ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(IRS Employer Identification No.) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
PREFERRED STOCK PURCHASE RIGHTS |
N/A |
N/A |
☒ |
Accelerated Filer |
☐ |
|
Non-Accelerated Filer |
☐ |
Smaller Reporting Company |
|
Emerging growth company |
☐ |
Proxy Statement for the 2020 |
||
Annual Meeting of Shareholders |
Incorporated into Part III |
|
to be held on March 16, 2020 |
of this Form 10-K |
ITEM 1. |
BUSINESS |
ITEM 1A. |
RISK FACTORS |
• | we will be able to adequately protect our technology; |
• | competitors will not independently develop similar technology; or |
• | international intellectual property laws will adequately protect our intellectual property rights. |
• | loss of any of our key customers or suppliers; |
• | additions or departures of key personnel; |
• | third party sales of common stock; |
• | our ability to execute our business plan, including but not limited to, our expansion into China; |
• | announcements and consummations of business acquisitions; |
• | operating results that fall below expectations; |
• | issuances or repurchases of our common stock; |
• | intellectual property disputes; |
• | industry developments; |
• | news or disclosures by competitors or customers; |
• | business combinations, divestitures, or bankruptcies by customers, suppliers, or competitors; |
• | economic and other external factors; and |
• | period-to-period fluctuations in our financial results. |
ITEM 1B. |
UNRESOLVED STAFF COMMENTS |
ITEM 2. |
PROPERTIES |
Location |
Type of Interest |
||
Allen, Texas |
Owned |
||
Boise, Idaho |
Owned |
||
Brookfield, Connecticut |
Owned |
||
Bridgend, Wales |
Leased |
||
Cheonan, Korea |
Owned |
||
Hefei, China |
Owned |
(1) |
|
Dresden, Germany |
Leased |
||
Hsinchu, Taiwan |
Owned |
(1) |
|
Hsinchu, Taiwan |
Leased |
||
Taichung, Taiwan |
Owned |
(1) |
|
Xiamen, China |
Owned |
(1) |
ITEM 3. |
LEGAL PROCEEDINGS |
ITEM 4. |
MINE SAFETY DISCLOSURES |
ITEM 5. |
MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER PURCHASES OF EQUITY SECURITIES |
August 2019 Authorization |
Total Number of Shares Purchased (in millions) |
Average Price Paid Per share |
Total Number of Shares Purchased as Part of Publicly Announced Program (in millions) |
Dollar Value of Shares That May Yet Be Purchased (in millions) |
||||||||||||
Fiscal year 2019 repurchases |
||||||||||||||||
September 23, 2019 – October 31, 2019 |
1.0 |
$ |
11.05 |
1.0 |
$ |
89.0 |
||||||||||
Total |
1.0 |
1.0 |
2018 Authorizations |
Total Number of Shares Purchased (in millions) |
Average Price Paid Per share |
Total Number of Shares Purchased as Part of Publicly Announced Program (in millions) |
Dollar Value of Shares That May Yet Be Purchased (in millions) |
||||||||||||
Fiscal year 2019 repurchases |
||||||||||||||||
November 1, 2018 – November 25, 2018 |
0.2 |
$ |
9.49 |
0.2 |
$ |
20.1 |
||||||||||
November 26, 2018 – December 23, 2018 |
0.7 |
$ |
9.38 |
0.7 |
$ |
13.4 |
||||||||||
December 24, 2018 – January 27, 2019 |
0.2 |
$ |
9.41 |
0.2 |
$ |
11.2 |
* |
|||||||||
Total |
1.1 |
$ |
9.40 |
1.1 |
Fiscal year 2018 repurchases |
Total Number of Shares Purchased (in millions) |
Average Price Paid Per share |
Total Number of Shares Purchased as Part of Publicly Announced Program (in millions) |
Dollar Value of Shares That May Yet Be Purchased (in millions) |
||||||||||||
July 10, 2018 – July 29, 2018 |
0.8 |
$ |
8.72 |
0.8 |
$ |
13.2 |
||||||||||
July 30, 2018 – August 26, 2018 |
0.9 |
$ |
9.05 |
0.9 |
$ |
5.0 |
||||||||||
September 23, 2018 – October 31, 2018 |
0.9 |
$ |
9.46 |
0.9 |
$ |
21.9 |
||||||||||
Total |
2.6 |
$ |
9.04 |
2.6 |
ITEM 6. |
SELECTED FINANCIAL DATA |
Year Ended |
||||||||||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
October 30, 2016 |
November 1, 2015 |
||||||||||||||||
OPERATING DATA: |
||||||||||||||||||||
Revenue |
$ |
550,660 |
$ |
535,276 |
$ |
450,678 |
$ |
483,456 |
$ |
524,206 |
||||||||||
Gross profit |
$ |
120,841 |
$ |
131,503 |
$ |
91,315 |
$ |
118,706 |
$ |
143,136 |
||||||||||
Gross margin |
21.9 |
% |
24.6 |
% |
20.3 |
% |
24.6 |
% |
27.3 |
% |
||||||||||
Operating income |
$ |
52,121 |
$ |
65,627 |
$ |
31,868 |
$ |
52,475 |
$ |
72,233 |
||||||||||
Operating margin |
9.5 |
% |
12.3 |
% |
7.1 |
% |
10.9 |
% |
13.8 |
% |
||||||||||
Effective tax rate (a) |
20.1 |
% |
10.7 |
% |
19.9 |
% |
7.9 |
% |
18.8 |
% |
||||||||||
Net income (a), (b), (c), (d) |
$ |
40,491 |
$ |
61,236 |
$ |
21,289 |
$ |
55,676 |
$ |
56,859 |
||||||||||
Net income attributable to Photronics, Inc. shareholders (a), (b), (c), (d) |
$ |
29,793 |
$ |
42,055 |
$ |
13,130 |
$ |
46,200 |
$ |
44,625 |
||||||||||
Earnings per share: |
||||||||||||||||||||
Basic (a), (b), (c), (d) |
$ |
0.45 |
$ |
0.61 |
$ |
0.19 |
$ |
0.68 |
$ |
0.67 |
||||||||||
Diluted (a), (b), (c), (d) |
$ |
0.44 |
$ |
0.59 |
$ |
0.19 |
$ |
0.64 |
$ |
0.63 |
||||||||||
Weighted-average diluted number of common shares outstanding: |
69,155 |
74,821 |
69,288 |
76,354 |
78,383 |
|||||||||||||||
Net cash provided by operating activities |
$ |
68,386 |
$ |
130,567 |
$ |
96,833 |
$ |
122,137 |
$ |
133,195 |
||||||||||
Purchase of property, plant and equipment |
$ |
178,375 |
$ |
92,585 |
$ |
91,965 |
$ |
50,147 |
$ |
104,033 |
||||||||||
Purchase of treasury stock |
$ |
21,696 |
$ |
23,111 |
$ |
- |
$ |
- |
$ |
- |
||||||||||
Employees |
1,775 |
1,575 |
1,475 |
1,530 |
1,550 |
BALANCE SHEET DATA |
||||||||||||||||||||
As of |
||||||||||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
October 30, 2016 |
November 1, 2015 |
||||||||||||||||
Working capital |
$ |
275,573 |
$ |
311,655 |
$ |
367,348 |
$ |
360,269 |
$ |
168,237 |
||||||||||
Property, plant and equipment, net |
$ |
632,441 |
$ |
571,781 |
$ |
535,197 |
$ |
506,434 |
$ |
547,284 |
||||||||||
Total assets |
$ |
1,118,665 |
$ |
1,110,009 |
$ |
1,020,794 |
$ |
987,988 |
$ |
1,042,811 |
||||||||||
Long-term debt |
$ |
41,887 |
$ |
- |
$ |
57,337 |
$ |
61,860 |
$ |
67,120 |
||||||||||
Total Photronics, Inc. shareholders’ equity |
$ |
769,892 |
$ |
759,671 |
$ |
744,564 |
$ |
710,363 |
$ |
646,555 |
||||||||||
Noncontrolling interests |
$ |
141,200 |
$ |
144,898 |
$ |
120,731 |
$ |
115,111 |
$ |
115,511 |
(a) | In 2016, includes tax benefits in Taiwan of $4.8 million primarily related to the recognition of prior period tax benefits and other tax positions no longer deemed necessary. |
(b) | In 2018, includes $0.6 million gain on sale of assets. |
(c) | In 2016, includes $8.8 million gain on sale of investment in a foreign entity and $0.2 million gain on the sale of the Company’s 49.99% interest in the MP Mask joint venture. |
(d) | In 2015, includes $0.9 million of financing expenses related to the exchange of $57.5 million of 3.25% convertible senior notes. |
ITEM 7. |
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
Three Months Ended |
||||||||||||
October 31, 2019 |
July 28, 2019 |
October 31, 2018 |
||||||||||
Revenue |
100.0 |
% |
100.0 |
% |
100.0 |
% |
||||||
Cost of goods sold |
75.6 |
77.9 |
75.5 |
|||||||||
Gross profit |
24.4 |
22.1 |
24.5 |
|||||||||
Selling, general and administrative expenses |
7.8 |
9.5 |
9.3 |
|||||||||
Research and development expenses |
2.9 |
2.9 |
2.7 |
|||||||||
Operating income |
13.7 |
9.7 |
12.5 |
|||||||||
Other income (expense), net |
(3.9 |
) |
(0.2 |
) |
1.5 |
|||||||
Income before income tax provision |
9.8 |
9.5 |
14.0 |
|||||||||
Income tax provision |
1.5 |
2.4 |
2.4 |
|||||||||
Net income |
8.3 |
7.1 |
11.6 |
|||||||||
Net income attributable to noncontrolling interests |
2.1 |
2.5 |
3.0 |
|||||||||
Net income attributable to Photronics, Inc. shareholders |
6.2 |
% |
4.6 |
% |
8.6 |
% |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Revenue |
100.0 |
% |
100.0 |
% |
100.0 |
% |
||||||
Cost of goods sold |
78.1 |
75.4 |
79.7 |
|||||||||
Gross profit |
21.9 |
24.6 |
20.3 |
|||||||||
Selling, general and administrative expenses |
9.5 |
9.6 |
9.7 |
|||||||||
Research and development expenses |
2.9 |
2.7 |
3.5 |
|||||||||
Operating income |
9.5 |
12.3 |
7.1 |
|||||||||
Other income (expense), net |
(0.3 |
) |
0.5 |
(1.2 |
) |
|||||||
Income before income tax provision |
9.2 |
12.8 |
5.9 |
|||||||||
Income tax provision |
1.9 |
1.4 |
1.2 |
|||||||||
Net income |
7.3 |
11.4 |
4.7 |
|||||||||
Net income attributable to noncontrolling interests |
1.9 |
3.5 |
1.8 |
|||||||||
Net income attributable to Photronics, Inc. shareholders |
5.4 |
% |
7.9 |
% |
2.9 |
% |
Q4 FY19 from Q3 FY19 |
Q4 FY19 from Q4 FY18 |
|||||||||||||||||||
Revenue in Q4 FY19 |
Increase (Decrease) |
Percent Change |
Increase (Decrease) |
Percent Change |
||||||||||||||||
IC |
||||||||||||||||||||
High-end |
$ |
45.0 |
$ |
6.5 |
16.9 |
% |
$ |
5.5 |
14.0 |
% |
||||||||||
Mainstream |
67.6 |
5.9 |
9.5 |
% |
(3.9 |
) |
(5.4 |
)% |
||||||||||||
Total IC |
$ |
112.5 |
$ |
12.4 |
12.3 |
% |
$ |
1.7 |
1.5 |
% |
||||||||||
FPD |
||||||||||||||||||||
High-end |
$ |
28.5 |
$ |
2.5 |
9.8 |
% |
$ |
6.5 |
29.4 |
% |
||||||||||
Mainstream |
15.2 |
3.3 |
27.2 |
% |
3.5 |
29.5 |
% |
|||||||||||||
Total FPD |
$ |
43.7 |
$ |
5.8 |
15.3 |
% |
$ |
9.9 |
29.4 |
% |
||||||||||
Total Revenue |
$ |
156.3 |
$ |
18.1 |
13.1 |
% |
$ |
11.6 |
8.0 |
% |
Q4 FY19 from Q3 FY19 |
Q4 FY19 from Q4 FY18 |
|||||||||||||||||||
Revenue in Q4 FY19 |
Increase (Decrease) |
Percent Change |
Increase (Decrease) |
Percent Change |
||||||||||||||||
Taiwan |
$ |
68.9 |
$ |
7.6 |
12.4 |
% |
$ |
6.6 |
10.6 |
% |
||||||||||
Korea |
37.3 |
0.2 |
0.6 |
% |
(3.4 |
) |
(8.4 |
)% |
||||||||||||
United States |
30.5 |
5.1 |
20.1 |
% |
(0.2 |
) |
(0.8 |
)% |
||||||||||||
Europe |
7.9 |
(0.1 |
) |
(1.0 |
)% |
(1.9 |
) |
(19.6 |
)% |
|||||||||||
China |
11.3 |
5.4 |
89.8 |
% |
10.7 |
1,692.9 |
% |
|||||||||||||
Other |
0.4 |
(0.1 |
) |
(16.6 |
)% |
(0.1 |
) |
(22.6 |
)% |
|||||||||||
Total revenue |
$ |
156.3 |
$ |
18.1 |
13.1 |
% |
$ |
11.6 |
8.0 |
% |
FY19 from FY18 |
||||||||||||
Revenue in FY19 |
Increase (Decrease) |
Percent Change |
||||||||||
IC |
||||||||||||
High-end |
$ |
156.4 |
$ |
(3.9 |
) |
(2.5 |
)% |
|||||
Mainstream |
249.8 |
(5.9 |
) |
(2.3 |
)% |
|||||||
Total IC |
$ |
406.2 |
$ |
(9.9 |
) |
(2.4 |
)% |
|||||
FPD |
||||||||||||
High-end |
$ |
98.8 |
$ |
22.7 |
29.9 |
% |
||||||
Mainstream |
45.6 |
2.5 |
5.8 |
% |
||||||||
Total FPD |
$ |
144.5 |
$ |
25.3 |
21.2 |
% |
||||||
Total Revenue |
$ |
550.7 |
$ |
15.4 |
2.9 |
% |
FY19 from FY18 |
||||||||||||
Revenue in FY19 |
Increase (Decrease) |
Percent Change |
||||||||||
Taiwan |
$ |
244.4 |
$ |
7.3 |
3.1 |
% |
||||||
Korea |
147.7 |
0.7 |
0.5 |
% |
||||||||
United States |
105.0 |
(7.6 |
) |
(6.7 |
)% |
|||||||
Europe |
32.6 |
(3.0 |
) |
(8.3 |
)% |
|||||||
China |
19.0 |
17.9 |
1,543.0 |
% |
||||||||
Other |
1.9 |
0.1 |
4.5 |
% |
||||||||
Total Revenue |
$ |
550.7 |
$ |
15.4 |
2.9 |
% |
Percent Change |
||||||||||||||||||||
Q4 FY19 |
Q3 FY19 |
Q4 FY18 |
Q4 FY19 from Q3 FY19 |
Q4 FY19 from Q4 FY18 |
||||||||||||||||
Gross profit |
$ |
38.2 |
$ |
30.6 |
$ |
35.4 |
24.8 |
% |
7.7 |
% |
||||||||||
Gross margin |
24.4 |
% |
22.1 |
% |
24.5 |
% |
Percent Change |
||||||||||||
FY19 |
FY18 |
FY19 from FY18 |
||||||||||
Gross profit |
$ |
120.8 |
$ |
131.5 |
(8.1 |
)% |
||||||
Gross margin |
21.9 |
% |
24.6 |
% |
Q4 FY19 |
Q3 FY19 |
Q4 FY18 |
||||||||||
Interest income and other income (expense), net |
$ |
(5.9 |
) |
$ |
- |
$ |
2.9 |
|||||
Interest expense |
(0.2 |
) |
(0.4 |
) |
(0.6 |
) |
||||||
Total other income (expense) |
$ |
(6.1 |
) |
$ |
(0.4 |
) |
$ |
2.3 |
FY19 |
FY18 |
|||||||
Interest income and other income (expense), net |
$ |
- |
$ |
5.2 |
||||
Interest expense |
(1.4 |
) |
(2.3 |
) |
||||
Total other income (expense) |
$ |
(1.4 |
) |
$ |
2.9 |
Q4 FY19 |
Q3 FY19 |
Q4 FY18 |
||||||||||
Income tax provision |
$ |
2.3 |
$ |
3.2 |
$ |
3.6 |
||||||
Effective income tax rate |
15.1 |
% |
24.7 |
% |
17.5 |
% |
FY19 |
FY18 |
|||||||
Income tax provision |
$ |
10.2 |
$ |
7.3 |
||||
Effective income tax rate |
20.1 |
% |
10.7 |
% |
Q4 FY19 |
Q3 FY19 |
Q4 FY18 |
FY19 |
FY18 |
||||||||||||||||
Net income attributable to noncontrolling interest |
$ |
3.3 |
$ |
3.5 |
$ |
4.3 |
$ |
10.7 |
$ |
19.2 |
October 31, 2019 |
October 31, 2018 |
|||||||
(in $ millions) |
(in $ millions) |
|||||||
Cash and cash equivalents |
$ |
206.5 |
$ |
329.3 |
||||
Net cash provided by operating activities |
$ |
68.4 |
$ |
130.6 |
||||
Net cash used in investing activities |
$ |
(151.4 |
) |
$ |
(90.9 |
) |
||
Net cash used in financing activities |
$ |
(42.1 |
) |
$ |
(13.8 |
) |
Payment due by period |
||||||||||||||||||||
Contractual Obligations |
Total |
Less Than 1 Year |
1 - 3 Years |
3 - 5 Years |
More Than 5 Years |
|||||||||||||||
Debt (1) |
$ |
52,760 |
$ |
10,873 |
$ |
20,735 |
$ |
10,029 |
$ |
11,123 |
||||||||||
Operating leases |
6,701 |
2,010 |
3,148 |
1,166 |
377 |
|||||||||||||||
Purchase obligations (1) |
