircraft Company
One Cessna Blvd.
Wichita, KS 67215
Louis W. Smith Director President & Chief Executive Officer
Ewing Marion Kauffman Foundation
4900 Oak
Kansas City, MO 64112-2776
David C. Wittig President and Chief Executive 818 Kansas Avenue
Officer Topeka, KS 66612 USA
William B. Moore Acting Executive Vice President and 818 Kansas Avenue
Chief Financial Officer Topeka, KS 66612 USA
Carl M. Koupal, Jr. Executive Vice President and Chief 818 Kansas Avenue
Administrative Officer Topeka, KS 66612 USA
Douglas T. Lake Executive Vice President and Chief 818 Kansas Avenue
Strategic Officer Topeka, KS 66612 USA
Richard D. Terrill Vice President, Law and Corporate 818 Kansas Avenue
Secretary Topeka, KS 66612 USA
Jerry D. Courington Controller 818 Kansas Avenue
Topeka, KS 66612 USA
Thomas R. Grennan Senior Vice President, Electric 818 Kansas Avenue
Operations Topeka, KS 66612 USA
Natural Person Reporting
Persons:
John E. Mack N/A Executive Vice President, Business
Development
Protection One, Inc.
6011 Bristol Parkway
Culver City, CA 90230 USA
<PAGE>
John W. Hesse N/A Executive Vice President, Business
Development
6225 N. State Highway 161
4th Floor
Irving, TX 75063 USA
</TABLE>
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION AND MERGER
Dated as of October 28, 1998
by and among
Protection One, Inc.
(a Delaware corporation)
Protection One Acquisition Holding Corporation
(a Delaware corporation)
P-1 Merger Sub, Inc.
(a Massachusetts corporation)
P-1 Merger Sub, Inc.
(a Delaware corporation)
and
Lifeline Systems, Inc.
(a Massachusetts corporation)
<PAGE>
TABLE OF CONTENTS
ARTICLE 1 - THE MERGERS......................................................2
1.1 The Mergers................................................2
1.2 Effective Time.............................................3
1.3 Effect of the Merger.......................................3
1.4 Further Actions............................................3
1.5 Articles of Organization; By-Laws; Directors and Officers..3
1.6 Corporate Identity.........................................4
ARTICLE 2 - CONVERSION OF SECURITIES.........................................4
2.1 Conversion of Securities.........................................4
2.2 Conversion of Securities - The Parent Merger.....................8
2.3 Cancellation of Certain New Parent Stock; Other Matters
Affecting New Parent Common Stock................................8
2.4 Exchange of Certificates.........................................9
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES..................................13
3.1 Organization and Qualification..................................13
3.2 Capitalization..................................................13
3.3 Authority.......................................................15
3.4 Compliance......................................................15
3.5 Commission Filings..............................................16
3.6 Litigation......................................................17
3.7 Changes.........................................................18
3.8 Environmental Matters...........................................18
3.9 Compliance with Laws; Permits...................................19
3.10 No Undisclosed Material Liabilities.............................19
3.11 Interim Operations of Merger Subs...............................20
3.12 Broker's Fees...................................................20
3.13 Financing.......................................................20
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................20
4.1 Organization and Qualification..................................20
4.2 Subsidiaries....................................................21
4.3 Capitalization..................................................21
4.4 Authority.......................................................23
4.5 Compliance......................................................23
4.6 Commission Filings..............................................24
4.7 Litigation......................................................25
4.8 Changes.........................................................25
4.9 Transactions with Affiliates....................................26
4.10 Environmental Matters...........................................26
4.11 Employee Benefits and Contracts.................................27
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4.12 Liens on Assets.................................................29
4.13 Rights Agreement................................................29
4.14 Taxes...........................................................30
4.15. Compliance with Laws; Permits...................................30
4.16 Intellectual Property...........................................31
4.17 No Undisclosed Material Liabilities.............................31
4.18 Brokers.........................................................31
4.19 Prepayment of Indebtedness......................................32
4.20 Provisions Inapplicable.........................................32
4.21 No Existing Discussions.........................................32
ARTICLE 5 - CONDUCT OF BUSINESS.............................................32
5.1 Company Conduct Prior to Effective Time.........................32
5.2 Parent Conduct Prior to Effective Time..........................35
5.3 Commission Filings..............................................35
5.4 Joint Proxy Statement/Information Statement; Registration
Statement.......................................................36
5.5 Employee Stock Options and Benefit Plans........................37
5.6 Further Assurances..............................................39
5.7 Accountants' "Comfort" Letters..................................39
ARTICLE 6 - ADDITIONAL AGREEMENTS...........................................39
6.1 Access to Information...........................................39
6.2 Notification of Certain Matters.................................40
6.3 Fees and Expenses...............................................40
6.4 Additional Agreements...........................................41
6.5 No Solicitation.................................................42
6.6 Employee Stock Purchase Plan....................................44
6.7 Indemnification and Insurance...................................44
6.8 Fair Price Structure............................................45
6.9 Guaranty........................................................45
6.10 Certain Tax Related Representations.............................45
ARTICLE 7 - CONDITIONS......................................................45
7.1 Conditions to Obligation of Each Party to Effect the Mergers....45
7.2 Conditions to Obligation of the Company to Effect the Company
Merger..........................................................46
7.3 Conditions to Obligation of the Parent, New Parent and the
Merger Subsidiaries to Effect the Mergers.......................47
ARTICLE 8 - TERMINATION, AMENDMENT AND WAIVER...............................48
8.1 Termination.....................................................48
8.2 Effect of Termination...........................................49
8.3 Amendment.......................................................49
8.4 Waiver..........................................................49
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ARTICLE 9 - GENERAL PROVISIONS..............................................50
9.1 Closing.........................................................50
9.2 Publicity.......................................................50
9.3 Notices.........................................................50
9.4 Interpretation..................................................52
9.5 Representations and Warranties; etc.............................53
9.6 Miscellaneous...................................................53
9.7 Validity........................................................53
9.8 Descriptive Headings............................................53
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<PAGE>
TABLE OF DEFINED TERMS
Acquiring Person 4.13
Acquisition Proposal 6.5(a)
Affiliates 9.4
Agreement Recital
Average Closing Price 2.1(a)(i)
Cash Consideration 2.1(a)
Certificate of Merger 1.2
Certificates 2.4(a)
Closing 9.1
Closing Date 9.1
Code Recital
Company Recital
Commission 3.5(a)
Company 1998 Commission Filings 4.6(a)
Company 1997 10-K 4.2
Company 1997 Balance Sheet 4.12
Company Applicable Laws 4.15
Company Assets 4.12
Company Commission Filings 4.6(a)
Company Disclosure Schedule Article 4
Introduction
Company Material Adverse Effect 4.1
Company Merger Recital
Company Merger Consideration 2.1(a)
Company Option 4.3
Company Option Plan 4.3
Company Shares 2.1(a)(i)
Company Subsidiary 4.2
Delaware Law 1.1
Dissenting Shares 2.1(b)
Effective Time 1.2
Election Form 2.1(c)
Election Deadline 2.1(d)
ESPP 4.3(vi)
Environmental Law 3.8(a)
Environmental Reports 4.10(c)
ERISA 4.11(b)
Exchange Act 3.4(b)
Exchange Agent 2.4(a)
Exchange Fund 2.4(a)
Exchange Ratio 2.1(a)(i)
Financial Advisor 6.5(a)
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<PAGE>
Governmental Entity 4.10(a)
Hart-Scott-Rodino Act 3.4(b)
Hazardous Materials 3.8(a)
Indemnified Parties 6.7
Information Statement 5.4(a)(i)
Joint Proxy/Information Statement 5.4(a)(i)
Massachusetts Law 1.1
Merger 1.1
Merger Sub I Recital
Merger Sub II Recital
Merger Subsidiary 1.1
New Parent Recital
New Parent Common Stock 2.1(a)(i)
Notice of Qualified Acquisition Proposal 6.5(c)
Option Exchange Ratio 5.5(a)
Parent Recital
Parent Applicable Laws 3.9
Parent Commission Filings 3.5(a)
Parent Common Stock 2.1(a)(i)
Parent Disclosure Schedule Article 3
Introduction
Parent Material Adverse Effect 3.1
Parent Merger Recital
Parent Merger Consideration 2.2
Parent Option 3.2(a)
Parent Option Plan 3.2(a)
Parent Preferred Shares 3.2(a)
Parent Shares 2.2
Parent Subsidiaries 3.1
Party 1.1
Proxy Statement 5.4(a)(i)
Qualified Acquisition Proposal 6.5(a)
Qualified Commercial Bank 2.4(d)
Registration Statement 5.4(a)(i)
Rights Agreement 4.13
Securities Act 3.4(b)
Special Meeting 2.1(b)
Stock Election 2.1(a)
Stock Option Agreement Recital
Substitute Option 5.5(a)
Surviving Corporation 1.1
Tax 4.14
Tax Returns 4.14
Third Party 6.5(a)
-v-
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Trigger Event 6.3(d)
Voting Agreement 4.13
Western Resources Voting Agreement Recital
1994 Plan 3.2
1991 Directors Plan 4.3
1991 Plan 4.3
-vi-
<PAGE>
AMENDED AND RESTATED AGREEMENT
AND PLAN OF CONTRIBUTION AND MERGER
THIS AMENDED AND RESTATED AGREEMENT AND PLAN OF
CONTRIBUTION AND MERGER (this "Agreement"), dated as of October 28, 1998, is by
and among Protection One, Inc., a corporation organized under the laws of the
State of Delaware (the "Parent"), Protection One Acquisition Holding
Corporation, a corporation organized under the laws of the State of Delaware and
a wholly owned subsidiary of Parent (the "New Parent"), P-1 Merger Sub, Inc., a
corporation organized under the laws of the Commonwealth of Massachusetts and a
wholly owned subsidiary of New Parent (the "Merger Sub I"), P-1 Merger Sub,
Inc., a corporation organized under the laws of the State of Delaware and a
wholly owned subsidiary of New Parent (the "Merger Sub II"), and Lifeline
Systems, Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts (the "Company").
BACKGROUND
A. The Parent, New Parent, Merger Sub I, Merger Sub II and the
Company are parties to an Agreement and Plan of Contribution and Merger dated as
of October 18, 1998 (the "Initial Merger Agreement") and wish to amend and
restate the Initial Merger Agreement in its entirety by executing this Agreement
to permit holders of Company Shares (as defined below) to make the Stock
Election (as defined below).
B. The respective Boards of Directors of the Company and Merger Sub
I have each duly approved the merger of Merger Sub I and the Company on the
terms and subject to the conditions of this Agreement (the "Company Merger"), as
a result of which the Company will become a wholly owned subsidiary of New
Parent. New Parent, as the sole stockholder of Merger Sub I has duly approved
the Company Merger and the Board of Directors of the Company has duly resolved
to recommend approval of the Company Merger by its stockholders.
C. The respective Boards of Directors of Parent and Merger Sub II
have each duly approved the merger of Merger Sub II and Parent on the terms and
subject to the conditions of this Agreement (the "Parent Merger"), as a result
of which Parent will become a wholly owned subsidiary of New Parent. New Parent,
as the sole stockholder of Merger Sub II has duly approved the Parent Merger and
the Board of Directors of Parent has duly resolved to recommend approval of the
Parent Merger by its stockholders.
D. Concurrently with the execution and delivery of the Initial
Merger Agreement and as a condition to Parent's willingness to enter into the
Initial Merger Agreement and this Agreement, Parent and the Company entered into
a Stock Option Agreement (the "Stock Option Agreement") attached as Annex A
hereto.
<PAGE>
E. Concurrently with the execution and delivery of the Initial
Merger Agreement, and as a condition to Parent's willingness to enter into the
Initial Merger Agreement and this Agreement, Parent and each director and
executive officer of the Company entered into a Voting Agreement (the "Voting
Agreement") in the form attached as Annex B hereto.
F. Concurrently with the execution and delivery of the Initial
Merger Agreement, and as a condition to the Company's willingness to enter into
the Initial Merger Agreement and this Agreement, the Company and Westar Capital,
Inc., the controlling stockholder of Parent, entered into a Voting Agreement
(the "Western Resources Voting Agreement") attached as Annex C hereto.
G. For United States federal income tax purposes, it is intended
that the formation of New Parent and the Mergers to effectuate the contribution
of all of the outstanding shares of Common Stock of the Company and Parent to
New Parent constitute an exchange under Section 351 of the Internal Revenue Code
of 1986, as amended (the "Code"), and that the Parent Merger also constitute a
reorganization within the meaning of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and for other good and valuable consideration the receipt and
adequacy of which are hereby acknowledged, Parent, New Parent, Merger Sub I,
Merger Sub II and the Company hereby agree as follows:
ARTICLE 1
THE MERGERS
1.1 The Mergers. Subject to and upon the terms and conditions of this
Agreement, at the Effective Time (as hereinafter defined) (i) Merger Sub I shall
be merged with and into the Company in accordance with this Agreement and the
applicable provisions of the Massachusetts Business Corporation Law (the
"Massachusetts Law"), the separate corporate existence of Merger Sub I shall
cease and the Company shall continue as the surviving corporation and as a
wholly owned subsidiary of New Parent, and (ii) Merger Sub II shall be merged
with and into Parent in accordance with this Agreement and the applicable
provisions of the General Corporation Law of the State of Delaware (the
"Delaware Law"), the separate corporate existence of Merger Sub II shall cease
and Parent shall continue as the surviving corporation and as a wholly owned
subsidiary of New Parent. The Company Merger and the Parent Merger are herein
collectively referred to as the "Mergers" and each individually as a "Merger".
The Company and Parent, as the surviving corporations after the Mergers, are
herein sometimes collectively referred to as the "Surviving Corporations" and
each individually as a "Surviving Corporation". Merger Sub I and Merger Sub II
are herein sometimes collectively referred to as the
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<PAGE>
"Merger Subsidiaries" and each individually as a "Merger Subsidiary". Parent,
New Parent, the Company, Merger Sub I and Merger Sub II are herein referred to
collectively as the "Parties" and each individually as a "Party."
1.2 Effective Time. As promptly as practicable after the satisfaction or
waiver of the conditions set forth in Article 7 hereof, the Parties shall cause
the Mergers to be consummated concurrently by (a) delivering to the Secretary of
State of the Commonwealth of Massachusetts Articles of Merger with respect to
the Company Merger, in such form as required by, and executed and acknowledged
in accordance with, the relevant provisions of Massachusetts Law and (b) filing
a Certificate of Merger with the Secretary of State of the State of Delaware
with respect to the Parent Merger, in such form as required by, and executed in
accordance with, the relevant provisions of Delaware Law (the time of the later
of such filings to occur being the "Effective Time").
1.3 Effect of the Merger. At the Effective Time, (i) the Company shall
continue its corporate existence under the laws of the Commonwealth of
Massachusetts and the Company Merger shall have the effects set forth in Section
80 of Chapter 156B of the Massachusetts Law and (ii) Parent shall continue its
corporate existence under the laws of the State of Delaware and the Parent
Merger shall have the effects set forth in Section 259 of the Delaware Law.
1.4 Further Actions. If, at any time after the Effective Time, either of
the Surviving Corporations shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to continue in, vest, perfect or confirm of record or otherwise in
such Surviving Corporation its right, title or interest in, to or under any of
the rights, properties, privileges, franchises or assets of either of its
constituent corporations or otherwise to carry out this Agreement, the officers
and directors of such Surviving Corporation shall be directed and authorized to
execute and deliver, in the name and on behalf of any of such constituent
corporations or the Merger Subsidiaries, all such deeds, bills of sale,
assignments and assurances and to take and do, in the name and on behalf of each
of such corporations or otherwise, all such other actions and things as may be
necessary or desirable to vest, perfect or confirm any and all right, title and
interest in, to and under such rights, properties, privileges, franchises or
assets in such Surviving Corporation or otherwise to carry out this Agreement.
1.5 Articles of Organization; By-Laws; Directors and Officers. Unless
otherwise agreed by Parent and Company before the Effective Time, at the
Effective Time:
(i) The Articles of Organization of the Company as in effect
immediately prior to the Effective Time (including the purposes of the Surviving
Corporation and the total number of shares and the par value, if any, of each
class of
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<PAGE>
stock which the Surviving Corporation is authorized to issue) shall be the
Articles of Organization of the Company as a Surviving Corporation, and the
Certificate of Incorporation of Parent as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of Parent as a
Surviving Corporation (except that the Certificate of Incorporation of Parent
shall be amended by virtue of the Parent Merger to change the name of Parent to
"Protection One Holding Corporation"), in each case until thereafter amended as
provided by law and such Articles of Organization or Certificate of
Incorporation, as the case may be.
(ii) The respective Bylaws of each of Company and Parent in each
case as in effect immediately prior to the Effective Time, shall be the Bylaws
of Company and Parent, respectively, as a Surviving Corporation in each case
until thereafter amended as provided by law and the Articles of Organization or
Certificate of Incorporation, as the case may be, of such Surviving Corporation
and such Bylaws; and
(iii) (x) The directors of Merger Sub I and Merger Sub II
immediately prior to the Effective Time shall be the directors of Company and
Parent, respectively, as the respective Surviving Corporations from and after
the Effective Time, in each case until their successors are elected or appointed
and qualified or until their resignation or removal; and (y) the officers of
Parent and Company immediately prior to the Effective Time shall be the officers
of Parent and Company, respectively, as the respective Surviving Corporations
from and after the Effective Time, in each case until their successors are
elected or appointed and qualified or until their resignation or removal.
1.6 Corporate Identity. The Company and Parent agree that immediately
after the Effective Time, the corporate name of New Parent shall be changed to
"Protection One, Inc." (and the Company and Parent agree that they shall take
such actions in connection with the consummation of the transactions
contemplated by this Agreement as may be necessary to ensure that such name
change may be effected without further action by the stockholders of New Parent
immediately following the consummation of the Mergers).
ARTICLE 2
CONVERSION OF SECURITIES
2.1 Conversion of Securities - The Company Merger
(a) At the Effective Time, by virtue of the Company Merger and
without any action on the part of Merger Sub I, the Company, the Surviving
Corporation of the Company Merger or the holder of any of the following
securities:
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<PAGE>
(i) subject to Section 2.1(b), each share of Common Stock,
$0.02 par value per share, of the Company (the "Company Shares")
issued and outstanding immediately prior to the Effective Time
(other than Company Shares to be cancelled pursuant to clause (ii)
below and any Dissenting Shares (as defined below)) together with
the associated Right (hereafter defined) issued or issuable pursuant
to the Rights Agreement (hereafter defined) shall be cancelled and
extinguished and be converted into and become a right to receive
(without interest thereon) (x) (subject to the proviso set forth
below) $14.50 in cash (the "Cash Consideration"), (y) the number of
shares of New Parent Common Stock, $.01 par value per share ("New
Parent Common Stock") equal to the Exchange Ratio (as defined below)
and (z) cash in lieu of fractional shares as contemplated by Section
2.4(b); provided, however, that each holder of Company Shares shall
be entitled to elect (the "Stock Election") to receive, in lieu of
all or any portion of the Cash Consideration, additional shares of
New Parent Common Stock in an amount equal to the portion of the
Cash Consideration with respect to which the Stock Election is made
divided by the greater of (1) the Average Closing Price (as defined
below) and (2) $9.50 (the consideration referred to in clauses (x),
(y) and (z) being collectively referred to as the "Company Merger
Consideration").
The term "Exchange Ratio" means:
(A) 1.7857 if the Average Closing Price is less than $7.00;
(B) the quotient obtained by dividing (x) $12.50 by (y) the
Average Closing Price, if the Average Closing Price is
equal to or greater than $7.00 but less than $8.19;
(C) 1.5263 if the Average Closing Price is equal to or
greater than $8.19 but less than $9.50;
(D) the quotient obtained by dividing (x) $14.50 by (y) the
Average Closing Price, if the Average Closing Price is
equal to or greater than $9.50 but less than $11.00; and
(E) 1.3182 if the Average Closing Price is equal to or
greater than $11.00.
