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                                                                    EXHIBIT 10.3
 
                              EMPLOYMENT AGREEMENT
                              --------------------

EMPLOYMENT AGREEMENT (the "Agreement") dated January 11, 1999 by and between
INTEGRATED CIRCUIT SYSTEMS, INC., a Pennsylvania corporation (the "Company") and
RUDOLF GASSNER ("Employee").

     1.   Employment. The Company's Board of Directors (the "Board") has elected
Employee to the position of Chairman of the Board effective January 1, 1999. The
Company hereby employs Employee as Chairman of the Board (the "Position")
effective January 1, 1999, and Employee hereby accepts such employment and
agrees to perform Employee's duties and responsibilities hereunder, in
accordance with the terms and conditions hereinafter set forth; provided,
however, that the Position will be changed to that of the Company's Vice
President -- Corporate Development if: (i) the Board selects another Chairman of
the Board, or (ii) Employee resigns as or otherwise ceases to be a member of the
Board.

     1.1  Employment Term. The period of Employee's employment by the Company
pursuant to this Agreement (the "Employment Term") shall commence on January 1,
1999 and shall continue for one-year period thereafter, ending December 31,
1999, provided, however, that the Employment Term shall be automatically
extended for successive one-year periods ending on December 31 of each
successive year unless the Employment Term is terminated by written notice from
the Company to Employee or from Employee to the Company no later than October 1
of the year immediately preceding any one-year extension period (in which event
the Employment Term shall expire on December 31 of the year in which such
termination notice is given). The Employment Term shall also terminate in
accordance with Section 5 hereof.

     1.2      Duties and Responsibilities.

         (a) During the Employment Term, Employee shall serve in the previously
identified Position and shall perform all duties and accept all responsibilities
incident to such Position or as may be assigned to him by the Company's Board of
Directors. In particular, Employee shall be responsible to lead the Company's
search for a suitable candidate to serve as the Company's Chief Executive
Officer, and Employee shall have responsibility for management of the day-to-day
operations of the Company until a suitable Chief Executive Officer is secured.

        (b) Employee represents to the Company that Employee is not subject to
or party to (and except for the present Agreement and any other agreement with
the Company, Employee agrees during the Employment Term not to become subject to
or a party to) any employment agreement, non-competition covenant, non-
disclosure agreement or other agreement, covenant, understanding or restriction
of any nature which would prohibit Employee from executing this Agreement and
performing fully Employee's duties and responsibilities hereunder, or which
would in any manner, directly or indirectly, limit or affect the duties and
responsibilities which may now or in the future be assigned to Employee by the
Company, including without limitation any duties and responsibilities relating
to the business in which the Company (including its subsidiaries) is engaged
during the Employment Term or for which Employee has notice during such
Employment Term that the Company is planning to be engaged within the six (6)
month
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period following any expiration or termination of this Agreement (the
"Business" of the Company).

     1.3     Extent of Service. During the Employment Term, Employee agrees to
use best efforts to carry out the duties and responsibilities under Section 1.2
hereof and to devote full time, attention and energy thereto. Employee further
agrees not to work either on a part time or independent contracting basis, or
serve as a director, officer or in any other capacity, or to otherwise become
engage in any business activity or enterprise (including any material investment
therein) during the Employment Term without the prior disclosure to and consent
of the Company in accordance with its policies. The foregoing shall not,
however, be construed as prohibiting the ownership of not more than 5% of any
class of securities registered pursuant to the Securities Exchange Act of 1934,
as amended, provided that such ownership represents solely a passive investment
and the Employee does not in any way manage, control, perform services for or
otherwise take any role therein which may create a conflict of interest or
otherwise interfere with Employee's ability to discharge Employee's duties and
responsibilities to the Company.

     1.4      Base Compensation.

         (a) For all the services rendered by Employee hereunder, the Company
shall pay Employee a salary at a monthly rate of Twelve Thousand ($12,000.00)
dollars per month during the Employment Term.

         (b) During the Employment Term, Employee shall also be entitled to
participate in such vacation pay, retirement, other fringe benefit plans and
prerequisites, if any, as may be duly authorized from time to time by the
Company, in its sole discretion, the terms and provisions of which plans and
prerequisites shall also be in the sole discretion of the Company, which terms
and provisions shall be controlling with respect to the manner in which any such
benefit or prerequisite is earned, accrued, vested, paid or otherwise available.

