<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Plan year ended December 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________ to ___________________
Commission file number
A. Full title of the plan and the address of the plan, if different
from that of the issuer named below:
Protection One 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
WESTERN RESOURCES, INC.
818 Kansas Avenue
Topeka, KS 66612
PROTECTION ONE, INC.
6011 Bristol Parkway
Culver City, CA 90230
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PROTECTION ONE 401(k) PLAN
Table of Contents
<TABLE>
<CAPTION>
Page
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<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Plan Benefits as of
December 31, 1999 and 1998 2
Statement of Changes in Net Assets Available for Plan Benefits
for the Year Ended December 31, 1999 3
NOTES TO FINANCIAL STATEMENTS 4-9
SUPPLEMENTAL SCHEDULES:
Part IV - Line 4i - Supplemental Schedule of Assets Held
For Investment Purposes as of December 31, 1999 10
SIGNATURES 11
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS 12
</TABLE>
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Trustees of the Protection One 401(k) Plan:
We have audited the accompanying statements of net assets available for plan
benefits of Protection One 401(k) Plan (formerly Protection One Employees
Savings Plan) as of December 31, 1999 and 1998, and the related statement of
changes in net assets available for plan benefits for the year ended December
31, 1999. These financial statements and the supplemental schedule referred
to below, are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements and schedule based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan as
of December 31, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended December 31, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule Part IV Line 4i
Supplemental Schedule of Assets Held for Investment Purposes is presented for
purposes of additional analysis and is not a required part of the basic
financial statements but is supplementary information required by the Department
of Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule has been
subjected to the auditing procedures applied in our audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN LLP
Kansas City, Missouri
June 15, 2000
1
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PROTECTION ONE 401(k) PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------------- ----------------
ASSETS:
<S> <C> <C>
Investments at fair value (Note 3) $15,482,587 $8,064,526
Contributions receivable-
Employer 164,684 211,370
Participant 240,747 270,491
Uninvested cash related to Comsec
Narrangansett Security, Inc. Profit Sharing,
Savings and Retirement Plan merger - 2,712,216
----------------- ----------------
Net receivables 405,431 3,194,077
----------------- ----------------
Total assets 15,888,018 11,258,603
----------------- ----------------
LIABILITIES:
Refunds payable and excess contributions (101,739) (141,606)
----------------- ----------------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $15,786,279 $11,116,997
================= ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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PROTECTION ONE 401(k) PLAN
Statement of Changes in Net Assets Available for Plan Benefits
For the Year Ended December 31, 1999
<TABLE>
<CAPTION>
ADDITIONS:
<S> <C>
Investment income-
Interest and dividend income $ 918,347
Net appreciation 733,380
Contributions-
Employer 560,267
Participant 3,516,948
----------------
Total additions 5,728,942
DEDUCTIONS:
Payment of benefits (1,858,844)
----------------
Total deductions (1,858,844)
TRANSFERS TO (FROM) PLAN:
Transfers out (737,221)
Transfers in 1,536,405
----------------
Net transfers 799,184
----------------
Net increase 4,669,282
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of period 11,116,997
----------------
End of period $15,786,279
================
</TABLE>
The accompanying notes are an integral part of this financial statement.
3
<PAGE>
PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
1. DESCRIPTION OF THE PLAN:
GENERAL
The Protection One 401(k) Plan (formerly Protection One Employees Savings Plan)
(the Plan), was adopted to provide eligible employees of Protection One Alarm
Monitoring, Inc. (the Employer) a method to provide for retirement and other
related benefits. The Plan was restated effective July 1, 1998, concurrent with
the merger of the Westar Security Services 401(k) Plan (the Westar Plan) into
the Plan. The Plan is administered by the retirement committee (the Committee)
appointed by the Employer. The following summary description of the Plan is for
general information purposes only. Participants should refer to the Plan
agreement for more complete information.