130,270 |
105,579 |
24,691 |
- |
- |
|||||||||||||||
Interest |
7,385 |
2,433 |
3,034 |
1,609 |
309 |
|||||||||||||||
Other noncurrent liabilities |
11,436 |
1,046 |
2,656 |
2,658 |
5,076 |
|||||||||||||||
Total |
$ |
208,552 |
$ |
121,941 |
$ |
54,264 |
$ |
15,462 |
$ |
16,885 |
• | the determination of whether revenues related to our revenue contracts should be recognized over time or at a point in time, as these determinations impact the timing of our reported revenues and net income; |
• | the estimation of the point in the manufacturing process at which we are entitled to receive payment as we perform; |
• | the determination of the useful lives of our property, plant, and equipment and the timing of when depreciation should begin on such assets, as these determinations can significantly impact our gross margin and research and development expenses; |
• | the evaluation of the recoverability of our long-lived assets and definite-lived intangible assets, which requires us to forecast the future cash flows related to these assets; this evaluation can significantly impact our gross margin and operating expense; |
• | the estimation of the collectability of our accounts receivable which impacts our gross margin and operating expenses; |
• | the recognition and measurement of current and deferred income taxes, including the measurement of uncertain tax positions, which impacts our provision for income taxes and our tax-related asset and liability balances. |
ITEM 7A. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
ITEM 8. |
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA |
Page |
|
34 |
|
36 |
|
37 |
|
38 |
|
39 |
|
40 |
|
41 |
October 31, 2019 |
October 31, 2018 |
|||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
$ |
||||||
Accounts receivable, net of allowance of $ |
||||||||
Inventories |
||||||||
Other current assets |
||||||||
Total current assets |
||||||||
Property, plant and equipment, net |
||||||||
Intangible assets, net |
||||||||
Deferred income taxes |
||||||||
Other assets |
||||||||
Total assets |
$ |
$ |
||||||
LIABILITIES AND EQUITY |
||||||||
Current liabilities: |
||||||||
Short-term debt |
$ |
$ |
||||||
Current portion of long-term debt |
||||||||
Accounts payable |
||||||||
Accrued liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt |
||||||||
Other liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies |
||||||||
Equity: |
||||||||
Preferred stock, $ |
||||||||
Common stock, $ |
||||||||
Additional paid-in capital |
||||||||
Retained earnings |
||||||||
Treasury stock, |
( |
) |
||||||
Accumulated other comprehensive loss |
( |
) |
( |
) |
||||
Total Photronics, Inc. shareholders' equity |
||||||||
Noncontrolling interests |
||||||||
Total equity |
||||||||
Total liabilities and equity |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Revenue |
$ |
$ |
$ |
|||||||||
Cost of goods sold |
||||||||||||
Gross profit |
||||||||||||
Operating expenses: |
||||||||||||
Selling, general and administrative |
||||||||||||
Research and development |
||||||||||||
Total operating expenses |
||||||||||||
Operating income |
||||||||||||
Other income (expense): |
||||||||||||
Interest income and other income (expense), net |
( |
) |
||||||||||
Interest expense |
( |
) |
( |
) |
( |
) |
||||||
Income before income tax provision |
||||||||||||
Income tax provision |
||||||||||||
Net income |
||||||||||||
Net income attributable to noncontrolling interests |
||||||||||||
Net income attributable to Photronics, Inc. shareholders |
$ |
$ |
$ |
|||||||||
Earnings per share: |
||||||||||||
Basic |
$ |
$ |
$ |
|||||||||
Diluted |
$ |
$ |
$ |
|||||||||
Weighted-average number of common shares outstanding: |
||||||||||||
Basic |
||||||||||||
Diluted |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Net income |
$ |
$ |
$ |
|||||||||
Other comprehensive (loss) income, net of tax: |
||||||||||||
Foreign currency translation adjustments |
( |
) |
( |
) |
||||||||
Amortization of cash flow hedge |
||||||||||||
Other |
( |
) |
||||||||||
Net other comprehensive (loss) income |
( |
) |
( |
) |
||||||||
Comprehensive income |
||||||||||||
Less: comprehensive income attributable to noncontrolling interests |
||||||||||||
Comprehensive income attributable to Photronics, Inc. shareholders |
$ |
$ |
$ |
Photronics, Inc. Shareholders |
||||||||||||||||||||||||||||||||
Common Stock |
Additional Paid-In |
Retained |
Treasury |
Accumulated Other Comprehensive |
Non- Controlling |
Total |
||||||||||||||||||||||||||
Shares |
Amount |
Capital |
Earnings |
Stock |
(Loss) Income |
Interests |
Equity |
|||||||||||||||||||||||||
Balance at October 30, 2016 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
|||||||||||||||||||||||
Net income |
- |
|||||||||||||||||||||||||||||||
Other comprehensive income |
- |
|||||||||||||||||||||||||||||||
Sales of common stock through employee stock option and purchase plan |
||||||||||||||||||||||||||||||||
Restricted stock awards vesting and expense |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Dividends to noncontrolling interests |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Balance at October 29, 2017 |
||||||||||||||||||||||||||||||||
Net income |
- |
|||||||||||||||||||||||||||||||
Other comprehensive income |
- |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||
Sales of common stock through employee stock option and purchase plan |
||||||||||||||||||||||||||||||||
Restricted stock awards vesting and expense |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Contribution from noncontrolling interests |
- |
|||||||||||||||||||||||||||||||
Dividends to noncontrolling interests |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Purchases of treasury stock |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Balance at October 31, 2018 |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Adoption of ASU 2014-09 |
- |
|||||||||||||||||||||||||||||||
Adoption of ASU 2016-16 |
- |
( |
) |
( |
) |
( |
) |
|||||||||||||||||||||||||
Net income |
- |
|||||||||||||||||||||||||||||||
Other comprehensive (loss) income |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans |
||||||||||||||||||||||||||||||||
Restricted stock awards vesting and expense |
||||||||||||||||||||||||||||||||
Share-based compensation expense |
- |
|||||||||||||||||||||||||||||||
Contribution from noncontrolling interest |
- |
|||||||||||||||||||||||||||||||
Dividends to noncontrolling interest |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Repurchase of common stock of subsidiary |
- |
( |
) |
( |
) |
|||||||||||||||||||||||||||
Purchases of treasury stock |
( |
) |
( |
) |
||||||||||||||||||||||||||||
Retirement of treasury stock |
( |
) |
( |
) |
( |
) |
( |
) |
||||||||||||||||||||||||
Balance at October 31, 2019 |
$ |
$ |
$ |
$ |
$ |
( |
) |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Cash flows from operating activities: |
||||||||||||
Net income |
$ |
$ |
$ |
|||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||
Depreciation and amortization of property, plant and equipment |
||||||||||||
Amortization of intangible assets |
||||||||||||
Share-based compensation |
||||||||||||
Deferred income taxes |
( |
) |
( |
) |
||||||||
Changes in assets, liabilities, and other: |
||||||||||||
Accounts receivable |
( |
) |
( |
) |
( |
) |
||||||
Inventories |
( |
) |
( |
) |
( |
) |
||||||
Other current assets |
( |
) |
( |
) |
||||||||
Accounts payable, accrued liabilities and other |
( |
) |
( |
) |
||||||||
Net cash provided by operating activities |
||||||||||||
Cash flows from investing activities: |
||||||||||||
Purchases of property, plant and equipment |
( |
) |
( |
) |
( |
) |
||||||
Government incentives |
||||||||||||
Purchases of intangible assets |
( |
) |
( |
) |
( |
) |
||||||
Proceeds from sales of investments |
||||||||||||
Acquisition of business |
( |
) |
||||||||||
Other |
* |
* |
||||||||||
Net cash used in investing activities |
( |
) |
( |
) |
( |
)* |
||||||
Cash flows from financing activities: |
||||||||||||
Proceeds from debt |
||||||||||||
Contribution from noncontrolling interests |
||||||||||||
Repayments of debt |
( |
) |
( |
) |
( |
) |
||||||
Dividends paid to noncontrolling interests |
( |
) |
( |
) |
( |
) |
||||||
Purchases of treasury stock |
( |
) |
( |
) |
||||||||
Proceeds from share-based arrangements |
||||||||||||
Other |
( |
) |
( |
) |
( |
) |
||||||
Net cash used in financing activities |
( |
) |
( |
) |
( |
) |
||||||
Effects of exchange rate changes on cash, cash equivalents, and restricted cash |
( |
)* |
* |
|||||||||
Net (decrease) increase in cash, cash equivalents, and restricted cash |
( |
) |
* |
( |
)* |
|||||||
Cash, cash equivalents, and restricted cash at beginning of year |
* |
|||||||||||
Cash, cash equivalents, and restricted cash at end of year |
$ |
$ |
* |
$ |
* |
|||||||
Supplemental disclosure of non-cash information: |
||||||||||||
Accrual for property, plant and equipment purchased during year |
$ |
$ |
$ |
October 31 2019 |
October 31 2018 |
|||||||
Raw materials |
$ |
$ |
||||||
Work in process |
||||||||
Finished goods |
||||||||
$ |
$ |
October 31, 2019 |
October 31, 2018 |
|||||||
Land |
$ |
$ |
||||||
Buildings and improvements |
||||||||
Machinery and equipment |
||||||||
Leasehold improvements |
||||||||
Furniture, fixtures and office equipment |
||||||||
Construction in progress |
||||||||
Accumulated depreciation and amortization |
( |
) |
( |
) |
||||
$ |
$ |
As of October 31, 2019 |
Gross Amount |
Accumulated Amortization |
Net Amount |
|||||||||
Technology license agreement |
$ |
$ |
( |
) |
$ |
|||||||
Customer relationships |
( |
) |
||||||||||
Software and other |
( |
) |
||||||||||
$ |
$ |
( |
) |
$ |
||||||||
As of October 31, 2018 |
||||||||||||
Technology license agreement |
$ |
$ |
( |
) |
$ |
|||||||
Customer relationships |
( |
) |
||||||||||
Software and other |
( |
) |
||||||||||
$ |
$ |
( |
) |
$ |
Fiscal Years: |
||||
2020 |
$ |
|||
2021 |
$ |
|||
2022 |
$ |
|||
2023 |
$ |
|||
2024 |
$ |
October 31, 2019 |
October 31, 2018 |
|||||||||||||||
Classification |
Carrying Amount |
Photronics Interest |
Carrying Amount |
Photronics Interest |
||||||||||||
Current assets |
$ |
$ |
$ |
$ |
||||||||||||
Non-current assets |
||||||||||||||||
Total assets |
||||||||||||||||
Current liabilities |
||||||||||||||||
Non-current liabilities |
||||||||||||||||
Total liabilities |
||||||||||||||||
Net assets |
$ |
$ |
$ |
$ |
October 31, 2019 |
October 31, 2018 |
|||||||
Compensation related expenses |
$ |
$ |
||||||
Income taxes |
||||||||
Contract liabilities |
||||||||
Value added and other taxes |
||||||||
Professional fees |
||||||||
Other |
||||||||
$ |
$ |
October 31, 2019 |
October 31, 2018 |
|||||||
Project Loans |
$ |
$ |
||||||
Working Capital Loans (value added tax component) |
||||||||
Current portion of long-term debt |
( |
) |
( |
) |
||||
Long-term debt |
$ |
$ |
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
$ |
Fiscal Year |
||||||||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
2026 |
||||||||||||||||||||||
Principal payments |
$ |
$ |
$ |
$ |
$ |
$ |
$ |
Fiscal Year |
||||||||||||
2020 |
2021 |
2022 |
||||||||||
Principal payments |
$ |
$ |
$ |
Consolidated Balance Sheet October 31, 2019 |
||||||||||||
As Reported |
Adjustments |
Balance without Adoption of Topic 606 |
||||||||||
Assets |
||||||||||||
Accounts receivable |
$ |
$ |
( |
) |
$ |
|||||||
Inventory |
||||||||||||
Other current assets |
( |
) |
||||||||||
Deferred income taxes |
||||||||||||
Liabilities |
||||||||||||
Accrued liabilities |
$ |
$ |
( |
) |
||||||||
Equity |
||||||||||||
Photronics, Inc. shareholders’ equity |
$ |
$ |
( |
) |
$ |
|||||||
Noncontrolling interests |
( |
) |
Consolidated Statement of Income Year Ended October 31, 2019 |
||||||||||||
As Reported |
Adjustments |
Balance without Adoption of Topic 606 |
||||||||||
Revenue |
$ |
$ |
( |
) |
$ |
|||||||
Cost of goods sold |
( |
) |
||||||||||
Gross profit |
( |
) |
||||||||||
Provision for taxes |
( |
) |
||||||||||
Net income |
( |
) |
||||||||||
Noncontrolling interests |
( |
) |
||||||||||
Income attributable to Photronics, Inc. shareholders |
$ |
$ |
( |
) |
$ |
Consolidated Statement of Cash Flows Year Ended October 31, 2019 |
||||||||||||
As Reported |
Adjustments |
Balance without Adoption of Topic 606 |
||||||||||
Net Income |
$ |
$ |
( |
) |
$ |
|||||||
Changes in operating accounts: |
||||||||||||
Accounts receivable |
$ |
( |
) |
$ |
$ |
( |
) |
|||||
Inventories |
( |
) |
( |
) |
( |
) |
||||||
Other current assets |
( |
) |
( |
) |
||||||||
Accounts payable, accrued liabilities, and other |
( |
) |
( |
) |
Year Ended |
||||
Revenue by Product Type |
October 31, 2019 |
|||
IC |
||||
High-end |
$ |
|||
Mainstream |
||||
Total IC |
$ |
|||
FPD |
||||
High-end |
$ |
|||
