SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement [ ] Confidential, for use of the Commission
[X] Definitive proxy statement only (as permitted by Rule 14a-6(e)(2))
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
______________________________Photronics, Inc._________________________
(Name of Registrant as specified in Its Charter)
________________________________________________________________________
(Name of Person[s] Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
(1) Title of each class of securities to which transaction applies:
___________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
___________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
___________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
___________________________________________________________________________
(5) Total fee paid:
___________________________________________________________________________
[ ] Fee paid previously with preliminary materials:
__________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
___________________________________________________________________________
(2) Form, schedule or registration statement number:
___________________________________________________________________________
(3) Filing party:
___________________________________________________________________________
(4) Date filed:
___________________________________________________________________________
FORMS\14A/p
<PAGE> PHOTRONICS, INC.
1061 East Indiantown Road
Jupiter, Florida 33477
(561) 745-1222
- ----------------------------------------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 20, 1997
-------------
TO THE SHAREHOLDERS OF PHOTRONICS, INC.
Notice is hereby given that the Annual Meeting of Shareholders of
Photronics, Inc. will be held at The Omni Richardson Hotel, 701 East
Campbell Road, Richardson, Texas 75081, on March 20, 1997, at 2:00 p.m.
local time, for the following purposes:
1) To elect five (5) members of the Board of Directors, each to serve
until the next Annual Meeting;
2) To ratify the appointment of Deloitte & Touche LLP as the independent
certified public accountants of the Company for the fiscal year
ending October 31, 1997; and
3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed February 7, 1997 as the record date
for determining the holders of Common Stock entitled to notice of and to
vote at the meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO
COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED
ENVELOPE. NO POSTAGE IS REQUIRED FOR MAILING IN THE UNITED STATES.
By Order of the Board of Directors
Jeffrey P. Moonan
Secretary
February 12, 1997
<PAGE> PHOTRONICS, INC.
1061 East Indiantown Road
Jupiter, Florida 33477
(561) 745-1222
- ------------------------------------------------------------------------
PROXY STATEMENT
For the Annual Meeting of Shareholders
to be held on March 20, 1997
The enclosed proxy is solicited by the Board of Directors (the
"Board" or "Board of Directors") of Photronics, Inc. (the "Company"),
1061 East Indiantown Road, Jupiter, Florida 33477, to be voted at the
Annual Meeting of Shareholders to be held on March 20, 1997, at 2:00 p.m.
local time at The Omni Richardson Hotel, 701 East Campbell Road,
Richardson, Texas 75081, or any adjournments thereof (the "Annual
Meeting"). At the Annual Meeting, the presence in person or by proxy of
the holders of a majority of the total number of shares of outstanding stock
will be necessary to constitute a quorum.
The persons named as proxies on the accompanying proxy card have
informed the Company of their intention, if no contrary instructions are
given, to vote the shares represented by such proxies in favor of the
election as directors of the Company of those persons named as
management's nominees; in favor of the selection of Deloitte & Touche LLP
as independent certified public accountants of the Company for the 1997
fiscal year; and in accordance with their best judgment on any other
matters which may come before the meeting. The Board of Directors does
not know of any business to be brought before the Annual Meeting other
than as indicated in the notice.
Any shareholder who executes and delivers a proxy may revoke it at
any time prior to its use upon (a) receipt by the Secretary of the
Company of written notice of such revocation; (b) receipt by the
Secretary of the Company of a duly executed proxy bearing a later date;
or (c) appearance by the shareholder at the meeting and his request for
the return of his proxy. Any such notice or proxy should be sent to
Photronics, Inc., 1061 East Indiantown Road, Jupiter, Florida 33477,
Attention: Jeffrey P. Moonan. Appearance at the meeting without a
request for return of a proxy will not revoke a previously executed and
delivered proxy.
Only shareholders of record at the close of business on February 7,
1997 are entitled to notice of and to vote at the Annual Meeting. As of
February 7, 1997, there were 11,850,555 shares of Common Stock issued and
outstanding, each of which is entitled to one vote. Unless otherwise
noted in this proxy statement, all matters to come before the meeting
that are listed in the Notice of Meeting require, to be adopted, the
affirmative vote of a majority of those shares, present in person or by
proxy and voting at the Annual Meeting, assuming that a quorum is
present. Abstentions will be considered as present but will not be
considered as votes in favor of any matter; broker non-votes will not be
considered as present for the matter as to which the shares are not
voted. This proxy statement and the attached form of proxy are first
being sent or given to shareholders on or about February 12, 1997.