The term "Average Closing Price" means the average of the closing
prices of the Parent Common Stock, par value $.01 per share (the
"Parent Common Stock") on the Nasdaq National Market or the New York
Stock Exchange (as reported in The Wall Street Journal or, if not
-5-
<PAGE>
reported thereby, any other authoritative source) during the ten
most recent trading days on which shares of Parent Common Stock
actually traded ending three trading days prior to the date on which
stockholders of the Company approve the Merger;
(ii) each Company Share that is issued and outstanding
immediately prior to the Effective Time and owned by New Parent, the
Merger Subsidiaries or the Company shall be cancelled and retired,
and no payment shall be made with respect thereto; and
(iii) each share of Merger Sub I's capital stock issued and
outstanding immediately prior to the Effective Time shall be
converted into and become one validly issued, fully paid and
nonassessable share of common stock of the Surviving Corporation of
the Company Merger.
(b) Notwithstanding Section 2.1(a), Company Shares outstanding
immediately prior to the Effective Time and held by a holder who, acting in
accordance with Sections 86 to 98 of Chapter 156B of the Massachusetts Law, (i)
prior to the special meeting at which the Company's stockholders vote to approve
the Company Merger (the "Special Meeting") has delivered to the Company written
notice of such holder's intention to demand payment for his Company Shares if
the Company Merger is effectuated and (ii) has not voted in favor of the Merger
("Dissenting Shares"), shall not be converted into a right to receive the
Company Merger Consideration, unless such holder withdraws or otherwise loses
his right to demand payment for his Company Shares. If after the Effective Time
such holder withdraws or loses his right to demand payment for his Company
Shares, such Company Shares shall be treated as if they had been converted as of
the Effective Time into the right to receive the Company Merger Consideration
payable in respect of such Company Shares pursuant to Section 2.1(a)(i).
(c) Subject to paragraph (d) below, each person who is a record
holder of Company Shares (other than holders of shares of Company Shares to be
cancelled as set forth in Section 2.1(a)(ii) or Dissenting Shares) shall have
the right to submit an election form (the "Election Form") specifying the
portion of the Cash Consideration, if any, that such person desires to have
converted into the right to receive New Parent Common Stock pursuant to the
proviso set forth in Section 2.1(a)(i) above.
(d) Stock Elections shall be made by record holders of Company
Shares by mailing to the Exchange Agent an Election Form. Parent, New Parent and
the Company shall each use its reasonable best efforts to mail the Election Form
(which shall be part of an appropriate letter of transmittal), with a Proxy
Statement (as defined in Section 5.4), to the record holders of the Company
Shares for the Special Meeting, and to all persons who become record holders of
Company Shares
-6-
<PAGE>
during the period between the record date for the Special Meeting and 10:00 a.m.
New York City time, on the date five calendar days prior to the Special Meeting.
The Election Form will be available upon request to any person who becomes a
record holder of Company Shares after such date and prior to the close of
business on the business day prior to the Special Meeting. Any Stock Election
shall have been validly made only if the Exchange Agent shall have received by
5:00 p.m. New York City time on the date of the Special Meeting (the "Election
Deadline"), an Election Form properly completed and signed (with the signature
or signatures thereof guaranteed to the extent required by the Election Form) by
such holder accompanied by such holder's Certificates representing Company
Shares, or by an appropriate guarantee of delivery of such Certificates
representing Company Shares from a member of any registered national securities
exchange or of the National Association of Securities Dealers, Inc. or a
commercial bank or trust company in the United States or such other person
acceptable to New Parent, as set forth in such Election Form. Any holder of
Company Shares who has made an election by submitting an Election Form to the
Exchange Agent may at any time prior to the Election Deadline change such
holder's election by submitting a revised Election Form, properly completed and
signed that is received by the Exchange Agent prior to the Election Deadline.
Any holder of Company Shares may at any time prior to the Election Deadline
revoke his election and withdraw his Company Certificates deposited with the
Exchange Agent by written notice to the Exchange Agent received prior to the
Election Deadline. New Parent will have the discretion, which it may delegate in
whole or in part to the Exchange Agent, to determine whether Election Forms have
been properly completed, signed and submitted or revoked and to disregard
immaterial defects in the Election Forms. The decision of New Parent (or the
Exchange Agent) in such matters shall be conclusive and binding. Neither New
Parent or the Exchange Agent will be under any obligation to notify any person
of any defect in an Election Form submitted to the Exchange Agent. The Exchange
Agent shall also make all computations contemplated by this Section 2.1 and all
such computations shall be conclusive and binding on the holders of Company
Shares. As of the Election Deadline, all holders of Company Shares at the
Election Deadline that shall not have submitted to the Exchange Agent or shall
have properly revoked an effective, properly completed Election Form, shall be
deemed not to have made a Stock Election. If New Parent or the Exchange Agent
shall determine that any purported Stock Election was not properly made, such
purported Stock Election shall be of no force and effect.
(e) Parent (with the consent of the Company which shall not be
unreasonably withheld) shall have the right to make rules, not inconsistent with
the terms of this Agreement, governing the validity of the Election Forms, the
issuance and delivery of certificates for New Parent Common Stock into which
shares of Company Shares are converted in the Company Merger, and the payment of
cash for shares of Company Shares converted into the right to receive cash in
the Company Merger.
-7-
<PAGE>
(f) The Company shall give the New Parent and Merger Sub I prompt
notice of any demands for payment, or notices of intent to demand payment,
received by the Company with respect to Company Shares, and New Parent and
Merger Sub I shall have the right to participate in (and control) all
negotiations and proceedings with respect to such demands. The Company shall
not, except with the prior written consent of New Parent or as otherwise
required by law, make any payment with respect to, or settle, or offer to
settle, any such demands.
2.2 Conversion of Securities - The Parent Merger
At the Effective Time, by virtue of the Parent Merger and without
any action on the part of Merger Sub II, Parent, the Surviving Corporation of
the Parent Merger or the holder of any of the following securities:
(i) each share of Parent Common Stock ("Parent Shares"), issued and
outstanding immediately prior to the Effective Time (other than Parent Shares to
be cancelled pursuant to clause (ii) below) shall be converted into and become
one fully paid and nonassessable share of New Parent Common Stock (the "Parent
Merger Consideration");
(ii) each Parent Share that is issued and outstanding and owned by
Parent, New Parent, or Merger Sub II shall be cancelled and retired, and no
shares of New Parent Common Stock shall be issued with respect thereto; and
(iii) each share of Merger Sub II's capital stock issued and
outstanding immediately prior to the Effective Time shall be converted into and
become one validly issued, fully paid and nonassessable share of common stock of
the Surviving Corporation of the Parent Merger.
2.3 Cancellation of Certain New Parent Stock; Other Matters Affecting
New Parent Common Stock.
(a) At the Effective Time, the shares of New Parent Common Stock
held by Parent shall be cancelled and retired and all consideration paid by
Parent in respect thereof shall be returned. No shares of stock or other
securities of New Parent or any other corporation shall be issuable, and no
other payment or consideration shall be made, with respect to such shares of New
Parent Common Stock.
(b) At the Effective Time, New Parent shall assume all stock options
and warrants of Parent issued and outstanding immediately prior to the Effective
Time and such assumed options and warrants will be exercisable for the same
exercise price and for the same number of shares of New Parent Common Stock as
previously applied to Parent Common Stock. The adjustments provided herein with
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respect to any options which are "incentive stock options" (as defined in
Section 422 of the Code) shall be effected in a manner consistent with Section
424(a) of the Code.
2.4 Exchange of Certificates.
(a) As of the Effective Time, a bank or trust company to be
designated by the Parent or the New Parent prior to the record date for the
Special Meeting and consented to by the Company (such consent not to be
unreasonably withheld or delayed) (the "Exchange Agent") shall act as exchange
agent in effecting the exchange, for the Company Merger Consideration, of
certificates (the "Certificates") that, prior to the Effective Time, represented
Company Shares entitled to exchange pursuant to Section 2.1(a)(i). The New
Parent shall deposit with the Exchange Agent in trust for the benefit of the
holders of Certificates formerly representing Company Shares, cash together with
certificates for such number of shares of New Parent Common Stock into which the
Company Shares are converted pursuant to Section 2.1(a)(i)(together with any
dividends or distributions with respect thereto with a record date after the
Effective Time, the "Exchange Fund"). Promptly after the Effective Time (but in
any event within three business days thereof), the New Parent shall cause to be
mailed to each record holder of Certificates that immediately prior to the
Effective Time represented Company Shares (and which shall not previously have
been surrendered in connection with a Stock Election) a form of letter of
transmittal and instructions for use in surrendering such Certificates and
receiving the Company Merger Consideration therefor. Subject to any applicable
withholding tax requirements, upon the surrender of each such Certificate
together with a duly completed and executed letter of transmittal, the Exchange
Agent shall (x) pay to the holder of such Certificate formerly representing
Company Shares cash equal to the amount of cash due such holder after giving
effect to any Stock Election made by such holder and (y) issue to the holder of
such Certificate a certificate for that number of shares of the New Parent
Common Stock equal to the number of shares of New Parent Common Stock due under
the Company Merger Consideration elected by such holder, and such Certificate
shall forthwith be cancelled. Only certificates for whole shares of New Parent
Common Stock shall be issued, with cash paid in lieu of fractional shares as
provided in Section 2.4(b) below. Until so surrendered and exchanged, each such
Certificate (other than Certificates representing Company Shares held by New
Parent or the Company or Dissenting Shares) shall represent solely the right to
receive the Company Merger Consideration therefor. If any certificates for New
Parent Common Stock are to be issued to a person other than the holder in whose
name the Certificate formerly representing Company Shares surrendered in
exchange therefor is registered, it shall be a condition to such issuance that
the person requesting such issuance shall pay to the Exchange Agent any transfer
or other taxes required by reason of the issuance of such certificates for New
Parent Common Stock to a person other than the registered holder of the
Certificate surrendered, or such person shall establish to the satisfaction of
the Exchange Agent that such tax has been paid or is not applicable.
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Notwithstanding the foregoing, neither the Exchange Agent nor any party hereto
shall be liable to a holder of Company Shares for any Company Merger
Consideration delivered to a public official pursuant to applicable abandoned
property, escheat and similar laws.
(b) No fractional shares of New Parent Common Stock shall be issued
upon the surrender for exchange of Certificates, no dividend or distribution of
the New Parent shall relate to such fractional share interests and such
fractional share interests will not entitle the owner thereof to vote or to any
rights of a stockholder of the New Parent. As promptly as practicable following
the Effective Time, the New Parent shall pay to each record holder of Company
Shares an amount in cash, if any, equal to the product obtained by multiplying
(i) the fractional share interest to which such holder (after taking into
account all Company Shares held at the Effective Time by such holder) would
otherwise be entitled by (ii) the Average Closing Price. As soon as practicable
after the determination of the amount of cash, if any, to be paid to holders of
Company Shares with respect to any fractional share interests, the Exchange
Agent will make available such amounts to such holders subject to the terms of
Section 2.4(c).
(c) No dividends or other distributions with respect to New Parent
Common Stock with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate formerly representing Company Shares
with respect to the shares of New Parent Common Stock represented thereby, and
no cash payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 2.4(b), and all such dividends, other distributions and cash
in lieu of fractional shares of New Parent Common Stock shall be paid by New
Parent to the Exchange Agent and shall be included in the Exchange Fund, in each
case until the due and valid surrender of such Certificate in accordance with
this Article 2. Subject to the effect of applicable abandoned property, escheat
or similar laws and laws with respect to the withholding of taxes, following the
due and valid surrender of any such Certificate there shall be paid to the
holder of the Certificate representing whole shares of New Parent Common Stock
issued in the exchange therefor, without interest, (i) at the time of such
surrender, the amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to such whole shares of
New Parent Common Stock and the amount of any cash payable in lieu of a
fractional share of New Parent Common Stock to which such holder is entitled
pursuant to Section 2.4(b) and (ii) at the appropriate payment date, the amount
of dividends or other distributions with a record date after the Effective Time
but prior to such surrender and with a payment date subsequent to such surrender
payable with respect to such whole shares of New Parent Common Stock. The New
Parent shall make available to the Exchange Agent cash (or the other property so
distributed) for these purposes.
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(d) To the extent not immediately required for payment for
fractional shares or dividends, the Exchange Fund (excluding shares of New
Parent Common Stock) shall be invested by the Exchange Agent, as directed by the
New Parent (so long as such directions do not impair the rights of holders of
Company Shares), in direct obligations of the United States of America,
obligations for which the full faith and credit of the United States of America
is pledged to provide for the payment of principal and interest, commercial
paper rated of the highest quality by Moody's Investors Services, Inc. or
Standard & Poor's Corporation, or certificates of deposit issued by a commercial
bank having at least $300,000,000 in assets (a "Qualified Commercial Bank"); and
any net earnings with respect thereto shall be paid to the New Parent as and
when requested by the New Parent.
(e) Promptly following the date that is one year after the Effective
Time, the Exchange Agent shall deliver to the New Parent all shares of New
Parent Common Stock, cash, certificates and other documents in its possession
relating to the transactions described in this Agreement, and the Exchange
Agent's duties shall terminate. Thereafter, each holder of a Certificate
formerly representing a Company Share may surrender such Certificate to the New
Parent and receive (subject to applicable abandoned property, escheat and
similar laws) in exchange therefor (subject to any applicable withholding tax
requirements) the Company Merger Consideration therefor, together with payment
for any fractional shares or dividends pursuant to Sections 2.4(b) and (c)
without any interest thereon but such holders shall have no greater rights
against any Surviving Corporation or the New Parent than may be accorded to
general creditors of any Surviving Corporation or the New Parent under
applicable law.
(f) After the Effective Time, there shall be no transfers on the
stock transfer books of the Company, the Parent or the Surviving Corporations of
any Company Shares or Parent Shares. If, after the Effective Time, Certificates
formerly representing Company Shares are presented to the Surviving Corporation
of the Company Merger or the Exchange Agent, they shall be cancelled and
exchanged (subject to any applicable withholding tax requirements) for the
Company Merger Consideration, as provided in this Article 2, subject to
applicable law in the case of Dissenting Shares.
(g) From and after the Effective Time, holders of Certificates
theretofore evidencing Company Shares shall cease to have any rights as
stockholders of the Company, except as provided herein or by law. From and after
the Effective Time, holders of Certificates theretofore evidencing Parent Shares
shall cease to have any rights as stockholders of the Parent except as provided
herein or by law, but shall have all rights as stockholders of New Parent with
respect to the number of shares of New Parent Common Stock into which such
Parent Shares were converted in the Parent Merger. After the Effective Time,
Certificates formerly representing
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Parent Shares automatically shall be deemed to represent an equivalent number of
shares of New Parent Common Stock.
(h) If any Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such person of a bond in such reasonable amount as
the Surviving Corporation may direct as indemnity against any claim that may be
made against it with respect to such Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Certificate the Company Merger
Consideration or the Parent Merger Consideration, as appropriate, and, if
applicable, any cash in lieu of fractional shares, and unpaid dividends and
distributions on shares of New Parent Common Stock deliverable in respect
thereof, pursuant to this Agreement.
(i) If at any time during the period between the date of this
Agreement and the Effective Time, (A) any change in the outstanding shares of
capital stock of Parent shall occur as a result of any reclassification,
recapitalization, stock split (including a reverse stock split) or combination,
exchange or readjustment of shares, or any stock dividend or stock distribution
with a record date during such period, (B) Parent pays or declares an
extraordinary dividend with a record date prior to the Effective Time, or (C)
Parent issues Parent Common Stock at prices below the current market price
thereof (as reasonably determined by Parent and excluding issuance of shares
upon exercise of existing options or warrants or upon conversion of outstanding
securities convertible into shares of Parent Common Stock), the Exchange Ratio
shall be equitably adjusted.
(j) If the New Parent or the Exchange Agent is required by
applicable withholding tax requirements to withhold amounts from the Company
Merger Consideration, such withheld amounts shall be treated for all purposes of
this Agreement as having been paid to the holder of the Company Shares in
respect of which such deductions and holdings were made by New Parent or the
Exchange Agent.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE PARENT, NEW PARENT AND THE MERGER SUBSIDIARIES
The Parent, New Parent, Merger Sub I and Merger Sub II each represents and
warrants to the Company, except as set forth on a Disclosure Schedule previously
delivered to the Company the ("Parent Disclosure Schedule") with respect to any
representation or warranty set forth below, as follows:
3.1 Organization and Qualification. Each of the Parent, New Parent, Merger
Sub I and Merger Sub II is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation and has all requisite
corporate power and authority to carry on its business as it is now being
conducted. Each of the Parent, New Parent, Merger Sub I and Merger Sub II is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or leased or
the nature of its activities makes such qualification necessary, except for
failures to be so qualified or in good standing which would not, in the
aggregate, have or reasonably be expected to have a material adverse effect on
the business, properties, assets, financial condition or results of operations
of the Parent and its subsidiaries ("the Parent Subsidiaries") taken as a whole
(but excluding any change, effect, condition, event or circumstance arising out
of or attributable to (i) changes, effects, conditions, events or circumstances
that generally affect the industries in which the Parent or Parent Subsidiaries
operate (including legal and regulatory changes) or (ii) changes arising from
the consummation of the transactions contemplated hereby or the announcement of
the execution of this Agreement) (a "Parent Material Adverse Effect"). Copies of
the charter documents and by-laws of the Parent, New Parent, Merger Sub I and
Merger Sub II have heretofore been delivered to the Company and such copies are
accurate and complete as of the date hereof.
3.2 Capitalization.
(a) The authorized capital stock of the Parent consists of (a)
150,000,000 Parent Shares and (b) 5,000,000 shares of preferred stock, $0.10 par
value per share (the "Parent Preferred Shares"). As of the date of this
Agreement:
(i) 126,825,441 Parent Shares were validly issued and outstanding,
fully paid and nonassessable and no Parent Preferred Shares were issued or
outstanding;
(ii) No Parent Shares and no Parent Preferred Shares were held in
the treasury of the Parent;
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(iii) 9,245,529 Parent Shares are reserved for issuance pursuant to
the Convertible Notes.
(iv) 4,200,000 Parent Shares are reserved for issuance pursuant to
the Parent's 1997 Long-Term Incentive Plan (the "1997 LTIP");
(v) 2,750,238 Parent Shares are reserved for issuance pursuant to an
option issued to Western Resources, Inc., the parent company of Westar Capital,
Inc.;
(vi) 1,214,678 Parent Shares are reserved for issuance pursuant to
certain warrants issued in 1993 and 1995;
(vii) 973,165 Parent Shares are reserved for issuance pursuant to
the Parent's 1994 Stock Option Plan (the "1994 Plan");
(viii)560,134 Parent Shares are reserved for issuance pursuant to
the Parent's employee stock purchase plan;
(ix) 347,800 Parent Shares are reserved for issuance pursuant to the
Parent's 401(k) plan; and
(x) 103,697 Parent Shares are reserved for issuance pursuant to a
warrant held by a bank.
The 1997 LTIP and the 1994 Plan are sometimes hereinafter referred to
collectively as the "Parent Option Plans" and individually as a "Parent Option
Plan," and the options granted thereunder are hereinafter referred to
collectively as the "Parent Options" and individually as a "Parent Option."
Except as set forth above in this Section 3.2, as of the date hereof, there are
no other shares of capital stock or other equity securities of the Parent
outstanding and no other outstanding options, warrants, rights to subscribe to
(including any preemptive rights), calls or commitments of any character
whatsoever to which the Parent or any of the Parent Subsidiaries is a party or
may be bound requiring the issuance, transfer or sale of any shares of capital
stock or other securities of the Parent or any of the Parent Subsidiaries or any
securities or rights convertible into or exchangeable or exercisable for any
such shares or securities, and, as of the date hereof, there are no contracts,
commitments, understandings or arrangements by which the Parent or any of the
Parent Subsidiaries is or may become bound to issue additional shares of their
capital stock or options, warrants or rights to purchase or acquire any
additional shares of their capital stock or securities convertible into or
exchangeable or exercisable for any such shares. All of the outstanding Parent
Shares have been validly issued and are fully paid and non-assessable.