Mainstream |
||||
Total FPD |
$ |
|||
$ |
Revenue by Geographic Origin |
||||
Taiwan |
$ |
|||
Korea |
||||
United States |
||||
Europe |
||||
China |
||||
All other Asia |
||||
$ |
Revenue by Timing of Recognition |
||||
Over time |
$ |
|||
At a point in time |
||||
$ |
2020 |
$ |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Thereafter |
||||
$ |
Year Ended |
|||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
|
Expected volatility |
|||
Risk-free rate of return |
|||
Dividend yield |
|||
Expected term |
Options |
Shares |
Weighted- Average Exercise Price |
Weighted- Average Remaining Contractual Life |
Aggregate Intrinsic Value |
|||||||||
Outstanding at October 31, 2018 |
$ |
||||||||||||
Granted |
$ |
||||||||||||
Exercised |
( |
) |
$ |
||||||||||
Cancelled and forfeited |
( |
) |
$ |
||||||||||
Outstanding at October 31, 2019 |
$ |
$ |
|||||||||||
Exercisable at October 31, 2019 |
$ |
$ |
|||||||||||
Vested and expected to vest as of October 31, 2019 |
$ |
$ |
Restricted Stock |
Shares |
Weighted-Average Fair Value at Grant Date |
||||||
Outstanding at October 31, 2018 |
$ |
|||||||
Granted |
$ |
|||||||
Vested |
( |
) |
$ |
|||||
Cancelled |
( |
) |
$ |
|||||
Outstanding at October 31, 2019 |
$ |
|||||||
Expected to vest as of October 31, 2019 |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
United States |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|||
Foreign |
||||||||||||
$ |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Current: |
||||||||||||
Federal |
$ |
( |
) |
$ |
( |
) |
$ |
|||||
State |
( |
) |
||||||||||
Foreign |
||||||||||||
Deferred: |
||||||||||||
Federal |
( |
) |
||||||||||
State |
( |
) |
||||||||||
Foreign |
( |
) |
( |
) |
||||||||
Total |
$ |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
U.S. federal income tax at statutory rate |
$ |
$ |
$ |
|||||||||
Changes in valuation allowances |
( |
) |
||||||||||
Foreign tax rate differentials |
( |
) |
( |
) |
||||||||
Tax credits |
( |
) |
( |
) |
( |
) |
||||||
Uncertain tax positions, including reserves, settlements and resolutions |
( |
) |
( |
) |
||||||||
Employee stock option |
( |
) |
||||||||||
Income tax holiday |
( |
) |
( |
) |
( |
) |
||||||
Tax reform |
( |
) |
||||||||||
Distributions from foreign subsidiaries |
||||||||||||
Tax on foreign subsidiary earnings |
||||||||||||
Other, net |
( |
) |
( |
) |
( |
) |
||||||
$ |
$ |
$ |
||||||||||
Effective tax rate |
% |
% |
% |
• | The Act repealed the corporate alternative minimum tax (“AMT”) for tax years beginning after December 31, 2017, and provided that existing AMT credit carryforwards are fully refundable. We recognized a $ |
• | As of January 1, 2018, the Act reduced the corporate income tax rate from a maximum |
• | The Act imposed a transition tax for a one-time deemed repatriation of the accumulated earnings of foreign subsidiaries. The entire amount of transition tax was fully offset by tax credits (including carryforwards) that resulted in a provisional net-zero impact on the period. |
As of |
||||||||
October 31, 2019 |
October 31, 2018 |
|||||||
Deferred income tax assets: |
||||||||
Net operating losses |
$ |
$ |
||||||
Reserves not currently deductible |
||||||||
Tax credit carryforwards |
||||||||
Share-based compensation |
||||||||
Alternative minimum tax credits |
||||||||
Other |
||||||||
Valuation allowances |
( |
) |
( |
) |
||||
Deferred income tax liabilities: |
||||||||
Property, plant and equipment |
( |
) |
( |
) |
||||
Other |
( |
) |
||||||
( |
) |
( |
) |
|||||
Net deferred income tax assets |
$ |
$ |
||||||
Reported as: |
||||||||
Deferred income tax assets |
$ |
$ |
||||||
Deferred income tax liabilities |
( |
) |
( |
) |
||||
$ |
$ |
Operating Loss Carryforwards |
Amount |
Expiration Periods |
||||||
Federal |
$ |
-Indefinite |
||||||
State |
- |
|||||||
Foreign |
- |
Tax Credit Carryforwards |
Amount |
Expiration Period |
||||||
Federal research and development |
$ |
- |
||||||
State |
- |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Balance at beginning of year |
$ |
$ |
$ |
|||||||||
Additions (reductions) for tax positions in prior years |
( |
) |
( |
) |
||||||||
Additions based on current year tax positions |
||||||||||||
Settlements |
( |
) |
( |
) |
( |
) |
||||||
Lapses of statutes of limitations |
( |
) |
( |
) |
( |
) |
||||||
Balance at end of year |
$ |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Net income attributable to Photronics, Inc. shareholders |
$ |
$ |
$ |
|||||||||
Effect of dilutive securities: |
||||||||||||
Interest expense on convertible notes, net of related tax effects |
||||||||||||
Earnings for diluted earnings per share |
$ |
$ |
$ |
|||||||||
Weighted-average common shares computations: |
||||||||||||
Weighted-average common shares used for basic earnings per share |
||||||||||||
Effect of dilutive securities: |
||||||||||||
Convertible notes |
||||||||||||
Share-based payment awards |
||||||||||||
Potentially dilutive common shares |
||||||||||||
Weighted-average common shares used for diluted earnings per share |
||||||||||||
Basic earnings per share |
$ |
$ |
$ |
|||||||||
Diluted earnings per share |
$ |
$ |
$ |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Share based payment awards |
||||||||||||
Convertible notes |
||||||||||||
Total potentially dilutive shares excluded |
Year Ended |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Net revenue |
||||||||||||
Taiwan |
$ |
$ |
$ |
|||||||||
Korea |
||||||||||||
United States |
||||||||||||
Europe |
||||||||||||
China |
||||||||||||
All other Asia |
||||||||||||
$ |
$ |
$ |
||||||||||
IC |
$ |
$ |
$ |
|||||||||
FPD |
||||||||||||
$ |
$ |
$ |
As of |
||||||||||||
October 31, 2019 |
October 31, 2018 |
October 29, 2017 |
||||||||||
Long-lived assets |
||||||||||||
China |
$ |
$ |
$ |
|||||||||
Taiwan |
||||||||||||
United States |
||||||||||||
Korea |
||||||||||||
Europe |
||||||||||||
$ |
$ |
$ |
Year Ended October 31, 2019 |
||||||||||||
Foreign Currency Translation Adjustments |
Other |
Total |
||||||||||
Balance at October 31, 2018 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
|||
Other comprehensive loss |
( |
) |
( |
) |
( |
) |
||||||
Less: other comprehensive income (loss) attributable to noncontrolling interests |
( |
) |
||||||||||
Balance at October 31, 2019 |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
Year Ended October 31, 2018 |
||||||||||||||||
Foreign Currency Translation Adjustments |
Amortization of Cash Flow Hedge |
Other |
Total |
|||||||||||||
Balance at October 29, 2017 |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
||||||||
Other comprehensive income before reclassifications |
( |
) |
( |
) |
||||||||||||
Amounts reclassified from other accumulated comprehensive income |
||||||||||||||||
Net current period other comprehensive income |
( |
) |
( |
) |
||||||||||||
Less: other comprehensive (loss) income attributable to noncontrolling interests |
( |
) |
( |
) |
||||||||||||
Balance at October 31, 2018 |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
( |
) |
October 31, 2018 |
||||||||
Fair Value |
Carrying Value |
|||||||
$ |
$ |
Fiscal Year 2019 Purchases |
Fiscal Year 2018 Purchases |
Total Purchases Under Programs |
||||||||||
Number of shares repurchased |
||||||||||||
Cost of shares repurchased |
$ |
$ |
$ |
|||||||||
Average price paid per share |
$ |
$ |
$ |
First |
Second |
Third |
Fourth |
Year |
||||||||||||||||
Fiscal 2019: |
||||||||||||||||||||
Revenue |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Gross profit |
||||||||||||||||||||
Net income |
||||||||||||||||||||
Net income attributable to Photronics, Inc. shareholders |
||||||||||||||||||||
Earnings per share: |
||||||||||||||||||||
Basic |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Diluted |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
First |
Second |
Third |
Fourth |
Year |
||||||||||||||||
Fiscal 2018: |
(a) |
(a) |
||||||||||||||||||
Revenue |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Gross profit |
||||||||||||||||||||
Net income |
||||||||||||||||||||
Net income attributable to Photronics, Inc. shareholders |
||||||||||||||||||||
Earnings per share: |
||||||||||||||||||||
Basic |
$ |
$ |
$ |
$ |
$ |
|||||||||||||||
Diluted |
$ |
$ |
$ |
$ |
$ |
ITEM 9. |
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
ITEM 9A. |
CONTROLS AND PROCEDURES |
ITEM 9B. |
OTHER INFORMATION |
ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
ITEM 11. |
EXECUTIVE COMPENSATION |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
ITEM 14. |
PRINCIPAL ACCOUNTANT FEES AND SERVICES |
ITEM 15. |
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
Page No. |
||
1. |
32 |
|
2. |
Financial Statement Schedule: |
|
72 |
||
All other schedules are omitted because they are not applicable. |
||
3. |
72 |
Balance at Beginning of Year |
Charged to Costs and Expenses |
Deductions |
Balance at End of Year |
|||||||||||||
Allowance for Doubtful Accounts |
||||||||||||||||
Year-ended October 31, 2019 |
$ |
$ |
( |
) |
$ |
( |
)(a) |
$ |
||||||||
Year-ended October 31, 2018 |
$ |
$ |
( |
) |
$ |
(a) |
$ |
|||||||||
Year ended October 29, 2017 |
$ |
$ |
( |
)(b) |
$ |
(a) |
$ |
(a) |
(b) |
ITEM 16. |
FORM 10-K SUMMARY |
Incorporated by Reference |
Filed or Furnished Herewith |
|||||||||
Exhibit Number |
Description |
Form |
Exhibit |
Filing Date |
||||||
Certificate of Incorporation as amended July 9, 1986, April 9, 1990, March 16, 1995, November 13, 1997, April 15, 2002 and June 20, 2005. |
X |
|||||||||
Amended and Restated By-laws of the Company dated as of September 7, 2016. |
8-K |
3.2 |
9/13/2016 |
|||||||
Description of Securities of the Company |
X |
|||||||||
Certificate of Amendment with Respect to Series A Preferred Stock, dated September 24, 2019 |
8-K |
3.1 |
9/24/2019 |
|||||||
Indenture dated January 22, 2015, by and between the Company and the Bank of New York Mellon Trust Company, N.A., as trustee. |
8-K |
4.2 |
1/28/2015 |
|||||||
The Company’s 1992 Employee Stock Purchase Plan |
10-K |
10.1 |
12/20/2017 |
|||||||
Amendment to the Employee Stock Purchase Plan as of March 24, 2004.+ |
10-K |
10.2 |
1/6/2017 |
|||||||
Amendment to the Employee Stock Purchase Plan as of April 8, 2010.+ |
10-K |
10.4 |
1/7/2016 |
|||||||
Amendment to the Employee Stock Purchase Plan as of March 28, 2012.+ |
10-K |
10.4 |
12/21/2018 |
|||||||
Amendment to the Employee Stock Plan as of December 18, 2019* |
X |
|||||||||
2016 Equity Incentive Compensation Plan.+ |
DEF 14A |
2/29/2016 |
||||||||
The Company’s 2007 Long-Term Equity Incentive Plan.+ |
X |
Amendment to the 2007 Long-Term Equity Incentive Plan as of April 8, 2010.+ |
10-K |
10.7 |
1/7/2016 |
|||||||
Amendment to the 2007 Long Term Equity Incentive Plan as of April 11, 2014.+ |
10-K |
10.8 |
1/6/2015 |
|||||||
2011 Executive Incentive Compensation Plan effective as of November 1, 2010.+ |
10-K |
10.9 |
1/6/2015 |
|||||||
Joint Venture Framework Agreement dated November 20, 2013, between the Company and Dai Nippon Printing Co., Ltd.# |
10-K/A |
10.19 |
7/8/2015 |
|||||||
Joint Venture Operating Agreement dated November 20, 2013, between the Company and Dai Nippon Printing Co., Ltd.# |
10-K/A |
10.20 |
7/8/2015 |
|||||||
Outsourcing Agreement dated November 20, 2013, among the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.# |
10-K/A |
10.21 |
7/8/2015 |
|||||||
License Agreement dated November 20, 2013, between the Company and Photronics Semiconductor Mask Corporation.# |
10-K/A |
10.22 |
7/8/2015 |
|||||||
License Agreement dated November 20, 2013, between Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.# |
10-K/A |
10.23 |
7/8/2015 |
|||||||
Margin Agreement dated November 20, 2013, among the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.# |
10-K/A |
10.24 |
7/8/2015 |
|||||||
Merger Agreement dated January 16, 2014, between Photronics Semiconductor Mask Corporation and DNP Photomask Technology Taiwan Co., Ltd.# |
10-K/A |
10.25 |
7/8/2015 |
|||||||
Executive Employment Agreement between the Company and Christopher J. Progler, Vice President, Chief Technology Officer dated September 10, 2007.+ |
X |
|||||||||
Executive Employment Agreement between the Company and Peter S. Kirlin dated May 4, 2015.+ |
10-Q |
10.28 |
9/9/2015 |
|||||||
Executive Employment Agreement between the Company and Richelle E. Burr dated May 21, 2010.+ |
10-K |
10.30 |
1/7/2016 |
|||||||
Executive Employment Agreement between the Company and John P. Jordan dated September 5, 2017.+ |
10-K |
10.31 |
12/20/2017 |
|||||||
Consulting Agreement between the Company and DEMA Associates, LLC dated January 20, 2018. |
10-K |
10.21 |
12/21/2018 |
Form of Amendment to Executive Employment Agreement dated March 16, 2012.+ |
X |
|||||||||