<PAGE> OWNERSHIP OF COMMON
STOCK BY DIRECTORS, NOMINEES,
OFFICERS AND CERTAIN BENEFICIAL OWNERS
To the best knowledge of the Company based on information filed with
the Securities and Exchange Commission and the Company's stock records,
the following table sets forth the beneficial ownership of the Company's
Common Stock as of December 31, 1996, by (i) beneficial owners of more
than five percent of the Company's Common Stock, (ii) each director,
(iii) each nominee for director, (iv) each executive officer named in the
summary compensation table set forth below, and (v) all directors and
executive officers of the Company as a group.
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership(1) of Class
Robert J. Bollo 7,500(2) *
1061 East Indiantown Road
Jupiter, FL 33477
Walter M. Fiederowicz 26,125(2)(3) *
39 Painter Hill Road
Woodbury, CT 06798
Joseph A. Fiorita, Jr. 13,925(2) *
146 Deer Hill Avenue
Danbury, CT 06810
Yukio Tagawa 1,590,000(5) 13.4%
Toppan Printing Co., Ltd.
2-2-7 Yaesu, Chuo-ku
Tokyo, Japan 104
Constantine S. Macricostas 1,596,459(2)(4) 13.3%
1061 East Indiantown Road
Jupiter, FL 33477
Macricostas Partners, L.P. 1,140,000 9.6%
1122 Bel Air
Allen, Texas 75013
Jeffrey P. Moonan 76,250(2) *
1061 East Indiantown Road
Jupiter, FL 33477
Toppan Printing Co., Ltd. 1,590,000 13.4%
1, Kanda Izumi-cho
Chiyoda-ku
Tokyo, Japan 101
Michael J. Yomazzo 195,609(2)(6) 1.6%
1061 East Indiantown Road
Jupiter, FL 33477
<PAGE>
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership(1) of Class
Directors and Executive 3,505,868(7) 28.9%
Officers as a group
(7 persons)
- ----------------
* Less than 1%
- ----------------
(1) Except as otherwise indicated, the named person has the sole voting and
investment power with respect to the shares of the Company's Common Stock
set forth opposite such person's name.
(2) Includes shares of Common Stock subject to stock options exercisable as
of March 1, 1997 as follows: Mr. Bollo (7,500); Mr. Fiederowicz (13,725);
Mr. Fiorita (13,725); Mr. Macricostas (145,628); Mr. Yomazzo (56,400);
and Mr. Moonan (65,000).
(3) Includes 6,000 shares owned by the wife of Mr. Fiederowicz and 1,375
shares owned by his children, as to which shares he disclaims beneficial
ownership.
(4) Includes 18,000 shares held by the wife of Mr. Macricostas as to which
shares he disclaims beneficial ownership. Also includes 1,140,000 shares
owned by Macricostas Partners, L.P., of which Mr. Macricostas is a
limited partner and 25,309 shares owned by the corporate general partner
of such partnership of which Mr. Macricostas is President and Director
and a significant shareholder. Mr. Macricostas disclaims ownership of
those shares not represented by his ownership interests.
(5) Includes 1,590,000 shares owned by Toppan Printing Co., Ltd. of which Mr.
Tagawa is a director, as to which shares Mr. Tagawa disclaims ownership.
(6) Also includes 31,000 shares held by the wife of Mr. Yomazzo as to which
shares he disclaims beneficial ownership.
(7) Includes the shares listed in notes (2), (3), (4), (5) and (6), above.
ELECTION OF DIRECTORS
A board of five (5) directors is to be elected at the Annual
Meeting. The names of, and certain information with respect to, the
nominees for election as directors, to serve until the 1998 Annual
Meeting of Shareholders and until their successors are elected and
qualified, are set forth below and were furnished to the Company by the
nominees.
If, for any reason, any of the nominees shall become unavailable for
election, the individuals named in the enclosed proxy may exercise their
discretion to vote for any substitutes chosen by the Board of Directors,
unless the Board of Directors should decide to reduce the number of
directors to be elected at the Annual Meeting. The Company has no reason
to believe that any nominee will be unable to serve as a director. There
are no family relationships between any directors or executive officers
of the Company.
