EXHIBIT 10.24

 

INDEMNIFICATION AGREEMENT

 

THIS INDEMNIFICATION AGREEMENT (“Agreement”) is made as of the          day of
            ,             , by and between CERADYNE, INC., a Delaware
corporation (the “Company”), and                                         
(“Indemnitee”).

 

WHEREAS, the Company and Indemnitee recognize the increasing difficulty in
obtaining directors’ and officers’ liability insurance, the significant
increases in the cost of such insurance and the general reductions in the
coverage of such insurance;

 

WHEREAS, the Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors and officers to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited;

 

WHEREAS, Indemnitee does not regard the current protection available as adequate
under the present circumstances, and Indemnitee and other directors and officers
of the Company may not be willing to continue to serve as directors and officers
without additional protection;

 

WHEREAS, the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as directors and officers of
the Company, and to indemnify such directors and officers so as to provide them
with the maximum protection permitted by law; and

 

WHEREAS, the Indemnitee will be relying on the agreements of the Company herein
in remaining as a director and/or officer of the Company.

 

NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

 

1.    Indemnification.

 

        (a)    Third-Party Proceedings.  If Indemnitee is or was a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Company) by reason of (i) the
fact that Indemnitee is or was a director, officer, employee or agent of the
Company, or any subsidiary of the Company, or (ii) any action or inaction on the
part of Indemnitee in Indemnitee’s capacity as a director or officer of the
Company, or (iii) the fact that Indemnitee is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, then the Company shall
indemnify Indemnitee against expenses (including attorneys’ fees), judgments,
fines and amounts paid in settlement (if such settlement is approved in advance
by the Company, which approval shall not be unreasonably withheld) actually and
reasonably incurred by Indemnitee in connection with such action, suit or
proceeding, if Indemnitee acted in good faith and in a manner Indemnitee
reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe Indemnitee’s conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that Indemnitee did not act in good faith and in a manner which
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, or, with respect to any criminal action or proceeding, had
reasonable cause to believe that Indemnitee’s conduct was unlawful.

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        (b)    Proceedings By or in the Right of the Company.  If Indemnitee was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding by or in the right of the Company or any
subsidiary of the Company to procure a judgment in its favor by reason of (i)
the fact that Indemnitee is or was a director, officer, employee or agent of the
Company, or any subsidiary of the Company, or (ii) any action or inaction on the
part of Indemnitee in Indemnitee’s capacity as a director or officer of the
Company, or (iii) the fact that Indemnitee is or was serving at the request of
the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, then the Company shall
indemnify Indemnitee against expenses (including attorneys’ fees) and, to the
fullest extent permitted by law, amounts paid in settlement, in each case to the
extent actually and reasonably incurred by Indemnitee in connection with the
defense or settlement of such action, suit or proceeding, if Indemnitee acted in
good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been adjudged to be liable to the Company unless and only to the
extent that the Court of Chancery or the court in which such action, suit or
proceeding is or was pending shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

 

2.    Expenses; Indemnification Procedure.

 

        (a)    Advancement of Expenses.  The Company shall advance all expenses
incurred by Indemnitee in connection with the investigation, defense, settlement
or appeal of any civil or criminal action, suit or proceeding referenced in
Section 1(a) or (b) hereof (but not amounts actually paid in settlement of any
such action, suit or proceeding). Indemnitee hereby undertakes to repay such
amounts advanced only if, and to the extent that, it shall ultimately be
determined that 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 Indemnitee within twenty (20) days following delivery of a written
request therefor by Indemnitee to the Company.

 

        (b)    Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
condition precedent to his or her right to be indemnified under this Agreement,
give the Company notice in writing as soon as practicable of any claim made
against Indemnitee for which indemnification will or could be sought under this
Agreement. In addition, Indemnitee shall give the Company such information and
cooperation as it may reasonably require and as shall be within Indemnitee’s
power.

 

        (c)    Procedure.  Any indemnification provided for in Section 1 shall
be made no later than sixty (60) days after receipt of the written request of
Indemnitee. If a claim under this Agreement, under any statute, or under any
provision of the Company’s Certificate of Incorporation or Bylaws providing for
indemnification, is not paid in full by the Company within sixty (60) days after
a written request for payment thereof has first been received by the Company,
Indemnitee may, but need not, at any time thereafter bring an action against the
Company to recover the unpaid amount of the claim and, subject to Section 13 of
this Agreement, Indemnitee shall also be entitled to be paid for the expenses
(including reasonable attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in connection with any action or proceeding in advance of its
final disposition) that Indemnitee has not met the standards of conduct which
make it permissible under applicable law for the Company to indemnify Indemnitee
for the amount claimed, but the burden of proving such defense shall be on the
Company, and Indemnitee shall be entitled to receive interim payments of
expenses pursuant to

 

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Section 2(a) unless and until such defense may be finally adjudicated by court
order or judgment from which no further right of appeal exists. It is the
parties’ intention that if the Company contests Indemnitee’s right to
indemnification, the question of Indemnitee’s right to indemnification shall be
for the court to decide, and neither the failure of the Company (including its
Board of Directors, any committee or subgroup of the Board of Directors,
independent legal counsel, or its shareholders) to have made a determination
that indemnification of Indemnitee is proper in the circumstances because
Indemnitee has met the applicable standard of conduct required by applicable
law, nor an actual determination by the Company (including its Board of
Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its shareholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.