Fourth Amended and Restated Credit Agreement dated as of September 27, 2018 among Photronics, Inc. the Foreign Subsidiary Borrower Party Thereto, the Lender Party Thereto, JPMorgan Chase Bank, N.A. as Administrative and Collateral Agent and Bank of America, N.A. as syndication agent |
10-K |
10.24 |
12/21/2018 |
|||||||
Third Amended and Restated Security Agreement entered into as of September 27, 2018 by and among Photronics, Inc., the subsidiaries of the Company and JPMorgan Chase Bank N.A |
10-K |
10.25 |
12/21/2018 |
|||||||
Fixed Asset Loan Agreement between Photronics DNP Mask Corporation Xiamen and Industrial and Commercial Bureau China Limited Xiamen Xiang’an Branch effective as of November 29, 2012 |
10-K |
10.26 |
12/21/2018 |
|||||||
Working Capital Loan Agreement between Industrial and Commercial Bureau China Limited Xiamen Xiang’an Branch and Photronics DNP Mask Corporation Xiamen effective as of November 7, 2018. |
10-K |
10.27 |
12/21/2018 |
|||||||
Investment Agreement between Xiamen Torch Hi-Tech Industrial Development Zone Management Committee and Photronics Singapore Pte. Ltd. |
10-Q |
10.35 |
9/2/2016 |
|||||||
Amendment No. 1 to the Investment Agreement between Xiamen Torch Hi-Tech Industrial Development Zone Management Committee and Photronics Singapore Pte, Ltd #* |
X |
|||||||||
Contribution Agreement dated May 16, 2017 among Dai Nippon Printing Co., Ltd. (“DNP), DNP Asia Pacific Pte. Ltd. (“DNP Asia Pacific”), Photronics, Inc. (“Photronics”), Photronics Singapore Pte. Ltd., (“Photronics Singapore”), and Xiamen American Japan Photronics Mask Co., Ltd. (“PDMCX”).# |
10-Q/A |
10.26 |
12/19/2017 |
|||||||
Joint Venture Operating Agreement dated May 16, 2017 among Photronics, Photronics Singapore, DNP and DNP Asia Pacific.# |
10-Q/A |
10.27 |
12/19/2017 |
|||||||
Outsourcing Agreement dated May 16, 2017 among Photronics, DNP, Photronics DNP Photomask Corporation (“PDMC”), and PDMCX.# |
10-Q/A |
10.28 |
12/19/2017 |
|||||||
Amended and Restated License Agreement dated May 16, 2017 between DNP and PDMC.# |
10-Q/A |
10.29 |
12/19/2017 |
|||||||
Investment Cooperation Agreement between Hefei State Hi-tech Industry Development Zone and Photronics UK, Ltd. |
10-K |
10.42 |
12/20/2017 |
|||||||
Section 382 Rights Agreement, dated as September 23, 2019, between Photronics, Inc. and Computershare Trust Company, N.A. as rights agent. |
8-K |
4.1 |
9/24/2019 |
|||||||
List of Subsidiaries of the Company.* |
X |
|||||||||
Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm* |
X |
|||||||||
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
X |
|||||||||
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.* |
X |
|||||||||
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
X |
|||||||||
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* |
X |
101.INS |
XBRL Instance Document |
X |
||||||||
101.SCH |
XBRL Taxonomy Extension Schema Document |
X |
||||||||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document |
X |
||||||||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document |
X |
||||||||
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document |
X |
||||||||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document |
X |
+ | Represents a management contract or compensatory plan or arrangement. |
# | Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. |
* | Represents an exhibit that is filed with this Annual Report on Form 10-K. |
PHOTRONICS, INC. |
||||
(Registrant) |
||||
By |
By |
|||
/s/ John P. Jordan |
/s/ Eric Rivera |
|||
John P. Jordan Senior Vice President, Chief Financial Officer (Principal Financial Officer) |
Eric Rivera Vice President, Corporate Controller (Principal Accounting Officer) |
|||
December 20, 2019 |
December 20, 2019 |
By |
||||
/s/ Peter S. Kirlin |
December 20, 2019 |
|||
Peter S. Kirlin Chief Executive Officer Director (Principal Executive Officer) |
||||
By |
||||
/s/ John P. Jordan |
December 20, 2019 |
|||
John P. Jordan Senior Vice President, Chief Financial Officer (Principal Financial Officer) |
||||
By |
||||
/s/ Eric Rivera |
December 20, 2019 |
|||
Eric Rivera Vice President, Corporate Controller (Principal Accounting Officer) |
||||
By |
||||
/s/ Constantine S. Macricosta |
December 20, 2019 |
|||
Constantine S. Macricostas Chairman of the Board |
||||
By |
||||
/s/ Walter M. Fiederowicz |
December 20, 2019 |
|||
Walter M. Fiederowicz Director |
||||
By |
||||
/s/ Joseph A. Fiorita, Jr. |
December 20, 2019 |
|||
Joseph A. Fiorita, Jr. Director |
||||
By |
||||
/s/ Liang-Choo Hsia |
December 20, 2019 |
|||
Liang-Choo Hsia Director |
||||
By |
||||
/s/ George Macricostas |
December 20, 2019 |
|||
George Macricostas Director |
By |
||||
/s/ Mary Paladino |
December 20, 2019 |
|||
Mary Paladino Director |
||||
By |
||||
/s/ Mitchell G. Tyson |
December 20, 2019 |
|||
Mitchell G. Tyson Director |
1.
|
The name of the corporation (hereinafter called the “Corporation”) is Photronics, Inc.
|
2.
|
The Certificate of Amendment of the Corporation, which was filed by the Secretary of State of the State of Connecticut on April 15, 2002, is hereby corrected.
|
3.
|
The incorrect statement in said document and the reason it is incorrect are:
|
4.
|
The portion of the document in corrected form is as follows:
|
|
/s/ Edwin L. Lewis
|
|
Vice President, Secretary and General Counsel
|
Space For Office Use Only
|
|
|
1. NAME OF CORPORATION:
PHOTRONICS, INC.
|
|
XXX
|
A. AMENDED.
|
|
|
____
|
B. AMENDED AND RESTATED.
|
|
|
____
|
C. RESTATED.
|
3.
|
The aggregate number of shares which the Corporation shall have the authority to issue is 152,000,000 shares, of which 2,000,000 shares shall be shares of Preferred Stock having a par value of
$0.01 per share(hereinafter called “Common Stock”).
|
The amendment shall be effective upon filing of this Certificate of Amendment with the Secretary of State.
|
|
Space For Office Use Only
|
4.
|
VOTE INFORMATION (check A., B. or C.):
|
XXX A. The resolution was approved by shareholders as follows:
|
____B.
|
The amendment was adopted by the board of directors without shareholder action. No shareholder vote was required for adoption.
|
|
|
____C.
|
The amendment was adopted by the incorporators without shareholder action. No shareholder vote was required for adoption.
|
5. EXECUTION:
|
Dated this 22nd day of March , 2002. |
James A. Eder
|
|
Secretary
|
|
/s/James A. Eder
|
Print or type name of signatory
|
|
Capacity of signatory
|
|
Signature
|
Space For Office Use Only
|
1.
|
NAME OF CORPORATION:
|
2.
|
THE CERTIFICATE OF INCORPORATION IS (check A., B., or C.):
|
XXX
|
A. AMENDED.
|
____
|
B. AMENDED AND RESTATED.
|
____
|
C. RESTATED.
|
3.
|
TEXT OF EACH AMENDMENT / RESTATEMENT:
|
3).
|
The aggregate number of shares which the Corporation shall have the authority to issue is 77,000,000 shares, of which 2,000,000 shares shall be shares of Preferred Stock having a par value of
$0.01 per share(hereinafter called “Preferred Stock”) and 75,000,000 shares shall be shares of Common Stock having a par value of $0.01 per share(hereinafter call “Common Stock”).
|
Space For Office Use Only
|
____B.
|
The amendment was adopted by the board of directors without shareholder action. No shareholder vote was required for adoption.
|
|
|
____C.
|
The amendment was adopted by the incorporators without shareholder action. No shareholder vote was required for adoption.
|
5. EXECUTION:
|
Dated this 13th day of November, 1997
|
JEFFREY P. MOONAN
|
|
SECRETARY
|
|
/s/ Jeffrey P. Moonan
|
Print or type name of signatory
|
|
Capacity of signatory
|
|
Signature
|
1.
|
Name of Corporation (Please enter name within lines)
PHOTRONICS, INC.
|
||
|
|
||
|
|
||
2.
|
The Certificate if Incorporation is: (Check one)
|
||
|
|
||
|
x A.
|
Amended only, pursuant to Conn. Gen. Stat. Section 33-360.
|
|
|
|
|
|
|
o B.
|
Amended only, to cancel authorized shares (state number of shares to be cancelled, the class, the series, if any, and the par value, P.A. 90-107.)
|
|
|
|
|
|
|
o C.
|
Restated only, pursuant to Conn. Gen. Stat. Section 33-362(a)
|
|
|
|
|
|
|
o D.
|
Amended and restated, pursuant to Conn. Gen. Stat. Section 33-362(c).
|
|
|
|
|
|
|
o E.
|
Restated and superseded pursuant to Conn. Gen. Stat. Section 33-362(d).
|
|
|
|
|
|
|
Set forth here the resolution of amendment and/or restatement. Use an 8 1/2x11 attached sheet if more space is needed. Conn. Gen. Stat. Section 1-9.
|
||
|
|
||
RESOLVED, that the Certificate of Incorporation be amended by striking the first paragraph of Article Third in its entirety and substituting therefor the following:
|
|||
|
|
|
|
3)
|
The aggregate number of shares which the Corporation shall have the authority to issue is 22,000,000 shares, of which 2,000,000 shares shall be shares of Preferred Stock having a par value of
$0.01 per share (hereinafter called “Preferred Stock”) and 20,000,000 shares shall be shares of Common Stock having a par value of $0.01 per share(hereinafter called “Common Stock”).
|
||
|
|
||
(If 2A or 2B is checked, go to 5 & 6 to complete this certificate. If 2C or 2D is checked, complete 3A or 3B. If 2E is checked, complete 4.)
|
|||
|
|
||
3.
|
(Check one)
|
||
|
|
||
|
o
|
A. This Certificate purports merely to restate but not to change the provisions of the original Certificate of Incorporation as supplemented and amended to date, and there is no discrepancy
between the provisions of the original Certificate of Incorporation as supplemented and amended to date, and the provisions of this Restated Certificate of Incorporation. (If 3A is checked, go to 5 & 6 to complete this certificate.).
|
|
o
|
B. This Restated Certificate of Incorporation shall give effect to the amendment(s) and purports to restate all those provisions now in effect not being amended by such new amendment(s). (If 3B
is checked, check 4, if true, and go to 5 & 6 to complete this Certificate.)
|
|
|
|
|
|
4.
|
(Check, if true)
|
||
|
|
||
|
o
|
This restated Certificate of Incorporation was adopted by the greatest vote which would have been required to amend any provision of the Certificate of Incorporation as in effect before such
vote and supersedes such Certificate of Incorporation.
|
|
|
|
|
|
5.
|
The manner of adopting the resolution was as follow
|
||
|
|
|
|
|
x
|
A. By the board of directors and shareholders pursuant to Conn. Gen. Stat. Section 33 – 360.
Vote of Shareholders: (Check (i) or (ii), and check (iii) if applicable.)
|
|
|
|
|
|
|
|
(i) x
|
No shares are required to be voted as a class; the shareholder’s vote was as follows:
|
|
|
|
|
Vote Required for Adoption 3,288,639 Vote Favoring Adoption 5,151,790
|
|||
|
|
|
|
|
|
(ii) o
|
There are shares of more than one class entitled to vote as a class. The designation of each class required for adoption of the resolution and the vote of each class in favor of adoption were as
follows:
(Use and 8 1/2 x 11 attached sheet if more space is needed. Conn. Gen. Stat. (S) 1 - 9.)
|
|
|
|
|
|
|
(iii) x
|
Check here if the corporation has 100 or more recordholders, as defined in Conn. Gen. Stat. (S) 33 - 311a(a)
|
|
|
|
|
|
o
|
B. By the board of directors acting alone, pursuant to Conn. Gen. Stat.(S) 33 - 360(b)(2) or 33-362(a).
The number of affirmative votes required to adopt such resolution is: _______________________
The number of directors’ voted in favor of resolution was:
|
(Print or Type)
|
|
Signature
|
|
(Print or Type)
|
|
Signature
|
|
|
|
|
|
|
|
Name of Pres.
|
|
|
|
Name of Sec.
|
|
|
Michael J. Yomazzo
|
|
/s/ Michael J. Yomazzo
|
|
Jeffrey P. Moonan
|
|
/s/ Jeffrey P. Moonan
|
o
|
C. The corporation does not have any shareholders. The resolution was adopted by vote of at least two-thirds of the incorporators before the organization meeting
of the corporation and approved in writing by all subscribers for shares of the corporation. If there are no subscribers, state NONE below.
|
Signed Incorporator
|
Signed Incorporator
|
Signed Incorporator
|
Signed Subscriber
|
Signed Subscriber
|
Signed Subscriber
|
|
Rec, CC. GS: (Type or Print)
|
|
CT Corporation System
|
|
One Commercial Plaza
|
|
Hartford, CT 06103-3597
|
|
Please provide filer’s name and complete address for mailing receipt
|
I)
|
The Certificate of Incorporation is amended only by the following resolutions adopted by the Corporations’ shareholders and directors:
|
|
RESOLVED, that the Certificate of Incorporation of the Corporation be amended by striking Article FIRST in its entirety and substituting therefor the following:
|
1)
|
The name of the corporation is Photronics, Inc.;
|
3)
|
The aggregate number of shares which the Corporation shall have the authority to issue is 12,000,000 shares, of which 2,000,000 shares shall be shares of Preferred Stock having a par value of
$.01 per share (hereinafter called “Preferred Stock”) and 10,000,000 shares shall be shares of Common Stock having a par value of $.01 per share (hereinafter called “Common Stock”).