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(b) The authorized capital stock of the New Parent consists of (a)
250,000,000 shares of New Parent Common Stock of which 1,000 shares are issued
and outstanding and owned beneficially and of record by Parent and (b)
50,000,000 shares of preferred stock, $0.10 par value per share, none of which
are issued or outstanding. All of the outstanding shares of New Parent Common
Stock have been validly issued and are fully paid and non-assessable.
3.3 Authority. Each of the Parent, New Parent, Merger Sub I and Merger Sub
II has all requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the Parent,
New Parent, Merger Sub I and Merger Sub II and the consummation by the Parent,
New Parent, Merger Sub I and Merger Sub II of the transactions contemplated
hereby have been duly authorized by the respective Boards of Directors of the
Parent, New Parent, Merger Sub I and Merger Sub II and by the Parent as the sole
stockholder of New Parent and by New Parent as the sole stockholder of the
Merger Subsidiaries and no other corporate proceedings on the part of the
Parent, New Parent or the Merger Subsidiaries are necessary to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby by the Parent, New Parent or the Merger Subsidiaries except
for the approval of the Parent Merger by holders of Parent Common Stock. This
Agreement has been duly executed and delivered by the Parent, New Parent, Merger
Sub I and Merger Sub II and constitutes a valid and binding obligation of each
of them, enforceable against each of them in accordance with its terms, subject
to applicable bankruptcy, insolvency and other laws pertaining to creditors'
rights in general.
3.4 Compliance.
(a) Neither the execution and delivery of this Agreement by the
Parent, New Parent and the Merger Subsidiaries nor the consummation by them of
the transactions contemplated hereby, nor compliance by the Parent, New Parent
and the Merger Subsidiaries with any of the provisions hereof will (i) violate,
conflict with, or result in a breach of any provision of, or constitute a
default (or an event that, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Parent, New Parent or
the Merger Subsidiaries under, any of the terms, conditions or provisions of (x)
the charter or by-laws of the Parent, New Parent or the Merger Subsidiaries or
(y) any note, bond, mortgage, indenture, deed of trust, license, lease, or any
other agreement or instrument or obligation to which the Parent, New Parent or
the Merger Subsidiaries is a party, or to which any of them, or any of their
respective properties or assets, may be subject, or (ii) subject to compliance
with the statutes and regulations referred to in the next paragraph, violate any
Parent
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Applicable Law (as defined in Section 3.9 below); except, in the case of each of
clauses (i)(y) and (ii) above, for such violations, conflicts, breaches,
defaults, terminations, accelerations or creations of liens, security interests,
charges or encumbrances that, would not have a Parent Material Adverse Effect
and would not materially adversely affect the ability of the Parent, New Parent
and the Merger Subsidiaries to perform their obligations under this Agreement.
(b) Other than in connection with or in compliance with the
provisions of the Massachusetts Law, Delaware Law, the Securities Act of 1933,
as amended (the "Securities Act"), the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the "blue sky" laws of various states and the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and
regulations thereunder (the "Hart-Scott-Rodino Act"), no notice to, filing with,
or authorization, consent or approval of, any Governmental Entity (as defined in
Section 4.10(a)) is necessary for the consummation by the Parent, New Parent or
the Merger Subsidiaries of the transactions contemplated by this Agreement,
unless the failure to give such notices, make such filings, or obtain such
authorizations, consents or approvals would not, in the aggregate, materially
impair the ability of the Parent, New Parent and the Merger Subsidiaries to
perform their obligations hereunder and would not have a Parent Material Adverse
Effect.
3.5 Commission Filings.
(a) The Parent has filed with the Commission all required reports,
schedules, forms, statements and other documents from January 1, 1994 through
the date hereof. All documents filed by the Parent with the Commission pursuant
to the Securities Act or the Exchange Act since January 1, 1994 are referred to
herein as the "Parent Commission Filings." The Parent Commission Filings (i)
were prepared, in all material respects, in accordance with the applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations thereunder, (ii) did not at the time they were filed (or, if filed
and amended prior to the date of this Agreement, at the time they were amended
prior to the date hereof, or, if first filed after the date of this Agreement
and amended, at the time they were amended) contain any untrue statement of
material fact, and (iii) did not at the time they were filed (or, if filed and
amended prior to the date of this Agreement, at the time they were amended prior
to the date hereof, or, if first filed after the date of this Agreement and
amended, at the time they were amended) omit to state a material fact necessary
to make the statements therein, in light of the circumstances in which they were
made, not misleading.
Each of the audited consolidated financial statements and unaudited
interim consolidated financial statements (including any related notes or
schedules) included in the Parent Commission Filings was prepared in accordance
with generally accepted accounting principles applied on a consistent basis,
except as may be
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indicated therein or in the notes or schedules thereto, and fairly presented in
all material respects the consolidated financial position of the Parent and the
Parent Subsidiaries as at the dates thereof and the consolidated results of
their operations and cash flows for the periods then ended, subject, in the case
of the unaudited interim financial statements, to normal year-end audit
adjustments and the absence of complete notes.
(b) None of the information supplied or to be supplied by the
Parent, New Parent or the Merger Subsidiaries for inclusion or incorporation by
reference in (i) the Registration Statement (as defined herein) will, at the
time the Registration Statement is filed with the Commission and at the time it
becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading and (ii) the Joint
Proxy Statement/Information Statement (as defined herein) will, at the date
mailed to stockholders of the Company and Parent and at the time of the meeting
of stockholders of the Company to be held in connection with the Company Merger,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time, any event with respect
to the Parent, New Parent, the Merger Subsidiaries, their respective officers
and directors or any of their subsidiaries should occur which is required to be
described in an amendment of, or a supplement to, the Registration Statement or
the Joint Proxy Statement/Information Statement, Parent shall promptly so advise
the Company and such event shall be so described, and such amendment or
supplement (which the Company shall have a reasonable opportunity to review)
shall be promptly filed with the Commission and, as and to the extent required
by law, disseminated to the stockholders of Parent. The Registration Statement
will comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations thereunder and the Joint Proxy
Statement/Information Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
thereunder, except that no representation or warranty is made with respect to
statements made or incorporated by reference therein based on information
supplied by the Company specifically for inclusion or incorporation by reference
in such documents.
3.6 Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best knowledge of the Parent, threatened against the Parent,
New Parent, the Merger Subsidiaries or any of the Parent Subsidiaries that could
reasonably be expected to have a Parent Material Adverse Effect or to materially
adversely affect the Parent's, New Parent's, Merger Sub I's or Merger Sub II's
ability to perform its respective obligations under this Agreement.
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3.7 Changes. Except as contemplated by this Agreement or as disclosed in
the Parent Disclosure Schedule or in the Parent Commission Filings, since June
30, 1998, the Parent and the Parent Subsidiaries, taken as a whole, have
conducted their business only in the ordinary and usual course, and there has
not occurred any change, effect, condition, event or circumstance which has a
Parent Material Adverse Effect.
3.8 Environmental Matters.
(a) The Parent and the Parent Subsidiaries have complied in all
respects with all applicable Environmental Laws (as defined below), except for
such noncompliance which would not have a Parent Material Adverse Effect. For
purposes of this Agreement, "Environmental Law" means any foreign, U.S. federal,
provincial, state or local law, statute, ordinance, rule or regulation or the
common law relating to the environment or occupational health and safety,
including without limitation, any statute, ordinance, regulation or order
pertaining to (i) release, manufacture, use, processing, distribution,
treatment, storage, disposal, handling, generation or transportation of
Hazardous Materials (as defined below); (ii) air, water and noise pollution;
(iii) groundwater and soil contamination; (iv) the release or threatened release
into the environment of Hazardous Materials, including without limitation
emissions, discharges, injections, spills, escapes or dumping of Hazardous
Materials; (v) the protection of wild life, marine sanctuaries and wetlands,
including without limitation all endangered and threatened species; (vi) storage
tanks, vessels and containers; (vii) underground and other storage tanks or
vessels, abandoned, disposed or discarded barrels, containers and other closed
receptacles; and (viii) health and safety of employees and other persons. As
used herein the term "Environmental Laws" shall include, without limitation, the
Clean Water Act, also known as the Federal Water Pollution Control Act, 33
U.S.C. ss.ss. 1251, et seq.; the Clean Air Act, 42 U.S.C. ss.ss. 7401, et seq.;
the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), 7 U.S.C. ss.
136; the Surface Mining Control and Reclamation Act of 1977 (SMCRA), 30 U.S.C.
ss.ss. 1201, et seq.; the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ss.ss. 9601, et seq. (CERCLA); the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613;
the Emergency Planning and Community Right-to-Know Act of 1986 (CEPCRA), 42
U.S.C. ss.ss. 11001, et seq.; the Resource Conversation and Recovery Act of 1976
(OSHA) as amended, 29 U.S.C. ss.ss. 655 and 657; the Carpenter-Presley-Tanner
Hazardous Substances Account Act; the California Health & Safety Code ss.ss.
25300, et seq., the Massachusetts Hazardous Waste Management Act, M.G.L. c. 21C;
the Massachusetts Oil and Hazardous Materials Release, Prevention and Response
Act, M.G.L. c. 21E; the Massachusetts Toxics Use Reduction Act, M.G.L. c. 211;
the Massachusetts Air Pollution Control Act, M.G.L. c. 111, ss.ss.142A-142M; and
the Massachusetts Water Pollution Control Act, M.G.L. c. 21, together, in each
case, with any amendment thereto, and the regulations and rules adopted and the
official publications promulgated thereunder and all substitutions thereof. As
used herein
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the term "Hazardous Materials" shall mean (i) any chemical, compound, material,
mixture or substance that is defined or listed in, or otherwise classified
pursuant to, any Environmental Laws as a "hazardous substance," "hazardous
material," "hazardous waste," "extremely hazardous waste," "infectious waste,"
"toxic substance," "toxic pollutant" or any other formulation intended to
define, list, or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive
toxicity, or "EP toxicity" and (ii) any petroleum, natural gas, natural gas
liquid, liquefied natural gas, synthetic gas usable for fuel (or mixtures of
natural gas and such synthetic gas), ash produced by a resource recovery
facility utilizing a governmental solid waste stream, and drilling fluids,
produced waters, and other wastes associated with the exploration, development
or production of crude oil, natural gas, or geothermal resources.
(b) There have been no releases of any Hazardous Materials into the
environment by the Parent or any Parent Subsidiary, or, to the knowledge of the
Parent by any other party at any parcel of real property or any facility
formerly or currently owned, operated or controlled by the Parent or any Parent
Subsidiary which had a Parent Material Adverse Effect.
3.9 Compliance with Laws; Permits. Neither the Parent nor any Parent
Subsidiary (a) is in violation of, or has violated, any Parent Applicable Laws
(as defined below) or (b) has received any notice from any Governmental Entity
or any other person that either the Parent or any Parent Subsidiary is in
violation of, or has violated, any Parent Applicable Laws, except for violations
which, individually or in the aggregate, do not have a Parent Material Adverse
Effect. The Parent or each Parent Subsidiary have all permits, licenses and
franchises from Governmental Entities required to conduct their businesses as
now being conducted, except for such permits, licenses and franchises the
absence of which would not have a Parent Material Adverse Effect. As used herein
the term "Parent Applicable Laws" means all applicable provisions of any laws,
statutes, ordinance, codes, rules, regulations or any agency requirements,
permits, licenses, judgments, orders, injunctions, decrees or arbitration awards
of any Governmental Entities applicable to the Parent or any Parent Subsidiary
and material to the conduct of the businesses of the Parent or any Parent
Subsidiary as those businesses are now being conducted and the ownership and
operation of any of the assets, properties or facilities of the Parent or any
Parent Subsidiary, provided, however, that the term Parent Applicable Laws shall
not include any Environmental Laws.
3.10 No Undisclosed Material Liabilities. Except as disclosed in the
Parent Commission Filings or on the Parent Disclosure Schedule, and except for
liabilities arising since June 30, 1998 in the ordinary course of business,
there are no liabilities of the Parent or any of its subsidiaries of any kind
whatsoever, whether accrued, contingent, absolute, determined, determinable or
otherwise, that would have a Parent Material Adverse Effect.
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3.11 Interim Operations of Merger Subs. Each of the Merger Subsidiaries
was formed solely for the purpose of engaging in the transactions contemplated
by this Agreement, has engaged in no other business activities and has conducted
its operations only as contemplated by this Agreement.
3.12 Broker's Fees. Except for Barnes Associates, Inc., no agent, broker,
person or firm acting on behalf of the Parent, New Parent, Merger Sub I or
Merger Sub II is or will be entitled to any advisory, commission or broker's or
finder's fee from any of the parties hereto in connection with any of the
transactions contemplated herein.
3.13 Financing. The Parent has, and will have at the Effective Time, funds
and financing arrangements available to it sufficient to provide the funds
necessary to pay the cash portion of the Company Merger Consideration and to
consummate the Company Merger.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Parent, New Parent and the
Merger Subsidiaries, except as set forth on a Disclosure Schedule previously
delivered to the Parent (the "Company Disclosure Schedule") with respect to any
representation or warranty set forth below, as follows:
4.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has all requisite corporate power and
authority to carry on its business as it is now being conducted. The Company is
duly qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or leased or
the nature of its activities makes such qualification necessary, except for
failures to be so qualified or in good standing which would not, in the
aggregate, have or reasonably be expected to have a material adverse effect on
the business, properties, assets, financial condition or results of operations
of the Company and the Company Subsidiaries (as defined in Section 4.2) taken as
a whole (but excluding any change, effect, condition, event or circumstance
arising out of or attributable to (i) changes, effects, conditions, events or
circumstances that generally affect the industries in which the Company operates
(including legal and regulatory changes) or (ii) changes arising from the
consummation of the transactions contemplated hereby or the announcement of the
execution of this Agreement) (a "Company Material Adverse Effect"). Copies of
the charter documents and by-laws of the Company and its Subsidiaries have
heretofore been delivered to the Parent and such copies are accurate and
complete as of the date hereof.
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4.2 Subsidiaries. The only direct or indirect subsidiaries of the Company
(collectively, the "Company Subsidiaries" and, individually, a "Company
Subsidiary") are those named in Exhibit 21 to the Company's Annual Report on
Form 10-K for the Fiscal Year ended December 31, 1997 as filed with the
Commission (the "Company 1997 10-K") and heretofore delivered to the Parent, as
amended.
The Company is, directly or indirectly, the record and beneficial owner of
all of the outstanding shares of capital stock in each of the Company
Subsidiaries, there are no irrevocable proxies or voting agreements or voting
trusts with respect to such shares, and no securities of any of the Company
Subsidiaries are or may become required to be issued by reason of any options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights, exercisable for, convertible
into or exchangeable for, shares of any capital stock of any Company Subsidiary,
and there are no contracts, commitments, understandings or arrangements by which
any Company Subsidiary is bound to issue or sell additional shares or purchase
shares of its capital stock or securities convertible into or exchangeable for
such shares. All of such shares so owned by the Company are validly issued,
fully paid and nonassessable and are owned by the Company free and clear of any
security interest, claim, lien, encumbrance or agreement of any kind with
respect thereto.
Each Company Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation and has
the requisite power and authority to carry on its business as it is now being
conducted. Each Company Subsidiary is duly qualified as a foreign corporation to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or leased or the nature of its activities makes such
qualification necessary, except for failures to be so qualified or in good
standing that would not have a Company Material Adverse Effect. Copies of the
charter documents and by-laws of each Company Subsidiary have heretofore been
made available to the Parent and are accurate and complete as of the date
hereof.
Except as disclosed in the Company Disclosure Schedule referred to above
or the Company 1997 10-K, the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any other corporation,
partnership, limited liability company, joint venture or other business
association or entity.
4.3 Capitalization. The authorized capital stock of the Company consists
of 20,000,000 shares of Common Stock, $.02 par value. As of the date of this
Agreement:
(i) 5,826,181 Shares were validly issued and outstanding, fully
paid and nonassessable;
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(ii) 592,548 Shares were held in the treasury of the Company;
(iii) 473,534 Shares were reserved for issuance pursuant to
outstanding options heretofore granted under the Company's 1994 Stock
Option Plan (the "1994 Plan"), and 106,206 Shares were reserved for future
issuances of Company Options pursuant to the 1994 Plan;
(iv) 344,266 Shares were reserved for issuance pursuant to
outstanding options heretofore granted under the Company's 1991 Stock
Option Plan (the "1991 Plan"), and 109,541 Shares were reserved for future
issuances of Company Options pursuant to the 1991 Plan;
(v) 107,000 Shares were reserved for issuance pursuant to
outstanding options heretofore granted under the Company's 1991 Director
Stock Option Plan (the "1991 Director Plan"), and 26,000 Shares were
reserved for future issuances of Company Options pursuant to the 1991
Director Plan;
(vi) 43,499 Shares were reserved for issuance in connection with the
offering expiring on October 31, 1998 under the Company's Employee Stock
Purchase Plan (the "ESPP"); and
(vii) 7,500,000 shares of Common Stock have been reserved for
issuance under the Rights Agreement (as defined in Section 4.13).
The 1994 Plan, the 1991 Plan and the 1991 Director Plan are sometimes
hereinafter referred to collectively as the "Company Option Plans" and
individually as a "Company Option Plan," and the options granted thereunder are
hereinafter referred to collectively as the "Company Options" and individually
as a "Company Option." True and complete copies of all of the Company Option
Plans and the ESPP have heretofore been made available to the Parent. The
Disclosure Schedule sets forth, with respect to each Company Option, the number
of Company Shares that may be purchased upon exercise of such Company Option and
the exercise price thereof. Except as set forth above in this Section 4.3, there
are no other shares of capital stock or other securities of the Company
outstanding and no other outstanding options, warrants, rights to subscribe to
(including any preemptive rights), calls or commitments of any character
whatsoever to which the Company or any of the Company Subsidiaries is a party or
may be bound requiring the issuance, transfer or sale of any shares of capital
stock or other securities of the Company or any of the Company Subsidiaries or
any securities or rights convertible into or exchangeable or exercisable for any
such shares or securities, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of the Company
Subsidiaries is or may become bound to issue additional shares of their capital
stock or options, warrants or rights to purchase or acquire any additional
shares of their capital stock or securities convertible into or exchangeable or
exercisable for any such
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shares. Except for the Voting Agreements and as set forth on the Company
Disclosure Schedule, to the best of the Company's knowledge, none of the Company
Shares is subject to any voting trust, transfer restrictions or other similar
arrangements, except for vesting arrangements pursuant to agreements with the
Company or restrictions on transfer imposed by the Securities Act and state
securities laws. All of the outstanding Company Shares have been validly and
legally issued and are fully paid and non-assessable.
4.4 Authority. The Company has all requisite corporate power and authority
to enter into this Agreement and the Stock Option Agreement, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
and the Stock Option Agreement by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by the
Company's Directors and, except for the approval of the Company Merger by its
stockholders, no other corporate proceedings on the part of the Company are
necessary to authorize the execution, delivery and performance by the Company of
this Agreement and the Stock Option Agreement and the transactions contemplated
hereby and thereby. This Agreement and the Stock Option Agreement have been duly
executed and delivered by the Company and constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, subject to applicable bankruptcy, insolvency and other
laws pertaining to creditors' rights in general.
