Exhibit 10.24
INDEMNIFICATION AGREEMENT
This Agreement, dated as of May 22,
2000, is made by and between Integrated Circuit Systems, Inc., a
Pennsylvania corporation (the “Company”), and Lewis C.
Eggebrecht, who is currently serving as an officer and/or director
of the Company (the “Indemnitee”).
WHEREAS, the Indemnitee is currently
serving in the capacity or capacities described above;
WHEREAS, the Company recently
completed an initial public offering of its common stock (the
“Offering”), which will likely increase the risk of
litigation and other claims of being asserted against the directors
and officers of a Company;
WHEREAS, prior to the Offering the
Company determined that it was in the best interests of the Company
to enter into indemnification agreements with its current officers
and/or directors of the Company;
WHEREAS, the Company wishes the
Indemnitee to continue to serve in such capacity or capacities and
the Indemnitee is willing, under certain circumstances, to continue
in such capacity or capacities;
WHEREAS, damages sought and
sometimes paid in many claims made against corporate directors and
officers and the expenses required to defend such claims, whether
or not the allegations are meritorious, may not bear a reasonable
relationship to the amount of compensation received by and may be
beyond the financial resources of the Indemnitee;
WHEREAS, the Indemnitee is currently
entitled to indemnification under Pennsylvania Business Corporation
Law and the Certificate of Incorporation of the Company, which the
Indemnitee does not regard to be adequate protection against the
risks associated with his service to or at the request of the
Company;
WHEREAS, the Indemnitee and the
Company have concluded that the exposure to risk of personal
liability and payment of damages out of the Indemnitee’s
personal assets may result in overly conservative direction and
supervision of the Company’s affairs, which is detrimental to
the best interests of the Company and its stockholders;
and
WHEREAS, the Company has concluded
that additional protection is necessary for its directors and
elected officers.
NOW, THEREFORE, the parties hereto,
intending to be legally bound, hereby:
1. Definitions .
(a) Agent. For the purposes
of this Agreement, “agent” of the Company means any
person who is or was a director, officer, employee, agent or
fiduciary of the Company or a subsidiary of the Company, or is or
was serving at the request of, for the convenience of, or to
represent the interests of the Company or a subsidiary of the
Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other
enterprise or entity, including service with respect to an employee
benefit plan.
(b) Disinterested Director .
For purposes of this Agreement, “Disinterested
Director” of the Company means a director of the Company who
is not and was not a party to the proceeding for which
indemnification is being sought by the claimant.
(c) Expenses. For purposes of
this Agreement, “expenses” includes all direct and
indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements,
other out-of-pocket costs and reasonable compensation for time
spent by the Indemnitee for which he is not otherwise compensated
by the Company or any third party) actually and reasonably incurred
by the Indemnitee in connection with either the investigation,
defense or appeal of a proceeding or establishing or enforcing a
right to indemnification under this Agreement, Section 1741 of the
Business Corporation Law of Pennsylvania or otherwise; provided,
however , that expenses shall not include any judgments, fines,
excise taxes or penalties under the Employee Retirement Income
Security Act of 1974 (“ERISA”), or amounts paid in
settlement of a proceeding.
(d) Independent Legal Counsel
. For purposes of this Agreement, “Independent Legal
Counsel” means a law firm, a member of a law firm, or an
independent practitioner, that is experienced in matters of
corporation law and shall include any person who, under the
applicable standards of professional conduct then prevailing, would
not have a conflict of interest in representing either the Company
or the Indemnitee in an action to determine the Indemnitee’s
rights under this Agreement.
(e) Proceeding . For the
purposes of this Agreement, “proceeding” means any
threatened, pending, or completed action, suit or other proceeding,
whether civil, criminal, administrative, investigative or any other
type whatsoever.
(f) Subsidiary. For purposes
of this Agreement, “subsidiary” means any corporation,
partnership, joint venture or other enterprise, a majority of whose
equity interests are owned by the Company, directly or through one
or more other subsidiaries.
2. Agreement to Serve . The
Indemnitee agrees to serve as an agent of the Company, at its will
(or under separate agreement, if such agreement exists), in the
capacity Indemnitee currently serves as an agent of the Company, so
long as he is duly appointed or elected and qualified in accordance
with the applicable provisions of the By-Laws of the Company or any
subsidiary of the Company or until such time as he tenders his
resignation in writing; provided , however , that
nothing contained in this Agreement is intended to create any right
to continued service of the Indemnitee.