|
a)
|
The Board of Directors is expressly authorized at any time, and from time to time, to provide for the issuance of shares of Preferred Stock in one or more series, with such voting powers, full
or limited, or without voting powers and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the
resolution or resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in this Certificate of Incorporation, or any amendment thereto, including (but without limiting the generality
of the foregoing) the following:
|
(i)
|
The designation of such series;
|
(ii)
|
The dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any
other class or classes of any other series of capital stock, and whether such dividends shall be cumulative or non-cumulative;
|
(iii)
|
Whether the shares of such series shall be subject to redemption by the Corporation, and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption;
|
(iv)
|
The terms and amount of any sinking fund provided for the purchase or redemption of the shares of such series;
|
(v)
|
Whether or not the shares of such series shall be convertible into or exchangeable for shares or any other class or classes of capital stock of the Corporation, and, if provision be made for
conversion or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange;
|
(vi)
|
The extent, if any, to which the holders of the shares of such series shall be entitled to vote as a class or otherwise with respect to the election of the directors or otherwise;
|
(vii)
|
The restrictions, if any, on the issue or release of any additional Preferred Stock;
|
(viii)
|
The rights of the holders of the shares of such series upon the dissolution of, or upon the distribution of assets of, the Corporation.
|
b)
|
Except as otherwise required by law and except for such voting powers with respect to the election of directors or other matters as may be stated in the resolutions of the Board of Directors
creating any series of Preferred Stock,the holders of any such series shall have no voting power whatsoever.
|
8)
|
The shareholders of the Corporation shall not have any pre-emptive or preferential rights to subscribe for, purchase or receive any shares of stock of the Corporation (or any obligation
convertible into shares of stock,including without limitation, warrants, subscription rights or options to acquire shares) which the Corporation may issue or sell.
|
RESOLVED,
|
that the Certificate of Incorporation of this Corporation be amended by adding Article NINTH in the following form:
|
9)
|
The personal liability of any Director to the Corporation or its shareholders for monetary damages for breach of duty as a Director is hereby limited to the amount of the compensation received
by the Director for serving the Corporation during the year of the violation if such breach did not (a) involve a knowing and culpable violation of law by the Director, (b) enable the Director or an associate, as defined in subdivision (3)
of Section 33-374d of the Connecticut General Statutes, to receive an improper personal economic gain, (c) show a lack of good faith and a conscious disregard for the duty of the Director to the Corporation under circumstances in which the
Director was aware that his conduct or omission created an unjustifiable risk of serious injury to the Corporation, (d) constitute a sustained and unexcused pattern of inattention that amounted to an abdication of the Director’s duty to the
Corporation, or (e) create liability under Section 33-321 of the Connecticut General Statutes. This Article shall not limit or preclude the liability of any Director for any act or omission occurring prior to the effective date of this
Article. Any repeal or modification of this Article by the shareholders of the Corporation shall not adversely affect any right or protection of a Director of the Corporation existing at the time of such repeal or modification.
|
II)
|
The above resolutions were adopted by the Shareholders and the Board of Directors.
|
III)
|
Number of Recordholders:
|
IV)
|
Vote of Shareholders:
|
Number of Shares
Entitled to Vote |
|
Total Voting
Power of Shares |
|
Vote Required
For Adoption |
|
Favoring
Adoption |
3,191,100
|
|
3,191,100
|
|
1,594,801
|
|
2,507,209
|
|
/s/
|
Constantine Macricostas
|
|
|
Constantine Macricostas
|
|
|
President
|
|
|
|
|
/s/
|
Jeffrey P. Moonan
|
|
|
Jeffrey P. Moonan
|
|
|
Secretary
|
Number of Shares
Entitled to Vote |
|
Total Voting
Power of Shares |
|
Vote Required
For Adoption |
|
Vote Favoring
Adoption |
4200
|
|
4200
|
|
2101
|
|
4200
|
|
/s/
|
Constantine Macricostas
|
|
|
Constantine Macricostas
|
|
|
President
|
|
|
|
|
/s/
|
Michael J. Yomazzo
|
|
|
Michael J. Yomazzo
|
|
|
Secretary
|
a)
|
To engage and participate in the business of precision scientific photography and related processes.
|
b)
|
To purchase or otherwise acquire, own, mortgage, lease, sell, convey or otherwise dispose of or utilize or deal in and with real property, goods, wares, merchandise and personal property of
every kind and description and wherever located.
|
c)
|
To carry on any other lawful business whatever in connection with the foregoing, or calculated directly or indirectly, to promote the interests of this corporation, or to enhance the value of
its properties; to have, enjoy, and exercise all rights, powers and privileges which are now or may hereafter be conferred upon business corporations organized under the general corporation laws of Connecticut; to do any and all things
necessary or proper for the accomplishment of any of the purposes or the attainment of any objects hereinbefore set forth, and in general to do every other act or thing pertaining to the foregoing purposes or powers to the same extent that
a natural person might lawfully do in any part of the world.
|
d)
|
The foregoing clauses shall be construed as both objects and powers and the enumeration of specific objects or powers shall not be deemed to limit or restrict in any manner the objects and
powers of this corporation. All such objects and powers shall be deemed to be furtherance of and in addition to the general powers conferred by the laws of the State of Connecticut upon business corporations organized under the general
corporation laws of the State.
|
Common Stock
|
||
x
|
|
5,000 Shares
|
x
|
|
$10.00 par value
|
NAME OF INCORPORATOR (Print or Type)
|
NAME OF INCORPORATOR(Print or Type)
|
NAME OF INCORPORATOR (Print or Type)
|
1. Armindo J. Rebeiro
|
2. Gerard P. Keehan
|
3. Edward O. Law
|
SIGNED (Incorporator)
|
SIGNED (Incorporator)
|
SIGNED(Incorporator)
|
1. /s/ Armindo J. Rebeiro
|
2. /s/ Gerard P. Keehan
|
3. /s/Edward O. Law
|
NAME OF INCORPORATOR (Print or Type)
|
NAME OF INCORPORATOR(Print or Type)
|
NAME OF INCORPORATOR(Print or Type)
|
4. Larry L. Sharp
|
5. Edward G. Keehan
|
6. Constantine S. Macricostas
|
SIGNED (Incorporator)
|
SIGNED (Incorporator)
|
SIGNED(Incorporator)
|
4. /s/ Larry L. Sharp
|
5. /s/ Edward G. Keehan
|
6. /s/Constantine S. Macricostas
|
APPOINTMENT OF STATUTORY AGENT FOR SERVICE
|
ACCOUNT NO.
|
DOMESTIC CORPORATION
|
P 52357
|
61-6 Rev. 6-66
|
|
NAME OF NATURAL PERSON WHO IS RESIDENT OF CONNECTICUT
|
BUSINESS ADDRESS
|
Armindo J. Rebeiro
|
20 Ta’Agan Point Road, Danbury
|
|
|
|
RESIDENCE ADDRESS
|
|
Ta’Agan Point Road, Danbury
|
|
|
NAME OF CONNECTICUT CORPORATION
|
ADDRESS OF PRINCIPAL OFFICE IN CONN. (if none,
|
|
enter address of appointee’ statutory agent
|
|
for services)
|
|
|
NAME OF CORPORATION not Original Under the Laws of Conn.
|
ADDRESS OF PRINCIPAL OFFICE IN CONN.
|
|
(if none, enter “Secretary
|
|
or the State Connecticut”)
|
|
AUTHORIZATION
|
NAME OF INCORPORATOR (Print or type)
|
SIGNED(Incorporator)
|
DATE
|
|
|
|||
ORIGINAL APPOINTMENT
|
Gerard P. Keehan
|
/s/ Gerard P. Keehan
|
|
(Must be signed by a majority
|
Edward O. Law
|
/s/ Edward O. Law
|
February 24, 1969
|
|
Edward G. Keehan
|
/s/ Edward G. Keehan
|
|
NAME OF PRESIDENT, VICE PRESIDENT, OR SEC.
|
SIGNED(President or Vice
|
DATE
|
|
President, or Secretary)
|
|
SUBSEQUENT
|
|
|
APPOINTMENT
|
|
|
ACCEPTANCE
|
NAME OF STATUTORY AGENT FOR SERVICE (Print or Type)
|
SIGNED (Statutory Agent for service)
|
|
Accepted:
|
Armindo J. Rebeiro
|
/s/ Armindo J. Rebeiro
|
EMPLOYEE STOCK PURCHASE PLAN
(Amended and Current as of
December 18, 2019)
|
1.1 |
The purpose of Photronics, Inc. Employee Stock Purchase Plan is to provide eligible employees of the Company and its designated subsidiaries (if any) with an opportunity to acquire a proprietary interest in the Company by the purchase
of shares of the Common Stock of the Company directly from the Company through payroll deductions. It is felt that employee participation in the ownership of the Company will be to the mutual benefit of both the employees and the
Company.
|
1.2 |
The Plan is intended to qualify as an "employee stock purchase plan" within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"). The provisions of the Plan shall, accordingly, be construed so as to
extend and/or limit eligibility and participation in a manner consistent, and so as to otherwise comply, with the requirements of the Code.
|
1.3 |
Eligibility and participation in the Plan shall give any Employee only such rights as are set forth in the Plan and any amendments hereto and shall in no way affect or in any manner limit the Company's right to discharge the Employee,
which right is expressly reserved by the Company, or impair the authority of the Plan Committee to limit the Employee's rights, claims or causes, as provided in the Plan.
|
2.1 |
The following words and phrases, when used in the Plan, shall have the following respective meanings, unless the context clearly indicates otherwise:
|
3.1 |
Subject to the provisions of Article XIV hereof, the aggregate number of shares of Common Stock which may be issued under the Plan shall not exceed 1,850,000. The aggregate number of such shares which may be issued with respect to any
Offering shall be determined by the Plan Committee with respect to such Offering. Such shares may be authorized but unissued shares of Common Stock or issued shares of Common Stock which are held by the Company. Any shares subscribed
for under the Plan and not purchased as a result of the cancellation in whole or in part of such subscription shall (unless the Plan shall have terminated) be again available for issuance under the Plan.
|
4.1 |
Each Employee who has been continuously employed by the Company for the one complete calendar month (or such longer period as may be determined by the Plan Committee) ending immediately prior to an Offering Date shall be eligible to
participate in the Offering under the Plan made on such Offering Date.
|
4.2 |
Notwithstanding the provisions of Section 4.1, no Employee shall be offered Shares if, immediately after he would subscribe for such Shares, such Employee would own capital stock (including shares of Common Stock which may be purchased
under such subscription and under any other outstanding subscriptions under the Plan or options to purchase shares of Common Stock of the Company held by such Employee, as computed in accordance with Section 423[b][3] of the Code or any
successor provision thereto) possessing 5% or more of the total combined voting power or value of all classes of stock of the Company. For purposes of determining the stock ownership of any Employee, the provisions of Section 424[d] of
the Code shall apply.
|
5.1 |
Offerings under the Plan shall be made on such Offering Dates as shall be determined by the Plan Committee. Notwithstanding anything to the contrary, no Offering shall be made on any date prior to the date that a required registration
statement with respect to such Offering filed under the Securities Act of 1933, as amended, has become effective. Nothing contained herein shall be deemed to require that an Offering be made in any year.
|
5.2 | [a] | Subject to the limitations set forth in Sections 5.2[b] and 6.3, and to the other terms and conditions of the Plan, in each offering under the Plan, each Eligible Employee on an Offering Date shall be offered the right during the Subscription Period as provided in Section 6.2, to subscribe to purchase Shares at the percentage designated by the Plan Committee for such offering (not to exceed 5%) of his Compensation would buy, at a price equal to the product of (i) the fair market value of a Share on the Offering Date, multiplied by (ii) the Purchase Price percentage utilized under Section 5.3 hereof. |
[b] |
Notwithstanding anything to the contrary contained in Sub-Section [a] of this Section 5.2, no Eligible Employee shall be eligible to subscribe for Shares in an Offering if, immediately after he would subscribe for such Shares, such
subscription would permit his rights to purchase shares of Common Stock under all employee stock purchase plans of the Company to accrue at a rate which exceeds $25,000 (or such other maximum amounts as may be prescribed from time to time
under the Code) of the fair market value of such shares (determined as of the Offering Date for such Offering) for each calendar year in which such subscription would be outstanding at any time. For purposes of this limitation the
provisions of Section 423[b][8] of the Code shall be applicable.
|
5.3 |
The Purchase Price per share subscribed for all Shares in a particular Offering shall be an amount equal to such percentages, not greater than 100% nor less than 85%, as shall be determined by the Plan Committee on or prior to the
Offering Date, of the fair market value of a share of Common Stock (determined in accordance with the provisions of Article XIII) on one of the following dates with respect to such Offering, with such date to be determined by the Plan
Committee on or prior to the Offering Date: (i) the Offering Date, (ii) the Purchase Date, or (iii) the Offering Date or the Purchase Date (whichever would result in a lower Purchase Price for the Common Stock).
|
5.4 |
In order to participate in any Offering, an Eligible Employee entitled to purchase Shares in such Offering shall comply with the subscription procedures set forth in Article VI.
|
6.1 |
As soon as practicable after an Offering Date, the Company shall furnish to each Eligible Employee a Subscription Agreement to which such Eligible Employee may subscribe in such Offering, the fair market value per share of Common
Stock on the Offering Date, the Purchase Price for Shares in such Offering and such other terms and conditions consistent with the Plan as shall be determined by the Plan Committee.
|
6.2 |
Within fifteen (15) days after receipt of such Subscription Agreement, an Eligible Employee desiring to participate in the Offering shall notify the Plan Committee of the percentage of Shares for which the employee desires to
subscribe. Such notification shall be effected by the Eligible Employee's completing, executing and returning to the Secretary of the Company the Subscription Agreement or such other process as the Secretary of the Company shall
provide. All such subscriptions shall be deemed to have been made as of the Offering Date. No subscription shall be accepted from any person who is not an Eligible Employee on the date his subscription is received by the Company.
|
6.3 |
The minimum number of Shares for which an Eligible Employee will be permitted to subscribe in any Offering is one (1) . If at any time the Shares available for an Offering are oversubscribed, the Number of Shares for which each
Eligible Employee is entitled to subscribe pursuant to Section 5.2 shall be reduced, pro rata, to such lower number as may be necessary to eliminate such over-subscription.
|
6.4 |
If an Eligible Employee fails to subscribe within the period and in the manner prescribed in Section 6.2, he shall waive all rights to purchase Shares in that Offering.
|
7.1 |
The aggregate Purchase Price for the Shares for which a Participant subscribes in any Offering in accordance with the provisions of Article VI of the Plan shall be paid by means of payroll deductions.
