Document:

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                                                                    Exhibit 4.01

         This Note is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository named
below or a nominee of the Depository. This Note is not exchangeable for Notes
registered in the name of a Person other than the Depository or its nominee
except in the limited circumstances described herein and in the Indenture, and
no transfer of this Note (other than a transfer of this Note as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
the limited circumstances described herein.

         Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation (the "Depository"), to the
Company or its agent for registration of transfer, exchange, or payment, and any
certificate issued is registered in the name of Cede & Co. or in such other name
as is requested by an authorized representative of the Depository (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depository), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.

                                 CITIGROUP INC.
                        3.625% NOTES DUE FEBRUARY 9, 2009

REGISTERED                                                            REGISTERED

                                                              CUSIP: 172967 CH 2
                                                            ISIN: US172967 CH 23
                                                          Common Code: 018570866

No. R-                                                                         $

         CITIGROUP INC., a Delaware corporation (the "Company", which term
includes any successor Person under the Indenture), for value received, hereby
promises to pay to Cede & Co., or registered assigns, the principal sum of
$____________ on February 9, 2009 and to pay interest thereon from and including
February 9, 2004 or from the most recent Interest Payment Date to which interest
has been paid or duly provided for, semi-annually, on February 9 and August 9 of
each year, commencing August 9, 2004, at the rate of 3.625% per annum, until the
principal hereof is paid or made available for payment. The interest so payable,
and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Note is
registered at the close of business on the Record Date for such interest, which
shall be the January 31 and July 31 (whether or not a Business Day) immediately
preceding such Interest Payment Date.
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         Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the holder on such Record Date and may either
be paid to the Person in whose name this Note is registered at the close of
business on a subsequent Record Date, such subsequent Record Date to be not less
than five days prior to the date of payment of such defaulted interest, notice
whereof shall be given to holders of Notes of this series not less than 15 days
prior to such subsequent Record Date, or be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Notes of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture.

         Interest hereon will be calculated on the basis of a 360-day year
comprised of twelve 30-day months.

         If either an Interest Payment Date or the Maturity of the Notes falls
on a day that is not a Business Day, such Interest Payment Date or Maturity will
be the next succeeding Business Day. If a date for payment of interest or
principal on the Notes falls on a day that is not a business day in the place of
payment, such payment will be made on the next succeeding business day in such
place of payment as if made on the date the payment was due. No interest will
accrue on any amounts payable for the period from and after the due date for
payment of such principal or interest.

         For these purposes, "Business Day" means any day which is a day on
which commercial banks settle payments and are open for general business in The
City of New York.

         Payment of the principal of and interest on this Note will be made at
the office or agency of the Trustee maintained for that purpose in The City of
New York.

         Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         Unless the certificate of authentication hereon has been executed by
the Trustee or by an authenticating agent on behalf of the Trustee by manual
signature, this Note shall not be entitled to any benefit under the Indenture or
be valid or obligatory for any purpose.

                                       2
<PAGE>
         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.

Dated:  February 9, 2004

                                            CITIGROUP INC.

                                            By:_________________________________
                                            Title:  Assistant Treasurer

ATTEST:

By:___________________________
Title:  Assistant Secretary

                                       3
<PAGE>
         This is one of the Notes of the series issued under the
within-mentioned Indenture.

Dated:  February 9, 2004

                                    THE BANK OF NEW YORK,
                                    as Trustee

                                    By:_________________________________
                                       Name:
                                       Title:

                                    -or-

                                    CITIBANK, N.A.,
                                    as Authenticating Agent

                                    By:_________________________________
                                       Name:
                                       Title:

                                       4
<PAGE>
         This Note is one of a duly authorized issue of Securities of the
Company (the "Notes"), issued and to be issued in one or more series under the
Indenture, dated as of March 15, 1987 (as amended and supplemented to date, the
"Indenture"), between the Company and The Bank of New York, as Trustee (the
"Trustee", which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee and the holders of the Notes
and of the terms upon which the Notes are, and are to be, authenticated and
delivered. This Note is one of the series designated on the face hereof,
initially limited in aggregate principal to $1,000,000,000.

         If an event of default (as defined in the Indenture) with respect to
Notes of this series shall occur and be continuing, the principal of the Notes
of this series may be declared due and payable in the manner and with the effect
provided in the Indenture.

         The Indenture contains provisions for defeasance at any time of the
entire indebtedness of this Note upon compliance by the Company with certain
conditions set forth in Sections 11.03 and 11.04 thereof, which provisions apply
to this Note.