3. Mandatory Indemnification
. Subject to the limitations set forth in Section 7, if the
Indemnitee is a person who was or is a party or is threatened to be
made a party to or is involved, including involvement as a witness,
in any proceeding, including any action by or in the right of the
Company, by reason of the fact that he is or was or has agreed to
become an agent, or by reason of any action alleged to have been
taken or omitted by him in any such capacity, the Company shall
indemnify the Indemnitee against all expense, liability and
loss
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(including but not limited to judgments, fines,
ERISA excise taxes or penalties and amounts paid or to be paid in
settlement), actually and reasonably incurred by him in connection
with the investigation, defense, settlement or appeal of such
proceeding whether or not serving in such capacity at the time any
liability or expense is incurred; provided, however , that
except as provided in Section 7(c) of this Agreement with respect
to proceedings seeking to enforce rights to indemnification, the
Company shall indemnify the Indemnitee in connection with a
proceeding (or part thereof) initiated by the Indemnitee only if
such proceeding (or part thereof) was authorized by the Board of
Directors of the Company.
4. Mandatory Advancement of
Expenses . The Company shall advance all expenses incurred by
the Indemnitee in connection with the investigation, defense,
settlement or appeal of any proceeding referred to in Section 3 to
which the Indemnitee is a party or is threatened to be made a party
or with respect to which the Indemnitee is otherwise involved
(including involvement as a witness) as an agent of the Company.
The Indemnitee hereby undertakes to repay such amounts advance if,
but only if and to the extent that, it shall ultimately be
determined pursuant to the provisions hereof that the Indemnitee is
not entitled to be indemnified by the Company as authorized hereby.
The advances to be made hereunder shall be paid by the Company to
the Indemnitee within twenty (20) days following delivery of a
written request therefore by the Indemnitee to the Company;
provided, however , that, if and to the extent that the
Pennsylvania Business Corporation Law requires, an advancement of
expenses incurred by the Indemnitee in his capacity as director or
officer shall be made only upon delivery of an undertaking by or on
behalf of the Indemnitee to repay all amounts so advance dif it
shall ultimately be determined by final judicial decision from
which there is no further right to appeal that the Indemnitee is
not entitled to be indemnified for such expenses under this
Agreement or otherwise.
5. Maintenance of D&O
Insurance .
(a) So long as the Indemnitee shall
continue to serve in any capacity described in Section 2 and
thereafter so long as there is any reasonable possibility that the
Indemnitee shall be subject to any proceeding by reason of the fact
that the Indemnitee served in any of such capacities, the Company
will use reasonable efforts to purchase and maintain in effect for
the benefit of the Indemnitee one or more valid, binding and
enforceable policies of directors’ and officers’
liability insurance (“D&O Insurance”) providing, in
all respects, coverage and amounts as reasonably determined by the
Board of Directors.
(b) Notwithstanding Section 5(a),
the Company shall not be required to maintain D&O Insurance if
such is not reasonably available or if, in the reasonable business
judgment of the Board of Directors of the Company as it may exist
from time to time, either (i) the premium cost for such insurance
is substantially disproportionate to the amount of insurance or
(ii) the coverage is so limited by exclusions that there is
insufficient benefit provided by such insurance.
6. Notice and Other
Indemnification Procedures .
(a) Promptly after receipt by the
Indemnitee of notice of the commencement of or the threat of
commencement of any proceeding, the Indemnitee shall, if the
Indemnitee
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believes that the indemnification with respect
thereto properly may be sought from the Company under this
Agreement, notify the Company of the commencement or threat of
commencement thereof. The failure to notify or promptly notify the
Company shall not relieve the Company from any liability which it
may have to the Indemnitee otherwise under this Agreement, and
shall relieve the Company from liability hereunder only to the
extent the Company has been prejudiced.
(b) If, at the time of the receipt
of a notice of the commencement of a proceeding pursuant to Section
6(a), the Company has D&O Insurance in effect, the Company
shall give prompt notice of the commencement of such proceeding to
the insurers in accordance with the procedures set forth in the
D&O Insurance policy. The Company shall thereafter take all
necessary or desirable action to cause such insurers to pay to, or
on behalf of the Indemnitee, all amounts payable as a result of
such proceeding in accordance with the terms of such
policy.
(c) In the event the Company shall
be obligated to pay the expenses of the Indemnitee in connection
with any proceeding, the Company shall be entitled to assume the
defense of such proceeding, with counsel approved by the
Indemnitee, upon the delivery to the Indemnitee of written notice
of its election to do so. After delivery of such notice, approval
of such counsel by the Indemnitee and the retention such counsel by
the Company, the Company will not be liable to the Indemnitee under
this Agreement for any fees of counsel or other expenses
subsequently incurred by the Indemnitee with respect to the same
proceeding; provided that (i) the Indemnitee shall have the
right to employ his own counsel in any such proceeding at the
Indemnitee’s expense, and (ii) if (A) the employment of
counsel by the Indemnitee has been previously authorized by the
Company, or (B) the Indemnitee shall have reasonably concluded that
there is a conflict of interest between the Company and the
Indemnitee in the conduct of any such defense, or (C) the Company
shall not, in fact, have employed counsel to assume the defense of
such proceeding, the fees and expenses of the Indemnitee’s
counsel shall be paid by the Company; and provided further
that the Company shall not be