     1.5     Incentive Compensation. In addition to the compensation set forth
in Section 1.4 hereof, Employee shall be entitled to participate in such
incentive compensation plans, if any, as may be applicable to its management
level employees, and as may be duly established from time to time in respect to
the Employment Term by the Company in its sole discretion, which terms and
provisions shall be controlling with respect to the manner in which any such
incentive compensation is earned, accrued, vested, paid or otherwise made
available to its participants.

     2.      Expenses. Employee shall be reimbursed for the reasonable business
expenses incurred by Employee in connection with Employee's performance of
services hereunder during the Employment Term upon presentation of an itemized
account and written proof of such expenses in accordance with policies duly
established by the Company. Employee shall also be reimbursed for his legal
expenses and disbursements incurred in connection with the negotiation of this
Agreement. Termination of Employee's Employment Term in accordance with Section


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5 of this Agreement shall not terminate the obligation to reimburse expenses 
properly incurred prior to the date of such termination in accordance with the 
Company's policies.

     3.    Confidential Information; Non-solicitation and Non-competition.
Employee acknowledges and agrees that (i) Employee has executed or will execute
the Company's standard agreements regarding confidential information (the
"Confidentiality Agreements"), (ii) during Employee's employment and for a
period of eighteen (18) months after the employment of Employee by Company has
ended (or for such other period as may be specified in Section 5.4 or 5.5),
Employee will not, directly or indirectly, solicit the employment of any person
who was employed by the Company or any of its subsidiaries during Employee's
employment, unless such person was (1) involuntarily discharged by the Company
or such subsidiary or (2) voluntarily terminated his or her relationship with
the Company prior to Employee's termination, and (iii) during Employee's
employment and for a period of twelve (12) months after the employment of
Employee by Company has ended (or for such other period as may be specified in
Section 5.4 or 5.5), Employee will not, without the prior written consent of the
Company, directly or indirectly engage in, participate in, have any interest in,
or permit his name to be used by any corporation or other entity or enterprise
which competes with the Business in the geographical areas where the Company
conducts such Business, whether as an employee, officer, director, agent,
consultant, investor, security holder, creditor, guarantor, partner, joint
venturer or beneficiary under a trust (subparagraphs (ii) and (iii) are
collectively the "Restrictive Covenants").

     4.   Arbitration and Equitable Relief.

         (a) Employee acknowledges that the restrictions contained in the
Confidentiality Agreements and Restrictive Covenants are reasonable and
necessary to protect the legitimate interests of the Company and its affiliates,
that the Company would not have entered into this Agreement in the absence of
such restrictions, and that any violation of any provision of the
Confidentiality Agreements or Restrictive Covenants will result in irreparable
injury to the Company. Employee represents that Employee's experience and
capabilities are such that the restrictions contained in the Confidentiality
Agreements and Restrictive Covenants will not prevent Employee from obtaining
employment or otherwise earning a living at the same general level of economic
benefit as anticipated by this Agreement. Employee further represents and
acknowledges that (i) as a condition of entering into this Agreement, Employee
has reconfirmed, and does hereby reconfirm that all of the provisions of the
Confidentiality Agreements and Restrictive Covenants are and will continue to be
valid and binding upon Employee, and enforceable against Employee to the full
extent set forth therein, (ii) Employee has been advised by the Company to
consult Employee's own legal counsel in respect of this Agreement and the
statements set forth herein and in respect of the Confidentiality Agreements and
Restrictive Covenants, and (iii) that Employee has, prior to execution of this
Agreement and the Confidentiality Agreements, reviewed this Agreement, the
Confidentiality Agreements and the Restrictive Covenants with Employee's
counsel.