The Plan is a defined contribution, contributory employee benefit plan
established in accordance with Section 401(a) of the Internal Revenue Code (IRC)
and is subject to the provisions of the Employee Retirement Income Security Act
of 1974 (ERISA). All Protection One Alarm Monitoring, Inc., employees become
eligible to participate after attaining age 21 and completion of six months of
service.
CONTRIBUTIONS
During each plan year, contributions include the total amount of the salary
reductions elected by the participants (not to exceed 16 percent of the
participant's individual compensation), subject to certain limits, and a
discretionary match of the participant contributions, determined each year by
the Employer. Such matching contributions will be allocated to the participants'
accounts in the same ratio as participant contributions. At the Employer's
discretion, additional matching contributions may be provided at a rate of up to
25 percent of the participant's contribution. The Employer made matching
contributions in the amount of $560,267 in 1999.
VESTING AND FORFEITURES
Each participant has a fully vested and nonforfeitable interest in all amounts
attributable to voluntary contributions, rollover contributions, and income
earned thereon.
4
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PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Participants who terminate service for reasons other than retirement, death, or
full and permanent disability prior to the completion of five years of service,
will forfeit the nonvested portion of Employer contributions to their account.
Participants vest in employer contributions according to the following schedule:
<TABLE>
<CAPTION>
Years of Vesting
Service Percentage
------------ ----------
<S> <C>
Less than 1 0%
1 20
2 40
3 60
4 80
5 or more 100
</TABLE>
Forfeitures of terminated participants' nonvested accounts are used to reduce
future Employer contributions. Total forfeitures were $154,076 in 1999.
Effective October 1, 1999, participants transferring accounts from Western
Resources, Inc. Employees' 401(k) Savings Plan carryover their vested status to
the Plan.
PARTICIPANT LOANS
Participants may borrow from their fund accounts an amount equal to the lesser
of one-half of the participant's vested account balance or $50,000. All loans
must be repaid in equal installments on not less than a quarterly basis over a
five-year period or in excess of five years for the purchase of a primary
residence. The loans are secured by up to 50 percent of the participant's vested
account balance and bear interest at a rate based on the prime rate published in
the Wall Street Journal at the beginning of the calendar quarter plus 1 percent.
Principal and interest are paid through payroll deductions. Interest rates on
outstanding participant loans ranged from 8.75 percent to 9.50 percent as of
December 31, 1999.
ADMINISTRATION
All funds in the Plan are held with the trustee. The Plan changed its trustee
effective July 1, 1998. The plan administrator is the Employer and is
responsible for administration of the Plan, including the costs of administering
the Plan. Records are maintained in the form of individual accounts, and credits
and charges are made to such accounts. When appropriate, a participant shall
have two separate accounts, an Employer matching contribution account and a
participant contribution account. Each participant's account is credited with
the participant's contribution, the Employer's matching contribution, and an
allocation of plan earnings based on account balances. The benefit to which a
participant is entitled is the vested benefit that can be provided from the
participant's account. Certain administrative expenses of the Plan are paid by
the Employer. The Employer paid expenses of approximately $170,000 during the
year ended December 31, 1999, on behalf of the Plan.
5
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PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
PAYMENT OF BENEFITS
Benefits are recorded when paid. At December 31, 1999, all benefit claims
submitted prior to year-end were paid. On termination of service due to death,
full and permanent disability, or normal retirement, a participant will be
entitled to 100 percent of the value of their account balance. Payment of
benefits may be in the form of lump-sum distributions or an annuity contract
payable.
For termination of service due to other reasons, a participant may receive the
value of the vested interest in their account as a lump-sum distribution. If the
participant's account has ever exceeded $5,000, the participant (and spouse, if
applicable) must give written consent before the distribution may be made.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
BASIS OF ACCOUNTING
The Plan's financial statements have been prepared on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments of the Plan are presented at fair market value. Shares of common
trust funds are valued at quoted market prices, which represent the net asset
value of shares held by the Plan at year-end. The Protection One, Inc. Common
Stock and Western Resources, Inc., Common Stock is valued at its year-end unit
closing price (comprised of year-end market price plus uninvested cash
position). Participant loans are valued at cost, which approximates fair market
value. Purchases and sales of investments are recorded on the trade date.