4.5 Compliance.
(a) Neither the execution and delivery of this Agreement or the
Stock Option Agreement by the Company, nor the consummation by the Company of
the transactions contemplated hereby or thereby, nor compliance by the Company
with any of the provisions hereof or thereof will (i) violate, conflict with, or
result in a breach of any provision of, or constitute a default (or an event
that, with notice or lapse of time or both, would constitute a default) under,
or result in the termination of, or accelerate the performance or payment
required by, or result in a right of termination or acceleration under, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the properties or assets of the Company or any Company Subsidiaries,
under any of the terms, conditions or provisions of (x) the charter or by-laws
of the Company or any Company Subsidiaries, or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, distribution agreement, joint venture
agreement or any other agreement or instrument or obligation to which the
Company or any Company Subsidiaries is a party, or to which any of them or any
of their respective properties or assets, may be subject, or (ii) subject to
compliance with the statutes and regulations referred to in the next paragraph,
violate any Company Applicable Laws (as defined in Section 4.15 below); except,
in the case of each of clauses (i)(y) and (ii) above, for such violations,
conflicts, breaches,
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defaults, terminations, accelerations or creations of liens, security interests,
charges or encumbrances that would not have a Company Material Adverse Effect
and would not materially adversely affect the Company's ability to perform its
obligations under this Agreement and the Stock Option Agreement.
(b) Other than in connection with or in compliance with the
provisions of the Massachusetts Law, the Securities Act, the Exchange Act, the
"takeover" or "blue sky" laws of various states and the Hart-Scott-Rodino Act,
no notice to, filing with, or authorization, consent or approval of, any
Governmental Entity is necessary for the consummation by the Company of the
transactions contemplated by this Agreement and the Stock Option Agreement,
unless the failure to give such notices, make such filings, or obtain such
authorizations, consents or approvals would not, in the aggregate, materially
impair the ability of the Company to perform its obligations hereunder and
thereunder and would not have a Company Material Adverse Effect.
4.6 Commission Filings.
(a) The Company has filed with the Commission all required reports,
schedules, forms, statements and other documents from January 1, 1994 through
the date hereof. All documents filed by the Company with the Commission pursuant
to the Securities Act or the Exchange Act since January 1, 1994 are referred to
herein as the "Company Commission Filings;" the Company 1997 10-K, the Company's
Quarterly Reports on Form 10-Q for the periods ended March 31, 1998 and June 30,
1998 and any Report on Form 8-K filed by the Company since January 1, 1998 and
prior to the date hereof are collectively referred to as the "Company 1998
Commission Filings." The Company Commission Filings (i) were prepared, in all
material respects, in accordance with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations thereunder,
(ii) did not at the time they were filed contain any untrue statement of
material fact, and (iii) did not at the time they were filed omit to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
Each of the audited consolidated financial statements and unaudited
interim consolidated financial statements (including any related notes or
schedules) included in the Company Commission Filings was prepared in accordance
with generally accepted accounting principles applied on a consistent basis,
except as may be indicated therein or in the notes or schedules thereto, and
fairly presented in all material respects the consolidated financial position of
the Company and the Company Subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended, subject, in the case of the unaudited interim financial statements, to
normal year-end audit adjustments and the absence of complete notes.
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(b) None of the information supplied or to be supplied by the
Company for inclusion or incorporation by reference in (i) the Registration
Statement will, at the time the Registration Statement is filed with the
Commission and at the time it becomes effective under the Securities Act,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and (ii) the Joint Proxy Statement/Information Statement will, at
the date mailed to stockholders of the Company and Parent and at the time of the
meeting of stockholders of the Company to be held in connection with the Company
Merger, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. If at any time prior to the Effective Time, any event with respect
to the Company, its officers and directors or any of its subsidiaries should
occur which is required to be described in an amendment of, or a supplement to,
the Registration Statement or the Joint Proxy Statement/Information Statement,
the Company shall promptly so advise Parent and such event shall be so
described, and such amendment or supplement (which Parent shall have a
reasonable opportunity to review) shall be promptly filed with the Commission
and, as and to the extent required by law, disseminated to the stockholders of
the Company. The Joint Proxy Statement/Information Statement, insofar as it
relates to the meeting of the Company's stockholders to vote on the Company
Merger, will comply as to form in all material respects with the provisions of
the Exchange Act and the rules and regulations thereunder, except that no
representation or warranty is made with respect to statements made or
incorporated by reference therein based on information supplied by Parent
specifically for inclusion or incorporation by reference therein.
4.7 Litigation. There are no actions, suits, proceedings or investigations
pending or, to the best knowledge of the Company, threatened against the Company
or any Company Subsidiary, nor is the Company or any Company Subsidiary subject
to any order, judgment, writ, injunction or decree, except in either case for
matters that could not reasonably be expected to have a Company Material Adverse
Effect or to materially adversely affect the Company's ability to perform its
obligations under this Agreement.
4.8 Changes. Except as contemplated by this Agreement or as disclosed in
the Company Disclosure Schedule or in the 1998 Commission Filings, since June
30, 1998, the Company and the Company Subsidiaries, taken as a whole, have
conducted their business only in the ordinary and usual course, and none of the
following has occurred:
(a) any change, effect, condition, event or circumstance which has a
Company Material Adverse Effect;
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(b) any change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or business, except insofar
as may have been required by a change in generally accepted accounting
principles;
(c) any damage, destruction or loss, whether or not covered by
insurance, having a Company Material Adverse Effect;
(d) any declaration, setting aside or payment of dividends or
distributions in respect of the Company Shares, or any redemption, purchase or
other acquisition of any of its securities;
(e) any issuance by the Company of, or commitment of the Company to
issue, any shares of capital stock or securities convertible into or
exchangeable or exercisable for shares of capital stock other than pursuant to
the Company Option Plans, the ESPP or the Stock Option Agreement;
(f) any evaluation by the Company or any Company Subsidiary of any
of its respective assets, including, without limitation, writing down the value
of inventory or writing off notes or accounts receivables other than in the
ordinary course of business and consistent with past practice;
(g) any action taken by the Company or any Company Subsidiary which
is prohibited by Section 5.1; or
(h) any agreement by the Company to do any of the things described
in the preceding clauses (a) through (g) other than as expressly contemplated or
provided for herein.
4.9 Transactions with Affiliates. Except as disclosed in the Company
Commission Filings filed and publicly available prior to the date of this
Agreement or on the Company Disclosure Schedule, since January 1, 1994, neither
the Company nor any Company Subsidiary has entered into any transaction with any
current director or officer of the Company or any Company Subsidiary or any
transaction which would be subject to proxy statement disclosure under the
Exchange Act pursuant to the requirements of Item 404 of Regulation S-K.
4.10 Environmental Matters.
(a) The Company and the Company Subsidiaries have complied in all
material respects with all applicable Environmental Laws. There is no pending
or, to the knowledge of the Company, threatened civil or criminal litigation,
written notice of violation, formal administrative proceeding or investigation,
inquiry or information request by any court, arbitration tribunal,
administrative agency or commission, political subdivision or other governmental
or regulatory authority or
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agency of the United States of America, Canada, any other foreign country, or
any state, province, county or other municipality thereof (a "Governmental
Entity"), relating to any Environmental Law involving the Company or any Company
Subsidiary.
(b) There have been no releases of any Hazardous Materials into the
environment by the Company or any Company Subsidiary, or, to the knowledge of
the Company, by any other party at any parcel of real property or any facility
formerly or currently owned, operated or controlled by the Company or any
Company Subsidiary which would have a Company Material Adverse Effect. With
respect to any such releases of Hazardous Materials, the Company has given all
notices required to be given by the Company or any Company Subsidiaries to
Governmental Entities (copies of which have been provided to the Parent). The
Company is not aware of any releases of Hazardous Materials at parcels of real
property or facilities other than those owned, operated or controlled by the
Company or any Company Subsidiaries that would have a Company Material Adverse
Effect on the real property or facilities owned, operated or controlled by the
Company or the Company Subsidiaries.
(c) The Company Disclosure Schedule describes all environmental
reports, investigations and audits ("Environmental Reports") conducted by or on
behalf of the Company or any Company Subsidiary or, to the knowledge of the
Company, conducted by or on behalf of a third party (whether done at the
initiative of the Company or directed by a Governmental Entity or other third
party) issued or conducted during the past five years relating to premises
currently or previously owned or operated by the Company or any Company
Subsidiary. Complete and accurate copies of each such Environmental Report
conducted by or on behalf of the Company, has been provided to the Parent and
complete and accurate copies of all other Environmental Reports conducted by or
on behalf of any third party have been provided to the Parent if in the
possession or control of the Company.
4.11 Employee Benefits and Contracts.
(a) The Company Disclosure Schedule lists all employment agreements,
compensation agreements, deferred compensation agreements, severance plans,
stay-bonus plans, and describes all other employee benefit plans, including
without limitation, pension or retirement plans, profit sharing plans, stock
purchase or stock option plans, medical insurance, and bonus plans, to which the
Company or any Company Subsidiary is a party. Neither the Company nor any
Company Subsidiary is a party or otherwise subject to any collective bargaining
agreement governing the wages, hours and terms of employment of its employees,
is subject to any actual, or to the knowledge of the Company, threatened with,
any material labor dispute involving employees of the Company or any Company
Subsidiary, and is not subject to any actual, or, to the knowledge of the
Company, threatened demand by
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its employees for a collective bargaining agreement or recognition by any labor
organization. None of the key management employees has indicated to the Company
in writing any intention to terminate his or her employment with the Company.
(b) The Company Disclosure Schedule lists all employee benefit plans
(as defined in Section 3(3) of ERISA maintained by the Company or any affiliate
thereof. Each of such employee benefit plans complies in all material respects
with all applicable requirements of ERISA, and no "reportable event" or
"prohibited transaction" (as such terms are defined in ERISA or any applicable
foreign law, statute, ordinance, code, rule or regulation) has occurred with
respect to any such plan, and no termination, if it has occurred or were to
occur before the Effective Time, would present a risk of liability to any
Governmental Entity or other persons that would have a Company Material Adverse
Effect. The Company has made available to the Parent true and complete copies
of: (i) all plan texts and agreements relating to each employee benefit plan;
and (ii) all summary plan descriptions (whether or not required to be furnished
pursuant to ERISA or any applicable foreign law, statute, ordinance, code, rule
or regulation), the most recent annual report (including all schedules thereto)
and the most recent annual and periodic accounting of related plan assets.
Neither the Company nor any affiliate thereof has ever maintained an
employee benefit plan subject to Section 412 of the Code or Title IV of ERISA.
Each employee benefit plan of the Company or any affiliate intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service confirming such
qualification and nothing has occurred that would cause such qualified status to
be jeopardized. Neither the Company nor any affiliate has ever had an obligation
to contribute to a "multiemployer plan" as defined in Section 4001(a)(3) of
ERISA. There are no unfunded obligations under any employee benefit plan of the
Company or any affiliate providing benefits after termination of employment to
any employee or former employee, including but not limited to retiree health
coverage and deferred compensation, but excluding continuation of health
coverage required to be continued under Section 4980(B) of the Code. Each
employee benefit plan of the Company or any affiliate may be amended or
terminated by the Company or such affiliate without the consent or approval of
any other person. Except as set forth herein or in the Company Disclosure
Schedule, there is no employee benefit plan, stock option plan, stock
appreciation right plan, restricted stock plan, stock purchase plan, or
severance benefit plan of the Company or any affiliate, any of the benefits of
which will be increased or the vesting of the benefits under which will be
accelerated by the occurrence of any of the transactions contemplated by this
Agreement or the benefits under which will be calculated on the basis of the
transactions contemplated by this Agreement.
(c) Neither the Company nor any Subsidiary is obligated to make any
parachute payment, as defined in Section 280G(b)(2) of the Code, nor will any
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parachute payment be deemed to have occurred as a result of or arising out of
any of the transactions contemplated by this Agreement. Except for acceleration
of vesting of Company Options under the Option Plans or as set forth in the
Company Disclosure Schedule, the Company has no contract, agreement, obligation
or arrangement with any employee or other person, any of the payments or other
benefits of which will be increased or the vesting of the benefits under which
will be accelerated by any change of control of the Company or the occurrence of
any of the transactions contemplated by this Agreement or the benefits under
which will be calculated on the basis of the transactions contemplated by this
Agreement.
4.12 Liens on Assets. The assets, including any real property in which the
Company or any Company Subsidiary has an interest, reflected in the balance
sheet of the Company for the year ended December 31, 1997 included in the
Company 1997 10-K (the "Company 1997 Balance Sheet") or acquired in the ordinary
course of business since December 31, 1997 (the "Company Assets") (except those
Company Assets sold or disposed of in the ordinary course of business for full
and fair consideration), are free and clear of all mortgages, security
interests, pledges, liens and encumbrances (collectively, "Encumbrances") other
than (a) as set forth on the Company Disclosure Schedule, (b) as reflected in
the Company 1997 Balance Sheet, (c) "mechanics" liens or similar statutory liens
on assets which, in the aggregate, are not material to the Company and the
Company Subsidiaries, taken as a whole, and (d) liens for state and local
property taxes not in arrears and liens arising by operation of law.
4.13 Rights Agreement. The Company has amended (the "Rights Agreement
Amendment") its Rights Agreement dated as of July 24, 1998 between the Company
and State Street Bank and Trust Company (the "Rights Agreement"), so that (w)
neither the Parent, New Parent or the Merger Subsidiaries (nor any entity
acquiring of record or beneficially Company Shares as contemplated by this
Agreement, the Stock Option Agreement or the Voting Agreements (as defined
below)) shall constitute an "Acquiring Person" as defined in Section 1(a) of the
Rights Agreement, (x) the acquisition of Company Shares by the Parent or the New
Parent (or any affiliate of the Parent's or the New Parent's) shall not cause
the Parent or the New Parent or any of their respective affiliates to become an
"Acquiring Person" as a result of the Company Merger and/or the entering into of
one or more Voting Agreements, of even date herewith, between the Parent and the
directors and executive officers of the Company (collectively, the "Voting
Agreements") and/or as a result of the entering into or exercise of the Stock
Option Agreement, (y) no Distribution Date (as defined in the Rights Agreement)
shall occur as a result of the Company Merger, and/or the entering into of the
Voting Agreements and/or as a result of the entering into or exercise of the
Stock Option Agreement, and (z) no Stock Acquisition Date (as defined in the
Rights Agreement) shall occur as a result of the Company Merger and/or the
execution and delivery of this Agreement, and/or the consummation of any of the
transactions contemplated hereby, and/or the
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entering into of the Voting Agreements and/or as a result of the entering into
or exercise of the Stock Option Agreement.
4.14 Taxes. (a) The Company and each Company Subsidiary have timely filed
all material tax returns, statements, reports and forms required to be filed
with any Tax (as defined below) authority, including without limitation filings
required under ERISA (collectively, "Tax Returns"), and have paid when due all
Taxes owed by the Company and each Company Subsidiary (whether or not shown on
any such Tax Returns). Except as otherwise provided in Clause (d) of Section
4.12 hereof, there are no liens on any of the assets of the Company or any
Company Subsidiary that arose in connection with any failure (or alleged
failure) to pay any Tax except for liens that would in the aggregate not have a
Company Material Adverse Effect. As used herein the term "Tax" and "Taxes" means
all income, gross receipts, franchise, excise, transfer, severance, value added,
sales, use, wage, payroll, workers' compensation, employment, occupation,
intangibles, and real and personal property taxes; taxes measured by or imposed
on capital; levies, imposts, duties, licenses, legislation fees; other taxes
imposed by a U.S. federal, Canadian, other foreign, provincial, state,
municipal, local or other governmental authority or agency, including
assessments in the nature of taxes, including interest, penalties, fines,
assessments and deficiencies relating to any tax or taxes; and including any
transferee or secondary liability for taxes and any liability in respect of
taxes as a result of being a member of any affiliated, consolidated, combined or
unitary group or any liability in respect of taxes under a tax sharing, tax
allocation, tax indemnity or other agreement.
(b) No dispute or claim concerning any Tax liability of the Company
or any Company Subsidiary has been claimed or raised by any authority in
writing.
(c) Neither the Company nor any Company Subsidiary has waived any
statute of limitations in respect of Taxes or agreed to any extension of time
with respect to a Tax assessment or deficiency.
(d) Neither the Company nor any Company Subsidiary has filed a
consent under Section 341(f) of the Code concerning collapsible corporations.
Neither the Company nor any Company Subsidiary has any liability for the Taxes
of any person (other than the Company and any Company Subsidiary) under Treas.
Reg. Section 1.1502-6 (or any similar provision of state, local or foreign law),
as a transferee or successor, by contract, or otherwise.
4.15. Compliance with Laws; Permits. Neither the Company nor any Company
Subsidiary (a) is in violation of, or has violated, any Company Applicable Laws
(as defined below) or (b) has received any notice from any Governmental Entity
or any other person that either the Company or any Company Subsidiary is in
violation of, or has violated, any Company Applicable Laws, except for
violations
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which, individually or in the aggregate, do not have a Company Material Adverse
Effect. The Company and each Company Subsidiary have all permits, licenses and
franchises from Governmental Entities required to conduct their businesses as
now being conducted, except for such permits, licenses and franchises the
absence of which would not have a Company Material Adverse Effect. As used
herein the term "Company Applicable Laws" means all applicable provisions of any
laws, statutes, ordinance, codes, rules, regulations or any agency requirements,
permits, licenses, judgments, orders, injunctions, decrees or arbitration awards
of any Governmental Entities applicable to the Company or any Company Subsidiary
and material to the conduct of the businesses of the Company or any Company
Subsidiary as those businesses are now being conducted and the ownership and
operation of any of the assets, properties or facilities of the Company or any
Company Subsidiary, including, without limitation, the Medicare/Medicaid
"anti-kickback" laws (42 U.S.C. ss.ss. 1320a, et seq.), the Immigration Reform
and Control Act (8 U.S.C. ss.ss. 1324, et seq.), applicable anti-trust laws,
applicable labor laws, including, without limitation, applicable
anti-discrimination laws and laws prohibiting sexual harassment, applicable
consumer protection laws and applicable product liability laws; provided,
however, that the term Company Applicable Laws shall not include any
Environmental Laws.
4.16 Intellectual Property. The Company, together with the Company
Subsidiaries, own or have all necessary rights to use each patent, patent
application, trademark (whether or not registered), trademark application, trade
name, service mark, copyright and other trade secret or proprietary intellectual
property (collectively, "Intellectual Property") used in and material to the
business of the Company and the Company Subsidiaries, taken as a whole, and none
of the previous or current development, manufacture, marketing or distribution
of products or services of or by the Company or any Company Subsidiary infringes
the right of any other person, except for any such infringements that would not,
individually or in the aggregate, have a Company Material Adverse Effect. Except
as disclosed in the Company Disclosure Schedule, to the knowledge of the
Company, no other person is infringing the rights of the Company or any Company
Subsidiary in any such Intellectual Property, except for any such infringements
that would not, individually or in the aggregate, have a Company Material
Adverse Effect.
4.17 No Undisclosed Material Liabilities. Except as disclosed in the
Company 1998 Commission Filings or on the Company Disclosure Schedule, and
except for liabilities arising since June 30, 1998 in the ordinary course of
business, there are no liabilities of the Company or any Company Subsidiary of
any kind whatsoever, whether accrued, contingent, absolute, determined,
determinable or otherwise, that would have a Company Material Adverse Effect.
4.18 Brokers. Except for the Financial Advisor, no agent, broker, person
or firm acting on behalf of the Company is or will be entitled to any advisory
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commission or broker's or finder's fee from any of the parties hereto in
connection with any of the transactions contemplated herein. The Company has
made available to Parent a complete and correct copy of the Company's engagement
letter with the Financial Advisor, which has not been amended or modified. The
Financial Advisor has delivered to the Board of Directors of the Company its
opinion, dated the date of this Agreement, to the effect that, on the basis of
and subject to the assumptions set forth therein, the Company Merger
Consideration is fair to the holders of Company Shares, from a financial point
of view.