|
7.2 | [a] | The aggregate Purchase Price for Shares shall be paid by payroll deductions in equal amounts over a period of 24 months (or such shorter period as shall be determined by the Plan Committee in accordance with the Plan) from the Offering Date. The period over which such payroll deductions are to be made in hereinafter referred to as the "Payment Period". |
[b] |
Such payroll deductions with respect to an Offering shall commence as soon as practicable after the receipt of the Company of the executed Subscription Agreement authorizing such payroll deductions, and shall cease upon the earlier of
the termination of the Payment Period or payment in full of the Purchase Price for such Shares. A Participant may cancel his subscription to the extent provided for in Article X, but no other change in terms of his Subscription Agreement
may be made during the Payment Period and, in particular, in no event may a Participant change the amount of his payroll deductions under such Subscription Agreement. All payroll deductions withheld from a Participant under a
Subscription Agreement shall be credited to his account under the Plan. In the event that payroll deductions are simultaneously being made with respect to more than one Subscription Agreement, the aggregate amount of such payroll
deductions at any payday shall be credited first toward the payment for Shares subscribed for in the earliest Offering. A Participant may not make any separate cash payment into his account, provided, however, that a Participant who has
been deemed to be in the employ of the Company while on an Authorized Leave of Absence without pay during the Payment Period, may upon his return to the actual employ of the Company, make a cash payment into his account in an amount not
exceeding the aggregate of the payroll deductions which would have been made during such Authorized Leave of Absence.
|
[c] |
All funds representing payroll deductions for the accounts of Participants will, except as provided in Section 7.3, be paid into the general funds of the Company. No interest will be paid or accrued under any circumstances on any
funds withheld by the Company as payroll deductions pursuant to this Section 7.2 or on any other funds paid to the Company for purchases of Shares under the Plan.
|
7.3 |
Notwithstanding anything in this Article VII to the contrary, with respect to any Offering which is made prior to the approval of the Plan by the stockholders of the Company, all payroll deductions withheld for the accounts of
Participants shall, until the Plan is approved by the stockholders, be held by the Company in a special escrow account for the benefit of such Participants. No interest will be paid or accrued under any circumstances on such funds. No
Shares will be issued to such Participants until after approval of the Plan by the stockholders. In the event that the Plan is not approved by the stockholders within the period specified in Article XVII, all such funds will thereupon be
promptly refunded to the respective Participants.
|
7.4 |
Failure to pay for subscribed Shares as provided in this Article VII shall constitute the cancellation of such subscription to the extent that any such Shares shall not have been so paid for.
|
8.1 |
At the end of the Payment Period for an Offering, (each of which dates is referred to as a "Purchase Date"), the balance of all amounts then held in the account of a Participant representing payroll deductions pursuant to a
Subscription Agreement shall be applied to the purchase by the Participant from the Company of the number of Shares equal to the amount of such balance divided by the Purchase Price per share for such Shares applicable on such Purchase
Date up to the number of Shares provided for in the respective Subscription Agreement. Any amount remaining in the Participant's account in excess of the sum required to purchase whole Shares on a Purchase Date shall be promptly refunded
to the Participant. As soon as practicable after a Purchase Date, the Company will issue and deliver to the Participant a certificate representing the Shares purchased by him from the Company on such Purchase Date. No fractional shares
will be issued at any time.
|
8.2 |
A Participant who disposes (whether by sale, exchange, gift or otherwise) of any of the Shares acquired by him pursuant to the Plan within two (2) years after the Offering Date for such Shares or within one (1) year after the issuance
of Shares to him shall notify the Company in writing of such disposition within thirty (30) days after such disposition.
|
9.1 |
A Participant shall not have any rights to dividends or any other rights as a stockholder of the Company with respect to any Shares until such Shares shall have been issued to him as reflected by the books and records maintained by the
Company's transfer agent relating to stockholders of the Company.
|
10.1 |
A Participant may discontinue his payroll deductions at any time by giving written notice thereof to the stock plan administrator of the Company as well as the stock platform under which the employee subscribed , effective for all
payroll periods commencing five (5) days after receipt of such notice received by the stock plan administrator as well as the stock platform . The balance in the account of such Participant following such discontinuance shall be promptly
refunded to the Participant. Withdrawal from an Offering pursuant to this Section 10.1 shall not affect an Eligible Employee's eligibility to participate in any other Offering under the Plan.
|
10.2 |
If the Participant's employment with the Company is terminated for any reason other than death while still an Employee, such Participant's rights to purchase Shares under any Subscription Agreement shall immediately terminate. Any
balance remaining in his account as of the date of such termination of employment shall be promptly refunded to the Participant.
|
10.3 |
In the event of the death of an Employee who was a Participant prior to the purchase of the Shares for which he subscribed pursuant to Article VI hereof, the person or persons who acquired by laws of descent and distribution (his
"Estate") his rights to purchase Shares under his Subscription Agreement(s), shall have the right within ninety (90) days after the death of the Participant (but in no event later than the termination of the Payment Period) to purchase
from the Company that number of Shares subscribed for and not issued to the Participant prior to his death which the balance in the Participant's payroll deduction account is sufficient to purchase. The failure of the person or persons
so acquiring his rights to so give notice of intention to purchase shall constitute a forfeiture of all further rights of the Participant or other persons to purchase such Shares and in such event, the balance in the Participant's payroll
deduction account will be refunded, without interest. If the Participant dies more than fifty (50) days prior to the termination of the Payment Period and his Estate elects to purchase the Shares subscribed for, the Purchase Price for
his Shares shall be the percentage, designated pursuant to Section 5.3, of the fair market value on the Offering Date, irrespective of the Purchase Price for other Participants.
|
11.1 |
During the lifetime of a Participant, the Shares for which he subscribes may be purchased only by him. No Subscription Agreement of a Participant and no right under or interest in the Plan or any such Subscription Agreement
(hereinafter collectively referred to as "Subscription Rights") may be assigned, transferred, pledged, hypothecated or disposed of in any way (whether by operation of law or otherwise), except by the Participant's will or by the
applicable laws of descent and distribution, or may be subject to execution, attachment or similar process. Any assignment, transfer, pledge, hypothecation or other disposition of Subscription Rights, or any levy of execution, attachment
or other process attempted upon Subscription Rights, shall be null and void and without effect, and in any such event all Subscription Rights shall, in the sole discretion of the Plan Committee (exercised by written notice to the
Participant or to the person then entitled to purchase the Shares under the provisions of Sections 10.3 hereof), terminate as of the occurrence of any such event.
|
12.1 |
The Plan shall be administered by a Plan Committee which shall consist of two (2) or more members of the Board of Directors, none of whom shall be eligible to participate in the Plan. The members of the Plan Committee shall be
appointed, and may be removed, by the Board of Directors. The Board of Directors shall have the power to remove and substitute for members of the Plan Committee and to fill any vacancy which may occur in the Plan Committee.
|
12.2 |
Unless otherwise determined by the Board of Directors, the members of the Plan Committee shall serve without additional compensation for their services. All expenses in connection with the administration of the Plan, including, but
not limited to, clerical, legal and accounting fees, and other costs of administration, shall be paid by the Company.
|
12.3 |
The Chairman of the Plan Committee shall be designated by the Board of Directors. The Plan Committee shall select a Secretary who need not be a member of the Plan Committee. The Secretary, or in his absence, any member of the Plan
Committee designated by the Chairman, shall keep the minutes of the proceedings of the Plan Committee and all data, records and documents relating to the administration of the Plan by the Plan Committee.
|
12.4 |
A quorum of the Plan Committee shall be such number as the Committee shall from time to time determine, but shall not be less than a majority of the entire Plan Committee. The acts of a majority of the members of the Plan Committee
present at any meeting at which a quorum is present shall be the act of the Plan Committee. Members of the Plan Committee may participate in a meeting by means of telephone conference or similar communications procedure pursuant to which
all persons participating in the meeting can hear each other. The Plan Committee may take action without a meeting if such action is evidenced by a writing signed by at least a majority of the entire Plan Committee.
|
12.5 |
The Plan Committee may, by an instrument in writing, delegate to one or more of its members or to an officer or officers of the Company any of its powers and its authority under the Plan, including the execution and delivery on its
behalf of instruments, instructions and other documents.
|
12.6 |
It shall be the sole and exclusive duty and authority of the Plan Committee to interpret and construe the provisions of the Plan, to decide any disputes which may arise with regard to the status, eligibility and rights of Employees
under the terms of the Plan, and any other persons claiming an interest under the terms of the Plan, and, in general, to direct the administration of the Plan.
|
12.7 |
The Plan Committee may adopt, and from time to time amend, such rules and regulations consistent with the purposes and provisions of the Plan, as it deems necessary or advisable to administer and effectuate the Plan.
|
12.8 |
The Plan Committee may shorten, lengthen (but not beyond thirty (30) days) or waive the time required by the Plan for the filing of any notice or other form under the Plan.
|
12.9 |
The discretionary powers granted hereunder to the Plan Committee shall in no event be exercised in any manner that will discriminate against individual employees or a class of employees or discriminate in favor of employees who are
shareholders, officers, supervisors or highly compensated employees of the Company.
|
13.1 |
For purposes of the Plan, the "fair market value" of a share of Common Stock as of any date shall be determined as follows:
|
[a] |
If the Common Stock is then listed on a national securities exchange, the "fair market value" shall be the closing price of a share of Common Stock on such exchange on such date, or, if there has been no sale of shares of Common Stock
on that date, the closing price of a share of Common Stock on such exchange on the last preceding business day on which shares of Common Stock were traded.
|
[b] |
If the Common Stock is then listed on the National Association of Securities Dealers Automatic Quotation System National Market System, the "fair market value" shall be the average of the high and low sales prices of a share of Common
Stock on that date, or if there has been no sale of shares of Common Stock on that date, the average of the high and low sales prices of Common Stock on the last preceding business day on which shares of Common Stock were traded.
|
14.1 |
If (i) the Company shall at any time be involved in a transaction to which sub-section [a] of Section 424 of the Code is applicable, (ii) the Company shall declare a dividend payable in, or shall sub-divide or combine, its Common
Stock, or (iii) any other event shall occur which in the judgment of the Board of Directors necessitates action by way of adjusting the terms of the outstanding Subscription Agreements, the Board of Directors shall take any such action as
in its judgment shall be appropriate to preserve Participant rights substantially proportionate to the rights existing prior to such event. To the extent that such action shall include an increase or decrease in the number of shares of
Common Stock subject to outstanding Subscription Agreements, the aggregate number of shares available under Article III hereof for issuance under the Plan pursuant to outstanding Subscription Agreements and Subscription Agreements which
may be entered into, and the aggregate number of shares available for issuance in any Offering and the number which may be subscribed for, shall be proportionately increased or decreased, as the case may be. No action shall be taken by
the Board of Directors under the provisions of this Article XIV which, in its judgment, would constitute a modification, extension or renewal of the Subscription Agreement (within the meaning of Section 424[h] of the Code), or would
prevent the Plan from qualifying as an "employee stock purchase plan" (within the meaning of Section 423 of the Code). The determination of the Board of Directors with respect to any matter referred to in this Article XIV shall be
conclusive and binding upon each Participant.
|
15.1 |
The Board of Directors may, without further approval by the stockholders of the Company, at any time terminate or amend the Plan without notice, or make such modifications of the Plan as it shall deem advisable; provided that the Board
of Directors may not, without prior approval by the holders of a majority of the outstanding shares of Common Stock of the Company, amend or modify the Plan so as to (i) increase the maximum number of shares of Common Stock which may be
issued under the Plan (except as contemplated in Article XIV hereof), (ii) extend the term during which Offerings may be made under the Plan or (iii) increase the maximum number of Shares which an Eligible Employee is entitled to purchase
(except as contemplated in Article XIV hereof); and provided further that the Board of Directors may not amend or modify the Plan in any manner which would prevent the Plan from qualifying as an "employee stock purchase plan" (within the
meaning of Section 423 of the Code). No termination, amendment or modification of the Plan may, without the consent of a Participant, adversely affect the rights of such Participant under an outstanding Subscription Agreement.
|
16.1 |
Unless otherwise expressly provided in the Plan, all notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received by the Secretary of the
Company or when received in the form specified by the Company at the location and by the persons, designated by the Company for the receipt thereof.
|
16.2 |
Notwithstanding anything hereunder to the contrary, the offer, sale and delivery by the Company of Shares under the Plan to any Eligible Employee is subject to compliance with all applicable securities regulation and other federal and
state laws. The terms of this Plan shall be construed under the laws of the State of Connecticut.
|
17.1 |
The Plan shall become effective at such time as the Plan has been adopted by the Board of Directors and has been approved by the holders of a majority of the outstanding shares of Common Stock of the
Company.
|
Exhibit 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of September 10, 2007 by and between Photronics, Inc., a Connecticut corporation (the "Company"), having a principal place of business at 15 Secor Road,
Brookfield, CT 06804 and Christopher Progler ("Executive") residing at 5901 Woodwind Drive, Plano, Texas 75093.
WITNESSETH:
WHEREAS, the Company and Executive desire to enter into this Agreement to assure the Company of the continuing service of Executive and to set forth the terms and conditions of Executive's employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties agree as follows:
1. Term. The Company agrees to employ Executive and Executive hereby accepts such employment, in accordance with the terms of this Agreement. Subject to Section 5, the term of Executive's employment shall commence on the
date hereof and continue for three (3) years thereafter unless this Agreement is earlier terminated as provided herein (the "Term"); provided, however, that unless the Company gives written notice to Executive at least thirty (30)
days prior to the end of the Term of this Agreement (as the Term may be extended pursuant to this Section 1), on each anniversary of the date hereof, the Term of this Agreement shall automatically be extended for an additional one (1)
year period.
2. Services. So long as this Agreement shall continue in effect, Executive shall devote Executive's full business time, energy and ability to the business, affairs and interests of the Company and its subsidiaries and matters
related thereto. Executive shall use his best efforts and abilities to promote the Company's interests and shall perform faithfully the services contemplated by this Agreement in accordance with the Company's policies as established by the Board
of Directors of the Company.
3. Duties and Responsibilities.
(a) Executive shall serve as the Vice President and Chief Technology Officer of the Company. In the performance of Executive's duties, Executive shall report directly to the CEO or as otherwise directed by the CEO or the Company's Board
of Directors, and shall have such duties, responsibilities and authority as may from time to time be assigned to the Executive by the CEO or the Company's Board of Directors.
(b) In addition, Executive agrees to observe and comply with the policies, rules and regulations of the Company. The Company agrees that the duties which may be assigned to Executive shall be the customary duties of the office of Vice
President and Chief Technology Officer and shall not be inconsistent with the provisions of the charter documents of the Company or applicable law.
4. Compensation.
(a) Base Compensation. During the Term, the Company agrees to pay Executive a base salary at the rate of $242,999.90 per year payable in accordance with the Company's customary payroll practices generally applicable to similarly
situated employees as may be in effect from time to time (the "Base Salary"). All payments required hereunder, including the payments required by this Section 4(a), may be allocated by the Company to one or more of its
subsidiaries to which Executive renders services but the Company shall remain responsible for all payments hereunder and Executive shall have no obligation to seek payment from such subsidiaries.