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       (b) Except as provided in Section 4(c) below, Employee and the Company
agree that any dispute or controversy arising out of or relating to any
interpretation, construction, performance or breach of this Agreement, shall be
exclusively settled by arbitration to be held in the county and state set forth
in the following paragraph, in accordance with the National Rules for the
Resolution of Employment Disputes as then in effect of the American Arbitration
Association. A panel of three arbitrators shall be chosen in accordance with
such rules to conduct the arbitration, unless Employee and the Company agree in
writing to have such disputes settled by a single arbitrator. The arbitrators
may grant injunctions or other relief in such dispute or controversy, but shall
have no authority to set aside or review any decision of the board of directors
or its compensation committee which under the terms of this Agreement or the
controlling Company benefit plan or policy are discretionary with the Company,
unless such decisions are shown by clear and convincing evidence to have been
made in bad faith. The decision of the arbitrators shall be final, conclusive
and binding on the parties to the arbitration. Judgment may be entered on the
arbitrators' decision in any court having jurisdiction. The Company and Employee
shall each pay one-half of the costs and expenses of such arbitration, and each
of the Company and Employee shall separately pay its counsel fees and expenses,
subject, however, to the right of the arbitrators to assess costs and expenses
in circumstances where such arbitrators deem it appropriate to do so. If a party
shall attempt to vacate or appeal from an arbitration award or obtain an order
staying the arbitration, and such party (the "non-prevailing party") is
unsuccessful in obtaining such judicial relief, then the non-prevailing party
will be responsible for all attorney's fees and costs incurred by the other
party in connection therewith.

       (c) Employee agrees that the Company shall be entitled (in addition to
seeking relief pursuant to an arbitration pursuant to (b) above) to preliminary
and permanent injunctive relief, without the necessity of proving actual
damages, as well as an equitable accounting of all earnings, profits and other
benefits arising from any violation of the Confidentiality Agreements or
Restrictive Covenants, which rights shall be cumulative and in addition to any
other rights or remedies to which the Company may be entitled as set forth in
the Confidentiality Agreements or otherwise. Employee irrevocably and
unconditionally (i) agrees that any such suit, action or other legal proceeding
commenced by the Company may be brought in the United States District Court for,
or in any court of general jurisdiction in the county of Montgomery,
Commonwealth of Pennsylvania, (ii) consents to the non-exclusive jurisdiction of
any such court in any such suit, action or proceeding, and (iii) waives any
objection which Employee may have to the laying of venue of any such suit,
action or proceeding in any such court. Employee also irrevocably and
unconditionally consents to the service of any process, pleadings, notices or
other papers in a manner permitted by the notice provisions of Section 10
hereof.

       (d) In the event that any of the provisions of the Confidentiality
Agreements or Restrictive Covenants should ever be held or adjudicated to exceed
the time, geographic, product or service, or other limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, product or
service, or other limitations permitted by applicable law.

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       (e) Employee agrees that Employee will provide, and that the Company may
similarly provide, a copy of the Confidentiality Agreements and Restrictive
Covenants to any business or enterprise (i) which Employee may directly or
indirectly own, manage, operate, finance, join, control or participate in the
ownership, management, operation, financing, control or control of, or (ii) with
which Employee may be connected with as an officer, director, employee, partner,
principal, agent, representative, consultant or otherwise, or in connection with
which Employee may use or permit Employee's name to be used.

     5    Termination. The Employment Term shall terminate prior to its
expiration as set forth in Section 1.1 above, and Employee's employment by the
Company shall be terminated, upon the occurrence of any of the following events
(and in accordance with the following provisions associated with such events):

     5.1. Disability. In the event that Employee is unable fully to perform
Employee's duties and responsibilities hereunder to the full extent required by
the board of directors of the Company by reason of illness, injury or incapacity
for more than ninety (90) days, Employee will continue to be compensated as
provided in Section 1.4 (less any payments due Employee under any disability
benefit program, including Social Security, worker's compensation and disability
retirement benefits). After the expiration of such ninety (90) day period, the
Employment Term may be terminated immediately by the Company, and the Company
shall have no further liability or obligation to Employee for compensation
hereunder; provided, however, that Employee will be entitled to receive the
payments prescribed under any disability benefit plan maintained by the Company
and in which Employee participated at the date of such disability; and provided
further that Employee will be entitled to a pro-rata portion to the date of
disability of any earned incentive compensation referred to in Section 1.5 with
respect to the fiscal year during which Employee first became disabled. In the
event of any dispute under this Section 5.1, Employee shall submit to a physical
examination by a licensed physician selected by the Company.