Nominees to be Elected by the Shareholders
Director
Name and Age Since Position with the Company
Walter M. Fiederowicz(1)......... 1984 Director
(50 years)
Joseph A. Fiorita, Jr.(1)........ 1987 Director
(52 years)
Yukio Tagawa .................... 1997 Director
(59 years)
<PAGE> Director
Name and Age Since Position with the Company
Constantine S. Macricostas....... 1974 Chairman of the Board
(61 years) Chief Executive Officer
Michael J. Yomazzo............... 1977 President
(54 years) Chief Operating Officer
Director
- --------------
(1) Member of the Audit Committee and the Compensation Committee.
- --------------
For the past five years, the principal occupation of each nominee
has been substantially as set forth in the above table, except as follows:
Mr. Fiederowicz is a private investor and consultant. He served as
chairman of Colonial Data Technologies Corp., (a distributor of
telecommunications equipment) from August 1994 to March 1996. From
January 1991 until July 1994, he held various positions, including
executive vice president and chairman and served as director of Conning
and Company (the parent company of an investment firm). Mr. Fiederowicz
was chairman and director of Covenant Mutual Insurance Company, (a
property and casualty insurance company) from 1989 until March 1993, and
was president and chief executive officer of Covenant from 1989 until
December 1992. Covenant was placed in rehabilitation by the Insurance
Commissioner of the State of Connecticut in 1993 and subsequently
liquidated as a result of losses in connection with insurance claims
relating to Hurricane Andrew. Mr. Fiederowicz also serves as a director
of InteliData Technologies Corporation (a provider of caller
identification based telecommunications devices, smart telephone and on-
line electronics information services), Blau Marketing Technologies, Inc.
(a marketing firm) and First Albany Companies, Inc. (the parent of a
broker-dealer).
Mr. Fiorita is a partner in Fiorita, Kornhaas and Van Houten, P.C.,
the independent certified public accountants for the Company from May
1973 through October 1984.
Mr. Macricostas also serves as a director of Nutmeg Federal Savings
and Loan Association, of InteliData Technologies Corporation (a provider
of caller identification based telecommunications devices, smart
telephone and on-line electronics information services) and The DII
Group, Inc. (a provider of integrated electronic manufacturing products
and services).
Mr. Tagawa has served as Vice Divisional Manager, Electronics
Division of Toppan since June 1996 and as a Director of Toppan from June
1995. Prior to such dates, Mr. Tagawa served in other managerial
capacities with Toppan since March 1991. Toppan is a diversified
manufacturing company with operations in the printing and electronics
industries (including photomask manufacture) and had revenues in excess
of $11 billion during its last fiscal year.
<PAGE>
Mr. Yomazzo has served as President since January 1994. From
November 1990 until January 1994, he served as Executive Vice President,
from July 1989 until November 1990, he served as Senior Vice President -
Finance and Planning and since 1977, he has served as a Vice President of the
Company with responsibilities which included finance, sales and marketing.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors met four times during the fiscal year ended
October 31, 1996. During fiscal 1996, each director who served during fiscal
1996 and is nominated for re-election attended at least 75% of the
total number of meetings of the Board of Directors and of all committees
of the Board on which such director served.
The Company has an Audit Committee and a Compensation Committee.
The Audit Committee's functions include recommending to the Board of
Directors the engagement of the Company's independent certified public
accountants, reviewing with such accountants the plan for and results of
their auditing engagement and the independence of such accountants. The
Audit Committee held three meetings during the fiscal year ended October
31, 1996. The Compensation Committee's functions include establishing
compensation for the executive officers of the Company and administration
of the Company's stock plans. The Compensation Committee held four
meetings during the fiscal year ended October 31, 1996. The Company does
not have a nominating committee.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
Mr. Walter Fiederowicz serves as a member of the Compensation
Committee of the Board of Directors. He has served as a Director of the
Company since 1984 and as a member of the Compensation Committee since 1992.
Both Messrs. Fiederowicz and Macricostas serve as directors of
InteliData Technologies Corporation ("InteliData") and have held such
office with InteliData (or its predecessors) since 1985 and 1987,
respectively. Mr. Fiederowicz also serves on the Compensation Committee
of InteliData and served as Chairman of the predecessor of InteliData
until March 1996. Mr. Macricostas does not serve on the Compensation
Committee of InteliData.
EXECUTIVE COMPENSATION
The following tables set forth certain compensation paid by the
Company for services rendered during each of the three fiscal years
during the period ended October 31, 1996 for each of the individuals who
served as an executive officer of the Company during fiscal 1996.