         The Indenture contains provisions permitting the Company and the
Trustee, without the consent of the holders of the Securities, to establish,
among other things, the form and terms of any series of Securities issuable
thereunder by one or more supplemental indentures, and, with the consent of the
holders of not less than 66 2/3% in aggregate principal amount of Securities at
the time outstanding which are affected thereby, to modify the Indenture or any
supplemental indenture or the rights of the holders of Securities of such series
to be affected, provided that no such modification will (i) extend the fixed
maturity of any Securities, reduce the rate or extend the time of payment of
interest thereon, reduce the principal amount thereof or the premium, if any,
thereon, reduce the amount of the principal of Original Issue Discount
Securities payable on any date, change the currency in which Securities are
payable, or impair the right to institute suit for the enforcement of any such
payment on or after the maturity thereof, without the consent of the holder of
each Security so affected, or (ii) reduce the aforesaid percentage of Securities
of any series the consent of the holders of which is required for any such
modification without the consent of the holders of all Securities of such series
then outstanding, or (iii) modify, without the written consent of the Trustee,
the rights, duties or immunities of the Trustee.

         No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.

         This Note is a Global Security registered in the name of a nominee of
the Depository. This Note is exchangeable for Notes registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances hereinafter described. Unless and until it is exchanged in whole
or in part for definitive Notes in certificated form, this Note may not be

                                       5
<PAGE>
transferred except as a whole by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository.

         The Notes represented by this Global Security are exchangeable for
definitive Notes in certificated form of like tenor as such Notes in
denominations of $1,000 and integral multiples thereof only if (i) the
Depository notifies the Company that it is unwilling or unable to continue as
Depository for the Notes or (ii) the Depository ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, or (iii) the
Company in its sole discretion decides to allow the Notes to be exchanged for
definitive Notes in registered form. Any Notes that are exchangeable pursuant to
the preceding sentence are exchangeable for certificated Notes issuable in
authorized denominations and registered in such names as the Depository shall
direct. As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of definitive Notes in certificated form is registrable
in the register maintained by the Company in The City of New York for such
purpose, upon surrender of the definitive Note for registration of transfer at
the office or agency of the registrar, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
registrar duly executed by, the holder thereof or his attorney duly authorized
in writing, and thereupon one or more new Notes of this series and of like
tenor, of authorized denominations and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. Subject to the
foregoing, this Note is not exchangeable, except for a Global Security or Global
Securities of this issue of the same principal amount to be registered in the
name of the Depository or its nominee.

         No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.

         Prior to due presentment of this Note for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.

         The Company will pay additional amounts ("Additional Amounts") to the
beneficial owner of any Note that is a non-United States person in order to
ensure that every net payment on such Note will not be less, due to payment of
U.S. withholding tax, than the amount then due and payable. For this purpose, a
"net payment" on a Note means a payment by the Company or a paying agent,
including payment of principal and interest, after deduction for any present or
future tax, assessment or other governmental charge of the United States. These
Additional Amounts will constitute additional interest on the Note.

         The Company will not be required to pay Additional Amounts, however, in
any of the circumstances described in items (1) through (13) below.

         (1)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner:

                                       6
<PAGE>
                  (a)      having a relationship with the United States as a
                           citizen, resident or otherwise;

                  (b)      having had such a relationship in the past or

                  (c)      being considered as having had such a relationship.

         (2)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner:

                  (a)      being treated as present in or engaged in a trade or
                           business in the United States;

                  (b)      being treated as having been present in or engaged in
                           a trade or business in the United States in the past
                           or

                  (c)      having or having had a permanent establishment in the
                           United States.

         (3)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner being or having been any of the
                  following (as such terms are defined in the Internal Revenue
                  Code of 1986, as amended):

                  (a)      personal holding company;

                  (b)      foreign personal holding company;

                  (c)      foreign private foundation or other foreign
                           tax-exempt organization;

                  (d)      passive foreign investment company;

                  (e)      controlled foreign corporation or

                  (f)      corporation which has accumulated earnings to avoid
                           United States federal income tax.

         (4)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the beneficial owner owning or having owned,
                  actually or constructively, 10 percent or more of the total
                  combined voting power of all classes of stock of the Company
                  entitled to vote or by reason of the beneficial owner being a
                  bank that has invested in a Note as an extension of credit in
                  the ordinary course of its trade or business.

For purposes of items (1) through (4) above, "beneficial owner" means a
fiduciary, settlor, beneficiary, member or shareholder of the holder if the
holder is an estate, trust, partnership, limited liability company, corporation
or other entity, or a person holding a power over an estate or trust
administered by a fiduciary holder.

