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 or in part under applicable law, such Indemnitee shall have
the right to commence litigation in any court in the States of New York or
Delaware having subject matter jurisdiction thereof and in which venue is proper
seeking an initial determination by the court or challenging any such refusal by
the Company or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process relating thereto
and hereby consents to personal jurisdiction of any such court and agrees of
appear in any such proceeding. In any such litigation, an Indemnitee shall be
entitled to the benefits of the burden of proof presumption provided in Section
7 hereof.
4. No Duplication of Payments. The Company shall not be liable under
this Agreement to make any payment in connection with any Claim made
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against an Indemnitee to the extent such Indemnitee has otherwise actually
received payment (under any insurance policy, Bylaw or otherwise) of the amounts
otherwise indemnifiable hereunder.
5. Indemnification for Additional Expenses. The Company shall
indemnify Indemnitees against any and all Expenses (including attorneys' fees)
and, if requested by such Indemnitee, shall (within two business days of such
request) advance such expenses to Indemnitee, which are incurred by Indemnitee
in connection with any claim asserted or action brought by Indemnitee for (i)
indemnification or payment of Expenses by the Company or advance of expenses
under this Agreement or any other agreement or Company Bylaw now or hereafter in
effect relating to Claims for Indemnifiable Events and/or (ii) recovery under
any directors' and officers' liability insurance policies maintained by the
Company, regardless of whether such Indemnitee ultimately is determined to be
entitled to such indemnification, advance expense payment or insurance recovery,
as the case may be.
6. Partial Indemnity, Etc. If an Indemnitee is entitled under any
provision of this Agreement or otherwise to indemnification by the Company for
some or a portion of the Expenses, judgments, fines, penalties and amounts paid
in settlement of a Claim but not, however, for all of the total amount thereof,
the Company shall nevertheless indemnify such Indemnitee for the portion thereof
to which such Indemnitee is entitled. Moreover, notwithstanding any other
provision of this Agreement, to the extent that such Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating
in whole or in part to an Indemnifiable Event or in defense of any issue or
matter therein, including dismissal without prejudice, such Indemnitee shall be
indemnified, to the extent permitted by law, against all Expenses incurred in
connection with such Indemnifiable Event.
7. Burden of Proof. In connection with any determination hereunder or
otherwise, including any litigation of the sort described in Section 3(b) or
3(c), as to whether an Indemnitee is entitled to be indemnified hereunder the
burden of proof shall be on the Company to establish that such Indemnitee is not
so entitled.
8. No Adverse Presumptions. For purposes of this Agreement, the
termination of any claim, action, suit or proceeding, whether civil or criminal,
by judgment, order, settlement (whether with or without court approval) or
conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that an Indemnitee did not meet any particular standard of
conduct or have any particular belief or that a court has determined that
indemnification is not permitted by applicable law.
9. Nonexclusivity, Etc. The rights of an Indemnitee hereunder shall be
in addition to any other rights Indemnitee may have under the Company's Bylaws
or the DGCL or otherwise. To the extent that a change in the DGCL (whether by
statute or judicial decision) permits greater indemnification by agreement than
those currently afforded under the Company's Bylaws and this Agreement, it is
the intent of the parties hereto that such Indemnitee shall enjoy by this
Agreement the greater benefits so afforded by such change.
5. Liability Insurance. To the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, an Indemnitee shall be covered by such policy or policies, in
accordance with its or their terms, to the maximum extent of the coverage
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available for any director or officer of the Company.
6. Period of Limitations. No legal action shall be brought and no
cause of action shall be asserted by or on behalf of the Company against an
Indemnitee, an Indemnitee's spouse, heir, executors or personal or legal
representatives from and after the date hereof.
7. Amendments, Etc. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by the parties hereto. No
waiver of any of the provisions of this Agreement shall be effective unless in
writing and no written waiver shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a waiver.
8. Subrogation. In the event of payment under this Agreement to an
Indemnitee, the Company shall be subrogated to the extent of such payment to all
of the rights of recovery of such Indemnitee, who shall execute all papers
required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company
effectively to bring suit to enforce such rights.
9. Specific Performance. The parties recognize that if any provision
of this Agreement is violated by the Company, an Indemnitee may be without an
adequate remedy at law. Accordingly, in the event of any such violation, such
Indemnitee shall be entitled, if such Indemnitee so elects, to institute
proceedings, either in law or at equity, to obtain damages or reimbursements for
costs, expenses, or disbursements, to enforce specific performance, to enjoin
such violation, or to obtain any relief or any combination of the foregoing as
such Indemnitee may elect to pursue.
10. Binding Effect, Etc. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
and/or assets of the Company, assigns, spouses, heirs, executors, and personal
and legal representatives. This Agreement shall continue in effect regardless of
whether an Indemnitee continues to serve as an officer or director of the
Company or of any other enterprise at the Company's request or in any other
capacity, such as agent or consultant.
11. Severability; Several Obligations. The provisions of this
Agreement shall be severable in the event that any of the provisions hereof
(including any provisions within a single section, paragraph or sentence) is
held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such
provision in every other respect and with respect to all other Indemnitees and
of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law. The indemnities
afforded hereby are several and not joint obligations, and no requirement of
joinder, common pleadings, joint request or the like shall be needed for any
single Indemnitee to enjoy the rights hereby afforded.
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THE INDEMNITOR:
NAPCO SECURITY SYSTEMS, INC.
By: /s/
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Name: Xxxxxxx Xxxxxxx
Title: President
THE IMDEMNITEES:
/s/
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Xxxxxxx Xxxxxxx
/s/
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Xxxxx X. Xxxxxx
/s/
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Xxxxx Xxxxxxxxx
/s/
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Xxxxxx X. Xxxxxx
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