<PAGE>
<TABLE>
Summary Compensation Table
<CAPTION>
- --------------------------------------------------------------------------
| Annual | Long-Term |
| Compensation | Compensation | All
|---------------|------------------| Other
| | | Awards | Comp-
| | |------------------| ensa-
| | |Restricted| Stock | tion
Name/Principal Position Year|Salary | Bonus | Stock |Options| ($)
| ($) | ($) | ($) | (#) | (1)
-------------------------------|-------|-------|----------|-------|-------
<S> <C> |<C> |<C> |<C> |<C> | <C>
Constantine S. Macricostas 1996|322,249|322,249| 0 |50,000 | 59,750
Chief Executive Officer 1995|306,859|370,635| 0 | 0 | 59,620
and Director 1994|295,100|421,000|452,813(2)| 0 | 2,715
| | | | |
| | | | |
Michael J. Yomazzo 1996|251,836|251,836| 0 |35,000 | 44,262
President and Chief 1995|239,845|303,635| 0 | 0 | 44,620
Operating Officer 1994|230,620|357,000|452,813(2)| 0 | 2,757
Director | | | | |
| | | | |
| | | | |
Jeffrey P. Moonan 1996|161,550|161,550| 0 |17,500 | 25,731
Senior Vice President, 1995|153,835|178,242| 0 | 0 | 27,588
General Counsel and 1994|147,940|195,250|150,938(2)| 0 | 2,919
Secretary | | | | |
| | | | |
| | | | |
Robert J. Bollo 1996|125,954| 50,000| 0 |17,500 | 2,519
Vice President/Finance 1995|119,961| 50,000| 0 | 0 | 1,292
and Chief Financial 1994| -| -| - | - | -
Officer (3) | | | | |
| | | | |
</TABLE>
- -------
(1) Includes, in 1995 and 1996 for Messrs. Macricostas, Yomazzo and Moonan,
premiums paid on life insurance policies owned by the individual or their
designee as to which the Company shall be entitled to be repaid unless
the respective individual satisfies certain length of service
requirements. The amount of such premiums is as follows: Mr. Macricostas
($55,000); Mr. Yomazzo ($40,000); and Mr. Moonan ($22,500). The balance
of the amounts shown represent matching contributions by the Company
pursuant to the Company's Savings and Profit Sharing (401-k) Plan.
(2) Represents restricted stock awards granted during fiscal 1994 which vest
equally over three (3) years based on achievement of certain performance
goals. Messrs. Macricostas, Yomazzo and Moonan received 33,750, 33,750
and 11,250 restricted stock awards, respectively. The value of the
awards at the date of grant are indicated in the above table. At fiscal
1996 year end, Messrs. Macricostas, Yomazzo and Moonan still held 11,250,
11,250 and 3,750 restricted stock awards which had a value at that time
of $303,750, $303,750 and $101,250, respectively. Dividends earned on
shares subject to the awards would be subject to the terms of the awards
and would not be paid if the award is not earned.
(3) Mr. Bollo became Vice President/Finance and Chief Financial Officer in
November 1994 and amounts paid to Mr. Bollo prior to fiscal 1995 are not
reported in the above table.
- ---------------------------------------------------------------------------
The Company has agreed that if the employment of Messrs.
Macricostas, Yomazzo or Moonan is terminated under certain conditions, such
officer will be entitled to continued salary and benefits for one year.