         (5)      Additional Amounts will not be payable to any beneficial owner
                  of a Note that is a:

                                       7
<PAGE>
                  (a)      fiduciary;

                  (b)      partnership;

                  (c)      limited liability company or

                  (d)      other fiscally transparent entity

                  or that is not the sole beneficial owner of the Note, or any
                  portion of the Note. However, this exception to the obligation
                  to pay Additional Amounts will only apply to the extent that a
                  beneficiary or settlor in relation to the fiduciary, or a
                  beneficial owner or member of the partnership, limited
                  liability company or other fiscally transparent entity, would
                  not have been entitled to the payment of an Additional Amount
                  had the beneficiary, settlor, beneficial owner or member
                  received directly its beneficial or distributive share of the
                  payment.

         (6)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld solely by
                  reason of the failure of the beneficial owner or any other
                  person to comply with applicable certification,
                  identification, documentation or other information reporting
                  requirements. This exception to the obligation to pay
                  Additional Amounts will only apply if compliance with such
                  reporting requirements is required by statute or regulation of
                  the United States or by an applicable income tax treaty to
                  which the United States is a party as a precondition to
                  exemption from such tax, assessment or other governmental
                  charge.

         (7)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is collected or imposed by any method
                  other than by withholding from a payment on a Note by the
                  Company or a paying agent.

         (8)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld by reason of a
                  change in law, regulation, or administrative or judicial
                  interpretation that becomes effective more than 15 days after
                  the payment becomes due or is duly provided for, whichever
                  occurs later.

         (9)      Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is imposed or withheld by reason of
                  the presentation by the beneficial owner of a Note for payment
                  more than 30 days after the date on which such payment becomes
                  due or is duly provided for, whichever occurs later.

         (10)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any:

                  (a)      estate tax;

                  (b)      inheritance tax;

                                       8
<PAGE>
                  (c)      gift tax;

                  (d)      sales tax;

                  (e)      excise tax;

                  (f)      transfer tax;

                  (g)      wealth tax;

                  (h)      personal property tax or

                  (i)      any similar tax, assessment, withholding, deduction
                           or other governmental charge.

         (11)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment, or other
                  governmental charge required to be withheld by any paying
                  agent from a payment of principal or interest on a Note if
                  such payment can be made without such withholding by any other
                  paying agent.

         (12)     Additional amounts will not be payable if a payment on a Note
                  is reduced as a result of any tax, assessment or other
                  governmental charge that is required to be made pursuant to
                  any European Union directive on the taxation of savings income
                  or any law implementing or complying with, or introduced to
                  conform to, any such directive.

         (13)     Additional Amounts will not be payable if a payment on a Note
                  is reduced as a result of any combination of items (1) through
                  (12) above.

         Except as specifically provided herein, the Company will not be
required to make any payment of any tax, assessment or other governmental charge
imposed by any government or a political subdivision or taxing authority of such
government.

         As used in this Note, "United States person" means:

         (a)      any individual who is a citizen or resident of the United
                  States;

         (b)      any corporation, partnership or other entity created or
                  organized in or under the laws of the United States;

         (c)      any estate if the income of such estate falls within the
                  federal income tax jurisdiction of the United States
                  regardless of the source of such income and

         (d)      any trust if a United States court is able to exercise primary
                  supervision over its administration and one or more United
                  States persons have the authority to control all of the
                  substantial decisions of the trust.

         Additionally, "non-United States person" means a person who is not a
United States person, and "United States" means the United States of America,
including the States and the District of Columbia, but excluding its territories
and its possessions.

         Except as provided below, the Notes may not be redeemed prior to
maturity.

         (1)      The Company may, at its option, redeem the Notes if:
<PAGE>
                  (a)      the Company becomes or will become obligated to pay
                           Additional Amounts as described above;

                  (b)      the obligation to pay Additional Amounts arises as a
                           result of any change in the laws, regulations or
                           rulings of the United States, or an official position
                           regarding the application or interpretation of such
                           laws, regulations or rulings, which change is
                           announced or becomes effective on or after February
                           2, 2004 and

                  (c)      the Company determines, in its business judgment,
                           that the obligation to pay such Additional Amounts
                           cannot be avoided by the use of reasonable measures
                           available to it, other than substituting the obligor
                           under the Notes or taking any action that would
                           entail a material cost to the Company.