(b) Periodic Review. The Compensation Committee or the Board of Directors of the Company shall review Executive's Base Salary and Benefits (as defined below) from time to time in accordance with the normal business practices of the
Company. The Company may in its sole discretion increase the Base Salary during the Term. The amount of any increase combined with the previous year's Base Salary shall then constitute Executive's Base Salary for purposes of this Agreement.
(c) Additional Benefits. During the Term, the Executive shall be entitled to participate in the employee benefit plans and arrangements as the Company may establish from time to time in which other employees similarly situated are
entitled to participate (which may include, without limitation, bonus plan(s), medical plan, dental plan, disability plan, basic life insurance and business travel accident insurance plan, 401(k) plan, stock option or stock purchase plans or any
successor plans thereto (the "Benefits")). The Company shall have the right to terminate or change any such plans or programs at any time.
(d) Automobile Allowance. During the Term of this Agreement, the Company shall provide the Executive with an automobile allowance or company car consistent with the Company's policies and provisions applicable to other similarly
situated executives of the Company.
(e) Vacation. During the Term of this Agreement, Executive shall be entitled to four (4) weeks' paid vacation per calendar year, which shall not be transferable to any subsequent year.
5. Termination. This Agreement and all rights and obligations hereunder, except the rights and obligations contained in this Section 5, Section 7 (Confidential Information), Section 8 (Non-Competition), Section
9 (Intellectual Property) and Section 10 (Remedies), which shall survive any termination hereunder, shall terminate upon the earliest to occur of any of the following:
(a) Resignation without Good Reason; Retirement. Upon the resignation by Executive without Good Reason (as defined below) following at least thirty (30) days written notice to the Company or retirement from the Company in
accordance with the normal retirement policies of the Company, Executive shall be entitled to receive a payment in the amount of the sum of (A) Executive's Base Salary through the last day of employment to the extent not theretofore paid, (B) any
compensation previously deferred by Executive (together with any accrued interest or earnings thereon), and (C) any accrued vacation pay according to Company U.S. Vacation Policy, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (A), (B) and (C) shall be hereinafter referred to as the "Accrued Obligations"), in a lump sum, subject to statutory deductions and withholdings, in cash within ten (10) business days after the last day of
employment or any earlier time required by applicable law.
(b) Death or Disability of Executive.
(i) If Executive's employment is terminated by reason of Executive's death or disability, this Agreement shall terminate without further obligations to Executive (or Executive's heirs or legal representatives) under this Agreement,
other than for:
(1) Payment of any Accrued Obligations, which shall be paid to Executive or Executive's estate or beneficiary, as applicable, in a lump sum, subject to statutory deductions and withholdings, in cash within ten (10) business days
after the date of termination or any earlier time required by applicable law.
(2) Payment to Executive or Executive's estate or beneficiary, as applicable, of any amount accrued pursuant to the terms of any other applicable benefit plan.
(ii) If Executive shall become disabled, Executive's employment may be terminated only by written notice from the Company to Executive.
(iii) For the purposes of this Agreement, "disability" or "disabled" shall mean a mental or physical incapacity which prevents Executive from performing Executive's duties with the Company for a period of three hundred
sixty (360) consecutive calendar days, as certified by a physician selected by the Company or its insurers.
(c) Termination for Cause.
(i) The Company may terminate Executive's employment and all of Executive's rights to receive Base Salary, and any Benefits hereunder for Cause.
(ii) Upon such termination for Cause, Executive shall be entitled to receive any Accrued Obligations, which shall be paid to Executive in a lump sum, subject to statutory deductions and withholdings, in cash within ten (10) business
days after the date of termination or any earlier time required by applicable law.
(iii) For purposes of this Agreement, the term "Cause" shall be defined as any of the following:
(1) Executive's material breach of any of any obligations under this Agreement (other than by reason of physical or mental illness, injury, or condition);
(2) Executive's conviction by, or entry of a plea of "guilty" or "nolo contendere" in a court of competent and final jurisdiction for any felony that impairs his ability to perform his duties to the Company or any crime of moral
turpitude;
(3) Executive's commission of an act of fraud upon the Company;
(4) Executive's engaging in willful or reckless misconduct or gross negligence in connection with any property or activity of the Company or its Affiliates;
(5) Executive's repeated and intemperate use of alcohol or illegal drugs after written notice from the Board or Directors;
(6) Executive's material breach of any other material obligation to the Company (other than by reason of physical or mental illness, injury, or condition) that is or could reasonably be expected to result in material harm to the
Company;
(7) Executive's becoming insolvent or filing for bankruptcy;
(8) Executive's becoming barred or prohibited by the SEC from holding my position with the Company; or
(9) Executive's violation of any duty of loyalty (i.e., engaging in self-interested transactions, misappropriation of business opportunities that belong to the Company, or a breach of Executive's fiduciary duties to the Company).
(d) Termination Without Cause; Resignation For Good Reason.
(i) Notwithstanding any other provision of this Section 5, (i) the Company may, at its option and at any time, provide to Executive: (A) up to twelve (12) months' advance written notice of termination of employment without
Cause, or (B) written notice of a current material adverse change in the Executive's position (such notice in (A) or (B) being referred to herein as a "Working Notice"). If the Company issues a Working Notice to the Executive, any entitlement to
a Severance Payment and Benefit Period (as defined below) shall be reduced in proportion to the period covered by the Working Notice. During the period covered by the Working Notice, the Executive shall continue to provide the services according
to Section 2, hereof as an employee of the Company. If the Executive resigns during the period covered by the Working Notice, then Executive shall receive only the Accrued Obligations through the date of termination. Executive, upon thirty
(30) days advance notice to the Company, shall have the right to resign for Good Reason.
(ii) If Executive is so terminated without Cause or resigns for Good Reason, Executive shall receive from the Company:
(1) Any Accrued Obligations through the date of termination, which shall be paid to Executive in a lump sum, subject to statutory deductions and withholdings, in cash within ten (10) business days after the date of termination
or any earlier time required by applicable law.
(2) A payment ("Severance Payment") equal to twelve (12) months of Executive's current Base Salary. The Severance Payment shall be paid by the Company to Executive in equal installments, following the expiration of the
Revocation Period defined in the Release referred to in Section 5(d)(iv), in accordance with the Company's customary payroll practices generally applicable to similarly situated employees as may be in effect from time and shall be subject
to statutory deductions and withholdings.
(3) Payment of Executive's COBRA premiums for the 360-day period following termination of employment ("Benefit Period"), provided Executive elects to receive COBRA continuation coverage and is eligible for COBRA
continuation coverage.
(iii) As used in this Agreement, the term "Good Reason" shall mean (i) (except as set forth in Section 5(e)) the relocation of the Company's principal executive offices to a location outside the contiguous 48 United States
without the consent of Executive or (ii) a material diminution in Executive's overall employee benefits not the result of changes in benefit plans affecting other employees, without the consent of Executive.
(iv) As a condition to receiving the payment and benefits extension contemplated by Section 5(d) or 5(e), Executive agrees to execute and deliver to the Company the Release substantially in the form attached to this Agreement
as Exhibit A.
(e) Change of Control.
(i) For purposes of the Agreement, a "change of control" means, and shall be deemed to have taken place, if;
(1) any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity or person, or any syndicate or group deemed to be a person under Section 14 (d) (2) of the Exchange Act, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company's
then outstanding securities entitled to vote in the election of directors of the Company;
(2) during any period of two (2) consecutive years (not including any period prior to the execution of this Agreement) individuals who at the beginning of such period constituted the Board and any new directors, whose election
by the Board or nomination for election by the Company's shareholders was approved by a vote of at least three-fourths (3/4ths) of the directors then still in office who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to constitute a majority of the Board;
(3) there occurs a reorganization, merger, consolidation or other corporate transaction involving the Company (a "Transaction"), and shareholders of the Company immediately prior to such Transaction do not, immediately
after the Transaction, own more than 50% of the combined voting power of the Company or other corporation resulting from such Transaction; or
(4) there is a "change in control" of the Company within the meaning of Section 280G of the U.S. Federal internal revenue code of 1986.
(iii) If during the period three (3) months before or two (2) years following a "change in control" of the Company (or any successor), the Executive is terminated by the Company for any reason (other than for Cause as defined in Section
5(c) thereof), including an election by the Company or its successor not to extend this Agreement pursuant to Section 1, or the Executive resigns for Good Reason as defined in Section 5(e)(ii)), " "Executive shall be entitled to
receive a cash payment equal to eighteen (18) months of Executive's current Base Salary and the benefits described in Section 5(d)(ii) of the Agreement. Upon such "change of control" during the Term, the Term of this Agreement shall
automatically be the period equal to the longer of (i) two (2) years from the date of the "change of control" or (ii) the remaining period of the initial three (3) year Term after the "change of control". In no event shall Executive be entitled
to receive both the Severance Payment described in Section 5(d) hereof and the "change of control" payment described in this Section 5(e).
(iv) Any payments to be made to Executive in connection with this Section 5(e) shall be made in a lump sum, subject to statutory deductions and withholdings, in cash within ten (10) business days after the date of termination
or any earlier time required by applicable law, following the expiration of the Revocation Period defined in the Release referred to in Section 5(d)(iv).
(f) Tax Consideration.
(i) In the event that the aggregate of all payments or benefits made or provided to the Executive under this Agreement and under all other plans and programs of the Company (the "Aggregate Payment") is determined to constitute
a Parachute Payment, as such term is defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), the Company shall pay to the Executive an additional amount (the "Gross-Up Amount"), prior to the time any
excise tax ("Excise Tax") is imposed by Section 4999 of the Code is payable with respect to such Aggregate Payment, which, after the imposition of all excise, federal, state and local income taxes, enables the Executive to retain a total
amount equal to the Aggregate Payment prior to the payment of the Gross-Up Amount. Notwithstanding the foregoing, if it shall be determined that the Executive is entitled to receive the Gross-Up Amount, but the portion of the Aggregate Payment
that would be treated as a Parachute Payment does not exceed 125% of the greatest amount that could be paid to the Executive such that the receipt of the Aggregate Payment would not give rise to any Excise Tax (the "Safe Harbor Amount"), then no
Gross-Up Amount shall be paid to the Executive and the Aggregate Payment shall be reduced to the Safe Harbor Amount.
(ii) All determinations required to be made under this Section 5(f), including whether the Aggregate Payment constitutes a Parachute Payment, the amount of the Gross-Up Amount to be paid to the Executive, if any, and the
determination of the Safe Harbor Amount, if applicable, shall be made in good faith by the by the Company's regular outside auditors (the "Accounting Firm"); provided, however, that such Accounting Firm presents its rationale and
supporting calculations to the Executive upon his request and shall in good faith work to resolve any discrepancies raised by accountants or lawyers chosen by the Executive who present reasonable critiques of the determination. If a dispute over
the methodology or conclusions of the Accounting Firm cannot be resolved between the parties, an impartial accounting firm shall be consulted to resolve the dispute. All fees and expenses of the Accounting Firm incurred in connection with the
retention of the Accounting Firm pursuant to this Section 5(f) shall be borne by the Company. All fees and expenses of the accountants and lawyers chosen by the Executive and, if retained, the additional accounting firm, incurred in connection
with the resolution of any disputes pursuant to this Section 5(f) shall be borne by the non-prevailing party.
(iii) As a result of uncertainty in the application of Sections 280G and 4999 of the Code at the time of the determination by the Accounting Firm, the parties hereto acknowledge and agree that it is possible that the Company will have
paid a Gross-Up Amount that exceeds the amount that the Company should have paid pursuant to this Section 5(f) (the "Overpayment") or that the Company will have paid a Gross-Up Amount that is less than the amount that the Company should
have paid pursuant to this Section 5(f) (the "Underpayment"). In the event the Accounting Firm, in a written opinion delivered to the Company and to the Executive, determines that, based upon the assertion of a deficiency by the Internal
Revenue Service against the Executive, which the Accounting Firm believes has a high probability of success, an Overpayment has been made, then any such Overpayment shall, to the extent permitted under applicable law (including Section 402 of the
Sarbanes-Oxley Act of 2002), be treated for all purposes as a loan to the Executive which the Executive shall promptly repay to the Company together with interest at the Applicable Federal Rate provided for in Section 7872(f)(2) of the Code;
provided, however, the Executive may contest any such determination by the Accounting Firm at his own expense. In the event the Accounting Firm, based upon controlling precedent or other substantial authority, determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the Applicable Federal Rate provided for in Section 7872(f)(2) of the Code.
(g) Treatment of Stock Options Upon Change of Control or a Termination.
(i) All stock options or similar rights granted to Executive pursuant to the Company's stock option plans including, without limitation, any restricted stock shall immediately vest as of the effective date of such "change of
control".
(ii) If this Agreement is terminated pursuant to clause (c) of this Section 5 or if Executive resigns his employment, all unvested stock options granted to Executive pursuant to the Company's stock plans shall
terminate immediately.
To the extent that the Executive has been granted stock options intended to be incentive stock options under Section 422 of the Internal Revenue Code, such stock options shall cease to be incentive stock options and shall be
treated as nonqualified stock options if the options are exercised by the Employee more than three (3) months (one year in case of death or disability as defined in Section 422 of the Internal Revenue Code) following termination of employment.
Except as expressly modified by this clause (g) of this Section 5, all stock options and similar rights granted under the Company's stock plans shall remain subject to all of the terms and conditions of the
applicable stock plans and agreements evidencing the grants thereof.
(h) Exclusive Remedy. Executive agrees that the payments other benefits provided and contemplated by this Agreement shall constitute the sole and exclusive obligation of the Company in respect of Executive's employment with and
relationship to the Company and that the full payment thereof shall be the sole and exclusive remedy for any termination of Executive's employment. Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect
to any termination of employment.
6. Business Expenses. During the Term of this Agreement, to the extent that such expenditures satisfy the criteria under the Internal Revenue Code or other applicable laws for deductibility by the Company (whether or not fully
deductible by the Company) for federal income tax purposes as ordinary and necessary business expenses, the Company shall provide the Executive with reimbursement of reasonable business expenses incurred by the Executive while conducting Company
business in a manner consistent with the Company's policies and provisions applicable to the Executives of the Company.
7. Confidential Information.
(a) Executive acknowledges that the nature of Executive's employment by the Company is such that Executive shall have access to information of a confidential and/or trade secret nature which has great value to the Company and which
constitutes a substantial basis and foundation upon which the business of the Company is based. Such information includes (A) trade secrets, inventions, mask works, ideas, processes, manufacturing, formulas, source and object codes, data,
programs, other works of authorship, know-how, improvements, discoveries, developments or experimental work, designs, and techniques; (B) information regarding plans for research, development, new products, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; (C) information regarding the skills and compensation of other employees the Company or its affiliates, including but not limited to, their
respective business plans or clients (including, without limitation, customer lists and lists of customer sources), or information relating to the products, services, customers, sales or business affairs of the Company or its Affiliates (the "Confidential
Information").