4.19 Prepayment of Indebtedness. All of the outstanding indebtedness
(whether secured or unsecured) for borrowed money of the Company and each of the
Company Subsidiaries may be prepaid by the Company or its Subsidiaries without
the consent or approval of, or prior notice to, any other person, and without
payment of any premium or penalty.
4.20 Provisions Inapplicable. The Company's Board of Directors has taken
all action necessary or advisable to render inapplicable to the Company Merger,
the Voting Agreements and the execution and exercise of the Stock Option
Agreement and the transactions contemplated by this Agreement, the Voting
Agreements and the Stock Option Agreement the provisions of Chapters 110C, 110D
and 110F of the Massachusetts Law. There are no additional "anti-takeover" or
similar provisions of Massachusetts Law applicable to the Company Merger, the
Voting Agreements or the Stock Option Agreement or the consummation of the
transactions contemplated by this Agreement or the Stock Option Agreement and
the consummation of the transactions contemplated hereby or thereby.
4.21 No Existing Discussions. As of the date hereof, the Company has
terminated any and all discussions or negotiations with any Third Party (as
defined below) with respect to any Acquisition Proposal (as defined below).
ARTICLE 5
CONDUCT OF BUSINESS
5.1 Company Conduct Prior to Effective Time. Except as specifically
contemplated hereby or as disclosed in Section 5.1 of the Company Disclosure
Schedule, the Company covenants and agrees that, unless the Parent shall
otherwise consent in writing, prior to the Effective Time, the business of the
Company and the Company Subsidiaries shall be conducted only in, and the Company
and the Company Subsidiaries shall not take any action except in, the ordinary
course of business consistent with past practices of the Company and the Company
Subsidiaries, and the Company shall use all reasonable efforts, to maintain and
preserve its and each Company Subsidiary's business organization, assets,
employees and advantageous business relationships. Notwithstanding the
foregoing, without
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the Parent's consent, neither the Company nor any of the Company Subsidiaries
shall directly or indirectly do any of the following:
(i) other than upon exercise (provided that any "cashless
exercise" shall be effected only through a broker's transaction in
accordance with Regulation T of the Board of Governors of the Federal
Reserve System) of Company Options outstanding on the date hereof pursuant
to the Company Option Plans or stock purchase rights granted under the
ESPP, issue, sell, pledge, dispose of, grant pursuant to the Company
Option Plans or otherwise, or encumber, or authorize, propose or agree to
the issuance, sale, pledge, disposition, grant pursuant to the Company
Option Plans or otherwise, any shares of, or any options, warrants or
rights of any kind to acquire any shares of, or any securities convertible
into or exchangeable or exercisable for any shares of, capital stock of
any class of the Company or any of the Company Subsidiaries or any other
securities in respect of, in lieu of, or in substitution for Company
Shares outstanding as of the date hereof;
(ii) pledge or encumber any assets of the Company or of any
Company Subsidiaries;
(iii) sell or dispose of any assets (including, without
limitation, any accounts, leases, contracts or intellectual property or
any assets or the stock of any Company Subsidiaries, but excluding the
sale of products in the ordinary course of business consistent with past
practices of the Company and the Company Subsidiaries);
(iv) amend its charter or by-laws or similar organizational
documents or alter or further amend the Rights Agreement or the Rights in
a manner inconsistent with the Rights Agreement Amendment or directly or
indirectly cause the Rights Agreement and the Rights to be applicable to
or effective with respect to the Company Merger and/or the transactions
contemplated by this Agreement, including the execution or exercise of the
Stock Option Agreement and/or the Voting Agreements;
(v) split, combine or reclassify any shares of its capital
stock or declare, set aside for payment or pay any dividend or
distribution, payable in cash, stock, property or otherwise, with respect
to any of its capital stock other than, with respect to dividends or
distributions, cash dividends and distributions by a wholly owned Company
Subsidiary to the Company or to another wholly owned Company Subsidiary;
(vi) redeem, purchase or otherwise acquire or offer to redeem,
purchase or otherwise acquire any of its capital stock or rights to
acquire capital stock;
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(vii) except pursuant to Section 6.5, enter into an agreement
with respect to any merger, consolidation, liquidation or business
combination, or any acquisition or disposition of assets or securities of
the Company, or acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership, limited liability company or
other business organization or division thereof or make any investment
either by purchase of stock or securities, contributions to capital (other
than to wholly owned Company Subsidiaries), property transfer or purchase
of any property or assets of any other individual or entity;
(viii)transfer the stock of any Company Subsidiary to any
other Company Subsidiary or any assets or liabilities to any new or
existing Company Subsidiary;
(ix) enter into an agreement with respect to the release or
relinquishment of any material contract right or any comparable event;
(x) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee, endorse or otherwise as an
accommodation become responsible for, the obligations of any other
individual or entity (other than as a result of the endorsement of checks
for collection in the ordinary course of business) or make any loans or
advances (other than advances for travel expenses in the ordinary course
of business consistent with past practices of the Company and the Company
Subsidiaries;
(xi) make or commit to make any capital expenditures which,
individually or in the aggregate, exceeds $500,000;
(xii) except as may be required by a change in law or
generally accepted accounting principles, change any accounting principles
or practices used by it, including any change in assumptions underlying,
or method of calculating, any bad debt, contingency or other reserve;
(xiii)pay, discharge, satisfy or settle any material
litigation, claims, liabilities or obligations (absolute, accrued,
contingent or otherwise), other than required payments, discharges or
satisfactions of accounts payable and other similar liabilities in the
ordinary course of business consistent with past practices of the Company
and the Company Subsidiaries;
(xiv) waive, release, grant or transfer any material rights of
value or modify or change in any material respect any existing license,
lease, contract or other document;
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(xv) adopt or amend (except as may be required by law or under
this Agreement) any bonus, profit sharing, compensation, stock option,
stock purchase, pension, retirement, deferred compensation, employment or
other employee benefit plan, agreement, trust, fund or other arrangement
for the benefit or welfare of any employee or former employee or, except
in the ordinary course of business consistent with past practices of the
Company and the Company Subsidiaries, increase the compensation or fringe
benefits of any employee or former employee or pay any benefit not
required by any existing plan, arrangement, or agreement;
(xvi) take any action with respect to the grant of any
severance or termination pay benefits or with respect to any increase of
benefits payable under its severance or termination pay policies in effect
on the date hereof;
(xvii)make or revoke any tax election or settle or compromise
any U.S. federal, Canadian federal, other foreign, state, provincial, or
local Tax liability;
(xviii) cause or permit a new Plan Period (as defined in the
ESPP) to commence, for purposes of the ESPP, upon the expiration or
termination of the current Plan Period; or
(xix) authorize or agree, in writing or otherwise, to take any
of the foregoing actions or any action which would make any representation
or warranty in Article 4 hereof untrue or incorrect in any material
respect, or would materially impair or prevent the occurrence of any
condition in Article 7 hereof.
The Company will use its reasonable best efforts to maintain (on a consolidated
basis) cash and cash equivalents of at least $8 million at the Effective Time
and the Company will notify the Parent if it believes the cash and cash
equivalents at the Effective Time will be below $8 million.
5.2 Parent Conduct Prior to Effective Time. Except as otherwise
contemplated hereby or as disclosed in the Parent Disclosure Schedule, the
Parent covenants and agrees that, unless the Company shall otherwise consent in
writing prior to the Effective Time, the Parent and the Parent Subsidiaries will
not, directly or indirectly, take or knowingly permit any act or omission that
is reasonably likely to materially hinder, delay, impair or inhibit consummation
of the transactions contemplated by this Agreement.
5.3 Commission Filings. The Company shall promptly provide the Parent (or
its counsel) with copies of all filings made by the Company with the Commission
or any other Governmental Entity in connection with this Agreement and the
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transactions contemplated hereby. The Parent, New Parent and the Merger
Subsidiaries shall promptly provide the Company (or its counsel) with copies of
all filings made by the Parent, New Parent or the Merger Subsidiaries with the
Commission or any other Governmental Entity in connection with this Agreement
and the transactions contemplated hereby.
5.4 Joint Proxy Statement/Information Statement; Registration Statement.
(a) The Company and the Parent shall together, or pursuant to an
allocation of responsibility to be agreed upon between them:
(i) prepare and file with the Commission as soon as is
reasonably practicable a proxy statement (the "Proxy Statement") for the
Special Meeting, an information statement relating to the Parent
Stockholder Approval (the "Information Statement" and, together with the
Proxy Statement, the "Joint Proxy Statement/Information Statement") and a
registration statement on Form S-4 under the Securities Act (the
"Registration Statement") with respect to the New Parent Common Stock
issuable in the Mergers, and shall use their reasonable best efforts to
have the Joint Proxy Statement/Information Statement cleared by the
Commission under the Exchange Act and the Registration Statement declared
effective by the Commission under the Securities Act;
(ii) as soon as is reasonably practicable take all such
reasonable action as may be required under state blue sky or securities
laws in connection with the transactions contemplated by this Agreement;
(iii) promptly prepare and file with the Nasdaq Stock Market,
Inc. or the New York Stock Exchange, as determined by the Parent, listing
applications covering the shares of New Parent Common Stock issuable in
the Mergers and use their reasonable best efforts to obtain, prior to the
Effective Time, approval for the listing of such shares of New Parent
Common Stock, subject only to official notice of issuance;
(iv) subject to Section 6.4, cooperate with one another in
order to lift any injunctions or remove any other impediment to the
consummation of the transactions contemplated herein; and
(v) cooperate with one another in obtaining the opinions of
Hale and Dorr LLP, counsel to the Company, and Weil, Gotshal & Manges LLP,
counsel to the Parent, dated as of the Effective Time, referenced in
Sections 7.2(b) and 7.3(b). In connection therewith, each of the Parties
and Westar Capital, Inc. shall deliver to Hale and Dorr LLP and Weil,
Gotshal &
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Manges LLP, respectively, customary representation letters in form and
substance reasonably satisfactory to such tax counsel.
(b) The Company shall cause the Joint Proxy Statement/Information
Statement to be mailed to its stockholders, as promptly as practicable after the
Registration Statement is declared effective under the Securities Act; provided,
however, that at the request of Parent, the Company shall defer the mailing of
the Proxy Statement for such period of time (not to exceed ten business days)
specified by Parent to permit Westar Capital, Inc. or an affiliate thereof to
purchase additional shares of Parent Common Stock in open market transactions or
directly from the Parent. Promptly after the Company mails the Joint Proxy
Statement/Information Statement to the Company's stockholders, the Parent shall
(i) take all actions necessary to obtain stockholder approval of the Parent
Merger and (ii) cause the Joint Proxy Statement/Information Statement to be
mailed to its stockholders.
(c) The Company shall, as soon as practicable following the date of
this Agreement, duly call, give notice of, convene and hold the Special Meeting
for the purpose of obtaining the Company Stockholder Approval and shall, through
its Board of Directors, recommend to its stockholders the adoption of this
Agreement, the Company Merger and the other transactions contemplated hereby;
provided, however, that nothing in this paragraph (c) shall prevent the Board of
Directors of the Company from withdrawing or modifying its recommendation of the
adoption of this Agreement, the Company Merger and the other transactions
contemplated hereby to the extent permitted by Section 6.5; provided further,
however, that, unless this Agreement is terminated pursuant to Section 8.1(a),
8.1(b)(iii), 8.1(b)(iv), 8.1(c)(ii) or 8.1(c)(vi), no such withdrawal or
modification shall relieve the Board of Directors of the Company from its
obligation to call, give notice of, convene and hold the Special Meeting.
(d) Each party agrees to cooperate, as reasonably requested, in
connection with filings by the other party (or any affiliate of the other party)
with the Commission (including registration statements and proxy statements) and
shall use all reasonable efforts to obtain all required financial information
and related accountants' consents for inclusion in the other party's (or any of
their affiliates') Commission filings.
5.5 Employee Stock Options and Benefit Plans.
(a) As of the Effective Time, (i) each outstanding Company Option
shall be converted into an option (a "Substitute Option") to purchase the number
of shares of New Parent Common Stock (rounded upward to the next whole share)
equal to the product of (x) the Option Exchange Ratio and (y) the number of
Company Shares which could have been obtained immediately prior to the Effective
Time upon the exercise of each such Company Option (assuming such Company
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Option was exercisable in full but after giving effect to any election made
pursuant to Section 5.5(b)), at an exercise price per share (rounded downward to
the next whole cent) equal to the exercise price per share payable immediately
prior to the Effective Time pursuant to such Company Option divided by the
Option Exchange Ratio, and all references in each such Company Option to the
Company shall be deemed to refer to New Parent, where appropriate, and (ii) New
Parent shall assume the obligations of the Company under the Company Option
Plans. The other terms of each such Substitute Option and the plans under which
they were issued, shall continue to apply in accordance with their terms, it
being agreed and acknowledged that all such Substitute Options shall be
immediately exercisable in full from and after the Effective Time. For purposes
of this Agreement, "Option Exchange Ratio" means the result obtained by dividing
(A) the sum of (x) $14.50 plus (y) the product of (i) the Exchange Ratio and
(ii) the Average Closing Price, by (B) the Average Closing Price.
(b) The holder of any Company Option who has not exercised any
Company Option during the period from the date of this Agreement until the
Effective Time may make an election pursuant to this Section to receive a cash
payment with respect to up to 25% of the number of Company Shares subject to
such Company Option immediately prior to the Effective Time, such cash payment
to be in lieu of receiving a Substitute Option with respect to such Company
Shares as to which an election has been made. Such election shall be made by the
holder of any Company Option by filing an election (in a form to be provided by
the Parent at least 30 days in advance of the Effective Time) with the Company
on or before the Effective Time. As part of such election, the electing holder
shall certify that he or she has not exercised any Company Option during the
period from the date of this Agreement until the date of such election and will
covenant not to exercise any Company Option during the period from the date of
the election until the Effective Time, unless he or she first notifies the
Company in writing, which notification shall have the effect of rescinding the
election under this Section previously made by such holder. Promptly after the
Effective Time, New Parent shall exchange any Company Option as to which an
election pursuant to this Section has been made (and not rescinded) for (i) an
amount of cash equal to the Option Spread (as defined below) multiplied by the
number of Common Shares subject to such Company Option immediately prior to the
Effective Time as to which such election has been made (it being understood that
such number may not exceed 25% of the number of Company Shares subject to such
Company Option immediately prior to the Effective Time) and (ii) a Substitute
Option in accordance with Section 5.5(a) with respect to the remaining Company
Shares subject to such Company Option immediately prior to the Effective Time.
For purposes of this agreement, "Option Spread" means (A) the sum of (x) $14.50
plus (y) the product of (i) the Exchange Ratio and (ii) the Average Closing
Price minus (B) the exercise price per share payable immediately prior to the
Effective Time pursuant to the applicable Company Option.
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(c) As soon as practicable after the Effective Time, New Parent
shall deliver to each holder of a Company Option assumed by New Parent in
accordance with Section 5.5(a) and (b), an appropriate notice setting forth such
holder's rights pursuant to such Substitute Option and the agreements evidencing
such Company Options shall continue in effect on the same terms and conditions
(subject to the amendments provided for in this Section 5.5 and such notice).
(d) Prior to the Effective Time, the New Parent shall take all
corporate action necessary to reserve for issuance a sufficient number of shares
of New Parent Common Stock for delivery upon exercise of the Company Options
assumed in accordance with Section 5.5(a) and (b). Prior to the Effective Time,
the New Parent shall, with respect to all shares of New Parent Common Stock
subject to such options (i) either (x) file a Registration Statement on Form S-8
(or any successor form) under the Securities Act or (y) file any necessary
amendments to the Company's previously filed Registration Statements on Form S-8
in order that the New Parent will be deemed a "successor registrant" thereunder,
and, in either event, shall use all reasonable efforts to maintain the
effectiveness of such registration statement for so long as the Substitute
Options remain outstanding and (ii) take all actions necessary to have such
shares of New Parent Common Stock approved for listing on The Nasdaq Stock
Market or The New York Stock Exchange, as the case may be, subject to official
notice of issuance.
5.6 Further Assurances. In case at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers of the Parties shall take all such necessary
action.
5.7 Accountants' "Comfort" Letters. The Company and the Parent will each
use reasonable best efforts to cause to be delivered to each other letters from
their respective independent accountants, dated as of a date within two business
days before the effective date of the Registration Statement, in form reasonably
satisfactory to the recipient and customary in scope for comfort letters
delivered by independent accountants in connection with registration statements
on Form S-4 under the Securities Act.
ARTICLE 6
ADDITIONAL AGREEMENTS
6.1 Access to Information. Except as prohibited under applicable law, the
Company shall, and shall cause its subsidiaries, and its and its subsidiaries'
respective officers, directors, employees and agents to, afford to the Parent
and to the officers, employees and agents of the Parent complete access at all
reasonable times, from the date hereof to the Effective Time, to its and its
subsidiaries, officers, employees, agents, properties, books, records and
contracts, and shall furnish the other party all
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financial, operating and other data and information as the Parent, through its
officers, employees or agents, may reasonably request.
6.2 Notification of Certain Matters.
(a) The Company shall give prompt notice to the Parent, of (i) the
obtaining by it of actual knowledge as to the matters set forth in clauses (x)
and (y) of clause (ii) of this sentence, or (ii) the occurrence, or failure to
occur, of any event which occurrence or failure to occur causes (x) any
representation or warranty made by the Company and contained in this Agreement
to be untrue or inaccurate in any material respect at any time from the date
hereof to the Effective Time, or (y) any material failure of the Company or of
any officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that no such notification shall be deemed to
cure any breach or otherwise affect the representations or warranties of the
Company or the conditions to the obligations of the parties hereunder.
(b) Parent shall give prompt notice to the Company of (i) the
obtaining by it of actual knowledge as to the matters set forth in clauses (x)
and (y) of clause (ii) of this sentence, or (ii) the occurrence, or failure to
occur, of any event which occurrence or failure to occur causes (x) any
representation or warranty made by Parent, New Parent, Merger Sub I or Merger
Sub II contained in this Agreement to be untrue or inaccurate in any material
respect at any time from the date hereof to the Effective Time, or (y) any
material failure of Parent, New Parent, Merger Sub I or Merger Sub II, or of any
officer, director, employee or agent thereof, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it under
this Agreement; provided, however, that no such notification shall be deemed to
cure any breach or otherwise affect the representations or warranties of Parent,
New Parent, Merger Sub I or Merger Sub II or the conditions to the obligations
of the parties hereunder.
6.3 Fees and Expenses.
(a) Except as otherwise provided in this Section 6.3 or the proviso
in Section 8.2, each party shall bear all of the fees and expenses incurred by
it in connection with the negotiation and performance of this Agreement, and no
party may recover any such fees and expenses from any other party upon any
termination of this Agreement.
(b) The Company shall immediately pay to the Parent $5,500,000 in
cash if:
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(i) the Trigger Event specified in Section 6.3(d) shall have
occurred;
(ii) the Company shall have elected to terminate this
Agreement pursuant to Section 8.1(b)(iii); or
(iii) the Parent shall have elected to terminate this
Agreement pursuant to subsections (ii) or (iv) of Section 8.1(c) hereof
(but if such termination is pursuant to subsection 8.1(c)(ii)(A), only if
an Acquisition Proposal shall have been made prior to the failure to
recommend or withdrawal giving rise to such termination or if such failure
to recommend or withdrawal is otherwise not in compliance with Section
6.5(c)).
(c) The provisions contained in this Section 6.3 shall survive any
termination of this Agreement.
(d) As used in this Agreement, the term "Trigger Event" shall mean
there shall have been publicly announced or proposed or commenced prior to the
termination of this Agreement any Acquisition Proposal which is not publicly
withdrawn prior to the Special Meeting, this Agreement is terminated (other than
as a result of a material breach of this Agreement by Parent, New Parent, Merger
Sub I or Merger Sub II) and, within 12 months after such termination, the
Company consummates an Acquisition Proposal.