         (2)      The Company may also redeem the Notes, at its option, if:

                  (a)      any act is taken by a taxing authority of the United
                           States on or after February 2, 2004, whether or not
                           such act is taken in relation to the Company or any
                           affiliate, that results in a substantial probability
                           that the Company will or may be required to pay
                           Additional Amounts as described above;

                  (b)      the Company determines, in its business judgment,
                           that the obligation to pay such Additional Amounts
                           cannot be avoided by the use of reasonable measures
                           available to it, other than substituting the obligor
                           under the Notes or taking any action that would
                           entail a material cost to the Company and

                  (c)      the Company receives an opinion of independent
                           counsel to the effect that an act taken by a taxing
                           authority of the United States results in a
                           substantial probability that the Company will or may
                           be required to pay the Additional Amounts described
                           under above, and delivers to the Trustee a
                           certificate, signed by a duly authorized officer,
                           stating that based on such opinion the Company is
                           entitled to redeem the Notes pursuant to their terms.

Any redemption of the Notes as set forth in clauses (1) or (2) above shall be in
whole, and not in part, and will be made at a redemption price equal to 100% of
the principal amount of the Notes Outstanding plus accrued interest thereon to
the date of redemption. Holders shall be given not less than 30 days nor more
than 60 days prior notice by the Trustee of the date fixed for such redemption.

         All terms used in this Note which are defined in the Indenture shall
have the meanings assigned to them in the Indenture. The Notes are governed by
the laws of the State of New York.

                                       10<PAGE>

                                                                    EXHIBIT 10.I

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

                  AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"),
dated as of June 26, 2003, between Napco Security Systems, Inc., a Delaware
corporation (the "Company"), and Richard Soloway (the "Employee").

                  WHEREAS, Employee has been serving as Chairman of the Board,
President and Chief Executive Officer of the Company and the parties wish to
provide for the continuation of such services.

                  NOW, THEREFORE, in consideration of the covenants and
agreements contained herein, the Employment Agreement is hereby amended and
restated to read as follows:

                  1.       Employment, Duties and Acceptance.

                           1.1.     The Company hereby employs the Employee for
the Term (as hereinafter defined) to render services to the Company as its
chairman of the board, president and chief executive officer, subject to the
direction of the Board of Directors, and, in connection therewith, to perform
such executive and managerial duties as he shall be directed by the Board of
Directors consistent with Employee's position as chairman of the board,
president and chief executive officer and consistent with the duties performed
by the Employee immediately prior to the date of this Agreement.

                           1.2      Acceptance of Employment by the Employee.
The Employee hereby accepts such employment and agrees to render the executive
and managerial services described above on the terms and conditions set forth.

                  2.       Term of Employment. The term of the Employee's
employment under this Agreement shall commence on the date hereof and shall end
five (5) years from the date hereof, unless sooner terminated pursuant to
Article 5 of this Agreement and shall renew for additional one year intervals
thereafter unless (i) sooner terminated pursuant to Article 5 hereof or (ii)
either party gives notices of non-renewal at least six months before the end of
the then applicable term of employment (the "Term").

                  3.       Compensation.

                           3.1.     Salary. For services to be rendered pursuant
to this Agreement, the Company agrees to pay the Employee a salary of $453,235
per annum (the "Annual Salary"), payable in accordance with the Company's
regular payroll practices but no less frequently than once per month. Employee's
annual salary shall be reviewed by the Board of Directors from time to time, but
may not be reduced, and shall be increased commencing January 1 of each year of
the Term by an amount at least equal to the product of the prior year's Annual
Salary and the

                                      E-1

<PAGE>

increase in the Consumer Price Index ("CPI") (over the CPI for 2003). Any
increased amount shall be considered "Annual Salary" for the purposes of this
Agreement.

                           3.2.     Incentive Compensation. For each of the
Company's fiscal years ending during the Term, including the fiscal year ending
June 30, 2003, the Employee shall be awarded an incentive bonus (the "Bonus"),
in such amount as determined by the Board of Directors. All or a portion of the
amount of such bonus shall, at the Employee's option, be payable in common stock
of the Company valued at the average closing sales price of NASDAQ, or the
principal market on which the Company's common stock trades, on the last five
trading days of the fiscal year for which the bonus is paid. The bonus set forth
in this Section 3.2 shall be paid to the Employee no later than thirty (30) days
after the Company's receipt of the audited financial statements for the Company
with respect to the applicable fiscal year.

                           3.3.     Withholdings and Deductions. All
Compensation described in this Article 3 shall be less such deductions as may be
required to be withheld by applicable law and regulation including the payment
by the Employee of any applicable tax withholding with respect to his receipt of
shares of common stock pursuant to Section 3.2 hereof.