 

        (d)    Notice to Insurers.  If, at the time of the receipt of a notice
of a claim pursuant to Section 2(b) hereof, the Company has director and/or
officer liability 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 respective policies. The Company shall thereafter
take all necessary or desirable action to cause such insurers to pay, on behalf
of the Indemnitee, all amounts payable as a result of such proceeding in
accordance with the terms of such policies.

 

        (e)    Selection of Counsel.  In the event the Company shall be
obligated under Section 2(a) hereof to pay the expenses of any proceeding
against Indemnitee, the Company, if appropriate, shall be entitled to assume the
defense of such proceeding, with counsel approved by Indemnitee, which approval
shall not be unreasonably withheld, upon the delivery to Indemnitee of written
notice of its election so to do. After delivery of such notice, approval of such
counsel by Indemnitee and the retention of such counsel by the Company, the
Company will not be liable to Indemnitee under this Agreement for any fees of
counsel subsequently incurred by Indemnitee with respect to the same proceeding,
provided that (i) Indemnitee shall have the right to employ his or her counsel
in any such proceeding at Indemnitee’s expense; and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there may be a conflict of
interest between the Company and 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, then the fees and expenses of Indemnitee’s counsel
shall be at the expense of the Company.

 

3.    Additional Indemnification Rights; Non-Exclusivity.

 

        (a)    Scope.  Notwithstanding any other provision of this Agreement,
the Company hereby agrees to indemnify the Indemnitee to the fullest extent
permitted by law, notwithstanding that such indemnification is not specifically
authorized by the other provisions of this Agreement, the Company’s Certificate
of Incorporation, the Company’s Bylaws or by statute. In the event of any
change, after the date of this Agreement, in any applicable law, statute or rule
which expands the right of a Delaware corporation to indemnify a member of its
board of directors or an officer, such changes shall be, ipso facto, within the
purview of Indemnitee’s rights and Company’s obligations, under this Agreement.
In the event of any change in applicable law, statute or rule which narrows the
right of a Delaware corporation to indemnify a member of its board of directors
or an officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties’ rights and obligations hereunder.

 

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        (b)    Non-Exclusivity.  The indemnification provided by this Agreement
shall not be deemed exclusive of any right to which Indemnitee may be entitled
under the Company’s Certificate of Incorporation, its Bylaws, any agreement, any
vote of shareholders or disinterested directors, the General Corporation Law of
the State of Delaware, or otherwise, both as to action in Indemnitee’s official
capacity and as to action in another capacity while holding such office. The
indemnification provided under this Agreement shall continue as to Indemnitee
for any action taken or not taken while serving in an indemnified capacity even
though he or she is not serving in such capacity or in any capacity with the
Company at the time of any action or other covered proceeding.

 

4.    Partial Indemnification.  If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred by him
in the investigation, defense, appeal or settlement of any civil or criminal
action or proceeding, but not, however, for the total amount thereof, the
Company shall nevertheless indemnify Indemnitee for the portion of such
expenses, judgments, fines or penalties to which Indemnitee is entitled.

 

5.    Mutual Acknowledgment.  Both the Company and Indemnitee acknowledge that
in certain instances, Federal law or applicable public policy may prohibit the
Company from indemnifying its directors and officers under this Agreement or
otherwise. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the Securities and
Exchange Commission to submit the question of indemnification to a court in
certain circumstances for a determination of the Company’s right under public
policy to indemnify Indemnitee and, in that event, the Indemnitee’s rights and
the Company’s obligations hereunder shall be subject to that determination.

 

6.    Directors’ and Officers’ Liability Insurance.  The Company shall, from
time to time, make a good faith determination whether or not it is practicable
for the Company to obtain and maintain a policy or policies of insurance with
reputable insurance companies providing the officers and directors of the
Company with coverage for losses from wrongful acts, or to ensure the Company’s
performance of its indemnification obligations under this Agreement. Among other
considerations, the Company will weigh the costs of obtaining such insurance
coverage against the protection afforded by such coverage. In all policies of
directors’ and officers’ liability insurance, Indemnitee shall be named as an
insured in such a manner as to provide Indemnitee the same rights and benefits
as are accorded to the most favorably insured of the Company’s directors, if
Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a
director of the Company but is an officer; or of the Company’s key employees, if
Indemnitee is not an officer or director but is a key employee. Notwithstanding
the foregoing, the Company shall have no obligation to obtain or maintain such
insurance if the Company determines in good faith that such insurance is not
reasonably available, or that the premium costs for such insurance are
disproportionate to the amount of coverage provided, or that the coverage
provided by such insurance is limited by exclusions so as to provide an
insufficient benefit, or if Indemnitee is covered by similar insurance
maintained by a subsidiary or parent of the Company.