(e) The Company shall immediately pay to the Parent $1,000,000 in
cash if the Parent shall have elected to terminate this Agreement pursuant to
subsection 8.1(c)(ii)(A) and no Acquisition Proposal shall have been made prior
to the Company's Directors failure to recommend, or withdraw its approval or the
recommendation of the Company Merger or this Agreement. Any fee paid under this
Section 6.3(e) shall be credited towards any fee payable under Section 6.3(b).
6.4 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, and to
cooperate with each of the other parties hereto in connection with the
foregoing, including using its reasonable best efforts: (A) to obtain all
necessary waivers, consents and approvals from other parties to loan agreements,
leases and other contracts; (B) to obtain all necessary consents, approvals and
authorizations as are required to be obtained under any U.S. federal, foreign,
state or provincial laws or regulations; (C) to lift or rescind any injunction
or restraining order or other order adversely affecting the ability of the
parties to consummate the transactions contemplated hereby; (D) to effect all
necessary registrations and filings, including, but not limited to, filings
under the
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Hart-Scott-Rodino Act and submissions of information requested by Governmental
Entities; and (E) to fulfill all conditions to this Agreement. Each of the
Parties further covenants and agrees that, it shall use its respective
reasonable best efforts to prevent, with respect to a threatened or pending
preliminary or permanent injunction or the entry thereof the effect of which
would be to prevent consummation of the Merger and, if entered, shall use their
respective reasonable best efforts to have such injunction stayed or vacated.
The Company will use its reasonable best efforts to keep available to New Parent
and the Surviving Corporation the present key officers and employees of the
Company and the Company Subsidiaries and to preserve for New Parent and the
Surviving Corporation the present relationships and good will of the Company and
the Company Subsidiaries with their respective lenders, suppliers, customers and
other third parties having business relations with them. For purposes of the
foregoing, the obligation of the Parties to use "reasonable best efforts" to
obtain waivers, consents and approvals to loan agreements, leases and other
contracts and by Governmental Entities shall not include any obligation to agree
to a modification of the terms of such documents, or to dispose of or restrict
the operation or ownership of any portion of the businesses, assets or
properties of the Parties, except as expressly contemplated hereby, or to make
any guaranty or monetary payment in consideration of such waiver, consent or
approval.
6.5 No Solicitation.
(a) Neither the Company nor any of the Company Subsidiaries shall,
and the Company shall use its best efforts to cause its affiliates, and each of
its and the Company Subsidiaries' officers, directors, employees,
representatives and agents (including, without limitation, BT Alex. Brown
Incorporated (the "Financial Advisor")) not to, directly or indirectly, solicit,
initiate, knowingly encourage, knowingly facilitate, engage or participate in
discussions or negotiations with, or provide any non-public information to, any
corporation, partnership, limited liability company, person or other entity or
group other than the Parent, New Parent, Merger Subsidiaries or another
affiliate of the Parent (a "Third Party") and other than in connection with this
Agreement, concerning (or concerning the business of the Company or any
Subsidiary in connection with) (i) any tender offer or exchange offer for more
than 20% of the Company Shares on a fully-diluted basis (in calculating the
number of fully-diluted Shares for this purpose, only (A) Company Shares covered
by Company Options, and (B) 43,499 Company Shares reserved for issuance pursuant
to the ESPP, being considered dilutive), (ii) any merger, consolidation, sale of
20% or more of the assets of the Company and the Company Subsidiaries, taken as
a whole, recapitalization, accumulation of Shares or proxy solicitation or other
business combination involving the Company or any Company Subsidiary or (iii)
any public announcement of a proposal, plan or intention to do any of the
foregoing or any agreement to engage in any of the foregoing (any such proposed
tender offer, exchange offer, merger, consolidation, sale of material assets,
recapitalization, accumulation of Company Shares or proxy solicitation or other
business combination
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being referred to herein as an "Acquisition Proposal"). Notwithstanding the
foregoing, at any time prior to the date on which stockholders of the Company
vote to approve the Company Merger, the Company, its Subsidiaries, and their
respective officers, directors, employees, representatives and agents (i) may,
in the case of a Qualified Acquisition Proposal (as hereinafter defined),
furnish or cause to be furnished information concerning the Company's business,
properties or assets to a Third Party (subject to such Third Party executing a
confidentiality agreement on terms no more favorable to the Third Party than
those applicable to Parent in the Confidentiality Agreement between the Parent
and the Financial Advisor dated July 13, 1998), (ii) may, in the case of a
Qualified Acquisition Proposal only, enter into, participate in, conduct or
engage in discussions or negotiations with such Third Party, (iii) may take any
position with respect to an Acquisition Proposal in accordance with Rules 14a-9
and 14e-2 promulgated under the Exchange Act, and (iv) may, in the case of a
Qualified Acquisition Proposal only and in compliance with the provisions of
this Section 6.5, enter into an agreement to consummate a Qualified Acquisition
Proposal. As used herein, "Qualified Acquisition Proposal" means a bona fide,
unsolicited, written Acquisition Proposal at a price per Company Share and on
terms and conditions that the Board of Directors of the Company (after
consultation with the Financial Advisor or another independent financial advisor
of national reputation) determines to be superior to the Merger and to be in the
best interests of the Company and its stockholders including, as part of the
Board of Director's determination, that as to any cash consideration to be paid
pursuant to the Qualified Acquisition Proposal, the Third Party making the
Qualified Acquisition Proposal has all requisite funds on hand or is reasonably
capable of obtaining any requisite funds.
(b) The Company will promptly notify the Parent if it receives any
Acquisition Proposal and shall promptly provide to the Parent copies of all
written Acquisition Proposals or a written summary of any oral Acquisition
Proposals, and all material amendments or modifications thereto. Nothing in this
paragraph (b) shall be construed as interfering with the Company's obligations
to its stockholders under Rule 14e-1 promulgated under the Exchange Act.
(c) Except as set forth in this Section 6.5(c), the Board of
Directors of the Company shall not (i) withdraw or modify, or propose publicly
to withdraw or modify, in a manner adverse to Parent, or New Parent, the
approval or recommendation of the Company Merger and this Agreement by the Board
of Directors of the Company, (ii) approve or recommend, or propose publicly to
approve or recommend, any Acquisition Proposal, or (iii) cause the Company to
enter into any agreement (including, without limitation, any letter of intent
but excluding any confidentiality agreement) with respect to any Acquisition
Proposal. Notwithstanding the foregoing, if the Board of Directors of the
Company, after consultation with outside legal counsel, determines in good faith
that it is more likely than not necessary to do so in order to comply with its
fiduciary duties under applicable law, the Company's Board of Directors may (x)
withdraw or modify, or
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propose publicly to withdraw or modify, in a manner adverse to Parent, or New
Parent, the approval and recommendation of the Company Merger and this Agreement
by the Board of Directors of the Company, (y) approve or recommend, or propose
publicly to approve or recommend, a Qualified Acquisition Proposal, or (z) cause
the Company to enter into an agreement with respect to a Qualified Acquisition
Proposal, but in the case of the foregoing clauses (y) and (z) only after the
expiration of three business days after the date on which the Company provides
written notice to Parent (a "Notice of Qualified Acquisition Proposal") advising
Parent that the Company's Board of Directors has received a Qualifying
Acquisition Proposal, specifying the terms and conditions of such Qualifying
Acquisition Proposal and identifying the person making such Qualifying
Acquisition Proposal; provided, that prior to or concurrently with entering into
an agreement (including a letter of intent) with respect to a Qualifying
Acquisition Proposal, the Company shall terminate this Agreement pursuant to
Section 8.1(b)(iii) below and shall pay the fee specified in Section 6.3(b).
6.6 Employee Stock Purchase Plan. Each participant in the ESPP on the
Effective Time shall have the rights specified in Sections 16 and 17 of the
Plan, after which no further rights to purchase Company Shares under the ESPP
shall exist and the ESPP shall terminate.
6.7 Indemnification and Insurance. The Parent, New Parent and Merger
Subsidiaries agree that all rights to indemnification, advancement of expenses,
exculpation, limitation of liability and any and all similar rights now existing
in favor of the employees, agents, directors or officers of the Company and the
Company Subsidiaries (the "Indemnified Parties") as provided in their respective
charters or by-laws in effect on the date hereof, shall survive the Company
Merger and shall continue in full force and effect for a period of six years
from the Effective Time; provided, however, that in the event any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect to any such claim or claims shall continue until the
disposition of any and all such claims. The New Parent agrees to provide each
individual who served as a director or officer of the Company at any time prior
to the date hereof with liability insurance for a period of six years after the
Effective Time no less favorable in coverage and amount than any applicable
insurance in effect immediately prior to the Effective Time; provided, however,
that New Parent shall not be obligated to provide such insurance if it is
generally not available and New Parent may reduce the coverage and amount of
liability insurance to the extent that the cost thereof would exceed 200% of the
cost of any such insurance in effect immediately prior to the date hereof. The
Indemnified Parties shall be deemed third party beneficiaries of this provision
and shall be entitled to bring actions to enforce the obligations of the Parent,
New Parent and the Merger Subsidiaries under this Section 6.7 and Section 6.9.
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6.8 Fair Price Structure. If any "fair price" or "control share
acquisition" or "anti-takeover" statute, or other similar statute or regulation
or any state "blue sky" statute shall become applicable to the transactions
contemplated hereby, including the execution or exercise of the Stock Option
Agreement, and the Voting Agreements, the Company and the members or the Board
of Directors of the Company shall grant such approvals and take such actions as
are reasonably necessary so that the transactions contemplated hereby including
the execution or exercise of the Stock Option Agreement, and the Voting
Agreements may be consummated as promptly as practicable on the terms
contemplated hereby, or by the Stock Option Agreement and the Voting Agreements
and otherwise act to minimize the effects of such statute or regulation on the
transactions contemplated hereby or thereby.
6.9 Guaranty. The Parent and New Parent hereby unconditionally guarantee
Merger Sub I's obligations under this Agreement and, if the Company Merger is
consummated, the indemnification obligations set forth in Section 6.7, and agree
to be liable for any breach of this Agreement by the Parties hereto (other than
the Company) (or a breach of Section 6.7).
6.10 Certain Tax Related Representations. Each of Parent and New Parent
has no present intention to merge or liquidate the New Parent, Parent or the
Company with or into any other person or transfer any of the assets thereof
other than in the ordinary course of business and, in the case of Parent, other
than pursuant to a transaction described in Section 368(a)(2)(C) of the Code or
Treasury Regulation Section 1.368-1(d)(4) or 1.368-2(k).
ARTICLE 7
CONDITIONS
7.1 Conditions to Obligation of Each Party to Effect the Mergers. The
respective obligations of each party to effect the Mergers shall be subject to
the fulfillment at or prior to the Effective Time of each of the following
conditions:
(a) The Company Stockholder Approval shall have been obtained in
accordance with applicable law and the Company's Articles of Organization and
ByLaws and the applicable rules of The Nasdaq Stock Market, Inc.;
(b) The Registration Statement shall have been declared effective in
accordance with the provisions of the Securities Act and no stop order
suspending such effectiveness shall have been issued and remain in effect;
(c) The shares of New Parent Common Stock to be issued in the
Mergers shall have been approved for listing on the Nasdaq National Market or
the New York Stock Exchange;
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(d) any waiting period (and any extension thereof) applicable to the
consummation of the Company Merger under the Hart-Scott-Rodino Act shall have
expired or been terminated; and
(e) no preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission nor any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority shall be in effect, which would prevent the consummation of the
Mergers.
7.2 Conditions to Obligation of the Company to Effect the Company Merger.
The obligation of the Company to effect the Company Merger is further subject to
fulfillment of the following conditions:
(a)(i) The representations and warranties of the Parent, New Parent
and the Merger Subsidiaries contained herein shall be true and correct in all
respects (but without regard to any materiality qualifications or references to
Parent Material Adverse Effect contained in any specific representation or
warranty) as of the Effective Time with the same effect as though made as of the
Effective Time except (x) for changes specifically permitted by the terms of
this Agreement, (y) that the accuracy of representations and warranties that by
their terms speak as of the date of this Agreement or some other date will be
determined as of such date and (z) where any such failure of the representations
and warranties in the aggregate to be true and correct in all respects would not
have a Parent Material Adverse Effect, (ii) the Parent, New Parent and the
Merger Subsidiaries shall have performed in all material respects all
obligations and complied with all covenants required by this Agreement to be
performed or complied with by any of them prior to the Effective Time and (iii)
the Parent and New Parent shall have delivered to the Company a certificate,
dated the Effective Time and signed by their respective Chief Executive Officer
or Chief Financial Officer certifying to both such effects; and
(b) The Company shall have received an opinion of Hale and Dorr LLP,
tax counsel to the Company, dated as of the Effective Time, substantially to the
effect that the Company Merger will qualify as an exchange within the meaning of
Section 351 of the Code. The issuance of such opinion shall be conditioned upon
the receipt by such tax counsel of reasonable and customary representation
letters from each of the Parties and Westar Capital, Inc., in each case in form
and substance reasonably satisfactory to such tax counsel. The specific
provisions of each such representation letter shall be in form and substance
reasonably satisfactory to such tax counsel, and each such representation letter
shall be dated on or before the date of such opinion and shall not have been
withdrawn or modified in any material respect; and
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(c) The Parent Stockholder Approval shall have been obtained in
accordance with applicable law and Parent's Certificate of Incorporation and
Bylaws and the applicable rules of The Nasdaq Stock Market, Inc. (or, if Parent
shall have become listed on the New York Stock Exchange, the rules of the New
York Stock Exchange);
7.3 Conditions to Obligation of the Parent, New Parent and the Merger
Subsidiaries to Effect the Mergers. The obligation of the Parent, New Parent and
the Merger Subsidiaries to effect the Mergers is further subject to the
fulfillment of the following conditions:
(a)(i) The representations and warranties of the Company contained
herein shall be true and correct in all respects (but without regard to any
materiality qualifications or references to Company Material Adverse Effect
contained in any specific representation or warranty) as of the Effective Time
with the same effect as though made as of the Effective Time except (x) for
changes specifically permitted by the terms of this Agreement, (y) that the
accuracy of representations and warranties that by their terms speak as of the
date of this Agreement or some other date will be determined as of such date and
(z) where any such failure of the representations and warranties in the
aggregate to be true and correct in all respects would not have a Company
Material Adverse Effect; (ii) the Company shall have performed in all material
respects all obligations and complied with all covenants required by this
Agreement to be performed or complied with by it prior to the Effective Time;
and (iii) the Company shall have delivered to the Parent a certificate, dated
the Effective Time and signed by its Chief Executive Officer certifying to both
such effects.
(b) The Parent and New Parent shall have received an opinion of
Weil, Gotshal & Manges LLP, tax counsel to Parent and New Parent, dated as of
the Effective Time, substantially to the effect that the Parent Merger will
qualify as an exchange within the meaning of Section 351 of the Code and a
reorganization within the meaning of Section 368(a) of the Code. The issuance of
such opinion shall be conditioned upon the receipt by such tax counsel of
reasonable and customary representation letters from each of the Parties and
Westar Capital, Inc., in each case in form and substance reasonably satisfactory
to such tax counsel. The specific provisions of each such representation letter
shall be in form and substance reasonably satisfactory to such tax counsel, and
each such representation letter shall be dated on or before the date of such
opinions and shall not have been withdrawn or modified in any material effect.
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ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether prior to or after approval by the stockholders of the
Company or the Parent, as follows:
(a) By mutual written consent of the Boards of Directors of the
Parent and the Company; or
(b) By the Company:
(i) if the Effective Time shall not have occurred on or before
April 30, 1999 due to a failure of any of the conditions to the obligation
of the Company to effect the Merger set forth in Sections 7.1 and 7.2; or
(ii) if, prior to the Effective Time, the Parent, New Parent,
Merger Sub I or Merger Sub II fails to perform in any material respect any
of their respective obligations under this Agreement; or
(iii) in order for the Company to enter into an agreement with
a Third Party to consummate a Qualified Acquisition Proposal (provided
that no such termination shall be effective until the Company has complied
with its obligation to pay the fee specified in Section 6.3(b)); or
(iv) if there shall be a nonappealable order issued by a court
of competent jurisdiction enjoining the consummation of one or both of the
Mergers.
(c) By the Parent:
(i) if the Effective Time shall not have occurred on or before
April 30, 1999 due to a failure of any of the conditions to the
obligations of the Parent, New Parent and the Merger Subsidiaries to
effect the Merger set forth in Sections 7.1 and 7.3; or
(ii) if, prior to the Effective Time, the Company's Directors,
whether or not in the exercise of their fiduciary or other legal duties,
either (A) shall have failed to recommend, or shall have withdrawn its
approval or recommendation of, the Company Merger or this Agreement or (B)
take any action (other than as permitted under clauses (i) and (ii) of the
second sentence of Section 6.5(a)) with respect to any Acquisition
Proposal other than to recommend rejection of the Acquisition Proposal
(including taking a position of neutrality or failing to take any position
within 10 business days after the making or commencement of a Acquisition
Proposal); or
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(iii) if, prior to the Effective Time, the Company fails to
perform in any material respect any of its obligations under this
Agreement; or
(iv) if, prior to the Effective Time, the Company alters or
amends the Rights Agreement or the Rights in a manner that adversely
affects the Parties' (other than the Company) ability to consummate the
transactions contemplated hereby); or
(v) if the Company's stockholders shall have voted against
this Agreement and the Company Merger at the Special Meeting; or
(vi) if there shall be a nonappealable order issued by a court
of competent jurisdiction enjoining the consummation of one or both of the
Mergers.
8.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 8.1, all obligations and agreements of the
Parties set forth in this Agreement shall forthwith terminate and be of no
further force or effect, and there shall be no liability on the part of the
Parties hereunder, except as set forth in Section 6.3; provided that the
foregoing shall not relieve any Party for liability for damages actually
incurred as a result of any breach of this Agreement.
8.3 Amendment. This Agreement may not be amended except by action of the
Board of Directors of each of the Parties hereto set forth in an instrument in
writing signed on behalf of each of the Parties hereto; provided, however, that
after approval of the Merger by the stockholders of the Company or the Parent,
no amendment may be made without the further approval of the stockholders of the
Company or the Parent to the extent such further approval would be required
under the Massachusetts Law, with respect to the Company Merger, or the Delaware
Law, with respect to the Parent Merger.
8.4 Waiver. At any time prior to the Effective Time, whether before or
after the Company Meeting, any Party hereto by action taken by its Board of
Directors, may (i) extend the time for the performance of any of the obligations
or other acts of any other Party hereto or (ii) subject to the proviso contained
in Section 8.3, waive compliance with any of the agreements of any other Party
or with any conditions to its own obligations. Any agreement on the part of a
Party hereto to any such extension or waiver shall be valid only if set forth in
an instrument in writing signed on behalf of such Party by a duly authorized
officer.
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ARTICLE 9
GENERAL PROVISIONS
9.1 Closing. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to the
provisions of Article 8, and subject to the provisions of Article 7 hereof, the
closing of the Merger pursuant to this Agreement (the "Closing") shall take
place at the offices of Hale and Dorr LLP, 60 State Street, Boston,
Massachusetts, within three business days following the Company Meeting, or at
such other place, time and date as the parties may mutually agree. The date and
time of such Closing are hereinafter referred to as the "Closing Date."
9.2 Publicity. So long as this Agreement is in effect each of Parent, New
Parent, the Company and the Merger Subsidiaries will consult with one another
before issuing any press release or otherwise making any public statements with
respect to the transactions contemplated by this Agreement, including, without
limitation, the Mergers, and shall not issue any such press release or make any
such public statement prior to such consultation, except to the extent that the
party making such announcement determines that it must do so in order to comply
with applicable law or its obligations pursuant to any listing agreement with
the Nasdaq Stock Market or the NYSE and it is impracticable under the
circumstances to consult with the other parties hereto prior to making such
announcement.