Interest income is accrued when earned. Dividend income is recorded on the
ex-dividend date. Capital gain distributions are included in dividend income.
REFUNDS PAYABLE AND EXCESS CONTRIBUTIONS
Refunds payable and excess contributions represent amounts deferred from the
salaries of participants in excess of those allowed by ERISA, as well as the
related matching Employer contributions, that will be returned to the
participants and the Employer.
6
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PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
PARTICIPANT-DIRECTED FUND INVESTMENTS
The Accounting Standards Executive Committee issued Statement of Position 99-3
"Accounting For and Reporting of Certain Defined Contribution Plan Investments
and Other Disclosure Matters" (SOP) which eliminates the requirement for a
defined contribution plan to disclose participant-directed investment programs.
The SOP was adopted for the 1999 financial statements and as such, the 1998
financial statements have been reclassified to eliminate participant-directed
fund investment program disclosures.
3. INVESTMENTS:
The following investments individually represent 5 percent or more of the net
assets available for plan benefits at December 31:
<TABLE>
<CAPTION>
1999 1998
------------- -------------
Common trust funds-
<S> <C> <C>
Vanguard 500 Index Fund $4,336,641 $2,017,238
Vanguard PRIMECAP Fund 3,443,052 1,388,763
Vanguard Wellington Fund 1,695,298 929,207
Vanguard Windsor Fund 1,929,376 1,234,572
Short-term investments-
Vanguard Prime Money Market Fund 1,677,629 977,573
</TABLE>
The net change in realized and unrealized appreciation (depreciation) in fair
value of investments included in the statement of changes in net assets
available for plan benefits for the year ended December 31, 1999, consisted of
the following:
<TABLE>
Common trust funds-
<S> <C>
Stock funds $ 1,309,375
Combined stock/bond funds (147,556)
Protection One, Inc. Common Stock (231,316)
Westar Resources, Inc. Common Stock (197,123)
------------
Net appreciation in fair value of investments $ 733,380
============
</TABLE>
4. TAX STATUS:
The Employer received a favorable determination letter dated August 5, 1996,
from the Internal Revenue Service (IRS) stating the Plan and the related trust
are qualified and exempt from federal income taxes under Sections 401(a) and
501(a) of the IRC, as amended. The Plan has been amended and restated since the
latest determination letter was received. In the opinion of the Plan
Administrator, the Plan is currently designed and being operated in compliance
with the applicable requirements of the IRC.
7
<PAGE>
PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
5. TERMINATION OF THE PLAN:
The Employer has the right to terminate the Plan at any time by delivering to
the trustee and administrator written notice of such termination. In the event
of Plan termination, participants will become fully vested and assets will be
distributed to participants in a manner consistent with plan provisions and
ERISA regulations. The Employer currently has no intent to terminate the Plan.
6. TRANSFERS TO/FROM PLAN:
During the year ended December 31, 1999, Protection One, Inc. (the Company),
agreed with certain successor employers to transfer former employee participant
account balances totaling $737,221 to qualified defined contribution plans (the
RLS Inc. 401(k) Savings Plan and the ProStar 401(k) Savings Plan).
Also during the year ended December 31, 1999, employee participant accounts
totaling $1,536,405 were transferred into the Plan from qualified defined
contribution plans (the Dynamark 401(k) Plan, the Sentry 401(k) Plan, the Westar
Communications, Inc. 401(k) Profit Sharing Plan, and the Western Resources, Inc.
Employees' 401(k) Savings Plan). These transfers were a result of the Plan being
restated in 1998 to allow employees to combine their participant account
balances from former employers qualified defined contribution accounts with
their account balance in the Plan.