                           3.4.     Stock Options. As additional incentive to
Employee, simultaneous with the execution of this Agreement, the Company shall
grant Employee options under the Company's Stock Option Plan to purchase 100,000
shares of the Company's common stock at an exercise price equal to 110% of the
"Market Price" (as defined below) of the shares on the date the Options are
granted with respect to incentive stock options and 100% of the Market Price on
the date the Options are granted for a non-qualified stock options. Options set
forth in this Section 3.4 shall vest as provided in such Plan, but in no event
later than on a Change in Control, as defined in Article 6 below, and may be
exercisable for 5 years. For the purposes hereof, "Market Price" shall mean the
last reported sales price of the Company's common stock on the relevant date.
The Stock Option Agreement shall provide that the Employee may exercise options
through a "cashless exercise" procedure and shall permit the Employee to sell
any or all of the shares acquired through the exercise of any Options to the
Company, at the discretion of the Employee, upon a Change in Control, at the
Market Price of such shares on the date of sale.

                           3.5.     Supplemental Amount. (a) The Company has a
qualified retirement plan, under Section 401 et seq. of the Internal Revenue
Code of 1986, as amended (the "Code"). The Employee is a participant in said
plans. Section 415 of the Code provides that a plan shall not be a qualified
trust under Section 401(a) if it provides for the payment of contributions with
respect to a participant in excess of certain amounts. The Company's plan has
provisions intended to assure that they are such qualified trusts, by providing
that no contribution may be made to a plan if such contribution would cause the
plan to be a non-qualified trust (the "Section 415 provisions"). The annual
amounts that the Employee, as a participant, would be entitled to have
contributed for his benefit by the Company under said plan (or under any other
plan qualified under Section 401 et seq. of the Code in which the Employee may
be a participant during the Term) if the plans did not have Section 415
provisions (or any successor provisions) in excess of the annual amounts that
the Company actually contributes thereto for the benefit of the Employee is
referred to as the "Supplemental Amount."

                                      E-2

<PAGE>

                                    (b)      As supplemental compensation for
each year during the Term, the Company shall, within 90 days after the end of
the year, at the election of the Employee either (i) contribute the Supplemental
Amount to non-qualified retirement plan established for the benefit of the
Employee, (ii) issue (or transfer from its treasury stock) to the Employee a
number of shares of its common stock, subject to no restriction other than as
required by the Securities Act of 1933, equal to (x) the Supplemental Amount,
(y) divided by the average of the daily closing prices of such stock over the
last five trading days during said year. Such number of shares shall be rounded
to the nearest number of whole shares. The certificate representing said shares
shall bear the following legend: "The shares represented by this certificate
were acquired in a transaction not registered under the Securities Act of 1933,
and may not be transferred or disposed of except pursuant to an effective
registration statement under said Act or an exemption from such registration
thereunder" or (iii) pay the Supplemental Amount to the Employee in a lump sum
cash payment.

                  4.       Expenses and Benefits.

                           4.1.     Expenses. The Company shall pay or reimburse
the Employee for all reasonable expenses actually incurred or paid by him during
the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as it may require.

                           4.2.     Benefits. The Employee shall be entitled to
all rights and benefits for which he shall be eligible under any stock option or
extra compensation plan, pension, group insurance or other so-called "fringe"
benefits which the Company may, in its sole discretion, provide for him or for
its senior executive employees generally.

                           4.3.     Vacation. The Employee shall be entitled to
such vacation as is provided from time to time to other senior executives of the
Company. Upon termination of Employee's employment for any reason, the Company
shall pay Employee for all unused vacation pay from the beginning of the Term of
this Agreement.

                  5.       Termination.

                           5.1.     Termination upon Death. If the Employee
shall die during the Term, this Agreement shall terminate, except that the
Employee's legal representatives shall be entitled to receive the Annual Salary
provided for in Section 3.1 of this Agreement for a period of one year after the
Employee's death, paid in accordance with the Company's normal payroll
practices, and his Bonus shall be calculated on a pro rata basis through the end
of the fiscal quarter immediately preceding his death. In addition, the
Employee's legal representatives shall receive payment for unreimbursed
expenses.

                           5.2.     Termination upon Disability. If, during the
Term, the Employee shall become physically or mentally disabled, whether totally
or partially, as determined by a medical doctor acceptable to both parties
hereto, so that he is unable substantially to perform his services hereunder
with or without reasonable accommodation for (i) a period of six consecutive
months, or (ii) for shorter periods aggregating six months during any
twelve-month period, the

                                      E-3

<PAGE>

Company may at any time after the last day of the sixth consecutive month of
disability or the day on which the shorter periods of disability shall have
equaled an aggregate of six months, by written notice to the Employee (but
before the Employee has recovered from such disability), terminate the term of
the Employee's employment hereunder. Notwithstanding such disability, the
Company shall continue to pay the Employee an amount equal to sixty (60%)
percent of the Annual Salary herein provided for in Section 3.1 up to and
through the scheduled Term under Article 2 hereof, but not longer than three (3)
years, but his Bonus shall be calculated on a pro rata basis through the end of
the fiscal quarter immediately preceding the sixth month of his disability. In
addition, the Employee or his legal representatives shall receive payment for
unreimbursed expenses. Notwithstanding any provision contained herein to the
contrary, the amounts set forth in this Section 5.2 shall be reduced by the
amount of any disability insurance payments received by the Employee under
disability plans or policies of the Company.