    5.2.  Death. In the event that Employee dies during the Employment Term, the
Company shall pay to Employee's executors, legal representatives or
administrators an amount equal to the installment of Employee's Monthly Salary
set forth in Section 1.4 hereof for the month in which Employee dies and a pro-
rata portion to the date of death of any earned incentive compensation referred
to in Section 1.5 with respect to the fiscal year during which Employee died,
and thereafter the Company shall have no further liability or obligation
hereunder to Employee's executors, legal representatives, administrators, heirs
or assigns or any other person claiming under or through him; provided, however,
that Employee's estate or designated beneficiaries shall be entitled to receive
the payments prescribed for such recipients under any death benefit plan
maintained by the Company and in which Employee participated at the date of such
death.

    5.3.  Cause. Nothing in this Agreement shall be construed to prevent
termination of the Employment Term by the Company at any time for "cause." For
purposes of this Agreement, "cause" shall mean (a) dishonesty, wanton or willful
misconduct, commission of a crime involving moral turpitude, substance abuse,
misappropriation of funds, disparagement of the

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Company (or its management or employees), or (b) failure of Employee to perform,
observe and fully comply during the Employment Term with any of the terms or
provisions of this Agreement or the lawful directives of the Company, or at any
time any of the terms or provisions of the Confidentiality Agreements or
Restrictive Covenants, or any other proper cause determined in good faith by the
Company; provided, however, that Employee's conduct shall not constitute "cause"
within the meaning of (b)above unless and until (i) the Company shall have
provided Employee with notice setting forth with specificity (1) the conduct
deemed to constitute such "cause," (2) reasonable action, if any, that would
remedy the objectionable conduct, and (3) a reasonable time within which
Employee may take such remedial action (provided, however, that the Company
shall not be required to provide additional time for remedial action in the
event of repeated instances of the conduct deemed to constitute cause for which
it has already given prior notice and time for remedial action in accordance
with the provisions of this Agreement), and (ii) Employee shall not have taken
and accomplished such specified remedial action within such specified reasonable
time. The Company's liability, if any, for payments to Employee by virtue of any
wrongful termination of Employee's employment pursuant to this Agreement shall
be reduced by and to the extent of any earnings received by or accrued for the
benefit of Employee during any unexpired part of the Employment Term.

     5.4.  Without Cause. The Company shall have the right to terminate the
Employment Term without cause at any time by giving Employee written notice of
such termination. Under such circumstances, Employee shall be entitled to
receive, for a period (the "Severance Period") equal to the balance of the
unexpired Employment Term (which, in accordance with Section 1.1 hereof, shall
be December 31 of the current year if notice of termination is given on or prior
to October 1, or December 31 of the following year if notice of termination is
given after October 1, continued coverage under any group health plan(s)
maintained by the Company and in which Employee participated immediately prior
such termination, subject to any deductibles, limitations, exclusions, co-
payments and other cost sharing features applicable to active employees of the
Company covered under such plan(s) (or, at the Company's option, an amount in
cash equal, on an after-tax basis, to the "applicable premium" for such
coverages, as described in 29 U.S.C. ss. 1164). The foregoing notwithstanding,
any obligation to provide medical insurance (or payment in lieu thereof) shall
expire when Employee is employed by a new employer that provides health
insurance to its employees on a cost-sharing basis comparable to that provided
by the Company. In addition, if the Company terminates the Employment Term
without Cause, Employee will be entitled to receive an amount in cash equal to
the sum of the salary payments he would have received for the balance of the
unexpired Employment Term (assuming the rate of salary in effect at the time of
his termination), but for such termination. Employee shall only have the right
to receive payment for incentive compensation, if any, referred to in Section
1.5 hereof to which Employee would have been entitled in accordance with and
subject to the provisions of the applicable plans or programs as duly adopted by
the Company. Except as expressly stated in this paragraph, upon the termination
of this Agreement Employee shall not be entitled to any payments or benefits
which may be provided to employees of the Company. Payments and benefits to be
provided hereunder shall in all respects be conditioned upon (1) the prior
receipt by the Company from Employee of a general release of all claims of any
nature whatsoever which Employee had, has or may have against the Company and

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related parties relating to Employee's employment by the Company (other than 
Employee's entitlement under any employee benefit plan or program sponsored by 
the Company in which Employee participated and under which Employee has accrued 
a benefit) or the termination thereof, such release and covenant to be in form 
and substance reasonably satisfactory to counsel for the Company, and (2) 
continued compliance by Employee with the Confidentiality Agreements and, for 
the duration of the Severance Period, the Restrictive Covenants.