<PAGE>
The Company maintains stock option plans which allow for the grant
of stock options and restricted stock awards to directors and executive
officers of the Company as well as other employees of the Company. The
Company's stock option plans do not provide for the issuance of stock
appreciation rights ("SAR's"). The following tables set forth information
with respect to option grants to executive officers named in the summary
compensation table and with respect to option exercises and the value of
options granted to such executive officers of the Company.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
- -----------------------------------------------------------------------
| Potential
| Realizable Value
| at Assumed
Individual Grants | Annual Rates of
| Stock Price
| Appreciation for
| Option Term (a)
- ------------------------------------------------|----------------------
| Number | % of | | | |
| of | Total | | | |
| Securi- | Options | Exer- | | |
| ties | Granted | cise | | |
Name | Under- | to | or | | |
| lying |Employees| Base |Expira-| |
| Options |in Fiscal| Price | tion | |
<S> | Granted | Year | $/Sh. | Date | %5 ($) | 10% ($)
- ------------|---------|---------|-------|-------|-----------|----------
Constantine | <C> | <C> | <C> |<C> |<C> |<C>
Macricostas | 50,000 | 10.6 | 25.00 |8/21/06| 786,118| 1,992,178
- ------------|---------|---------|-------|-------|-----------|----------
Michael J. | | | | | |
Yomazzo | 35,000 | 7.4 | 25.00 |8/21/06| 550,283| 1,394,525
- ------------|---------|---------|-------|-------|-----------|----------
Jeffrey P. | | | | | |
Moonan | 17,500 | 3.7 | 25.00 |8/21/06| 275,141| 697,262
- ------------|---------|---------|-------|-------|-----------|----------
Robert J. | | | | | |
Bollo | 17,500 | 3.7 | 25.00 |8/21/06| 275,141| 697,262
- ------------|---------|---------|-------|-------|-----------|----------
All Stock- | | | | | |
holders(b) | N/A | N/A | N/A | N/A |185,757,046|470,773,583
- -----------------------------------------------------------------------
</TABLE>
The option exercise price was equal to the market price of a share of
common stock on the date of grant and all options vest ratably in
installments over a period of four (4) years.
- -------------------
(a) No gain to the optionees is possible without appreciation in the stock
price which will benefit all shareholders commensurately. The dollar
amounts under these columns are the result of calculations at the 5% and
10% assumption rates set by the SEC and, therefore, are not intended to
forecast possible future appreciation of the Company's stock price or
to establish any present value of the options.
(b) Based on 11,816,606 shares outstanding, the approximate number of shares
outstanding on the date of grant.
<PAGE>
<TABLE> Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
<CAPTION>
- ---------------------------------------------------------------------
| | | Number of |
| | | Securities | Value of
| | | Underlying | Unexercised
| Shares | | Unexercised | in-the-money
| Acquired | | Options at | Options at
| on | Value | Fiscal Year | Fiscal Year
Name | Exercise | Realized | End | End
| (#) | ($) |---------------|--------------
| | | Exercisable/ | Exercisable/
| | | Unexercisable | Unexercisable
- ----------------|----------|----------|---------------|--------------
<S> <C> <C> <C> <C>
Constantine | 94,372 |1,667,270 | 145,628/ | 3,190,762/
Macricostas | | | 50,000 | 100,000
- ----------------|----------|----------|---------------|--------------
Michael J. | 3,600 | 57,600 | 51,900/ | 1,063,237/
Yomazzo | | | 39,500 | 157,750
- ----------------|----------|----------|---------------|--------------
Jeffrey P. | -0- | -0- | 62,187/ | 1,329,299/
Moonan | | | 20,313 | 89,854
- ----------------|----------|----------|---------------|--------------
Robert J. | -0- | -0- | 7,500/ | 91,253/
Bollo | | | 25,000 | 126,253
- ---------------------------------------------------------------------
</TABLE>
DIRECTORS' COMPENSATION
A fee of $1,500 for each directors' meeting attended is payable to
directors who are not also employees of the Company. The Chairman and other
members of the Compensation and Audit Committees also receive a fee
of $5,000 and $2,500, respectively, per year, for service on each such
committee.
During fiscal 1996, the Company retained Joseph Fiorita as a
consultant to perform certain accounting and tax services. Fees paid to
Mr. Fiorita in this capacity aggregated $46,000.
CERTAIN TRANSACTIONS
The Company continues to lease a building at one of its
manufacturing facilities and a contiguous parcel of land from entities
controlled by Constantine S. Macricostas. The rent paid to these
entities for the fiscal year ended October 31, 1996 was $135,328.
Financing for construction of such leased building and certain
equipment was provided through the sale of industrial development bonds
issued by the Connecticut Development Authority (the "CDA"). As lessee,
the Company was obligated to serve as guarantor of certain of the bonds
issued by the CDA. As of October 31, 1996 there were outstanding a total
of approximately $546,000 of industrial development bonds for which the
Company serves as guarantor.
<PAGE>
The Company believes that the terms of the transactions described
above with affiliated persons were no less favorable to the Company than
the Company could have obtained from non-affiliated parties.
