**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 Indemniteerecognize 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 substantialincrease 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 asadequate 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 highlyqualified 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 Companyherein 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 orcompleted 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 theCompany, 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 theCompany 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 andamounts 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 Indemniteeacted 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 wasunlawful. 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 ina 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.

        (b)    Proceedings By or in theRight 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 procurea 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’scapacity 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 otherenterprise, 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 byIndemnitee 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 noindemnification 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 orproceeding 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 Courtof 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 repaysuch 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 toIndemnitee within twenty (20) days following delivery of a written request therefor by Indemnitee to the Company. 

 

        (b)    Notice/Cooperation by Indemnitee.  Indemnitee shall, as acondition 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. Inaddition, 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 1shall 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 forindemnification, 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 Companyto 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 anysuch 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 underapplicable 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 furtherright 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 failureof 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 circumstancesbecause 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 thetime 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 inaccordance 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 proceedingin 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 againstIndemnitee, 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 itselection 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 subsequentlyincurred 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 Indemniteehas 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, haveemployed 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 anyother 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, theCompany’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 indemnifya member of its board of directors or an officer, such changes shall be, ipsofacto, 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 shallhave 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 entitledunder 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’sofficial 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 eventhough 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 bythe 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 thetotal 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 incertain 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 berequired 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 Indemniteeand, 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 goodfaith 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 fromwrongful 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 bysuch 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 ofthe 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 butis 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 suchinsurance 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 asubsidiary 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’sinability, 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 portionhereof 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 thisAgreement 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 theDelaware 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 broughtvoluntarily 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 theDelaware 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 toenforce 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, ERISAexcise 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 orsubsidiary 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 purchaseand 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 andmay 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 ofanother 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 havehad 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 constituentcorporation 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 Indemniteewould 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 includeany 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 andits 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 toenforce 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, thecourt 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 underthis 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 withrespect 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.  Allnotices, 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 bycertified 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 theCompany. 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 lawsof 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:    Title:      
Address:    3169 Redhill Avenue

                  Costa Mesa, CA 92626

 

 
AGREED TO AND ACCEPTED:INDEMNITEE: Address:     
 

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