     5.5   Resignation for Good Reason. Employee shall have the right to
terminate the Employment Term at any time for Good Reason, by giving the Company
ninety (90) days' prior written notice of such termination. For purposes of this
Agreement "Good Reason" shall mean, exclusively, a resignation based upon (a) a
failure of the Company to observe or perform any of the material terms or
provisions of this Agreement (including, for example, any reduction in the
Monthly Salary other than a reduction which is a concurrent reduction on a
comparable basis of the other management level employees), or (b) a material
reduction in Employee's level of responsibility, position (including office and
title, but not including reporting relationships), authority or duties
(including changes resulting from the assignment to Employee of any duties and
responsibilities inconsistent with Employee's Position as in effect on the date
of this Agreement), in each case as determined by Employee acting reasonably and
in good faith. Employee's notice of termination hereunder shall specify the
basis for Employee's determination of "Good Reason"; provided, however, that the
Company's conduct shall not constitute "Good Reason" unless and until (i)
Employee shall have given the Company written notice setting forth with
specificity (1) the conduct deemed to constitute "Good Reason," (2) reasonable
action that would remedy the objectionable conduct, and (3) a reasonable time
within which the Company may take such remedial action, and (ii) the Company
shall not have taken and accomplished such specified remedial action within such
specified reasonable time. Under such circumstances, the Company shall continue
for the Severance Period (as defined in the previous paragraph) continued
coverage under any group health plan(s) maintained by the Company and in which
Employee participated immediately prior such termination, subject to any
deductibles, limitations, exclusions, co-payments and other cost sharing
features applicable to active employees of the Company covered under such
plan(s) (or, at the Company's option, an amount in cash equal, on an after-tax
basis, to the "applicable premium" for such coverages, as described in 29 U.S.C.
ss. 1164). The foregoing notwithstanding, any obligation to provide medical
insurance (or payment in lieu thereof) shall expire when Employee is employed by
a new employer that provides health insurance to its employees on a cost-sharing
basis comparable to that provided by the Company. In addition, if Employee
terminates the Employment Term for Good Reason, Employee will be entitled to
receive an amount in cash equal to the sum of the salary payments he would have
received for the balance of the unexpired Employment Term (assuming the rate of
salary in effect at the time of his termination), but for such termination.
Employee shall only have the right to receive payment for incentive
compensation, if any, referred to in Section 1.5 hereof to which Employee would
have been entitled in accordance with and subject to the provisions of the
applicable plans or programs as duly adopted by the Company. Except as expressly
stated in this paragraph, upon the termination of this Agreement Employee shall
not be entitled to any payments or benefits which may be provided to employees
of the Company. Payments and benefits to be provided hereunder shall in all
respects be

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conditioned upon (1) the prior receipt by the Company from Employee of a general
release of all claims of any nature whatsoever which Employee had, has or may
have against the Company and related parties relating to Employee's employment
by the Company (other than Employee's entitlement under any employee benefit
plan or program sponsored by the Company in which Employee participated and
under which Employee has accrued a benefit) or the termination thereof, such
release and covenant to be in form and substance reasonably satisfactory to
counsel for the Company, and (2) continued compliance by Employee with the
Confidentiality Agreements and, for the duration of the Severance Period, the
Restrictive Covenants.

     5.6.  Employment of a New Chief Executive. Notwithstanding any other
provision of this Agreement, the Employment Term will terminate automatically if
the Company hires a new Chief Executive Officer. In that event, Employee will be
entitled to receive any accrued but unpaid Monthly Salary and a pro-rata portion
to the date of termination of employment of any earned incentive compensation
referred to in Section 1.5 with respect to the fiscal year during which Employee
terminates, and thereafter the Company shall have no further liability or
obligation hereunder.