The Company and Toppan have engaged in numerous ongoing commercial
transactions for the purchase and sale of raw materials and finished
goods at prices based upon competitive market prices. The total amount
of sales by the Company to or from Toppan aggregated approximately
$7,212,000 during fiscal 1996. The Company believes these transactions
are negotiated as arm's-length transactions and were no less favorable to the
Company than the Company could have obtained from non-affiliated
parties. The Company and Toppan also entered into an agreement whereby
the companies share certain technology.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors was established
during fiscal 1992 and is responsible for the establishment of executive
compensation and administration of the Company's stock plans.
The Committee's philosophy is that executive compensation must be
competitive with other comparable employers to insure that qualified
employees can be attracted and retained and that the Company's
compensation practices should provide incentives and rewards for
achieving or exceeding company goals and for creating a return to the
Company's shareholders. The Committee uses three components to achieve
these goals: base salary, bonuses and stock based awards.
The Committee evaluates and establishes base salary levels in light
of economic conditions and comparisons to other similarly situated
companies. Bonuses, if any, are dependent upon a subjective evaluation
of the Company's performance and achievement of its financial and other
goals during the relevant period. Stock options and restricted stock
awards, which the Compensation Committee believes provide a strong link
between executive compensation and shareholder return, are used to
provide long-term incentives which are based on shareholder return.
While Section 162(m) of the Internal Revenue Code limits the
deductibility of certain compensation (in excess of $1,000,000 per year)
paid by the Company to named executive officers unless certain formal
requirements are satisfied, the Committee believes that its ability to
subjectively evaluate executive officer performance is an important part
of its function and its ability to provide incentives. Additionally,
compensation to the named executive officers has historically not
exceeded deductibility limits under this Section. Accordingly, the
Committee has not pursued adoption of compensation programs which comply
with such Section although the Committee continues to consider the
advisability of such adoption.
In establishing compensation levels for the executive officers of
the Company, the Committee in 1992 considered compensation at companies
in the electronics industries with similar levels of sales and capital.
The companies considered were not necessarily the same as those included
in the performance chart below due to the difference in the size of the
companies considered. The Committee adjusted executive compensation in
connection with this review. Generally, the Committee believes that its
expectation of performance from the Company and its executive officers
should allow executive compensation to fall within the median to 75th
percentile of compensation at this comparison group. Since that time,
salary adjustments for the executive officers have been in accordance
with the salary adjustment budgets for the Company's other employees. The
Committee believes that its three-part approach provides reasonable
compensation to the executive which is aligned with the Company's needs
and results and balances both short and long-term goals.
<PAGE>
Mr. Macricostas' compensation for 1996 was determined based on this
analysis. Mr. Macricostas' base salary was adjusted in 1996 in
accordance with the salary budget for other employees of the Company. The
Committee also approved the payment of a bonus to Mr. Macricostas
based on its subjective evaluation of his efforts during fiscal 1996 and
of the Company's performance during the year. Prominent factors in this
determination were the Company's ability to recognize record levels of sales,
earnings and other performance criteria during the year and to
successfully achieve its goal of increasing its international presence.
The Committed also considered that its prior stock based awards did
not extend beyond fiscal 1996 and granted Mr. Macricostas additional
stock options to maintain the long-term component of his compensation.
The compensation for the other executive officers was determined
based on the same factors used to determine Mr. Macricostas'
compensation.
Respectfully submitted,
Joseph A. Fiorita, Jr.
Walter M. Fiederowicz
<PAGE> PERFORMANCE GRAPH
The following graph compares the yearly percentage change at October
31 of the indicated year in the Company's cumulative total shareholder
return on its common stock with the cumulative total shareholder return
on (i) securities traded on the NASDAQ market, and (ii) publicly traded
securities of companies which have indicated that their business falls
within Standard Industrial Classification (SIC) Code 367 (Electronic
Components and Accessories). Although the Company believes this graph
reflects favorably on the Company, it does not believe that the
comparison is necessarily useful in determining the quality of the
Company's performance or in establishing executive compensation.