9.3 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been fully given if (i) delivered
personally, (ii) sent by certified or registered mail, return receipt requested,
(iii) sent by overnight courier for delivery on the next business day or (iv)
sent by confirmed telecopy, provided that a hard copy of all such telecopied
materials is thereafter sent within 24 hours in the manner described in clauses
(i), (ii) or (iii), to the Parties at the following addresses or at such other
addresses as shall be specified by the Parties by like notice:
(a) If to the Parent, New Parent, Merger Sub I or Merger Sub II:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attention: John E. Mack, III
Telecopy No.: (310) 649-3855
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with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Jeremy W. Dickens, Esq.
Telecopy No.: (214) 746-7777
with a copy to:
Mitchell, Silberberg & Knupp LLP
Trident Center
11377 West Olympic Boulevard
Los Angeles, California 90084
Attention: Anthony A. Adler, Esq.
Telecopy No.: (310) 312-3785
(b) If to the Company:
Lifeline Systems, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02139-4851
Attention: Ronald Feinstein
Telecopy No.: (617) 679-1386
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Attention: Jay E. Bothwick, Esq.
Telecopy No.: (617) 526-5000
Notices provided in accordance with this Section 9.3 shall be deemed
delivered (i) on the date of personal delivery, (ii) four business days after
deposit in the mail, (iii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the telecopy transmission, as
the case may be.
9.4 Interpretation. When a reference is made in this Agreement to
subsidiaries of a Party, the word "subsidiaries" means any corporation more than
50 percent of whose outstanding voting securities, or any partnership, joint
venture, limited liability company or other entity more than 50 percent of whose
total equity interest, is directly or indirectly owned by such Party and the
word "affiliates" shall
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have the meaning assigned to such term under Rule 405 of the Securities Act. For
purposes of this Agreement, the Company shall not be deemed to be an affiliate
or subsidiary of the Parent, New Parent or the Merger Subsidiaries. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Inclusion of
information in the Company Disclosure Schedule or the Parent Disclosure Schedule
does not constitute an admission or acknowledgment of the materiality of such
information.
9.5 Representations and Warranties; etc. The respective representations
and warranties of the Parties contained herein shall expire with, and be
terminated and extinguished upon, consummation of the Mergers. This Section 9.5
shall have no effect upon any other obligation of the Parties hereto, whether to
be performed before or after the consummation of the Mergers.
9.6 Miscellaneous. This Agreement together with the Confidentiality
Agreement between the Parent and the Financial Advisor dated July 13, 1998, the
Stock Option Agreement and the Voting Agreements constitute the entire agreement
and supersede all other prior agreements and undertakings, both written and
oral, among the Parties, or any of them, with respect to the subject matter
hereof (including without limitation the Initial Merger Agreement. This
Agreement (i) is not intended to confer upon any other person any rights or
remedies hereunder, create any agreement of employment with any person or
otherwise create any third-party beneficiary hereto; (ii) shall not be assigned,
except that each Merger Subsidiary may assign its rights and obligations to a
direct wholly owned subsidiary of the New Parent which in a written instrument
shall make all the representations and warranties of such Merger Subsidiary set
forth herein and shall agree to assume all of such Merger Subsidiary's
obligations hereunder and be bound by all of the terms and conditions of this
Agreement; provided, however, that no such assignment shall relieve the Parent,
New Parent or the Merger Subsidiaries of their obligations hereunder; and (iii)
shall be governed in all respects, including validity, interpretation and
effect, by the internal laws of the Commonwealth of Massachusetts, without
giving effect to the principles of conflict of laws thereof. This Agreement may
be executed in one or more counterparts which together shall constitute a single
agreement.
9.7 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
9.8 Descriptive Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, each of the Parent, New Parent, Merger Sub I, Merger
Sub II and the Company have caused this Agreement to be executed and its
corporate seal to be thereto affixed as of the date first written above by its
respective officers thereunto duly authorized.
[SEAL] PROTECTION ONE, INC.
By: /s/ John E. Mack, III
--------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
[SEAL] PROTECTION ONE ACQUISITION
HOLDING CORPORATION
By: /s/ John E. Mack, III
--------------------------------------
Name: John E. Mack, III
Title: President
[SEAL] P-1 MERGER SUB, INC.
(a Massachusetts corporation)
By: /s/ John E. Mack, III
--------------------------------------
Name: John E. Mack, III
Title: President
By: /s/ John Hesse
--------------------------------------
Name: John Hesse
Title: Treasurer
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[SEAL] P-1 MERGER SUB, INC.
(a Delaware corporation)
By: /s/ John E. Mack, III
--------------------------------------
Name: John E. Mack, III
Title: President
[SEAL] LIFELINE SYSTEMS, INC.
By: /s/ Ronald Feinstin
--------------------------------------
Name: Ronald Feinstin
Title: President
By: /s/ Dennis M. Hurley
--------------------------------------
Name: Dennis M. Hurley
Title: Treasurer
joanq/bothwick/54631-489/mrgag_a_r.wpf
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STOCK OPTION AGREEMENT, dated as of October 18, 1998 (the
"Stock Option Agreement"), between Protection One, Inc., a Delaware corporation
(the "Parent"), and Lifeline Systems, Inc., a Massachusetts corporation (the
"Company")
WHEREAS, the Parent and the Company are parties to that
certain Agreement and Plan of Contribution and Merger, dated as of the date
hereof (the "Merger Agreement"), which provides, among other things, that Merger
Sub I (as defined in the Merger Agreement), on the terms and subject to the
conditions thereof, will merge with and into the Company with Company surviving
as a wholly owned subsidiary of New Parent (as defined in the Merger Agreement);
WHEREAS, as a condition to its willingness to enter into the
Merger Agreement, the Parent has requested that the Company grant to the Parent
an option to purchase up to 1,159,410 shares of common stock, par value $0.02
per share ("Common Stock") of the Company, upon the terms and subject to the
conditions hereof; and
WHEREAS, in order to induce the Parent to enter into the
Merger Agreement, the Company is willing to grant the Parent the requested
option.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein, the parties hereto agree as
follows:
1. The Option; Exercise; Adjustments. (a) Contemporaneously
herewith the Parent and the Company are entering into the Merger Agreement.
Subject to the other terms and conditions set forth herein, the Company hereby
grants to the Parent an irrevocable option (the "Option") to purchase up to
1,159,410 shares of Common Stock (the "Shares"). The purchase price per Share
(the "Purchase Price") shall be $29.00.
(b) Subject to the provisions of Section 1(c), the
Option may be exercised by the Parent, in whole or in part, at any time or from
time to time after (i) (A) the termination of the Merger Agreement and (B) the
occurrence of any circumstance that would entitle the Parent to receive the fee
provided for pursuant to Section 6.3(b) or (ii) the commencement of any
Acquisition Proposal as defined in Section 6.5(a)(i) of the Merger Agreement and
prior to the termination of the Option in accordance with Section 18 hereof;
provided that any purchase of Shares upon exercise of the Option shall be
subject to compliance with applicable law. Notwithstanding the termination of
the Option, Parent shall be entitled to purchase the Shares with respect to
which it has exercised the Option in accordance with the terms hereof prior to
the termination of the Option.
(c) In the event the Parent wishes to exercise the
Option, the Parent shall send a written notice to the Company (the "Stock
Exercise Notice") specifying a date (subject to the HSR Act (as defined below)
not later than 20 business days and not earlier than three business days
following the date such notice is given) for the closing of such purchase. In
the event of any change in the number of issued and outstanding shares of Common
DA1:\55191\02\16L302!.DOC
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Stock by reason of any stock dividend, stock split, split-up, recapitalization,
merger or other change in the corporate or capital structure of the Company, the
number of Shares subject to this Option and the purchase price per Share shall
be appropriately adjusted to restore the Parent to its rights hereunder,
including its right to purchase Shares representing approximately 19.9% of the
capital stock of the Company entitled to vote generally for the election of the
directors of the Company which are issued and outstanding immediately prior to
the exercise of the Option at an aggregate purchase price equal to the Purchase
Price multiplied by 1,159,410; provided, however, that in no event shall any
adjustment be made under this Section 1(c) with respect to any transaction
contemplated or permitted by the Merger Agreement.
(d) If at any time the Option is then exercisable
pursuant to the terms of Section 1(b)(i) hereof, the Parent may elect, in lieu
of exercising the Option to purchase Shares provided in Section 1(a) hereof, to
send a written notice to the Company (the "Cash Exercise Notice") specifying a
date not later than 20 business days and not earlier than 10 business days
following the date such notice is given on which date the Company shall pay to
the Parent an amount in cash equal to the Spread (as hereinafter defined)
multiplied by all or such portion of the Shares subject to the Option as Parent
shall specify. As used herein "Spread" shall mean the excess, if any, over the
Purchase Price of the higher of (x) if applicable, the highest price per share
of Common Stock (including any brokerage commissions, transfer taxes and
soliciting dealers' fees) paid by any person pursuant to an Acquisition Proposal
(as defined in the Merger Agreement) (the "Alternative Purchase Price") or (y)
the closing price of the shares of Common Stock on the Nasdaq Stock Market on
the last trading day immediately prior to the date of the Cash Exercise Notice
(the "Closing Price"). If the Alternative Purchase Price includes any property
other than cash, the Alternative Purchase Price shall be the sum of (i) the
fixed cash amount, if any, included in the Alternative Purchase Price plus (ii)
the fair market value of such other property. If such other property consists of
securities with an existing public trading market, the average of the closing
prices (or the average of the closing bid and asked prices if closing prices are
unavailable) for such securities in their principal public trading market on the
five trading days ending two trading days prior to the date of the Cash Exercise
Notice shall be deemed to equal the fair market value of such property. If such
other property consists of something other than cash or securities with an
existing public trading market and, as of the payment date for the Spread,
agreement on the value of such other property has not been reached, the
Alternative Purchase Price shall be deemed to equal the Closing Price. Upon
exercise of its right to receive cash pursuant to this Section 1(c), the
obligations of the Company to deliver Shares pursuant to Section 3 shall be
terminated with respect to such number of Shares for which the Parent shall have
elected to be paid the Spread.
2. Conditions to Delivery of Shares. The Company's obligation
to deliver Shares upon exercise of the Option is subject only to the conditions
that:
(i) No preliminary or permanent injunction or other
order issued by any federal or state court of competent jurisdiction in
the United States prohibiting the delivery of the Shares shall be in
effect; and
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(ii) Any applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act")
shall have expired or been terminated.
3. The Closing. (a) Any closing hereunder shall take place on
the date specified by the Parent in its Stock Exercise Notice or Cash Exercise
Notice, as the case may be, at 9:00 A.M., local time, at the offices of Weil,
Gotshal & Manges LLP, 100 Crescent Court, Suite 1300, Dallas, Texas, or, if the
conditions set forth in Section 2(i) or 2(ii) have not then been satisfied, on
the second business day following the satisfaction of such conditions, or at
such other time and place as the parties hereto may agree (the "Closing Date").
On the Closing Date, (i) in the event of a closing pursuant to Section 1(c)
hereof, the Company will deliver to the Parent a certificate or certificates,
duly endorsed (or accompanied by duly executed stock powers), representing the
Shares in the denominations designated by the Parent in its Stock Exercise
Notice and the Parent will purchase such Shares from the Company at the price
per Share equal to the Purchase Price or (ii) in the event of a closing pursuant
to Section 1(d) hereof, the Company will deliver to the Parent cash in an amount
determined pursuant to Section 1(d) hereof. Any payment made by the Parent to
the Company, or by the Company to the Parent, pursuant to this Stock Option
Agreement shall be made by wire transfer of immediately available funds to a
bank designated by the party receiving such funds.
(b) The certificates representing the Shares may
bear an appropriate legend relating to the fact that such Shares have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
4. Representations and Warranties of the Company. The Company
represents and warrants to the Parent that (a) the Company is a corporation duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Massachusetts and has the requisite corporate power and
authority to enter into and perform this Stock Option Agreement; (b) the
execution and delivery of this Stock Option Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by the Board of Directors of the Company and this Stock Option
Agreement has been duly executed and delivered by a duly authorized officer of
the Company and will constitute a valid and binding obligation of the Company
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; (c) the Company has taken
all necessary corporate action to authorize and reserve the Shares issuable upon
exercise of the Option and the Shares, when issued and delivered by the Company
upon exercise of the Option, will be duly authorized, validly issued, fully paid
and non-assessable and free of preemptive rights; and (d) except as otherwise
required by the HSR Act, the execution and delivery of this Stock Option
Agreement by the Company and the consummation by it of the transactions
contemplated hereby do not require the consent, waiver, approval or
authorization of or any filing with any person or public authority and will not
violate, result in a breach of or the acceleration of any obligation under, or
constitute a default under, any provision of any charter or by-law, indenture,
3
<PAGE>
mortgage, lien, lease, agreement, contract, instrument, order, law, rule,
regulation, judgment, ordinance, or decree, or restriction by which the Company
or any of its subsidiaries or any of their respective properties or assets is
bound, except for any breach, violation, default, acceleration, creation or
change that, individually or in the aggregate, is not reasonably likely to have
a Company Material Adverse Effect (as defined in the Merger Agreement) or
prevent, materially delay or materially impair the ability of the Company to
consummate the transactions contemplated by this Stock Option Agreement; and (e)
no "fair price", "moratorium", "control share acquisition" or other form of
antitakeover statute or regulation (including, without limitation, the
prohibitions of Chapters 110C, 110D and 110F of the Massachusetts General Laws)
is applicable to the acquisition of Shares pursuant to this Stock Option
Agreement.
5. Representations and Warranties of the Parent. The Parent
represents and warrants to the Company that (a) the Parent is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has the requisite corporate power and authority to enter into and
perform this Stock Option Agreement, (b) the execution and delivery of this
Stock Option Agreement by the Parent and the consummation by it of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of the Parent and this Stock Option Agreement has
been duly executed and delivered by a duly authorized officer of the Parent and
will constitute a valid and binding obligation of Parent enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles, and
(c) the Parent is acquiring the Option and, if and when it exercises the Option,
will be acquiring the Shares issuable upon the exercise thereof for its own
account and not with a view to distribution or resale in any manner which would
be in violation of the Securities Act.
6. Quotation of Shares; HSR Act Filings; Governmental
Consents. The Company will promptly file an application to have the Shares
approved for quotation on the Nasdaq Stock Market and will use all reasonable
efforts to obtain approval of such quotation and to effect all necessary filings
by the Company under the HSR Act; provided, however, that if the Company is
unable to effect such quotation on the Nasdaq Stock Market by the Closing Date,
the Company will nevertheless be obligated to deliver the Shares upon the
Closing Date. Each of the parties hereto will use all reasonable efforts to
obtain consents of all third parties and governmental authorities, if any,
necessary to the consummation of the transactions contemplated hereby.
7. Registration Rights. (a) In the event that the Parent shall
desire to sell any of the Shares within two years after the purchase of such
Shares pursuant hereto, and such sale requires, in the opinion of counsel to the
Parent, which opinion shall be reasonably satisfactory to the Company and its
counsel, registration of such Shares under the Securities Act, the Company will
cooperate with the Parent and any underwriters in registering such Shares for
resale, including, without limitation, promptly filing a registration statement
which complies with the requirements of applicable federal and state securities
4
<PAGE>
laws, entering into an underwriting agreement with such underwriters upon such
terms and conditions as are customarily contained in underwriting agreements
with respect to secondary distributions; provided that the Company shall not be
required to have declared effective more than two registration statements
hereunder and shall be entitled to delay the filing or effectiveness of any
registration statement for up to 120 days if the offering would, in the good
faith judgment of the Board of Directors of the Company, require premature
disclosure of any material corporate development or otherwise interfere with or
adversely affect any pending or proposed offering of securities of the Company
or any other material transaction involving the Company.
(b) If the Common Stock is registered pursuant to
the provisions of this Section 7, the Company agrees (i) to furnish copies of
the registration statement and the prospectus relating to the Shares covered
thereby in such numbers as the Parent may from time to time reasonably request
and (ii) if any event shall occur as a result of which it becomes necessary to
amend or supplement any registration statement or prospectus, to prepare and
file under the applicable securities laws such amendments and supplements as may
be necessary to keep available for at least 90 days a prospectus covering the
Common Stock meeting the requirements of such securities laws, and to furnish
the Parent such numbers of copies of the registration statement and prospectus
as amended or supplemented as may reasonably be requested. The Company shall
bear the cost of the registration, including, but not limited to, all
registration and filing fees, printing expenses, and fees and disbursements of
counsel and accountants for the Company, except that the Parent shall pay the
fees and disbursements of its counsel, the underwriting fees and selling
commissions applicable to the shares of Common Stock sold by the Parent. The
Company shall indemnify and hold harmless Parent, its affiliates and its
officers and directors from and against any and all losses, claims, damages,
liabilities and expenses arising out of or based upon any statements contained
in, omissions or alleged omissions from, each registration statement filed
pursuant to this paragraph; provided, however, that this provision does not
apply to any loss, liability, claim, damage or expense to the extent it arises
out of any untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Parent, its affiliates,
officers or other representatives expressly for use in any registration
statement (or any amendment thereto) or any prospectus (as amended or
supplemented) filed pursuant to this paragraph. The Company shall also indemnify
and hold harmless each underwriter and each person who controls any underwriter
within the meaning of either the Securities Act or the Securities Exchange Act
of 1934, as amended, against any and all losses, claims, damages, liabilities
and expenses arising out of or based upon any statements contained in, omissions
or alleged omissions from, each registration statement filed pursuant to this
paragraph; provided, however, that this provision does not apply to any loss,
liability, claim, damage or expense to the extent it arises out of any untrue
statement or omission made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the underwriters
expressly for use in any registration statement (or any amendment thereto) or
any prospectus, as amended or supplemented, filed pursuant to this paragraph.
5
<PAGE>
8. Expenses. Each party hereto shall pay its own expenses
incurred in connection with this Stock Option Agreement.
9. Specific Performance. The Company acknowledges that if the
Company fails to perform any of its obligations under this Stock Option
Agreement immediate and irreparable harm or injury would be caused to the Parent
for which money damages would not be an adequate remedy. In such event, the
Company agrees that the Parent shall have the right, in addition to any other
rights it may have, to specific performance of this Stock Option Agreement.
Accordingly, if the Parent should institute an action or proceeding seeking
specific enforcement of the provisions hereof, the Company hereby waives the
claim or defense that the Parent has an adequate remedy at law and hereby agrees
not to assert in any such action proceeding the claim or defense that such a
remedy at law exists. The Company further agrees to waive any requirements for
the securing or posting of any bond in connection with obtaining any such
equitable relief.
10. Profit Limitation. (a) Notwithstanding any other provision
of this Stock Option Agreement, in no event shall the Parent's Total Profit (as
hereinafter defined) exceed $9 million and, if it otherwise would exceed such
amount, the Parent, at its sole election, shall either (a) deliver to the
Company for cancellation Shares previously purchased by Parent, (b) pay cash or
other consideration to the Company or (c) undertake any combination thereof, so
that Parent's Total Profit shall not exceed $9 million after taking into account
the foregoing actions.
(b) Notwithstanding any other provision of this
Stock Option Agreement, this Option may not be exercised for a number of Shares
as would, as of the date of the Stock Exercise Notice, result in a Notional
Total Profit (as defined below) of more than $9 million and, if exercise of the
Option otherwise would exceed such amount, the Parent, at its discretion, may
increase the Purchase Price for that number of Shares set forth in the Stock
Exercise Notice so that the Notional Total Profit shall not exceed $9 million;
provided, that nothing in this sentence shall restrict any exercise of the
Option permitted hereby on any subsequent date at the Purchase Price set forth
in Section 1(a) hereof.
(c) As used herein, the term "Total Profit" shall
mean the aggregate amount (before taxes) of the following: (i) the amount of
cash received by Parent pursuant to Section 1(d), (ii) (x) the net cash amounts
received by Parent pursuant to the sale of Shares (or any other securities into
which such Shares are converted or exchanged) to any unaffiliated party, less
(y) the Parent's Purchase Price for such Shares, and (iii) any fees received
pursuant to Section 6.3(b) or Section 6.3(e) of the Merger Agreement.