     5.7.  Change in Control. Notwithstanding any other provision of this
Agreement, the Company may upon written notice terminate the Employment Term at
any time following a Change in Control (as defined below). In that event,
Employee will be entitled to receive any accrued but unpaid Monthly Salary and a
pro-rata portion to the date of termination of employment of any earned
incentive compensation referred to in Section 1.5 with respect to the fiscal
year during which Employee terminates, and thereafter the Company shall have no
further liability or obligation hereunder. For purposes of this Agreement,
"Change in Control" will have the same meaning as defined in the Integrated
Circuit Systems, Inc. 1997 Equity Compensation Plan.

    6.    Coordination of Benefits; No Set-off. Other severance plans generally,
or policies or agreements, if any, applicable to Employee or to employees of the
Company generally, and any other severance payments required by applicable
statutes or provided under government programs, may provide compensation and
benefits to Employee upon events which would also require the Company pursuant
to this Agreement to provide compensation or continue benefits. In such event,
Employee shall be entitled only to the largest cash compensation provided for
under any of such agreements, plans, policies, statutes or programs, including
this Agreement, and the maximum benefit continuance provided for under any of
such agreements, plans, policies, statutes or programs, including this
Agreement.

     7.     Certain Reduction of Payments.

       (a) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined as set forth herein that any payment or
distribution by, or benefit provided by, the Company to or for the benefit of
Employee, whether paid or payable, made available to or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), would constitute an "excess parachute payment" within the meaning of
Section 280G of the

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Internal Revenue Code of 1986, as amended (the "Code"), and that it would be
economically advantageous to the Company to reduce the Payment to avoid the
limitation of the Company's deduction for such excess parachute payments under
Section 280G of the Code, the aggregate present value of amounts payable or
distributable to or for the benefit of Employee pursuant to this Agreement (such
payments, benefits or distributions pursuant to this Agreement are hereinafter
referred to as "Agreement Payments") shall be reduced (but not below zero) to
the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present
value which maximizes the aggregate present value of Agreement Payments without
causing any Payment not to be deductible by the Company under Section 280G of
the Code. For purposes of this Section 7, present value shall be determined in
accordance with Section 280G(d)(4) of the Code.

       (b) All determinations to be made under this Section 7 shall be made by
the Company's firm of independent public accountants (the "Accounting Firm"),
which firm shall use its best efforts to provide its determinations and any
supporting calculations both to the Company and Employee within fifteen (15)
days of any termination for which payment under Section 5 is required hereunder.
Any such determination by the Accounting Firm shall be final and binding upon
the Company and Employee. Employee shall in Employee's sole discretion determine
which and how much of the Agreement Payments shall be eliminated or reduced
consistent with the requirements of this Section 7. Within ten (10) days after
the Company's determination, the Company shall pay (or cause to be paid) or
distribute (or cause to be distributed) to or for the benefit of Employee such
amounts as are then due to Employee under this Agreement.
 
       (c) As a result of the uncertainty in the application of Section 280G of
the Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Agreement Payments, as the case may be, will have
been made by the Company which should not have been made ("Overpayment") or that
additional Agreement Payments which have not been made by the Company could have
been made ("Underpayment"), in each case, consistent with the calculations
required to be made hereunder. Within two years after the applicable termination
of employment, the Accounting Firm shall review the determination made by it
pursuant to the preceding paragraph. In the event that the Accounting Firm
determines that an Overpayment has been made, any such Overpayment shall be
treated for all purposes as a loan to Employee which Employee shall repay to the
Company together with interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Code (the "Federal Rate"); provided, however, that no
amount shall be payable by Employee to the Company if and to the extent such
payment would not affect the limitations on the amount which is not deductible
under Section 280G of the Code. In the event that the Accounting Firm determines
that an Underpayment has occurred, any such Underpayment shall be promptly paid
by the Company to or for the benefit of Employee together with interest at the
Federal Rate.

       (d) All of the fees and expenses of the Accounting Firm in performing the
determinations referred to in subsections (b) and (c) above shall be borne
solely by the Company. The Company agrees to indemnify and hold harmless the
Accounting Firm of and from any and all claims, damages and expenses of any
nature resulting from or relating to its determinations

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pursuant to subsections (b) and (c) above, except for claims, damages or 
expenses resulting from the gross negligence or willful misconduct of the 
Accounting Firm.

