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Ex-10.M
INDEMNIFICATION AGREEMENT
AGREEMENT, effective as of the 9th day of August, 1999, between
NAPCO
SECURITY SYSTEMS, INC., a Delaware
corporation (the "Company"), and the
individuals listed on the signature page
(each an "Indemnitee" and collectively
the "Indemnitees").
WHEREAS, Indemnitee is a director, officer or employee of the
Company;
and
WHEREAS, both the Company and the Indemnitee recognize the risk
of
litigation and other claims being asserted
against corporate agents or public
companies in today's environment; and
WHEREAS, the Articles of Incorporation and Bylaws of the
Company
permit the Company to indemnify and advance
expenses to its directors and
officers to the fullest extent now or
hereafter authorized or permitted by law.
NOW, THEREFORE, in consideration of the premises and intending to
be
legally bound hereby, the parties hereto
agree as follows:
1. Certain Definitions.
(a) Approved Counsel shall mean any attorney or law firm
located
and selected by an Indemnitee and
reasonably acceptable to the Company.
(b) Board of Directors shall mean the Board of Directors of the
Company.
(c) Claim shall mean any threatened, pending or completed
action,
suit or proceeding, or any inquiry or
investigation, whether instituted by the
Company or any other party, that an
Indemnitee in good faith believes might lead
to the institution of any such action, suit
or proceeding, whether civil,
criminal, administrative, investigative or
other and shall also include
litigation of the type described in Section
3(b), 3(c) or 5.
(d) Expenses shall include attorneys' fees of approved counsel
and all other costs, expenses,
disbursements, and obligations paid or incurred
in connection with investigating,
defending, being a witness in or participating
in (including on appeal), or preparing to
defend, be a witness in or participate
in any Claim relating to any Indemnifiable
Event, including any litigation
described in Section 3(b), 3(c) or 5
together with interest calculated at the
Company's average cost of funds for
short-term borrowings, accrued from the date
of payment of such expense of the date
Indemnitee received reimbursement
therefor.
(e) Indemnifiable Event shall mean any event or occurrence
related to the fact that an Indemnitee is
or was a director, officer, employee,
agent or fiduciary of the Company, or is or
was serving at the request
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of the Company as a director, officer,
employee, trustee, agent or fiduciary of
another corporation of any type or kind,
domestic or foreign, partnership, joint
venture, employee benefit plan, trust or
other enterprise, or by reason of
anything done or not done by an Indemnitee
in any such capacity. Without
limitation of an indemnification provided
hereunder, an Indemnitee serving (i)
another corporation, partnership, joint
venture or trust of which twenty (20%)
percent or more of the voting power or
residual economic interest is held,
directly or indirectly, by the Company, or
(ii) any employee benefit plan of the
Company or any entity referred to in clause
(i), in any capacity shall be deemed
to be doing so at the request of the
Company.
2. Basic Indemnification Arrangement. If an Indemnitee was, is
or
becomes at any time a party to or witness
or other participant in, or is
threatened to be made a party to or witness
or other participant in, a Claim by
reason of (or arising in part out of) an
Indemnifiable Event, the Company shall
indemnify such Indemnitee to the fullest
extent now or hereafter authorized or
permitted by law as soon as practicable but
in any event no later than fifteen
(15) days after written demand is presented
to the Company, against any and all
Expenses, judgments, fines (including
excise taxes assessed against an
Indemnitee with respect to an employee
benefit plan), penalties and amounts paid
in settlement (including all interest,
assessments and other charges paid or
payable in connection with or in respect of
such Expenses, judgments, fines,
penalties or amounts paid in settlement) of
such Claim. If so requested by
Indemnitee, the Company shall advance
(within two (2) business days of such
request) any and all Expenses to an
Indemnitee (an "Expense Advance"), provided
however, the Indemnitee must sign an
undertaking to reimburse the Company for
such Expenses if it is ultimately
determined that the Indemnitee was not
entitled to indemnification with respect to
the Claim. As to any action or suit
by or in the right of the Company, such
indemnification shall be subject to the
provisions of Section 145(b) of the
DGCL.
3. Payment. (a) Notwithstanding the provisions of Section 2,
the
obligations of the Company under Section 2
shall in no event be deemed to
preclude any right to indemnification to
which an Indemnitee may be entitled
under the Delaware General Corporation Law
(the "DGCL").
(b) In the event an Indemnitee seeks indemnification in a
proceeding initiated by such Indemnitee
(other than a proceeding under Section
3(c) hereof), the obligations of the
Company under Section 2 shall be subject to
the requirement that such proceeding was
specifically authorized, or later
ratified, by the Company.
(c) If the Company refuses to indemnify an Indemnitee for any
reason whatsoever and such Indemnitee
substantively would be permitted to be
indemnified in whole