(d) As used herein, the term "Notional Total Profit"
with respect to any number of Shares as to which Parent may propose to exercise
this Option shall be the Total Profit determined as of the date of the Stock
Exercise Notice assuming that this Option were exercised on such date for such
number of Shares and assuming that such Shares, together with all other Shares
6
<PAGE>
held by Parent and its affiliates as of such date, were sold for cash at the
closing market price for the Common Stock as of the close of business on the
preceding trading day (less customary brokerage commissions).
11. Notice. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
fully given if (i) delivered personally, (ii) sent by certified or registered
mail, return receipt requested, (iii) sent by overnight courier for delivery on
the next business day or (iv) sent by confirmed telecopy, provided that a hard
copy of all such telecopied materials is thereafter sent within 24 hours in the
manner described in clauses (i), (ii) or (iii), to the parties at the following
addresses or at such other addresses as shall be specified by the parties by
like notice:
If to the Parent:
Protection One, Inc.
6011 Bristol Parkway
Culver City, CA 90230
Attn: John E. Mack, III
Telecopy: 310/649-3855
Protection One, Inc.
6225 North Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
Telecopy: 972/916-6156
With a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens
Telecopy: 214/746-7777
If to the Company:
Lifeline Systems, Inc.
640 Memorial Drive
Cambridge, Massachusetts 02109
Attn: Ronald Feinstein
Telecopy: (617) 679-1386
7
<PAGE>
With a copies to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 0216
Attn: Jay Bothwick, Esq.
Telecopy: 617/526-5000
Notices provided in accordance with this Section 11 shall be
deemed delivered (i) on the date of personal delivery, (ii) four business days
after deposit in the mail, (ii) one business day after delivery to an overnight
courier, or (iv) on the date of confirmation of the telecopy transmission, as
the case may be.
12. Parties in Interest. This Stock Option Agreement shall
inure to the benefit of and be binding upon the parties named herein and their
respective successors and permitted assigns; provided, however, that such
successor in interest or permitted assigns shall agree to be bound by the
provisions of this Stock Option Agreement. Nothing in this Stock Option
Agreement, express or implied, is intended to confer upon any Person other than
the Company or the Parent, or their successors or assigns, any rights or
remedies under or by reason of this Stock Option Agreement.
13. Entire Agreement; Amendments. This Stock Option Agreement,
together with the Merger Agreement and the other documents referred to therein,
contains the entire agreement between the parties hereto with respect to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings, oral or written, with respect to such transactions. This
Stock Option Agreement may not be changed, amended or modified orally, but may
be changed only by an agreement in writing signed by the party against whom any
waiver, change, amendment, modification or discharge may be sought.
14. Assignment. No party to this Stock Option Agreement may
assign any of its rights or obligations under this Stock Option Agreement
without the prior written consent of the other party hereto, except that the
Parent may assign its rights and obligations hereunder to any of its direct or
indirect wholly owned subsidiaries, but no such transfer shall relieve the
Parent of its obligations hereunder if such transferee does not perform such
obligations.
15. Headings. The section headings herein are for convenience
only and shall not affect the construction of this Stock Option Agreement.
16. Counterparts. This Stock Option Agreement may be executed
in any number of counterparts, each of which, when executed, shall be deemed to
be an original and all of which together shall constitute one and the same
document.
17. Governing Law. This Stock Option Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth of
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<PAGE>
Massachusetts (regardless of the laws that might otherwise govern under
applicable Massachusetts principles of conflicts of law).
18. Termination. The right to exercise the Option granted
pursuant to this Stock Option Agreement shall terminate upon the earliest of (i)
the Effective Time (as defined in the Merger Agreement), (ii) the termination of
the Merger Agreement pursuant to circumstances under which the Parent is not
entitled (whether at the time of termination or upon the occurrence of a
Triggering Event) to receive the fee provided for pursuant to Section 6.3(b) of
the Merger Agreement, (iii) the date on which Purchaser realizes a Total Profit
equal to the Profit Limit (as such terms are defined in Section 10) and (iv) one
year after the date (the "Merger Termination Date") on which the Merger
Agreement is terminated (the date referred to in clause (iv) being hereinafter
referred to as the "Option Expiration Date"); provided that, if the Option
cannot be exercised or the Shares cannot be delivered to Parent upon such
exercise by reason of any applicable judgment, decree or order or because the
condition set forth in Section 2(ii) has not yet been satisfied, the Option
Expiration Date shall be extended until thirty days after such impediment to
exercise has been removed.
19. Severability. If any term, provision, covenant or
restriction of this Stock Option Agreement is held by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Stock Option Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated.
20. Public Announcement. Each of Parent, New Parent, the
Company and the Merger Subsidiaries (as defined in the Merger Agreement) will
consult with one another before issuing any press release or otherwise making
any public statements with respect to the transactions contemplated by this
Stock Option Agreement, and shall not issue any such press release or make any
such public statement prior to such consultation, except to the extent that the
party making such announcement determines that it must do so in order to comply
with applicable law or its obligations pursuant to any listing agreement with
the Nasdaq Stock Market or the NYSE and it is impracticable under the
circumstances to consult with the other parties hereto prior to making such
announcement.
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9
<PAGE>
IN WITNESS WHEREOF, the Parent and the Company have caused
this Stock Option Agreement to be duly executed and delivered on the day and
year first above written.
PROTECTION ONE, INC.
By: /s/ JOHN E. MACK, II
---------------------------------
Name: John E. Mack, II
Title: Executive Vice President
LIFELINE SYSTEMS, INC.
By: /s/ RONALD FEINSTEIN
---------------------------------
Name: Ronald Feinstein
Title: President
10
Exhibit E-1
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Everett N. Baldwin (the
"Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278P.540
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
----------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Everett N. Baldwin
--------------------------------------------
Everett N. Baldwin
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -----------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-2
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Heather E.
Edelman (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.040
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By:/s/ John E. Mack, III
---------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Heather E. Edelman
-------------------------------------------
Heather E. Edelman
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-3
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Ronald Feinstein (the
"Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.110
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By:/s/ John E. Mack, III
---------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Ronald Feinstein
------------------------------------------
Ronald Feinstein
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-4
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and John D.
Gugliotta (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.130
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
------------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ John D. Gugliotta
-----------------------------------------------
John D. Gugliotta
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-5
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Dennis M.
Hurley (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.160
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
-----------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Dennis M. Hurley
---------------------------------------------
Dennis M. Hurley
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-6
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Joseph E.
Kasputys, Ph.D. (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.200
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
--------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Joseph E. Kasputys, Ph.D.
------------------------------------------
Joseph E. Kasputys, Ph.D.
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-7
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Thomas E.
Loper (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.240
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
-------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Thomas E. Loper
-----------------------------------------
Thomas E. Loper
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-8
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Richard M.
Reich (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.270
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
--------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Richard M. Reich
------------------------------------
Richard M. Reich
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-9
-----------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Carolyn C.
Roberts (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.300
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
-----------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Carolyn C. Roberts
---------------------------------------
Carolyn C. Roberts
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-10
------------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of
October 18, 1998, is made by and between Protection One, Inc., a corporation
organized under the laws of the State of Delaware (the "Parent") and L. Dennis
Shapiro (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.350
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
-------------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ L. Dennis Shapiro
-----------------------------------------
L. Dennis Shapiro
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-11
------------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Donald G.
Strange (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.360
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
-----------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Donald G. Strange
---------------------------------------
Donald G. Strange
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-12
------------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Gordon C.
Vineyard, M.D. (the "Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.410
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
---------------------------------
Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Gordon C. Vineyard, M.D.
-------------------------------------
Gordon C. Vineyard, M.D.
8
<PAGE>
Schedule A(1)
Owned Shares
------------
Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
- -------------------------
1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
Exhibit E-13
------------
VOTING AGREEMENT
THIS VOTING AGREEMENT (this "Voting Agreement"), dated as of October 18,
1998, is made by and between Protection One, Inc., a corporation organized under
the laws of the State of Delaware (the "Parent") and Susan Bailis, M.D. (the
"Stockholder").
WHEREAS, concurrently herewith, the Parent; Protection One Acquisition
Holding Corporation, a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of Parent ("New Parent"); P-1 Merger Sub,
Inc., a corporation organized under the laws of the Commonwealth of
Massachusetts and a wholly owned subsidiary of New Parent ("Merger Sub I"); P-1
Merger Sub, Inc., a corporation organized under the laws of the State of
Delaware and a wholly owned subsidiary of New Parent ("Merger Sub II"); and
Lifeline Systems, Inc., a corporation organized under the laws of the
Commonwealth of Massachusetts (the "Company"), are entering into an Agreement
and Plan of Contribution and Merger (as it may be amended from time to time in
the future in accordance with its terms, the "Merger Agreement"), providing for,
among other things, the merger of Merger Sub I with and into the Company (the
"Company Merger"), with the Company being the entity surviving the Company
Merger and continuing after the Company Merger as a wholly owned subsidiary of
New Parent;
WHEREAS, as of the date hereof, the Stockholder beneficially owns the
number of issued and outstanding shares of common stock, par value $0.02 per
share, of the Company (the "Shares") as indicated on Schedule A hereto (the
"Owned Shares");
WHEREAS, following the execution and delivery of this Voting Agreement,
the Stockholder may become the beneficial owner of additional Shares upon the
exercise of options, warrants or rights, the conversion or exchange of
convertible or exchangeable securities, or by means of purchase, dividend,
distribution, gift, bequest, inheritance or as a successor in interest in any
capacity or otherwise (which additional Shares shall, from and after the time
they are acquired by the Stockholder, be deemed to constitute "Owned Shares");
and
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Parent has required that the Stockholder agree, and the
Stockholder has agreed, to vote the Owned Shares in favor of the adoption of the
Merger Agreement and the approval of the Company Merger in accordance with the
terms and conditions of this Voting Agreement;
DAFS01...:\23\68523\0008\6899\AGR0278R.440
<PAGE>
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote. The Stockholder hereby agrees that, during the time
this Voting Agreement is in effect, at any meeting of the stockholders of the
Company, however called, and in any action by consent of the stockholders of the
Company, he or she will vote all of the Owned Shares, subject to the expiration
of this Voting Agreement pursuant to Section 2 hereof, (i) in favor of the
Company Merger, the Merger Agreement and the transactions contemplated by the
Merger Agreement and (ii) against any Acquisition Proposal (as defined in the
Merger Agreement) and any other action or agreement that would result in a
breach of any covenant, representation or warranty or any other obligation or
agreement of the Company under the Merger Agreement or which would result in any
of the conditions to the Company's obligations under the Merger Agreement not
being fulfilled. In order to effect the intentions of the parties hereunder, the
Stockholder hereby constitutes and appoints John E. Mack and John W. Hesse,
either of whom may act without the joinder of the other, as the Stockholder's
true and lawful proxy and attorney-in-fact to vote any and all of the Owned
Shares at the Special Meeting (as defined in the Merger Agreement). The
Stockholder acknowledges that the proxy granted hereby is irrevocable, being
coupled with an interest, and that such proxy will continue until the
termination of this Voting Agreement in accordance with its terms.
2. Expiration. This Voting Agreement and the Stockholder's obligations
hereunder shall terminate on the first to occur of (a) the Effective Time, (b)
the termination of the Merger Agreement in accordance with its terms and (c)
April 30, 1999.
3. Representations and Warranties of the Stockholder. The Stockholder
hereby represents and warrants to the Purchaser as follows:
3.1 Ownership of Shares. The Stockholder beneficially owns the Owned
Shares listed on Schedule A hereto, all of which are held of record by him or
her. The Stockholder has sole voting power and sole power of disposition with
respect to such Owned Shares, with no restrictions, subject to applicable
federal laws, on his or her rights of disposition pertaining thereto.
3.2 Power; Binding Agreement. The Stockholder has the legal
capacity, power and authority to enter into and perform all of his or her
obligations under this Voting Agreement. This Voting Agreement has been duly and
validly
2
<PAGE>
executed and delivered by the Stockholder and constitutes a valid and binding
agreement of the Stockholder, enforceable against the Stockholder in accordance
with its terms, except to the extent (i) such enforcement may be limited by
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
and (ii) the remedy of specific enforcement and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
3.3 No Conflicts. The execution, delivery and performance of this
Voting Agreement by the Stockholder will not constitute a breach, violation or
default (or any event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration
under, or result in the creation of any lien or encumbrance upon any of the
Owned Shares under, any note, bond, mortgage, indenture, deed of trust, license,
lease, agreement or other instrument to which the Stockholder is a party or by
which the Owned Shares may be bound.
4. Certain Covenants of the Stockholder. The Stockholder hereby covenants
and agrees as follows with respect to the period during which this Voting
Agreement is in effect:
4.1 Restriction on Transfer, Proxies and Non-Interference. Except as
contemplated hereby, the Stockholder shall not (i) sell, transfer, pledge,
encumber, assign or otherwise dispose of, or enter into any contract, option or
other arrangement or understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of his or her Shares, (ii)
grant any proxies, deposit any shares of capital stock of the Company into a
voting trust or enter into a voting agreement with respect to any such Shares or
(iii) take any action that would make any representation or warranty of the
Stockholder contained herein untrue or incorrect or have the effect of
preventing or disabling the Stockholder from performing his or her obligations
under this Voting Agreement. Notwithstanding the foregoing, the Stockholder
shall be permitted to (i) transfer any of the Owned Shares to any member of the
immediate family of the Stockholder or any trust, limited partnership or other
entity the beneficial ownership of which is held by the Stockholder or such
family members (each, a "Permitted Transferee"), so long as such Permitted
Transferee agrees in writing, in form and substance satisfactory to the
Purchaser, to be bound by the terms hereof to the same extent as the Stockholder
is bound and provided further, however, that no such transfer shall relieve the
Stockholder of his or her obligations hereunder if such Permitted Transferee
does not perform such obligations, (ii) dispose of any Owned Shares in payment
of the exercise price or any withholding taxes in
3
<PAGE>
connection with any exercise by the Stockholder of stock options outstanding on
the date of this Voting Agreement to acquire shares of capital stock of the
Company and (iii) transfer by gift to any charitable organization up to the
number of Owned Shares indicated on Schedule A under the heading "Maximum Number
of Shares that May be Transferred by Gift."
4.2 Additional Owned Shares. The Stockholder shall promptly notify
the Purchaser of the number of additional Owned Shares acquired by such
Stockholder, if any, after the date hereof.
4.3 Appraisal Rights. The Stockholder shall not exercise any rights
(including, without limitation, under Sections 85 to 98 of the Business
Corporation Law of the Commonwealth of Massachusetts) to demand appraisal of any
Owned Shares which may arise with respect to the Company Merger.
5. Other Matters.
5.1 Proposed Amendment of Merger Agreement. Notwithstanding anything
to the contrary contained herein or in the Merger Agreement, if, without the
Stockholder's prior written consent, the Parent proposes in writing to the
Company, the Board of Directors of the Company or any Committee thereof, or
publicly releases a proposal for any reduction in the Company Merger
Consideration (as defined in the Merger Agreement) this Voting Agreement shall
terminate and be of no further force or effect.
5.2 Stockholder Capacity. The Stockholder does not make any
agreement or understanding herein in a capacity as a director or officer of the
Company. The Stockholder signs solely in his or her capacity as the record
holder and beneficial owner of Owned Shares and nothing contained herein shall
limit or affect any actions taken by the Stockholder in his or her capacity as
an officer or director of the Company.
5.3 Further Assurances. From time to time, at the other party's
request and without further consideration, each party hereto shall execute and
deliver such additional documents and take all such further action as may be
necessary or desirable to consummate and make effective the transactions
contemplated by Section 1 of this Voting Agreement.
6. Miscellaneous.
4
<PAGE>
6.1 Entire Agreement; Assignment. This Voting Agreement (i)
constitutes the entire agreement among the parties with respect to the subject
matter hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof
and (ii) shall not be assigned by operation of law or otherwise, provided that
the Parent may assign its rights and obligations hereunder to any direct or
indirect wholly owned subsidiary of the Parent, but no such assignment shall
relieve the Parent of its obligations hereunder if such assignee does not
perform such obligations.
6.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly received if so given) by hand delivery, telegram, telex
or telecopy, by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
To the Stockholder at the address set forth on Schedule A hereto.
with a copy to:
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
Attn: Jay E. Bothwick, Esq.
To the Parent:
Protection One, Inc.
6001 Bristol Parkway
Culver City, California 90230
Attn: John E. Mack, III
and
Protection One, Inc.
6225 N. Highway 161, Suite 400
Irving, Texas 75038
Attn: John W. Hesse
5
<PAGE>
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attn: Jeremy W. Dickens, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.3 Governing Law. This Voting Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
6.4 Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Voting Agreement will cause the other party to sustain damages for which it
would not have an adequate remedy at law for money damages, and therefore each
of the parties hereby agrees that in the event of any such breach the aggrieved
party shall be entitled to the remedy of specific performance of such covenants
and agreements and injunctive and other equitable relief in addition to any
other remedy to which it may be entitled, at law or in equity.
6.5 Counterparts. This Voting Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same Voting Agreement.
6.6 Descriptive Headings. The descriptive headings used herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Voting Agreement.
6.7 Severability. Whenever possible, each provision or portion of
any provision of this Voting Agreement will be interpreted in such manner as to
be effective and valid under applicable law but if any provision or portion of
any provision of this Voting Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such jurisdiction, and this
Voting Agreement will be reformed, construed
6
<PAGE>
and enforced in such jurisdiction as if such invalid, illegal or unenforceable
provision or portion of any provision had never been contained herein.
6.8 Capitalized Terms. Capitalized terms used in this Voting
Agreement but not otherwise defined in this Voting Agreement shall have the
respective meanings given to such terms in the Merger Agreement.
[Remainder of page intentionally left blank.]
7
<PAGE>
IN WITNESS WHEREOF, the Parent and the Stockholder have caused this Voting
Agreement to be duly executed as of the day and year first above written.
PROTECTION ONE, INC.
By: /s/ John E. Mack, III
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Name: John E. Mack, III
Title: Executive Vice President
STOCKHOLDER:
/s/ Susan Bailis, M.D.
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Susan Bailis, M.D.
8
<PAGE>
Schedule A(1)
Owned Shares
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Everett N. Baldwin 19,000(2)
Heather E. Edelman 445
Ronald Feinstein 186,534(3)
John D. Gugliotta 17,400(4)
Dennis M. Hurley 9,295(5)
Joseph E. Kasputys, Ph.D. 12,150
Thomas E. Loper 9,139(6)
Richard M. Reich 37,961(7)
Carolyn C. Roberts 1,000
L. Dennis Shapiro 684,333(8)
Donald G. Strange 5,013
Gordon C. Vineyard, M.D. 1,001
Susan Bailis 0
Maximum Number of Shares That May Be Transferred by Gift
L. Dennis Shapiro 20,000
All Others 0
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1 Listed number of Owned Shares excludes Shares subject to stock options.
Accurate as of 9/30/98.
2 Includes 7,000 shares held by the Everett N. Baldwin Revocable Trust of
1997.
3 Includes 8,513 Shares beneficially owned through interest in the Company's
Employees Savings and Investment Plan (the "401(k)").
4 Includes 2,201 Shares beneficially owned through interest in the 401(k).
5 Includes (i) certain Shares beneficially owned within an Individual
Retirement Account, (ii) 572 Shares beneficially owned through interest in
the 401(k) and (iii) certain jointly-owned Shares.
6 Includes 8,939 Shares pledged to the Company.
7 Includes (i) certain jointly-owned Shares and (ii) 5,461 Shares
beneficially owned through interest in the 401(k).
8 Excludes certain Shares held variously (i) in custody, (ii) by spouse and
(iii) by spouse as co-trustee; includes certain jointly-owned Shares.
9