(b) Executive shall keep all such Confidential Information in confidence during the Term of this Agreement and at any time thereafter and shall not disclose any of such Confidential Information to any other person, except to the extent
such disclosure is (i) necessary to the performance of this Agreement and in furtherance of the Company's best interests, (ii) required by applicable law, (iii) publicly known within the relevant industry, or (iv) authorized in writing by the
Board. Upon termination of Executive's employment with the Company, Executive shall deliver to the Company all documents, records, notebooks, work papers, and all similar material containing any of the foregoing information, whether prepared by
Executive, the Company or anyone else.
8. Non-Competition. Executive covenants and agrees that commencing on the date hereof and continuing for the entire Term of Executive's employment and for period of twelve (12) months thereafter (the "Restricted Period"),
Executive shall not:
(a) Work or be affiliated with in any capacity (including as a founder, employee, owner, consultant, or otherwise), directly or indirectly, for himself or on behalf of any other entity, in any business that manufacturers photomasks or that
is otherwise competitive with the business of the Company or any subsidiary of the Company at any time during Executive's employment or during the Restricted Period, such as, for example and not as a limitation, Toppan, DNP and the photomask
manufacturing operations of semiconductor manufacturers such as IBM and TSMC.
(b) Solicit, attempt to solicit, or assist others in soliciting or attempting to solicit, directly or indirectly, any business related to the business of the Company from any customers or prospective customers of the Company; for the
purposes of this Section 8, the term "customer" means any entity or person who is or has been a client or customer of the Company during the time which Executive was employed with the Company, and the term "prospective customer"
means a person or entity who became known to the Company during the time which Executive was employed with the Company as a result of that person's or entity's interest in obtaining the services or products of the Company; and
(c) Solicit, attempt to solicit, or assist others in soliciting or attempting to solicit, directly or indirectly, for employment or similar capacity, any person who is an employee of, or an independent contractor for, the Company or its
direct or indirect subsidiaries, parents or Affiliates or who was such an employee within twelve (12) months prior to the date of such solicitation or attempted solicitation.
(d) Executive acknowledges that in the event of his employment with the Company terminates for any reason, Executive will be able to earn a livelihood without violating the foregoing restrictions.
(e) If any provision or clause, or portion thereof, within this Section 8 shall be held by any court or other tribunal of competent jurisdiction to be illegal, invalid, or unenforceable in such jurisdiction, the remainder of such
provision shall not be thereby affected and shall be given full effect, without regard to the invalid portion. It is the intention of the parties that, if any court construes any provision or clause within this Section 8, or any portion
thereof, to be illegal, void or unenforceable because of the duration of such provision or the geographic area or matter covered thereby, such court shall reduce the duration, area, or matter of such provision, and, in its reduced form, such
provision shall then be enforceable and shall be enforced.
9. Intellectual Property.
(a) Executive has no interest (except as disclosed to the Company) in any inventions, designs, improvements, patents, copyrights and discoveries which are useful in or directly or indirectly related to the business of the Company or to any
experimental work carried on by the Company. Except as may be limited by applicable law, all inventions, designs, improvements, patents, copyrights and discoveries conceived by Executive during the Term of this Agreement which are useful in or
directly or indirectly related to the business of the Company or to any experimental work carried on by the Company, shall be the property of the Company. Executive will promptly and fully disclose to the Company all such inventions, designs,
improvements, patents, copyrights and discoveries (whether developed individually or with other persons) and will take all steps necessary and reasonably required to assure the Company's ownership thereof and to assist the Company in protecting
or defending the Company's proprietary rights therein.
(b) Executive also agrees to assist the Company in obtaining United States or foreign letters patent and copyright registrations covering inventions assigned hereunder to the Company and that Executive's obligation to assist the Company
shall continue beyond the termination of Executive's employment but the Company shall compensate Executive at a reasonable rate for time actually spent by Executive at the Company's request with respect to such assistance. If the Company is
unable because of Executive's mental or physical incapacity (for the period of such incapacity only) or for any other reason to secure Executive's signature to apply for or to pursue any application for any United States or foreign letters patent
or copyright registrations covering inventions assigned to the Company (after reasonable efforts to contact employee), then Executive hereby irrevocably designates and appoints the Company, each of its duly authorized officers and agents as
Executive's agent and attorney-in-fact to act for and in Executive's behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright
registrations thereon with the same legal force and effect as if executed by Executive. Executive will perform all other lawful acts necessary to assist the Company to enforce any copyrights or patents obtained including, without limitation,
testifying in any suit or proceeding involving any of the copyrights or patents or executing any documents deemed necessary by the Company, all without further consideration but at the expense of the Company. If Executive is called upon to
render such assistance after the termination of Executive's employment, then Executive shall be entitled to a fair and reasonable per diem fee in addition to reimbursement of any expenses incurred at the request of the Company.
10. Remedies. The parties hereto agree that the services to be rendered by Executive pursuant to this Agreement, and the rights and privileges granted to the Company pursuant to this Agreement, are of a special, unique,
extraordinary and intellectual character, which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law, and that a breach by Executive of any of the terms of this Agreement
will cause the Company great and irreparable injury and damage. Executive hereby expressly agrees that the Company shall be entitled to the remedies of injunction, specific performance and other equitable relief to prevent a breach of this
Agreement by Executive. This Section 10 shall not be construed as a waiver of any other rights or remedies which the Company may have for damages or otherwise.
11. Return of Property. Executive agrees to return, on or before his last day of employment, all property belonging to the Company, including but not limited to computers, PDA, telephone and other credit cards, Company business
records, Company automobile (if applicable), etc.
12. Severability. If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the parties to the extent possible. In any event,
all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.
13. Succession. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns and any such successor or assignee shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" and "assignee" shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires the stock of
the Company or to which the Company assigns this Agreement by operation of law or otherwise. The obligations and duties of Executive hereunder are personal and otherwise not assignable. Executive's obligations and representations under this
Agreement will survive the termination of Executive's employment, regardless of the manner of such termination.
14. Notices. Any notice or other communication provided for in this Agreement shall be in writing and sent if to the Company to its principal office at:
Photronics, Inc.
15 Secor Road, PO Box 5226
Brookfield, Connecticut 06804
Attention: Chief Executive Officer
With a copy to the Vice President, Chief Financial Officer of Photronics, Inc.
or at such other address as the Company may from time to time in writing designate, and if to Executive at the address set forth above or at such address as Executive may from time to time in writing designate. Each such notice or other
communication shall be effective (I) if given by written telecommunication, three (3) days after its transmission to the applicable number so specified in (or pursuant to) this Section 14 and a verification of receipt is received, (ii) if
given by certified mail, once verification of receipt is received, or (iii) if given by any other means, when actually delivered to the addressee at such address and verification of receipt is received.
15. Adequate Consideration. Executive acknowledges that the cash severance and other benefits to be provided by the Company to Executive are not available under any current plan or policies of the Company. Accordingly, Executive
further acknowledges that the payments and benefits under this Agreement provide adequate consideration for Executive's obligations to the Company contained in Section 7 (Confidential Information), Section 8 (Non-Competition), Section
10 (Remedies) and Exhibit A (Release).
16. Entire Agreement. This Agreement contains the entire agreement of the parties relating to the subject matter hereof and supersedes any prior agreements, undertakings, commitments and practices relating to Executive's
employment by the Company.
17. Amendments. No amendment or modification of the terms of this Agreement shall be valid unless made in writing, duly executed by both parties.
18. Waiver. No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other
exercise of such right or any other right.
19. Governing Law. This Agreement, and the legal relations between the parties, shall be governed by and construed in accordance with the laws of the State of Connecticut without regard to conflicts of law doctrines and any court
action arising out of this Agreement shall be brought in any court of competent jurisdiction within the State of Connecticut.
20. Withholding. All compensation payable hereunder, including salary and other benefits, shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions.
21. Counterparts. This Agreement and any amendment hereto may be executed in one or more counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each
party has been delivered to the other party.
22. Headings. Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
THE COMPANY
PHOTRONICS, INC.
By: /s/ Edwin L. Lewis
Name: Edwin L. Lewis
Title: Senior Vice President, General Counsel and Secretary
EXECUTIVE
/s/ Christopher Progler
Name: Christopher Progler
Address: 5901 Woodwind Drive, Plano, Texas 75093
RELEASE
1. I signed an Employment Agreement with Photronics, Inc. (the "Company"), dated ________________ (the "Agreement"), wherein I agreed to the terms applicable to certain terminations of employment with the Company. Pursuant to the terms of the
Agreement, I am entitled to certain severance payments and benefits, described in the Agreement, provided that I sign this Release.
2. In consideration of the severance payments described in the Agreement, I, on behalf of myself, my heirs, agents, representatives, predecessors, successors and assigns, hereby irrevocably release, acquit and forever discharge the Company and
each of its respective agents, employees, representatives, parents, subsidiaries, divisions, affiliates, officers, directors, shareholders, investors, employees, attorneys, transferors, transferees, predecessors, successors and assigns, jointly
and severally (the "Released Parties") of and from any and all debts, suits, claims, actions, causes of action, controversies, demands, rights, damages, losses, expenses, costs, attorneys' fees, compensation, liabilities and obligations
whatsoever, suspected or unsuspected, known or unknown, foreseen or unforeseen, arising at any time up to and including the date of this Release, save and except for the parties' obligations and rights under this Release. In recognition of the
consideration set forth in the Agreement, I hereby release and forever discharge the Released Parties from any and all claims, actions and causes of action, I have or may have as of the date of this Release arising under any federal, state, or
local statute, regulation, ordinance, or law of any kind, including under the Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder ("ADEA"), the Connecticut Human Rights and
Opportunities Law, the Connecticut Family and Medical Leave Law, and the Connecticut Age Discrimination and Employee Insurance Benefits Law, and including claims for wrongful discharge, breach of contract, or in tort.
3. I agree not to criticize, denigrate, or otherwise disparage the Company or any other Released Party.
4. This Release is not an admission of guilt or wrongdoing by either me or the Company. This Release constitutes the entire agreement between me and the Company with respect to the subject matter hereof, and I am not signing this Release in
reliance on any representation not expressly set forth herein. No provisions of this Release may be modified, waived, amended or discharged except by a written document signed by me and a duly authorized Company representative. This Release
binds my heirs, administrators, representatives, executors, successors, and assigns, and will inure to the benefit of all Released Parties and their respective heirs, administrators, representatives, executors, successors, and assigns. The
invalidity or unenforceability of any provision of this Release shall not affect the validity or enforceability of any other provision of this Release, which shall remain in full force and effect. A waiver of any conditions or provisions of this
Release in a given instance shall not be deemed a waiver of such conditions or provisions at any other time. If any of the provisions, terms or clauses of this Release are declared illegal, unenforceable or ineffective in a legal forum, those
provisions, terms and clauses shall be deemed severable, such that all other provisions, terms and clauses of this Release shall remain valid and binding upon both parties. If any of the provisions, terms or clauses of this Release are found by
a court to be overly broad, those provisions, terms and clauses shall be enforceable (and modified and enforced) to the broadest extent permissible under the law. The validity, interpretation, construction, and performance of this Release shall
be governed by the internal laws of the State of Connecticut (excluding any that mandate the use of another jurisdiction's laws)
5. All payments to me under this Release shall be net of applicable withholdings and deductions.
6. The Company advised me to take this Release home, read it, and carefully consider all of its terms before signing it. The Company gave me at least 21 days in which to consider this Release, and I waive any right I might have to additional
time beyond this consideration period within which to consider this Release. The Company advised me to discuss this Release with my own attorney (at my own expense) during this period if I wished to do so. I understand that I may revoke my
acceptance of this Release within seven (7) days after I sign it ("Revocation Period"). I understand that if I revoke my acceptance of this Release, I will not be entitled to any payments or benefits hereunder or otherwise in connection with the
termination of my employment with the Company, except as required by law in the absence of the Agreement and this Release. I have carefully read this Release, fully understand what it means, and am entering into it voluntarily.
____________________ ______________
Print Name Date
____________________
Signature
March 16, 2012
[Name and Address of Executive]
Reference is made to the Employment Agreement entered into on _________________ (the “Employment Agreement”) between Photronics, Inc. (the “Company”) and ____________________ (the “Executive”).
The Company and Executive hereby agree to amend the Employment Agreement by (i) deleting Article 5(f) of the Employment Agreement and (ii) deleting all references to such Article in the Employment Agreement.
Except as amended above all other terms and conditions of the Employment Agreement remain in full force and effect.
Photronics, Inc. | |
By: | |
Title: | |
Agreed to and Accepted | |
[Executive] | |
State or Jurisdiction of Incorporation or Organization
|
|
Align-Rite International, Ltd.
|
(United Kingdom)
|
Photronics (Wales) Limited
|
(United Kingdom)
|
Photronics California, Inc.
|
(California, USA)
|
Photronics Idaho, Inc.
|
(Idaho, USA)
|
Photronics Texas Allen, Inc.
|
(Texas, USA)
|
Photronics MZD, GmbH
|
(Germany)
|
Photronics Advanced Mask Corporation
|
(Taiwan, R.O.C.)
|
Photronics DNP Mask Corporation (1)
|
(Taiwan, R.O.C.)
|
PDMC Shanghai, Ltd.
|
(Shanghai, P.R.C.)
|
Photronics Singapore Pte, Ltd.
|
(Singapore)
|
Xiamen American Japan Photronics Mask Co., Ltd. (1)
|
(Xiamen, P.R.C.)
|
Photronics UK, Ltd.
|
(United Kingdom)
|
PMCH
|
(Hefei, P.R.C.)
|
PK, Ltd. (2)
|
(Republic of Korea)
|
PKLT Co., Ltd.
|
(Taiwan, R.O.C.)
|
Trianja Technologies, Inc.
|
(Texas, USA)
|
(1) |
50.01% owned by Photronics, Inc. and 49.99% owned by DNPJ
|
(2) |
99.75% owned by Photronics, Inc., and 0.25% owned by minority shareholders
|
1.
|
I have reviewed this Annual Report on Form 10-K of Photronics, Inc.;
|
|||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
|||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this annual report based on such evaluation; and
|
|||
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors
(or persons performing the equivalent functions):
|
|||
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report
financial information; and
|
|||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Peter S. Kirlin | |
Peter S. Kirlin
Chief Executive Officer
December 20, 2019
|
1.
|
I have reviewed this Annual Report on Form 10-K of Photronics, Inc.;
|
|||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
|
|||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and
for, the periods presented in this report;
|
|||
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|||
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|||
b)
|
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|||
c)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this annual report based on such evaluation; and
|
|||
d)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
|||
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors
(or persons performing the equivalent functions):
|
|||
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and
report financial information; and
|
|||
b)
|
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ John P. Jordan | |
John P. Jordan
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
December 20, 2019
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended October 31, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ Peter S. Kirlin | |
Peter S. Kirlin
Chief Executive Officer
December 20, 2019
|
1.
|
the Annual Report on Form 10-K of the Company for the year ended October 31, 2019 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
2.
|
the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ John P. Jordan | |
John P. Jordan
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
December 20, 2019
|
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