                           5.3.     Termination for Cause. Nothing contained
herein shall preclude the Company from terminating this Agreement for "Cause."
As used herein the term for "Cause" shall be deemed to mean and include with
respect to the Employee only chronic alcoholism, addiction to any illegal drugs,
conviction of the Employee of any felony, or of any lesser crime or offense
involving the property of the Company or any of its subsidiaries or affiliates,
or willful failure or refusal to substantially perform the services required of
the Employee under this Agreement, following written notice by the Board of
Directors to the Employee and Employee having failed to cure such failure within
thirty days after such notice. In the event of a termination of the Employee for
Cause, the Employee shall receive any unpaid Annual Salary in effect on the date
immediately prior to such termination through the date of termination and
payment for all unreimbursed expenses.

                           5.4.     Voluntary Termination Without Good Reason.
If the Employee terminates his employment for other than Good Reason, the
Company shall pay the Employee the Employee's Annual Salary in effect on the
date immediately prior to such termination through the date of termination and
all unreimbursed expenses.

                  "Good Reason" means the occurrence, without the Employee's
express written consent, of any of the following circumstances:

                  (i)      the Company's failure to perform or observe any of
the material terms or provisions of this Agreement;

                  (ii)     the assignment to the Employee of any duties
inconsistent with, or any substantial diminution in, such Employee's status or
responsibilities as in effect on the date hereof, including imposition of travel
obligations that are materially greater than is reasonably required by the
Company's business;

                  (iii)    (I) a reduction in the Employee's Annual Salary as in
effect on the date hereof, as that amount may be increased from time to time; or
(II) the failure to pay any agreed upon bonus award to which the Employee is
otherwise entitled, at the time such bonuses are usually paid;

                                      E-4

<PAGE>

                  (iv)     a change in the principal place of the Employee's
employment, as in effect on the date hereof or as in effect after any subsequent
change to which the Employee consented in writing, to a location more than fifty
(50) miles from the Employee's residence in Manhattan on the date hereof;

                  (v)      (I) the Company's failure to continue in effect any
incentive compensation plan or stock option plan in which the Employee
participates, unless the Company has provided an equivalent alternative
compensation arrangement (embodied in an ongoing substitute or alternative plan)
to the Employee, or (II) the Company's failure to continue the Employee's
participation in any such incentive or stock option plan on substantially the
same basis, both in terms of the amount of benefits provided and the level of
the Employee's participation relative to other participants; or

                  (vi)     the failure of the Company or any successor to obtain
a satisfactory written agreement from any successor to assume and agree to
perform this Agreement.

                           5.5.     Other. If the Company terminates the
Employee's employment other than for Cause or if the Employee terminates
employment with the Company for Good Reason, the Company shall pay the Employee,
a total amount, in a lump sum cash payment, equal to the product of (i) the sum
of (x) the Employee's Annual Salary plus, at a minimum, (y) the Bonus paid to
the Employee for the year prior to his termination of employment, multiplied by
(ii) the greater of (x) the number of years (and portions thereof) remaining in
the Term or (y) three (3). In addition, the Employee shall receive all
unreimbursed expenses.

                  6.       Change in Control. (a) If during the Term there
should be a Change in Control (hereinafter defined), then the Employee shall, by
written notice to the Company at any time within twelve months following a
Change in Control, be entitled to terminate the Term and his employment
hereunder for any reason or no reason, and within 10 business days following
such notice, the Employer shall pay the Employee, as a termination payment, an
amount equal to 299% of the average of the prior five calendar year's
compensation (including bonuses, pension, profit sharing, health and life
insurance benefits and 401(k) contributions), except that in no event shall the
amount payable under this paragraph 6(a) exceed $100.00 less than the amount
which would (when aggregated with any other amounts which would be subject to
the "parachute payment" provisions hereinafter referred to) result in any part
of a payment to otherwise be made under this paragraph 6(a) constituting a
"parachute payment" under Section 280G of the Code (the "Maximum Termination
Payment"). The determination whether or not any part of such payment would
constitute a "parachute payment" and the amount of the Maximum Termination
Payment shall be made by the Company's regularly engaged independent
accountants. In making the determination, the accountants shall rely on the
Company's federal income tax returns and on the Code and the regulations
thereunder, as then in effect, and may rely on the legislative and Internal
Revenue Service reports issued in connection with the adoption of said Paragraph
and regulations.