     8.     Survival. Notwithstanding expiration or termination of the
Employment Term and except as is expressly set forth herein, Employee's
obligations under the Confidentiality Agreements and Restrictive Covenants shall
survive and remain in full force and effect for the periods therein provided,
and Employee's agreements, covenants and representations under Sections 1.2(b)
and 3 of this Agreement, the provisions for arbitration and equitable relief
under Section 4 of this Agreement, the provisions for certain payments after the
Employment Term in Sections 5, 6 and 7 of this Agreement, and Sections 9, 10,
11, 12, 13 and 14 of this Agreement shall survive and continue to remain in full
force and effect.

     9.     Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT GIVING EFFECT TO ANY
CONFLICT OF LAWS PROVISIONS.

    10.     Notices. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in writing
and shall be deemed to have been given when hand delivered or mailed by
registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):

    If to the Company, to:

           Integrated Circuit Systems, Inc.
           2435 Blvd. of the Generals
           P.O. Box 968
           Valley Forge, PA  19482-0968
           Attention:  Chief Financial Officer and Chief Operating Officer

           With a copy to the Company's Legal Department.

    If to Employee, to:

           Mr. Rudolf Gassner
           523 Bridgeview Drive
           Lemoine, PA 17043

or to such other names or addresses as the Company or Employee, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.

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     11.      Contents of Agreement; Amendment and Assignment.

              (a) This Agreement (including the Restrictive Covenants) and the
Confidentiality Agreements supersede all prior agreements and set forth the
entire understanding among the parties hereto with respect to the subject matter
hereof or thereof and cannot be changed, modified, extended or terminated except
upon written amendment approved by the parties and executed on their behalf by a
duly authorized officer in the case of the Company and Employee in the case of
Employee. Without limitation of the foregoing, Employee acknowledges that the
effect of this provision is that no oral modifications of any nature whatsoever
to this Agreement or the Confidentiality Agreements shall be permitted. In
addition, nothing in this Agreement or in the Confidentiality Agreements shall
be construed as giving Employee any right to be retained in the employ of the
Company beyond the expiration of the Employment Term, and Employee specifically
acknowledges that if Employee's employment by the Company continues beyond the
expiration of the Employment Term, Employee shall be an employee-at-will of the
Company, and thus subject to discharge at any time by the Company with or
without cause and without compensation of any nature hereunder.

              (b) Employee acknowledges that from time to time, the Company may
establish, maintain and distribute employee manuals or handbooks or personnel
policy manuals, and officers or other representatives of the Company may make
written or oral statements relating to personnel policies and procedures. Such
manuals, handbooks and statements are intended only for general guidance. No
policies, procedures or statements of any nature by or on behalf of the Company
(whether written or oral, and whether or not contained in any employee manual or
handbook or personnel policy manual), and no acts or practices of any nature,
shall be construed to modify this Agreement or the Confidentiality Agreements or
to create express or implied obligations of any nature to Employee.

              (c) All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, executors, administrators, legal representatives, successors and assigns
of the parties hereto, except that the duties and responsibilities of Employee
hereunder are of a personal nature and shall not be assignable or delegable in
whole or in part by Employee.

     12.      Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances is held to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction.

     13.      Remedies Cumulative; No Waiver. No remedy conferred upon the
Company by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder or now or

                                      -11-
<PAGE>
 
hereafter existing at law or in equity. No delay or omission by the Company in 
exercising any right, remedy or power hereunder, under the Confidentiality 
Agreements, or existing at law or in equity shall be construed as a waiver 
thereof, and any such right, remedy or power may be exercised by the Company 
from time to time and as often as may be deemed expedient or necessary by the 
Company in it sole discretion.

     14.  Miscellaneous. All section headings are for convenience only. This
Agreement may be executed in several counterparts, each of which is an original.
It shall not be necessary in marking proof of this Agreement or any counterpart
hereof to produce or account for any of the other counterparts.

         IN WITNESS WHEREOF, the undersigned, intending to be legally bound,
have executed this Agreement as of January 11, 1999.

                                        INTEGRATED CIRCUIT SYSTEMS, INC.


                                        By:/s/ Hock E. Tan
                                        -------------------------------------
                                        Hock E. Tan, Senior Vice President,
                                        Chief Operating Officer 
                                        and Chief Financial Officer


                                        EMPLOYEE:

                                        /s/ Rudolf Gassmer
                                        -------------------------------------
                                        RUDOLF GASSNER


                                      -12-