7. RELATED-PARTY TRANSACTIONS:
The Plan invests in shares of mutual funds managed by an affiliate of the
trustee. Transactions in such investments qualify as party-in-interest
transactions, which are exempt from the prohibited transaction rules. During
1999, the Plan received transfers from related-party qualified defined
contributions benefit plans including approximately $300,000 from the Westar
Communications, Inc. 401(k) Profit Sharing Plan (formerly Westar Security
Services, Inc. 401(k) Profit Sharing Plan) and approximately $350,000 from the
Western Resources, Inc. Employees' 401(k) Savings Plan.
8. COMSEC NARRAGANSETT SECURITY, INC. PROFIT
SHARING SAVINGS AND RETIREMENT PLAN MERGER:
The Comsec Narragansett Security, Inc. Profit Sharing Savings and Retirement
Plan (Comsec Plan) was merged into the Plan effective December 22, 1998. The
assets of the Comsec Plan were transferred prior to December 31, 1998, but the
funds were not invested until after December 31, 1998. The assets of the Comsec
Plan are presented as uninvested cash as of December 31, 1998, on the
accompanying statement of net assets available for plan benefits. In 1999, these
assets were invested in participant-directed funds.
9. PURCHASE OF WESTERN RESOURCES, INC. COMMON STOCK:
The Plan purchased approximately 9,000 shares of Western Resources, Inc. Common
Stock in the period from July 1, 1998 to March 31, 1999, which may not have been
registered under the Securities Act of 1933. The purchases
8
<PAGE>
PROTECTION ONE 401(k) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
made by the trustee on behalf of the Plan were made in a manner consistent with
the Plan and investment elections of the Plan participants. The Employer is
considering what further action should be taken, if any, including whether to
make a rescission offer to Plan participants who elected to allocate some of
their pay deferral contributions to the Western Resources, Inc. Common Stock
Fund between July 1, 1998 and March 31, 1999.
10. SUBSEQUENT EVENTS:
Effective April 1, 2000, the Plan was amended allowing entry into the plan at
the beginning of any calendar month and changing the eligibility to completion
of 90 days of service with no minimum age requirement.
During the third quarter of 1999, the Company sold assets comprised of its
Mobile Services Group to ATX Technologies, Inc. Assets of approximately $500,000
were transferred from the Plan to the ATX 401(k) Plan on May 15, 2000.
9
<PAGE>
PROTECTION ONE 401(k) PLAN
Part IV - Line 4i -- Supplemental Schedule of Assets Held for Investment
Purposes
As of December 31, 1999
<TABLE>
<CAPTION>
Indentity of Issuer Description of Investment Market Value
------------------------------------------------------------ ------------------------------------- ----------------
<S> <C> <C>
* Vanguard 500 Index Fund Registered Investment Company $ 4,336,641
* Vanguard International Growth Fund Registered Investment Company 770,687
* Vanguard Prime Money Market Fund Registered Investment Company 1,677,629
* Vanguard PRIMECAP Fund Registered Investment Company 3,443,052
* Vanguard Total Bond Market Index Fund Registered Investment Company 677,631
* Vanguard Wellington Fund Registered Investment Company 1,695,298
* Vanguard Windsor Fund Registered Investment Company 1,929,376
* Protection One, Inc. Common Stock Company Stock Fund 140,656
* Western Resources, Inc. Common Stock Company Stock Fund 231,524
* Participant Loans 8.75% - 9.50% 580,093
----------------
Total assets held for investment purposes $15,482,587
================
</TABLE>
(*) Indicates a party-in-interest to the Plan
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act 1934, the
Retirement Committee for the Protection One 401(k) Plan has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
Protection One 401(k) Plan
By:
/s/ Anthony D. Somma Chief Financial Officer Date: June 27, 2000
----------------------- -------------
Anthony D. Somma
11
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CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
reports included in this Form 11-K, into the Company's previously filed S-8
Registration Statement File Number 333-02828.
ARTHUR ANDERSEN LLP
Kansas City, Missouri
June 27, 2000
12