                                    (b)      For purposes of this Agreement, a
"Change in Control" shall mean:

                                      E-5

<PAGE>

                                            (i)     either (x) any merger or
                                    consolidation of the Company into or with
                                    another corporation, or (y) the acquisition
                                    by another person, group or entity after the
                                    execution date of this Employment Agreement
                                    of beneficial ownership of more than 20% of
                                    the common stock of the Company (such
                                    person, group or entity reporting, or being
                                    required to report, the acquisition pursuant
                                    to Section 13 of the Securities Exchange Act
                                    of 1934 of all the voting and investment
                                    powers of such stock),

                                                     or

                                            (ii)    any sale by the Company of
                                    substantially all of the assets and business
                                    of Company for cash, stock, or any
                                    combination thereof, unless, immediately
                                    after such sale, the holders of Common Stock
                                    of the Company immediately prior to such
                                    sale own more than 80% or more of the voting
                                    capital stock of the acquiring corporation
                                    or, if the acquiring person or entity is not
                                    a corporation, more than 80% of the voting
                                    equity interests of such acquiring person or
                                    entity,

                                                     or

                                            (iii)   if a majority of Company's
                                    board of directors consists of individuals
                                    who were not Incumbent Directors. "Incumbent
                                    Directors" shall mean directors who either
                                    (A) are directors of the Company as of the
                                    date hereof, or (B) are elected, or
                                    nominated for election, to the Board with
                                    the affirmative votes of at least a majority
                                    of the Incumbent Directors at the time of
                                    such election or nomination (but shall not
                                    include an individual whose election or
                                    nomination is in connection with an actual
                                    or threatened proxy contest relating to the
                                    election of directors to the Company).

                                    (c)      In the event that the Employee
brings an action to enforce the provisions of this Agreement after a Change in
Control, the Company shall pay the legal expenses of the Employee during the
proceeding; provided that the court having jurisdiction over the proceeding
shall have the right to require the Employee, as part of any judgment against
the Employee, to repay the Company for any monies received from the Company for
such expenses.

                  7.       Certain Restrictions.

                           7.1.     Non-Competition. Subject to the provisions
of this Section 7.1, for the duration of the Term and for a period of one year
after termination of the Term for any reason, the Employee will not, directly or
indirectly, as an officer, director, stockholder, partner, associate, employee,
consultant or owner, become or be interested in, or associated with, any other
corporation, firm or business engaged in a business which is the same as,
similar to or competitive with the business of the Company; provided that the
ownership by the Employee,

                                      E-6

<PAGE>

directly or indirectly, of shares of stock of a corporation, which shares are
regularly traded on a national securities exchange or on the over-the-counter
market and which shares do not amount to the lesser of (a) five per cent of the
issued and outstanding shares of such corporation, or (b) an aggregate market
value in excess of $500,000, shall not, in any event, be deemed to be in
violation of the provisions of this Section 7.1. Notwithstanding any provision
contained herein to the contrary, the provisions of this Section 7.1 shall not
apply after a Change in Control or after the non-renewal of the Term pursuant to
Article 2 hereof.

                           7.2.     Mutual Non-Disparagement. During the Term
and for a period of one year thereafter (regardless of any termination under
Article 5 hereof), the Employee agrees that he will not publish or communicate
to any person or entity any "Disparaging" (as defined below) remarks, comments
or statements concerning the Company, its employees, agents, current and former
directors and officers. In addition, during such period, the officers, directors
and employees of the Company shall be instructed not to publish or communicate
to any person or entity any Disparaging remarks, comments or statements
concerning the Employee. For the purposes of this Agreement, "Disparaging"
remarks, comments or statements are those that impugn the character, honesty,
integrity or morality or business acumen or abilities in connection with any
aspect of the operation of business of the individual or entity being
disparaged.

                  8.       Protection of Confidential Information.

                           8.1.     Confidential Information. In view of the
fact that the Employee's work for the Company will bring him into close contact
with many confidential affairs of the Company not readily available to the
public, the Employee agrees:

                                    (a)      To keep secret and retain in the
strictest confidence all confidential matters of the Company, including, without
limitation, trade "know-how", secrets, the names of its customers, suppliers and
contractors, the Company's procedures and policies in purchasing and sales,
including its pricing policies, operational methods and technical processes, and
other business affairs of the Company, learned by him heretofore or hereafter,
and not to disclose them to anyone outside of the Company, either during or
after his employment with the Company, except in the course of performing his
duties hereunder or with the Company's express written consent; and

                                    (b)      To deliver promptly to the Company
on termination of his employment, all memoranda, notes, records, reports,
manuals, drawings and other documents (and all copies thereof) relating to the
Company's business and all property associated therewith, which he may then
possess or have under his control.