Comparison of Five-Year Cumulative Total Return Among
Photronics, Inc., NASDAQ Over-the-Counter Securities
and Publicly Traded Companies with SIC Code 367
- ----------------------------------------------------------------------
3
450 ------------------------------------------------------------------
3
400 ------------------------------------------------------------------
350 ------------------------------------------------------------------
300 ------------------------------------------------------------------
1
1
250 ------------------------------------------------------------------
3
200 ------------------------------------------------------------------
1
150 ------------------------------------------------------------------
3 2
2
3 2 2
100 ------------------------------------------------------------------
2 1
1
0 ------------------------------------------------------------------
1991 1992 1993 1994 1995 1996
<TABLE>
=======================================================================
<CAPTION> 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C>
1 Photronics, Inc. 100.00 61.90 87.30 171.43 281.23 257.40
2 NASDAQ Stock Market 100.00 96.87 127.13 135.16 160.32 188.27
(US) Index
3 NASDAQ Electronic 100.00 122.01 189.55 227.42 424.25 456.96
Component Stock Index
=======================================================================
</TABLE>
<PAGE> RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Subject to ratification by the shareholders at the Annual Meeting,
the Board of Directors has appointed Deloitte & Touche LLP to serve as the
independent certified public accountants for the Company for its
fiscal year ending October 31, 1997. Deloitte & Touche LLP has served as the
Company's independent certified public accountants since July
1991. Representatives of Deloitte & Touche LLP are expected to be
present at the Annual Meeting, will have the opportunity to make a
statement, if they desire to do so, and will be available to respond to
appropriate questions.
The affirmative vote of the majority of the votes cast by the
holders of the Company's Common Stock on this proposal shall constitute
ratification of the appointment of Deloitte & Touche LLP.
If the shareholders by the affirmative vote of a majority of the
Common Stock represented at the Annual Meeting do not ratify the
appointment of Deloitte & Touche LLP, the selection of independent
certified public accountants will be reconsidered by the Board of
Directors.
The Board of Directors recommends a vote FOR this proposal.
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows
of no matters which will be presented for consideration at the Annual
Meeting other than the proposals set forth in this Proxy Statement. If
any other matters properly come before the Annual Meeting, it is intended
that the persons named in the proxy will act in respect thereof in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company no later than
October 13, 1997 and must meet certain eligibility requirements of the
Securities and Exchange Commission. Proposals may be mailed to
Photronics, Inc. to the attention of Jeffrey P. Moonan, 1061 East
Indiantown Road, Jupiter, Florida 33477.
SOLICITATION OF PROXIES AND COST THEREOF
This proxy solicitation is being made by the Board of Directors of
the Company and the cost of such solicitation of proxies will be borne by the
Company. In addition to solicitation of the proxies by use of the
mails, employees of the Company, without extra remuneration, may solicit
proxies personally or by telephone or cable. The Company will reimburse
brokerage firms, nominees, custodians and fiduciaries for their out-of-
pocket expenses for forwarding proxy materials to beneficial owners and
seeking instruction with respect thereto.
By order of the Board of Directors
Jeffrey P. Moonan
Secretary
February 12, 1997
<PAGE>
P R O X Y
___________
Photronics, Inc.
1997 Annual Meeting of Shareholders
March 20, 1997
___________________________________________________
The undersigned hereby appoints Constantine S. Macricostas, Michael J.
Yomazzo and Jeffrey P. Moonan, or any one or more of them acting in the
absence of the others, with full power of substitution, proxies for the
undersigned, to vote at the 1997 Annual Meeting of Shareholders of
Photronics, Inc. to be held at 2:00 p.m. on March 20, 1997 at The Omni
Richardson Hotel, 701 East Campbell Road, Richardson, Texas 75081, and at
any adjournment or adjournments thereof according to the number
of votes the undersigned might cast and with all powers the undersigned would
possess if personally present.
1) To elect the following five (5) directors:
Walter M. Fiederowicz Yukio Tagawa Constantine S. Macricostas
Joseph A. Fiorita, Jr. Michael J. Yomazzo
[ ] FOR all nominees listed above (except as marked to the contrary
below).
[ ] Withhold authority to vote for all nominees listed above.
INSTRUCTION: To withhold authority to vote for any individual
nominee, print that nominee's name below:
___________________________________________________________________
2) To ratify the appointment of Deloitte & Touche LLP as the independent
certified public accountants of the Company for the fiscal year ending
October 31,1997.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3) To transact such other business as may properly come before the
meeting or any adjournments thereof.
(Please date and sign proxy card on other side)
THIS PROXY CARD IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shares represented by this proxy card will be voted (or not voted) on
Items 1 and 2, as directed by the shareholder, but if no direction is
indicated, will be voted FOR each thereof. The management recommends a vote
FOR each of the proposals.
Please sign as name(s) appear hereon. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.
__________________________________________________________________
Signature(s)
___________________________________________________________________
Signature(s)
Dated:____________________
Please mark, sign, date and return the proxy card using the enclosed
envelope.