 

7.    Severability.  Nothing in this Agreement is intended to require or shall
be construed as requiring the Company to do or fail to do any act in violation
of applicable law. The Company’s inability, pursuant to court order, to perform
its obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 7. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent

 

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permitted by any applicable portion of this Agreement that shall not have been
invalidated, and the balance of this Agreement not so invalidated shall be
enforceable in accordance with its terms.

 

8.    Exceptions.  Any other provision herein to the contrary notwithstanding,
the Company shall not be obligated pursuant to the terms of this Agreement:

 

        (a)    Excluded Acts.  To indemnify Indemnitee for any acts or omissions
or transactions for which a director may not be relieved of liability under the
Delaware General Corporation Law or the Federal Securities Laws; or

 

        (b)    Claims Initiated by Indemnitee.  To indemnify or advance expenses
to Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee and not by way of defense, except with respect to
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other statute or law or otherwise as required under
Section 145 of the Delaware General Corporation Law, but such indemnification or
advancement of expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such suit; or

 

        (c)    Lack of Good Faith.  To indemnify Indemnitee for any expenses
incurred by the Indemnitee with respect to any proceeding instituted by
Indemnitee to enforce or interpret this Agreement, if a court of competent
jurisdiction determines that each of the material assertions made by the
Indemnitee in such proceeding was not made in good faith or was frivolous; or

 

        (d)    Insured Claims.  To indemnify Indemnitee for expenses or
liabilities of any type whatsoever (including, but not limited to, judgments,
fines, ERISA excise taxes or penalties, and amounts paid in settlement) which
have been paid directly to Indemnitee by an insurance carrier under a policy of
directors’ and officers’ liability insurance maintained by the Company or any
parent or subsidiary of the Company; or

 

        (e)    Claims Under Section 16(b).  To indemnify Indemnitee for expenses
and the payment of profits and other amounts, if any, arising from the purchase
and sale by Indemnitee of securities in violation of Section 16(b) of the
Securities Exchange Act of 1934, as amended, or any similar successor statute.

 

9.    Effectiveness of Agreement.  This Agreement shall be effective as of the
date set forth on the first page and may apply to acts or omissions of
Indemnitee which occurred prior to such date if Indemnitee was an officer,
director, employee or other agent of the Company, or was serving at the request
of the Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, at the time such act or
omission occurred.

 

10.    Construction of Certain Phrases.

 

        (a)    For purposes of this Agreement, references to the “Company” shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees or agents, so that if
Indemnitee is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, Indemnitee shall stand in the

 

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same position under the provisions of this Agreement with respect to the
resulting or surviving corporation as Indemnitee would have with respect to such
constituent corporation if its separate existence had continued.

 

        (b)    For purposes of this Agreement, references to “other enterprises”
shall include employee benefit plans; references to “fines” shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to “serving at the request of the Company” shall include any
service as a director, officer, employee or agent of the Company which imposes
duties on, or involves services by, such director, officer, employee or agent
with respect to an employee benefit plan, its participants, or beneficiaries.

 

11.    Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall constitute an original.

 

12.    Successors and Assigns.  This Agreement shall be binding upon the Company
and its successors and assigns, and shall inure to the benefit of Indemnitee and
Indemnitee’s estate, heirs, legal representatives and assigns.

 

13.    Attorneys’ Fees.  In the event that any action is instituted by
Indemnitee under this Agreement to enforce or interpret any of the terms hereof,
Indemnitee shall be entitled to be paid all court costs and expenses, including
reasonable attorneys’ fees, incurred by Indemnitee with respect to such action,
unless as a part of such action, the court of competent jurisdiction determines
that each of the material assertions made by Indemnitee as a basis for such
action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Company under this Agreement or to enforce
or interpret any of the terms of this Agreement, Indemnitee shall be entitled to
be paid all court costs and expenses, including attorneys’ fees, incurred by
Indemnitee in defense of such action (including with respect to Indemnitee’s
counterclaims and cross-claims made in such action), unless as a part of such
action the court determines that each of Indemnitee’s material defenses to such
action were made in bad faith or were frivolous.

 

14.    Notices.  All notices, requests, demands and other communications under
this Agreement shall be in writing and shall be deemed duly given (i) if
delivered by hand and receipted for by the party addressee, on the date of such
receipt, or (ii) if mailed by certified or registered mail with postage prepaid,
on the third business day after the date postmarked. Notices to the Company
shall be directed to the Chief Executive Officer and a copy shall be directed to
the Chief Financial Officer of the Company. Addresses for notice to either party
are as shown on the signature page of this Agreement, or as subsequently
modified by written notice.

 

15.    Choice of Law.  This Agreement shall be governed by and its provisions
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of laws thereof.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

CERADYNE, INC. By:        

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Title:        

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Address:    3169 Redhill Avenue

                  Costa Mesa, CA 92626

 

 

AGREED TO AND ACCEPTED: INDEMNITEE:  

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Address:        

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