                                    (c)      Notwithstanding any provision
contained herein to the contrary, confidential information shall not include
information that is public knowledge (other than by acts by the Employee in
violation of this Section 8.1) and the Employee shall be permitted to disclose
information covered under this Section 8.1 if required by law, an order of court
or a governmental agency with jurisdiction.

                                      E-7

<PAGE>

                           8.2.     Survival. The provisions related to
post-termination payments under Article 5, Article 7 and Article 8 shall survive
any termination of this Agreement; provided that the provisions of Section 7.1
shall not apply after a Change in Control or after the non-renewal of the Term
pursuant to Article 2 hereof.

                           8.3.     Specific Performance. The parties recognize
that, because of the nature of the subject matter of this Article 8, it would be
impractical and extremely difficult to determine the Company's actual damages in
the event of a breach of this Article 8 by the Employee. Accordingly, if the
Employee commits a breach, or threatens to commit a breach, of any of the
provisions of Section 8.1, the Company shall be entitled to have the provisions
of said Sections specifically enforced by temporary, preliminary and permanent
injunctive relief without the posting of bond or other security by and court of
competent jurisdiction, notwithstanding the provisions of Article 8 hereof.

                  9.       Notices. All notices, requests, consents and other
communications, required or permitted to be given hereunder, shall be in writing
and shall be deemed to have been duly given if delivered personally, or mailed
first-class, postage prepaid by registered or certified mail (notices shall be
deemed to have been given when so delivered personally) or, if mailed, two days
after the date of mailing, as follows (or to such other address as either party
shall designate by notice so given to the other in accordance herewith):

                  If to the Company, to:

                           Napco Security Systems, Inc.
                           Attention:  Randy B. Blaustein
                           333 Bayview Avenue
                           Amityville, NY 11701

                  If to the Employee, to:

                           Richard Soloway
                           [intentionally omitted]

                   With a copy to:

                           Schulte Roth & Zabel LLP
                           Attention:  Marc Weingarten, Esq.
                           919 Third Avenue
                           New York, NY 10022

                  10.      General.

                           10.1.    Governing Law and Venue. This Agreement
shall be governed by and construed and enforced in accordance with the local
laws of the State of New York applicable to agreements made and to be performed
entirely in New York. Any proceeding

                                      E-8

<PAGE>

seeking to enforce any provision of this Agreement shall be brought only in the
courts of the State of New York, sitting in the Borough of Manhattan, City of
New York or in the United States District Court for the Southern District of New
York and the Employee and the Company consent to the exclusive jurisdiction of
such courts.

                           10.2.    Section Headings. The article and section
headings contained herein are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.

                           10.3.    Entire Agreement. This Agreement sets forth
the entire agreement and understanding of the parties relating to the subject
matter hereof, and supersedes all prior agreements, arrangements and
understandings, written or oral, relating to the subject matter hereof. No
representation, promise or inducement has been made by either party that is not
embodied in this Agreement, and neither party shall be bound by or liable for
any alleged representation, promise or inducement not so set forth.

                           10.4.    Successors and Assigns. This Agreement, and
the Employee's rights and obligations hereunder, may not be assigned by the
Employee; provided that the Employee's legal representatives shall have the
rights set forth in Article 5. The Company may assign its rights, together with
its obligations, hereunder in connection with any sale, transfer or other
disposition of all or substantially all of its business or assets; in any event
the obligations of the Company hereunder shall be binding on its successors or
assigns, whether by merger, consolidation or acquisition of all or substantially
all of its business or assets.

                           10.5.    Amendments, Modifications, etc. This
Agreement may be amended, modified, superseded, canceled, renewed or extended
and the terms or covenants hereof may be waived, only by a written instrument
executed by the party to be charged therewith. The failure of either party at
any time or times to require performance of any provision hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by either
party of the breach of any term or covenant contained in this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement. The
invalidity or unenforceability of any term or provision of this Agreement shall
in no way impair or affect the balance thereof, which shall remain in full force
and effect.

                                      E-9

<PAGE>

                  IN WITNESS WHEREOF, the parties have executed this Agreement
on June 26, 2003.

                           NAPCO SECURITY SYSTEMS, INC.

                           By: /s/ Randy Bruce Blaustein
                               ------------------------------------------------
                               RANDY BRUCE BLAUSTEIN, for the
                               Board of Directors

                               /s/ Richard Soloway
                               ------------------------------------------------
                               RICHARD SOLOWAY

                                      E-10

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